- ISIN EE3100092503
Skano Group
Financial results, 6 months 2014
DGAP-News: Skano Group
29.08.2014 / 15:28
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Pärnu, 2014-08-29 15:28 CEST (GLOBE NEWSWIRE) --
THE SECOND QUARTER IN SHORT
Consolidated net sales of the second quarter of 2014 was 5.35 mil. euros,
representing a 13% increase on the second quarter compared to the same period
in 2013. At the same time, consolidated EBITDA amounted to 431 thousand euros
(EBITDA 123 thousand euros in Q2 2013).
The sales in Skano Fibreboard OÜ Pärnu factory (incl. Isotex) was 2.2 mil.
euros, increased as compared to the respective period last year by 25%, the
operating profit of the second quarter was 126 thousand euros compared with the
operating loss of 76 thousand euros last year.
The turnover of Skano Fibreboard OÜ Püssi factory was 1.2 mil. euros,
representing a 39% increase in the second quarter compared to the same period
in 2013. The operating loss amounted to 25 thousand euros compared with the
operating loss 158 thousand euros last year.
The main sales growth came from Finland thanks to the new distribution partner
and from Estonia. Despite of sales growth from Finland, which came at the
expense of a bigger market share, our main foreign markets remained weak due to
the general economic situation in Europe. We have continuously expanded the
list of our target markets and made considerable efforts in product development
to obtain certificates necessary for different markets. In the second quarter
we also conducted product testing and fine tuning of the production process in
both factories in order to achieve a lower production cost.
The priority of the management of the company is to continuously ensure the
sales of the production of both factories in order to guarantee the maximum
production capacity and efforts are taken in this direction on an on-going
basis.
The turnover of Skano Furniture Factory OÜ factory in Pärnu decreased in the
second quarter by 7,5% and amounted to 1,7 mil. euros. The operating profit in
the second quarter was 141 thousand euros, in 2013 the operating profit of the
same period was 133 thousand euros. Sales in the second quarter of 2014
decreased mostly in Finland due to a weak demand by 23% compared to 2013, also
sales to the Baltics (through the subsidiary) decreased by 16%. Sales to Russia
remained at the same level compared to 2013. In addition to seeking new sales
possibilities in the current markets, the company has made considerable efforts
to enter into new markets. The sales in new markets is not yet covering the gap
from our main markets.
The turnover of Skano Furniture OÜ retail chain was 543 thousand euros which is
a 12% decrease compared to the same period last year and the operating loss was
49 thousand euros, compared with the sales of 619 thousand and operating loss
of 3 thousand euros in the second quarter of 2013. The current year second
quarter operating loss of 49 thousand euros also contains a loss from the drop
in currency exchange rate of hryvnia 55 thousand euros, out of which 32
thousand euros was due to the revaluation of intragroup loans as a separate
subsidiary but which will be eliminated out on the group level and will not
affect Skano Group end result. The realized currency exchange rate loss
amounted to 20 thousand euros (the realized loss from the currency exchange
rate was 13 thousand euros in the same period of 2013). Retail sales increased
surprisingly in Ukraine but decreased in the Baltics. The sales of Skano
Furniture Factory OÜ own furniture still forms a considerable part of the
retail sale and it enables the furniture factory to operate much more
profitably than it would be possible without its own retail chain.
INCOME STATEMENT
The consolidated net sales of the second quarter in 2014 was 5.35 mil. euros
(4.74 mil. euros in the same period of 2013) representing a 13% increase
compared to Q2 2013. The Group's gross margin in the second quarter of 2014 was
21.8% compared to 15.6% in the second quarter of 2013. The consolidated
operating profit amounted to 212 thousand euros (operating loss of 104 thousand
euros from the main activities in the same period of 2013). The consolidated
operating margin of net sales was 4.0% (-2.2% from main activities in Q2 2013).
The consolidated net profit amounted to 142 thousand euros (compared to a net
loss of 164 thousand euros in Q2 2013), and the net margin was 2.7% (-3.5% in
Q2 2013).
POSITION OF FINANCIAL STATEMENT
As of 30.06.2014 the total assets of Skano Group AS amounted to 15.1 mil. euros
(30.06.2013: 15.3 mil. euros). The liabilities of the company accounted for
55.5% (30.06.2013: 54.1%) thereof, i.e. 8.4 mil. euros (30.06.2013: 8.2 mil.
euros).
Receivables and prepayments have decreased by 0.3 mil. euros i.e. 18% decrease
with 12 months. The reason of decrease of receivables was implementation of
factoring instrument.
Inventories have increased with 12 months by 0,25 mil. euros compared to last
year, amounting to 3.5 mil. euros on 30.06.2014. (30.06.2013: 3.3 mil. euros).
Property, plant and intangibles decreased by 0.4 mil. euros mainly as a result
of depreciation.
Short-term loans have increased by 0.2 mil. euros and amounted to 1.4 mil.
euros in 30.06.2014 which was a result of the usage of bank overdraft
(30.06.2013: 1.2 mil. euros). Supplier payables, tax liabilities, other
payables, including payables to employees, and provisions amounted to 2.6 mil.
euros (30.06.2013: 2.4 mil. euros).
Long-term loans have decreased by 0.2 mil euros and amounted to 4.1 mil. euros
in 30.06.2014 (30.06.2013: 4.3 mil. euros). The decrease was due to principal
payments amounted to 0.2 mil. euros.
Current and non-current liabilities increased by 0.2 mil. euros to 8.4 mil.
euros (30.06.2013: 8.2 mil. euros).
DIVISIONAL REVIEW
NET SALES BY BUSINESS SEGMENTS
th EUR % of net sales
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Q2 2014 Q2 2013 Q2 2014 Q2 2013
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Skano Fibreboard OÜ 3,397 2,631 63.5% 55.5%
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Skano Furniture Factory OÜ 1,694 1,831 31.7% 38.7%
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Skano Furniture OÜ retail 543 619 10.1% 13.1%
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Elimination (284) (344) (5.3%) (7.3%)
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TOTAL 5,350 4,737 100.0% 100.0%
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NET SALES BY GEOGRAPHICAL SEGMENTS
th EUR % of net sales
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Q2 2014 Q2 2013 Q2 2014 Q2 2013
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Finalnd 2,113 1,404 39.5% 29.6%
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Russia 1,358 1,636 25.4% 34.5%
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Estonia 872 704 16.3% 14.9%
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Great Britain 252 235 4.7% 5.0%
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Ukraine 135 136 2.5% 2.9%
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Latvia 117 112 2.2% 2.4%
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Lithuania 108 165 2.0% 3.5%
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Sweden 99 146 1.9% 3.1%
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United Arab Emirates 56 0 1.0% 0.0%
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Germany 45 18 0.8% 0.4%
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Kazakhstan 43 39 0.8% 0.8%
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Japan 20 0 0.4% 0.0%
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Other countries 142 142 2.7% 3.0%
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TOTAL 5,350 4,737 100.0% 100.0%
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Regarding the markets, turnover has increased in Finland and Estonia. The
percentage of turnover has decreased in most in Russia.
PROFIT BY BUSINESS SEGMENTS
th EUR Q2 2014 Q2 2013
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Skano Furniture factory 141 133
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Skano Furniture retail (49) (3)
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Skano Fibreboard 101 (234)
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Elimination 19 0
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TOTAL 212 (104)
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Net financial costs (70) (60)
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Income tax 0 0
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NET PROFIT 142 (164)
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SKANO FIBREBOARD
The net sales of Skano Fibreboard in the second quarter of 2014 amounted to 3.4
mil. euros and operating profit to 101 thousand euros. In the same period last
year, the turnover of Skano Fibreboard totaled to 2.6 mil. euros and the
operating loss from main activities 234 thousand euros. Due to a new
distribution partner in Finland we have managed to increase sales considerably
at the expense of a bigger market share. Sales to Finland grew by 105%.
Considerable investments into production efficiency have paid off and improved
production profitability in the second quarter.
The biggest drop in sales in the second quarter compared to last year took
place in Russia, 37% respectively due to the general political situation and
weakened purchase power in Russia for import goods.
NET SALES BY GEOGRAPHICAL SEGMENTS
th EUR % of net sales
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Q2 2014 Q2 2013 Q2 2014 Q2 2013
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Finland 1,651 803 48.6% 30.5%
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Estonia 552 382 16.2% 14.5%
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Russia 509 806 15.0% 30.6%
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Great Britain 262 229 7.7% 8.7%
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Sweden 99 146 2.9% 5.5%
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Latvia 68 45 2.0% 1.7%
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Germany 45 18 1.3% 0.7%
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Netherlands 32 51 0.9% 1.9%
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Ukraine 28 35 0.8% 1.3%
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Japan 20 0 0.6% 0.0%
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Other countries 125 107 3.7% 4.1%
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Intragroup 6 9 0.2% 0.3%
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TOTAL 3,397 2,631 100.0% 100.0%
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th EUR Net sales Operating Profit
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Q2 2014 Q2 2013 Q2 2014 Q2 2013
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Pärnu Fibreborad factory 1,564 1,091 111 (125)
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Püssi Fibreboard factory 1,233 889 (25) (158)
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Pärnu interior boards factory (Isotex) 594 642 15 49
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Not allocated 6 9 0 0
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TOTAL 3,397 2,631 101 (234)
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The net sales of the Pärnu fibreboard factory and interior board's line
increased 25% in the second quarter of 2014 compared to the same quarter of
2013 and amounted to 2.2 mil. euros. Production efficiency has improved thanks
to our targeted production improvement and investment program.
The turnover of Püssi fibreboard factory amounted to 1.2 mil. euros growing 39%
compared to the same quarter in 2013 and operating loss amounted to 25 thousand
euros (turnover 0.9 mil. euros and operating loss 158 thousand euros in Q2
2013). Output of Püssi Fibreboard factory grew in the second quarter but the
main challenge is still to secure Püssi Fibreboard factory with sufficient
sales volumes and optimizing production portfolio and efficiency.
SKANO FURNITURE
FURNITURE RETAIL SALES
Skano Group AS retail business is operated by a private limited company Skano
Furniture OÜ and its subsidiaries in Latvia, Lithuania and Ukraine. Skano has
totally 10 stores in Tallinn (2), Tartu, Pärnu, Riga, Vilnius, Kiev (2),
Kharkiv and Dnipropetrovs'k at the end of the second quarter in 2014.
RETAIL SALES BY COUNTRIES
th EUR % of net sales Number of stores
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Q2 2014 Q2 2013 Q2 2014 Q2 2013 30.06.14 30.06.13
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Estonia 294 308 54.2% 49.8% 4 3
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Latvia 49 67 9.0% 10.8% 1 1
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Lithuania 93 143 17.1% 23.1% 1 1
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Ukraine 107 101 19.7% 16.3% 4 4
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TOTAL 543 619 100.0% 100.0% 10 9
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The furniture retail sales amounted to 543 thousand euros in the second quarter
of 2014 and operating loss 49 thousand euros (sales 619 thousand euros and
operating loss 3 thousand euros in Q2 2013). The current year second quarter
operating loss 49 thousand euros contains also a loss from a drop in the
currency exchange rate of hryvnia 55 thousand euros, out of which 32 thousand
euros was due to revaluation of intragroup loans as a separate subsidiary but
which will be eliminated out on group level and will not affect Skano Group end
result and the realized currency exchange rate loss amounted to 20 thousand
euros (realized loss from currency exchange rate 13 thousand euros in the same
period of 2013).
FURNITURE PRODUCTION
The net sales of the Skano Furniture Factory in the second quarter amounted to
1.7 mil. euros and operating profit to 141 thousand euros. In the same period
last year, the turnover of the factory amounted to 1.8 mil. euros and the
profit to 133 thousand euros. As compared to the previous year the turnover of
the factory has decreased 7.5% and the operating profit has increased by 8
thousand euros. In the second quarter the sales decreased especially in Finland
by 23% due to a colder economic environment and weaker demand for durable
goods.
FURNITURE FACTORY SALES BY COUNTRIES
th EUR % of net sales
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Q2 2014 Q2 2013 Q2 2014 Q2 2013
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Russia 849 830 50.1% 45.3%
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Finland 462 601 27.3% 32.8%
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Kazakhstan 43 39 2.5% 2.1%
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Estonia 26 14 1.5% 0.8%
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Other countries 36 12 2.1% 0.7%
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Subsidiaries 278 335 16.5% 18.3%
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TOTAL 1,694 1,831 100.0% 100.0%
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FORECAST AND DEVELOPMENT
SKANO FIBREBOARD. Sales of Skano Fibreboard in Q3 2014 will remain at the same
level compared to sales of the same period last year. In Q3 collective
vacations in both factories are planned which will influence profitability. In
addition to optimizing the production portfolio the management's priority is to
also improve energy efficiency in the production process, with the aim to
achieve our 2014 investment and improvement program target.
We are moderately optimistic about 2014 2H, but further escalation of the
conflict in Ukraine would impact negatively to fibreboard sales in our main
markets of Finland and Russia. Despite of geopolitical developments we are
taking actions to enter into new export markets.
SKANO FURNITURE RETAIL SALES. We expect retail sales in the third quarter of
2014 to decrease compared to the sale of the same period last year. We expect a
bigger negative impact to sales from Ukraine due to political and economic
instability.
SKANO FURNITURE FACTORY. In the third quarter of 2014 we expect smaller sales
of the furniture factory compared to the same period in 2013 because of the
deteriorated economic situation in the neighbouring region, in Finland due to
general economic situation and in Russia due to conflict in Ukraine, which has
impact on local purchasing power and general trade with EU.
FINANCIAL HIGHLIGHTS
th EUR 6 m 2014 6 m 2013 6 m 2012
---------------------------------------------------
Income statement
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Revenue 10,701 9,098 9,440
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EBITDA 531 86 512
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EBITDA margin 5.0% 0.9% 5.4%
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Operating profit 87 (370) 10
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Operating margin 0.8% (4.1%) 0.1%
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Net profit (44) (486) (134)
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Net margin (0.4%) (5.3%) (1.4%)
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Balance sheet (30.06)
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Total assets 15,133 15,256 16,050
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Return on assets (0.3%) (3.2%) (0.8%)
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Equity 6 737 7 009 7,532
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Return on equity (0.7%) (6.9%) (1.8%)
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Debt-to-equity ratio 55.5% 54.1% 53.1%
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Share (30.06)
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Closing price 1.00 1.06 1.31
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Earnings per share (0.01) (0.11) (0.03)
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Price-earnings ratio (100.00) (9.64) (43.67)
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Book value of a share 1.50 1.56 1.67
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Market to book ratio 0.67 0.68 0.78
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Market capitalization 4,499 4,769 5,894
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EBITDA = Earnings before interest, taxes, depreciation and amortization
EBITDA margin = EBITDA / Revenue
Operating margin = Operating profit / Revenue
Net margin = Net profit / Revenue
Return on assets = Net profit / Total assets
Return on equity = Net profit / Equity
Debt-to-equity ratio = Liabilities / Total assets
Earnings per share = Net profit / Total shares
Price-earnings ratio = Closing price / Earnings per share
Book value of a share = Equity / Total shares
Market to book ratio = Closing price / Book value of a share
Market capitalization = Closing price * Total shares
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
th EUR 30.06.2014 31.12.2013 30.06.2013
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Cash and bank 264 355 111
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Receivables and prepayments (Note 1) 1,601 1,368 1,942
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Inventories (Note 2) 3,512 2,974 3,257
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Total current assets 5,377 4,697 5,310
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Investment property (Note 3) 408 408 185
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Tangible fixed assets (Note 4) 9,322 9,505 9,741
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Intangible fixed assets (Note 5) 26 26 20
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Total fixed assets 9,756 9,939 9,946
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TOTAL ASSETS 15,133 14,636 15,256
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Debt obligations (Note 6) 1,406 1,919 1,249
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Payables and prepayments (Note 7) 2,617 2,255 2,419
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Short-term provisions (Note 8) 7 14 7
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Total current liabilities 4,030 4,188 3,675
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Non-current debt obligations (Note 6) 4,127 3,413 4,328
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Non-current provisions (Note 8) 239 230 244
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Total non-current liabilities 4,366 3,643 4,572
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Total liabilities 8,396 7,831 8,247
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Share capital at nominal value (Note 9) 2,699 2,699 2,699
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Issue premium 364 364 364
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Statutory capital reserve 288 288 288
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Currency translation (16) 8 (8)
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Retained profits 3,446 4,152 4,152
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Net profit (loss) for the year (Note 10) (44) (706) (486)
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Total equity 6,737 6,805 7,009
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TOTAL LIABILITIES AND EQUITY 15,133 14,636 15,256
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CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
th EUR 2nd Q 2nd Q 2013 6 m 2014 6 m 2013
2014
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RETURN ON SALES (Note 11) 5,350 4,736 10,701 9,098
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Cost of production sold (4,181) (3,999) (8,719) (7,841)
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Gross profit 1,169 737 1,982 1,257
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Marketing expenses (729) (649) (1,451) (1,229)
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General administrative expenses (159) (180) (332) (387)
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Other income 6 19 23 61
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Other expenses (75) (31) (135) (72)
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Operating profit (loss) (Note 11) 212 (104) 87 (370)
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Financial income and financial (70) (60) (131) (115)
expenses
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Profit (loss) before taxes 142 (164) (44) (485)
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Prepaid income tax 0 0 0 (1)
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NET PROFIT (LOSS) FOR THE PERIOD 142 (164) (44) (486)
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Basic earnings per share (Note 10) 0.03 (0.04) (0.01) (0.11)
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Diluted earnings per share (Note 10) 0.03 (0.04) (0.01) (0.11)
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Other comprehensive income:
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Currency translation differences 21 3 (24) 13
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TOTAL COMPREHENSIVE INCOME 163 (161) (68) (473)
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The planned time of publishing of interim report of the third quarter of 2014
is week 48 (24-28 November 2014)
Martin Kalle
CEO
+372 4478 331
martin.kalle@skano.com
News Source: NASDAQ OMX
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29.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Skano Group
Estonia
ISIN: EE3100092503
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