Estonia : Baltika's Q2 net profit drops 36.8% to €405,000

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Baltika's Q2 net profit drops 36.8% to €405,000

21
Jul '14

Baltika’s second-quarter net profit from continuing operations totalled 405 thousand euros, comparative figure in prior year was 641 thousand euros profit.

Group second-quarter net profit including discontinued operations was 648 thousand euros that is 24 thousand euros better result compared to same period in previous year.

In connection with Baltika’s exit from the Ukrainian retail business, which represented a major line of business of the Group, the 2014 results of the Ukrainian entity are presented as discontinued operation. Therefore the results of the discontinued operation are reported separately from continuing operations to allow better assessment of the performance of continuing operations. For comparability, the figures for 2013 have been adjusted accordingly.

The Group’s second-quarter revenue grew by 257 thousand euros, amounting to 12,970 thousand euros. In line with the strategic objective of placing greater focus on the development of other sales channels and increase sales in e-store and though wholesale and franchise, the proportion of other channels from total revenues has increased. Wholesale and franchise revenues quarterly increase was 41% and e-store sales growth 18%. Second quarter retail revenue remained on the same level as prior year amounting to 12,064 thousand euros. Baltic countries sales grew by 353 thousand euros (+4%) and Russia sales decreased by 338 thousand euros (-15%).

Baltika’s second-quarter gross margin was 56.5%, 2.3 percentage points lower compared to the same period in prior year. In addition to heightening of competition in retail and in Russia it is due to weakening of the exchange rate of rouble, the margin is impacted by the increase of other sales channels proportion from revenues.

While the results from Baltics are satisfactory then Group total results were still negatively impacted by results of Russia. Retail sales in Russia decreased in the second quarter by 15% compared to prior year, which were somewhat compensated by cost savings from weakening rouble. Baltika envisages focusing going forward own retail network operating stores in St. Petersburg and Kaliningrad region. New wholesale and franchise partners are sought to operate existing stores or open new stores in other regions.

Half-year result with discontinued operations was a net loss of 1,834 thousand euros, which includes the loss from allowance for assets in Ukraine of 1,095 thousand euros. Half-year result of continued operations was a net loss of 505 thousand euros.

Click here to view full results.

Baltika

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