AS Tallinna Vesi´s financial results for the 3rd quarter of 2020AS 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 quarter | Change 2020/ 2019 | 9 months | Change 2020/ 2019 | | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | | Sales | 13.28 | 16.49 | 16.49 | -19.5% | 13.28 | 16.49 | 16.49 | -19.5% | | Gross profit | 5.80 | 8.92 | 8.59 | -35.0% | 5.80 | 8.92 | 8.59 | -35.0% | | Gross profit margin % | 43.69 | 54.12 | 52.10 | -19.3% | 43.69 | 54.12 | 52.10 | -19.3% | | Operating profit before depreciation and amortisation | 7.35 | 9.01 | 8.73 | -18.5% | 7.35 | 9.01 | 8.73 | -18.5% | | Operating profit before depreciation and amortisation margin % | 55.33 | 54.63 | 52.95 | 1.3% | 55.33 | 54.63 | 52.95 | 1.3% | | Operating profit | 5.77 | 7.52 | 7.31 | -23.3% | 5.77 | 7.52 | 7.31 | -23.3% | | Operating profit - main business | 5.44 | 7.19 | 7.07 | -24.4% | 5.44 | 7.19 | 7.07 | -24.4% | | Operating profit margin % | 43.43 | 45.60 | 44.31 | -4.8% | 43.43 | 45.60 | 44.31 | -4.8% | | Profit before taxes | 5.64 | 7.33 | 7.14 | -23.1% | 5.64 | 7.33 | 7.14 | -23.1% | | Profit before taxes margin % | 42.45 | 44.47 | 43.28 | -4.6% | 42.45 | 44.47 | 43.28 | -4.6% | | Net profit | 5.64 | 7.33 | 7.14 | -23.1% | 5.64 | 7.33 | 7.14 | -23.1% | | Net profit margin % | 42.45 | 44.47 | 43.28 | -4.6% | 42.45 | 44.47 | 43.28 | -4.6% | | ROA % | 2.24 | 2.89 | 2.97 | -22.4% | 2.24 | 2.89 | 2.97 | -22.4% | | Debt to total capital employed % | 57.73 | 59.29 | 59.89 | -2.6% | 57.73 | 59.29 | 59.89 | -2.6% | | ROE % | 5.42 | 7.27 | 7.58 | -25.5% | 5.42 | 7.27 | 7.58 | -25.5% | | Current ratio | 3.66 | 5.14 | 4.99 | -28.8% | 3.66 | 5.14 | 4.99 | -28.8% | | Quick ratio | 3.62 | 5.10 | 4.96 | -29.0% | 3.62 | 5.10 | 4.96 | -29.0% | | Investments into fixed assets | 5.92 | 4.66 | 4.29 | 27.1% | 5.92 | 4.66 | 4.29 | 27.1% | | Payout ratio % | na | 72.05 | 62.11 | | na | 72.05 | 62.11 | |
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 INCOME | 3rd quarter | 3rd quarter | | 9 months | 9 months | | 12 months | | € thousand | 2020 | 2019 | | 2020 | 2019 | | 2019 | | | | | | | | | | | Revenue | 13,276 | 16,487 | | 38,545 | 47,301 | | 63,423 | | Cost of goods and services sold | -7,476 | -7,565 | | -21,954 | -21,327 | | -29,470 | | GROSS PROFIT | 5,800 | 8,922 | | 16,591 | 25,974 | | 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 PROFIT | 5,765 | 7,518 | | 16,027 | 21,013 | | 32,075 | | | | | | | | | | | Financial income | 3 | 12 | | 28 | 30 | | 38 | | Financial expenses | -133 | -199 | | -357 | -691 | | -809 | | Other financial income (+)/ expenses (-) | 0 | 0 | | 0 | 0 | | 0 | | PROFIT BEFORE TAXES | 5,635 | 7,331 | | 15,698 | 20,352 | | 31,304 | | | | | | | | | | | Income tax on dividends | 0 | 0 | | -4,355 | -3,544 | | -3,544 | | | | | | | | | | | NET PROFIT FOR THE PERIOD | 5,635 | 7,331 | | 11,343 | 16,808 | | 27,760 | | COMPREHENSIVE INCOME FOR THE PERIOD | 5,635 | 7,331 | | 11,343 | 16,808 | | 27,760 | | | | | | | | | | | Attributable profit to: | | | | | | | | | Equity holders of A-shares | 5,634 | 7,330 | | 11,342 | 16,807 | | 27,759 | | B-share holder | 0.60 | 0.60 | | 0.60 | 0.60 | | 0.60 | | | | | | | | | | | Earnings per A share (in euros) | 0.28 | 0.37 | | 0.57 | 0.84 | | 1.39 | | Earnings per B share (in euros) | 600 | 600 | | 600 | 600 | | 600 |
| STATEMENT OF FINANCIAL POSITION | | | | | | € thousand | 30/09/2020 | 30/09/2020 | | 31/12/2019 | | | | | | | | ASSETS | | | | | | CURRENT ASSETS | | | | | | Cash and cash equivalents | 45,868 | 61,125 | | 64,775 | | Trade receivables, accrued income and prepaid expenses | 6,827 | 8,439 | | 7,239 | | Inventories | 695 | 539 | | 504 | | TOTAL CURRENT ASSETS | 53,390 | 70,103 | | 72,518 | | | | | | | | NON-CURRENT ASSETS | | | | | | Property, plant and equipment | 198,839 | 186,152 | | 189,627 | | Intangible assets | 598 | 594 | | 710 | | TOTAL NON-CURRENT ASSETS | 199,437 | 186,746 | | 190,337 | | | | | | | | TOTAL ASSETS | 252,827 | 256,849 | | 262,855 | | | | | | | | LIABILITIES AND EQUITY | | | | | | | | | | | | CURRENT LIABILITIES | | | | | | Current portion of long-term lease liabilities | 397 | 379 | | 352 | | Current portion of long-term loans | 3,631 | 3,631 | | 3,631 | | Trade and other payables | 7,757 | 6,719 | | 6,718 | | Derivatives | 28 | 271 | | 221 | | Prepayments | 2,757 | 2,639 | | 2,323 | | TOTAL CURRENT LIABILITIES | 14,570 | 13,639 | | 13,245 | | | | | | | | NON-CURRENT LIABILITIES | | | | | | Deferred income from connection fees | 33,278 | 28,981 | | 31,070 | | Leases | 1,465 | 1,013 | | 964 | | Loans | 85,791 | 89,490 | | 87,592 | | Derivatives | 0 | 50 | | 0 | | Provision for possible third party claims | 10,832 | 19,068 | | 14,442 | | Other payables | 25 | 36 | | 18 | | TOTAL NON-CURRENT LIABILITIES | 131,391 | 138,638 | | 134,086 | | TOTAL LIABILITIES | 145,961 | 152,277 | | 147,331 | | | | | | | | EQUITY | | | | | | Share capital | 12,000 | 12,000 | | 12,000 | | Share premium | 24,734 | 24,734 | | 24,734 | | Statutory legal reserve | 1,278 | 1,278 | | 1,278 | | Retained earnings | 68,854 | 66,560 | | 77,512 | | TOTAL EQUITY | 106,866 | 104,572 | | 115,524 | | | | | | | | TOTAL LIABILITIES AND EQUITY | 252,827 | 256,849 | | 262,855 | | | | | | | | | | | | | | | | | | | | | | | | | | CASH FLOWS STATEMENT | 9 months | 9 months | | 12 months | | € thousand | 2020 | 2019 | | 2019 | | | | | | | | CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | Operating profit | 16,027 | 21,013 | | 32,075 | | Adjustment for depreciation/amortisation | 4,634 | 4,457 | | 6,109 | | Adjustment for revenues from connection fees | -341 | -277 | | -389 | | Other non-cash adjustments | -3,610 | 0 | | -4,624 | | Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets | -14 | 154 | | 138 | | Change in current assets involved in operating activities | 221 | -843 | | 391 | | Change in liabilities involved in operating activities | -249 | 195 | | 318 | | TOTAL CASH FLOWS FROM OPERATING ACTIVITIES | 16,668 | 24,699 | | 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 fees | 1,618 | 2,205 | | 3,010 | | Proceeds from sales of property, plant and equipment and intangible assets | 32 | 7 | | 24 | | Interest received | 34 | 25 | | 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 loans | 0 | 0 | | 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 PERIOD | 64,775 | 61,769 | | 61,769 | | | | | | | | CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 45,868 | 61,125 | | 64,775 |
Karl Heino Brookes Chairman of the Management Board +372 62 62 200 karl.brookes@tvesi.ee
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