Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the second quarter and first six months of 2016

Teade

Segments (EURm)          Q2/16  Q2/15    yoy    6m/16  6m/15   yoy  
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Supermarkets              99.0   96.0   3.1%    191.8  182.3   5.2% 
Department stores         23.8   23.5   1.5%     46.0   45.3   1.6% 
Cars                      23.2   16.0   44.8%    41.4   28.3   46.1%
Footwear                   3.4    3.1   9.2%      5.8    5.3   9.0% 
Real Estate                1.2    0.8   57.8%     2.4    1.6   52.8%
Total sales              150.5  139.3   8.0%    287.4  262.8   9.4% 
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Supermarkets               3.5    2.0   75.9%     6.0    3.1   96.9%
Department stores          1.2    1.2   3.7%      1.1    1.0   8.7% 
Cars                       1.0    0.6   50.4%     1.4    1.1   29.1%
Footwear                   0.0   -0.2  -111.8%   -0.5   -0.9  -42.7%
Real Estate                2.8    2.2   26.8%     5.6    4.4   28.2%
Total profit before tax    8.6    5.9   45.3%    13.6    8.6   57.7%
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The unaudited consolidated sales revenue of the 2nd quarter of 2016 of Tallinna
Kaubamaja Group was 150.5 million euros, which exceeded the year-on-year sales
revenue by 8.0%. The sales revenue of the first half year of 2016 increased by
9.4% to 287.4 million euros compared to the first half year of 2015, when the
sales revenue was 262.8 million euros. The unaudited consolidated net profit of
the 2nd quarter of 2016 of the Group was 8.6 million euros, which exceeded the
year-on-year profit by 45.3%. The net profit of the first six months of 2016 of
the Group was 8.4 million euros. Compared to the same period in the previous
year, the profit has increased by 76.4%. The pre-tax profit was 13.6 million
euros in the first half-year, which is a 57.7% increase in a year-on-year
comparison. The net profit was affected by a dividend payment, on which 5.2
million euros of income tax was paid in the 1st quarter of 2016. In the
previous year, 3.9 million euros of income tax was paid. 

In the 2nd quarter, the 8% increase in the sales revenue of the Group exceeded
the overall trend in Estonian retail sales statistics. All in all, the sales
revenue and the financial results of all segments of the Group improved in the
quarter. The largest growth was achieved by the segment of car trade where new
models by KIA received a warm welcome and several fleet sale deals were won.
The largest retail sales segments of the Group, i.e. Selvers and department
stores, showed a stable increase in sales and an improvement in profits. The
footwear trade segment, which operates in a demanding market situation,
continued to implement the chosen strategy. The sales revenue of the footwear
segment grew and the loss decreased. The continued optimisation of trade
processes and thought-out marketing activities have helped increase the gross
profitability. The addition of new stores has increased the number of
employees. The wage costs of the new employees as well as increases in the wage
level to further increase the Group’s position on the labour market have raised
the overall cost of wages. This has helped to maintain professionalism and
trained personnel, which is essential to ensure a good level of service,
thereby allowing the Group to better service its customers. At the same time,
the earnings before interest, taxes, depreciation, and amortisation (EBITDA)
per employee and every labour input euro have grown, giving proof of the
efficiency of the Group’s labour force and an increase in the sustainability of
earning profits. 

Selver supermarkets

The consolidated sales revenue of the first half-year of 2016 of the business
segment of supermarkets was 191.8 million euros, having grown by 5.2% in a
year-on-year comparison. The consolidated sales revenue of the 2nd quarter was
99.0 million euros, indicating a 3.1% growth in a year-on-year comparison. The
consolidated pre-tax profit of the segment of supermarkets was 6.0 million
euros in the 1st half-year of 2016 and the net profit 3.4 million euros, having
grown by 3.0 and 2.6 million euros respectively compared to the previous year,
whereof the pre-tax profit earned in Estonia formed 7.0 million euros and the
net profit 4.4 million euros. The difference between the net profit and the
profit before income tax arises from the income tax paid on dividends – in
2016, the income tax on dividends surpassed the figure of the previous year by
0.39 million euros. The pre-tax profit and net profit were 3.5 million euros in
the 2nd quarter, indicating a growth of 1.5 million euros, of which the profit
earned in Estonia formed 4.0 million euros. The loss incurred in Latvia in the
first half-year was 1.0 million euros, of which the share of the 2nd quarter
was 0.5 million euros. In a year-on-year comparison, the loss in the first
half-year decreased by 0.2 million euros. The increase in revenue from sales of
goods in the 2nd quarter was supported by successful campaign and holiday
sales. Consumers’ increased confidence, increases in the real income of people,
and activities to offer a better product mix for customers have raised the
price of an average shopping basket. The comparison basis of the 2nd quarter of
2016 does not include the Viimsi Selver (the seventh hypermarket of the chain
was opened in August 2015) or the online store of Selver (e-Selver), which was
opened at the end of 2015. The Kärberi Selver in Lasnamäe, which was opened in
April, has a positive effect on the growth of sales revenue. As a
counterbalance, the Tondi Selver, a hypermarket, was closed for a month due to
renovation works. The Selvers that have been opened in the last five years,
which are still in a phase of higher-than-average growth, are driving the
increase in the sales revenue as far as Selvers are concerned, winning over new
customers in a tight competitive situation. The formation of the profit earned
in Estonia has primarily been affected by increases in the gross profit earned
from the sale of goods, which has been accomplished chiefly by changes in the
operating principles of the sale of goods and through optimising the
procurement process of goods. With regard to operating expenses, the Group has
managed to improve the level of cost effectiveness of the previous year.
Tallinn Administrative Court satisfied the claim for refund of sales tax from
the Tallinn City Enterprise Department regarding the sales tax collected on
excise goods. This non-recurrent income in the amount of 0.4 million is
reflected in the results of the 2nd quarter. The loss in Latvia decreased owing
to the termination of a lease contract of one store. 

Department stores

The sales revenue of the first six months of 2016 of the business segment of
department stores was 46.0 million euros, having increased by 1.6% in a
year-over-year comparison. The sales revenue of the 2nd quarter formed 23.8
million euros of this amount, which is 1.5% higher than the revenue of the 2nd
quarter of 2015. The pre-tax profit of the department stores in the first
half-year of 2016 was 1.1 million euros, which is 8.7% higher than the result
of the previous year. The pre-tax profit was 1.2 million euros in the 2nd
quarter, which was a 3.7% increase in a year-on-year comparison. The sales
revenue of the first half-year of the department stores was affected by
renovation works in the dedicated beauty and women’s departments of the Tartu
store. The sales revenue of the 2nd quarter of the department stores was
negatively affected by increased competition in central Tartu in the segment of
groceries and fashion items. At the same time, well-planned campaigns and
favourable weather, which helped to boost the sale of thicker clothes, had a
positive effect on the department stores’ results of the first half-year. In
addition, the changes in the brand portfolio and the interior decoration have
been well accepted. The number of products available in Kaubamaja’s online
store, which was opened at the beginning of March, was as high as 28,000 by the
end of the 2nd quarter. The sales revenue of the 2nd quarter of 2016 of OÜ TKM
Beauty Eesti, which operates the I.L.U. cosmetics stores, was 1.1 million
euros, having decreased by 2.2% compared to the same period in 2015. The loss
was 0.1 million euros in the 2nd quarter, which remained at the same level
compared to the same period in 2015. The sales revenue of the first half-year
of 2016 was 2.3 million euros, having grown by 0.4% in a year-on-year
comparison. The loss was 0.2 million euros in the first half-year of 2016,
which also overlapped compared to the results of the same period in 2015. 

Car Trade

The sales revenue of the first half-year of 2016 of the segment of car trade
was 41.4 million euros. The sales revenue was 46.1% higher in a year-on-year
comparison, incl. an increase of 39.7% in the sales revenue of KIAs. The sales
revenue of 23.2 million euros in the 2nd quarter exceeded the figure of the
previous year by 44.8%. The sales revenue of KIAs increased by 37.6%. The net
profit of the first half-year of 2016 of the segment was 1.0 million euros,
surpassing the profit of the same period of the previous year by 62.4%. The
pre-tax profit of the first half-year of 2016 of the segment was 1.4 million
euros, surpassing the profit of the first half-year of 2015 by 29.1%. The net
profit of the 2nd quarter of 2016 was 1.0 million euros, surpassing the profit
of the same period of the previous year by 50.4%. In the first half-year, all
car dealers that are part of the Group have done well. The biggest contribution
to the sales revenue was by Forum Auto SIA through the sale of KIAs. Forum Auto
SIA won many large public procurements in both the 1st and the 2nd quarter. The
sales performance of the company that sells Opels in Estonia was also solid in
the car trade segment owing to their outstanding marketing campaign. The strong
growth numbers are primarily supported by the modest sales volume of the
previous year but also by a favourable market growth – the overall market of
passenger cars and consumer vehicles in the Baltics grew by 19% in the first
half-year, incl. by 12% in Estonia. The sales market of KIAs has also grown at
the same pace in Estonia (+12.6%) thanks to the expectedly warm welcome of the
new KIA Sportage SUV by customers. Other KIA models like the compact car KIA
Cee’d have also met the expected sales targets. 

Footwear trade

The sales revenue of the first half-year of 2016 of the segment of footwear
trade was 5.8 million euros, increasing by 9.0% year-on-year. The sales revenue
of the 2nd quarter was 3.4 million euros, which is a 9.2% increase in a
year-on-year comparison. The profit resulting from the 2nd quarter was 0.02
million euros. The loss incurred in the same period of the previous financial
year was 0.2 million euros. The loss incurred in the first half-year of 2016
was 0.5 million euros, which is a 42.7% decrease compared to the same period of
the previous financial year. The decline in loss is a result of an improved
procurement process and, above all, a result of a better positioning of the
goods of the SHU concept to better fit the expectations of customers.
Improvements in the age structure of the stocks have allowed the segment to
activate discounts at a later stage and in a more moderate fashion than before. 

Real estate

The sales revenue of the first half of 2016 of the business segment of real
estate outside the Group was 2.4 million euros, which is 52.8% higher in a
year-on-year comparison. The sales revenue of the 2nd quarter outside the Group
was 1.2 million euros, which is 57.8% more in a year-on-year comparison. The
pre-tax profit of the first half of 2016 of the segment of real estate was 5.6
million euros, which is 28.2% more compared to the same period of the previous
financial year. The pre-tax profit of the 2nd quarter was 2.8 million euros,
which exceeded the results of the same period of the previous financial year by
26.8%. The increase in the sales revenue was supported by the 14,000-square
metre Viimsi Center opened in August 2015 and by renting the building in
Rezekne Latvia to an external party. In March 2016, the renovation works in the
department store of Tartu were completed. In the course of an exhaustive
renovation project, entire shopping environment was modernised. 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

                                              30.06.2016  31.12.2015
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ASSETS                                                              
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Current assets                                                      
Cash and cash equivalents                         13,643      13,911
Trade and other receivables                       11,351      20,191
Inventories                                       59,553      61,110
Total current assets                              84,547      95,212
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Non-current assets                                                  
Long-term trade and other receivables                293         293
Investments in associates                          1,875       1,778
Investment property                               46,956      44,963
Property, plant and equipment                    195,187     196,691
Intangible assets                                  8,782       9,043
Total non-current assets                         253,093     252,768
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TOTAL ASSETS                                     337,640     347,980
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LIABILITIES AND EQUITY                                              
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Current liabilities                                                 
Borrowings                                        16,660      33,377
Trade and other payables                          68,948      77,066
Total current liabilities                         85,608     110,443
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Non-current liabilities                                             
Borrowings                                        84,710      57,426
Provisions for other liabilities and charges         502         502
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Total non-current liabilities                     85,212      57,928
TOTAL LIABILITIES                                170,820     168,371
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Equity                                                              
Share capital                                     16,292      16,292
Statutory reserve capital                          2,603       2,603
Revaluation reserve                               64,972      65,701
Currency translation differences                    -255        -255
Retained earnings                                 83,208      95,268
TOTAL EQUITY                                     166,820     179,609
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TOTAL LIABILITIES AND EQUITY                     337,640     347,980
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

                                       II quarter     II     6 months   6 months
                                          2016      quarter    2016       2015  
                                                     2015                       
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Revenue                                   150,534   139,342   287,384    262,800
Other operating income                        684       160       951        391
                                                                                
Cost of sales                            -112,648  -104,613  -215,496   -197,648
Other operating expenses                  -12,807   -13,022   -25,566    -25,946
Staff costs                               -13,964   -12,737   -27,262    -24,453
Depreciation, amortisation and             -2,875    -2,852    -5,681     -5,701
 impairment losses                                                              
Other expenses                               -148      -101      -389       -330
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Operating profit                            8,776     6,177    13,941      9,113
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Finance income                                  0         2         2         10
Finance costs                                -223      -298      -431       -581
Finance income on shares of                    51        41        97         88
 associates                                                                     
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Profit before tax                           8,604     5,922    13,609      8,630
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Income tax expense                              0         0    -5,219     -3,873
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NET PROFIT FOR THE FINANCIAL YEAR           8,604     5,922     8,390      4,757
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Other comprehensive income:                                                     
Items that may be subsequently                                                  
 reclassified to  profit or loss                                                
Currency translation differences                0         0         0          0
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Other comprehensive income for the              0         0         0          0
 financial year                                                                 
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TOTAL COMPREHENSIVE INCOME FOR THE          8,604     5,922     8,390      4,757
 FINANCIAL YEAR                                                                 
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         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000