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AS Ekspress Grupp: Consolidated unaudited interim report for the Second Quarter and First Half-Year of 2022

Teade

In  the 2(nd) quarter  of 2022, the  revenue of  AS Ekspress  Grupp totalled EUR
16.4 million  and net profit totalled EUR 1.27 million. The revenue in the first
6 months  of 2022 increased  by 23% year-over-year  to EUR  29.8 million and net
profit  increased by 12% to EUR 0.76 million. Digital revenue contributed 76% to
the  Group's total revenue at the end of June. Digital revenue increased by 28%
as compared to the same period last year.

The  Group's performance in the 2(nd) quarter met expectations: the consolidated
revenue  totalled EUR  16.4 million (Q2  2021: EUR 13.3 million),  increasing by
23% as  compared to the previous year. The Group's online advertising sales were
strong,  attributable  to  the  total  market  growth as well as special digital
advertising  solutions offered to the  customers. Advertising buyers continue to
invest  an increasing share of their funds in online channels which opens up new
opportunities  for Ekspress Group companies. In  the first 6 months of the year,
the revenue totalled EUR 29.8 million, increasing by 23% as compared to the last
year.  The growth  in the  first 6 months  of the  year was strong; however, the
Group  is aware  of higher  risks arising  from weaker  economy and  a potential
recession  in the second half of the  year. Net profit growth of 12% as compared
to the previous year was hindered by a higher share of advertising sales through
agencies  which has a higher  cost base for the  Group, as well as higher labour
and other input prices (primarily paper, energy and services).

The number of digital subscriptions of AS Ekspress Grupp increased by 34% by the
end  of June as compared to the  same period last year and totalled 151 thousand
subscriptions.   In   a   year-over-year   comparison,  the  number  of  digital
subscriptions continued to demonstrate strong growth, but the growth rate slowed
down  slightly in the 2(nd) quarter this year. As expected, on the one hand this
slowdown  is related to the fact that the reference base as compared to previous
periods  continues to  increase while  on the  other hand  the overall inflation
forces  some consumers to regularly review their expenses. The average prices of
digital subscriptions have considerably continued to grow year after year.

The  earnings before  interest, tax,  depreciation and  amortisation (EBITDA) of
Ekspress  Grupp totalled  EUR 2.22 million  in the  2(nd) quarter and  EUR 2.83
million  in the  first 6 months  of the  year. EBITDA  growth was 1% both in the
2(nd) quarter  as well as in the 1(st) half of  the year as compared to the same
period  in  2021. Due  to  the  growth  of  input prices and the pressure of the
general  economic environment  on labour  costs, the  Group's EBITDA  margin has
fallen  from 12% to 9%. We are aiming to  find opportunities in the new economic
environment for more efficient process management and revenue growth.

The  consolidated net profit was EUR  1.27 million in the 2(nd) quarter of 2022
and  EUR 0.76 million in the first half of  2022. The net profit in the first 6
months of 2022 increased by 12% as compared to last year.

In  May, AS Ekspress Grupp entered into  a contract to acquire the operations of
the  news agency ELTA in  Lithuania. The acquisition of  the news agency ELTA is
part  of the Group's organic growth strategy. The key purpose of the transaction
is  to enhance and modernize a news agency with one hundred years of experience,
by  offering a  modern and  objective source  of information  for the Lithuanian
media  and foreign  channels, and  to foster  competition in the Lithuanian news
production market.

The  business environment  in the  first half  of 2022 was  volatile and it will
create insecurity for the future, requiring flexibility and quick responses from
the  Group. Over the last  two years, the Group  has demonstrated its ability to
quickly  adapt to difficult  conditions and maintain  profitability even in weak
economic conditions.


Q2 AND 6 MONTHS RESULTS


REVENUE

In the 2(nd) quarter of 2022, the consolidated revenue totalled EUR 16.4 million
(Q2 2021: EUR 13.3 million). The revenue for the 2(nd) quarter increased by 23%
year-over-year. The consolidated revenue for the first 6 months of 2022 totalled
EUR  29.8 million (first 6 months  2021: EUR 24.3 million). The  revenue for the
first  6 months increased by 23% year-over-year. This growth was attributable to
both  online advertising revenue  as well as  digital subscriptions revenue. The
share  of the Group's digital revenue in total revenue was 76% at the end of the
2(nd) quarter  of  2022 (at  the  end  of  the  2(nd) quarter 2021: 72% of total
revenue).  Digital revenue  for the  first 6 months  of 2022 increased by 28% as
compared to the same period last year.

PROFITABILITY

In  the 2(nd) quarter of 2022, the consolidated EBITDA totalled EUR 2.22 million
(Q2  2021: EUR 2.20 million). In the  2(nd) quarter of 2022, EBITDA increased by
1% as  compared  to  the  previous  year  and  the  EBITDA  margin  was  14% (Q2
2021: 17%). The  consolidated EBITDA for the first 6 months of 2022 totalled EUR
2.83 million  (6 months 2021: EUR 2.80 million). In the first 6 months of 2022,
EBITDA  increased by 1% as compared  to the previous year  and the EBITDA margin
was 9% (6 months 2021: 12%).

The  consolidated net  profit for  the 2(nd) quarter  of 2022 totalled EUR 1.27
million  (Q2  2021: EUR  1.12 million).  In  the  2(nd) quarter of 2022, the net
profit  increased by 13% as compared to the previous year. In the first 6 months
of  2022, the consolidated net  profit was EUR  0.76 million (6 months 2021: EUR
0.68 million). In the first 6 months of 2022, the net profit increased by 12% as
compared to the previous year. The revaluation profit from the final acquisition
instalment  of Bi?eshu Parad?ze  in the amount  of EUR 0.2 million  had a one-off
effect on the net profit for the 2(nd) quarter.

EXPENSES

In  the first 6 months of  2022, the cost of goods  sold, marketing, general and
administrative  costs  totalled  EUR  29.20 million  (6  months 2021: EUR 23.42
million). In the first 6 months of the year, operating expenses increased by EUR
5.78 million (25%), of which staff costs totalled EUR 3.31 million (26%). In the
2(nd) quarter  of  2022, the  number  of  employees  increased  by  13 people as
compared  to the same period  last year and as  of 30 June 2022, there were 145
employees  more working  at the  Group as  compared to  the previous  year. This
growth is attributable to 47 employees of OÜ Geenius Meedia that was acquired at
the end of 2021 and 98 employees of other media companies in Estonia, Latvia and
Lithuania.  In addition to inflationary pressures on salary growth, the employee
cost  base has increased due to  additional expenditure related to the editorial
staffs covering the war in Ukraine.

In  the first  6 months of  the year,  one-off expenditure includes donations to
Ukraine  in the total amount of  EUR 0.14 million (Q2 2022: additional donations
of EUR 0.05 million).

The  war in Ukraine  has had a  major negative effect  on the GDP  growth in the
Baltic  States. As  a result,  the economy  has slowed  down and  created a high
inflation  environment  (in  June  2022, inflation  was 21.9% in Estonia, 21% in
Lithuania  and 19.3% in Latvia as compared to  the previous year). The Group has
neither  any operations nor any assets in Ukraine and Russia, and therefore, the
war has only an indirect impact on the Group.

CASH POSITION

At  the end of the reporting period, the  Group had available cash in the amount
of  EUR 6.8 million and equity  in the amount of  EUR 52.1 million (56% of total
assets). The comparable data as of 30 June 2021, including the printing services
segment,  were  EUR  4.2 million  and  EUR  55.4 million  (59% of total assets),
respectively.  As of 30 June 2022, the Group's net debt was EUR 15.7 million (31
December 2021: EUR 11.3 million).

In  the first 6 months of 2022, the Group's cash flows from operating activities
totalled  EUR  2.57 million  (6  months  2021: EUR  1.99 million, incl. printing
services segment) 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 2022, the Group's cash flows from investing activities
totalled  EUR -3.60  million (6  months 2021: EUR  -1.42 million),  of which EUR
-2.34  million was related to development and acquisition of property, plant and
equipment,  indicating higher investments  in products and  technologies. In the
first  6 months of  the year,  the Group  invested EUR  -1.31 million in new LED
screens, partly to be funded with finance lease in the second half of 2022.

In  the first 6 months of 2022, the Group's cash flows from financing activities
totalled  EUR -3.14  million (6  months 2021: EUR  -2.64 million),  of which EUR
-2.43 million was the dividend payment to the shareholders of AS Ekspress Grupp.
Financing activities also include a net change in borrowings and principal lease
payments,  where the changes made  to SEB loan contracts  entered into in summer
2021 had  a positive impact. In the first 6 months of 2021, treasury shares were
purchased in the amount of EUR 0.45 million.

DIVIDENDS

At  the regular General Meeting of Shareholders  of AS Ekspress Grupp held on 2
May  2022, it was  decided to  pay a  dividend of  8 euro cents per share in the
total  amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May
2022.


Key financial indicators for segments


 (EUR thousand)    Sales

                                                                     12 months
                   Q2 2022 Q2 2021 Change % 6M 2022 6M 2021 Change % 2021

 Media segment     16 062  12 904  24%      29 144  23 560  24%      52 093

  incl. revenue
 from all digital
 and online
 channels          12 494  9 939   26%      22 580  17 603  28%      40 453

  % of revenue
 from all digital
 and online
 channels          78%     77%              77%     75%              78%

 Corporate
 functions         1 090   1 054   3%       2 182   2 106   4%       4 118

 Inter-segment
 eliminations      (743)   (652)            (1 490) (1 357)          (2 695)

 TOTAL GROUP       16 409  13 306  23%      29 836  24 308  23%      53 516

  % of revenue
 from all digital
 and online
 channels          76%     75%              76%     72%              76%


 (EUR thousand)    EBITDA

                                                                     12 months
                   Q2 2022 Q2 2021 Change % 6M 2022 6M 2021 Change % 2021

 Media segment     2 501   2 281   10%      3 394   3 076   10%      8 927

 Corporate
 functions         (261)   (111)   -136%    (491)   (289)   -70%     (669)

 Inter-segment
 eliminations      (24)    33               (70)    13               (18)

 TOTAL GROUP       2 216   2 204   1%       2 832   2 800   1%       8 240


  EBITDA margin   Q2 2022   Q2 2021   6M 2022   6M 2021   12 months 2021

  Media segment   16%       18%       12%       13%       17%

  TOTAL GROUP     14%       17%       9%        12%       15%



Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.06.2022 31.12.2021
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                     6 793     10 962
-------------------------------------------------------------------------------
 Trade and other receivables                                  10 786      9 323
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 181          2
-------------------------------------------------------------------------------
 Inventories                                                     293        266
-------------------------------------------------------------------------------
 Total current assets                                         18 053     20 553
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Other receivables and investments                             1 617      1 671
-------------------------------------------------------------------------------
 Deferred tax asset                                               42         42
-------------------------------------------------------------------------------
 Investments in joint ventures                                   833      1 011
-------------------------------------------------------------------------------
 Investments in associates                                     2 170      2 210
-------------------------------------------------------------------------------
 Property, plant and equipment                                 9 100      7 964
-------------------------------------------------------------------------------
 Intangible assets                                            61 017     60 807
-------------------------------------------------------------------------------
 Total non-current assets                                     74 779     73 705
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                 92 831     94 258
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                    2 379      3 201
-------------------------------------------------------------------------------
 Trade and other payables                                     17 621     17 664
-------------------------------------------------------------------------------
 Corporate income tax payable                                     40         82
-------------------------------------------------------------------------------
 Total current liabilities                                    20 040     20 947
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         20 098     19 018
-------------------------------------------------------------------------------
 Other long-term liabilities                                     601        601
-------------------------------------------------------------------------------
 Total non-current liabilities                                20 699     19 619
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            40 739     40 566
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority interest                                               138        140
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                18 478     18 478
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                               (362)      (384)
-------------------------------------------------------------------------------
 Reserves                                                      2 048      1 920
-------------------------------------------------------------------------------
 Retained earnings                                            17 513     19 261
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    51 954     53 552
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 52 092     53 692
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                 92 831     94 258
-------------------------------------------------------------------------------


Consolidated statement of comprehensive income (unaudited)

 (EUR thousand)                Q2 2022 Q2 2021  6M 2022  6M 2021 12 months 2021
-------------------------------------------------------------------------------
 Continuing operations
-------------------------------------------------------------------------------
 Sales                          16 409  13 306   29 836   24 308         53 516
-------------------------------------------------------------------------------
 Cost of sales                (12 407) (9 691) (23 441) (18 693)       (39 674)
-------------------------------------------------------------------------------
 Gross profit                    4 002   3 615    6 395    5 615         13 842
-------------------------------------------------------------------------------
 Other income                      198     212      317      318            929
-------------------------------------------------------------------------------
 Marketing expenses              (783)   (682)  (1 437)  (1 099)        (2 359)
-------------------------------------------------------------------------------
 Administrative expenses       (2 170) (1 747)  (4 317)  (3 623)        (7 435)
-------------------------------------------------------------------------------
 Other expenses                   (43)    (25)     (85)     (49)          (113)
-------------------------------------------------------------------------------
 Operating profit /(loss)        1 205   1 373      873    1 162          4 864
-------------------------------------------------------------------------------
 Interest income                     9       8       19       17             35
-------------------------------------------------------------------------------
 Interest expenses               (178)   (181)    (347)    (362)          (709)
-------------------------------------------------------------------------------
 Other finance income/(costs)      210    (11)      197        4            339
-------------------------------------------------------------------------------
 Net finance cost                   41   (184)    (131)    (341)          (335)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 joint ventures                   (87)    (63)    (220)    (170)          (281)
-------------------------------------------------------------------------------
 Profit/(loss) on shares of
 associates                        143      32      273       67            161
-------------------------------------------------------------------------------
 Profit /(loss) before income
 tax                             1 302   1 157      794      718          4 409
-------------------------------------------------------------------------------
 Income tax expense               (31)    (34)     (36)     (39)          (276)
-------------------------------------------------------------------------------
 Net profit /(loss) from
 continuing operations           1 271   1 124      759      679          4 133
-------------------------------------------------------------------------------
 Net profit /(loss) from
 discontinued operation              0     123        0      304        (1 876)
-------------------------------------------------------------------------------
 Net profit /(loss) for the
 reporting period                1 271   1 247      759      982          2 257
-------------------------------------------------------------------------------
 Net profit /(loss) for the reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent
 company                         1 272   1 246      761      980          2 243
-------------------------------------------------------------------------------
 Minority interest                 (1)       1      (2)        2             14
-------------------------------------------------------------------------------
 Total comprehensive income
 /(loss)                         1 271   1 247      759      982          2 257
-------------------------------------------------------------------------------
 Comprehensive income /(loss) for the reporting period attributable to
-------------------------------------------------------------------------------
 Equity holders of the parent
 company                         1 272   1 246      761      980          2 243
-------------------------------------------------------------------------------
 Minority interest                 (1)       1      (2)        2             14
-------------------------------------------------------------------------------
 Earnings per share (euro) - continuing operations
-------------------------------------------------------------------------------
 Basic earnings per share       0.0419  0.0371   0.0251   0.0224         0.1362
-------------------------------------------------------------------------------
 Diluted earnings per share     0.0405  0.0357   0.0242   0.0216         0.1316
-------------------------------------------------------------------------------
 Earnings per share (euro)
-------------------------------------------------------------------------------
 Basic earnings per share       0.0419  0.0412   0.0251   0.0325         0.0742
-------------------------------------------------------------------------------
 Diluted earnings per share     0.0405  0.0396   0.0242   0.0312         0.0716
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

                                                                      12 months
 (EUR thousand)                                      6M 2022 6M 2021*     2021*
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit /(loss) for the reporting year         873    1 524     3 060
-------------------------------------------------------------------------------
 Adjustments for (non-cash):
-------------------------------------------------------------------------------
 Depreciation and amortisation                         1 959    2 281     4 162
-------------------------------------------------------------------------------
 (Gain)/loss on sale, write-down and impairment of
 property, plant and equipment                             2       36      (10)
-------------------------------------------------------------------------------
 Change in value of share option                          18       19        36
-------------------------------------------------------------------------------
 Loss on sale of discontinued operation                    0        0     2 077
-------------------------------------------------------------------------------
 Cash flows from operating activities:
-------------------------------------------------------------------------------
 Trade and other receivables                         (1 385)  (1 150)   (1 599)
-------------------------------------------------------------------------------
 Inventories                                            (27)      160      (33)
-------------------------------------------------------------------------------
 Trade and other payables                              1 572    (390)     1 464
-------------------------------------------------------------------------------
 Income tax paid                                       (262)    (212)     (281)
-------------------------------------------------------------------------------
 Interest paid                                         (181)    (277)     (803)
-------------------------------------------------------------------------------
 Net cash generated from operating activities          2 569    1 992     8 073
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Acquisition of subsidiaries/ associates (less cash
 acquired) and
 other investments / cash paid-in equity-accounted
 investees                                           (1 971)    (201)   (3 325)
-------------------------------------------------------------------------------
 Disposal of discontinued operation, net of cash
 disposed of                                               0        0     6 326
-------------------------------------------------------------------------------
 Receipts of other investments                            10       51        51
-------------------------------------------------------------------------------
 Interest received                                         1        2         3
-------------------------------------------------------------------------------
 Purchase of property, plant and equipment and
 intangible assets                                   (2 335)  (1 268)   (2 786)
-------------------------------------------------------------------------------
 Proceeds from sale of property, plant and equipment
 and intangible assets                                    40        1         3
-------------------------------------------------------------------------------
 Loans granted                                          (30)     (82)     (212)
-------------------------------------------------------------------------------
 Loan repayments received                                 86        0       156
-------------------------------------------------------------------------------
 Dividends received                                      601       78       828
-------------------------------------------------------------------------------
 Net cash used in investing activities               (3 598)  (1 419)     1 044
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends paid                                      (2 425)        0   (3 028)
-------------------------------------------------------------------------------
 Payment of lease liabilities                          (851)    (954)   (1 814)
-------------------------------------------------------------------------------
 Loans received / Repayments of bank loans               136  (1 235)       864
-------------------------------------------------------------------------------
 Purchases of treasury shares                              0    (446)     (446)
-------------------------------------------------------------------------------
 Net cash used in financing activities               (3 140)  (2 635)   (4 424)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND CASH
 EQUIVALENTS                                         (4 169)  (2 062)     4 693
-------------------------------------------------------------------------------
 Cash and cash equivalents at the beginning of the
 period                                               10 962    6 269     6 269
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of the period    6 793    4 207    10 962
-------------------------------------------------------------------------------

*No  adjustments  have  been  made  to  the  consolidated cash flows for 2021 in
accordance  with the  requirements of  IFRS. Cash  flows related to the printing
services segment are still consolidated line-by-line.


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 sites
in Estonia and Latvia. Ekspress Grupp that launched its operations in 1989
employs more than 1400 people, owns leading web media portals in the Baltic
States and publishes the most popular daily and weekly newspapers as well as the
majority of the most popular magazines in Estonia.