AS Tallinna Vesi´s financial results for the 2nd quarter of 2020

Due to the new reduced tariffs and lower consumption, induced by the spread of coronavirus, the sales revenue of AS Tallinna Vesi in the 2^nd quarter of 2020 was €12.09 million, i.e. 25.1% lower compared with the same period of 2019. 

The sales revenue from private customers was €5.10 million, showing a decrease of 21.9% due to the new reduced tariffs. The tariffs impact was partly balanced by higher consumption of apartment blocks, which is the company’s largest private customer segment, because large number of people were working from home due to the arrangements regarding coronavirus.

In the main service area, the sales revenue from commercial customers dropped by 45.1% year-on-year to €2.95 million, which was mainly attributable to 35% less consumption and lower tariffs as well. Consumption in commercial customer segment was adversely impacted by coronavirus, because very many companies were closed from mid-March to the end of May to prevent the spread of the virus.

The gross profit of the 2^nd quarter of 2020 was €4.73 million, showing a 46.2% decrease mostly due to lower sales revenues. The operating profit was €4.59 million, lower by €2.01 million year-on-year.  Besides changes in tariffs and consumption, the operating profit was also impacted by €1.20 million change in the provision for third-party claims and lower legal costs related to the tariff dispute.

The net profit for the 2^nd quarter of 2020 was €0.15 million. It showed a 94.5% decrease compared to the same period last year and was additionally impacted by higher dividend tax payments and lower financial expenses.

Coronavirus also affected the sale of construction services, because the start of several new developments in Tallinn was postponed due to the emergency situation declared in Estonia and consequent effects. At the same time, the subsidiary Watercom continued the works on several larger projects they had been awarded in 2019 in Tallinn and other areas of Estonia. The revenue from construction services decreased by 18.6% or €0.27 million year-on-year.

MAIN FINANCIAL INDICATORS

€ million, except key ratios	2nd quarter			Change 2020/ 2019	6 months			Change 2020/ 2019
	2020	2019	2018		2020	2019	2018
Sales	12.09	16.15	15.98	-25.1%	25.27	30.81	30.06	-18.0%
Gross profit	4.73	8.79	8.90	-46.2%	10.79	17.05	17.22	-36.7%
Gross profit margin %	39.16	54.44	55.68	-28.1%	42.70	55.34	57.29	-22.8%
Operating profit before depreciation and amortisation	6.14	8.07	8.96	-23.9%	13.32	16.46	17.18	-19.1%
Operating profit before depreciation and amortisation margin %	50.76	49.96	56.04	1.6%	52.70	53.43	57.15	-1.4%
Operating profit	4.59	6.60	7.54	-30.4%	10.26	13.49	14.34	-24.0%
Operating profit - main business	4.32	6.40	7.35	-32.6%	9.94	13.18	14.09	-24.6%
Operating profit margin %	37.99	40.88	47.18	-7.1%	40.61	43.79	47.70	-7.3%
Profit before taxes	4.51	6.34	7.27	-28.9%	10.06	13.02	13.80	-22.7%
Profit before taxes margin %	37.29	39.23	45.47	-4.9%	39.82	42.25	45.91	-5.8%
Net profit	0.15	2.79	5.47	-94.5%	5.71	9.48	12.00	-39.8%
Net profit margin %	1.27	17.29	34.20	-92.7%	22.59	30.75	39.92	-26.5%
ROA %	0.06	1.09	2.32	-94.6%	2.22	3.78	5.16	-41.2%
Debt to total capital employed %	59.63	61.32	61.64	-2.8%	59.63	61.32	61.64	-2.8%
ROE %	0.14	2.70	5.97	-94.9%	5.27	9.48	13.60	-44.4%
Current ratio	3.23	3.90	5.00	-17.2%	3.23	3.90	5.00	-17.2%
Quick ratio	3.18	3.87	4.96	-17.8%	3.18	3.87	4.96	-17.8%
Investments into fixed assets	4.27	2.70	2.21	58.2%	7.85	6.11	3.07	28.6%
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	2nd quarter	2nd quarter		6 months	6 months		12 months
€ thousand	2020	2019		2020	2019		2019
Revenue	12,089	16,149		25,269	30,813		63,423
Cost of goods and services sold	-7,355	-7,358		-14,478	-13,762		-29,470
GROSS PROFIT	4,734	8,791		10,791	17,051		33,953
Marketing expenses	-109	-96		-226	-208		-390
General administration expenses	-1,213	-2,026		-2,508	-3,288		-5,689
Other income (+)/ expenses (-)	1,180	-67		2,205	-61		4,201
OPERATING PROFIT	4,592	6,602		10,262	13,494		32,075
Financial income	12	10		24	18		38
Financial expenses	-96	-276		-223	-491		-809
Other financial income (+)/ expenses (-)	0	0		0	0		0
PROFIT BEFORE TAXES	4,508	6,336		10,063	13,021		31,304
Income tax on dividends	-4,355	-3,544		-4,355	-3,544		-3,544
NET PROFIT FOR THE PERIOD	153	2,792		5,708	9,477		27,760
COMPREHENSIVE INCOME FOR THE PERIOD	153	2,792		5,708	9,477		27,760
Attributable profit to:
Equity holders of A-shares	152	2,791		5,707	9,476		27,759
B-share holder	0.60	0.60		0.60	0.60		0.60
Earnings per A share (in euros)	0.01	0.14		0.29	0.47		1.39
Earnings per B share (in euros)	600	600		600	600		600

STATEMENT OF FINANCIAL POSITION
€ thousand	30/06/2020	30/06/2019		31/12/2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	48,826	58,895		64,775
Trade receivables, accrued income and prepaid expenses	6,081	8,278		7,239
Inventories	742	526		504
TOTAL CURRENT ASSETS	55,649	67,699		72,518
NON-CURRENT ASSETS
Property, plant and equipment	194,467	183,028		189,627
Intangible assets	629	645		710
TOTAL NON-CURRENT ASSETS	195,096	183,673		190,337
TOTAL ASSETS	250,745	251,372		262,855
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current portion of long-term lease liabilities	493	388		352
Current portion of long-term loans	3,630	3,632		3,631
Trade and other payables	10,828	10,124		6,718
Derivatives	70	247		221
Prepayments	2,233	2,961		2,323
TOTAL CURRENT LIABILITIES	17,254	17,352		13,245
NON-CURRENT LIABILITIES
Deferred income from connection fees	32,865	27,017		31,070
Leases	1,552	1,048		964
Loans	85,785	89,486		87,592
Derivatives	0	115		0
Provision for possible third party claims	12,035	19,068		14,442
Other payables	23	45		18
TOTAL NON-CURRENT LIABILITIES	132,260	136,779		134,086
TOTAL LIABILITIES	149,514	154,131		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	63,219	59,229		77,512
TOTAL EQUITY	101,231	97,241		115,524
TOTAL LIABILITIES AND EQUITY	250,745	251,372		262,855
CASH FLOWS STATEMENT	6 months	6 months		12 months
€ thousand	2020	2019		2019
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit	10,262	13,494		32,075
Adjustment for depreciation/amortisation	3,054	2,969		6,109
Adjustment for revenues from connection fees	-225	-179		-389
Other non-cash adjustments	-2,407	0		-4,624
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets	-11	-5		138
Change in current assets involved in operating activities	938	-663		391
Change in liabilities involved in operating activities	-481	570		318
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES	11,130	16,186		34,018
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property, plant and equipment, and intangible assets	-5,450	-3,093		-10,441
Compensations received for construction of pipelines, incl connection fees	718	1,668		3,010
Proceeds from sales of property, plant and equipment and intangible assets	28	7		24
Interest received	30	15		36
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES	-4,674	-1,403		-7,371
CASH FLOWS USE D IN FINANCING ACTIVITIES
Interest paid and loan financing costs, incl swap interests	-367	-509		-1,056
Lease payments	-259	-209		-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	0	0		-36
Income tax paid on dividends	-73	-156		-3,544
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES	-22,405	-17,657		-23,641
CHANGE IN CASH AND CASH EQUIVALENTS	-15,949	-2,874		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	48,826	58,895		64,775

Karl Heino Brookes

Chairman of the Management Board

[phone]  

[e-mail]

Attachment

• Q2 2020 Final report ENG