In the 9 months of 2004, the sales revenue of AS Viisnurk amounted to EEK 276.3 mil (EUR 17.7 mil) and the net profit was EEK 3.5 mil (EUR 226,000). In the same period last year, the sales revenue of the company amounted to EEK 279.7 mil (EUR 17.9 mil) and the loss was 5.2 mil (EUR 334,000). In comparison with the same period of the previous year the turnover of the company decreased 1.2% while the economic performance improved by a total of EEK 8.7 mil (EUR 0.6 mil). In the third quarter of the accounting period, a profit of EEK 3 mil (EUR 190,000) was achieved with the sales revenues of EEK 81.3 mil (EUR 5.2 mil).

 

As of 30 September 2004, the total assets of Viisnurk AS amounted to EEK 237.7 mil (EUR 15.2 mil), which is about 15% less than at the beginning of the year. The liabilities of the company have decreased by EEK 46.8 mil (EUR 3 mil) when compared with the year's start. At the end of the accounting period the debt ratio of AS Viisnurk was 67%, which shows a decline of more than 6% when compared with the beginning of the year.

 

Divisional Review

 

In the 9 months the sales revenue of the Furniture Division of AS Viisnurk was EEK 119.1 mil (EUR 7.6 mil) and the economic performance reflected a profit of EEK 3.3 mil (EUR 0.2 mil). Last year the sales revenue of the Furniture Division in the 9 months was EEK 118 mil (EUR 7.5 mil) and the profit amounted to EEK 8.9 mil (EUR 0.57 mil).

In the third quarter, the most important event of the Furniture Division was completion of preparations for taking over the sales activities of Skano AG and the network of sales agents covering Germany, Austria and Switzerland. Skano AG has been in the furniture sales business for more than twenty years with purchase groups and retail sales chains engaged in mostly German-language European markets as its clients. In 2003, the turnover of Skano AG totalled EEK 16 mil (EUR 1 mil). The take–over at the beginning of October is an essential change in the sales strategy of the Furniture Division with the aim of creating, through the use of new sales channels, stable prerequisites for growth in the sales volume and profitability. The positive impact of the sales strategy change on the economic performance of the division is expected beginning from the first half of 2005.

At the end of September, the Furniture Division of AS Viisnurk, under the Skano trademark, participated in the M.O.W. (Möbel Ordermesse Westfalica) in Barntrup, Germany, the largest wholesalers' fair which is directed to specialists. The new product lines developed in cooperation with German designers were presented at the fair.

 

The Sports Goods Division ended the 9 months with a sales revenue of EEK 50.7 mil (EUR 3.2 mil) and a loss of EEK 6.4 mil (EUR 0.4 mil), which was better than the budgeted figures. The turnover of the division in the same period last year was EEK 43.6 mil (EUR 2.8 mil) and the loss amounted to EEK 4.3 mil (EUR 0.27 mil). The figures regarding the 9 months of 2004 also include the severance expenses of 141 employees who became redundant in the third quarter, in the amount of EEK 1.6 mil (EUR 0.1 mil).

By today all customer contracts have been duly performed in the Sports Goods Division and the division has been closed since 29 October in accordance with the resolution adopted on 31 May 2004. A total of 231 employees were laid off from the division. The severance expenses formed EEK 2.9 mil (EUR 0.2 mil). The sales of the assets of the division will be continued.

 

In the Building Materials Division the sales revenue achieved during the 9 months was EEK 73.1 mil (EUR 4.7 mil) and the profit was EEK 15 mil (EUR 0.96 mil). In the same period last year the turnover of the division was EEK 68.3 mil (EUR 4.4 mil) and the profit was EEK 15.8 mil (EUR 1 mil). No significant changes have taken place in the market situation of the division and the economic performance of the business unit has been continuously high. The potential buyer of the Building Materials Division has been elected and negotiations for entering into a purchase-sales contract of the division are under way.

 

The economic performance of the Wood Division of AS Viisnurk, which terminated its activities on 16 April, was a loss of EEK 3.1 mil (EUR 0.2 mil).

On 22 September 2004, AS Viisnurk signed a contract with OÜ Desparo for sales of the assets of the Wood Division. The assets of the Wood Division included a sawmill, a drying complex and a glulam plant. The assets were sold along with the land under the Wood Division the area of which was about 81.000 m². The total value of the transaction reached EEK 44 mil (EUR 2.8 mil), which shall be subject to VAT. EEK 11 mil (EUR 0.7 mil) of the purchase price has been paid, and EEK 33 mil (EUR 2.1 mil) will be paid after entry into the real right contract, which shall be executed after the acts required for division of the land under the Wood Division have been performed.

 

In the 9 months the company's operating revenue from sales of assets not connected with production was EEK 4.5 mil / EUR 0.3 mil (in the third quarter EEK 0.1 mil / EUR 6.000). Additionally, financial income of EEK 1.6 mil (EUR 0.1 mil) was also earned as a result of selling long-term financial investments in the third quarter.

 

 

 

 

 

 

 

 

Andrus Aljas
CFO
+372 447 8355