Baltika Group ended the third quarter with a net loss of 516 thousand euros. The
loss for the same period last year was 1,241 thousand euros. The quarter results
have improved 725 thousand euros year over-year due to Baltika Group heavy focus
on fixed costs reduction that saw operating expense decreasing by 2,243 thousand
euros.
The Group's sales revenue for the third quarter was 5,658 thousand euros,
decreasing by 42% compared to the same period last year. Retail sales revenue in
the third quarter decreased by 41% and e-com decreased by 23%. Main impactor for
the decrease in sales in those channels is the strategic decision to exit brands
- Mosaic and Bastion. Biggest brand Monton retail sales decreased by 7% in the
same period. Sales to business customers decreased by 84%, which is related to
the strategic decision to exit this sales channel.
The gross profit for the quarter was 2,884 thousand euros, decreasing by 36%
i.e. 1,600 thousand euros compared to the same period of the previous year (Q3
2019: 4,484 thousand euros). The company's gross profit margin was 51.0% in the
third quarter, which is 5.1 percentage points higher than the margin of the
third quarter of the previous year (Q3 2019: 45.9%). The decrease in gross
profit amount is due to decrease in sales. Increase in gross profit margin is
due to Baltika Group selling more full-price new stock and less discounted
items.
The Group's distribution and administrative expenses in the third quarter were
3,088 thousand euros, decreasing by 42% i.e. 2,243 thousand euros compared to
the same period last year. Over 60% of the decrease in expense relates to
reduction in retail costs. These are reduced not only by reduction of stores but
also with reduction of per store and market office expenses. Consistent and
significant reductions in distribution and administrative expenses is a part of
Baltika Group's ongoing restructuring plan that has seen the head-office
distribution and administrative expense decrease by 829 thousand euros. In line
with restructuring plan Baltika Group head-office staff has been reduced during
the quarter by 19 people.
9 months total gross profit amounts to 7,454 thousand euros, compared to prior
year 14,665 (decreasing 49%) with biggest decline coming from second quarter
where majority of stores were closed for a period due to COVID-19. Operating
expenses in the 9 months amounted to 11,604, decreasing by 31% that is 5,267
thousand euros with 45% of the amount coming from second quarter when stores
were closed for a period of time due to COVID-19 and 43% coming from third
quarter where it is due to cost savings in line with restructuring plan. Other
operating income of three quarters in the amount of 5,760 thousand euros is
mainly due to 4,585 thousand euros connected with restructuring of creditors'
claims in accordance to the restructuring plan approved on 19 June 2020 and the
reversal of the impairment of the right to use the property arising from the
lease agreements for the production buildings in the amount of 1,320 thousand
euros. With net financial expense of 635 thousand euros the net profit of 9
months 2020 is 975 thousand euros (prior year comparative 3,300 net loss).
As at 30 September 2020 owing to received loan 2,550 thousand euros from KJK
Fund SICAV-SIF via its holding company and all the costs savings achieved,
Baltika Group has achieved the financial stability with 1,085 thousand cash and
cash equivalents and no use of bank overdraft (with 3,000 thousand euros limit)
that allows to plan forward with the change in strategy. Baltika will move
forward with only one womenswear brand from second half-year 2021. Baltika has
started cooperation with international agency to build up a brand-new retail
concept. First store of the new concept will be tested in the second half-year
of 2021 in Tallinn.
Consolidated statement of financial position
30 September 2020 31 Dec 2019
-----------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 1,085 264
Trade and other receivables 180 621
Inventories 5,355 7,644
Assets classified as held for sale 0 28
Total current assets 6,620 8,557
Non-current assets
Deferred income tax asset 281 281
Other non-current assets 264 222
Property, plant and equipment 1,291 1,683
Right-of-use assets 10,391 16,040
Intangible assets 548 536
Total non-current assets 12,775 18,762
TOTAL ASSETS 19,395 27,319
LIABILITIES AND EQUITY
Current liabilities
Borrowings 148 1,731
Lease liabilities 3,371 5,383
Trade and other payables 3,383 4,118
Total current liabilities 6,902 11,232
Non-current liabilities
Borrowings 4,052 488
Lease liabilities 7,488 12,396
Total non-current liabilities 11,540 12,884
TOTAL LIABILITIES 18,442 24,116
EQUITY
Share capital at par value 5,408 5,408
Reserves 820 4,045
Retained earnings -6,250 -341
Net profit (loss) for the period 975 -5,909
TOTAL EQUITY 953 3,203
TOTAL LIABILITIES AND EQUITY 19,395 27,319
Consolidated statement of profit and loss and comprehensive income
3Q 2020 3Q 2019 9m 2020 9m 2019
-------------------------------------------------------------------------------
Revenue 5,658 9,758 15,502 29,491
Cost of goods sold -2,774 -5,274 -8,048 -14,826
Gross profit 2,884 4,484 7,454 14,665
Distribution costs -2,653 -4,788 -9,659 -14,843
Administrative and general expenses - 435 -543 -1,945 -2,028
Other operating income (-expense) -118 -73 5,760 -24
Operating profit (loss) -322 -920 1,610 -2,230
Finance costs -194 -321 -635 -1,070
Profit (loss) before income tax -516 -1,241 975 -3,300
Income tax expense 0 0 0 0
Net profit (loss) for the period -516 -1,241 975 -3,300
Total comprehensive income (loss)
for the period -516 -1,241 975 -3,300
Basic earnings per share from net profit
(loss)
for the period, EUR -0.01 -0,04 0,02 -0,11
Diluted earnings per share from net profit
(loss)
for the period, EUR -0,01 -0,04 0,02 -0,11
Flavio Perini
Member of the Management Board, CEO
flavio.perini@baltikagroup.com
(https://www.globenewswire.com/Tracker?data=3TZK3t4paybQ2Hs4xcrDYQJEjomTyRlztPxe
WTICb5b5_nZuabL34MGR_TMc4VCG-
_3jEPYLr0y32SnhGV9_ZqId0z0Nsm1RLrH34HtMgLT3uDoqvPUqMlufAhCb4GdR)
|