Income statement

 

Consolidated net sales of first quarter 2009 was 53.1 mil. kroons/3.4 mil. euros (73.9 mil. kroons/4.7 mil. euros in same period of 2008) representing a 28% decrease on the first quarter compared to Q1 2008. The Group’s gross margin in the first quarter of 2009 was 19.5% compared to 23.9% in the first quarter of 2008. Consolidated operating profit amounted to 0.3 mil. kroons/17 thousand euros (5.9 mil. kroons/378 thousand euros in same period 2008). The consolidated operating margin of net sales was 0.5% (8.0% in Q1 2008).

 

Consolidated net loss amounted to 0.7 mil. kroons/43 thousand euros, compared to 5.1 mil. kroons/328 thousand euros in Q1 2008), and the net margin was -1.3% (1.8% in Q1 2008). In Q1 2009, the Group’s return on equity was -1.0% (6.7% in Q1 2008) and return on assets was -0.4% (3.0% in Q1 2008).

 

The main reason for loss is decrease of net sales and cutting of production volume in main purpose to keep liquidity in present market situation.

 

 

Balance sheet

 

As of 31.3.2009 the total assets of Viisnurk amounted to 155.9 mil. kroons/10.0 mil. euros (31.12.2008: 163.8 mil. kroons/10.5 mil. euros). The liabilities of the company accounted for 54.8% (31.12.2008: 56.5%) thereof, i.e. 85.5 mil. kroons/5.5 mil. euros (31.12.2008: 92.6 mil. kroons/5.9 mil. euros).

 

Receivables and prepayments have increased by 7.3 mil. kroons/0.5 mil. euros i.e. 37% decrease with 3 months. The reason of increase of receivables is very small sales in December 2008, which essentially lowered the amount of receivables at the end of December.

 

Inventories decreased by 10.2 mil. kroons/0.7 mil. euros to reach 57.9 mil. kroons/3.7 mil. euros on 31.3.2009. (31.12.2008: 68.1 mil. kroons/4.4 mil. euros). The lowering of amount of inventories is one of the main goals to survive in crisis and to keep liquidity. Property, plant and intangibles decreased by 1.9 mil. kroons/0.1 mil. euros mainly as a result of depreciation.

 

Short-term loans decreased by 2.0 mil. kroons/0.1 mil. euros and amounted to 15.7 mil. kroons/1.0 mil. euros on 31 March 2009 (31.12.2008: 17.7 mil. kroons/1.1 mil. euros). Supplier payables, tax liabilities, other payables, including payables to employees, and provisions amounted to 38.7 mil. kroons/2.5 mil. euros (31.12.2008: 43.8 mil. kroons/2.8 mil. euros). Current and non-current liabilities decreased by 7.1 mil. kroons/0.5 mil. euros to 85.5 mil. kroons/5.5 mil. euros (31.12.2008: 92.6 mil. kroons/5.9 mil. euros).

 

 

Divisional review:

 

Net sales by business segments

	th. EEK		th. EUR		% of net sales
	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Furniture Factory	27,598	36,089	1,764	2,307	52.0%	48.9%
Skano	8,934	9,686	571	619	16.8%	13.1%
Building Materials Division	20,387	33,785	1,303	2,159	38.4%	45.7%
Elimination	(3,833)	(5,693)	(245)	(364)	(7.2)%	(7.7)%
TOTAL	53,086	73,867	3,393	4,721	100.0%	100.0%

 

Net sales by geographical segments

	th. EEK		th. EUR		% of net sales
	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Finland	21 704	35 435	1 387	2 265	40,9%	48,0%
Russia	12 514	15 961	799	1 020	23,6%	21,6%
Estonia	7 871	12 813	503	819	14,8%	17,3%
Ukraine	2 894	1 031	185	66	5,5%	1,4%
Latvia	2 368	3 112	151	199	4,5%	4,2%
Lithuania	2 218	2 638	142	168	4,2%	3,6%
Portugal	1 245	0	79	0	2,3%	0,0%
Germany	743	1 202	48	77	1,4%	1,6%
Kazakhstan	629	527	40	34	1,2%	0,7%
Sweden	559	1 017	36	65	1,1%	1,4%
Belarusian	119	0	8	0	0,2%	0,0%
Other countries	222	131	15	8	0,4%	0,2%
TOTAL	53 086	73 867	3 393	4 721	100,00%	100,00%

 

Regarding the markets, turnover has decreased in all big markets. The main reasons of increased turnover in Ukraine were the stores opened in 2008 which in the first quarter of 2008 were still in the start-up phase or not opened. AS Viisnurk initiated sales into Portugal and Belarusian.

 

Gross profit by business segments

	th. EEK		th. EUR
	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Furniture Factory	3,188	4,186	204	268
Skano	4,416	4,670	282	298
Building Materials Division	2,820	8,838	180	565
Elimination	(66)	(11)	(4)	(1)
TOTAL	10,358	17,683	662	1,130

 

The main reason for decreased gross margin in Building Material Division is changes in product portfolio and growth of cost value due to small production volume and big fixed costs.

 

Profit by business segments

	th. EEK		th. EUR
	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Furniture Factory	1,616	1,834	103	117
Skano	(778)	(164)	(50)	(10)
Building Materials Division	(248)	4,262	(16)	272
Elimination	(325)	(11)	(20)	(1)
TOTAL	265	5,921	17	378
Net financial costs	(938)	(788)	(60)	(50)
PROFIT BEFORE TAXES	(673)	5,133	(43)	328
Income tax	0	0	0	0
NET PROFIT	(673)	5,133	(43)	328

 

 

Furniture Division

 

The net sales of AS Viisnurk Furniture Division in the first quarter amounted to 32.7 mil. kroons/2.1 mil. euros (2008: 40.1 mil. kroons/2.6 mil. euros) and the economic result 0.1 mil. kroons/8 thousand euros as a profit (2008: 1.4 mil. kroons/88 thousand euros). As compared to the previous year the turnover of the division has decreased by 7.4 mil. kroons/472 thousand euros (18.4%).

 

 

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 10 stores in Tallinn, Pärnu, Riga, Vilnius, Kaunas, Klaipeda, Kiev, Donetsk, Kharkiv and Odessa at the end of the first quarter.

 

As a result of unexpected economical situation, management decided to stop openings of new stores. Management is in negotiations with leasers to lower premises rents.

 

Retail sales by countries

	th. EEK		th. EUR		% of net sales		Number of stores
	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Estonia	2,200	4,511	141	288	24.6%	46.6%	2	2
Latvia	1,730	2,319	110	148	19.4%	23.9%	1	1
Lithuania	2,110	2,533	135	162	23.6%	26.2%	3	3
Ukraine	2,894	323	185	21	32.4%	3.3%	4	2
TOTAL	8,934	9,686	571	619	100.0%	100.0%	10	8

 

The retail sale of the Furniture Division decreased most in Estonia. The sale in Ukraine has increased in stores opened after 31.3.2008. Within the first quarter this year the retail sale has decreased by 7.8% as compared to the same period last year. The stores that were opened before 31.3.2008 (Tallinn, Riga, Pärnu, Vilnius, Kaunas, Klaipeda, Kharkiv, Kiev) have decreased the sales in the first quarter by 33% compared to the same period in 2008.

 

 

Furniture Factory

 

The Furniture Factory’s sales in the first quarter in the company’s basic target market in Russia and Finland have decreased and clients do not estimate sales recovering in near future.

 

Furniture Factory sales by countries

	th EEK		th EUR		% of net sales
	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Russia	11,691	14,637	747	935	42.4%	40.6%
Finland	10,328	13,653	660	873	37.4%	37.7%
Kazakhstan	629	527	40	34	2.3%	1.5%
Germany	620	966	40	62	2.2%	2.7%
Others	497	613	32	39	1.8%	1.7%
Subsidiaries	3,833	5,693	244	364	13.9%	15.8%
TOTAL	27,598	36,089	1,763	2,307	100.0%	100.0%

 

 

Building Materials Division

 

The net sales of the Building Materials Division in the first quarter amounted to 20.4 mil. kroons/1.3 mil. euros and loss to 0.8 mil. kroons/51 thousand euros. In the same period last year, the turnover of the division totalled to 33.8 mil. kroons/2.2 mil. euros and the profit 3.8 mil. kroons/240 thousand euros. As compared to the previous year the turnover of the division has decreased by 13.4 mil. kroons/856 thousand euros and the profit has decreased by 4.5 mil. kroons/291 thousand euros.           

Net sales by geographical segments

	th. EEK		th. EUR		% of net sales
	Q1 2009	Q1 2008	Q1 2009	Q1 2008	Q1 2009	Q1 2008
Finland	11 376	21 782	727	1392	55,8%	64,5%
Estonia	5 365	7 820	343	500	26,3%	23,1%
Portugal	1 245	0	80	0	6,1%	0,0%
Russia	823	1 324	53	85	4,0%	3,9%
Latvia	638	793	41	51	3,1%	2,3%
Sweden	559	1 017	36	65	2,7%	3,0%
Germany	123	236	8	15	0,6%	0,7%
Lithuania	108	105	7	7	0,5%	0,3%
Ukraine	0	708	0	45	0,0%	2,1%
Other countries	150	0	10	0	0,7%	0,0%
TOTAL	20 387	33 785	1 305	2 160	100,0%	100,0%

 

 

Building Boards

 

The product group that makes up the biggest proportion in general building boards are wind protection boards. Compared to last year, decrease of sales is the biggest in this segment. This is caused by decrease of the building sector in Estonia and Finland, two main markets for the product. Sale of products to companies operating outside the building sector is same as previous year.

 

 

Interior Finishing Boards

 

The biggest market of Isotex interior finishing boards in the first quarter was Finland. Sale in the domestic market of Estonia has decreased marginally and was almost on the level of last year. Sales volumes have been achieved in Lithuania and Russia. In connection with the increase of production capacity potential, activities have been continued in order to find new markets.

 

 

Consolidated balance sheet

	Th EEK	Th EEK	Th EUR	Th EUR
	31.3.2009	31.12.2008	31.3.2009	31.12.2008
Cash and bank	3,831	6,913	245	442
Receivables and prepayments	26,835	19,568	1,715	1,250
Inventories	57,896	68,096	3,701	4,351
Total current assets	88,562	94,577	5,661	6,043
Investment property	2,893	2,893	185	185
Tangible fixed assets	64,431	66,333	4,118	4,239
Intangible fixed assets	19	21	1	1
Total fixed assets	67,343	69,247	4,304	4,425
TOTAL ASSETS	155,905	163,824	9,965	10,468
Debt obligations	15,654	17,722	1,001	1,132
Payables and prepayments	38,620	43,646	2,468	2,790
Short-term provisions	86	115	6	7
Total current liabilities	54,360	61,483	3,475	3,929
Non-current debt obligations	27,720	27,720	1,772	1,772
Non-current provisions	3,421	3,421	219	219
Total non-current liabilities	31,141	31,141	1,991	1,991
Total liabilities	85,501	92,624	5,466	5,920
Share capital at nominal value	44,991	44,991	2,875	2,875
Issue premium	5,698	5,698	364	364
Statutory capital reserve	4,499	4,499	288	288
Currency translation reserve	130	253	8	14
Retained profits	15,759	9,717	1,007	621
Net profit for the year	(673)	6,042	(43)	386
Total equity	70,404	71,200	4,499	4,548
TOTAL LIABILITIES AND EQUITY	155,905	163,824	9,965	10,468

 

           

Consolidated income statement

 

	Th EEK	Th EEK	Th EUR	Th EUR
	3 m 2009	3 m 2008 (adjusted)	3 m 2009	3 m 2008 (adjusted)
RETURN ON SALES	53,086	73,867	3,393	4,721
Cost of production sold	(42,728)	(56,184)	(2,731)	(3,591)
Gross profit	10,358	17,683	662	1,130
Marketing expenses	(8,878)	(9,922)	(567)	(634)
General administrative expenses	(1,516)	(1,585)	(97)	(101)
Other income	1,058	179	67	11
Other expenses	(756)	(435)	(48)	(28)
Operating profit	266	5,920	17	378
Financial income and financial expenses	(939)	(787)	(60)	(50)
NET PROFIT FOR THE PERIOD	(673)	5,133	(43)	328
Basic earnings per share	(0.15)	1.14	(0.01)	0.07
Diluted earnings per share	(0.15)	1.14	(0.01)	0.07

 

 

Einar Pähkel

CFO

+372 447 8331