Annual Financial Report
JSC "Brivais vilnis" Audited Annual Report 2018
In 2018, the JSC "Brivais vilnis" has been working with a loss of 386 238 EUR. Earnings of reporting year were 7,5 million EUR. Turnover in 2018 has increased by 10% compared to 2017. The Company`s operating results have been affected by the economic situation in the CIS countries and economic embargo stated by the Russian Federation, as well as large competition in the canned fish market in Europe. In 2019, the Company works on development of additional production sales markets and development of new products.
Salacgriva, Latvia, 2019-04-29 15:09 CEST --
The types of activities performed by the Joint Stock Company “Brivais vilnis” (“the Company”) are processing and canning of fish and fish products, wholesale of food products, including fish, shellfish and mollusc, and other commercial activities classified nowhere else.
Year 2018 is the 27th year of operation since the Company was transformed into a Joint Stock Company.
The Company is a leader in product quality, does not use genetically modified raw materials, synthetic food additives and flavour enhancers in the production.
In 2018 the Company produced a total of 13.4 million cans of various types (167) of canned fish products, including 5.2 million cans of smoked sprats. 14.1 million cans were sold for EUR 7.5 million that is 8% more compared to the previous year.
Impact on decrease of sales volumes of the Company had the stated economic embargo of the Russia, devaluation of the Ukrainian hryvnia, decline in purchasing power of the Transcaucasian and Central Asian countries, as well as was affected by the tough competition in the canned fish sales market in Europe and America.
The Company`s economic result for 2018 is a loss of EUR 386 238. In the 2nd half of 2018 the Company worked without losses.
Financial risks. The main financial risks related to the Company`s financial instruments are currency risk, interest rate risk, liquidity risk and credit risk.
Currency risk. Financial assets of the Company, subject to foreign currency risk include receivables. This is primarily due to the US dollar currency risk.
Interest rate risk. The Company is exposed to the interest rate risk mainly in relation to its short-term and long-term borrowings.
Credit risk. The Company is exposed to the credit risk through its trade receivables. The Company controls its credit risk by continuously assessing the credit history of customers and assigning credit terms on individual basis. In addition, the Company continuously controls the accounts receivables balances to minimize the possibility of bad debts.
Liquidity risk. The Company controls its liquidity risk through the bank credit granted and through the factoring.
The financial result of the Company`s economic activity in 2018 is a loss of EUR 386 238. At the end of reporting year, the Company`s liabilities exceed its current assets by EUR 2 397 159, while the short-term liabilities are less than the current assets by EUR 794 036. According to unaudited data, as at March 31, 2019, the liabilities of the Company exceed its current assets by EUR 2 302 846 and the short-term liabilities are less than the current assets by EUR 886 326. As at December 31, 2018, the Company had a positive shareholders` funds of EUR 1 202 545. Taking into account the above, the Board of the Company believes that the Company will be able to settle liabilities with the short-term creditors in 2019 and there will be no liquidity problems. The Company`s goal in 2019 is to continue to work on additional sales market acquisition and to optimize the cost structure. The Company is also ready to increase export volumes in Ukraine and Central Asia as soon as the regions improve their economic situation and increase their purchasing power. Based on the above, the Company`s management believes that the going-concern principle is applicable in the preparation of these financial statements.
We are continuing to work on development of new product types. We are planning to coordinate the cooperation with other canned fish producers to reduce costs related to the acquisition of external markets.
Electronic form of the Corporate Governance Report for 2018 is available on the website of “NASDAQ RIGA” www.nasdaqbaltic.com.
Chairman of the Board