Published: 2020-08-14 15:30:00 CEST
Linda Nektar
Company Announcement

Interim Report for the six month period ended 30 June 2020 (unaudited)

 

Management report

 

AS Linda Nektar (the ‘Company’) is closely monitoring and where necessary promptly responding to the impact of COVID-19 and related effects on the beverage industry, as the coronavirus-related pandemic (COVID-19) has affected people and businesses across the globe. The Company considers it essential to ensure the safety and well-being of its employees, suppliers, customers and the general public. Although the production process has continued without any interruptions, the Company has increased its critical stockpiles to ensure the availability of production inputs in the event of any supply disruptions.

Demand for fermented fruit wine bases has remained solid and the new products launched at the beginning of the financial year have been very well accepted by customers. The cutback of Estonian alcohol excise duties implemented last year has had a positive effect on overall domestic demand. Even though a number of sales channels (HORECA) for end products were shut down and borders were closed for tourism (due to the COVID-19 pandemic), the decline has been more than offset by increased consumer spending via other sales channels.

The Company, as a producer of wholesale unpacked fruit wines has therefore endured no overall direct material influence from pandemic-related restrictions up until the date of this report. This includes the movement of goods in its markets (via both production and delivery).

In H1 2020 AS Linda Nektar’s revenue amounted to EUR 1,315,669 marking an increase of 25.5% year-on-year (H1 2019: EUR 1,048,569). A minor contribution to sales in H1 2020 was generated by sales of aroma (EUR 4,832).

H1 2020 produced a net profit of EUR 52,639 (H1 2019 came in with a net loss of EUR 21,510). This helps to reinforce the management’s view that conditions within the industry are beginning to stabilise following a few years of uncertainty due to volatile market conditions (H1 2018 came in with a net loss of EUR 51,013).

The company’s product portfolio is widening to enable its customers to meet future trends. The broadened portfolio is also a key to expand the client base. Ongoing co-operation with partners such as Germany’s Symrise is part of the toolbox in this work. The Company is also investing in the development of new ferments (‘fingerprinted’ / unique base as well as various strain combinations) together with the accumulated knowledge in aroma technologies. Altogether the offering is expected to be quite distinctive for clients.                        

Operating cash flow in H1 2020 was a negative EUR 13,860 (H1 2019: positive EUR 76,528). This was primarily due to a greater need for working capital as the business levels expanded.

As of 30 June 2020, the Company’s total assets came to EUR 3,770,468 (H1 2019: EUR 3,966,072) marking a decrease of 4.93% year-on-year. Current assets amounted to EUR 1,768,313 (H1 2019: EUR 1,694,119) or 46.9% of total assets. Fixed assets amounted to EUR 2,002,155 (H1 2019: EUR 2,271,953) or 53.1% of the balance sheet total. The liabilities of AS Linda Nektar totalled EUR 112,398 (H1 2019: EUR 214,152) and equity capital amounted to EUR 3,658,070 (H1 2019: EUR 3,751,920).

As of 30 June 2020, there were no loan commitments, while cash and cash equivalents came to EUR 697,377 (H1 2019: EUR 859,878).

A total of EUR 57,157 was invested in fixed assets (H1 2019: EUR 125,863).

Depreciation costs in H1 2020 amounted to EUR 190,650 (H1 2019: EUR 185,800).

In H1 2020, the Company paid EUR 126,009 euros in dividends (H1 2019: EUR 126,009). The income tax cost on dividends was EUR 24,176 (H1 2019: EUR 27,839).

As of 30 June 2020, the Company had 13 employees, one Management Board Member, and four Supervisory Board Members. Labour costs in H1 2020 (including taxes) amounted to EUR 181,515 (H1 2019: EUR 163,346).

Management’s guidance for revenues in 2020 remains at EUR 2.5m. This reflects the shift towards a greater variety of higher value-added products being requested from clients. Capacity utilisation remains sufficient to materially expand production further should market conditions warrant this.

   

Financial Ratios:

 

  January - June
2020
January - June
2019
Current Ratio = Current Assets/ Current Liabilities x 15.73 7.91
Quick ratio = (Current Assets – Inventories) / Current Liabilities x 11.77 6.20
Working Capital = Current Assets - Current Liabilities   1,655,915 1,479,967
Equity Ratio = Total Equity / Total Assets % 97.02 94.60
Net Profit Margin = Net Profit / Sales Revenue % 4.00 -2.05
Debt to Assets = Total Liabilities / Total Assets x 0.03 0.05

   

Financial Statements

 

Statement of financial position

(In Euros)

 

  30.06.2020 31.12.2019 30.06.2019
Assets      
Current assets      
Cash and cash equivalents 697 377 883 944 859 878
Receivables and prepayments 625 591 378 175 466 949
Inventories 445 345 446 680 367 292
Total current assets 1 768 313 1 708 799 1 694 119
Non-current assets      
Receivables and prepayments 12 42 48
Property, plant and equipment 1 997 004 2 129 820 2 264 271
Intangible assets 5 139 6 225 7 634
Total non-current assets 2 002 155 2 136 087 2 271 953
Total assets 3 770 468 3 844 886 3 966 072
Liabilities and equity      
Liabilities      
Current liabilities      
Payables and prepayments 112 398 113 447 214 152
Total current liabilities 112 398 113 447 214 152
Total liabilities 112 398 113 447 214 152
Equity      
Issued capital 1 575 109 1 575 109 1 575 109
Share premium 617 517 617 517 617 517
Statutory reserve capital 70 672 70 672 70 672
Other reserves 11 416 11 416 8 809
Retained earnings (loss) 1 330 717 1 501 323 1 501 323
Reporting period profit (loss) 52 639 -44 598 -21 510
Total equity 3 658 070 3 731 439 3 751 920
Total liabilities and equity 3 770 468 3 844 886 3 966 072

 

Income statement

(In Euros)

 

  01.01.2020 -30.06.2020 01.01.2019-30.06.2019
Revenue 1 315 669 1 048 569
Other income 773 7 609
Changes in inventories of finished goods
and work in progress
21 391 9 344
Raw materials and consumables used -807 895 -624 706
Other operating expense -64 907 -85 323
Employee expense -181 515 -163 346
Depreciation and impairment loss (reversal) -190 650 -185 800
Significant impairment of current asset -16 046 0
Other expense -43 -66
Operating profit (loss) 76 777 6 281
Interest income 38 48
Profit (loss) before tax 76 815 6 329
Income tax expense -24 176 -27 839
Reporting period profit (loss) 52 639 -21 510

 

Statement of cash flows

(In Euros)

 

  01.01.2020 -30.06.2020 01.01.2019 -30.06.2019
Cash flows from operating activities    
Operating profit (loss) 76 777 6 281
Adjustments    
   Depreciation and impairment loss (reversal) 190 650 185 800
   Profit (loss) from sale of non-current assets -58 -861
Total adjustments 190 592 184 939
Changes in receivables and prepayments related to operating activities -247 386 -170 510
Changes in inventories 1 335 -41 564
Changes in payables and prepayments related to operating activities -11 002 125 221
Income tax refund (paid) -24 176 -27 839
Total cash flows from operating activities -13 860 76 528
Cash flows from investing activities    
Purchase of property, plant and equipment and intangible assets -46 736 -124 278
Proceeds from sales of property, plant and equipment and intangible assets 0 21 250
Interest received 38 48
Total cash flows from investing activities -46 698 -102 980
Cash flows from financing activities    
Dividends paid -126 009 -126 009
Total cash flows from financing activities -126 009 -126 009
Total cash flows -186 567 -152 461
Cash and cash equivalents at beginning of period 883 944 1 012 339
Change in cash and cash equivalents -186 567 -152 461
Cash and cash equivalents at end of period 697 377 859 878

   

Statement of changes in equity

(In Euros)

 

  Issued capital Share premium Statutory reserve capital Other reserves Retained earnings (loss) Total
31.12.2018 1 575 109 617 517 70 672 8 809 1 627 332 3 899 439
Reporting period profit (loss) 0 0 0 0 -21 510 -21 510
Declared dividends 0 0 0 0 -126 009 -126 009
30.06.2019 1 575 109 617 517 70 672 8 809 1 479 813 3 751 920
Reporting period profit (loss) 0 0 0 0 -23 088 -23 088
Changes in reserves 0 0 0 2 607 0 2 607
31.12.2019 1 575 109 617 517 70 672 11 416 1 456 725 3 731 439
Reporting period profit (loss) 0 0 0 0 52 639 52 639
Declared dividends 0 0 0 0 -126 009 -126 009
Other changes in equity 0 0 0 0 1 1
30.06.2020 1 575 109 617 517 70 672 11 416 1 383 356 3 658 070

 

 

 

 

         Additional information:
         
         Kadri Rauba
         Member of Management Board
         AS Linda Nektar
         Address: Kobela, Antsla parish, 66407 Võrumaa, Estonia
         Telephone: +372 785 5768
         E-mail: info@lindanektar.ee


Interim Reportl_H1_2020_EN.pdf