Börsiteade

Pealkiri

Results of Operations for the 1st half-year 2013

Teade

MANAGEMENT REPORT

Contractual Highlights

  -- AS Tallinna Vesi tariffs continue to be on the same level based on
     temporary
injunction granted by the Court for the period of court proceedings to
     protect the Company from the unilateral breach of privatization agreement
     by Estonian Authorities.
At the end of May 2012 the District Court ruled that AS Tallinna Vesi’s
     Services Agreement, that was part of the international privatisation, is a
     public law contract,
overturning the Competition Authority’s claim that the tariff mechanism
     specified in the Services Agreement is allegedly a civil law agreement that
     the company cannot rely on in an administrative court.
AS Tallinna Vesi firmly believes that the terms and conditions of the
     international privatisation contract that has been deemed a public law
     contract should not be broken simply by transferring the duties of the
     regulator from one state institution (the City of Tallinn) to a different
     state institution (the Competition Authority). A public law contract should
     enjoy the protection of the Estonian legal system, should the contract not
     honoured then the company will have a claim against the Estonian state.
  -- AS Tallinna Vesi would like all its shareholders to be fully aware of the
     facts that the Company was privatised
i
n 2001 with the full support and knowledge of the Estonian national
     government, with written confirmations from the Prime Minister, the
     Minister of Finance, and the Competition Authority itself regarding the key
     terms of the agreements, and utilising the expertise and guidance of the
     European Bank for Reconstruction and Development (EBRD). In addition to
     approving the framework of the privatisation the State of Estonia directly
     benefited as the sovereign guarantee it had been required to provide to
     EBRD to secure the then municipal AS Tallinna Vesi’s loans was passed to
     the Strategic Investor on privatisation. As this privatisation and these
     loans were EBRD sponsored projects, then the state of Estonia was required
     to object if the project did not comply with the PWSSA, it is noteworthy
     that it did not, in fact it voted in favour of both the privatisation and
     loan re-financing.
  -- During the 1st quarter of 2013 initial court proceedings commenced. The
     next court hearing is due to take place on 13 August 2013 AS Tallinna Vesi
     believes in open and transparent regulation and requested open court
     proceedings. On the other hand, the Competition Authority believes its
     methodology to be a “business secret” hence it requested closed court
     proceedings. On 20th of March 2013 the Administrative Court rules that the
     court proceedings would be partially closed, meaning that there could be no
     public discussion of the Competition Authority’s methodology, whilst all
     other aspects of the hearing will be  held in open proceedings, i.e all
     information can be made available to the public.
  -- Discussion of the complaint submitted to the EU Commission is on-going.
  -- Average real return on capital invested at privatization is still 6.2%
     since 2001.

The Company has continuously stated its belief in fully transparent regulation
and its willingness to enter into meaningful and evidence-based dialogue that
takes into account the privatization contract signed in 2001. 

RESULTS OF OPERATIONS - FOR THE 1st HALF-YEAR 2013

Financial highlights of 2nd quarter 2013

In the 2nd quarter of 2013 the Company’s underlying performance in general was
good, the Company is continuously focused on the improvement of operational
performance and customer service. 

During the 2nd quarter of 2013 the Company’s total sales increased, year on
year, by 2.6% to 13.5 mln euros. Sales of water and wastewater treatment were
up by 2.8% to 12.2 mln euros compared to the 2nd quarter of 2012. 

The operating profit from the Company’s main business activity decreased by 0.6
mln euros or 8.7% to 5.7 mln euros during the 2nd quarter of 2013 compared to
the 2nd quarter of 2012, mainly due to the increase in the variable costs,
which is in more detailed explained below. 

The Company’s profit before taxes for the 2nd quarter in 2013 was 6.4 mln
euros, which is a 0.8 mln euros or 13.2% increase compared to the relevant
period in 2012. The Company’s net profit for 2nd quarter of 2013 was 1.7 mln
euros, which is 0.5 mln euros or 50.4% larger than the net profit of 1.2 mln
euros in the equivalent period in 2012. 

mln €           2 Q     2 Q     2 Q     Change     6        6        6    Change
                2011    2012    2013    13/12    months   months  months   13/12
                                                 2011     2012     2013         
--------------------------------------------------------------------------------
Sales            12,8    13,1    13,5     2,6%     25,2     26,1    26,2    0,2%
Gross profit      7,8     7,8     7,3    -6,3%     15,4     16,0    14,8   -7,5%
Gross profit     61,4    59,4    54,3    -8,7%     61,0     61,4    56,7   -7,7%
 margin %                                                                       
Operating         6,9     6,3     5,7    -8,7%     13,8     13,2    11,9  -10,1%
 profit                                                                         
Operating         6,7     6,3     5,7    -8,7%     13,2     13,2    11,9   -9,6%
 profit -                                                                       
 main                                                                           
 business                                                                       
Operating        54,0    47,8    42,6   -11,0%     54,8     50,6    45,4  -10,3%
 profit                                                                         
 margin %                                                                       
Profit before     5,7     5,6     6,4    13,2%     13,7     11,9    12,6    5,4%
 taxes                                                                          
Net profit        1,5     1,2     1,7    50,4%      9,5      7,5     7,9    6,6%
Net profit       11,7     8,8    12,8    46,6%     37,6     28,5    30,3    6,4%
 margin %                                                                       
ROA %             0,8     0,6     0,9    44,5%      5,2      3,9     4,0    2,1%
Debt to total    62,9    63,1    61,7    -2,3%     62,9     63,1    61,7   -2,3%
 capital                                                                        
 employed                                                                       
ROE %             2,2     1,7     2,3    39,1%     14,2     10,7    10,6   -1,5%
Current ratio     2,3     2,6     2,3    -9,9%      2,3      2,6     2,3   -9,9%
--------------------------------------------------------------------------------

Gross profit margin – Gross profit / 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 / Total equity

Current ratio – Current assets / Current liabilities

Main business – water and wastewater activities, excl. connections profit and
government grants 



Profit and Loss Statement

2nd quarter 2013

Sales

In the 2nd quarter of 2013 the Company’s total sales increased, year on year,
by 2.6% to 13.5 mln euros. 89% of sales comprise of sales of water and
treatment of wastewater to domestic and commercial customers within and outside
of the service area, 6% of sales from fees received from the City of Tallinn
for operating and maintaining the storm water system and 5% from other works
and services. 

Sales of water and wastewater services were 12.2 mln euros, a 2.8% increase
compared to the 2nd quarter of 2012, resulting from the changes in sales
volumes as described below. 

Within the service area, sales to residential customers were at 5.9 mln euros,
showing a 0.4% decrease year on year, as revenues from apartment blocks form
the biggest share of our residential sales, the biggest decrease came also from
this client group. Sales to commercial customers increased by 4.4% to 5.0 mln
euros, mainly coming from the sales in industrial sector. Sales to customers
outside of the main service area increased by 6.6% to 1.1 mln euros in the 2nd
quarter of 2013. Over pollution fees received were 0.22 mln euros, a 49.5%
increase compared to the 2nd quarter of 2012. 

As there has not been a tariff increase compared to last year and same tariffs
are applied in 2013 the sales volumes reflect the same variances in main
services area as prescribed above. 

Outside service area sales volumes were 0.1 mln m3 or 6.0% higher than in the
2nd quarter of 2012. The main factor in this increase was higher volumes in
sewerage service due to connection of small areas in neighbouring
municipalities, balanced by a small reduction in storm water volumes. This
resulted in a sales increase in the 2nd quarter compared to the comparative
period last year of 6.6% or 0.07 mln euros. Higher sales increase than volumes
increase is due to storm water tariffs being significantly lower than sewage
tariffs. 

The sales from the operation and maintenance of the storm water and
fire-hydrant system in the main service area decreased by 11.1% to 0.86 mln
euros in the 2nd quarter of 2013 compared to the same period in 2012. According
to the terms and conditions of the contract revenues reflect actual volumes
treated and costs for treating the storm water, therefore this cost pass
through has no impact on profits. 



Cost of Goods Sold and Gross profit

The cost of goods sold for the main operating activity was 6.2 mln euros in the
2nd quarter of 2013, showing 0.84 mln euros or 15.8% increase compared to the
equivalent period in 2012. The cost increase is highly influenced by the
additional pollution tax incurred due to the incidents in the wastewater
treatment plant in the 2nd quarter of 2013 resulting extra pollution tax in the
amount of 0.91 mln euros. 

Total variable costs increased by 0.87 mln euros or 50.1% year on year. Main
reason for increased costs was the increase in pollution tax, which was
mentioned above. Other changes came from a combination of increase in prices
and tax rates and movements in treatment volumes that affected the variable
costs together with the following additional factors: 

  -- Water abstraction charges increased only by 0.01 mln euros or 5.1% to 0.25
     mln euros in the 2nd quarter of 2013, driven mainly by 5% raise in tax
     rates.
  -- Total chemical costs increased by 0.05 mln euros or 12.1% to 0.43 mln
     euros. Chemicals costs increased due to an increase in chemicals price
     worth 0.04 mln euros (0.03 mln euros coming from methanol price increase by
     21%) and increased coagulant usage due to bad raw water quality amounting
     to 0.04 mln euros. Costs increase was balanced by a decrease in chemicals
     volumes used due to less sewage treated, with an impact worth 0.3 mln
     euros.
  -- Electricity costs in total decreased by 0.04 mln euros or 4.9% in the 2nd
     quarter of 2013 compared to the 2nd quarter of 2012. Main reason for lower
     electricity costs is the decreased treatment volumes, worth 0.09 mln euros.
     Positive effects are reduced by increased electricity unit costs by 0.05
     mln euros.
  -- In the 2nd quarter of 2013 the pollution tax expense increased by 0.86 mln
     euros or 378.4%.There was an incident in the wastewater treatment plant due
     to which for the short period of time not all wastewater could have been
     treated. Due to that emergency in the 2nd quarter of 2013 higher rates for
     pollution tax were applied and the Company faced additional pollution tax
     and income tax all in total worth 0.91 mln euros. Eliminating the effects
     of the incident the pollution tax would have decreased by 0.05 mln euros or
     22.1%. The pollution tax decrease due to the improved pollutants removal
     process and decrease in volumes was balanced by overall increase in tax
     rates by 15%.

To mitigate the external price risk of maintenance services the Company
switched from outsourcing to insourcing in various areas in the 3rd quarter of
2012. Total fixed cost of goods sold (staff costs, depreciation and other cost
of goods sold) in the main operating activity decreased by 0.03 mln euros or
0.9%. 

As a result of all of the above the Company’s gross profit for the 2nd quarter
of 2013 was 7.3 mln euros, which is a decrease of 0.5 mln euros, or 6.3%,
compared to the gross profit of 7.8 mln euros for the 2nd quarter of 2012. 



Other Operating Costs

Marketing expenses and General administration expenses stayed mostly flat
during the 2nd quarter of 2013 compared to the corresponding period in 2012,
increasing in total by 0.07 mln euros, mainly due to overall salary increase
and also changes in the management board. In the 2nd quarter of 2013 the legal
fees related to the on-going tariff dispute have also increased compared to the
comparative period last year. 



Other net income/expenses

Other net income decreased by 0.02 mln euros or 25.4% to a net expense of 0.05
mln euros, compared to 0.07 mln euros net expense in the 2nd quarter of 2012. 



Operating profit

As a result of above factors the Company’s operating profit from main services
and in total, for the 2nd quarter of 2013 totalled 5.7 mln euros compared to
6.3 mln euros in the corresponding quarter in 2012, which shows a decrease of
0.60 mln euros. Year on year the operating profit for the 2nd quarter has
decreased by 8.7%. 



Financial expenses

The company received net financial income in the amount of 0.62 mln euros in
the 2nd quarter of 2013, which is a positive change of 1.3 mln euros compared
to -0.67 mln euros financial expenses in the 2nd quarter of 2012. In 2012 the
financial costs were mainly impacted from the non-cash revaluation of the fair
value of swap agreements, in the 2nd quarter of 2012 when the revaluation
impact was negative by 0.22 mln euros compared to the positive revaluation
impact of 1.1 mln euros in the 2nd quarter of 2013. 

The standalone swap agreements have been signed to mitigate the majority of the
long term floating interest risk, the interest swap agreements are signed for
75 mln euros and 20 mln euros are thereby still with floating interest rate. At
this point in time the estimated fair value of the swap contracts is negative,
totalling 2.9 mln euros. In order to continuously mitigate the interest risk,
the Company entered into 2 new swap contracts in the total amount of 30 mln
euros in May 2013, which will come into force after two old contracts expire. 
One contract was concluded for the period of 2013-2108 and the other one for
the period if 2015-2018. The average fixed interest rate for new contracts is
0.92%. 

Effective interest rate (incl. swap interests) in the 2nd quarter of 2013 was
3.24%, amounting in the interest costs of 0.78 mln euros, compared respectively
to 3.35% and 0.80 mln euros in the 2nd quarter of 2012. 



Profit Before and After Tax

The Company’s profit before taxes for the 2nd quarter of 2013 was 6.4 mln
euros, which is 0.8 mln euros higher than the profit before taxes of 5.6 mln
euros for the 2nd quarter of 2012, resulting from the movements in fair value
of financial instruments and increased costs as described above. 

The year on year increase in dividend payment by 0.6 mln euros increased also
the income tax on dividends by 0.16 mln euros. The Company’s profit after taxes
for the 2nd quarter of 2013 was 1.7 mln euros, which is 0.5 mln euros higher
than the profit after taxes of 1.2 mln euros for the 2nd quarter of 2012. 



Results for the six months of 2013

During the six months of 2013 the Company’s total sales increased, year on
year, by 0.2% to 26.2 mln euros. Sales of water and wastewater treatment were
24.0 mln euros, a 0.7% increase compared to the six months of 2012. 

The movements in sales are similar to the movements in the 2nd quarter
described above. There has been a slight 0.1 mln euros or 1.2% decline in the
sales to residential customers and 0.3 mln euros or 2.6% of increase in the
sales to the commercial clients. Industrial sector has given the most of the
increase in the sales to commercial clients. 

Due to less rainfall, the revenues from storm water treatment in the first half
of 2013 remain 0.27 mln euros or 15.6% behind the comparative period in 2012. 

The operating profit from the Company’s main business activity decreased by
9.6% to 11.9 mln euros during the six months of 2013 compared to the six months
of 2012. Main reason for a decline comes from the rise in pollution tax
expenses (1.29 mln euros year on year). Increase is influenced by two factors:
first the pollution tax expenses in 2012 were impacted by the reversal of
provision in the amount of 0.44 mln euros made in 2011 and also due to the
incident at the wastewater treatment plant described above. 

The Company’s profit before taxes for the six months of 2013 was 12.6 mln
euros, which is a 5.4% increase compared to the relevant period in 2012 being
highly influenced by the change in fair value of swap contracts. 

The Company’s net profit for the six months of 2013 was 7.9 mln euros, which is
0.4 mln euros higher than the net profit of 7.5 mln euros in the equivalent
period in 2012. 



Balance sheet

In the six months of 2013 the Company invested 3.5 mln euros into fixed assets.
As of 30 June 2013 non-current fixed assets amounted to 151.1 mln euros and
total non-current assets amounted to 159.5 mln euros. 

Current assets decreased by 6.0 mln euros to 36.7 mln euros in the six months
mainly due to decreased cash at bank by 3.0 mln euros and lower trade
receivables by 2.9 mln euros. 

Current liabilities increased by 6.0 mln euros to 15.9 mln euros in the six
months mainly due to increased payments to suppliers and also due to the
dividend income tax liability that is due in July in the amount of 4.6 mln
euros. 

The Company has a Total debt/Total assets level as expected of 61.7%, in range
of 55%-65%, reflecting the post dividend payment equity profile. This level is
consistent with the same period in 2012 when the total debt/total assets ratio
was 63.1%. 

Long-term liabilities stood at 105.1 mln euros at the end of June 2013,
consisting mainly of the outstanding balance of three long-term bank loans
totalling 95 mln euros. The first repayment of loans or refinancing should take
place at the end of 2014. The weighted average interest margin for the total
loan facility is 0.96%. The rest of long term liabilities reflect mainly the
accounting record of deferred income from connection fees. 

In the 4th quarter of 2011 the Company recorded an exceptional contingent
liability, which could cause an outflow of economic benefits of up to 36.0 mln
euros, as per note 13 to the accounts. Considering that the court proceedings
are continuously on-going, the Management has not changed the evaluation of the
contingent liability. 



Cash flow

During the six months of 2013, the Company generated 15.3 mln euros of cash
flows from operating activities, a decrease of 0.38 mln euros compared to the
corresponding period in 2012. 2013 operating cash flows were below 2012 cash
flows mainly due to the lower operating profit and also from an increase in
current payables. Underlying operating profit still continues to be the main
contributor to operating cash flows. 

In the six months of 2013 net cash flows from investing activities resulted in
a cash inflow of 0.71 mln euros, a decrease of 1.0 mln euros compared to an
inflow of 1.7 mln euros in the six months of 2012. This is made up as follows: 

In the six months of 2013 the cash outflows related to the fixed asset
investments were 3.4 mln euros compared to 4.2 mln euros spent in the same
period of 2012, a decrease of 0.80 mln euros. The compensations received for
the construction of pipelines were 3.6 mln euros in the six months of 2013, a
decrease of 2.0 mln euros compared to same period in 2012. In 2013 the Company
did not give any loans. In 2012 the loan granted to AS Maardu Vesi amounted to
0.38 mln euros. 

In the six months of 2013, cash outflow from financing amounted to 19.0 mln
euros due to interests paid and loan financing costs and dividends paid, which
is 0.57 mln euros more than in the same period of 2012, almost entirely due to
higher dividends. 

As a result of all of the above factors, the total cash outflow in the six
months of 2013 was 3.0 mln euros compared to a cash outflow of 1.1 mln euros in
2012. Cash and cash equivalents stood at 20.9 mln euros as of 30 June 2013,
which are 7.2 mln euros higher than at the corresponding period of 2012. 



Employees

At the end of the 2nd quarter of 2013, the total number of employees was 309
compared to 318 at the end of the 2nd quarter of 2012. The full time equivalent
(FTE) was respectively 296 in 2013 compared to the 304 in 2012. The management
continues to work actively for the efficiencies in processes to balance the
increase in individual salaries and cost pressure from the market with more
productive company structure. 



Dividends

Dividend allocation to the shareholders is recorded as the liability in the
financial statement of the Company at the time when the profit allocation and
hence dividend payment is confirmed by the annual general meeting of
shareholders. 

According to the dividend policy, which is also published on Company’s website,
the Company will maintain dividends to shareholders at the same amount in real
terms, i.e. dividends will increase in line with inflation each year. 

On the annual general meeting of shareholders held on 21st May 2013, 87 cents
dividends per share and the total dividend pay-out from the profit of 2012 net
income in the amount of 17.4 mln euros was approved. It is in accordance with
the Company’s dividend policy. Compared to 2012 dividends of 84 cents per
share, the increase is equal to the inflation. 

Dividends were paid out on 13th and 14th of June 2013.



Share performance

AS Tallinna Vesi is listed on NASDAQ OMX Main Baltic Market with trading code
TVEAT and ISIN EE3100026436. 

As of 30 June 2013 AS Tallinna Vesi shareholders, with a direct holding over
5%, were: 

United Utilities (Tallinn) BV  35.3%
------------------------------------
City of Tallinn                34.7%
------------------------------------

Pension funds have continued to increase their portfolios during the 2nd
quarter of 2013, owning 2.47% of the total shares compared to 1.57% at the end
of 1st quarter 2012. 

As of 30 June 2013, the closing price of the AS Tallinna Vesi share was 10.00
euros, which is a 3.85% decrease compared to the closing price of 10.40 euros
at the beginning of the quarter. During the same period the OMX Tallinn index
decreased by 3.04%. In the 2nd quarter the Company’s share price was mainly
impacted by the on-going contractual debate and dividend payment in June. 



Operational highlights in 1st half-year of 2013

Indicator                                                          2012    2013 
                                                                    Q1      Q1  
--------------------------------------------------------------------------------
Drinking water                                                                  
--------------------------------------------------------------------------------
- 
Compliance of water quality at the customers tap                  99.73%  99,80%
--------------------------------------------------------------------------------
Water loss in the water distribution network                       16.4%  16.64%
--------------------------------------------------------------------------------
Average duration of water interruptions per property, h            3.2 h  3.53 h
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Wastewater                                                                      
--------------------------------------------------------------------------------
- 
Number of sewer blockages                                          398     478  
--------------------------------------------------------------------------------
Number of sewer bursts                                              62      74  
--------------------------------------------------------------------------------
Wastewater treatment compliance with environmental standards       100%    100% 
--------------------------------------------------------------------------------
Customer service                                                                
--------------------------------------------------------------------------------
Number of written contacts                                         4647    4698 
--------------------------------------------------------------------------------
Number of customer contacts regarding water quality                100      90  
--------------------------------------------------------------------------------
Number of customer contacts regarding water pressure               340     326  
--------------------------------------------------------------------------------
Responding written customer contacts within at least 2 work days   98.4%   98.6%
--------------------------------------------------------------------------------
Number of failed promises                                            6       9  
--------------------------------------------------------------------------------
Notification of unplanned water interruptions at least 1 h         89.0%   97.1%
 before the interruption                                                        
--------------------------------------------------------------------------------



Complaint to European Commission

In parallel, on 10th December 2010 AS Tallinna Vesi lodged a complaint to the
European Commission regarding certain measures adopted by the Estonian
authorities. The company believes these measures unilaterally alter the terms
of AS Tallinna Vesi's privatization regime, and without any objective
justification, any form of meaningful prior discussion, or willingness to
engage in dialogue. Therefore they violate EU rules on the freedom of
establishment and the free movement of capital (articles 49 and 63 TFEU). The
process is on-going. 



Disclosure of relevant papers and perspectives

The Company has published its tariff application and all relevant
correspondence with the CA on its website
(http://www.tallinnavesi.ee/?op=body&id=728) and to the Tallinn Stock Exchange
and will keep its investors informed of all future developments regarding the
further key developments regarding the processing of the tariff application. 

In opposite to the Company the CA has requested the Court procedures to be
closed. Based on misleading information submitted by the CA the Court approved
the CA’s request. ASTV has reapplied for open proceedings. 

Still, at this point in time the Company is unable to say what is going to
happen to the tariffs before Court judgments and what would be the next steps
by the European Commission. The outcome and lengths of the Court proceedings is
outside the control of the Company. 



Corporate structure

At the end of the quarter, 30 June 2013, the Group consisted of 2 companies.
The subsidiary Watercom OÜ is wholly owned by AS Tallinna Vesi and consolidated
to the results of the Company. 



Supervisory Council

Supervisory Council plans and organises the management of the Company and
supervises the activities of the Management Board. According to AS Tallinna
Vesi articles of association Supervisory Council consists of 9 members who are
appointed for two years. 

In the annual general meeting that was held on 21st May 2013 the independent
member Valdur Laid was recalled from the Supervisory Council and new
independent member Allar Jõks was appointed. 

Supervisory Council has formed three committees to advise Supervisory Council
on audit, remuneration and corporate government matters. 

More information about the Supervisory Council and committees can be found in
the note 12 to the financial statements as well as from the Company’s webpage: 

http://tallinnavesi.ee/en/Investor/Corporate-Governance/Supervisory-Board

http://tallinnavesi.ee/en/Investor/Corporate-Governance/Audit-Committee

http://tallinnavesi.ee/en/Investor/Corporate-Governance/Corporate-Governance-Rep
ort 



Management Board

Management Board is a governing body which represents and manages AS Tallinna
Vesi in its daily operations in accordance with the legal requirements as well
as the Articles of Association. The Management Board must act economically in
the most efficient way taking into consideration the interest of the Company
and its shareholders and ensure the sustainable development of the Company in
accordance with the set objectives and strategy. 

To ensure that the company’s interests are met in the best way possible, the
Management and Supervisory Boards shall extensively collaborate. Meetings of
Management and Supervisory Board members are held at least once a quarter. In
those meetings the Management Board informs the Supervisory Council about all
significant issues in Company’s business operations, the fulfilment of the
company’s short and long-term goals are being discussed and the risks impacting
them. For every meeting of the Management Board prepares report and submits the
report in advance with the sufficient time for the Supervisory Board to study
it. 

According to the Articles of Association the Management Board consists of 2-5
members, who are elected for 3 years. 

Starting from 1st June 2013 there are 4 members of the Management Board of AS
Tallinna Vesi: Ian Plenderleith (Chairman of the Board), Ilona Nurmela,
Aleksandr Timofejev and Riina Käi. 

Additional information about the members of the Management Board can be found
from the Company’s website: 

http://tallinnavesi.ee/en/Investor/Corporate-Governance/Management-Board



Additional information:

Ian John Alexander Plenderleith

Chairman of the Management Board

+372 6262 201

[email protected]



STATEMENT OF COMPREHENSIVE         II         II         6        6        12   
 INCOME                          quarter    quarter    months   months   months 
(thousand €)                       2013       2012     2013     2012      2012  
                                                                                
Revenue                            13 493     13 145   26 186   26 139    52 924
Costs of goods sold                -6 172     -5 332  -11 341  -10 092   -20 337
                                                                                
GROSS PROFIT                        7 321      7 813   14 845   16 047    32 587
                                                                                
Marketing expenses                   -175       -191     -399     -398      -772
General administration             -1 351     -1 264   -2 479   -2 375    -4 740
 expenses                                                                       
Other income/ expenses (-)            -53        -71      -70      -39     1 696
                                                                                
OPERATING PROFIT                    5 742      6 287   11 897   13 235    28 771
                                                                                
Financial income                    1 395        352    2 237      747     1 591
Financial expenses                   -779     -1 021   -1 562   -2 058    -3 297
                                                                                
PROFIT BEFORE TAXES                 6 358      5 618   12 572   11 924    27 065
                                                                                
Income tax on dividends            -4 625     -4 466   -4 625   -4 466    -4 466
                                                                                
NET PROFIT FOR THE PERIOD           1 733      1 152    7 947    7 458    22 599
COMPREHENSIVE INCOME FOR THE        1 733      1 152    7 947    7 458    22 599
 PERIOD                                                                         
Attributable to:                                                                
Equity holders of A-shares          1 732      1 151    7 946    7 457    22 598
B-share holder                       0,60       0,60     0,60     0,60      0,60
                                                                                
Earnings per A share (in             0,09       0,06     0,40     0,37      1,13
 euros)                                                                         
Earnings per B share (in              600        600      600      600       600
 euros)                                                                         





STATEMENT OF FINANCIAL POSITION                                                 
(thousand €)                                     30.06.201  30.06.201  31.12.201
                                                         3          2          2
                                                                                
ASSETS                                                                          
CURRENT ASSETS                                                                  
Cash and equivalents                                20 892     13 678     23 935
Trade receivables, accrued income and prepaid       15 378     20 187     18 323
 expenses                                                                       
Inventories                                            391        315        356
TOTAL CURRENT ASSETS                                36 661     34 180     42 614
                                                                                
NON-CURRENT ASSETS                                                              
Other long-term receivables                          8 396      5 370      7 560
Property, plant and equipment                      150 146    147 395    149 400
Intangible assets                                      949      1 349      1 154
TOTAL NON-CURRENT ASSETS                           159 491    154 114    158 114
TOTAL ASSETS                                       196 152    188 294    200 728
                                                                                
LIABILITIES                                                                     
                                                                                
CURRENT LIABILITIES                                                             
Current portion of long-term borrowings                149         45        115
Trade and other payables                            11 458      9 639      5 482
Derivatives                                          1 883      1 909      2 039
Prepayments                                          2 366      1 727      2 252
TOTAL CURRENT LIABILITIES                           15 856     13 320      9 888
                                                                                
NON-CURRENT LIABILITIES                                                         
Deferred income from connection fees                 8 333      6 990      7 892
Borrowings                                          95 680     95 424     95 717
Derivatives                                          1 040      3 019      2 538
Other payables                                          24          9         20
TOTAL NON-CURRENT LIABILITIES                      105 077    105 442    106 167
TOTAL LIABILITIES                                  120 933    118 762    116 055
                                                                                
EQUITY CAPITAL                                                                  
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                                   37 207     31 520     46 661
TOTAL EQUITY CAPITAL                                75 219     69 532     84 673
TOTAL LIABILITIES AND EQUITY CAPITAL               196 152    188 294    200 728





CASH FLOW STATEMENT                                          6       6      12  
                                                          months  months  months
(thousand €)                                               2013    2012    2012 
                                                                                
CASH FLOWS FROM OPERATING ACTIVITIES                                            
Operating profit                                          11 897  13 235  28 771
Adjustment for depreciation/amortisation                   2 963   2 883   5 879
Adjustment for profit from government grants and               0     -80  -2 043
 connection fees                                                                
Other non-cash adjustments                                   -48       5    -153
Profit/loss(+) from sale and write off of property,          -20       7      -6
 plant and equipment, and intangible assets                                     
Change in current assets involved in operating              -864    -510    -160
 activities                                                                     
Change in liabilities involved in operating activities     1 348     114    -568
Total cash flow from operating activities                 15 276  15 654  31 720
                                                                                
CASH FLOWS FROM INVESTING ACTIVITIES                                            
Loans granted                                                  0    -384    -765
Acquisition of property, plant and equipment, and         -3 445  -4 243     -10
 intangible assets                                                           011
Proceeds from sales of property, plant and equipment          20       2      38
Compensations received for construction of pipelines       3 551   5 581  11 198
Interest received                                            583     757   1 585
Total cash flow from investing activities                    709   1 713   2 045
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES                                            
Interest paid and loan financing costs, incl swap         -1 563  -1 658  -3 272
 interests                                                                      
Repayment of finance lease                                   -64       0     -61
Dividends paid                                               -17     -16     -16
                                                             401     801     801
Income tax on dividends                                        0       0  -4 466
Total cash flow from financing activities                    -19     -18     -24
                                                             028     459     600
                                                                                
Change in cash and bank accounts                          -3 043  -1 092   9 165
                                                                                
CASH AND EQUIVALENTS AT THE BEGINNING OF THE PERIOD       23 935  14 770  14 770
                                                                                
CASH AND EQUIVALENTS AT THE END OF THE PERIOD             20 892  13 678  23 935






         Ian John Alexander Plenderleith
         Chairman of the Management Board
         +372 6262 201
         [email protected]