Market announcement

Title

Tallinna Vesi's fourth quarter sales were €15.52 million

Message

AS Tallinna Vesi's sales in the fourth quarter of 2023 were EUR15.52 million,
affected by the overall economic environment and a decrease in revenue from
construction services. At the same time, the company's revenue from its core
business of providing water services continued to grow.

Compared to the fourth quarter of 2022, the sales were EUR0.51 million lower.

Sales  from water service sold to commercial  customers in the fourth quarter of
2023 in  the company's main service area  were EUR4.64 million, which is 7.5% more
than  the year before.  Sales from water  services provided to private customers
increased  by 2.4% in  the fourth  quarter compared  to the  same period  of the
previous year and totalled EUR6.19 million.

The  company's  operating  profit  for  the  fourth  quarter  was EUR4.05 million.
Compared  to  the  fourth  quarter  of  the  previous year, the operating profit
increased by EUR1.25 million. The operating profit for 2023 was EUR17.35 million, an
increase  of EUR6.03 million compared  to the previous year.  This has been driven
mainly by an increase in water consumption and a stabilisation of energy prices.

According to Aleksandr Timofejev, CEO of Tallinna Vesi, the commissioning of the
new  cogeneration plant  has already  had a  positive impact on operating costs,
although  this  is  only  a  test  period.  "Using  biogas  to  produce heat and
electricity  at the  CHP plant  will allow  us to  cover up  to 15% of our total
energy  needs with  in-house produced  energy in  the future, reducing operating
costs  and  increasing  the  sustainability  of our operations," said Timofejev.
Supported  by new investments, the company  is moving towards a more sustainable
operating model and a reduction of its environmental impact, he added.

The company's net profit for the fourth quarter of 2023 was EUR2.98 million, which
is  EUR0.62 million  more than  in the  same period  last year. The group's profit
before  taxes for  the twelve  months was  EUR14.21 million,  being 33.4% or EUR3.56
million  higher than for the  same period a year  before. The net profit for the
twelve  months was EUR12.84  million, being 52.8% or  EUR4.44 million higher than in
2022.

The  group's net  financial expenses  were EUR0.98  million in the fourth quarter,
which is EUR0.62 million higher than in the same period last year. The increase in
financial  expenses was  due to  increased cost  of interest  on loans linked to
Euribor.

Throughout  the year, the quality of  tap water was excellent, meeting 99.87% of
all  quality requirements. The  corresponding result for  the fourth quarter was
99.7%. ?We work every day to ensure that our customers and consumers receive tap
water  of the very highest  quality. At the beginning  of 2023, we introduced an
innovative ice pigging technology for cleaning water pipes and cleaned more than
141 km  of water network in one year," Timofejev said. According to the customer
survey  carried out  for Tallinna  Vesi in  November, 89% of consumers drink tap
water, which shows that they are highly satisfied with the quality of the water.

In  the  fourth  quarter  of  2023, Tallinna  Vesi continued to introduce to the
public  the  principles  of  water  operations  as  a vital service and to raise
awareness  of the important aspects of maintaining a clean living environment by
being present at the sustainability festival Impact Day and opening the doors of
its  water treatment  plant to  the public  during the architecture weekend Open
House Tallinn.

During the twelve months of 2023, wastewater treated at the Wastewater Treatment
Plant  at Paljassaare met all the  established requirements. The good quality of
the  treated effluent is  demonstrated by pollutant  levels well below the legal
limits.  In 2023, we took more than 800 tons  of debris, 200 tons of grit, 1800
tons of nitrogen and 240 tons of phosphorus out of the wastewater.

The rate of water loss in the water network remained low at 11.35% in the fourth
quarter.  This  is  significantly  better  than  in  the  same  period last year
(15.34%).  For the twelve  months of 2023, the  rate of water  loss was 12.93%,
compared  to 16.02% of the year before. The low level of water losses is ensured
by  the  continuous  online  monitoring  of  the  water  network and the network
rehabilitation programme implemented as planned.

By  the end of the fourth quarter  of 2023, Tallinna Vesi had reconstructed more
than  27 kilometres of networks, 46% of which  using no-dig methods. The largest
reconstruction  works in 2023 were carried out  on Jõe and Pronksi Street, Vana-
Kalamaja  Street,  E. Vilde  and  Akadeemia  Road,  Kuklase and Vaablase Street,
Pärna,  Reinvaldi and Kuhlbarsi Street, Tehnika, Magasini and Punane Street, and
on Smuuli Road.

The  major projects  carried out  at the  treatment plants  in 2023 included the
reconstruction  of digesters and  the installation of  the cogeneration plant at
the  Wastewater Treatment Plant and the reconstruction of filters and clarifiers
at the Water Treatment Plant. The first phase of the reconstruction of digesters
has   been   successfully   completed  with  one  of  the  two  digesters  being
reconstructed  and  most  of  the  technological  components replaced. Work will
continue in 2024.

By  the end  of the  fourth quarter  of 2023, Tallinna  Vesi had installed smart
meters  for 40.6% of its customers. The company aims to replace water meters for
all  customers in its service  area with smart meters  by the end of 2026 at the
latest.

On  September 21, AS Tallinna  Vesi submitted an  application to the Competition
Authority  to change the prices for water services. The application concerns the
price  for water  services in  the main  service area  in Tallinn  and Saue, the
service  area in Maardu and for other water companies. The new prices will apply
once  the Competition Authority has approved the application. The adjustments to
the  water tariffs are  prompted by the  increase in justified  costs and by the
crucial  investments that  are needed  to ensure  the continued operation of the
vital  service,  to  reduce  environmental  impact  and  to  safeguard  a  clean
environment.

In  the twelve months of  2023, the group invested EUR35  million in fixed assets.
The total value of fixed assets amounts to EUR256,10 million.

AS  Tallinna Vesi is the largest water utility in Estonia, providing services to
more  than 24,900 private customers and  businesses and 470,000 end consumers in
Tallinn  and its surrounding municipalities. Tallinna Vesi is listed on the main
list  of the  Nasdaq Tallinn  Stock Exchange.  The largest  shareholdings in the
company  are held by the City of  Tallinn (55.06%) and the energy group Utilitas
(20.36%). 24.58% of the company's shares are free floating on the Nasdaq Tallinn
stock exchange.

MAIN FINANCIAL INDICATORS

 EUR million       Quarter 4                       12 months
 except key                        Variance                        Variance
 ratios          2023  2022  2021  2023/ 2022    2023  2022  2021  2023/ 2022
-------------------------------------------------------------------------------
 Sales           15.52 16.03 14.93         -3.1% 61.14 54.56 53.29        12.1%

 Gross profit     5.91  4.52  4.80         30.7% 24.07 16.90 20.58        42.4%

 Gross profit
 margin %        38.07 28.21 32.17         35.0% 39.36 30.97 38.61        27.1%

 Operating
 profit before
 depreciation
 and
 amortisation     6.17  4.65  5.10         32.8% 25.40 18.14 25.30        40.1%

 Operating
 profit before
 depreciation
 and
 amortisation
 margin %        39.78 29.00 34.17         37.1% 41.55 33.24 47.47        25.0%

 Operating
 profit           4.05  2.80  3.42         44.9% 17.35 11.32 18.78        53.3%

 Operating
 profit - main
 business         3.55  2.50  2.91         41.7% 15.99 10.31 17.52        55.1%

 Operating
 profit margin % 26.12 17.45 22.89         49.6% 28.38 20.75 35.23        36.8%

 Profit before
 taxes            3.07  2.44  3.31         26.0% 14.21 10.65 18.40        33.4%

 Profit before
 taxes margin %  19.79 15.22 22.19         30.0% 23.23 19.51 34.52        19.1%

 Net profit       2.98  2.36  3.21         26.4% 12.84  8.41 16.17        52.8%

 Net profit
 margin %        19.18 14.70 21.47         30.5% 21.01 15.41 30.33        36.3%

 ROA %            1.08  0.94  1.26         15.4%  4.80  3.30  6.45        45.5%

 Debt to total
 capital
 employed %      58.47 56.26 54.94          3.9% 58.47 56.26 54.94         3.9%

 ROE %            2.58  2.15  2.82         19.9% 11.27  7.43 14.69        51.7%

 Current ratio    1.30  1.24  2.83          4.8%  1.30  1.24  2.83         4.8%

 Quick ratio      1.24  1.17  2.79          6.0%  1.24  1.17  2.79         6.0%

 Investments
 into fixed
 assets          12.09 15.18  1.61        -20.4% 34.93 25.13 15.38        39.0%

 Payout ratio %      - 78.52 80.42                   - 78.52 80.42
-------------------------------------------------------------------------------

Gross profit margin - Gross profit / Net sales
Operating profit margin - Operating profit / Net sales
Operating  profit  before  depreciation  and  amortisation  - Operating profit +
depreciation and amortisation
Operating  profit before depreciation and amortisation margin - Operating profit
before depreciation and amortisation / Net sales
Net profit margin - Net profit / Net sales
ROA - Net profit / Average Total assets for the period
Debt to Total capital employed - Total liabilities / Total capital employed
ROE - Net profit / Average Total equity for the period
Current ratio - Current assets / Current liabilities
Quick ratio - (Current assets - Stocks) / Current liabilities
Payout ratio - Total Dividends per annum/ Total Net Income per annum
Main  business - water services related activities, excl. connections profit and
government grants, construction services, doubtful receivables

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                 as of 31
 EUR thousand                                                       December

 ASSETS                                               Note    2023    2022



 CURRENT ASSETS
---------------------------------------------------------------------------
   Cash and cash equivalents                           3    14,736  12,650

   Trade receivables, accrued income and prepaid
   expenses                                                  8,608   8,989

   Inventories                                               1,137   1,197
---------------------------------------------------------------------------
 TOTAL CURRENT ASSETS                                       24,481  22,836



 NON-CURRENT ASSETS
---------------------------------------------------------------------------
   Property, plant, and equipment                      4   256,108 229,869

   Intangible assets                                   5     1,293     688
---------------------------------------------------------------------------
 TOTAL NON-CURRENT ASSETS                                  257,401 230,557
---------------------------------------------------------------------------


 TOTAL ASSETS                                              281,882 253,393



 LIABILITIES AND EQUITY



 CURRENT LIABILITIES
---------------------------------------------------------------------------
   Current portion of long-term lease
   liabilities                                                 697     883

   Current portion of long-term loans                        3,594   3,630

   Trade and other payables                                 10,886  10,225

   Prepayments                                               3,604   3,749
---------------------------------------------------------------------------
 TOTAL CURRENT LIABILITIES                                  18,781  18,487



 NON-CURRENT LIABILITIES
---------------------------------------------------------------------------
   Deferred income from connection fees                     44,653  39,150

   Leases                                                    1,892   1,607

   Loans                                                    92,835  76,708

   Provision for possible third-party claims           6     6,018   6,018

   Deferred tax
   liability                                                   505     496

   Other payables                                              128     101
---------------------------------------------------------------------------
 TOTAL NON-CURRENT LIABILITIES                             146,031 124,080
---------------------------------------------------------------------------
 TOTAL LIABILITIES                                         164,812 142,567



 EQUITY
----------------------------------------------------------------------------
   Share capital                                            12,000  12,000

   Share premium                                            24,734  24,734

   Statutory legal reserve                                   1,278   1,278

   Retained earnings                                        79,058  72,814
---------------------------------------------------------------------------
 TOTAL EQUITY                                              117,070 110,826
---------------------------------------------------------------------------


 TOTAL LIABILITIES AND EQUITY                              281,882 253,393


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                          Quarter      for the year ended 31
 EUR thousand                               4                          December

                              Note   2023    2022    2023                2022



 Revenue                       7   15,522  16,025  61,141              54,558

 Cost of goods and services
 sold                          9   -9,612 -11,503 -37,074             -37,660
------------------------------------------------------------------------------
 GROSS PROFIT                       5,910   4,522  24,067              16,898



 Marketing expenses            9     -216    -169    -818                -703

 General administration
 expenses                      9   -1,391  -1,208  -5,278              -4,399

 Other income (+)/ expenses
 (-)                           10    -250    -347    -621                -476
------------------------------------------------------------------------------
 OPERATING PROFIT                   4,053   2,798  17,350              11,320



 Financial income              11      46       5     119                   8

 Financial expenses            11  -1,028    -363  -3,263                -682
------------------------------------------------------------------------------
 PROFIT BEFORE TAXES                3,071   2,440  14,206              10,646



 Income tax                    12     -95     -85  -1,362              -2,240



 NET PROFIT FOR THE PERIOD          2,976   2,355  12,844               8,406
------------------------------------------------------------------------------
 COMPREHENSIVE INCOME FOR THE
 PERIOD                             2,976   2,355  12,844               8,406



 Attributable profit to:
------------------------------------------------------------------------------
 Equity holders of A-shares         2,976   2,355  12,844               8,406

 Earnings per A share (in
 euros)                        13    0.15    0.12    0.64                0.42

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                     for the year ended 31
 EUR thousand                                                        December

                                           Note      2023              2022

 CASH FLOWS FROM OPERATING ACTIVITIES
----------------------------------------------------------------------------
   Operating profit                                17,350            11,320

     Adjustment for
     depreciation/amortisation           4,5,9,10   8,055             6,817

     Adjustment for revenues from
     connection fees                        10       -604              -544

     Other non-cash adjustments             6         -16                 0

     Profit (-)/loss (+) from sale of
     property, plant and equipment, and
     intangible assets                                -34               -32

   Change in current assets involved in operating
   activities                                         430            -2,841

   Change in liabilities involved in
   operating activities                              -667               309
----------------------------------------------------------------------------
 TOTAL CASH FLOWS FROM OPERATING ACTIVITIES        24,514            15,029



 CASH FLOWS USED IN INVESTING ACTIVITIES
----------------------------------------------------------------------------
   Acquisition of property, plant, and
   equipment, and
   intangible assets                              -28,885           -20,701

   Compensations received for
   construction of pipelines, incl.
   connection fees                                  2,535             1,593

   Proceeds from sale of property, plant and
   equipment, and intangible assets                    37                53

   Interest received                                  119                 9
----------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES    -26,194           -19,046



 CASH FLOWS USED IN FINANCING ACTIVITIES
----------------------------------------------------------------------------
   Interest paid and loan financing costs, incl.
   swap interests                                  -3,413              -616

   Lease payments                                  -1,233              -524

   Received loans                                  57,500                 0

   Repayment of loans                             -41,136            -3,636

   Dividends paid                           12     -6,515           -12,835

   Withheld income tax paid on dividends    12        -85              -165

   Income tax paid on dividends             12     -1,352            -2,116
----------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES      3,766           -19,892


----------------------------------------------------------------------------
 CHANGE IN CASH AND CASH EQUIVALENTS                2,086           -23,909


------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE
 BEGINNING OF THE PERIOD                    3      12,650            36,559


----------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE END
 OF THE PERIOD                              3      14,736            12,650

Additional information:

Taavi Gröön
Chief Financial Officer
AS Tallinna Vesi
(+372) 626 2200
[email protected]
(https://www.globenewswire.com/Tracker?data=rjLusj7mkAWJpqPCSInGCM09rG3zZvDvz_2r
O7F5Ho-gaEIqAUrU0y7QAfX2sMdgCqGjLgX-jcFb20ZKEf72jZ7QJVJe8VZMC2K7XhZe1DA=)