Börsiteade

Pealkiri

AS Tallinn Vesi’s sales revenue compared to the second quarter increased

Teade

AS  Tallinna Vesi's sales revenue in  the 3(rd) quarter of 2022 was EUR13 million.
The   decline  in  sales  of  construction  services  was  offset  by  increased
consumption  of water  services among  commercial customers  and an  increase in
stormwater  service  revenue.  The  quality  of  water  and  wastewater services
continued  to be high  and a number  of large-scale reconstruction projects were
carried out.

AS  Tallinna Vesi's sales  from water services  provided to commercial customers
was  EUR4.34 million in  the 3(rd) quarter of  this year, which  is about 13% more
than at the same time last year. The consumption of water services by commercial
customers  increased mainly  in the  leisure sector:  hotels and spas, trade and
sports center, and in the rental services sector and port.

A  significant impact  on the  small increase  in sales  revenue was caused by a
significant  decrease in the volume of  construction services due to instability
in  the construction sector. The  surge in energy prices  had a direct impact on
the Company's profits, which were down 58.5% from the same period last year. The
drop  in  profit  compared  to  last  year  was  also  significantly affected by
retaining  the provision for  potential third-party claims  at the third-quarter
level of 2021.

According  to Aleksandr  Timofejev, Chairman  of the  Board of AS Tallinna Vesi,
water  services  revenue  accounted  for  88% of  sales revenue. "Lifting of the
COVID-19 related  restrictions in the 1(st) quarter and the extremely favourable
prices  of water  services, which  did not  reflect the  increase in electricity
prices,  play an important role  here. The new prices  for water services agreed
with the Competition Authority started to apply as of 1 October 2022," Timofejev
explained.

Construction services accounted for 10.3% of the Group's revenue, which has been
affected  by the  start of  some major  projects being delayed, and construction
services are expected to recover in part in the last quarter.

The  sales from  water services  provided to  private customers, compared to the
same  period last year, decreased in the 3(rd) quarter by 1.1% to EUR4.84 million,
resulting  from a drop in the consumption of the largest private customer group,
the apartment buildings.

AS Tallinna Vesi's gross profit for the 3(rd) quarter of 2022 was EUR3.58 million.
The  Company's nine-month gross profit fell by 22% due to increasing operational
costs.  The main impacts came from the increase in electricity, salary, chemical
and  gas  costs.  To  minimise  the  impact,  we  try  to optimize the amount of
chemicals  used in treatment processes  and, where possible, consume electricity
smartly  by  closely  monitoring  electricity  exchange  prices  and  timing our
consumption accordingly.

The Company's operating profit was EUR2.44 million in the 3(rd) quarter. Operating
profit  fell by EUR3.07  million compared to  the 3(rd) quarter of  last year. The
nine-month  operating profit for  2022 was EUR8.52 million,  showing a decrease of
EUR6.84  million compared to the  previous year, driven by  both sharp increase in
electricity  costs and the retaining of  the provision for potential third-party
claims  at  third-quarter  levels  of  2021. When  eliminating the impact of the
change  in operating  profit resulting  from the  provision for potential third-
party  claims, the Company's  operating profit would  have been EUR4.30 million in
the  3(rd) quarter of 2021. Operating profit for the 3(rd) quarter of 2022 would
be EUR1.86 million or 43.3% down from the same period last year.

The  Company's net profit was EUR2.22  million in the 3(rd) quarter of 2022, which
is  EUR3.12 down from  the same period  last year. The  decrease in net profit was
affected by changes in operating profit and net financial costs.

In  September, AS Tallinna Vesi and OP Corporate Bank plc Estonian Branch signed
the  amendments  to  the  28 September  2017 loan  agreement. As a result of the
amendments  to  the  loan  agreement,  the  previous  loan repayment date of 28
September  2023 was  changed  to  28 September  2024. The  amendment to the loan
agreement  has  induced  an  increase  in  AS Tallinna Vesi's loan interest risk
margin from 0.60% to 0.63%. The loan will still be repaid in one installment and
all other terms of the loan agreement remain the same.

Investments  have significantly increased  in 2022. In nine  months, AS Tallinna
Vesi  invested EUR15.66 million in the  fixed assets, the investments increased by
EUR5.71  million compared  to the  same period  last year.  In the  nine months of
2022, AS  Tallinna Vesi  rehabilitated nearly  17 kilometres of  pipelines. "The
pipeline  reconstruction has been  going according to  plan throughout this year
and the work will continue in the last quarter," Timofejev said.

In the 3(rd) quarter, extensive reconstruction work started and continued on the
Street  of Vana-Kalamaja, and Rannamõisa  and Järvevana roads. "On Vana-Kalamaja
Street  alone, we  will be  laying nearly  4 kilometers of new pipes," Timofejev
pointed out.

Negotiations on a new Administrative Contract between the City of Tallinn and AS
Tallinna  Vesi  for  the  period  01.12.2022-30.11.2032 are closing. At the same
time,  AS Tallinna Vesi has applied for its appointment as a water undertaker in
the main service area of the public water supply and sewerage system with a term
of  administrative duty  of 10 years,  i.e. until 30.11.2032. The Administrative
Contract  currently awaits the resolution of  the AS Tallinna Vesi's Supervisory
Council   on  01.11.2022 and  the  approval  of  the  Tallinn  City  Council  on
03.11.2022 and  can then be found publicly  in the document management system of
Tallinn City Government and on the website of AS Tallinna Vesi.

The  preparation of a Public Water Supply  and Sewerage Development Plan for the
next  12 years is also currently under  way. The aim of that  is to give a clear
direction  to the development of the water sector in Tallinn and it will also be
the  basis for  the preparation  of the  Development and  Investment Plan  of AS
Tallinna Vesi.

"In  August, we started with the installation of remote water meters. Due to the
global supply shortage of chips, the start of mass installation has been delayed
until  November, the goal is to finish the installation work by 2026," Timofejev
emphasized.

In  order to ensure the  continuity of the services  provided by the Company and
the  sustainability of its  processes, AS Tallinna  Vesi continued in the 3(rd)
quarter  with  several  large  projects,  including  modernizing the Rummu Water
Pumping  Station, which will ensure high-quality  drinking water in the Lasnamäe
and  Pirita  areas,  and  the  installation  of UV equipment in various borehole
pumping  stations to create an  additional microbiological treatment barrier. At
the  Wastewater  Treatment  Plant,  work  continues  on  strategically important
projects  such as  modernizing the  shaft at  the Main  Pumping Station  and the
effluent  outlet tower, the first of which  plays an important role in receiving
the  wastewater at  the treatment  plant and  the latter  in discharging treated
effluent  to the sea. We have also completed a new point of reception for sewage
sludge  from the septic trucks and have started preparations for the replacement
of  one of the large pumps at the  Main Pumping Station. The pump replacement is
scheduled for the 1(st) quarter in 2023.

Over  the nine months of 2022, the Company has continued to provide reliable and
high-quality  water and wastewater services, as reflected in the very high level
of  quality indicators. During  the nine months  of this year,  the Company took
2,426 water  samples, 99.8% of  which met  all quality  requirements in full and
only  4 samples had  to be  considered non-compliant.  The quality  of tap water
continues  to  be  excellent  despite  high  outdoor  temperatures. According to
Timofejev,  excellent quality  of tap  water has  been ensured  by an  even more
efficient  water  treatment  process,  preventative  works  on water network and
investments  in  water  pumping  stations.  In  the  4(th) quarter,  we  plan to
introduce  a  new  technology  for  cleaning  water pipes, which works using the
crushed ice pressure wash method. Today, the technology is widely used in the US
and Japan, but still completely new to our region.

Also, the wastewater treated at the Wastewater Treatment Plant and discharged to
the  Baltic Sea met  all the strict  requirements both in  the 3(rd) quarter and
throughout  the  year  of  2022. "Today,  the  wastewater that has undergone the
treatment  process is significantly cleaner than the water in the Baltic Sea and
has an extremely positive impact on marine life," Timofejev explained.

The level of water loss in the water network remained low in the 3(rd) quarter -
13.4%, similarly  to the  previous year.  In the  nine-month view,  the level of
water  loss is  somewhat higher  than last  year because  of the  snowy and cold
winter that made it difficult to detect leaks and access pipelines in the 1(st)
quarter, high outdoor temperatures and low soil water levels also had an impact.

AS  Tallinna Vesi is the largest water utility in Estonia, providing services to
more  than 24,600 private customers and  businesses and 470,000 end consumers in
Tallinn  and its surrounding municipalities: Cities of Maardu and Saue and Harku
Municipality.  Tallinna Vesi is  listed on the  main list of  the Nasdaq Tallinn
Stock Exchange.


Main financial indicators

 EURmillion,       3rd quarter                     9 months
 except      key                   Change                          Change
 ratios          2022  2021  2020  2022/ 2021    2022  2021  2020  2022/ 2021
-------------------------------------------------------------------------------
 Sales           13.48 13.61 13.28         -1.0% 38.53 38.36 38.55         0.4%

 Gross profit     3.58  5.36  5.80        -33.3% 12.38 15.78 16.59       -21.5%

 Gross profit
 margin %        26.53 39.40 43.69        -32.7% 32.12 41.12 43.04       -21.9%

 Operating
 profit before
 depreciation
 and
 amortisation     4.15  7.17  7.35        -42.1% 13.49 20.20 20.66       -33.2%

 Operating
 profit before
 depreciation
 and
 amortisation
 margin %        30.80 52.67 55.33        -41.5% 35.00 52.64 53.60       -33.5%

 Operating
 profit           2.44  5.50  5.77        -55.7%  8.52 15.36 16.03       -44.5%

 Operating
 profit - main
 business         2.06  5.15  5.44        -59.9%  7.81 14.61 15.37       -46.6%

 Operating
 profit margin % 18.07 40.42 43.43        -55.3% 22.12 40.04 41.58       -44.8%

 Profit before
 taxes            2.32  5.41  5.64        -57.0%  8.21 15.09 15.70       -45.6%

 Profit before
 taxes margin %  17.24 39.72 42.45        -56.6% 21.30 39.32 40.73       -45.8%

 Net profit       2.22  5.34  5.64        -58.5%  6.05 12.96 11.34       -53.3%

 Net profit
 margin %        16.44 39.21 42.45        -58.1% 15.70 33.78 29.43       -53.5%

 ROA %            0.89  2.13  2.24        -58.0%  2.40  5.10  4.40       -53.0%

 Debt to total
 capital
 employed %      56.37 55.54 57.73          1.5% 56.37 55.54 57.73         1.5%

 ROE %            2.06  4.87  5.42        -57.6%  5.41 11.55 10.20       -53.2%

 Current ratio    1.59  3.07  3.66        -48.2%  1.59  3.07  3.66       -48.2%

 Quick ratio      1.52  3.01  3.62        -49.5%  1.52  3.01  3.62       -49.5%

 Investments
 into fixed
 assets           7.93  4.32  5.91         83.6% 15.66  9.95 13.77        57.3%

 Payout ratio %     na 80.42 77.70                  na 80.42 77.70
-------------------------------------------------------------------------------

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 FINANCIAL POSITION

 EUR thousand                                  30/09/2022 30/09/2021   31/12/2021



 ASSETS

 CURRENT ASSETS
-------------------------------------------------------------------------------
 Cash and cash equivalents                       16,656     36,143       36,559

 Trade receivables, accrued income and
 prepaid expenses                                 7,840      6,858        6,637

 Inventories                                      1,153        849          702
-------------------------------------------------------------------------------
 TOTAL CURRENT ASSETS                            25,649     43,850       43,898



 NON-CURRENT ASSETS
-------------------------------------------------------------------------------
 Property, plant and equipment                  222,332    208,002      211,546

 Intangible assets                                  632        532          729
-------------------------------------------------------------------------------
 TOTAL NON-CURRENT ASSETS                       222,964    208,534      212,275
-------------------------------------------------------------------------------
 TOTAL ASSETS                                   248,613    252,384      256,173



 LIABILITIES AND EQUITY

 CURRENT LIABILITIES
-------------------------------------------------------------------------------
 Current portion of long-term lease
 liabilities                                        675        386          421

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

 Trade and other payables                         7,958      7,182        7,835

 Prepayments                                      3,862      3,096        3,604
-------------------------------------------------------------------------------
 TOTAL CURRENT LIABILITIES                       16,125     14,294       15,490



 NON-CURRENT LIABILITIES
-------------------------------------------------------------------------------
 Deferred income from connection fees            37,996     36,226       37,241

 Leases                                             952      1,185        1,236

 Loans                                           78,550     82,144       80,336

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

 Deferred tax liability                             411        264          372

 Other payables                                      90         38           60
-------------------------------------------------------------------------------
 TOTAL NON-CURRENT LIABILITIES                  124,017    125,875      125,263
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                              140,142    140,169      140,753



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

 Share premium                                   24,734     24,734       24,734

 Statutory legal reserve                          1,278      1,278        1,278

 Retained earnings                               70,459     74,203       77,408
-------------------------------------------------------------------------------
 TOTAL EQUITY                                   108,471    112,215      115,420
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                   248,613    252,384      256,173


 STATEMENT OF
 COMPREHENSIVE INCOME   3rd quarter 3rd quarter   9 months 9 months   12 months

 EUR thousand                    2022        2021       2022     2021        2021



 Revenue                     13,479      13,611     38,534   38,363      53,294

 Cost of goods and
 services sold               -9,903      -8,248    -26,157  -22,588     -32,715
-------------------------------------------------------------------------------
 GROSS PROFIT                 3,576       5,363     12,377   15,775      20,579



 Marketing expenses            -189        -108       -535     -332        -462

 General administration
 expenses                    -1,094        -847     -3,192   -3,390      -4,438

 Other income (+)/
 expenses (-)                   -55       1,093       -129    3,308       3,099
-------------------------------------------------------------------------------
 OPERATING PROFIT             3,081       5,501      8,521   15,361      18,778



 Financial income                 1           1          4        8           8

 Financial expenses            -108         -96       -319     -283        -387

 Other financial income
 (+)/ expenses (-)
-------------------------------------------------------------------------------
 PROFIT BEFORE TAXES          2,974       5,406      8,206   15,086      18,399



 Income tax on
 dividends                   -2,017         -70     -2,155   -2,126      -2,234



 NET PROFIT FOR THE
 PERIOD                         957       5,336      6,051   12,960      16,165
-------------------------------------------------------------------------------
 COMPREHENSIVE INCOME
 FOR THE PERIOD                 957       5,336      6,051   12,960      16,165



 Attributable profit
 to:
-------------------------------------------------------------------------------
 Equity holders of A-
 shares                         957       5,336      6,051   12,960      16,165



 Earnings per A share
 (in euros)                    0.05        0.27       0.30     0.65        0.81


 CASH FLOWS STATEMENT                             9 months 9 months   12 months

 EUR thousand                                           2022     2021        2021



 CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------------------------------------------------
 Operating profit                                    8,521   15,361      18,778

 Adjustment for depreciation/amortisation            4,965    4,837       6,520

 Adjustment for revenues from connection fees         -406     -379        -510

 Other non-cash adjustments                              0   -3,610      -3,610

 Profit/loss(+) from sale and write off of
 property, plant and equipment, and intangible
 assets                                                -15        0         -29

 Change in current assets involved in operating
 activities                                         -1,619       24         380

 Change in liabilities involved in operating
 activities                                           -296      537         938
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS FROM OPERATING ACTIVITIES         11,150   16,770      22,467



 CASH FLOWS USED IN INVESTING ACTIVITIES
-------------------------------------------------------------------------------
 Acquisition of property, plant and equipment,
 and intangible assets                             -14,968   -9,491     -13,734

 Compensations received for construction of
 pipelines, incl connection fees                     1,451    1,933       2,892

 Proceeds from sales of property, plant and
 equipment and intangible assets                        17        0          29

 Interest received                                       3       11          11
-------------------------------------------------------------------------------
 TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES     -13,497   -7,547     -10,802



 CASH FLOWS USE D IN FINANCING ACTIVITIES
-------------------------------------------------------------------------------
 Interest paid and loan financing costs, incl
 swap interests                                       -271     -353        -460

 Lease payments                                       -351     -307        -408

 Repayment of loans                                 -1,818   -1,818      -3,636

 Dividends paid                                    -12,835  -12,841     -12,842

 Withheld income tax paid on dividends                -165     -159        -158

 Income tax paid on dividends                       -2,116   -2,116      -2,116
-------------------------------------------------------------------------------
 TOTAL CASH FLOW USED IN FINANCING ACTIVITIES      -17,556  -17,594     -19,620


-------------------------------------------------------------------------------
 CHANGE IN CASH AND CASH EQUIVALENTS               -19,903   -8,371      -7,955


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


-------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS AT THE END OF THE
 PERIOD                                             16,656   36,143      36,559


Maria Tiidus
Head of Communications
AS Tallinna Vesi
(+372) 626 2271
[email protected] (mailto:[email protected])