Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the second quarter and first six months of 2015

Teade

Segments (EURm)    Q2/15  Q2/14   yoy    6m/15  6m/14    yoy  
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Supermarkets        96.0   93.7   2.5%   182.3  176.1   3.5%  
Department stores   23.5   22.6   3.6%    45.3   43.2   4.7%  
Cars                16.0   16.1   -0.9%   28.3   28.6   -0.8% 
Footwear             3.1    3.4  -10.1%    5.3    6.8   -22.2%
Real Estate          0.8    0.8   -5.7%    1.6    1.6   -2.7% 
Total sales        139.3  136.7   1.9%   262.8  256.4   2.5%  
--------------------------------------------------------------
                                                              
Supermarkets         2.0    1.3   53.9%    0.8    0.3   216.0%
Department stores    1.2    1.2   -2.7%   -0.1    0.8  -117.6%
Cars                 0.6    0.7   -6.8%    0.6    0.2   182.4%
Footwear            -0.2   -0.1   48.2%   -0.9   -0.9   -0.4% 
Real Estate          2.2    2.3   -1.9%    4.4    4.4   -0.9% 
Total net profit     5.9    5.4   9.8%     4.8    4.8   -0.4% 
--------------------------------------------------------------

The unaudited consolidated sales revenue of the 2nd quarter of 2015 of Tallinna
Kaubamaja Group was 139.3 million euros, which exceeded the year-on-year sales
revenue by 1.9%. The sales revenue of the first half year of 2015 increased by
2.5% to 262.8 million euros compared to the first half year of 2014, when the
sales revenue was 256.4 million euros. The unaudited consolidated net profit of
the 2nd quarter of 2015 of the group was 5.9 million euros, which exceeded the
year-on-year profit by 9.8%. The net profit of the first six months of 2015 of
the group was 4.8 million euros. Compared to the same period in the previous
year, the profit has decreased by 0.4%. The pre-tax profit was 8.6 million
euros in the first half-year, which is a 41.4% increase in a year-on-year
comparison. The net profit was affected by a dividend payment, on which 3.9
million euros of income tax was paid in the 1st quarter of 2015. In the
previous year, 1.3 million euros of income tax was paid. 

In the 2nd quarter, the growth of the sales revenue of the group slightly
slowed down, but this was in line with the overall retail sales statistics
trend in Estonia. Selvers and the department stores, the largest retail sales
segments of the group, showed a stable growth in sales. The segment of car
trade was in a small decline compared to the same period of the previous year
resulting from a substantially lower percentage of fleet sales in Latvia. The
decrease in the sales revenue of the segment of footwear trade, which has
languished in a complicated market situation for a long time, has come to a
halt in the last months, demonstrating the rightness of brand and assortment
innovation previously undertaken. An increase in the gross margin has
contributed to the pre-tax profit of the group the most, which, in turn, was
achieved through a greater efficiency of the main process of supermarkets, both
by structuring the commercial activities, as well as with the support of IT
systems. On the other hand, aggressive seasonal discount campaigns have started
increasingly earlier on the highly competitive market of fashion items, and the
pressure on the margin exerted by these has carried over to the results of the
2nd quarter of the fashion items of the group. Alike to the entire Estonian
economy, increased labour costs affected the commercial profit of the group,
which was 7.7% in the 2nd quarter. This was a result of an increase in the
number of employees that joined at the opening of a store (3.6%), as well as an
increase in the average labour cost per employee (4.2%). 

Selver supermarkets

The consolidated sales revenue of the first half-year of 2015 of the business
segment of supermarkets was 182.3 million euros, having grown by 3.5% in a
year-on-year comparison. The consolidated sales revenue of the 2nd quarter was
96.0 million euros, indicating a 2.5% growth in a year-on-year comparison. The
sales revenues of Selver's subsidiaries Kulinaaria OÜ and SIA Selver remained
at the level of the previous year both in the 2nd quarter of the year and the
first half. 17.2 million purchases were made in Selvers in the first half of
2015, remaining at the level of the previous year. The consolidated pre-tax
profit of the segment of supermarkets was 3.1 million euros in the first half
of 2015 and the net profit 0.8 million euros, having grown by 2.4 and 0.6
million euros respectively compared to the previous year, whereof pre-tax
profit earned in Estonia formed 4.3 million euros and net profit 2.1 million
euros. The pre-tax profit and net profit were 2.0 million euros in the 2nd
quarter, indicating a growth of 0.7 million euros (increase of 53.9%), of which
profit earned in Estonia formed 2.6 million euros. The difference between the
net profit and the profit before income tax arises from the income tax paid on
dividends – in 2014, the income tax of dividends was 0.37 million euros; in
2015, it was 2.22 million euros. The pre-tax loss and net loss incurred in
Latvia in the first half-year were 1.2 million euros, of which the share of the
2nd quarter was 0.6 million euros. The loss remained at the level of the
previous year. 

The comparison basis of the figures of 2015 does not yet include Astri Selver
(opened in June 2014) in full, the addition of which has also influenced
increases in the turnover. As a counterbalance, the Torupilli Selver
hypermarket was closed for 2.5 weeks in June because of renovation works. It is
positive that customers have remained loyal to Selver in an increasingly
intensifying market situation, where new stores are constantly being opened.
This is confirmed by the fact that the number of purchases has remained at the
level of the previous year. The average purchase of customers has increased in
size. Successful marketing campaigns have supported an increased turnover in
the 2nd quarter of 2015. It has also been supported by prompt reactions to the
expectations of customers as well as activities concerning the assortment of
goods and management of categories. In Estonia, the greatest impact on the
profit earned has been the achievement of more efficiency regarding the main
process, which is the sale of goods. Stock has been managed more capably and,
as a result, the need for discounting and writing off goods has decreased. The
cost-effective level of the previous year has been maintained successfully
regarding the operating costs. 

Department stores

The sales revenue of the first six months of 2015 of the business segment of
department stores was 45.3 million euros, having increased by 4.7% in a
year-on-year comparison. The sales revenue of the 2nd quarter formed 23.5
million euros of this amount, which surpasses the revenue of the 2nd quarter of
2014 by 3.6%. The pre-tax profit of the department stores in the first half of
2015 was 1.0 million euros, which is 17.4% lower than the result of the
previous year. The pre-tax profit was 1.2 million euros in the 2nd quarter,
which was 2.7% lower in a year-on-year comparison. The sales result of the
department stores in the 2nd quarter was influenced by the weather in June,
which was colder than the average. This did not contribute to the sale of
seasonal items. Considering the locations of the department stores at city
centres, the record-low number of tourists had a negative impact on the sales
revenue of the 1st quarter. The sales revenue of the 2nd quarter of 2015 of OÜ
TKM Beauty Eesti, which operates the I.L.U. cosmetics stores, was 1.1 million
euros, having increased by 9.6% compared to the same period in 2014. The loss
was 0.1 million euros in the 2nd quarter of 2015, which is 0.2 million euros
less in a year-on-year comparison. The sales revenue of the first half-year of
2015 was 2.2 million euros, having grown by 9.3% in a year-on-year comparison.
The loss was 0.2 million euros in the first half of 2015, which is 0.2 million
euros less than the loss of the same period of 2014. The sales revenue was
affected positively, primarily by a more attractive location and assortment of
the I.L.U. store in the Ülemiste Centre, as well as changes made in the brand
portfolio, and successful marketing campaigns. 

Car Trade

The sales revenue of the first half-year of 2015 of the segment of car trade
was 28.3 million euros. The sales revenue was 0.8% lower compared to the
revenue of the same period of the previous year, including an increase of 8.4%
in the sales revenue of KIAs. The sales revenue of 16.0 million euros of the
2nd quarter was 0.9% lower than the figure of the same period of the previous
year, including an increase of 9.9% in the sales revenue of KIAs. Altogether
1,405 new vehicles were sold in the first half year, whereof 805 vehicles were
sold in the 2nd quarter. The net profit of the first half-year of 2015 of the
segment was 0.6 million euros, surpassing the profit of the same period of the
previous year by nearly three times. The pre-tax profit of the first half of
2015 of the segment was 1.1 million euros, surpassing the profit of the first
half of 2014 by 47.3%. The net profit of the 2nd quarter of 2015 was 0.6
million euros, 6.8% less compared to the same period of the previous year. A
lower percentage of fleet sales in Latvia in the first half year has hampered
the turnover, but favourably impacted the profit margin. 

Footwear trade

The sales revenue of the first half-year of 2015 of the segment of footwear
trade was 5.3 million euros, dropping by 22.2% in a year. The sales revenue was
3.1 million euros in the 2nd quarter, dropping by 10.1% compared to the same
period in 2014. The loss incurred in the first half year was 0.9 million euros,
which is a 0.4% decrease compared to the same period of the previous financial
year. The loss incurred in the 2nd quarter was 0.2 million euros, surpassing
the result of the 2nd quarter of 2014 by 0.1 million euros. Several
unfavourable coinciding circumstances were the reason for unsatisfactory sales
results. For the second year in a row, the weather conditions did not favour
the sale of winter boots. Furthermore, the competitive situation has
substantially intensified. The behaviour of consumers is changing as well,
which is increasingly need-based. However, it is positive to see the negative
trend of the segment of footwear trade coming to a halt in the 2nd quarter. At
the close of the quarter, we could even see an improvement in the sales
revenue, which has a positive effect on profitability as well. There is reason
to believe that the applied changes in the brand portfolio are beginning to
yield results in the highly intensive competitive situation. 

Real estate

The sales revenue of the first half of 2015 of the business segment of real
estate outside the group was 1.6 million euros, which is 2.7% less in a
year-on-year comparison. The sales revenue of the 2nd quarter outside the group
was 0.8 million euros, which is 5.7% less in a year-on-year comparison. The
pre-tax profit of the first half of 2015 of the segment of real estate was 4.4
million euros, which is 0.9% less compared to the same period of the previous
financial year. The pre-tax profit of the 2nd quarter was 2.2 million euros,
which is 1.9% less compared to the same period of the previous financial year.
The drop in the sales revenue and profit is due to the renovation works in the
department store of Tartu, which will result in changes to the composition of
the rental area and an addition of new brands to the shopping centre. The
general areas of the shopping centre as well as the exterior of the building
are also renovated. Construction works of the Viimsi Shopping and Entertainment
Centre are currently in the final stages. The Viimsi Centre is to be opened on
13 August. 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

                                              30.06.2015  31.12.2014
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ASSETS                                                              
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Current assets                                                      
Cash and cash equivalents                          7,926      24,626
Trade and other receivables                       13,799      17,938
Inventories                                       56,038      56,876
Total current assets                              77,763      99,440
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Non-current assets                                                  
Long-term trade and other receivables                339         338
Investments in associates                          1,866       1,778
Investment property                                3,035       3,035
Property, plant and equipment                    231,396     227,914
Intangible assets                                 10,185      10,402
Total non-current assets                         246,821     243,467
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TOTAL ASSETS                                     324,584     342,907
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LIABILITIES AND EQUITY                                              
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Current liabilities                                                 
Borrowings                                        11,645      20,405
Trade and other payables                          67,074      70,317
Total current liabilities                         78,719      90,722
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Non-current liabilities                                             
Borrowings                                        82,880      77,663
Provisions for other liabilities and charges         690         692
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Total non-current liabilities                     83,570      78,355
TOTAL LIABILITIES                                162,289     169,077
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Equity                                                              
Share capital                                     16,292      16,292
Statutory reserve capital                          2,603       2,603
Revaluation reserve                               66,430      67,159
Currency translation differences                    -255        -255
Retained earnings                                 77,225      88,031
TOTAL EQUITY                                     162,295     173,830
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TOTAL LIABILITIES AND EQUITY                     324,584     342,907
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

                                      II quarter  II quarter  6 months  6 months
                                         2015        2014       2015      2014  
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Revenue                                  139,342     136,709   262,800   256,360
Other operating income                       160         216       391       364
                                                                                
Cost of sales                           -104,613    -103,742  -197,648  -195,267
Other operating expenses                 -13,022     -12,758   -25,946   -25,818
Staff costs                              -12,737     -11,830   -24,453   -23,081
Depreciation, amortisation and            -2,852      -2,682    -5,701    -5 392
 impairment losses                                                              
Other expenses                              -101        -173      -330      -437
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Operating profit                           6,177       5,740     9,113     6,729
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Finance income                                 2           6        10        11
Finance costs                               -298        -402      -581      -735
Finance income on shares of                   41          51        88        97
 associates                                                                     
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Profit before tax                          5,922       5,395     8,630     6,102
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Income tax expense                             0           0    -3,873    -1,324
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NET PROFIT FOR THE FINANCIAL YEAR          5,922       5,395     4,757     4,778
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Other comprehensive income:                                                     
Items that may be subsequently                                                  
 reclassified to  profit or loss                                                
Currency translation differences               0           0         0         2
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Other comprehensive income for the             0           0         0         2
 financial year                                                                 
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TOTAL COMPREHENSIVE INCOME FOR THE         5,922       5,395     4,757     4,780
 FINANCIAL YEAR                                                                 
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         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000