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Pealkiri

AS Tallinna Vesi’s financial results for the 4th quarter of 2022

Teade

Tallinna  Vesi's sales increased by 2.4% in 2022, reaching EUR54.6 million. Growth
in sales resulted from the increased consumption of water services by commercial
customers.  In the 4(th) quarter of  2022, Tallinna Vesi earned 16 million euros
in sales.

In 2022, the sales from water services increased by 8.5% compared to 2021.

Sales  from water services provided to  commercial customers in the main service
area increased by 11.6% in the 4(th) quarter, reaching EUR4.32 million. ?Sales for
the  4th quarter  grew  due  to  the  increase in water consumption of capital's
hospitality  and leisure establishments. The increase in sales was also affected
by the change in the price for water services from 1 October due to the increase
in  electricity prices,"  said Aleksandr  Timofejev, Chief  Executive Officer of
Tallinna Vesi. Sales from water services provided to private customers increased
by 20.1% in the 4th quarter compared to a year ago, reaching EUR6.1 million.

The  Company's gross  profit for  the 4(th) quarter  was EUR4.52  million, down by
EUR0.28  million year-on-year. "The decrease in gross profit is linked to the cost
of goods and services sold, which increased by 13.6% compared to the same period
last  year," Timofejev explained.  The biggest impact  came from the increase in
the market price of electricity, which increased by 48.2% compared to the 4(th)
quarter  of last  year. The  Company's results  were also  affected by the sharp
increase  in the price of  chemicals. The total gross  profit for 2022 was EUR16.9
million, compared to 2021, the gross profit decreased by EUR3.68 million.

The  Company's operating profit in the 4(th) quarter was EUR2.8 million, which was
EUR0.62  million less compared to the same  period last year. The operating profit
for  the twelve months of 2022 was EUR11.32  million, showing a decrease of 39.7%
compared  to the previous year.  The decrease in operating  profit was driven by
both  the increased  electricity costs  and the  retaining of  the provision for
potential third-party claims at third-quarter levels of 2021.

The  Company's net profit was EUR2.36  million in the 4(th) quarter of 2022, which
is  EUR0.85 down from the same period in  2021. As for the twelve months of 2022,
the net profit was EUR8.41 million, compared to EUR16.2 million in 2021.

Compared  to the  4(th) quarter of  the previous  year, sales  from construction
services provided by the subsidiary Watercom decreased by 14.5% or EUR0.4 million.
The  total sales  from construction  services in  2022 amounted to EUR4.8 million,
decreasing  by 34.4% or EUR2.5 million compared to the same period of the previous
year.  The decrease in revenues is mainly linked to the decrease in construction
volumes in 2022 due to the uncertainty in the road construction market.

To  secure the sustainable  infrastructure and the  service continuity, Tallinna
Vesi  has increased investments in fixed  assets. Last year, investments made in
pipelines  amounted to EUR10.3  million and a  total of almost  19 km of water and
sewage pipes were reconstructed. Investments will continue in 2023 to ensure the
reliability of the assets.

The  investment plan for  the following years  is prepared based  on the Tallinn
Public  Water Supply and Sewerage Development  Plan for the next 12 years, which
will   be  completed  this  year  in  cooperation  with  the  City  of  Tallinn.
"Investments  made today and in the future  will continue to secure high quality
drinking  water  for  the  people  of  Tallinn  and  help  to  keep  the natural
environment clean", Timofejev said.

Tallinna  Vesi is gradually switching to remote water meters. Customers who have
a smart water meter installed, will no longer have to report their monthly water
meter  readings. The first thousand customers  already received new smart meters
at  the end  of last  year, and  the installation  will continue this year at an
increased pace. "The main advantage of smart meters is the speed and accuracy of
data  transmission,  as  well  as  security  and  reliability.  In  addition  to
consumption  data,  the  smart  meter  also  communicates  information about any
failures  and possible leakages,"  explained Timofejev. By  the end of 2026, all
existing  water meters  in Tallinna  Vesi's service  area will  be replaced with
smart meters.

In  addition to  investments in  water and  wastewater networks, the Company has
started  to  reduce  its  environmental  impact  by  continuing to map its CO(2)
footprint.  In order  to reduce  the footprint,  100% of the electricity used at
Tallinna  Vesi's  facilities  and  in  treatment  processes is now produced from
renewable  sources. At the end of last year, Tallinna Vesi signed a contract for
the  construction of a combined heat and power plant on the Wastewater Treatment
Plant  at  Paljassaare,  which  will  use  biogas  from the wastewater treatment
process  to reduce  heating and  electricity costs.  Biogas produced from sewage
sludge  covers  up  to  70% of  the  plant's  current average annual electricity
demand. The cogeneration plant will be operational by the end of this year.

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


KEY FINANCIAL INDICATORS

 EUR million,      4th quarter                     12 months
 except      key                   Change                          Change
 ratios          2022  2021  2020  2022/ 2021    2022  2021  2020  2022/ 2021
-------------------------------------------------------------------------------
 Sales           16.03 14.93 13.17 7.3%          54.56 53.29 51.72 2.4%

 Gross profit    4.52  4.80  5.64  -5.9%         16.90 20.58 22.23 -17.9%

 Gross    profit
 margin %        28.21 32.17 42.78 -12.3%        30.97 38.61 42.97 -19.8%

 Operating
 profit   before
 depreciation
 and
 amortisation    4.65  5.10  7.41  -8.9%         18.14 25.30 28.07 -28.3%

 Operating
 profit   before
 depreciation
 and
 amortisation
 margin %        29.00 34.17 56.23 -15.1%        33.24 47.47 54.27 -30.0%

 Operating
 profit          2.80  3.42  5.76  -18.2%        11.32 18.78 21.78 -39.7%

 Operating
 profit - main
 business        2.50  2.91  5.51  -13.9%        10.31 17.52 20.88 -41.2%

 Operating
 profit margin % 17.45 22.89 43.71 -23.8%        20.75 35.23 42.12 -41.1%

 Profit   before
 taxes           2.44  3.31  5.64  -26.3%        10.65 18.40 21.34 -42.1%

 Profit   before
 taxes margin %  15.24 22.19 42.85 -31.3%        19.52 34.52 41.27 -43.5%

 Net profit      2.36  3.21  5.39  -26.5%        8.41  16.17 16.73 -48.0%

 Net      profit
 margin %        14.71 21.47 40.91 -31.5%        15.41 30.33 32.35 -49.2%

 ROA %           0.94  1.26  2.12  -25.6%        3.30  6.32  6.45  -47.8%

 Debt  to  total
 capital
 employed %      56.26 54.94 56.09 2.4%          56.26 54.94 56.09 2.4%

 ROE %           2.15  2.82  4.92  -23.8%        7.43  14.20 14.69 -47.7%

 Current ratio   1.24  2.83  3.85  -56.2%        1.24  2.83  3.85  -56.2%

 Quick ratio     1.17  2.79  3.80  -58.1%        1.17  2.79  3.80  -58.1%

 Investments
 into      fixed
 assets          9.47  5.43  5.65  74.5%         25.13 15.38 19.42 63.4%

 Payout ratio %  -     80.42 77.70 0.0%          -     80.42 77.70 0.0%
-------------------------------------------------------------------------------

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


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                            for  the year ended
 EUR thousand                       Quarter 4                 31 December

                             Note 2022    2021      2022    2021



 Revenue                     7    16,025  14,931    54,558  53,294

 Cost    of    goods   and
 services sold               9    -11,503 -10,127   -37,660 -32,715
-------------------------------------------------------------------------------
 GROSS PROFIT                     4,522   4,804     16,898  20,579



 Marketing expenses          9    -169    -130      -703    -462

 General    administration
 expenses                    9    -1,208  -1,047    -4,399  -4,438

 Other     income     (+)/
 expenses (-)                10   -347    -209      -476    3,099
-------------------------------------------------------------------------------
 OPERATING PROFIT                 2,798   3,418     11,320  18,778



 Financial income            11   5       1         8       8

 Financial expenses          11   -363    -104      -682    -387
-------------------------------------------------------------------------------
 PROFIT BEFORE TAXES              2,440   3,315     10,646  18,399



 Income tax                  12   -85     -108      -2,240  -2,234



 NET PROFIT FOR THE PERIOD        2,355   3,207     8,406   16,165
-------------------------------------------------------------------------------
 COMPREHENSIVE   INCOME  FOR  THE
 PERIOD                           2,355   3,207     8,406   16,165



 Attributable profit to:
-------------------------------------------------------------------------------
 Equity  holders of
 A-shares                         2,355   3,207     8,406   16,165



 Earnings  per A share (in
 euros)                      13   0,12    0,16      0,42    0,81


CONSOLIDATED STATEMENT OF CASH FLOWS

                                                               for   the   year
                                                               ended        31
 EUR thousand                                                    December

                                       Note       2022         2021

 CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------------------------------------------------
   Operating profit                               11,320       18,778

     Adjustment                    for
     depreciation/amortisation         4,5,9,10   6,817        6,520

     Adjustment   for   revenues  from
     connection fees                   10         -544         -510

     Other non-cash adjustments        6          0            -3,610

     Profit  (-) / loss  (+) from sale
     of property, plant and equipment,
     and intangible assets                        -32          -29

   Change   in   current   assets  involved  in
   operating activities                           -2,841       380

   Change  in liabilities  involved in
   operating activities                           309          938
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS FROM OPERATING ACTIVITIES       15,029       22,467



 CASH    FLOWS   USED   IN   INVESTING
 ACTIVITIES
-------------------------------------------------------------------------------
   Acquisition of property, plant, and
   equipment, and
   intangible assets                              -20,701      -13,734

   Compensations      received     for
   construction  of  pipelines,  incl.
   connection fees                                1,593        2,892

   Proceeds  from sale  of property,  plant and
   equipment, and intangible assets               53           29

   Interest received                              9            11
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES    -19,046      -10,802



 CASH    FLOWS   USED   IN   FINANCING
 ACTIVITIES
-------------------------------------------------------------------------------
   Interest  paid  and  loan  financing  costs,
   incl. swap interests                           -616         -460

   Lease payments                                 -524         -408

   Repayment of loans                             -3,636       -3,636

   Dividends paid                      12         -12,835      -12,842

   Withheld   income   tax   paid   on
   dividends                           12         -165         -158

   Income tax paid on dividends        12         -2,116       -2,116
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES    -19,892      -19,620


-------------------------------------------------------------------------------
 CHANGE IN CASH AND CASH EQUIVALENTS              -23,909      -7,955


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE
 BEGINNING OF THE PERIOD               3          36,559       44,514


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


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 EUR thousand                                                   as of 31 December

 ASSETS                                        Note   2022    2021



 CURRENT ASSETS
-------------------------------------------------------------------------------
   Cash and cash equivalents                   3      12,650  36,559

   Trade  receivables,  accrued  income  and
   prepaid expenses                                   8,989   6,637

   Inventories                                        1,197   702
-------------------------------------------------------------------------------
 TOTAL CURRENT ASSETS                                 22,836  43,898



 NON-CURRENT ASSETS
-------------------------------------------------------------------------------
   Property, plant, and equipment              4      229,869 211,546

   Intangible assets                           5      688     729
-------------------------------------------------------------------------------
 TOTAL NON-CURRENT ASSETS                             230,557 212,275
-------------------------------------------------------------------------------


 TOTAL ASSETS                                         253,393 256,173



 LIABILITIES AND EQUITY



 CURRENT LIABILITIES
-------------------------------------------------------------------------------
   Current  portion of long-term lease
   liabilities                                        883     421

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

   Trade and other payables                           10,225  7,835

   Prepayments                                        3,749   3,604
-------------------------------------------------------------------------------
 TOTAL CURRENT LIABILITIES                            18,487  15,490



 NON-CURRENT LIABILITIES
-------------------------------------------------------------------------------
   Deferred   income  from  connection
   fees                                               39,150  37,241

   Leases                                             1,607   1,236

   Loans                                              76,708  80,336

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

   Deferred         tax
   liability                                          496     372

   Other payables                                     101     60
-------------------------------------------------------------------------------
 TOTAL NON-CURRENT LIABILITIES                        124,080 125,263
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                    142,567 140,753



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

   Share premium                                      24,734  24,734

   Statutory legal reserve                            1,278   1,278

   Retained earnings                                  72,814  77,408
-------------------------------------------------------------------------------
 TOTAL EQUITY                                         110,826 115,420
-------------------------------------------------------------------------------


 TOTAL LIABILITIES AND EQUITY                         253,393 256,173


Maria Tiidus
Head of Communications
AS Tallinna Vesi
Ph: 626 2271
E-mail: [email protected] (mailto:[email protected])