Published: 2020-10-30 08:00:00 CET
Tallinna Vesi
Quarterly report

AS Tallinna Vesi´s financial results for the 3rd quarter of 2020

AS Tallinna Vesi’s sales revenue for the third quarter of 2020 were €13.28 million, showing a decrease of 19.5% compared to the same period last year. This was caused by the reduced tariffs and lower commercial consumption resulting from the coronavirus outbreak. Nevertheless, we have seen a partial increase in commercial consumption during the third quarter compared to the second quarter, which hopefully signals a partial recovery.

Sales to private customers in the main service area decreased by 23.8% to €4.90 million, due to the reduced tariffs. The impact of reduced tariffs was partly balanced by higher consumption of apartment blocks, which is the largest private customer segment of the Company. This was the result of the coronavirus, as large number of people worked from home also during the 3rd quarter.

In the main service area, the sales revenue from commercial customers dropped by 29.8% to €3.71 million, which was mainly attributable to 18% less consumption and reduced tariffs. In the commercial customer segment, the hospitality sector has seen the greatest impact from the pandemic, resulting in reduced consumption. However, the 3rd quarter saw some increase in commercial consumption compared to the 2nd quarter, which hopefully indicates a partial recovery from the effects of coronavirus.

The gross profit for the 3rd quarter of 2020 was €5.80 million, showing a 35% decrease mostly due to lower sales revenues. The operating profit was €5.77 million, lower by €1.75 million year-on-year. Besides the negative changes in tariffs and consumption, the operating profit was positively impacted by €1.2 million reduction in the provision, formed for possible third-party claims, which was also reduced in the 2nd quarter.

The net profit for the 3rd quarter of 2020 was €5.64 million, showing a decrease of 23.1% compared to the same period last year. In addition to the changes in the operating profit, the net profit was positively affected by lower interest costs.

Coronavirus also affected the sale of construction services, because a number of new developments in Tallinn were postponed. In the 3rd quarter, the subsidiary Watercom continued the delivery of large projects in Tallinn and elsewhere in Estonia, which had been awarded in 2019. The construction revenue reduced by 17.3% or €0.36 million compared to the same period last year. The decrease in revenues was mainly attributable to reduced revenues from construction services, which were partly offset by higher revenues from road construction.

The Company has just reviewed its dividend policy for going forward. ASTV aims to distribute 50%-80% of the annual profit as dividends. Dividend payments shall be assessed annually considering ASTV’s earnings, investment needs, liquidity position and long-term financial objectives.

MAIN FINANCIAL INDICATORS

€ million,
except key ratios
3rd quarterChange 2020/ 20199 monthsChange 2020/ 2019
202020192018202020192018
Sales13.2816.4916.49-19.5%13.2816.4916.49-19.5%
Gross profit5.808.928.59-35.0%5.808.928.59-35.0%
Gross profit margin %43.6954.1252.10-19.3%43.6954.1252.10-19.3%
Operating profit before depreciation and amortisation7.359.018.73-18.5%7.359.018.73-18.5%
Operating profit before depreciation and amortisation margin %55.3354.6352.951.3%55.3354.6352.951.3%
Operating profit5.777.527.31-23.3%5.777.527.31-23.3%
Operating profit - main business5.447.197.07-24.4%5.447.197.07-24.4%
Operating profit margin %43.4345.6044.31-4.8%43.4345.6044.31-4.8%
Profit before taxes5.647.337.14-23.1%5.647.337.14-23.1%
Profit before taxes margin %42.4544.4743.28-4.6%42.4544.4743.28-4.6%
Net profit5.647.337.14-23.1%5.647.337.14-23.1%
Net profit margin %42.4544.4743.28-4.6%42.4544.4743.28-4.6%
ROA %2.242.892.97-22.4%2.242.892.97-22.4%
Debt to total capital employed %57.7359.2959.89-2.6%57.7359.2959.89-2.6%
ROE %5.427.277.58-25.5%5.427.277.58-25.5%
Current ratio3.665.144.99-28.8%3.665.144.99-28.8%
Quick ratio3.625.104.96-29.0%3.625.104.96-29.0%
Investments into fixed assets5.924.664.2927.1%5.924.664.2927.1%
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 INCOME3rd quarter3rd quarter 9 months9 months 12 months
€ thousand20202019 20202019 2019
        
Revenue13,27616,487 38,54547,301 63,423
Cost of goods and services sold-7,476-7,565 -21,954-21,327 -29,470
GROSS PROFIT5,8008,922 16,59125,974 33,953
        
Marketing expenses-94-89 -320-297 -390
General administration expenses-1,123-1,120 -3,631-4,408 -5,689
Other income (+)/ expenses (-)1,182-195 3,387-256 4,201
OPERATING PROFIT5,7657,518 16,02721,013 32,075
        
Financial income312 2830 38
Financial expenses-133-199 -357-691 -809
Other financial income (+)/ expenses (-)00 00 0
PROFIT BEFORE TAXES5,6357,331 15,69820,352 31,304
        
Income tax on dividends00 -4,355-3,544 -3,544
        
NET PROFIT FOR THE PERIOD5,6357,331 11,34316,808 27,760
COMPREHENSIVE INCOME FOR THE PERIOD5,6357,331 11,34316,808 27,760
        
Attributable profit to:       
Equity holders of A-shares5,6347,330 11,34216,807 27,759
B-share holder0.600.60 0.600.60 0.60
        
Earnings per A share (in euros)0.280.37 0.570.84 1.39
Earnings per B share (in euros)600600 600600 600


STATEMENT OF FINANCIAL POSITION    
€ thousand30/09/202030/09/2020 31/12/2019
     
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents45,86861,125 64,775
Trade receivables, accrued income and prepaid expenses6,8278,439 7,239
Inventories695539 504
TOTAL CURRENT ASSETS53,39070,103 72,518
     
NON-CURRENT ASSETS    
Property, plant and equipment198,839186,152 189,627
Intangible assets598594 710
TOTAL NON-CURRENT ASSETS199,437186,746 190,337
     
TOTAL ASSETS252,827256,849 262,855
     
LIABILITIES AND EQUITY    
     
CURRENT LIABILITIES    
Current portion of long-term lease liabilities397379 352
Current portion of long-term loans3,6313,631 3,631
Trade and other payables7,7576,719 6,718
Derivatives28271 221
Prepayments2,7572,639 2,323
TOTAL CURRENT LIABILITIES14,57013,639 13,245
     
NON-CURRENT LIABILITIES    
Deferred income from connection fees33,27828,981 31,070
Leases1,4651,013 964
Loans85,79189,490 87,592
Derivatives050 0
Provision for possible third party claims10,83219,068 14,442
Other payables2536 18
TOTAL NON-CURRENT LIABILITIES131,391138,638 134,086
TOTAL LIABILITIES145,961152,277 147,331
     
EQUITY    
Share capital12,00012,000 12,000
Share premium24,73424,734 24,734
Statutory legal reserve1,2781,278 1,278
Retained earnings68,85466,560 77,512
TOTAL EQUITY106,866104,572 115,524
     
TOTAL LIABILITIES AND EQUITY252,827256,849 262,855
     
     
     
     
CASH FLOWS STATEMENT9 months9 months 12 months
€ thousand20202019 2019
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Operating profit16,02721,013 32,075
Adjustment for depreciation/amortisation4,6344,457 6,109
Adjustment for revenues from connection fees-341-277 -389
Other non-cash adjustments-3,6100 -4,624
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets-14154 138
Change in current assets involved in operating activities221-843 391
Change in liabilities involved in operating activities-249195 318
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES16,66824,699 34,018
     
CASH FLOWS USED IN INVESTING ACTIVITIES    
Acquisition of property, plant and equipment, and intangible assets-10,114-6,147 -10,441
Compensations received for construction of pipelines, incl connection fees1,6182,205 3,010
Proceeds from sales of property, plant and equipment and intangible assets327 24
Interest received3425 36
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES-8,430-3,910 -7,371
     
CASH FLOWS USE D IN FINANCING ACTIVITIES    
Interest paid and loan financing costs, incl swap interests-519-764 -1,056
Lease payments-452-306 -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 dividends-113-36 -36
Income tax paid on dividends-4,355-3,544 -3,544
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES-27,145-21,433 -23,641
     
CHANGE IN CASH AND CASH EQUIVALENTS-18,907-644 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 PERIOD45,86861,125 64,775

Karl Heino Brookes

Chairman of the Management Board

+372 62 62 200  

karl.brookes@tvesi.ee

Attachment


Q3 2020 Final report ENG.pdf