Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated unaudited interim report for Q2 and 6 months of 2023

Teade

The revenue of AS Ekspress Grupp for the 2(nd) quarter of 2023 increased by 13%
to  EUR 18.5 million and EBITDA increased  by 8% to EUR 2.4 million. The revenue
for  the first 6 months of 2023 increased  by 18% to EUR 35.3 million and EBITDA
increased  by 25% to EUR 3.6 million  as compared to last  year. The Group's net
profit for the 2(nd) quarter totalled EUR 0.6 million and for the first 6 months
it  totalled EUR 0.2 million,  decreasing by 71% as  compared to the same period
last  year. At  the end  of June,  the share  of digital  revenue was 82% of the
Group's  total revenue. Digital revenue increased by 28% as compared to the same
period last year.

The  Group continued to  be successful in  increasing its sales  volumes in both
advertising and digital subscriptions. The 2(nd) quarter was successful in terms
of  increasing the market share in advertising as well as increasing the average
price  of  digital  subscriptions.  The  Group's  2(nd) quarter's  revenue  grew
strongly and increased by 13% as compared to the same period last year. In terms
of the first 6 months of the year, the total revenue increased by 18%. Excluding
from  revenue the  acquisitions made  in Lithuania  (news portal Lrytas and news
agency  ELTA) in the second half of 2022, revenue growth was 12% in the first 6
months  of the  year. Advertising  revenue was  strong in  Estonia and Lithuania
where  the market has  been stable so  far and the  volumes have remained at the
same level as last year.

In Latvia, the total market volume decreased, and the advertising revenue earned
by  Ekspress Group in Latvia is about  4% less than last year. This decrease has
been  offset by the increase in sales revenue of the ticket platform and digital
screens. The ticket platform operated by the Group successfully sold the tickets
for  the Jubilee Song and Dance Festival  held in Riga, which increased both the
number of tickets sold as well as the company's sales.

The  inflationary environment and high-interest rates will increase the risks to
advertising revenue in all Baltic States in the second half of the year.

The  number of digital subscriptions of AS Ekspress Grupp increased by 24% year-
over-year (Q2: 9%, 6 months: 20%) and totalled 175.4 thousand subscriptions. The
number  of the Group's digital subscriptions  continued their fast growth in the
first  6 months  of  the  year,  making  up  an increasingly higher share of the
Group's  revenue base.  The Group  has added  nearly 34 000 readers with digital
subscriptions in the Baltic States over the last year or 24% more as compared to
the  end of  June last  year. The  Group's digital  revenue base is increasingly
based  on the sales revenue from digital subscriptions. We have strengthened the
quality and volume of content offered by the Group's media companies so as to be
the leader in the field of digital subscriptions in all Baltic States. The Group
is  moving towards its strategic financial goals  and aims to offer digital paid
content to at least 340 000 subscribers by the year 2026.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress Grupp totalled EUR 2.4 million in the 2(nd) quarter, growing by 8%. The
EBITDA in the first 6 months of the year totalled EUR 3.6 million, increasing by
25%. Profitability  was  positively  impacted  by  successful  sales  of  online
advertising  and digital subscriptions in Estonia  and Lithuania, and the volume
growth of ticket sales platforms and digital outdoor screens.

The  net profit in the first 6 months of 2023 totalled EUR 0.2 million, which is
71% lower  as  compared  to  the  previous year. Including one-off extraordinary
expenses,  the net  loss for  the first  6 months of  the year totalled EUR -0.1
million.  The decrease in net profit is  mainly due to the one-off costs related
to  the  liquidation  of  the  home  delivery  services  of Express Post and its
unprofitable operations in the first 6 months of the year in the total amount of
EUR  -0.6 million. The home delivery services of Express Post were liquidated in
the first 6 months of the year and one-off liquidation expenses and unprofitable
operations  will no longer incur in the next quarters of the Group. In addition,
the  level of net  profit has been  impacted by higher  interest rates resulting
from the increase in the Euribor and higher depreciation expenses resulting from
the  Group's  investments.  The  negative  impact  of  interest  is  twofold and
manifested itself as an additional expense of EUR 0.3 million in the results for
the first 6 months of the year.

The  Group's liquidity is solid, and we  consider it important to keep liquidity
reserves  for possible  new acquisitions  as well  as for  the possible economic
cooldown.  As  of  30 June  2023, the  Group's  monetary funds totalled EUR 6.1
million  (31.12.2022: EUR 7.4 million).  In the first  6 months of the year, the
Group  repurchased shares in the  amount of EUR 1 million  and paid dividends to
the  shareholders in the amount of EUR  1.5 million. Thus, in the first 6 months
of  2023 the Group made payments to the  shareholders in the total amount of EUR
2.5 million.


Q2 AND 6 MONTHS RESULTS



REVENUE

In the 2(nd) quarter of 2023, the consolidated revenue totalled EUR 18.5 million
(Q2 2022: EUR 16.4 million). The revenue for the 2(nd) quarter increased by 13%
year-over-year. The consolidated revenue for the first 6 months of 2023 totalled
EUR 35.3 million (6 months 2022: EUR 29.8 million). The revenue for the first 6
months  of the  year increased  by 18% as  compared to  the previous  year. This
growth  was attributable to  both online advertising  revenue as well as digital
subscription  revenue. The share of the Group's digital revenue in total revenue
was  82% in the  first 6 months  of 2023 (6  months 2022: 76% of total revenue).
Digital  revenue for the first 6 months  of 2023 increased by 28% as compared to
the same period last year.

PROFITABILITY

In  the 2(nd) quarter of 2023, the  consolidated EBITDA totalled EUR 2.4 million
(Q2  2022: EUR 2.2 million). EBITDA increased by 8% as compared to last year and
the  EBITDA margin  was 13% (Q2  2022: 14%). In the  first 6 months of 2023, the
consolidated  EBITDA totalled EUR 3.6 million  (6 months 2022: EUR 2.8 million).
EBITDA  increased by 25% as compared to last year and the EBITDA margin was 10%
(6 months 2022: 9%). Profitability has been driven by successful sales of online
advertising  and digital subscriptions in Estonia  and Lithuania, and the volume
growth or ticket sales platforms and digital outdoor screens.

In  the 2(nd) quarter of 2023, the  consolidated net profit totalled 0.6 million
(Q2  2022: EUR 1.3 million). In the first 6 months of 2023, the consolidated net
profit,  excluding extraordinary  expenses, totalled  EUR 0.2 million  (6 months
2022: EUR  0.8 million). In the first 6 months of 2023, the net profit decreased
by  71% as compared to last year.  Including one-off extraordinary expenses, the
net  loss for  the first  6 months of  the year  totalled EUR  -0.1 million. The
decrease in net profit is mainly due to higher interest rates resulting from the
increase  in the  Euribor and  higher depreciation  expenses resulting  from the
Group's  investments. The negative  impact of interest  is twofold and manifests
itself  as an additional expense of EUR 0.3 million in the results for the first
6 months  of the year. The results for the  first 6 months of the year were also
impacted  by the one-off costs  in the amount of  EUR 0.3 million related to the
liquidation  of the  home delivery  services of  AS Express  Post and the higher
operating  loss in the amount of EUR  0.3 million earned by the joint venture in
the first 6 months of the year. Thus, the negative effect of the liquidation and
the  unprofitable operations of Express  Post on the Group's  net profit was EUR
0.6 million higher than in the same period last year. The home delivery services
of  Express Post were liquidated in the first 6 months of the year and the Group
will  no longer incur any additional losses  on this business in the second half
of the year.

In  the first 6 months of 2022, the positive one-off impact on the net profit in
the  amount of EUR 0.2 million was attributable to the profit which arose on the
revaluation of the final payment related to the acquisition of Bi?eshu Parad?ze.

EXPENSES

In  the first 6 months of  2023, the cost of goods  sold, marketing, and general
and  administrative costs  totalled EUR  34.0 million (6  months 2022: EUR 29.2
million).  Operating expenses increased by EUR 4.8 million (+17%) as compared to
the  same period last year. Labour costs  increased the most, by EUR 2.9 million
(+18%).

In the first 6 months of 2023, the Group employed 974 employees on average which
is  112 employees  more  as  compared  to  the  same  period last year (6 months
2022: 862 employees).  This  growth  is  attributable  to  88 employees who were
transferred  from the  acquired companies,  incl. ELTA  news agency in Lithuania
acquired  in  May  2022 and  the  news  portal  lrytas.lt  acquired  in December
2022. 24 employees  were  hired  from  other  companies  in  Estonia, Latvia and
Lithuania.

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 6.1 million and equity  in the amount of  EUR 53.1 million (51% of total
assets).  The comparable data as of  30 June 2022 were EUR 6.8 million and 52.1
million (56% of total assets), respectively. As of 30 June 2023, the Group's net
debt totalled EUR 14.7 million (30 June 2022: EUR 10.5 million).

In  the first 6 months of 2023, the Group's cash flows from operating activities
totalled  EUR 4.4 million (6 months 2022: EUR 2.6 million), that were positively
impacted by the ticket sales platforms in Estonia and Latvia. The sales activity
of  the Latvian ticket sales platform has  recovered and is in a better position
due to higher ticket prices as compared to the pre-Covid-19 period.

In  the first 6 months of 2023, the Group's cash flows from investing activities
totalled  EUR -1.5 million (6 months 2022: EUR  -3.6 million), of which EUR -1.2
million  was  related  to  the  development  and  acquisition  of  tangible  and
intangible   assets,   demonstrating   higher   investments   in   products  and
technologies.  In the first  6 months of the  year, the Group  invested EUR -0.9
million in new LED screens using a finance lease.

In  the first 6 months of 2023, the Group's cash flows from financing activities
totalled  EUR -4.3 million (6 months 2022: EUR  -3.1 million), of which EUR -1.0
million  is the share buy-back  and EUR -1.5 million  is the dividend payment to
the shareholders of AS Ekspress Grupp. The financing activities also include the
net change in borrowings in the amount of EUR -0.8 million and lease liabilities
in the amount of EUR -0.9 million.

SHARE BUY-BACK AND DIVIDENDS

Within  the  framework  of  the  share  buy-back  programme,  on 9 March 2023 AS
Ekspress  Grupp purchased 588 235 shares  at the price  of EUR 1.70 per share in
the total amount of EUR 1.0 million.

At  the regular general meeting of shareholders  of AS Ekspress Grupp held on 4
May  2023, it was  decided to  pay a  dividend of  5 euro cents per share in the
total  amount of EUR 1.49 million. Dividends were paid to shareholders on 24 May
2023.


SEGMENT OVERVIEW


Key financial indicators for segments

 (EUR thousand)    Sales

                                                                     12 months
                   Q2 2023 Q2 2022 Change % 6M 2023 6M 2022 Change % 2022

 Media segment     18 766  16 062  17%      35 634  29 144  22%      62 690

  advertising
 revenue           11 124  9 562   16%      20 805  17 402  20%      37 613

 subscriptions
 (incl. single-
 copy sales)       4 658   4 050   15%      9 219   7 936   16%      16 819

 marketplaces      603     475     27%      1 239   828     50%      2 232

 outdoor screens   837     637     31%      1 526   1 039   47%      2 396

 sale of other
 goods and
 services          1 543   1 338   15%      2 845   1 938   47%      3 630

 Corporate
 functions         1 081   1 090   -1%      2 308   2 182   6%       4 500

 Inter-segment
 eliminations      (1 320) (743)            (2 658) (1 490)          (3 050)

 TOTAL GROUP       18 528  16 409  13%      35 283  29 836  18%      64 141

  incl. revenue
 from all digital
 channels          15 412  12 494  23%      28 796  22 580  28%      49 928

  % of revenue
 from all digital
 channels          83%     76%              82%     76%              78%


 (EUR thousand)    EBITDA

                                                                     12 months
                   Q2 2023 Q2 2022 Change % 6M 2023 6M 2022 Change % 2022

 Media segment     2 643   2 501   6%       4 121   3 394   21%      10 183

 Corporate
 functions         (240)   (261)   8%       (561)   (491)   -14%     (1 122)

 Inter-segment
 eliminations      (4)     (24)             (8)     (70)             (171)

 TOTAL GROUP       2 399   2 216   8%       3 552   2 832   25%      8 891


  EBITDA margin   Q2 2023   Q2 2022   6M 2023   6M 2022   12 months 2022

  Media segment   14%       16%       12%       12%       16%

  TOTAL GROUP     13%       14%       10%       9%        14%


Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.06.2023 31.12.2022
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                     6 111      7 448
-------------------------------------------------------------------------------
 Trade and other receivables                                  17 298     11 661
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 144         49
-------------------------------------------------------------------------------
 Inventories                                                     259        286
-------------------------------------------------------------------------------
 Total current assets                                         23 813     19 444
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 580      1 580
-------------------------------------------------------------------------------
 Deferred tax asset                                               69         60
-------------------------------------------------------------------------------
 Investments in joint ventures                                   690      1 017
-------------------------------------------------------------------------------
 Investments in associates                                     2 030      2 279
-------------------------------------------------------------------------------
 Property, plant and equipment                                 9 165      8 736
-------------------------------------------------------------------------------
 Intangible assets                                            66 982     66 720
-------------------------------------------------------------------------------
 Total non-current assets                                     80 517     80 392
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                104 330     99 836
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    2 558      3 393
-------------------------------------------------------------------------------
 Trade and other payables                                     25 734     19 004
-------------------------------------------------------------------------------
 Corporate income tax payable                                     82         25
-------------------------------------------------------------------------------
 Total current liabilities                                    28 375     22 422
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         22 852     21 948
-------------------------------------------------------------------------------
 Other long-term liabilities                                      41         43
-------------------------------------------------------------------------------
 Total non-current liabilities                                22 893     21 991
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            51 268     44 413
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority interest                                                 0        147
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                18 478     18 478
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                             (1 057)      (334)
-------------------------------------------------------------------------------
 Reserves                                                      2 275      2 059
-------------------------------------------------------------------------------
 Retained earnings                                            19 089     20 796
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    53 062     55 276
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 53 062     55 423
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                104 330     99 836
-------------------------------------------------------------------------------


Consolidated statement of comprehensive income (unaudited)

 (EUR thousand)              Q2 2023  Q2 2022   6M 2023  6M 2022 12 months 2022
-------------------------------------------------------------------------------
 Sales                        18 528   16 409    35 283   29 836         64 141
-------------------------------------------------------------------------------
 Cost of sales              (14 107) (12 407)  (27 748) (23 441)       (48 185)
-------------------------------------------------------------------------------
 Gross profit                  4 422    4 002     7 535    6 395         15 956
-------------------------------------------------------------------------------
 Other income                    110      198       181      317            789
-------------------------------------------------------------------------------
 Marketing expenses            (791)    (783)   (1 362)  (1 437)        (2 979)
-------------------------------------------------------------------------------
 Administrative expenses     (2 376)  (2 170)   (4 927)  (4 317)        (8 823)
-------------------------------------------------------------------------------
 Other expenses                (120)     (43)     (140)     (85)          (146)
-------------------------------------------------------------------------------
 Operating profit /(loss)      1 245    1 205     1 287      873          4 797
-------------------------------------------------------------------------------
 Interest income                  10        9        19       19             36
-------------------------------------------------------------------------------
 Interest expenses             (347)    (178)     (677)    (347)          (738)
-------------------------------------------------------------------------------
 Other finance
 income/(costs)                 (11)      210      (21)      197            179
-------------------------------------------------------------------------------
 Net finance cost              (347)       41     (679)    (131)          (523)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 joint ventures                (242)     (87)     (795)    (220)          (242)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 associates                        2      143       130      273            325
-------------------------------------------------------------------------------
 Profit /(loss) before
 income tax                      658    1 302      (57)      794          4 357
-------------------------------------------------------------------------------
 Income tax expense             (46)     (31)      (62)     (36)          (302)
-------------------------------------------------------------------------------
 Net profit /(loss) for the
 reporting period                612    1 271     (118)      759          4 055
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                  613    1 272     (120)      761          4 048
-------------------------------------------------------------------------------
 Minority interest               (1)      (1)         2      (2)              7
-------------------------------------------------------------------------------
 Total comprehensive income
 /(loss)                         612    1 271     (118)      759          4 055
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                  613    1 272     (120)      761          4 048
-------------------------------------------------------------------------------
 Minority interest               (1)      (1)         2      (2)              7
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per share     0.0205   0.0419  (0.0040)   0.0251         0.1335
-------------------------------------------------------------------------------
 Diluted earnings per share   0.0199   0.0405  (0.0039)   0.0242         0.1294
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

                                                                      12 months
 (EUR thousand)                                       6M 2023 6M 2022      2022
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the reporting year        1 287     873     4 797
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                          2 265   1 959     4 084
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and impairment of
 property, plant and equipment                            (4)       2        29
-------------------------------------------------------------------------------
 Change in value of share option                           16      18        29
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                          (5 409) (1 385)   (1 939)
-------------------------------------------------------------------------------
 Inventories                                               26    (27)       (9)
-------------------------------------------------------------------------------
 Trade and other payables                               6 885   1 572     2 188
-------------------------------------------------------------------------------
 Income tax paid                                        (108)   (262)     (401)
-------------------------------------------------------------------------------
 Interest paid                                          (540)   (181)     (767)
-------------------------------------------------------------------------------
 Net cash generated from operating activities           4 420   2 569     8 011
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates (less cash
 acquired) and other investments /
 cash paid-in equity-accounted investees                (949) (1 971)   (7 632)
-------------------------------------------------------------------------------
 Receipts of other investments                             13      10        10
-------------------------------------------------------------------------------
 Interest received                                          2       1         2
-------------------------------------------------------------------------------
 Purchase of property, plant and equipment and
 intangible assets                                    (1 232) (2 335)   (3 748)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant and equipment
 and intangible assets                                      3      40        66
-------------------------------------------------------------------------------
 Loans granted                                              0    (30)      (30)
-------------------------------------------------------------------------------
 Loan repayments received                                   0      86        86
-------------------------------------------------------------------------------
 Dividends received                                       674     601       601
-------------------------------------------------------------------------------
 Net cash used in investing activities                (1 489) (3 598)  (10 645)
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                       (1 488) (2 425)   (2 425)
-------------------------------------------------------------------------------
 Payment of lease liabilities                           (940)   (851)   (1 751)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank loans              (840)     136     3 296
-------------------------------------------------------------------------------
 Purchases of treasury shares                         (1 000)       0         0
-------------------------------------------------------------------------------
 Net cash used in financing activities                (4 268) (3 140)     (880)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1 337) (4 169)   (3 514)
-------------------------------------------------------------------------------
 Cash and cash equivalents at the beginning of the
 period                                                 7 448  10 962    10 962
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of the period     6 111   6 793     7 448
-------------------------------------------------------------------------------



Signe Kukin

Group CFO

AS Ekspress Grupp

Telephone: +372 669 8381

E-mail address: [email protected] (mailto:[email protected])


AS Ekspress Grupp is the leading Baltic media group whose key activities include
web media content production, publishing of newspapers, magazines and books. The
Group also operates an electronic ticket sales platform and ticket sales offices
in  Estonia  and  Latvia.  Ekspress  Grupp  launched  its operations in 1989 and
employs almost 1100 people.