Annual Financial Report
CORRECTION: Storent Investments AS Audited Annual Report 2018
Insider information, 2019-05-08 16:31 CEST --
Annual report in English is published
The main type of activity of the Company is related to provision of all the companies of the Storent group with financial resources, maintenance of the Storent brand and information technology systems, as well as provision of management services to related companies. In the reporting year, the Company increased its turnover by 29% reaching 6 million euro. The reporting year closed with a profit of EUR 1,490,360. The financial stability of the Company is supported by a thorough balance sheet structure. Long-term investments amount to 82% of total assets of the Company. Equity amounts to 68% of the total balance sheet amount.
In 2018, the Group continued to strengthen its position on the Baltic rental market and still keeps a stable position among top 3 largest rental companies. An increase in construction volumes was observed in all the three Baltic countries, allowing also to increase equipment rental prices. Rental revenue in the Baltic countries region increased by 13% with the highest increase in revenue being observed in Latvia, where Storent is the equipment rental market leader. Baltic region accounts for approximately 70% of Group’s rent incomes.
In 2018 construction market in Estonia grew by 21% with increase in all segments – residential, non-residential and civil engineering. Market is expected to demonstrate modest growth in construction volumes in 2019, although there’s wide pipeline of various construction projects to be realized through the year.
Latvian construction market increased by 22% in 2018. Highest growth rate was achieved in specialized construction works with almost 28% and in building construction with 26%. There is a number of large and medium scale projects including ones financed under EU programs to be started in 2019, which provide confidence in further construction market positive trend. Labour shortage drives up wage level making construction industry more attractive for jobseekers.
Lithuanian construction market grew by 17% in 2018. Largest increase was in civil engineering segment with 21% growth. Residential and non-residential segments had grown by 16% and 15%, respectively. There are many EU financed construction related projects to be realized in 2019.
Favourable construction markets caused emerging of new rental market players in the region, which have been luring customers with low pricing strategy. This fact slowed down our pace in Lithuania, where customers especially appreciate an opportunity of low-price offerings.
Nordic operations have increased by 25% compared to 2017. There’s been decrease of residential construction in Sweden, but growth in non-residential and civil engineering construction. Swedish construction market expected to decline by 3,8% in 2019 with highest decline in residential sector. Finnish market showed growth of 3,5% in 2018 and it’s expected to decline by 1,2% in 2019.
Finnish operation (Leinolift Oy) showed good growth dynamics and Swedish one continued with rapid rate through the year. We have started to evaluate geographical expansion opportunities in both countries. Our main focus has been on structuring sales process, enlarging sales teams and shipping additional fleet as these are important factors in order to continue to grow and enter new market segments.
Kaliningrad operation has seen revenues decrease. Although official sources report construction market growth, construction activities are ensured mostly by state financed projects. Customers’ insolvencies remains to be one of key factors for reduced rent incomes. We see number of large construction projects started in December, which should serve as driver for rent incomes growth in 2019.
Investment plan for rental assets for 2018 in amount of 7 million euros has been realized and new machines have been delivered to designated countries. Flexible approach to fleet rotation among Storent group companies ensured quicker response to construction market changes and overall more efficient fleet usage.
The future development of the Group
The Group management plans to continue development of its activities supporting its subsidiaries and fostering growth of the entire Group. The Company management offers to leave profit of the reporting year undistributed.
AS Storent Investments CFO
Mobile: + 371 29340012