Börsiteade

Pealkiri

RESULTS OF OPERATIONS - FOR THE 3rd QUARTER 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 in 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 (Public Water Supply and Sewerage Act), 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.
     Currently the date of the next court hearing is not set. 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 3rd QUARTER 2013

Financial highlights of 3rd quarter 2013

In the 3rd quarter of 2013 the Company is continuously focused on the
improvement of operational performance and customer service. 

During the 3rd quarter of 2013 the Company’s total sales increased, year on
year, by 0.4% to 13.12 mln euros. Sales of water and wastewater treatment were
down by 0.6% to 11.67 mln euros compared to the 3rd quarter of 2012. 

The operating profit from the Company’s main business activity decreased by
0.66 mln euros or 9.4% to 6.31 mln euros during the 3rd quarter of 2013
compared to the 3rd quarter of 2012, mainly due to the increase in the variable
costs, which is in more detail explained below. 

The Company’s profit before taxes and net profit for the 3rd quarter in 2013
was 5.80 mln euros, which is a 0.68 mln euros or 10.5% decrease compared to the
relevant period in 2012. 

mln €           3 Q     3 Q     3 Q     Change  9        9        9       Change
                 2011    2012    2013   13/12    months   months   month  13/12 
                                                 2011     2012    s 2013        
--------------------------------------------------------------------------------
Sales             13,0    13,1    13,1    0,4%     38,2     39,2    39,3    0,2%
Gross profit       7,8     8,2     7,4   -8,8%     23,1     24,2    22,3   -7,9%
Gross profit      59,8    62,4    56,7   -9,1%     60,6     61,7    56,7   -8,1%
 margin %                                                                       
Operating          7,0     7,0     6,3   -9,4%     20,8     20,2    18,2   -9,9%
 profit                                                                         
Operating          6,5     6,8     6,3   -6,9%     19,7     19,9    18,2   -8,7%
 profit - main                                                                  
 business                                                                       
Operating         54,2    53,3    48,1   -9,7%     54,6     51,5    46,3  -10,1%
 profit margin                                                                  
 %                                                                              
Profit before      4,4     6,5     5,8  -10,5%     18,1     18,4    18,4   -0,2%
 taxes                                                                          
Net profit         4,4     6,5     5,8  -10,5%     13,8     13,9    13,7   -1,4%
Net profit        33,6    49,5    44,2  -10,9%     36,2     35,5    35,0   -1,6%
 margin %                                                                       
ROA %              2,4     3,4     2,9  -13,1%      7,5      7,3     7,0   -4,2%
Debt to total     61,3    60,2    58,8   -2,3%     61,3     60,2    58,8   -2,3%
 capital                                                                        
 employed                                                                       
ROE %              6,1     8,5     7,2  -16,1%     19,4     18,3    17,0   -7,5%
Current ratio      3,1     3,7     3,8    1,5%      3,1      3,7     3,8    1,5%
--------------------------------------------------------------------------------

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

3rd quarter 2013

Sales

In the 3rd quarter of 2013 the Company’s total sales increased, year on year,
by 0.4% to 13.12 mln euros. 88.9% of sales comprise of sales of water and
treatment of wastewater to domestic and commercial customers within and outside
of the service area, 6.1% of sales from fees received from the City of Tallinn
for operating and maintaining the storm water system and 5.0% from other works
and services. 

Sales of water and wastewater services were 11.67 mln euros, a 0.6% decrease
compared to the 3rd quarter of 2012, resulting from the changes in sales
volumes as described below. 

Within the service area, sales to residential customers were at 5.77 mln euros,
showing a 0.2% 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 1.4% to 4.68 mln
euros, mainly coming from the sales in leisure sector. Sales to customers
outside of the main service area decreased by 6.4% to 1.03 mln euros in the 3rd
quarter of 2013. It was mostly affected by storm water as sales of water and
wastewater remained broadly flat decreasing only by 0.6% or 0.01 mln euros.
Over pollution fees received were 0.19 mln euros, a 20.9% decrease compared to
the 3rd 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 0.28 mln m3 or 16.6% lower than in the
3rd quarter of 2012. As already mentioned before the main factor in this
decrease was a reduction in storm water volumes influenced by low rainfall. 

The sales from the operation and maintenance of the storm water and
fire-hydrant system in the main service area decreased by 21.2% to 0.85 mln
euros in the 3rd 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. 

Increase of 31.2% to 0.60 mln euros in other sales is related with increased
pipeline construction activities compared to 3rd quarter in 2012. 



Cost of Goods Sold and Gross profit

The cost of goods sold for the main operating activity was 5.68 mln euros in
the 3rd quarter of 2013, showing 0.76 mln euros or 15.4% 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 3rd quarter of 2013 resulting extra pollution tax in the
amount of 0.36 mln euros. 

Total variable costs increased by 0.25 mln euros or 14.4% year on year. Biggest
increase comes from the increase in pollution tax. 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 0.02 mln euros or 8.8% to 0.25
     mln euros in the 3rd quarter of 2013, driven mainly by 5% raise in tax
     rates.
  -- Total chemical costs remained broadly flat, decreasing 0.6% to 0.46 mln
     euros. Costs decrease was mainly the result of a decrease in chemicals
     volumes used due to less sewage treated.
  -- Electricity costs decreased by 0.12 mln euros or 13.8% in the 3rd quarter
     of 2013 compared to the 3rd quarter of 2012. Lower electricity costs are
     mostly derived from the decrease in treatment volumes, worth 0.19 mln
     euros. Positive effects are reduced by increased electricity unit costs by
     0.07 mln euros.
  -- In the 3rd quarter of 2013 the pollution tax expense increased by 0.36 mln
     euros or 233.1%. 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. As a result higher pollution tax rates were applied and the
     Company faced additional pollution tax and income tax expenses all in total
     worth 0.37 mln euros. Eliminating the effects of the incident the pollution
     tax would have decreased by 0.01 mln euros or 7.8%. The pollution tax
     decrease due to decrease in volumes was balanced by the increase due to
     pollutants concentration (worth 0.03 mln euros) and overall increase in tax
     rates by 15% (worth 0.02 mln euros).

Total fixed cost of goods sold (staff costs, depreciation and other cost of
goods sold) in the main operating activity increased by 0.51 mln euros or
16.0%. 63% or 0.3 mln euros of the increase is mainly related to increased
revenues from pipeline construction as mentioned above. The remaining increase
is related to higher repair and maintenance carried out in the 3rd quarter of
2013. 

As a result of all of the above the Company’s gross profit for the 3rd quarter
of 2013 was 7.4 mln euros, which is a decrease of 0.8 mln euros, or 8.8%,
compared to the gross profit of 8.2 mln euros for the 3rd quarter of 2012. 



Other Operating Costs

Marketing expenses and General administration expenses stayed mostly flat
during the 3rd quarter of 2013 compared to the corresponding period in 2012,
decreasing in total by 4.5% or 0.06 mln euros, mainly because of slightly lower
legal fees and servitude fees, balanced by overall salary increase and also
changes in the management board. 



Other net income/expenses

Other net income stayed flat at net expense of 0.15 mln euros, compared to 0.15
mln euros net expense in the 3rd quarter of 2012. The decline in government
grants revenues were balanced by a reduction in doubtful receivable expenses. 



Operating profit

As a result of above factors the Company’s operating profit from main services
for the 3rd quarter of 2013 totalled 6.31 mln euros compared to 6.78 mln euros
in the corresponding quarter in 2012, which shows a decrease of 0.47 mln euros
or 6.9%. Total operating profit for the 3rd quarter of 2012 was 6.31 mln euros,
a decrease of 0.66 mln euros. Year on year the operating profit for the 3rd
quarter has decreased by 9.4%. 



Financial expenses

The company’s net financial expenses amounted to 0.51 mln euros in the 3rd
quarter of 2013, which is a negative change of 0.03 mln euros compared to -0.49
mln euros financial expenses in the 3rd quarter of 2012. Financial costs have
been balanced by interest income in 2012 and in 2013 by the non-cash
revaluation of the fair value of swap agreements. In the 3rd quarter of 2012
there was no revaluation impact on financial expenses, compared to the positive
impact of 0.28 mln euros in the 3rd 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 still with floating interest rate. At this
point in time the estimated fair value of the swap contracts is negative,
totalling 2.64 mln euros. 

Effective interest rate (incl. swap interests) in the 3rd quarter of 2013 was
3.21%, amounting in the interest costs of 0.78 mln euros, compared to the
effective interest rate of 3.25% and the interest costs of 0.79 mln euros into
the 3rd quarter of 2012. 



Profit Before and After Tax

The Company’s profit before taxes for the 3rd quarter of 2013 was 5.80 mln
euros, which is 0.68 mln euros lower than the profit before taxes of 6.48 mln
euros for the 3rd quarter of 2012, resulting mainly from the increased costs as
described above. 

As the dividends were paid out in June 2013 and 2012 there is no income tax in
the 3rd quarter and the Company’s profit after taxes equals to the profit
before taxes amount. 



Results for the nine months of 2013

During the nine months of 2013 the Company’s total sales increased, year on
year, by 0.2% to 39.31 mln euros. Sales of water and wastewater treatment were
35.63 mln euros, a 0.3% increase compared to the nine months of 2012. 

The movements in sales are similar to the movements in the 3rd quarter
described above. There has been a slight 0.16 mln euros or 0.9% decline in the
sales to residential customers and 0.31 mln euros or 2.2% of increase in the
sales to the commercial clients. Industrial sector has given the most of the
increase in the sales to commercial clients. The sales revenues from outside
service area clients for water and wastewater services has been also been
relatively stable showing an increase of 0.06 mln euros or 2.2% compared to 9
months in 2012. 

Due to less rainfall, the revenues from storm water treatment in the nine
months of 2013 remain 0.50 mln euros or 18.1% behind the comparative period in
2012 in the main service area. In outside service area the revenues from storm
water were down 0.16 mln euros or 32.0%. 

The operating profit from the Company’s main business activity decreased by
8.7% to 18.21 mln euros during the nine months of 2013 compared to the nine
months of 2012. As revenues have been relatively flat, decreasing only 0.2% or
0.10 mln euros, then the main reason for a decline comes from the rise in
pollution tax expenses (1.65 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 0.4 mln euros made in 2011 and also due
to the incidents at the wastewater treatment plant described above. 

The Company’s profit before taxes for the nine months of 2013 was 18.37 mln
euros, which is only a 0.2% decrease compared to the relevant period in 2012.
Decrease in operating profit was mostly compensated by the change in fair value
of swap contracts. 

The Company’s net profit for the nine months of 2013 was 13.74 mln euros, which
is 0.19 mln euros lower than the net profit of 13.94 mln euros in the
equivalent period in 2012. 



Balance sheet

In the nine months of 2013 the Company invested 5.86 mln euros into fixed
assets. As of 30 September 2013 non-current fixed assets amounted to 151.21 mln
euros and total non-current assets amounted to 156.41 mln euros. The reduction
in long-term receivables compared to year end by 3.17 mln euros to 4.39 mln
euros is related to the fact that in May 2013 AS Maardu Vesi repaid its loan to
the Company in the amount of 3.81 mln euros. 

Current assets decreased by 2.33 mln euros to 40.28 mln euros in the nine
months mainly due to decreased trade receivables by 2.93 mln euros and
increased cash at bank by 0.64 mln euros. 

Current liabilities increased by 0.75 mln euros to 10.64 mln euros in the nine
months mainly due to increased payments to suppliers in the amount of 0.20 mln
euros and increased tax liabilities by 0.47 mln euros. 

The Company has a Total debt/Total assets level as expected of 58.8%, in range
of 55%-65%, reflecting the year end equity profile. This level is consistent
with the same period in 2012 when the total debt/total assets ratio was 60.2%. 

Long-term liabilities stood at 105.05 mln euros at the end of September 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 and noted an exceptional
contingent liability, which could cause an outflow of economic benefits of up
to 36.0 mln euros. In the 3rd quarter of 2013 the Company re-evaluated the
liability, which now stands at 34.0 mln. euros, as per note 13 to the accounts. 



Cash flow

During the nine months of 2013, the Company generated 21.59 mln euros of cash
flows from operating activities, a decrease of 2.96 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 a change in
working capital. Underlying operating profit still continues to be the main
contributor to operating cash flows. 

In the nine months of 2013 net cash flows from investing activities resulted in
a cash inflow of 3.49 mln euros, an increase of 2.59 mln euros compared to an
inflow of 0.91 mln euros in the nine months of 2012. This is made up as
follows: 

In the nine months of 2013 the Company paid 6.17 mln euros for the fixed asset
investments which is a decrease of 2.13 mln euros compared to the same period
in 2012, when the Company spent 8.31 mln euros. The compensations received for
the construction of pipelines were 5.15 mln euros in the nine months of 2013, a
decrease of 3.58 mln euros compared to same period in 2012. In 2013 the Company
did not give any further loans and AS Maardu Vesi repaid their loan in full in
the amount of 3.8 mln euros. In 2012 the loan granted to AS Maardu Vesi
amounted to 0.58 mln euros. 

In the nine months of 2013, cash outflow from financing amounted to 24.44 mln
euros due to interests paid, loan financing costs and dividends paid, which is
0.77 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 inflow in the nine
months of 2013 was 0.64 mln euros compared to a cash inflow of 1.79 mln euros
in 2012. Cash and cash equivalents stood at 24.58 mln euros as of 30 September
2013, which is 8.02 mln euros higher than at the corresponding period of 2012. 



Employees

At the end of the 3rd quarter of 2013, the total number of employees was 305
compared to 316 at the end of the 3rd quarter of 2012. The full time equivalent
(FTE) was respectively 292 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 September 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 3rd
quarter of 2013, owning 2.54% of the total shares compared to 1.57% at the end
of 1st quarter 2012. 

As of 30 September 2013, the closing price of the AS Tallinna Vesi share was
10.30 euros, which is a 3.0% increase compared to the closing price of 10.00
euros at the beginning of the quarter. During the same period the OMX Tallinn
index increased by 2.9%. In the 3rd quarter the Company’s share price was
mainly impacted by the on-going contractual debate. 



Operational highlights in the nine months of 2013

Indicator                                                          2012     2013
                                                                      9        9
                                                                 months   months
--------------------------------------------------------------------------------
Drinking water                                                                  
--------------------------------------------------------------------------------
- 
Compliance of water quality at the customers tap                 99.60%   99,64%
--------------------------------------------------------------------------------
Water loss in the water distribution network                     16.07%   16.65%
--------------------------------------------------------------------------------
Average duration of water interruptions per property, h          3.49 h   3.54 h
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Wastewater                                                                      
--------------------------------------------------------------------------------
- 
Number of sewer blockages                                           536      605
--------------------------------------------------------------------------------
Number of sewer bursts                                              340      357
--------------------------------------------------------------------------------
Wastewater treatment compliance with environmental standards       100%     100%
--------------------------------------------------------------------------------
                                                                                
--------------------------------------------------------------------------------
Customer service                                                                
--------------------------------------------------------------------------------
Number of written contacts                                          120      107
--------------------------------------------------------------------------------
Number of customer contacts regarding water quality                 167      196
--------------------------------------------------------------------------------
Number of customer contacts regarding water pressure                544      578
--------------------------------------------------------------------------------
Notification of unplanned water interruptions at least 1 h        90.2%    90.8%
 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        III         III        9        9        12   
 INCOME                         quarter     quarter    months   months   months 
(thousand €)                      2013        2012     2013     2012      2012  
                                                                                
Revenue                            13 122     13 076   39 309   39 214    52 924
Costs of goods sold                -5 680     -4 920  -17 021  -15 011   -20 337
                                                                                
GROSS PROFIT                        7 442      8 156   22 288   24 203    32 587
                                                                                
Marketing expenses                   -139       -178     -538     -576      -772
General administration             -1 141     -1 162   -3 620   -3 537    -4 740
 expenses                                                                       
Other income/ expenses (-)            146        148       75      109     1 696
                                                                  ,             
OPERATING PROFIT                    6 308      6 964   18 205   20 199    28 771
                                                                                
Financial income                      282        307    2 519    1 052     1 591
Financial expenses                   -795       -793   -2 357   -2 849    -3 297
                                                                                
PROFIT BEFORE TAXES                 5 795      6 478   18 367   18 402    27 065
                                                                                
Income tax on dividends                 0          0   -4 625   -4 466    -4 466
                                                                                
NET PROFIT FOR THE PERIOD           5 795      6 478   13 742   13 936    22 599
COMPREHENSIVE INCOME FOR THE        5 795      6 478   13 742   13 936    22 599
 PERIOD                                                                         
Attributable to:                                                                
Equity holders of A-shares          5 794      6 477   13 741   13 935    22 598
B-share holder                       0,60       0,60     0,60     0,60      0,60
                                                                                
Earnings per A share (in             0,29       0,32     0,69     0,70      1,13
 euros)                                                                         
Earnings per B share (in              600        600      600      600       600
 euros)                                                                         





STATEMENT OF FINANCIAL POSITION                                                 
(thousand €)                                     30.09.201  30.09.201  31.12.201
                                                         3          2          2
                                                                                
ASSETS                                                                          
CURRENT ASSETS                                                                  
Cash and equivalents                                24 579     16 557     23 935
Trade receivables, accrued income and prepaid       15 393     19 021     18 323
 expenses                                                                       
Inventories                                            311        296        356
TOTAL CURRENT ASSETS                                40 283     35 874     42 614
                                                                                
NON-CURRENT ASSETS                                                              
Other long-term receivables                          4 389      5 727      7 560
Property, plant and equipment                      151 210    148 147    149 400
Intangible assets                                      815      1 336      1 154
TOTAL NON-CURRENT ASSETS                           156 414    155 210    158 114
TOTAL ASSETS                                       196 697    191 084    200 728
                                                                                
LIABILITIES                                                                     
                                                                                
CURRENT LIABILITIES                                                             
Current portion of long-term borrowings                150         51        115
Trade and other payables                             6 071      5 206      5 482
Derivatives                                          1 836      2 066      2 039
Prepayments                                          2 579      2 292      2 252
TOTAL CURRENT LIABILITIES                           10 636      9 615      9 888
                                                                                
NON-CURRENT LIABILITIES                                                         
Deferred income from connection fees                 8 567      7 155      7 892
Borrowings                                          95 650     95 431     95 717
Derivatives                                            806      2 864      2 538
Other payables                                          24          9         20
TOTAL NON-CURRENT LIABILITIES                      105 047    105 459    106 167
TOTAL LIABILITIES                                  115 683    115 074    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                                   43 002     37 998     46 661
TOTAL EQUITY CAPITAL                                81 014     76 010     84 673
TOTAL LIABILITIES AND EQUITY CAPITAL               196 697    191 084    200 728





CASH FLOW STATEMENT                                          9       9      12  
                                                          months  months  months
(thousand €)                                               2013    2012    2012 
                                                                                
CASH FLOWS FROM OPERATING ACTIVITIES                                            
Operating profit                                          18 205  20 199  28 771
Adjustment for depreciation/amortisation                   4 381   4 328   5 879
Adjustment for profit from government grants and             -85    -269  -2 043
 connection fees                                                                
Other non-cash adjustments                                  -177       3    -153
Profit/loss(+) from sale and write off of property,         -119       8      -6
 plant and equipment, and intangible assets                                     
Change in current assets involved in operating            -1 528    -518    -160
 activities                                                                     
Change in liabilities involved in operating activities       911     796    -568
Total cash flow from operating activities                 21 588  24 547  31 720
                                                                                
CASH FLOWS FROM INVESTING ACTIVITIES                                            
Loans granted                                                  0    -581    -765
Repayment of loan                                          3 814       0       0
Acquisition of property, plant and equipment, and         -6 173  -8 307     -10
 intangible assets                                                           011
Proceeds from sales of property, plant and equipment         121       2      38
Compensations received for construction of pipelines       5 150   8 728  11 198
Interest received                                            582   1 063   1 585
Total cash flow from investing activities                  3 494     905   2 045
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES                                            
Interest paid and loan financing costs, incl swap         -2 314  -2 398  -3 272
 interests                                                                      
Repayment of finance lease                                   -98       0     -61
Dividends paid                                               -17     -16     -16
                                                             401     801     801
Income tax on dividends                                   -4 625  -4 466  -4 466
Total cash flow from financing activities                    -24     -23     -24
                                                             438     665     600
                                                                                
Change in cash and bank accounts                             644   1 787   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             24 579  16 557  23 935




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