In the fourth quarter of 2011, Baltika earned operating profit from regular operations (before other operating income and expense) of approximately one million euros.
The fourth quarter ended with the loss of 1.88 million due to one-off non-cash expenses of approximately 3 million euros. Fourth quarter revenue increased by 3% and sales efficiency by 10%. With the support of strong fourth quarter the Group reached by the end of the year operating income-expense balance and stable financial position.
“Due to strong cost savings, increase of sales and efficiency and profitable fourth quarter, we have reached by the end of the year operating income-expense balance and stable financial position. We have adapted our business model to be more flexible and cost efficient that enables increasing sales to give quicker effect on our profitability”, said Meelis Milder, Chairman of Baltika Management Board.
Baltika fourth quarter revenue increased by 3% and sales efficiency by 10%. The efforts made in restructuring the store network and cost control continue to show results in the fourth quarter of 2011: the distribution expenses decreased by 8% compared to prior year comparative period and administrative and general expenses by 11%.
According to Meelis Milder, the year 2011 was a turnaround point for the company when efforts for exiting the crisis made in 2009-2011, started to give positive impact. “We have done big job to achieve today´s situation–we have closed our unprofitable stores and Polish and Czech market, cut costs, made more efficient our internal processes and developed multibrand concept strategy for big markets.”
“We continue focusing on our main business and due to that we plan to exit real estate business by selling our property and land in Tallinn, located at Veerenni Street 24,” Meelis Milder added. Company´s operating expences have decrease in 2011 by 27%, number of employees by 28% and own production costs by 43% compared to 2008.
Baltika`s largest shareholder KJK Fund SICAV-SIF, that is also represented by two members in Baltika Supervisory Board appreciates Baltika`s management's efforts during the restructuring period.
Member of the Management Board of KJK Fund and Member of the Supervisory Board of Baltika Jaakko Salmelin: “We believe that the largest challenges are now behind us. The company's extensive restructuring efforts in the past years are already showing strong positive impact and with the plan presented by the management to the Supervisory Board we are confident Baltika will achieve a full turnaround of its business. We look forward to showing good financial and operational results in the coming years.”
The operating profit from regular operations (before other operating income and expense) was 930 thousand euros compared to 60 thousand euros in the fourth quarter of 2010. This is best fourth quarter operating profit before other income and expense since 2008 third quarter and in fourth quarter comparison since year 2006.
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