Baltika Group ended the first quarter with a net loss of 2,474 thousand euros.
The loss for the same period last year was 1,442 thousand euros. The financial
results of the first quarter were strongly affected by the weak March caused by
the global COVID-19 pandemic. January and February results were in accordance
with the company's forecasts.
In the first quarter, COVID-19 had the strongest impact on Baltika Group's
operations in Lithuania, where all stores were closed as of 16 March due to
orders from the Lithuanian government, and all shopping centers in Estonia were
closed by a government decision on 27 March. In Latvia, the shops were open
part-time during the week and closed on weekends. Since the declaration of the
state of emergency, Baltika Group has directed even more resources to the e-shop
www.andmorefashion.com, through which customers can shop without contact.
In addition, non-recurring costs related to the restructuring of the Baltika
Group (mainly the cessation of production in Estonia) have also had a negative
impact on the financial results and liquidity of the Baltika Group in the first
quarter. In order to overcome the above difficulties, the court initiated the
reorganization proceedings of AS Baltika on March 26, 2020. Baltika is of the
opinion that in the current situation the reorganization of the company is the
best way to protect the rights and interests of Baltika's shareholders,
employees, creditors and partners.
The Group's sales revenue for the first quarter was 6,137 thousand euros,
decreasing by 34% compared to the same period last year. Majority, i.e 70% of
the loss of sales revenue (2.2 million euros) came from March, when a state of
emergency was declared in the Baltics and stores were closed. The sales revenue
in January and February was slightly lower than in the previous year, but the
men's collection made a very strong result, where sales of Baltman suits and
Monton outerwear increased significantly compared to the previous year.
The sales channel with the largest share retail, decreased by 32% (2.6 million
euros) of which 80% is the extremely weak result in March. The sales revenue of
Baltika Group's e-store Andmorefashion.com in the first quarter decreased by 7%
compared to the same period last year and was 505 thousand euros. The sales
revenue of business customers was 200 thousand euros in the first quarter,
decreasing by 72% compared to a year ago. The decrease in sales revenue of
business customers is expected, as the exit of business customers` sales channel
is a part of the Baltika Group's ongoing restructuring plan.
The Group's distribution expenses in the first quarter were 4,200 thousand euros
decreasing by 17%, i.e 829 thousand euros compared to the same period last year.
A consistent and significant reduction in distribution and administrative
expenses is a part of Baltika Group's ongoing restructuring plan.
The result for the first quarter of 2020 includes a negative impact of 11
thousand euros on the new accounting standard IFRS 16.
Consolidated statement of financial position
31 March 2020 31 Dec 2019
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ASSETS
Current assets
Cash and cash equivalents 215 264
Trade and other receivables 753 621
Inventories 8 035 7 644
Assets classified as held for sale 28 28
Total current assets 9 031 8 557
Non-current assets
Deferred income tax asset 281 281
Other non-current assets 222 222
Property, plant and equipment 1 538 1 683
Right-of-use assets 14 925 16 040
Intangible assets 557 536
Total non-current assets 17 523 18 762
TOTAL ASSETS 26 554 27 319
LIABILITIES AND EQUITY
Current liabilities
Borrowings 2 819 1 731
Lease liabilities 6 237 5 383
Trade and other payables 4 920 4 118
Total current liabilities 13 976 11 232
Non-current liabilities
Borrowings 1 412 488
Lease liabilities 10 437 12 396
Total non-current liabilities 11 849 12 884
TOTAL LIABILITIES 25 825 24 116
EQUITY
Share capital at par value 5 408 5 408
Share premium 0 0
Reserves 4 045 4 045
Retained earnings -6 250 -341
Net profit (loss) for the period -2 474 -5 909
TOTAL EQUITY 729 3 203
TOTAL LIABILITIES AND EQUITY 26 554 27 319
Consolidated statement of profit and loss and comprehensive income
1Q 2020 1Q 2019
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Revenue 6 137 9 270
Client bonus provision 0 0
Revenue after client bonus provision 6 137 9 270
Cost of goods sold -3 390 -4 836
Gross profit 2 747 4 434
Distribution costs -4 200 -5 029
Administrative and general expenses -792 -598
Other operating income (-expense) 37 117
Operating profit (loss) -2 208 -1 076
Finance costs -266 -366
Profit (loss) before income tax -2 474 -1 442
Income tax expense 0 0
Net profit (loss) for the period -2 474 -1 442
Total comprehensive income (loss) for the period -2 474 -1 442
Basic earnings per share from net loss for the period, EUR -0,05 -0,04
Diluted earnings per share from net loss for the period, EUR -0,05 -0,04
Flavio Perini
Member of Management Board, CEO
flavio.perini@baltikagroup.com (mailto:flavio.perini@baltikagroup.com)
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