Published: 2020-07-31 08:00:00 CEST
Tallinna Vesi
Quarterly report

AS Tallinna Vesi´s financial results for the 2nd quarter of 2020

Due to the new reduced tariffs and lower consumption, induced by the spread of coronavirus, the sales revenue of AS Tallinna Vesi in the 2nd quarter of 2020 was €12.09 million, i.e. 25.1% lower compared with the same period of 2019. 

The sales revenue from private customers was €5.10 million, showing a decrease of 21.9% due to the new reduced tariffs. The tariffs impact was partly balanced by higher consumption of apartment blocks, which is the company’s largest private customer segment, because large number of people were working from home due to the arrangements regarding coronavirus.

In the main service area, the sales revenue from commercial customers dropped by 45.1% year-on-year to €2.95 million, which was mainly attributable to 35% less consumption and lower tariffs as well. Consumption in commercial customer segment was adversely impacted by coronavirus, because very many companies were closed from mid-March to the end of May to prevent the spread of the virus.

The gross profit of the 2nd quarter of 2020 was €4.73 million, showing a 46.2% decrease mostly due to lower sales revenues. The operating profit was €4.59 million, lower by €2.01 million year-on-year.  Besides changes in tariffs and consumption, the operating profit was also impacted by €1.20 million change in the provision for third-party claims and lower legal costs related to the tariff dispute.

The net profit for the 2nd quarter of 2020 was €0.15 million. It showed a 94.5% decrease compared to the same period last year and was additionally impacted by higher dividend tax payments and lower financial expenses.

Coronavirus also affected the sale of construction services, because the start of several new developments in Tallinn was postponed due to the emergency situation declared in Estonia and consequent effects. At the same time, the subsidiary Watercom continued the works on several larger projects they had been awarded in 2019 in Tallinn and other areas of Estonia. The revenue from construction services decreased by 18.6% or €0.27 million year-on-year.

MAIN FINANCIAL INDICATORS

€ million,
except key ratios
2nd quarterChange 2020/ 20196 monthsChange 2020/ 2019
202020192018202020192018
Sales12.0916.1515.98-25.1%25.2730.8130.06-18.0%
Gross profit4.738.798.90-46.2%10.7917.0517.22-36.7%
Gross profit margin %39.1654.4455.68-28.1%42.7055.3457.29-22.8%
Operating profit before depreciation and amortisation6.148.078.96-23.9%13.3216.4617.18-19.1%
Operating profit before depreciation and amortisation margin %50.7649.9656.041.6%52.7053.4357.15-1.4%
Operating profit4.596.607.54-30.4%10.2613.4914.34-24.0%
Operating profit - main business4.326.407.35-32.6%9.9413.1814.09-24.6%
Operating profit margin %37.9940.8847.18-7.1%40.6143.7947.70-7.3%
Profit before taxes4.516.347.27-28.9%10.0613.0213.80-22.7%
Profit before taxes margin %37.2939.2345.47-4.9%39.8242.2545.91-5.8%
Net profit0.152.795.47-94.5%5.719.4812.00-39.8%
Net profit margin %1.2717.2934.20-92.7%22.5930.7539.92-26.5%
ROA %0.061.092.32-94.6%2.223.785.16-41.2%
Debt to total capital employed % 59.63 61.32 61.64-2.8% 59.63 61.32 61.64-2.8%
ROE %0.142.705.97-94.9%5.279.4813.60-44.4%
Current ratio3.233.905.00-17.2%3.233.905.00-17.2%
Quick ratio3.183.874.96-17.8%3.183.874.96-17.8%
Investments into fixed assets4.272.702.2158.2%7.856.113.0728.6%
Payout ratio %na72.0562.11 na72.0562.11 

Gross profit margin – Gross profit / Net sales
Operating profit before depreciation and amortisation – Operating profit + depreciation and amortisation
Operating profit before depreciation and amortisation margin – Operating profit before depreciation and amortisation / Net sales
Operating profit margin – Operating profit / Net sales
Net profit margin – Net profit / Net sales
ROA – Net profit / Average Total assets for the period
Debt to Total capital employed – Total liabilities / Total capital employed
ROE – Net profit / Average Total equity for the period
Current ratio – Current assets / Current liabilities
Quick ratio – (Current assets – Stocks) / Current liabilities
Payout ratio - Total Dividends per annum/ Total Net Income per annum
Main business – water services related activities, excl. connections profit and government grants, construction services, doubtful debt

STATEMENT OF COMPREHENSIVE INCOME2nd quarter2nd quarter 6 months6 months 12 months
€ thousand20202019 20202019 2019
        
Revenue12,08916,149 25,26930,813 63,423
Cost of goods and services sold-7,355-7,358 -14,478-13,762 -29,470
GROSS PROFIT4,7348,791 10,79117,051 33,953
        
Marketing expenses-109-96 -226-208 -390
General administration expenses-1,213-2,026 -2,508-3,288 -5,689
Other income (+)/ expenses (-)1,180-67 2,205-61 4,201
OPERATING PROFIT4,5926,602 10,26213,494 32,075
        
Financial income1210 2418 38
Financial expenses-96-276 -223-491 -809
Other financial income (+)/ expenses (-)00 00 0
PROFIT BEFORE TAXES4,5086,336 10,06313,021 31,304
        
Income tax on dividends-4,355-3,544 -4,355-3,544 -3,544
        
NET PROFIT FOR THE PERIOD1532,792 5,7089,477 27,760
COMPREHENSIVE INCOME FOR THE PERIOD1532,792 5,7089,477 27,760
        
Attributable profit to:       
Equity holders of A-shares1522,791 5,7079,476 27,759
B-share holder0.600.60 0.600.60 0.60
        
Earnings per A share (in euros)0.010.14 0.290.47 1.39
Earnings per B share (in euros)600600 600600 600


STATEMENT OF FINANCIAL POSITION    
€ thousand30/06/202030/06/2019 31/12/2019
     
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents48,82658,895 64,775
Trade receivables, accrued income and prepaid expenses6,0818,278 7,239
Inventories742526 504
TOTAL CURRENT ASSETS55,64967,699 72,518
     
NON-CURRENT ASSETS    
Property, plant and equipment194,467183,028 189,627
Intangible assets629645 710
TOTAL NON-CURRENT ASSETS195,096183,673 190,337
     
TOTAL ASSETS250,745251,372 262,855
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES    
Current portion of long-term lease liabilities493388 352
Current portion of long-term loans3,6303,632 3,631
Trade and other payables10,82810,124 6,718
Derivatives70247 221
Prepayments2,2332,961 2,323
TOTAL CURRENT LIABILITIES17,25417,352 13,245
     
NON-CURRENT LIABILITIES    
Deferred income from connection fees32,86527,017 31,070
Leases1,5521,048 964
Loans85,78589,486 87,592
Derivatives0115 0
Provision for possible third party claims12,03519,068 14,442
Other payables2345 18
TOTAL NON-CURRENT LIABILITIES132,260136,779 134,086
TOTAL LIABILITIES149,514154,131 147,331
     
EQUITY    
Share capital12,00012,000 12,000
Share premium24,73424,734 24,734
Statutory legal reserve1,2781,278 1,278
Retained earnings63,21959,229 77,512
TOTAL EQUITY101,23197,241 115,524
     
TOTAL LIABILITIES AND EQUITY250,745251,372 262,855
     
     
     
     
CASH FLOWS STATEMENT6 months6 months 12 months
€ thousand20202019 2019
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Operating profit10,26213,494 32,075
Adjustment for depreciation/amortisation3,0542,969 6,109
Adjustment for revenues from connection fees-225-179 -389
Other non-cash adjustments-2,4070 -4,624
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets-11-5 138
Change in current assets involved in operating activities938-663 391
Change in liabilities involved in operating activities-481570 318
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES11,13016,186 34,018
     
CASH FLOWS USED IN INVESTING ACTIVITIES    
Acquisition of property, plant and equipment, and intangible assets-5,450-3,093 -10,441
Compensations received for construction of pipelines, incl connection fees7181,668 3,010
Proceeds from sales of property, plant and equipment and intangible assets287 24
Interest received3015 36
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES-4,674-1,403 -7,371
     
CASH FLOWS USE D IN FINANCING ACTIVITIES    
Interest paid and loan financing costs, incl swap interests-367-509 -1,056
Lease payments-259-209 -404
Received loans00 37,500
Repayment of loans-1,818-1,818 -41,136
Dividends paid-19,888-14,965 -14,965
Withheld income tax paid on dividends00 -36
Income tax paid on dividends-73-156 -3,544
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES-22,405-17,657 -23,641
     
CHANGE IN CASH AND CASH EQUIVALENTS-15,949-2,874 3,006
     
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD64,77561,769 61,769
     
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD48,82658,895 64,775

Karl Heino Brookes

Chairman of the Management Board

+372 62 62 200  

karl.brookes@tvesi.ee

Attachment


Q2 2020 Final report ENG.pdf