Market announcement

Title

AS Tallinna Vesi´s financial results for the 4th quarter of 2021

Message

The  sales  revenue  of  the  Tallinna  Vesi increased by 3.1% in 2021, reaching
EUR53.29  million. The growth in sales revenue resulted from the increase in sales
of  construction services. Tallinna  Vesi earned EUR14.93  million on sales in the
4th quarter of 2021.

In  2021, revenue from the sale of water services remained at a level similar to
2020. The  revenue  from  construction  services  increased  over the year, as a
number of large pipe and road construction projects were carried out.

The  sales from water services sold to  commercial customers in the main service
area  increased by  1.5% in the  4th quarter, reaching  EUR3.9 million.  "The main
contributor  to the growth of sales revenue  in the 4th quarter was the increase
in  water consumption  in Tallinn's  hospitality and  entertainment businesses,"
Aleksandr Timofejev, Chief Executive Officer of AS Tallinna Vesi said. The sales
revenue  from services sold to private customers of Tallinna Vesi was EUR5 million
in the 4th quarter, showing a decline of 1.8% compared to the year before.

The Company's gross profit for the 4th quarter of 2021 was EUR4.8 million, showing
a  decrease of  EUR0.8 million  over the  year. "The  decrease in gross profit was
related to higher cost of goods and services that were 34.4% more expensive than
in  the  comparative  period  of  the  year before," Timofejev said. The biggest
impact  came  from  the  increase  in  the  market price for electricity and the
electricity  costs, increasing by 139.1% due to that. The Company's gross profit
for  2021 amounted to EUR20.6 million, showing a decrease of EUR1.6 million compared
to 2020.

The Company's operating profit for the 4th quarter of the year was EUR3.4 million,
showing  a decrease  of EUR2.3  million compared  to the  same period in 2020. The
operating  profit for 2021 amounted to EUR18.8  million, being 13.8% lower than in
the  same period  of 2020. In  addition to  the increased electricity costs, the
decrease  in commercial profit was attributed  to the retaining of the provision
for potential third-party claims at the third quarter end level.

The Company's net profit for the 4th quarter of 2021 was EUR3.2 million, showing a
decrease of EUR2.2 million compared to the same period of 2020. The net profit for
2021 was EUR16.2 million, whereas in 2020 the same figure stood at EUR16.7 million.

The  sale  of  construction  services  provided  by the subsidiary Watercom grew
110.8% or  1.4 million euros in  the 4th quarter compared  to the previous year.
The  sales  from  construction  services  for  2021 totalled  7.3 million euros,
growing  40.3% or 2.1 million euros compared to the same period the year before.
The  growth in revenue is mainly attributable  to the pipe and road construction
projects won in the procurements that were carried out in 2020 and 2021.

Tallinna  Vesi has increased  investments in fixed  assets to secure sustainable
infrastructure  and continuity  of its  service. Investments  in pipes increased
significantly  already in 2021, when a total of nearly 16 km of water and sewage
pipes  were reconstructed. The volume of investments in fixed assets planned for
2022 amounts to EUR25 million.

Over  the next years, the investments will  be planned based on the public water
supply  and sewerage development plan for the  next 12 years, to be completed in
cooperation  with the  City of  Tallinn this  year, and  the pipe reconstruction
program  prepared  in  cooperation  with  the Tallinn Technical University. "The
investments  made and forthcoming  will help us  to secure high-quality drinking
water for the people of Tallinn, but also keep the natural environment around us
cleaner," Timofejev said.

To  provide additional  value to  customers through  digitalization, the Company
started  installing  remote  water  meters  in  2021. ?With  smart meters, water
metering  becomes more accurate  and there is  no longer need  for reporting the
water  meter readings.  In the  future, we  will be  able to  proactively inform
customers  about water leaks. Also, remote water meters will allow to notify our
customers  when water leaks occur in  their buildings," Timofejev described. The
plan is to cover the entire service area with remote water meters by 2026.

In  addition to  investments in  the water  and sewage  network, the Company has
started  to reduce its environmental impact, by mapping its CO(2) footprint last
year.  To  reduce  that  footprint,  100% of  the energy used in Tallinna Vesi's
facilities  and in the treatment process  is now generated from renewable energy
resources. A cogeneration unit shall be set up in the wastewater treatment plant
in Paljassaare, to allow the use of biogas from the wastewater treatment process
to  generate  30% of  electricity  and  100% of  heat  energy  needed to run the
treatment plant.

To  finance these investments, the Company  plans to use additional loan capital
and continue with the established dividend policy.


Main financial indicators

 EUR million,         4th quarter                      12 months
 except key                               Change                         Change
 ratios           2021  2020  2019    2021/ 2020 2021  2020  2019    2021/ 2020
-------------------------------------------------------------------------------
 Sales           14.93 13.17 16.12         13.4% 53.29 51.72 63.42         3.0%

 Gross profit     4.80  5.64  7.98        -14.7% 20.58 22.23 33.95        -7.4%

 Gross    profit
 margin %        32.17 42.78 49.49        -24.8% 38.61 42.97 53.53       -10.1%

 Operating
 profit before
 depreciation
 and
 amortisation     5.10  7.41 12.72        -31.1% 25.30 28.07 38.18        -9.9%

 Operating
 profit before
 depreciation
 and
 amortisation
 margin %        34.17 56.23 78.86        -39.2% 47.47 54.27 60.21       -12.5%

 Operating
 profit           3.42  5.76 11.06        -40.6% 18.78 21.78 32.08       -13.8%

 Operating
 profit - main
 business         2.91  5.51 10.82        -47.2% 17.52 20.88 31.19       -16.1%

 Operating
 profit margin % 22.89 43.71 68.61        -47.6% 35.23 42.12 50.57       -16.3%

 Profit   before
 taxes            3.31  5.64 10.95        -41.3% 18.40 21.34 31.30       -13.8%

 Profit   before
 taxes margin %  22.19 42.85 67.93        -48.2% 34.52 41.27 49.36       -16.3%

 Net profit       3.21  5.39 10.95        -40.5% 16.17 16.73 27.76        -3.4%

 Net      profit
 margin %        21.47 40.91 67.93        -47.5% 30.33 32.35 43.77        -6.2%

 ROA %            1.26  2.12  4.21        -40.5%  6.32  6.45 10.83        -2.1%

 Debt  to  total
 capital
 employed %      54.94 56.09 56.05         -2.1% 54.94 56.09 56.05        -2.1%

 ROE %            2.82  4.92  9.95        -42.7% 14.20 14.69 25.43        -3.3%

 Current ratio    2.83  3.85  5.48         42.3%  2.83  3.85  5.48       -26.5%

 Quick ratio      2.79  3.80  5.44         43.2%  2.79  3.80  5.44       -26.6%

 Investments
 into      fixed
 assets           5.43  5.65  5.33         -3.9% 15.38 19.42 16.09       -20.8%

 Payout ratio %     na 77.70 72.05                  na 77.70 72.05
-------------------------------------------------------------------------------

Gross profit margin - Gross 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
Operating profit margin - Operating profit / 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


 STATEMENT OF COMPREHENSIVE
 INCOME                           4th quarter 4th quarter   12 months 12 months

 EUR thousand                              2021        2020        2021      2020



 Revenue                               14,931      13,172      53,294    51,717

 Cost of goods and services sold      -10,127      -7,537     -32,715   -29,491
-------------------------------------------------------------------------------
 GROSS PROFIT                           4,804       5,635      20,579    22,226



 Marketing expenses                      -130        -113        -462      -433

 General administration expenses       -1,047        -945      -4,438    -4,576

 Other income (+)/ expenses (-)          -209       1,180       3,099     4,567
-------------------------------------------------------------------------------
 OPERATING PROFIT                       3,418       5,757      18,778    21,784



 Financial income                           1           3           8        31

 Financial expenses                      -104        -116        -387      -473

 PROFIT BEFORE TAXES                    3,315       5,644      18,399    21,342



 Income tax on dividends                 -108        -255      -2,234    -4,610



 NET PROFIT FOR THE PERIOD              3,207       5,389      16,165    16,732
-------------------------------------------------------------------------------
 COMPREHENSIVE INCOME FOR THE
 PERIOD                                 3,207       5,389      16,165    16,732



 Attributable profit to:
-------------------------------------------------------------------------------
 Equity holders of A-shares             3,207       5,388      16,165    16,731

 B-share holder                          0.00        0.60        0.00      0.60



 Earnings per A share (in euros)         0.16        0.27        0.81      0.84

 Earnings per B share (in euros)            0         600         600       600


 STATEMENT OF FINANCIAL POSITION

 EUR thousand                                             31/12/2021 31/12/2020



 ASSETS

 CURRENT ASSETS
-----------------------------------------------------------------------------
 Cash and cash equivalents                                  36,559     44,514

 Trade receivables, accrued income and prepaid expenses      6,637      7,019

 Inventories                                                   702        701
-----------------------------------------------------------------------------
 TOTAL CURRENT ASSETS                                       43,898     52,234



 NON-CURRENT ASSETS
-----------------------------------------------------------------------------
 Property, plant and equipment                             211,546    202,802

 Intangible assets                                             729        629
-----------------------------------------------------------------------------
 TOTAL NON-CURRENT ASSETS                                  212,275    203,431
-----------------------------------------------------------------------------
 TOTAL ASSETS                                              256,173    255,665



 LIABILITIES AND EQUITY

 CURRENT LIABILITIES
-----------------------------------------------------------------------------
 Current portion of long-term lease liabilities                421        393

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

 Trade and other payables                                    7,835      7,085

 Prepayments                                                 3,604      2,445
-----------------------------------------------------------------------------
 TOTAL CURRENT LIABILITIES                                  15,490     13,553



 NON-CURRENT LIABILITIES
-----------------------------------------------------------------------------
 Deferred income from connection fees                       37,241     34,564

 Leases                                                      1,236      1,400

 Loans                                                      80,336     83,978

 Provision for possible third party claims                   6,018      9,628

 Deferred tax liability                                        372        255

 Other payables                                                 60         32
-----------------------------------------------------------------------------
 TOTAL NON-CURRENT LIABILITIES                             125,263    129,857
-----------------------------------------------------------------------------
 TOTAL LIABILITIES                                         140,753    143,410



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

 Share premium                                              24,734     24,734

 Statutory legal reserve                                     1,278      1,278

 Retained earnings                                          77,408     74,243
-----------------------------------------------------------------------------
 TOTAL EQUITY                                              115,420    112,255
-----------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                              256,173    255,665


 CASH FLOWS STATEMENT                                       12 months 12 months

 EUR thousand                                                      2021      2020



 CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------------------------------------------------
 Operating profit                                              18,778    21,784

 Adjustment for depreciation/amortisation                       6,520     6,283

 Adjustment for revenues from connection fees                    -510      -542

 Other non-cash adjustments                                    -3,610    -4,814

 Profit/loss(+) from sale and write off of property, plant
 and equipment, and intangible assets                             -29       -14

 Change in current assets involved in operating activities        380       140

 Change in liabilities involved in operating activities           938      -215
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS FROM OPERATING ACTIVITIES                    22,467    22,622



 CASH FLOWS USED IN INVESTING ACTIVITIES
-------------------------------------------------------------------------------
 Acquisition of property, plant and equipment, and
 intangible assets                                            -13,734   -15,682

 Compensations received for construction of pipelines, incl
 connection fees                                                2,892     1,998

 Proceeds from sales of property, plant and equipment and
 intangible assets                                                 29        32

 Interest received                                                 11        35
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES                -10,802   -13,617



 CASH FLOWS USE D IN FINANCING ACTIVITIES
-------------------------------------------------------------------------------
 Interest paid and loan financing costs, incl swap
 interests                                                       -460      -719

 Lease payments                                                  -408      -555

 Repayment of loans                                            -3,636    -3,636

 Dividends paid                                               -12,842   -19,888

 Withheld income tax paid on dividends                           -158      -113

 Income tax paid on dividends                                  -2,116    -4,355
-------------------------------------------------------------------------------
 TOTAL CASH FLOW USED IN FINANCING ACTIVITIES                 -19,620   -29,266


-------------------------------------------------------------------------------
 CHANGE IN CASH AND CASH EQUIVALENTS                           -7,955   -20,261


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD      44,514    64,775


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD            36,559    44,514


Aleksandr Timofejev

CEO

Member of the Management Board

+372 62 62 200

[email protected] (mailto:[email protected])


Kristi Ojakäär

CFO

Member of the Management Board

+372 62 62 200

[email protected] (mailto:[email protected])