The net sales of Viisnurk AS for the first half of 2003 were 188.6 mil. kroons (12.1 mil. euros) and the net profit 3.2 mil. kroons (0.2 mil. euros). In the same period of the last year, the net sales totalled 175.8 mil. kroons (11.2 mil. euros) and the net profit 3.7 mil. kroons (0.2 mil. euros).
In the 2nd quarter, the company exposed the profit of 2.6 mil. kroons (0.17 mil. euros) at the net sales of 97.4 mil. kroons (6.2 mil. euros). The net sales and net profit of Viisnurk for the 2nd quarter of 2002 were 94 mil. and 4.8 mil. kroons (6 mil. and 0.3 mil. euros), respectively.
The earnings of Viisnurk before interest, taxes, depreciation and amortization (EBITDA) amounted to 11.7 mil. kroons/0.75 mil. euros (i.e. the EBITDA margin was 12%) in the 2nd quarter, and 21.8 mil. kroons (1.4 mil. euros) in the first half of the year.
Divisional Review
- The Furniture Division of Viisnurk AS, which incorporates the sawmill, the Wood Panel and Furniture Factories, earned 2.8 mil. kroons (0.18 mil. euros) of profit at the net sales of 118.2 mil. kroons (7.6 mil. euros) in the first half of the year. As compared to the same period of the previous year, the net sales of the Furniture Division increased by 5%, but the profit slumped by approximately a half. In the 2nd quarter, the net sales of the Furniture Division totalled 60.6 mil. kroons (3.9 mil. euros) and the operations resulted in the loss of 2.2 mil. kroons (0.14 mil. euros). The half-yearly results were divided between various subdivisions of the Furniture Division as follows: in the period, the sawmill earned 3.1 mil. kroons (0.2 mil. euros) of profit at the net sales of 10.9 mil. kroons/0.7 mil. euros (the net sales for 2002 were 13.3 mil. kroons/0.85 mil. euros and the profit 0.4 mil. kroons/0.03 mil. euros); the Wood Panel Factory incurred a loss of 9.6 mil. kroons (0.6 mil. euros) at the net sales of 23.3 mil. kroons/1.5 mil. euros (cf. a loss of 7 mil. kroons/0.45 mil. euros at the net sales of 10.5 mil. kroons/0.7 mil. euros in 2002), and the Furniture Factory earned the profit of 9.3 mil. kroons (0.6 mil. euros) at the net sales of 84 mil. kroons/5.4 mil. euros (the net sales amounted to 88.9 mil. kroons/5.7 mil. euros and the profit 12 mil. kroons/0.8 mil. euros in the same period of the last year). Whereas the results of the sawmill and the Furniture Factory for the 2nd quarter complied with the plans, the loss of the Wood Panel Factory exceeded the estimates. The Wood Panel Factory suffered from the lack of orders to suit its product portfolio, thus the factory had to operate with the limited capacity in the 2nd quarter of the year. On one hand, it was due to the seasonal nature of the industrial sector; one the other hand, the market situation is incessantly low, especially for pine panels. After the vacation period in summer, the Furniture Division of Viisnurk will focus even more on processing birch, including all activities from producing sawn timber, furniture blanks and edge-glued panels to manufacturing and marketing solid wood furniture of birch. The product development process of furniture lines is mainly related to birch to enable more internal orders for both the sawmill and the Wood Panel Factory in the future, and make use of the synergy within the divisions.
- The economic activities of the Sports Goods Division for the first half of the year resulted in 22.2 mil. kroons (1.4 mil. euros) of net sales and 3.8 mil. kroons (0.24 mil. euros) of loss. Compared to the last year, the sales of the division grew by 7.6%, but the loss increased by 1.7 mil. kroons (0.1 mil. euros). However, the division started to earn profit again in the 2nd quarter of the year, making 1.2 mil. kroons (0.1 mil. euros) of profit at the net sales of 13 mil. kroons (0.83 mil. euros). Both the increase in the output of hockey sticks and the renewal of the quality management system of the production process of cross-country skis had an important role in it. The production capacities of the current year for both cross-country skis and hockey sticks are fully covered with agreements, including the ones made with such major customers as Rossignol, Exel, Skilom, Itech, Hespeler and Louisville.
- The current year has been the most successful for the Building Materials Division. The net sales of 47.6 mil. kroons (3 mil. euros) and the profit of 12.1 mil. kroons (0.77 mil. euros) were achieved in the first half of the year. The net sales escalated by 15% and the profit by 25% compared to the previous financial year. In the 2nd quarter, the net sales of the division totalled 23.6 mil. kroons (1.5 mil. euros) and the profit 6.7 mil. kroons (0.43 mil. euros). The increase was triggered by the strength of the construction sector, which kept the demand for environmentally friendly Isoplaat boards high, and the successful marketing activities in introducing Isotex interior finishing boards to builders. An operating contract with regard to the heat generation unit, which was included in the Building Materials Division at the beginning of the year, was entered into with Fortum Termest at the end of the 2nd quarter; as a result, Fortum took the assets of the boiler house of Viisnurk on lease and hired all the staff. The Furniture Division has entered into purchase agreements for heat energy with Ülejõe Soojusvõrk and Pärnu Soojus, the subsidiaries of the Swedish company Vattenfall. Energy-related contracts provide Viisnurk with an opportunity to concentrate its human and material resources on the development of its core activities.
- As to other activities, the sale of the real estate investment of Viisnurk by the Pärnu River, which was not involved in the production process, was of significance as 2.3 mil. kroons (0.15 mil. euros) of extraordinary return was earnd. Means of transport and drivers as well as the staff involved in cleaning, maintenance and repairs of office facilities and premises were transferred from Viisnurk under the service contract with Minu Vara Lääne in the 2nd quarter of the year.
INCOME STATEMENT
thousand kroons
2nd quarter 2nd quarter Half year Half year
2003 2002 2003 2002
RETURN ON SALES 97,373 93,997 188,570 175,787
Cost of production sold (85,014) (78,939) (164,862) (151,873)
Gross profit 12,359 15,058 23,708 23,914
Marketing expenses (6,094) (5,003) (11,710) (9,633)
General administrative (3,535) (2,497) (6,244) (4,993)
expenses
Other income 2,784 262 3,158 513
Other expenses (777) (407) (1,379) (988)
Operating profit 4,737 7,413 7,533 8,813
Financial income and (2,112) (2,573) (4,322) (5,069)
financial expenses
NET PROFIT FOR THE PERIOD 2,625 4,840 3,211 3,744
Basic earnings per share 0.58 1.08 0.71 0.83
Diluted earnings per share 0.58 1.08 0.71 0.83
INCOME STATEMENT
thousand euros
2nd quarter 2nd quarter Half year Half year
2003 2002 2003 2002
RETURN ON SALES 6,223 6,007 12,052 11,235
Cost of production sold (5,433) (5,045) (10,537) (9,706)
Gross profit 790 962 1,515 1,529
Marketing expenses (389) (320) (748) (616)
General administrative (226) (160) (399) (319)
expenses
Other income 178 17 201 33
Other expenses (50) (25) (88) (64)
Operating profit 303 474 481 563
Financial income and (135) (165) (276) (324)
financial expenses
NET PROFIT FOR THE PERIOD 168 309 205 239
Basic earnings per share 0.04 0.07 0.05 0.05
Diluted earnings per share 0.04 0.07 0.05 0.05
BALANCE SHEET
Thou. kroons Thou. kroons Thou. euros Thou. euros
30.06.2003 31.12.2002 30.06.2003 31.12.2002
Cash and bank 2,693 1,764 172 113
Customer receivables 54,736 54,143 3,498 3,460
Other receivables 1,915 1,916 122 122
Prepayments 4,472 4,447 286 284
Inventories 79,693 58,602 5,093 3,746
Total current assets 143,509 120,872 9,171 7,725
Long-term financial 1,436 1,436 92 92
investments
Real estate investments 2,619 2,792 167 178
Tangible fixed assets 206,109 219,008 13,173 13,998
Intangible fixed assets 651 785 42 50
Total fixed assets 210,815 224,021 13,474 14,318
TOTAL ASSETS 354,324 344,893 22,645 22,043
Debt obligations 34,800 38,773 2,224 2,478
Customer prepayments 1,498 620 96 40
Supplier payables 38,049 30,978 2,432 1,980
Taxes payable 7,818 5,944 499 380
Accrued expenses 14,381 12,267 919 784
Short-term provisions 1,493 95
Total current liabilities 96,546 90,075 6,170 5,757
Non-current debt 111,522 111,773 7,128 7,144
obligations
Total non-current 111,522 111,773 7,128 7,144
liabilities
Total liabilities 208,068 201,848 13,298 12,901
Share capital (nominal 44,991 44,991 2,875 2,875
value)
Issue premium 11,332 11,332 724 724
Mandatory capital reserve 4,499 4,499 288 288
Retained profits 82,223 101,855 5,255 6,510
Net profit for the year 3,211 (19,632) 205 (1,255)
Total equity 146,256 143,045 9,347 9,142
TOTAL LIABILITIES AND 354,324 344,893 22,645 22,043
EQUITY
Andrus Aljas
Business controller
+372 44 78355