Viisnurk
Financial result, 6 month 2011

Viisnurk 

03.08.2011 07:00
---------------------------------------------------------------------------

Pärnu, Estonia, 2011-08-03 07:00 CEST (GLOBE NEWSWIRE) -- 

Consolidated net sales of second quarter 2011 was 4.3 mil. euros, representing
a 34% increase on the second quarter compared to the same period 2010. At the
same time, consolidated net profit amounted to 271 thousand euros, representing
a 38% increase compared to second quarter 2010 (197 thousand euros in Q2 2010).
This is the positive trend, compared to Q1 2011 the sales is similar (+0.7%),
and profit is 2.6 times better. Increase of profit is excellent, especially for
the reason that in June there were additional startup costs of the softboard
factory at Püssi in the amount of 38 thousand euros. The first test run of
Püssi factory was at the last week of July and management plans to achieve the
readiness for capacity operations at late autumn. 

According to segments, the sales of construction materials showed up the
highest growth, namely 51%. Retail sale made a 20% growth; the result was 38
thousand euros loss caused by change of exchange rate of the Ukrainian hryvnia,
and continuously weak demand in Latvia and Ukraine. The sales of Furniture
factory increased by 17% compared to Q2 2010. The profit of Furniture factory
was 189 thousand euros and Building Materials Division 142 thousand euros. 

Income statement

Consolidated net sales of second quarter 2011 was 4.3 mil. euros (3.2 mil.
euros in same period of 2011) representing a 34% increase on the second quarter
compared to Q2 2010. The Group's gross margin in the second quarter of 2011 was
24.2% compared to 24.8% in the second quarter of 2010. Consolidated operating
profit amounted to 298 thousand euros (225 thousand euros in same period 2010).
The consolidated operating margin of net sales was 6.9% (7.0% in Q2 2010). 

Consolidated net profit amounted to 271 thousand euros, compared to 197
thousand euros in Q2 2010, and the net margin was 6.3% (6.1% in Q2 2010). In Q2
2011, the Group's return on equity was 4.7% (4.0% in Q2 2010) and return on
assets was 2.0% (2.2% in Q2 2010). 

Position of financial statement

As of 30.6.2011 the total assets of Viisnurk amounted to 13.5 mil. euros
(31.12.2010: 9.1 mil. euros). The liabilities of the company accounted for
57.6% (31.12.2010: 41.5%) thereof, i.e. 7.8 mil. euros (31.12.2010: 3.8 mil.
euros). The assets increase caused by purchase of softboard factory located in
Püssi. Price of factory was 4 mil. euros. Increase of liabilities caused by
loan token for buy the Püssi factory. 

Receivables and prepayments have increased by 0.7 mil. euros i.e. 61% increase
with 6 months. The reason of increase of receivables is small sales in December
2010, which essentially lowered the amount of receivables at the end of
December. 

Inventories increased by 0.4 mil. euros to reach 2.9 mil. euros on 30.6.2011.
(31.12.2010: 2.5 mil. euros). Property, plant and intangibles increased by 4
mil. euros as a result of acquisition of Püssi factory. 

Short-term loans decreased by 0.7 mil. euros and amounted to 0.7 mil. euros in
30 June 2011 (31.12.2010: 1.4 mil. euros). Short-term loan 0.6 mil. euros
refinanced and over classified to long term. Supplier payables, tax
liabilities, other payables, including payables to employees, and provisions
amounted to 1.9 mil. euros (31.12.2010: 1.5 mil. euros). Current and
non-current liabilities increased by 4.0 mil. euros to 7.8 mil. euros
(31.12.2010: 3.8 mil. euros). 



Divisional review

Net sales by business segments

                                  th. EUR       % of net sales 
                             Q2 2011  Q2 2010  Q2 2011  Q2 2010
---------------------------------------------------------------
Furniture Factory              1,830    1,559    42.4%    48.3%
Skano                            497      414    11.5%    12.8%
Building Materials Division    2,206    1,458    51.2%    45.2%
Elimination                    (221)    (203)   (5.1)%   (6.3)%
---------------------------------------------------------------
TOTAL                          4,312    3,228   100.0%   100.0%



Net sales by geographical segments

                      th. EUR       % of net sales 
                 Q2 2011  Q2 2010  Q2 2011  Q2 2010
---------------------------------------------------
---------------------------------------------------
Finland            1,723    1,285    40.0%    39.8%
Russia             1,141      726    26.5%    22.5%
Estonia              708      626    16.4%    19.4%
Ukraine              199       78     4.6%     2.4%
Sweden               128      116     3.0%     3.6%
Lithuania            111      142     2.6%     4.4%
Latvia                91       78     2.1%     2.4%
Kazakhstan            42       37     1.0%     1.1%
Denmark               39       22     0.9%     0.7%
Germany               31       31     0.7%     1.0%
Other countries       99       87     2.2%     2.7%
---------------------------------------------------
---------------------------------------------------
TOTAL              4,312    3,228  100.00%  100.00%

Regarding the markets, turnover has increased in Russia and Finland. The
percentage of turnover has decreased in most in Estonia, Sweden and Lithuania. 



Profit by business segments

th. EUR                      Q2 2011  Q2 2010
---------------------------------------------
Furniture Factory                189      164
Skano                           (39)      (2)
Building Materials Division      142       98
Elimination                        6     (35)
---------------------------------------------
TOTAL                            298      225
---------------------------------------------
Net financial costs             (25)     (28)
Income tax                       (2)        0
---------------------------------------------
---------------------------------------------
NET PROFIT                       271      197

Weakening of Ukrainian hryvnia and continuously small sales in Latvia and
Ukraina mostly causes loss of Skano. 



Furniture Division

Furniture Retail - Skano

AS Viisnurk retail business is operated by a private limited company OÜ Skano
and its subsidiaries in Latvia, Lithuania and Ukraine. Skano has totally 13
stores in Tallinn (2), Pärnu, Riga, Vilnius, Kaunas, Kiev (3), Donetsk, Kharkiv
and Dnipropetrovs'k (2) at the end of the second quarter. 



Retail sales by countries

                th. EUR       % of net sales    Number of stores 
           Q2 2011  Q2 2010  Q2 2011  Q2 2010  30.06.11  30.06.10
-----------------------------------------------------------------
-----------------------------------------------------------------
Estonia        152      161    30.6%    39.0%         3         2
Latvia          55       41    11.1%     9.8%         1         1
Lithuania      100      134    20.1%    32.4%         2         2
Ukraine        190       78    38.2%    18.8%         7         5
-----------------------------------------------------------------
-----------------------------------------------------------------
TOTAL          497      414   100.0%   100.0%        13        10

Despite of the growth of retail sales, Skano results with loss. The main
reasons are weak purchase power in Latvia and Ukraine and loss from currency
exchange rate of hryvnia (19 thousand euros). 



Furniture Production

The Furniture Factory's sales in the second quarter in the company's basic
target market in Russia and Finland have increased. Our clients does not
estimate significant increase of demand in near future. 

The net sales of the Furniture Factory in the second quarter amounted to 1.8
mil. euros and profit to 189 thousand euros. In the same period last year, the
turnover of the factory totalled to 1.6 mil. euros and the profit 164 thousand
euros. As compared to the previous year the turnover of the factory has
increased by 272 thousand euros and the profit has increased 25 thousand euros. 



Furniture factory sales by countries

                      th EUR        % of net sales 
                 Q2 2011  Q2 2010  Q2 2011  Q2 2010
---------------------------------------------------
---------------------------------------------------
Russia               798      560    43.6%    35.9%
Finland              740      733    40.4%    47.0%
Kazakhstan            42       37     2.3%     2.4%
Estonia               17       25     0.9%     1.6%
Other countries       12        0     0.7%     0.0%
Subsidiaries         221      203    12.1%    13.1%
---------------------------------------------------
---------------------------------------------------
TOTAL              1,830    1,558   100.0%   100.0%



Building Materials Division

The net sales of the Building Materials Division in the second quarter amounted
to 2.2 mil. euros and profit to 142 thousand euros. In the same period last
year, the turnover of the division totalled to 1.5 mil. euros and the profit 98
thousand euros. As compared to the previous year the turnover of the division
has increased by 748 thousand euros and the profit has decreased by 44 thousand
euros. The costs related to start of Püssi factory were 38 thousand euros. 


Net sales by geographical segments

                      th. EUR       % of net sales 
                 Q2 2011  Q2 2010  Q2 2011  Q2 2010
---------------------------------------------------
Finland              983      552    44.6%    37.9%
Estonia              540      439    24.5%    30.1%
Russia               343      166    15.5%    11.4%
Sweden               128      116     5.8%     8.0%
Denmark               39       22     1.8%     1.5%
Latvia                36       37     1.6%     2.5%
Germany               31       31     1.4%     2.1%
Ukraine                8        0     0.4%     0.0%
India                  8        9     0.4%     0.6%
Other countries       90       86     4.1%     5.9%
---------------------------------------------------
---------------------------------------------------
TOTAL              2,206    1,458   100.0%   100.0%



Forecast and development

Skano. We do not expect significant growth of retail sale in the third quarter
of 2011. Therefore we shall continue to save the costs and do not plan any
extension of the retail chain. 

Furniture factory. In the third quarter of 2011 we expect similar turnover as
in the preceding quarters in the furniture factory, but the volume will still
remain lower than the production capabilities would allow. Therefore the
workload is continuously low in the furniture factory. Agreements have been
concluded with the employees for application of undertime until 31.03.2012.
From April 1, 2011 the business hours were extended, however for most of the
employees the weekly number of business hours will remain below 40. 

Building Materials Division. At the main production line the production is
performed in four shifts round the clock in Pärnu softboard factory. On
interior finishing panel lines of Isotex one or two shifts are used as
necessary. Management expects for third quarter comparable sales number as in
second quarter. At the same time management's priority is raising the
effectiveness and profitability. 

AS Viisnurk acquired a softboard factory in Püssi for 4 million euros at the
auction on 25.5.2011. The total cost of the construction and equipment of the
factory was ca 14.7 million euros. The first test run of Püssi factory was at
the end of July and management plans to achieve the readiness for capacity
operations at late autumn. We estimate that it will be possible to produce up
to 70,000 m3 of softboard a year in new softboard factory and the turnover of
the factory could be around 7-8 million euros per year. The estimated
production at Püssi factory will 1,500 m3 of softboard in August, and all of
that is covered by orders. 

After the acquisition of the Püssi factory production of natural softboards
will be the biggest segment of the Group. Management plans to prepare the new
strategy by autumn, to act more strongly on the ecologically friendly building
materials market and offer natural and energy efficient solutions. 



Consolidated statement of financial position

Th EUR                          30.6.2011  31.12.2010  30.6.2010
----------------------------------------------------------------
----------------------------------------------------------------
                                                                
Cash and bank                         276       1,011        134
Receivables and prepayments         1,927       1,198      1,725
Inventories                         2,850       2,484      3,011
Total current assets                5,053       4,693      4,870
                                                                
Investment property                   185         185        185
Tangible fixed assets               8,211       4,217      4,044
Intangible fixed assets                18          20          1
Total fixed assets                  8,414       4,422      4,230
                                                                
TOTAL ASSETS                       13,467       9,115      9,100
                                                                
                                                                
Debt obligations                      662       1,383        520
Payables and prepayments            1,904       1,462      1,706
Short-term provisions                   3           8          3
Total current liabilities           2,569       2,853      2,229
                                                                
Non-current debt obligations        4,984         733      1,731
Non-current provisions                198         198        206
Total non-current liabilities       5,182         931      1,937
                                                                
Total liabilities                   7,751       3,784      4,166
                                                                
Share capital at nominal value      2,875       2,875      2,875
Issue premium                         364         364        364
Statutory capital reserve             288         288        288
Currency translation                   28          16          0
Retained profits                    1,788       1,017      1,017
Net profit for the year               373         771        390
Total equity                        5,716       5,331      4,934
                                                                
TOTAL LIABILITIES AND EQUITY       13,467       9,115      9,100







Consolidated statement of comprehensive income

Th EUR                                2nd q 2011  2nd q 2010  6 m 2011  6 m 2010
                                                                                
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                                                
RETURN ON SALES                            4,313       3,227     8,336     6,360
                                                                                
Cost of production sold                  (3,270)     (2,427)   (6,448)   (4,794)
                                                                                
Gross profit                               1,043         800     1,888     1,566
                                                                                
Marketing expenses                         (603)       (479)   (1,184)     (940)
General administrative expenses            (147)       (128)     (246)     (223)
Other income                                  58          46        62        78
Other expenses                              (53)        (14)      (93)      (38)
                                                                                
Operating profit                             298         225       427       443
Financial income and financial              (25)        (28)      (50)      (53)
 expenses                                                                       
                                                                                
Profit before taxes                          273         197       377       390
Prepaid income tax                           (2)           0       (4)         0
                                                                                
NET PROFIT FOR THE PERIOD                    271         197       373       390
Basic earnings per share                    0.06        0.04      0.08      0.09
Diluted earnings per share                  0.06        0.04      0.08      0.09
Currency translation differences             (3)        (20)        12      (26)
                                                                                
TOTAL COMPREHENSIVE INCOME                   268         177       385       364
                                                                                
                                                                                




         Einar Pähkel
         CFO
         +372 447 8331
         einar.pahkel@viisnurk.ee
         www.viisnurk.ee


03.08.2011 Dissemination of a Corporate News, transmitted by DGAP - 
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's Distribution Services include Regulatory Announcements, 
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

---------------------------------------------------------------------------
 
Language:     English
Company:      Viisnurk
              
               
              Estonia
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         EE3100092503
WKN:          
 
End of Announcement                             DGAP News-Service
 
---------------------------------------------------------------------------