Tallinna Kaubamaja Grupp
Unaudited consolidated interim accounts for the fourth quarter and twelve months of 2018
| || || || || || || |
|Total profit before tax||11,6||12,2||-5,1%||36,7||36,5||0,7%|
In the fourth quarter of 2018, the unaudited consolidated sales revenue of Tallinna Kaubamaja Group was 182.4 million euros, exceeding the year-on-year result by 4.2%. The sales revenue generated in 12 months was 681.2 million euros, showing an increase of 4.6% compared to the result of 2017, when the sales revenue was 651.3 million euros. In the fourth quarter of 2018, the unaudited consolidated net profit of the Group was 11.5 million euros, which is 3.3% lower than the profit of the same period of the previous year. The net profit of the group was 30.4 million euros in 2018, which is 2.0% better compared to the previous year. The pre-tax profit of twelve months was 36.7 million euros, showing a growth of 0.7% compared to the previous year. The size of the net profit was influenced by the dividend payment, on which income tax of 6.3 million euros was accrued in the first quarter of 2018, whereas a year earlier, income tax was accrued in the amount of 6.7 million euros.
In the fourth quarter of 2018, the Group continued to produce strong sales results. The supermarkets segment showed the largest growth in sales, supported by two new Selver stores opened in Tallinn in November. The successful sales campaigns of Kaubamaja and the launch of the new I.L.U. e-store increased the sales revenue and profit of the department stores segment compared to the last quarter of 2017. The car trade and supermarket segments had a very good year and were able to increase the sales and improve the profit numbers. The sales results of the Group’s e-stores grew strongly in 2018, showing a growth in numbers that still exceed the sales statistics of Estonian e-commerce sector. The labour costs of the Group increased by 8.7% in a year and the average salary of the Group’s employees grew by 6.1%. The profit earned in the fourth quarter was influenced by the re-evaluation of investment property. The value of investment property grew in 2018; however, the growth was smaller compared to the growth in 2017, as a result of which positive impact on earnings before interest, taxes, depreciation, and amortisation (EBITDA) was 1.0 million euros lower in 2018.
The annual consolidated sales revenue of the supermarkets business segment was 450.1 million euros in 2018, showing a growth of 3.9% in the year-on-year comparison. The consolidated sales revenue in the fourth quarter was 122.5 million euros, increasing by 5.6% in comparison with the same period last year. In 2018, 38.8 million purchases were made in Selver supermarkets, which exceeded the result of last year by 3.1%. In 2018, the consolidated pre-tax profit of the supermarkets segment was 18.6 million euros, increasing by 1.8 million euros compared to the previous year. The net profit earned in 2018 was 14.6 million euros, increasing by 1.4 million euros compared to the previous year. The difference between the net profit and profit before income tax is due to income tax paid on dividends – the income tax paid on dividends was by 0.4 million euros higher in 2018 compared to the year earlier. The pre-tax profit and net profit was 5.8 million euros in the fourth quarter, exceeding the result of the previous year of the comparable period by 0.1 million euros. In the second half-year of 2018, SIA Selver Latvia was liquidated and as at the end of the year, the company has been deleted from the commercial register.
The growth of the sales revenue in Selver supermarkets continued in the fourth quarter at a higher pace than in the non-specialised stores market segment. The growth trend was visible in the number of purchases as well as the amount of an average purchase. The growth of sales revenue of comparable stores was more rapid in the last quarter of the year. In the fourth quarter, the growth of sales revenue in e-commerce was 28.0%. The profit earned in the supermarkets segment was primarily influenced by the growth of the sales revenue. In terms of operating costs, the cost efficiency level was improved compared to the previous year. The main reason behind the growth of labour costs in the second half of the year is a strong pressure on wages and recruitment new employees to new opening stores. The comparison basis of 2018 does not include five new supermarkets opened in Tallinn last year and a mobile store in Hiiumaa; however, the comparison basis is larger on account of a supermarket closed in Tallinn.
In 2018, the department stores business segment earned a sales revenue of 100.9 million euros, which is 1.5% less than last year in the same period. Of this, the sales revenue generated in the fourth quarter was 31.6 million euros, which was 1.8% better than the revenue earned in the fourth quarter of 2017. In 2018, the pre-tax profit of the department stores segment was 3.8 million euros, which is 12.2% lower on the year-on-year basis. The pre-tax profit was 2.8 million euros in the fourth quarter, which was better by 24.0% compared to the result a year earlier. The sales revenue of 12 months of the Kaubamaja department stores segment was influenced by a longer and stronger summer discount campaign, because the long winter and early summer did not help with the sale of spring goods. The repair works on Gonsiori Street and the renovation of Tammsaare Park, which disturbed the traffic and movement of pedestrians in downtown Tallinn, influenced the summer sales, restricted access to and reduced the number of customers that visited the store in Tallinn. In addition, renovation works were undertaken on the first floor of the Tartu department store in July and August and the completely renewed women’s shoe department and men’s department were opened at the beginning of September. The sales revenue of the fourth quarter was greatly influenced by the best Osturalli campaign throughout the years and a strong Christmas campaign. Taking into account the location of the department store in downtown Tallinn, the structural changes in the number of tourists in 2018, showing a lower number of Finnish tourists, had a significant impact on the result of 2018. The changes in the excise policy have influenced the purchase behaviour of Finnish tourists, resulting in not only in the decrease of sales of alcoholic beverages, but also decreased sales in other groups of goods, such as perfumery products, clothes, footwear, and children's goods.
In the fourth quarter of 2018, the sales revenue of OÜ TKM Beauty Eesti, which operates the I.L.U. cosmetics stores, was 1.6 million euros, showing a growth of 3.8% compared to the same period in 2017. The profit earned in the fourth quarter was 0.1 million euros, which was 0.1 million euros better compared to the same period in 2017. The sales revenue was 4.6 million euros in 2018, decreasing by 0.7% compared to the sales revenue earned in 2017. The loss was 0.2 million euros in 2018, which was 0.1 million euros less than the loss earned in the comparable period in 2017. In February of the reporting year, the store in Kvartal shopping centre in Tartu was closed because of unsatisfactory business results. During the year, attention was paid to the assortment analyses by stores for the purpose of offering customers new attractive goods as well as ensuring an optimal balance of inventories. In September, completely renewed I.L.U. e-store was opened, which was well accepted by the customers.
In 2018, the sales revenue of the car trade segment was 114.9 million euros. The sales revenue exceeded the year-on-year revenue by 15.3%, whereas the annual increase in the sales revenue of KIAs was 1.7%. The sales revenue earned in the fourth quarter, 24.2 million euros, exceeded the year-on-year result by 2.8%. The sales revenue of KIAs decreased by 11.1% compared to the same time of the previous year. Peugeots made a strong sales result. In the Group’s car trade segment, a total of 5,050 new vehicles were sold in 2018, of which 949 vehicles were sold in the fourth quarter. In 2018, the net profit of the car trade segment was 3.7 million euros, which is 11.9% higher than the profit earned in the previous year. The pre-tax profit of the segment was 4.4 million euros in 2018, exceeding the profit of 2017 by 13.4%. The pre-tax profit of the fourth quarter of 2018 was 0.6 million euros, which exceeded the year-on-year pre-tax profit by 16.5%.
The success of the car trade segment in 2018 is primarily due to a very successful year of subsidiaries that operate as resellers. All three retail sellers – Viking Motors AS in Tallinn, Forum Auto SIA in Riga, and KIA Auto UAB in Vilnius – fulfilled the profit expectations. The economic results of KIA Auto AS, the company that imports KIAs, were as expected, although the very high results of the previous year were not exceeded. In summary, it can be said that 2018 was a year of records for the car trade segment in terms of turnover, profit, and the number of new cars sold.
The sales revenue of the footwear trade segment was 9.8 million euros in 2018, decreasing by 11.2% on the year-on-year basis. The pre-tax loss was significantly lower in 2018 compared to 2017. Altogether, the result improved by 2.7 million euros, of which 2.2 million euros accounted for the decrease in goodwill in 2017. The sales revenue was 2.6 million euros in the fourth quarter, which is 14.7% less than the year-on-year sales revenue. The profit earned in the fourth quarter was 0.04 million euros. In 2018, the footwear trade segment launched a new visual concept in ABC King stores. Two new ABC King stores with the renewed concept, which has been well accepted by customers, were opened in Ülemiste and Kristiine Shopping Centres in the second half of the reporting year. Along with the changed concept, more attention was paid to the training of personnel, which resulted in a lower turnover of employees and improved service. New supply channels supported the improvement of the margin compared to 2017.
The sales revenue earned in the real estate segment outside the Group was 5.4 million euros in 2018. The sales revenue grew by 8.1% compared to 2017. The sales revenue of the segment earned outside the Group was 1.4 million euros in the fourth quarter, growing by 7.3% compared to the same period in 2017. The pre-tax profit of the real estate segment was 10.2 million euros in 2018, which is 29.4% lower than the result earned in the same period last year. The pre-tax profit of the segment earned in the fourth quarter of 2018 was 2.3 million euros, which was 60% less than the year-on-year result. Tartu Kaubamaja Centre, which is showing good results despite strong competition, was the primary driver of the growth of the segment’s sales revenue. During the year, the gas station and store that opened in close proximity to Peetri Selver has supported the growth of sales. At the end of the year, Ogre building in Latvia was partially rented to parties outside of the Group. The decrease in profit of the real estate segment was affected by previous contracts concluded inside the Group, related to Latvian real estate, which have ended by now. The revaluation of investment property played a role in the decrease of the profit earned in the fourth quarter, which remained below extent the revaluations in 2017.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
|ASSETS|| || |
|Current assets|| || |
|Cash and cash equivalents||37,235||33,662|
|Trade and other receivables||16,093||16,127|
|Total current assets||131,54||125,605|
|Non-current assets|| || |
|Long-term trade and other receivables||113||114|
|Investments in associates||1,738||1,724|
|Property, plant and equipment||212,687||214,475|
|Total non-current assets||279,537||271,89|
| || || |
|LIABILITIES AND EQUITY|| || |
|Current liabilities|| || |
|Trade and other payables||90,775||85,569|
|Total current liabilities ||116,777||140,387|
|Non-current liabilities || || |
|Provisions for other liabilities and charges||370||360|
|Total non-current liabilities ||68,683||49,092|
|Equity|| || |
|Statutory reserve capital||2,603||2,603|
|Currency translation differences||-149||-255|
|TOTAL LIABILITIES AND EQUITY||411,077||397,495|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| ||IV quarter 2018||IV quarter 2017||12 months 2018||12 months 2017|
|Other operating income||982||1,339||2,175||2,239|
| || || || || |
|Cost of sales||-132,83||-128,147||-507,182||-484,76|
|Other operating expenses||-15,189||-14,161||-56,033||-54,611|
|Depreciation, amortisation and impairment losses||-3,227||-3,409||-13,426||-13,356|
|Finance income on shares of associates||27||27||214||162|
|Profit before tax||11,573||12,195||36,737||36,497|
|Income tax expense||-49||-275||-6,299||-6,666|
|NET PROFIT FOR THE FINANCIAL YEAR||11,524||11,92||30,438||29,831|
|Other comprehensive income:|| || || || |
|Items that will not be subsequently reclassified to profit or loss|| || || || |
|Revaluation of land and buildings||15,266||0||15,266||0|
|Other comprehensive income for the financial year||15,266||0||15,266||0|
|TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR||26,79||11,92||45,704||29,831|
Chairman of the Board
Phone +372 731 5000