- ISIN EE3100092503
Skano Group
Financial results, 9 months 2013
DGAP-News: Skano Group /
29.11.2013 / 15:35
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Pärnu, 2013-11-29 15:35 CET (GLOBE NEWSWIRE) -- THE THIRD QUARTER IN SHORT
Consolidated net sales of the third quarter of 2013 was 5.2 mil. euros,
representing a 11% increase on the third quarter compared to the same period in
2012. At the same time, consolidated EBITDA amounted to 354 thousand euros (351
thousand euros in Q3 2012).
The sales in Skano Fibreboard OÜ Pärnu factory (incl. Isotex) was 2.4 mil.
euros, increased as compared to the respective period last year by 13%, the
operating profit of the third quarter was 16 thousand euros compared with the
operating profit 25 thousand euros last year.
The turnover of Skano Fibreboard OÜ Püssi factory was 1.1 mil. euros,
representing 38% increase in the third quarter compared to the same period in
2012. Operating loss amounted to 118 thousand euros compared with the operating
loss 230 thousand euros last year.
Sales growth came from Finland but despite of that other foreign markets
remained weak due to general economic situation in Europe. We have continuously
expanded list of our target markets and made considerable efforts in product
development to obtain certificates necessary for different markets.
Profitability has suffered also due to higher sales costs in Finland. The same
factors will probably impact also Q4 results, when we also conduct product
testing and tuning of production process in order to achieve a lower production
cost.
The priority of the management of the company is continuously to 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
third quarter by 1% and amounted to 1 419 thousand euros. The operating profit
of the third quarter was 122 thousand euros as in 2012 the operating profit of
the same period was 58 thousand euros. Sales in the third quarter of 2013
decreased in Finland but sales to the Baltics (through the subsidiary) grew.
The company is seeking new sale's possibilities in the current markets but
going into totally new markets is a substantial direction for us.
The turnover of Skano Furniture OÜ retail chain decreased 1% as compared to the
same period last year being 547 thousand euros, operating loss was 24 thousand
euros compared with the sales 555 thousand and operating profit 3 thousand
euros in the third quarter of 2012. Current year operating loss contains also
loss from currency exchange rate of hryvnia 32 thousand euros in the third
quarter (loss from currency exchange rate 25 thousand euros in the same period
of 2012). Retail sale increased in Estonia and Latvia but decreased in
Lithuania and Ukraine. 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
Consolidated net sales of the third quarter in 2013 was 5.2 mil. euros (4.7
mil. euros in same period of 2012) representing a 11% increase on the third
quarter compared to Q3 2012. The Group's gross margin in the third quarter of
2013 was 19.3% compared to 15.9% in the third quarter of 2012. Consolidated
operating profit amounted to 128 thousand euros (operating profit 109 thousand
euros from main activities in same period 2012). The consolidated operating
margin of net sales was 2.4% (2.3% from main activities in Q2 2012).
Consolidated net profit amounted to 71 thousand euros (compared to net profit
44 thousand euros in Q3 2012), and the net margin was 1.3% (0.9% in Q3 2012).
POSITION OF FINANCIAL STATEMENT
As of 30.09.2013 the total assets of Skano Group AS amounted to 14.9 mil. euros
(30.09.2012: 16.2 mil. euros). The liabilities of the company accounted for
52.5% (30.09.2012: 53.1%) thereof, i.e. 7.8 mil. euros (30.09.2012: 8.6 mil.
euros).
Receivables and prepayments have decreased by 0.5 mil. euros i.e. 25% decrease
with 12 months. The reason of decrease of receivables was implementation of
factoring instrument.
Inventories have decreased by 0.2 mil. euros compared to last year, amounting
to 3.2 mil. euros on 30.09.2013. (30.09.2012: 3.4 mil. euros). Property, plant
and intangibles decreased by 0.5 mil. euros mainly as a result of depreciation.
Short-term loans have decreased by 0.2 mil. euros and amounted to 0.7 mil.
euros in 30.09.2013 (30.09.2012: 0.9 mil. euros). Supplier payables, tax
liabilities, other payables, including payables to employees, and provisions
amounted to 2.6 mil. euros (30.09.2012: 2.6 mil. euros).
Long-term loans have decreased by 0.6 mil euros and amounted to 4.3 mil. euros
in 30.09.2013 (30.09.2012: 4.9 mil. euros).
Current and non-current liabilities decreased by 0.8 mil. euros to 7.8 mil.
euros (30.09.2012: 8.6 mil. euros).
DIVISIONAL REVIEW
NET SALES BY BUSINESS SEGMENTS
th EUR % of net sales
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Q3 2013 Q3 2012 Q3 2013 Q3 2012
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Skano Fibreboard OÜ 3,514 2,964 67.2% 63.0%
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Skano Furniture Factory OÜ 1,419 1,399 27.1% 29.7%
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Skano Furniture OÜ retail 549 553 10.5% 11.8%
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Elimination (326) (236) (4.8%) (4.5%)
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TOTAL 5,231 4,708 100.0% 100.0%
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NET SALES BY GEOGRAPHICAL SEGMENTS
th EUR % of net sales
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Q3 2013 Q3 2012 Q3 2013 Q3 2012
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Finalnd 1,730 1,046 33.1% 22.2%
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Russia 1,506 1,487 28.8% 31.6%
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Estonia 841 754 16.1% 16.0%
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Great Britain 219 334 4.2% 7.1%
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Ukraine 201 229 3.8% 4.9%
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Latvia 179 207 3.4% 4.4%
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Sweden 110 143 2.1% 3.0%
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Germany 106 34 2.0% 0.7%
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Lithuania 96 146 1.8% 3.1%
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Kazakhstan 47 36 0.9% 0.8%
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Netherlands 39 165 0.7% 3.5%
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Japan 32 0 0.6% 0.0%
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Greece 15 14 0.3% 0.3%
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Other countries 110 113 2.2% 2.4%
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TOTAL 5,231 4,708 100.0% 100.0%
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Regarding the markets, turnover has increased in Finland, Russia and Estonia.
The percentage of turnover has decreased in most in the Great Britain and the
Netherlands.
PROFIT BY BUSINESS SEGMENTS
th EUR Q3 2013 Q3 2012
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Skano Furniture factory 112 58
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Skano Furniture retail (24) 3
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Skano Fibreboard 16 25
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Elimination 24 23
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TOTAL 128 109
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Net financial costs (57) (62)
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Income tax 0 (3)
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NET PROFIT 71 44
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SKANO FIBREBOARD
The net sales of Skano Fibreboard in the third quarter of 2013 amounted to 3.51
mil. euros and operating profit to 16 thousand euros. In the same period last
year, the turnover of Skano Fibreboard totaled to 2.96 mil. euros and the
operating profit from main activities 25 thousand euros. Sales are weak in all
regions due to weak economic situation in Europe except for Finland, where due
to a new distribution partner we have managed to increase sales considerably.
Sales to Finland grew by 122%. Implementing the new sales structure in Finland
has and will cause higher sales costs that is optimal during 6-9 months period.
Due to that increased sales to Finland have brought along bigger costs and
profitability hasn't improved yet.
The biggest drop in sales in the third quarter compare to last year took place
in the Great Britain and the Netherlands, 42% and 78% respectively. The latter
was due to review of our client portfolio, where we want to replace clients
with low profitability and to improve our efficiency.
NET SALES BY GEOGRAPHICAL SEGMENTS
th EUR % of net sales
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Q3 2013 Q3 2012 Q3 2013 Q3 2012
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Finland 1,339 602 38.1% 20.3%
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Russia 841 804 24.0% 27.1%
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Estonia 581 544 16.5% 18.4%
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Great Britain 194 334 5.5% 11.3%
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Sweden 110 143 3.1% 4.8%
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Germany 106 34 3.0% 1.1%
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Latvia 100 144 2.8% 4.9%
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Ukraine 46 34 1.3% 1.1%
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Netherlands 39 176 1.1% 5.9%
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Japan 32 0 0.9% 0.0%
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Lithuania 17 50 0.5% 1.7%
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Other countries 109 99 3.1% 3.4%
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Intragroup 0 0 0.0% 0.0%
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TOTAL 3,514 2,964 100.0% 100.0%
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th EUR Net sales Profit
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Q3 2013 Q3 2012 Q3 2013 Q3 2012
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Pärnu Fibreborad factory 1,685 1,457 63 149
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Püssi Fibreboard factory 1,104 799 (118) (230)
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Pärnu interior boards factory (Isotex) 725 673 71 103
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Not allocated 0 0 0 0
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TOTAL 3,514 2,964 16 25
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The net sales of the Pärnu fibreboard factory and interior board's line
increased 13% in the third quarter of 2013 compared to the same quarter of 2012
and amounted to 2.4 mil. euros. Due to higher sales cost in Finland, production
testing and too fragmented production portfolio the production efficiency was
low in the third quarter.
The turnover of Püssi fibreboard factory amounted to 1.1 mil. euros growing 38%
compared to the same quarter in 2012 and operating loss amounted to 118
thousand euros (turnover 799 thousand euros and operating loss 230 thousand
euros in Q3 2012). Output of Püssi Fibreboard factory grew in the third quarter
but the main challenge is still to secure Püssi Fibreboard factory with
sufficient sales volumes.
It is also important to note that due to high fixed costs, the factory must be,
for a profitable outcome, operated at as high capacity as possible, which shall
ensure a lower average cost of the product. Too fragmented production portfolio
could increase the production cost by 10-20%.
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 9 stores in Tallinn (2), Pärnu, Riga, Vilnius, Kiev (2), Kharkiv and
Dnipropetrovs'k at the end of the third quarter in 2013.
RETAIL SALES BY COUNTRIES
th EUR % of net sales Number of stores
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Q3 2013 Q3 2012 Q3 2013 Q3 2012 30.09.13 30.09.12
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Estonia 234 201 42.8% 36.2% 3 3
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Latvia 79 63 14.4% 11.4% 1 1
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Lithuania 79 96 14.4% 17.3% 1 1
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Ukraine 155 195 28.4% 35.1% 4 4
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TOTAL 547 555 100.0% 100.0% 9 9
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The furniture retail sale amounted to 547 thousand euros in the third quarter
of 2013 and operating loss 24 thousand euros (sales 555 thousand euros and
operating profit 3 thousand euros in Q3 2012). The 3rd quarter operating loss
contains also loss from currency exchange rate of hryvnia 32 thousand euros
(loss from currency exchange rate 25 thousand euros in the same period last
year. Retail sale increased in Estonia and Latvia but decreased in Lithuania
and Ukraine.
FURNITURE PRODUCTION
The net sales of the Skano Furniture Factory in the third quarter amounted to
1.4 mil. euros and operating profit to 112 thousand euros. In the same period
last year, the turnover of the factory amounted to 1.4 mil. euros and the
profit to 58 thousand euros. As compared to the previous year the turnover of
the factory has increased 1% and the operating profit has increased by 54
thousand euros. Sales in the third quarter of 2013 increased to the Great
Britain and our subsidiary. In the third quarter the sales decreased in Finland
and Russia due to weak demand of foreign markets.
FURNITURE FACTORY SALES BY COUNTRIES
th EUR % of net sales
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Q3 2013 Q3 2012 Q3 2013 Q3 2012
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Russia 665 683 46.9% 48.8%
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Finland 391 444 27.6% 31.7%
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Kazakhstan 47 36 3.3% 2.6%
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Estonia 26 9 1.8% 0.6%
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Other countries 41 17 2.9% 1.2%
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Subsidiaries 249 210 17.5% 15.0%
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TOTAL 1,419 1,399 100.0% 100.0%
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FORECAST AND DEVELOPMENT
SKANO FIBREBOARD. Sales of Skano Fibreboard will remain at the same level
compare to the same period last year. In Q4 we will carry out production
testing, development and tuning of production process in order to achieve a
lower production cost. In December we have 2-weeks collective vacation and
planned small maintenance repair. Those factors will impact negatively
Fibreboard Q4 results, but are important in order to achieve lower production
cost and efficient production portfolio.
In spite of weak demand of foreign markets and economic situation in Europe we
are moderately optimistic about sales growth in 2014, mostly from Finland. We
predict that the strategic agreement with a new distribution partner in Finland
allows us to increase our production capacity in 2014.
SKANO FURNITURE RETAIL SALES. We expect retail sale in the fourth quarter of
2013 to decrease compare to the sale of the same period in last year.
SKANO FURNITURE FACTORY. In the fourth quarter of 2013 we expect smaller sales
of the furniture factory compared to the same period in 2012 because of the
deteriorated economic situation in the near region and especially in Finland.
Sales to new markets (incl. the Great Britain) are not yet exceeding the lag
from our main markets.
FINANCIAL HIGHLIGHTS
th EUR 9 m 2013 9 m 2012 9 m 2011
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Income statement
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Revenue 14,329 14,148 12,513
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EBITDA 440 862 3,353
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EBITDA margin 3.1% 6.1% 26.8%
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Operating profit (242) 119 2,893
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Operating margin (1.7%) 0.8% 23.1%
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Net profit (415) (90) 2,775
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Net margin (2.9%) (0.6%) 22.2%
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Balance sheet (30.06)
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Total assets 14,916 16,201 16,538
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Return on assets (2.8%) (0.6%) 16.8%
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Equity 7,090 7,602 7,693
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Return on equity (5.9%) (1.2%) 36.1%
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Debt-to-equity ratio 52.5% 53.1% 53.5%
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Share (30.06)
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Closing price 1.30 1.37 1.50
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Earnings per share (0.09) (0.02) 0.62
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Price-earnings ratio (14.4) (68.5) 2.42
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Book value of a share 1.58 1.69 1.76
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Market to book ratio 0.82 0.81 0.85
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Market capitalization 5,849 6,164 6,749
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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 30.09.2013 31.12.2012 30.09.2012
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Cash and bank 165 158 179
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Receivables and prepayments (Note 1) 1,672 1,792 2,219
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Inventories (Note 2) 3,249 3,303 3,448
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Total current assets 5,086 5,253 5,846
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Investment property (Note 3) 185 185 185
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Tangible fixed assets (Note 4) 9,627 10,010 10,158
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Intangible fixed assets (Note 5) 18 23 12
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Total fixed assets 9,830 10,218 10,355
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TOTAL ASSETS 14,916 15,471 16,201
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Debt obligations (Note 6) 694 1,845 880
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Payables and prepayments (Note 7) 2,557 1,923 2,579
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Short-term provisions (Note 8) 3 12 3
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Total current liabilities 3,254 3,780 3,462
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Non-current debt obligations (Note 6) 4,328 3,973 4,898
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Non-current provisions (Note 8) 244 236 239
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Total non-current liabilities 4,572 4,209 5,137
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Total liabilities 7,826 7,989 8,599
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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 2 (21) (11)
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Retained profits 4,152 4,353 4,353
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Net profit (loss) for the year (Note 10) (415) (201) (91)
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Total equity 7,090 7,482 7,602
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TOTAL LIABILITIES AND EQUITY 14,916 15,471 16,201
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CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
th EUR 3rd Q 3rd Q 2012 9 m 2013 9 m 2012
2013
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RETURN ON SALES (Note 11) 5,231 4,708 14,329 14,148
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Cost of production sold (4,223) (3,961) (12,064) (11,901)
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Gross profit 1,008 747 2,265 2,247
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Marketing expenses (660) (559) (1,889) (1,752)
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General administrative expenses (169) (76) (556) (385)
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Other income 37 40 98 131
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Other expenses (88) (43) (160) (122)
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Operating profit (loss) (Note 11) 128 109 (242) 119
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Financial income and financial expenses (57) (62) (172) (197)
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Profit (loss) before taxes 71 47 (414) (78)
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Prepaid income tax 0 (3) (1) (13)
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NET PROFIT (LOSS) FOR THE PERIOD 71 44 (415) (91)
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Basic earnings per share (Note 10) 0.02 0.01 (0.09) (0.02)
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Diluted earnings per share (Note 10) 0.02 0.01 (0.09) (0.02)
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Other comprehensive income:
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Currency translation differences 10 27 23 0
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TOTAL COMPREHENSIVE INCOME 81 71 (392) (91)
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The planned time of publishing of interim report of the fourth quarter 2014 is
week 9 (25-28 February 2014)
Martin Kalle
CFO
+372 4478 331
martin.kalle@skano.com
www.skano.com
News Source: NASDAQ OMX
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29.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: Skano Group
Estonia
ISIN: EE3100092503
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