Income statement
Consolidated net sales of third quarter 2010 was 55.0 mil. kroons/3.5 mil. euros
(47.4 mil. kroons/3.0 mil. euros in same period of 2009) representing a 15.9%
increase on the third quarter compared to Q3 2009. The Group's gross margin in
the third quarter of 2010 was 22.8% compared to 19.9% in the third quarter of
2009. Consolidated operating profit amounted to 3.1 mil. kroons/201 thousand
euros (operating loss 0.8 mil. kroons/53 thousand euros in 2009). The
consolidated operating margin of net sales was 5.7% (-1.7% in Q3 2009).
Consolidated net profit amounted to 2.7 mil. kroons/172 thousand euros, compared
to net loss 1.5 mil. kroons/96 thousand euros in Q3 2009), and the net margin
was 4.9% (-3.2% in Q3 2009). In Q3 2010, the Group's return on equity was 3.3%
(-2.2% in Q3 2009) and return on assets was 1.9% (-1.1% in Q3 2009).
Position of financial statement
As of the end of September 2010 the total assets of Viisnurk amounted to 142.5
mil. kroons/9.1 mil. euros (31.12.2009: 132.8 mil. kroons/8.5 mil. euros). The
liabilities of the company accounted for 44% (31.12.2009: 46%) thereof, i.e.
62.2 mil. kroons/4.0 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
Receivables and prepayments have increased by 6.1 mil. kroons/0.4 mil. euros
i.e. 32% increase with 9 months. The reason of increase of receivables is very
small sales in December 2009, which essentially lowered the amount of
receivables at the end of December.
Inventories increased by 1.6 mil. kroons/0.1 mil. euros to reach 43.6 mil.
kroons/2.8 mil euros at 30 September 2010 (31.12.2009: 41.9 mil. kroons/2.7 mil.
euros). Property, plant and intangibles increased by 3.0 mil. kroons/0.2 mil.
euros.
Current liabilities decreased by 5.3 mil. kroons/0.3 mil euros and amounted in
30 September 2010 2.8 mil. kroons/0.2 mil. euros (31.12.2009: 8.0 mil.
kroons/0.5 mil. euros). Supplier payables, tax liabilities, other payables,
including payables to employees, and provisions amounted to 24.3 mil. kroons/1.6
mil. euros (31.12.2009: 22.9 mil. kroons/1.5 mil. euros). Current and
non-current liabilities increased by 0.9 mil. kroons/0.1 mil. euros to 62.2 mil.
kroons/4.0 mil. euros (31.12.2009: 62.3 mil. euros/3.9 mil kroons).
Divisional review:
Net sales by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Furniture | 20,605 | 22,232 | 1,317 | 1,422 | 37.5% | 46.9% |
| Factory | | | | | | |
--------------------------------------------------------------------------------
| Skano | 6,137 | 5,898 | 392 | 376 | 11.2% | 12.4% |
--------------------------------------------------------------------------------
| Building | 31,559 | 22,218 | 2,017 | 1,420 | 57.4% | 46.8% |
| Materials | | | | | | |
| Division | | | | | | |
--------------------------------------------------------------------------------
| Elimination | (3,297) | (2,901) | (211) | (186) | (6.0%) | (6.1%) |
--------------------------------------------------------------------------------
| TOTAL | 55,004 | 47,447 | 3,515 | 3,032 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 21,430 | 21,661 | 1,370 | 1,384 | 39.0% | 45.7% |
--------------------------------------------------------------------------------
| Estonia | 11,891 | 10,379 | 760 | 663 | 21.6% | 21.9% |
--------------------------------------------------------------------------------
| Russia | 9,956 | 7,417 | 636 | 474 | 18.1% | 15.6% |
--------------------------------------------------------------------------------
| Ukraine | 2,431 | 1,801 | 155 | 115 | 4.4% | 3.8% |
--------------------------------------------------------------------------------
| Latvia | 1,913 | 1,382 | 122 | 88 | 3.5% | 2.9% |
--------------------------------------------------------------------------------
| Sweden | 1,565 | 1,184 | 100 | 76 | 2.8% | 2.5% |
--------------------------------------------------------------------------------
| Lithuania | 1,122 | 1,610 | 72 | 103 | 2.0% | 3.4% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,087 | 1,115 | 69 | 71 | 2.0% | 2.3% |
--------------------------------------------------------------------------------
| China | 804 | 0 | 51 | 0 | 1.5% | 0.0% |
--------------------------------------------------------------------------------
| Malaysia | 491 | 0 | 31 | 0 | 0.9% | 0.0% |
--------------------------------------------------------------------------------
| India | 383 | 0 | 24 | 0 | 0.7% | 0.0% |
--------------------------------------------------------------------------------
| Great Britain | 342 | 0 | 22 | 0 | 0.6% | 0.0% |
--------------------------------------------------------------------------------
| Denmark | 186 | 277 | 12 | 18 | 0.3% | 0.6% |
--------------------------------------------------------------------------------
| Germany | 119 | 308 | 8 | 20 | 0.2% | 0.6% |
--------------------------------------------------------------------------------
| Other countries | 272 | 89 | 17 | 6 | 0.5% | 0.2% |
--------------------------------------------------------------------------------
| Total | 55,004 | 47,447 | 3,515 | 3,032 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Concerning the markets, turnover has been increased into Russia, Ukraine, Latvia
and Sweden. Sales into Asia has been initiated. Sales into Finland and
Kazakhstan has been the same and sales into Lithuania, Denmark and Germany has
been decreased.
Profit by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Furniture Factory | 1,054 | 371 | 67 | 24 |
--------------------------------------------------------------------------------
| Skano | (1,449) | (3,046) | (92) | (194) |
--------------------------------------------------------------------------------
| Building Materials | 3,054 | 1,508 | 196 | 96 |
| Division | | | | |
--------------------------------------------------------------------------------
| Elimination | 478 | 342 | 30 | 21 |
--------------------------------------------------------------------------------
| TOTAL | 3,137 | (825) | 201 | (53) |
--------------------------------------------------------------------------------
| Net financial costs | (449) | (683) | (29) | (43) |
--------------------------------------------------------------------------------
| NET PROFIT | 2,688 | (1,508) | 172 | (96) |
--------------------------------------------------------------------------------
Weakening of Ukrainian hryvnia has influenced result of Skano. Loss of change of
exchange rate was 813 thousand kroons/52 thousand euros.
Furniture Division
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 12
stores - in Tallinn, Pärnu, Riga, Vilnius, Kaunas, three in Kiev, Donetsk,
Kharkiv and Dnipropetrovs'k at the end of the third quarter.
As a result of opening of two stores in Ukraine the loss is additionally caused
by costs of new stores, which have not good sales at start. According to our
prognosis, stores will achieve the normal sales 3 to 6 months after opening.
Retail sales by countries
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales | Number of stores |
--------------------------------------------------------------------------------
| | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | 30.9.09| 30.9.08 |
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | | |
--------------------------------------------------------------------------------
| Estonia | 1,874 | 1,884 | 120 | 120 | 30.5% | 31.9% | 2 | 2 |
--------------------------------------------------------------------------------
| Latvia | 907 | 831 | 58 | 53 | 14.8% | 14.1% | 1 | 1 |
--------------------------------------------------------------------------------
| Lithuan | 1,080 | 1,508 | 69 | 96 | 17.6% | 25.6% | 3 | 2 |
| ia | | | | | | | | |
--------------------------------------------------------------------------------
| Ukraine | 2,276 | 1,675 | 146 | 107 | 37.1% | 28.4% | 4 | 7 |
--------------------------------------------------------------------------------
| TOTAL | 6,137 | 5,898 | 393 | 376 | 100.0% | 100.0% | 10 | 12 |
--------------------------------------------------------------------------------
The retail sale of Skano increased most in Ukraine and decreased in Lithuania.
Within the third quarter this year the retail sale has increased by 4.1% as
compared to the same period last year.
Furniture Factory
The Furniture Factory's sales in the third quarter in the company's basic target
market in Russia have increased and in Finland have decreased. Sales to Skano
have increased, too.
The net sales of the Furniture Factory in third quarter amounted to 20.6 mil.
kroons/1.3 mil. euros and profit to 1.1 mil. kroons/0.07 mil. euros. In the same
period of the last year, the turnover of the division totalled 22.2 mil.
kroons/1.4 mil. euros and the profit 0.4 mil. kroons/0.02 mil. euros. As
compared to the previous year the turnover of the division has decreased by 1.6
mil. kroons/0.1 mil. euros and the profit has increased by 0.7 mil. kroons/0.05
mil. euros.
Furniture Factory sales by countries
--------------------------------------------------------------------------------
| | th EEK | th EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 9,109 | 11,257 | 582 | 719 | 44.2% | 50.6% |
--------------------------------------------------------------------------------
| Russia | 6,625 | 6,336 | 423 | 405 | 32.2% | 28.5% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,087 | 1,115 | 69 | 71 | 5.3% | 5.0% |
--------------------------------------------------------------------------------
| Estonia | 326 | 216 | 21 | 14 | 1.6% | 1.0% |
--------------------------------------------------------------------------------
| Byelorussia | 162 | 89 | 10 | 6 | 0.8% | 0.4% |
--------------------------------------------------------------------------------
| Germany | 0 | 197 | 0 | 13 | 0.0% | 0.9% |
--------------------------------------------------------------------------------
| Others | 0 | 121 | 0 | 8 | 0.0% | 0.5% |
--------------------------------------------------------------------------------
| Skano | 3,296 | 2,901 | 211 | 185 | 16.0% | 13.0% |
--------------------------------------------------------------------------------
| TOTAL | 20,605 | 22,232 | 1,316 | 1,421 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Building Materials Division
The net sales of the Building Materials Division in third quarter amounted to
31.6 mil. kroons/2.0 mil. euros and profit to 3.1 mil. kroons/196 thousand
euros. In the same period of the last year, the turnover of the division
totalled 28.7 mil. kroons/1.8 mil. euros and the net profit 1.7 mil. kroons/108
thousand euros. As compared to the previous year the turnover of the division
has increased by 42% i.e. 9.3 mil. kroons/0.6 mil. euros and the profit has
increased by 1.6 mil. kroons/100 thousand euros.
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 12,321 | 10,404 | 787 | 665 | 39.1% | 46.8% |
--------------------------------------------------------------------------------
| Estonia | 9,691 | 8,280 | 619 | 529 | 30.7% | 37.3% |
--------------------------------------------------------------------------------
| Russia | 3,331 | 1,081 | 213 | 69 | 10.6% | 4.9% |
--------------------------------------------------------------------------------
| Sweden | 1,565 | 1,184 | 100 | 76 | 5.0% | 5.3% |
--------------------------------------------------------------------------------
| Latvia | 1,005 | 551 | 64 | 35 | 3.2% | 2.5% |
--------------------------------------------------------------------------------
| China | 804 | 0 | 51 | 0 | 2.5% | 0.0% |
--------------------------------------------------------------------------------
| Malaysia | 491 | 0 | 31 | 0 | 1.6% | 0.0% |
--------------------------------------------------------------------------------
| India | 383 | 0 | 24 | 0 | 1.2% | 0.0% |
--------------------------------------------------------------------------------
| Great Britain | 342 | 0 | 22 | 0 | 1.1% | 0.0% |
--------------------------------------------------------------------------------
| Denamrk | 185 | 241 | 12 | 15 | 0.6% | 1.1% |
--------------------------------------------------------------------------------
| Ukraine | 148 | 126 | 9 | 8 | 0.5% | 0.6% |
--------------------------------------------------------------------------------
| Germany | 119 | 111 | 8 | 7 | 0.4% | 0.5% |
--------------------------------------------------------------------------------
| Lithuania | 42 | 101 | 3 | 6 | 0.1% | 0.5% |
--------------------------------------------------------------------------------
| Portugal | 0 | 0 | 0 | 0 | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| Other countries | 1,124 | 139 | 72 | 9 | 3.6% | 0.6% |
--------------------------------------------------------------------------------
| TOTAL | 31,551 | 22,218 | 2,015 | 1,419 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Forecast and development
Skano. Management believes that Ukraine has gained political stability and it
improves its economical conditions. We have found suitable premises with good
price and quality and opened in third quarter one store in Dnipropetrovs'k and
one store in Kiev. There are no plans for openings at current year.
Furniture Factory. For Q4 2010 management forecasts small increase of sales, but
sales is continuously smaller than facilities. It means continuously small
production volume in furniture factory. Agreements with employees to use
shortened working time are effective until 31.03.2011.
Building Materials Division. In fourth quarter of 2010 factory continues with
decreased production volume. In main production line factory continues with
three shifts instead of four. In Isotex line are used one or two shifts
accordingly the demand of clients. The sale of Isoplaat is recovered and
management estimates bigger sales for future, too. According to estimates,
management plans to open fourth swift for main line in Q1 2011 and continue full
production capability.
AS Fortum Termest informed the company for ending the operating contract of
boiler-house belonging to AS Viisnurk at 3.2.2011. After the end of contract AS
Viisnurk continues heat production by itself.
Consolidated balance sheet
--------------------------------------------------------------------------------
| | Th EEK | Th EEK | Th EUR | Th EUR |
--------------------------------------------------------------------------------
| | 30.9.2010 | 31.12.2009| 30.9.2010 | 31.12.2009 |
| | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and bank | 5,043 | 6,091 | 322 | 389 |
--------------------------------------------------------------------------------
| Receivables and | 24,905 | 18,810 | 1,592 | 1,202 |
| prepayments | | | | |
--------------------------------------------------------------------------------
| Inventories | 43,551 | 41,912 | 2,783 | 2,680 |
--------------------------------------------------------------------------------
| Total current assets | 73,499 | 66,813 | 4,697 | 4,271 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investment property | 2,893 | 2,893 | 185 | 185 |
--------------------------------------------------------------------------------
| Tangible fixed assets | 65,726 | 63,083 | 4,201 | 4,031 |
--------------------------------------------------------------------------------
| Intangible fixed assets | 333 | 14 | 21 | 1 |
--------------------------------------------------------------------------------
| Total fixed assets | 68,952 | 65,990 | 4,407 | 4,217 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 142,451 | 132,803 | 9,104 | 8,488 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debt obligations | 2,768 | 8,048 | 177 | 514 |
--------------------------------------------------------------------------------
| Payables and prepayments | 24,261 | 22,742 | 1,550 | 1,454 |
--------------------------------------------------------------------------------
| Short-term provisions | 27 | 118 | 2 | 8 |
--------------------------------------------------------------------------------
| Total current liabilities | 27,056 | 30,908 | 1,729 | 1,976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current debt | 31,926 | 27,084 | 2,040 | 1,731 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Non-current provisions | 3,225 | 3,303 | 206 | 211 |
--------------------------------------------------------------------------------
| Total non-current | 35,151 | 30,387 | 2,246 | 1,942 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 62,207 | 61,295 | 3,975 | 3,918 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital at nominal | 44,991 | 44,991 | 2,875 | 2,875 |
| value | | | | |
--------------------------------------------------------------------------------
| Issue premium | 5,698 | 5,698 | 364 | 364 |
--------------------------------------------------------------------------------
| Statutory capital reserve | 4,499 | 4,499 | 288 | 288 |
--------------------------------------------------------------------------------
| Currency translation | 356 | 406 | 23 | 26 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained profits | 15,914 | 15,759 | 1,017 | 1,007 |
--------------------------------------------------------------------------------
| Net profit for the year | 8,786 | 155 | 562 | 10 |
--------------------------------------------------------------------------------
| Total equity | 80,244 | 71,508 | 5,129 | 4,570 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND | 142,451 | 132,803 | 9,104 | 8,488 |
| EQUITY | | | | |
--------------------------------------------------------------------------------
Consolidated income statement
--------------------------------------------------------------------------------
| th. EEK | Q3 2010 | Q3 2009 | 9 m 2010 | 9 m 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 55,004 | 47,447 | 154,515 | 151,670 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (42,463) | (37,992) | (117,472) | (120,044) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 12,541 | 9,455 | 37,043 | 31,626 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (8,144) | (8,559) | (22,851) | (26,374) |
--------------------------------------------------------------------------------
| General administrative | (587) | (1,021) | (4,072) | (4,054) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 659 | 390 | 1,877 | 1,722 |
--------------------------------------------------------------------------------
| Other expenses | (1,332) | (1,090) | (1,921) | (2,666) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (loss) | 3,137 | (825) | 10,076 | 254 |
--------------------------------------------------------------------------------
| Financial income and | (449) | (683) | (1,290) | (2,353) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before | 2,688 | (1,508) | 8,786 | (2,099) |
| taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET PROFIT (LOSS) FOR | 2,688 | (1,508) | 8,786 | (2,099) |
| THE PERIOD | | | | |
--------------------------------------------------------------------------------
| Currency translation | 361 | 259 | (50) | 482 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 3,049 | (1,249) | 8,736 | (1,617) |
| INCOME (LOSS) | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | 0.60 | (0.34) | 1.95 | (0.47) |
| share | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.60 | (0.34) | 1.95 | (0.47) |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| th. EUR | Q3 2010 | Q3 2009 | 9 m 2010 | 9 m 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 3,515 | 3,032 | 9,875 | 9,693 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (2,714) | (2,428) | (7,507) | (7,672) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 801 | 604 | 2,368 | 2,021 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (520) | (547) | (1,461) | (1,686) |
--------------------------------------------------------------------------------
| General administrative | (37) | (65) | (260) | (259) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 42 | 25 | 120 | 110 |
--------------------------------------------------------------------------------
| Other expenses | (85) | (70) | (123) | (170) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (loss) | 201 | (53) | 644 | 16 |
--------------------------------------------------------------------------------
| Financial income and | (29) | (43) | (82) | (150) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before | 172 | (96) | 562 | (134) |
| taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET PROFIT (LOSS) FOR | 172 | (96) | 562 | (134) |
| THE PERIOD | | | | |
--------------------------------------------------------------------------------
| Currency translation | 23 | 17 | (3) | 33 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 195 | (79) | 559 | (101) |
| INCOME (LOSS) | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | 0.04 | (0.02) | 0.12 | (0.03) |
| share | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.04 | (0.02) | 0.12 | (0.03) |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Einar Pähkel
CFO
Consolidated net sales of third quarter 2010 was 55.0 mil. kroons/3.5 mil. euros
(47.4 mil. kroons/3.0 mil. euros in same period of 2009) representing a 15.9%
increase on the third quarter compared to Q3 2009. The Group's gross margin in
the third quarter of 2010 was 22.8% compared to 19.9% in the third quarter of
2009. Consolidated operating profit amounted to 3.1 mil. kroons/201 thousand
euros (operating loss 0.8 mil. kroons/53 thousand euros in 2009). The
consolidated operating margin of net sales was 5.7% (-1.7% in Q3 2009).
Consolidated net profit amounted to 2.7 mil. kroons/172 thousand euros, compared
to net loss 1.5 mil. kroons/96 thousand euros in Q3 2009), and the net margin
was 4.9% (-3.2% in Q3 2009). In Q3 2010, the Group's return on equity was 3.3%
(-2.2% in Q3 2009) and return on assets was 1.9% (-1.1% in Q3 2009).
Position of financial statement
As of the end of September 2010 the total assets of Viisnurk amounted to 142.5
mil. kroons/9.1 mil. euros (31.12.2009: 132.8 mil. kroons/8.5 mil. euros). The
liabilities of the company accounted for 44% (31.12.2009: 46%) thereof, i.e.
62.2 mil. kroons/4.0 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
Receivables and prepayments have increased by 6.1 mil. kroons/0.4 mil. euros
i.e. 32% increase with 9 months. The reason of increase of receivables is very
small sales in December 2009, which essentially lowered the amount of
receivables at the end of December.
Inventories increased by 1.6 mil. kroons/0.1 mil. euros to reach 43.6 mil.
kroons/2.8 mil euros at 30 September 2010 (31.12.2009: 41.9 mil. kroons/2.7 mil.
euros). Property, plant and intangibles increased by 3.0 mil. kroons/0.2 mil.
euros.
Current liabilities decreased by 5.3 mil. kroons/0.3 mil euros and amounted in
30 September 2010 2.8 mil. kroons/0.2 mil. euros (31.12.2009: 8.0 mil.
kroons/0.5 mil. euros). Supplier payables, tax liabilities, other payables,
including payables to employees, and provisions amounted to 24.3 mil. kroons/1.6
mil. euros (31.12.2009: 22.9 mil. kroons/1.5 mil. euros). Current and
non-current liabilities increased by 0.9 mil. kroons/0.1 mil. euros to 62.2 mil.
kroons/4.0 mil. euros (31.12.2009: 62.3 mil. euros/3.9 mil kroons).
Divisional review:
Net sales by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Furniture | 20,605 | 22,232 | 1,317 | 1,422 | 37.5% | 46.9% |
| Factory | | | | | | |
--------------------------------------------------------------------------------
| Skano | 6,137 | 5,898 | 392 | 376 | 11.2% | 12.4% |
--------------------------------------------------------------------------------
| Building | 31,559 | 22,218 | 2,017 | 1,420 | 57.4% | 46.8% |
| Materials | | | | | | |
| Division | | | | | | |
--------------------------------------------------------------------------------
| Elimination | (3,297) | (2,901) | (211) | (186) | (6.0%) | (6.1%) |
--------------------------------------------------------------------------------
| TOTAL | 55,004 | 47,447 | 3,515 | 3,032 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 21,430 | 21,661 | 1,370 | 1,384 | 39.0% | 45.7% |
--------------------------------------------------------------------------------
| Estonia | 11,891 | 10,379 | 760 | 663 | 21.6% | 21.9% |
--------------------------------------------------------------------------------
| Russia | 9,956 | 7,417 | 636 | 474 | 18.1% | 15.6% |
--------------------------------------------------------------------------------
| Ukraine | 2,431 | 1,801 | 155 | 115 | 4.4% | 3.8% |
--------------------------------------------------------------------------------
| Latvia | 1,913 | 1,382 | 122 | 88 | 3.5% | 2.9% |
--------------------------------------------------------------------------------
| Sweden | 1,565 | 1,184 | 100 | 76 | 2.8% | 2.5% |
--------------------------------------------------------------------------------
| Lithuania | 1,122 | 1,610 | 72 | 103 | 2.0% | 3.4% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,087 | 1,115 | 69 | 71 | 2.0% | 2.3% |
--------------------------------------------------------------------------------
| China | 804 | 0 | 51 | 0 | 1.5% | 0.0% |
--------------------------------------------------------------------------------
| Malaysia | 491 | 0 | 31 | 0 | 0.9% | 0.0% |
--------------------------------------------------------------------------------
| India | 383 | 0 | 24 | 0 | 0.7% | 0.0% |
--------------------------------------------------------------------------------
| Great Britain | 342 | 0 | 22 | 0 | 0.6% | 0.0% |
--------------------------------------------------------------------------------
| Denmark | 186 | 277 | 12 | 18 | 0.3% | 0.6% |
--------------------------------------------------------------------------------
| Germany | 119 | 308 | 8 | 20 | 0.2% | 0.6% |
--------------------------------------------------------------------------------
| Other countries | 272 | 89 | 17 | 6 | 0.5% | 0.2% |
--------------------------------------------------------------------------------
| Total | 55,004 | 47,447 | 3,515 | 3,032 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Concerning the markets, turnover has been increased into Russia, Ukraine, Latvia
and Sweden. Sales into Asia has been initiated. Sales into Finland and
Kazakhstan has been the same and sales into Lithuania, Denmark and Germany has
been decreased.
Profit by business segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Furniture Factory | 1,054 | 371 | 67 | 24 |
--------------------------------------------------------------------------------
| Skano | (1,449) | (3,046) | (92) | (194) |
--------------------------------------------------------------------------------
| Building Materials | 3,054 | 1,508 | 196 | 96 |
| Division | | | | |
--------------------------------------------------------------------------------
| Elimination | 478 | 342 | 30 | 21 |
--------------------------------------------------------------------------------
| TOTAL | 3,137 | (825) | 201 | (53) |
--------------------------------------------------------------------------------
| Net financial costs | (449) | (683) | (29) | (43) |
--------------------------------------------------------------------------------
| NET PROFIT | 2,688 | (1,508) | 172 | (96) |
--------------------------------------------------------------------------------
Weakening of Ukrainian hryvnia has influenced result of Skano. Loss of change of
exchange rate was 813 thousand kroons/52 thousand euros.
Furniture Division
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 12
stores - in Tallinn, Pärnu, Riga, Vilnius, Kaunas, three in Kiev, Donetsk,
Kharkiv and Dnipropetrovs'k at the end of the third quarter.
As a result of opening of two stores in Ukraine the loss is additionally caused
by costs of new stores, which have not good sales at start. According to our
prognosis, stores will achieve the normal sales 3 to 6 months after opening.
Retail sales by countries
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales | Number of stores |
--------------------------------------------------------------------------------
| | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | 30.9.09| 30.9.08 |
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | | |
--------------------------------------------------------------------------------
| Estonia | 1,874 | 1,884 | 120 | 120 | 30.5% | 31.9% | 2 | 2 |
--------------------------------------------------------------------------------
| Latvia | 907 | 831 | 58 | 53 | 14.8% | 14.1% | 1 | 1 |
--------------------------------------------------------------------------------
| Lithuan | 1,080 | 1,508 | 69 | 96 | 17.6% | 25.6% | 3 | 2 |
| ia | | | | | | | | |
--------------------------------------------------------------------------------
| Ukraine | 2,276 | 1,675 | 146 | 107 | 37.1% | 28.4% | 4 | 7 |
--------------------------------------------------------------------------------
| TOTAL | 6,137 | 5,898 | 393 | 376 | 100.0% | 100.0% | 10 | 12 |
--------------------------------------------------------------------------------
The retail sale of Skano increased most in Ukraine and decreased in Lithuania.
Within the third quarter this year the retail sale has increased by 4.1% as
compared to the same period last year.
Furniture Factory
The Furniture Factory's sales in the third quarter in the company's basic target
market in Russia have increased and in Finland have decreased. Sales to Skano
have increased, too.
The net sales of the Furniture Factory in third quarter amounted to 20.6 mil.
kroons/1.3 mil. euros and profit to 1.1 mil. kroons/0.07 mil. euros. In the same
period of the last year, the turnover of the division totalled 22.2 mil.
kroons/1.4 mil. euros and the profit 0.4 mil. kroons/0.02 mil. euros. As
compared to the previous year the turnover of the division has decreased by 1.6
mil. kroons/0.1 mil. euros and the profit has increased by 0.7 mil. kroons/0.05
mil. euros.
Furniture Factory sales by countries
--------------------------------------------------------------------------------
| | th EEK | th EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 9,109 | 11,257 | 582 | 719 | 44.2% | 50.6% |
--------------------------------------------------------------------------------
| Russia | 6,625 | 6,336 | 423 | 405 | 32.2% | 28.5% |
--------------------------------------------------------------------------------
| Kazakhstan | 1,087 | 1,115 | 69 | 71 | 5.3% | 5.0% |
--------------------------------------------------------------------------------
| Estonia | 326 | 216 | 21 | 14 | 1.6% | 1.0% |
--------------------------------------------------------------------------------
| Byelorussia | 162 | 89 | 10 | 6 | 0.8% | 0.4% |
--------------------------------------------------------------------------------
| Germany | 0 | 197 | 0 | 13 | 0.0% | 0.9% |
--------------------------------------------------------------------------------
| Others | 0 | 121 | 0 | 8 | 0.0% | 0.5% |
--------------------------------------------------------------------------------
| Skano | 3,296 | 2,901 | 211 | 185 | 16.0% | 13.0% |
--------------------------------------------------------------------------------
| TOTAL | 20,605 | 22,232 | 1,316 | 1,421 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Building Materials Division
The net sales of the Building Materials Division in third quarter amounted to
31.6 mil. kroons/2.0 mil. euros and profit to 3.1 mil. kroons/196 thousand
euros. In the same period of the last year, the turnover of the division
totalled 28.7 mil. kroons/1.8 mil. euros and the net profit 1.7 mil. kroons/108
thousand euros. As compared to the previous year the turnover of the division
has increased by 42% i.e. 9.3 mil. kroons/0.6 mil. euros and the profit has
increased by 1.6 mil. kroons/100 thousand euros.
Net sales by geographical segments
--------------------------------------------------------------------------------
| | th. EEK | th. EUR | % of net sales |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 |
--------------------------------------------------------------------------------
| Finland | 12,321 | 10,404 | 787 | 665 | 39.1% | 46.8% |
--------------------------------------------------------------------------------
| Estonia | 9,691 | 8,280 | 619 | 529 | 30.7% | 37.3% |
--------------------------------------------------------------------------------
| Russia | 3,331 | 1,081 | 213 | 69 | 10.6% | 4.9% |
--------------------------------------------------------------------------------
| Sweden | 1,565 | 1,184 | 100 | 76 | 5.0% | 5.3% |
--------------------------------------------------------------------------------
| Latvia | 1,005 | 551 | 64 | 35 | 3.2% | 2.5% |
--------------------------------------------------------------------------------
| China | 804 | 0 | 51 | 0 | 2.5% | 0.0% |
--------------------------------------------------------------------------------
| Malaysia | 491 | 0 | 31 | 0 | 1.6% | 0.0% |
--------------------------------------------------------------------------------
| India | 383 | 0 | 24 | 0 | 1.2% | 0.0% |
--------------------------------------------------------------------------------
| Great Britain | 342 | 0 | 22 | 0 | 1.1% | 0.0% |
--------------------------------------------------------------------------------
| Denamrk | 185 | 241 | 12 | 15 | 0.6% | 1.1% |
--------------------------------------------------------------------------------
| Ukraine | 148 | 126 | 9 | 8 | 0.5% | 0.6% |
--------------------------------------------------------------------------------
| Germany | 119 | 111 | 8 | 7 | 0.4% | 0.5% |
--------------------------------------------------------------------------------
| Lithuania | 42 | 101 | 3 | 6 | 0.1% | 0.5% |
--------------------------------------------------------------------------------
| Portugal | 0 | 0 | 0 | 0 | 0.0% | 0.0% |
--------------------------------------------------------------------------------
| Other countries | 1,124 | 139 | 72 | 9 | 3.6% | 0.6% |
--------------------------------------------------------------------------------
| TOTAL | 31,551 | 22,218 | 2,015 | 1,419 | 100.0% | 100.0% |
--------------------------------------------------------------------------------
Forecast and development
Skano. Management believes that Ukraine has gained political stability and it
improves its economical conditions. We have found suitable premises with good
price and quality and opened in third quarter one store in Dnipropetrovs'k and
one store in Kiev. There are no plans for openings at current year.
Furniture Factory. For Q4 2010 management forecasts small increase of sales, but
sales is continuously smaller than facilities. It means continuously small
production volume in furniture factory. Agreements with employees to use
shortened working time are effective until 31.03.2011.
Building Materials Division. In fourth quarter of 2010 factory continues with
decreased production volume. In main production line factory continues with
three shifts instead of four. In Isotex line are used one or two shifts
accordingly the demand of clients. The sale of Isoplaat is recovered and
management estimates bigger sales for future, too. According to estimates,
management plans to open fourth swift for main line in Q1 2011 and continue full
production capability.
AS Fortum Termest informed the company for ending the operating contract of
boiler-house belonging to AS Viisnurk at 3.2.2011. After the end of contract AS
Viisnurk continues heat production by itself.
Consolidated balance sheet
--------------------------------------------------------------------------------
| | Th EEK | Th EEK | Th EUR | Th EUR |
--------------------------------------------------------------------------------
| | 30.9.2010 | 31.12.2009| 30.9.2010 | 31.12.2009 |
| | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and bank | 5,043 | 6,091 | 322 | 389 |
--------------------------------------------------------------------------------
| Receivables and | 24,905 | 18,810 | 1,592 | 1,202 |
| prepayments | | | | |
--------------------------------------------------------------------------------
| Inventories | 43,551 | 41,912 | 2,783 | 2,680 |
--------------------------------------------------------------------------------
| Total current assets | 73,499 | 66,813 | 4,697 | 4,271 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investment property | 2,893 | 2,893 | 185 | 185 |
--------------------------------------------------------------------------------
| Tangible fixed assets | 65,726 | 63,083 | 4,201 | 4,031 |
--------------------------------------------------------------------------------
| Intangible fixed assets | 333 | 14 | 21 | 1 |
--------------------------------------------------------------------------------
| Total fixed assets | 68,952 | 65,990 | 4,407 | 4,217 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 142,451 | 132,803 | 9,104 | 8,488 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debt obligations | 2,768 | 8,048 | 177 | 514 |
--------------------------------------------------------------------------------
| Payables and prepayments | 24,261 | 22,742 | 1,550 | 1,454 |
--------------------------------------------------------------------------------
| Short-term provisions | 27 | 118 | 2 | 8 |
--------------------------------------------------------------------------------
| Total current liabilities | 27,056 | 30,908 | 1,729 | 1,976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current debt | 31,926 | 27,084 | 2,040 | 1,731 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Non-current provisions | 3,225 | 3,303 | 206 | 211 |
--------------------------------------------------------------------------------
| Total non-current | 35,151 | 30,387 | 2,246 | 1,942 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 62,207 | 61,295 | 3,975 | 3,918 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital at nominal | 44,991 | 44,991 | 2,875 | 2,875 |
| value | | | | |
--------------------------------------------------------------------------------
| Issue premium | 5,698 | 5,698 | 364 | 364 |
--------------------------------------------------------------------------------
| Statutory capital reserve | 4,499 | 4,499 | 288 | 288 |
--------------------------------------------------------------------------------
| Currency translation | 356 | 406 | 23 | 26 |
| reserve | | | | |
--------------------------------------------------------------------------------
| Retained profits | 15,914 | 15,759 | 1,017 | 1,007 |
--------------------------------------------------------------------------------
| Net profit for the year | 8,786 | 155 | 562 | 10 |
--------------------------------------------------------------------------------
| Total equity | 80,244 | 71,508 | 5,129 | 4,570 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND | 142,451 | 132,803 | 9,104 | 8,488 |
| EQUITY | | | | |
--------------------------------------------------------------------------------
Consolidated income statement
--------------------------------------------------------------------------------
| th. EEK | Q3 2010 | Q3 2009 | 9 m 2010 | 9 m 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 55,004 | 47,447 | 154,515 | 151,670 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (42,463) | (37,992) | (117,472) | (120,044) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 12,541 | 9,455 | 37,043 | 31,626 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (8,144) | (8,559) | (22,851) | (26,374) |
--------------------------------------------------------------------------------
| General administrative | (587) | (1,021) | (4,072) | (4,054) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 659 | 390 | 1,877 | 1,722 |
--------------------------------------------------------------------------------
| Other expenses | (1,332) | (1,090) | (1,921) | (2,666) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (loss) | 3,137 | (825) | 10,076 | 254 |
--------------------------------------------------------------------------------
| Financial income and | (449) | (683) | (1,290) | (2,353) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before | 2,688 | (1,508) | 8,786 | (2,099) |
| taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET PROFIT (LOSS) FOR | 2,688 | (1,508) | 8,786 | (2,099) |
| THE PERIOD | | | | |
--------------------------------------------------------------------------------
| Currency translation | 361 | 259 | (50) | 482 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 3,049 | (1,249) | 8,736 | (1,617) |
| INCOME (LOSS) | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | 0.60 | (0.34) | 1.95 | (0.47) |
| share | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.60 | (0.34) | 1.95 | (0.47) |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| th. EUR | Q3 2010 | Q3 2009 | 9 m 2010 | 9 m 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON SALES | 3,515 | 3,032 | 9,875 | 9,693 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost of production sold | (2,714) | (2,428) | (7,507) | (7,672) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 801 | 604 | 2,368 | 2,021 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | (520) | (547) | (1,461) | (1,686) |
--------------------------------------------------------------------------------
| General administrative | (37) | (65) | (260) | (259) |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 42 | 25 | 120 | 110 |
--------------------------------------------------------------------------------
| Other expenses | (85) | (70) | (123) | (170) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit (loss) | 201 | (53) | 644 | 16 |
--------------------------------------------------------------------------------
| Financial income and | (29) | (43) | (82) | (150) |
| financial expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before | 172 | (96) | 562 | (134) |
| taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET PROFIT (LOSS) FOR | 172 | (96) | 562 | (134) |
| THE PERIOD | | | | |
--------------------------------------------------------------------------------
| Currency translation | 23 | 17 | (3) | 33 |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | 195 | (79) | 559 | (101) |
| INCOME (LOSS) | | | | |
--------------------------------------------------------------------------------
| Basic earnings per | 0.04 | (0.02) | 0.12 | (0.03) |
| share | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.04 | (0.02) | 0.12 | (0.03) |
| share | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Einar Pähkel
CFO