Published: 2017-04-13 15:30:00 CEST
Tallinna Kaubamaja Grupp
Quarterly report

Unaudited consolidated interim accounts for the first quarter of 2017

 

Segments (EURm) Q1/17 Q1/16 yoy
Supermarkets 99.6 92.8 7.3%
Department stores 23.0 22.2 4.0%
Cars 24.2 18.2 32.9%
Footwear 2.6 2.4 7.9%
Real Estate 1.2 1.2 -0.4%
Total sales 150.7 136.9 10.1%
       
Supermarkets 2.8 2.5 12.3%
Department stores 0.1 -0.2 -134.7%
Cars 1.2 0.5 172.8%
Footwear -0.8 -0.5 57.6%
Real Estate 2.9 2.8 4.4%
Total profit before tax 6.1 5.0 22.1%

The total consolidated unaudited sales revenue of Tallinna Kaubamaja Group of the 1st quarter of 2017 was 150.7 million euros. Compared to the 1st quarter of 2016, when the sales revenue amounted to 136.9 million euros, the growth was 10.1%. Sales revenue increased in all retail segments of the Group. Net loss for the reporting period was 0.3 million euros due to income tax of 6.4 million euros, calculated on dividends. Loss for the 1st quarter of 2016 was 0.2 million euros, including income tax of 5.2 million. Pre-tax profit was almost one-fifth higher (6.1 million euros) in a year-on-year comparison.

The beginning of the year showed an improvement in the Group results both in terms of sales revenue, as well as pre-tax profit. Sales revenue increased in all retail segments of the Group despite the fact that the reference period, i.e. the 1st quarter of 2016, was longer by one trading day due to the leap year. Profit improved in the more important areas of the Group. Carefully planned marketing campaigns, sophisticated assortment of goods and supplementation of trade processes continued to lead to success. The growth of the Group’s major e-stores met the expectations. Margin of the 1st quarter suffered slightly compared to the year prior due to the rise in raw material prices of the central kitchen and extensive seasonal discounts in the footwear segment. In terms of costs, the Group managed to keep control over miscellaneous operating costs, contributing more to data communication and IT expenses, which play an increasingly important role in the company’s development activities. Labour costs increased by 6.4%, which together with the growing number of employees is a good result and shows the success of the HR policy, contributing also to other values besides salary.

Selver supermarkets

The consolidated sales revenue of the 1st quarter of 2017 in the business segment of supermarkets and the sales revenue in Estonia was 99.6 million euros, indicating a 7.3% growth in a year-on-year comparison. 8.8 million purchases were made in Selvers in the 1st quarter of 2017, surpassing the figure of the previous year by 4.4%. The consolidated pre-tax profit of the business segment of supermarkets made 2.8 million euros in the 1st quarter of 2017, from which 3.3 million was the profit earned in Estonia, having grown by 0.3 million euros compared to the year prior. The consolidated net loss of the supermarket segment was 0.8 million euros, exceeding the last year’s result by 0.7 million euros. The net loss earned in Estonia was 0.3 million euros in the 1st quarter of 2017. The difference between net profit and profit before income tax arises from the income tax paid on dividends – in 2017, the income tax on dividends surpassed the figure of the previous year by 1.0 million euros. Pre-tax loss and net loss earned in Latvia amounted to 0.5 million euros in the 1st quarter of 2017. Loss remained on the same level with the previous year. The business operations in Latvia have been frozen. Growth in the sales revenue continued to be positively influenced by consumer confidence and increasing real income. In the 1st quarter, the turnover of Selver stores outpaced the average growth of the turnover of the market segment. Increase in the number of purchases and the average shopping basket (also by comparable stores) in the 1st quarter were supported by the newly opened stores, ongoing work with the assortment and successful campaigns. The results of e-Selver were really successful, with sales of the 1st quarter increasing by more than 1.6 times. The formation of the profit earned in Estonia has been particularly affected by an increase in the gross profit earned from the sale of goods, which has been accomplished primarily with successful sales and optimising the trade processes. With regard to operating expenses, the Group has managed to improve the level of cost efficiency of the previous year. As expected, a positive effect has come from investments, enabling to save on administrative costs and under the strong salary pressure, maintain the labour efficiency on the level of the previous year. The 2017 reference base does not include the three new supermarkets opened in Tallinn and Maardu in the previous year. The reference base is higher by the additional day due to the leap year, Easter moving into April and one closed store in Narva. 

Department stores

The sales revenue of the first three months of 2017 in the business segment of department stores was 23.0 million euros, having increased by 4.0% in a year-over-year comparison. The pre-tax profit of the department stores was 0.1 million euros in the 1st quarter of 2017, which is 0.2 million euros better than the result of the year prior. The sales revenue of the department stores in the 1st quarter was influenced by successful sales campaigns. The seasonal discount campaign in January and the campaign “Ilusat isu” (“Beautiful Appetite”) in the gourmet and home department held for the first time in February instead of May were successful. The customers have warmly welcomed the exclusive cosmetics brands sold only in department stores and this had a positive impact on the beauty campaign sales in March. The sales via the successfully launched e-store are included in the reference base starting from last March, which also has a positive impact on the result of the 1st quarter.  The sales revenue in the 1st quarter of 2017 of OÜ TKM Beauty Eesti, which operates the I.L.U. cosmetics stores, was 1.0 million euros, having decreased by 10.3% compared to the same period in 2016. The loss of the 1st quarter was 0.1 million euros, exceeding the loss of the comparable period of 2016 by 6.5%. The result of the 1st quarter was notably influenced by the weak performance of Tartu stores, caused by reconstruction works at Lõunakeskus and the slow start-up of the store in the Kvartal centre.

Car Trade

The sales revenue of the 1st quarter of 2017 of the car trade segment was 24.2 million euros. The sales revenue increased by 32.9% in a year-on-year comparison, whereas the sales revenue of KIAs grew by 56.7%. In the first three months of the year, a total of 1,116 new vehicles were sold. The pre-tax profit of the segment in the 1st quarter of 2017 was 1.2 million euros, surpassing the profit of the same period in 2016 by 0.8 million euros. The sales growth of new cars was driven by winning a couple of bigger procurements and delivering the cars in Latvia and Lithuania. In Lithuania, the sale of new KIAs increased also due to a change in the mindset of Lithuanian car buyers towards buying a larger number of new cars. Lithuania is known as the largest market in the Baltic region for second-hand vehicles. The sale of KIAs to private persons has increased, this above all in Latvia. The SUV Sportage is still the biggest hit model of KIA, with growing popularity. The sales growth of KIA has been boosted by active marketing and effectively targeted media campaigns organised by the importer of KIA. In addition, the sale of new Opels has started well in the 1st quarter of this year and the sale of Cadillac passenger cars has improved.

Footwear trade

The sales revenue of the 1st quarter of 2017 in the segment of footwear trade was 2.6 million euros, having increased by 7.9% year-on-year. Loss was 0.8 million euros in the 1st quarter, indicating a 0.3 million euros weaker performance than in the year prior. The weather that briefly promised winter last autumn remained mild and there was no real winter. This increased the discounts made on winter goods in the first months of this year, boosting the sales, but decreasing the margins. Profit was diminished also by the pre-closing clearance sale of two shoe stores. In March, the ABC King stores in the centre Kaubamajakas in Pärnu and in the Kuressaare Auriga Centre were closed. The ABC King store in the Kuressaare Auriga Centre was closed temporarily for the renovation of the Auriga Centre.

Real Estate

The external sales revenue of the real estate segment was 1.2 million euros in the 1st quarter of 2017, remaining on the same level as the year prior. The segment’s rental income of the reporting period increased, but other income received from tenants in the reference period was smaller due to one-off marketing revenue in the 1st quarter of 2016. Pre-tax profit of the 1st quarter in the segment was 2.9 million euros, which is 4.4%, or 0.1 million euros more in a year-on-year comparison. Profit growth was supported by the successful leasing of commercial premises and optimising operating expenses. In the course of renovating the Tartu Kaubamaja Centre, the lighting management programme was modernised, LED technology implemented and automation of heating systems improved. Heating costs decreased also due to a warmer than usual winter.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

  31.03.2017 31.12.2016
ASSETS    
Current assets    
Cash and cash equivalents 27,810 32,375
Trade and other receivables 13,637 15,396
Inventories 70,201 70,186
Total current assets 111,648 117,957
Non-current assets    
Long-term trade and other receivables 264 264
Investments in associates 1,813 1,762
Investment property 48,726 48,684
Property, plant and equipment 210,781 211,511
Intangible assets 8,340 8,505
Total non-current assets 269,924 270,726
TOTAL ASSETS 381,572 388,683
     
LIABILITIES AND EQUITY    
Current liabilities    
Borrowings 24,309 26,852
Trade and other payables 105,170 83,812
Total current liabilities 129,479 110,664
Non-current liabilities    
Borrowings 73,763 73,772
Provisions for other liabilities and charges 403 403
Total non-current liabilities 74,166 74,175
TOTAL LIABILITIES 203,645 184,839
Equity    
Share capital 16,292 16,292
Statutory reserve capital 2,603 2,603
Revaluation reserve 83,480 83,932
Currency translation differences -255 -255
Retained earnings 75,807 101,272
TOTAL EQUITY 177,927 203,844
TOTAL LIABILITIES AND EQUITY 381,572 388,683

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

  3 months 2017 3 months 2016
     
Revenue 150,688 136,850
Other operating income 482 267
     
Cost of sales -113,666 -102,848
Other operating expenses -13,494 -12,759
Staff costs -14,155 -13,298
Depreciation, amortisation and impairment losses -3,281 -2,806
Other expenses -329 -241
Operating profit 6,245 5,165
Finance income 0 2
Finance costs -183 -208
Finance income on shares of associates 51 46
Profit before tax 6,113 5,005
Income tax expense -6,371 -5,219
NET LOSS FOR THE FINANCIAL YEAR -258 -214
Other comprehensive income:    
Items that may be subsequently reclassified to  profit or loss    
Currency translation differences 0 0
Other comprehensive income for the financial year 0 0
TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR -258 -214

 

         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000


Börs_Kaubamaja_1Q2017_eng.pdf