The net sales of Viisnurk AS in the first six months of 2005 amounted to 118.5 mil Estonian kroons (7.6 mil euros) and net profit 6.4 mil kroons (411 thousand euros). The net sales of the 2^nd quarter of the accounting year totalled 56.6 mil kroons (3.6 mil euros) and the net profit 2.6 mil kroons 165 thousand euros). Last year, the company profited by 560 thousand kroons/36 thousand euros (whereas the loss in the 2^nd quarter of 2004 was 728 thousand kroons/47 thousand euros) within the same period. AS Viisnurk’s total sales of the first six months of 2004 were 195 mil kroons (12.5 mil euros), but this included a substantial amount of the sales of divisions closed in 2004.

 

As of 30.06.2005 the total assets of Viisnurk AS amounted to 152.8 mil kroons (9.8 mil euros). The liabilities of the company accounted for 58% thereof, i.e. 89 mil kroons (5.7 mil euros). Compared to the beginning of the year, the liabilities of the company have decreased by 62.2 mil kroons (4 mil euros).

 

In the 2^nd quarter, the sales processes of the set of assets of the Wood Division and the machines and equipment of the Sports Goods Division of Viisnurk AS were completed. The transactions did not significantly influence the current economic performance of the company, as the profit and costs of the transactions were included in the annual report 2004. The company used the received funds in full to reduce debts.

 

 

Divisional review:

 

(Thousand kroons)	Net sales		Profit
	2005 6m	2004 6m	2005 6m	2004 6m
Furniture Division	64 605	88 652	3 113	2 421
Building Materials Division	53 768	48 924	9 609	9 143
Terminated business activities	162	57 096	-1 140	-7 557
Other activities	0	366	0	4 727
TOTAL	118 535	195 038	11 582	8 734
Unallocated expenses			3 123	4 599
OPERATING PROFIT			8 459	4 135
Net financial expenses			2 019	3 575
NET PROFIT			6 440	560

(Thousand euros)	Net sales		Profit
	2005 6m	2004 6m	2005 6m	2004 6m
Furniture Division	4 129	5 666	199	155
Building Materials Division	3 437	3 127	614	584
Terminated business activities	10	3 648	-73	-483
Other activities	0	24	0	302
TOTAL	7 576	12 465	740	558
Unallocated expenses			200	294
OPERATING PROFIT			540	264
Net financial expenses			129	228
NET PROFIT			411	36

 

Furniture Division

 

The six-month net sales of AS Viisnurk’s Furniture Division were 64.6 mil kroons (4.1 mil euros) and the profit 3.1 mil kroons (199 thousand euros).

Compared to the last year, the division’s net sales have declined by 24 mil kroons (1.6 mil euros) and the profit increased by 14%. Thus, the profitability of the division has almost doubled compared to the previous year.

 

The six-month performance of the Furniture Division proves the success of the selected strategy that focuses on stable customers and production of profitable product lines only.  The share of the sales of the division’s own brands with higher profitability is constantly increasing. The economic performance was positively influenced also by the implementation of the fixed costs reduction programme.

 

The plan to increase the division’s sales in the German-speaking markets has been realised to a lesser extent than expected due to a general recession in the target market. The six-month sales in German-speaking markets amounted to ca 10% of the division’s net sales. To increase sales volumes in the area, several new product lines have been prepared as a result of active product development. They will be introduced in September at one of the largest furniture fairs in Germany – M.O.W. 2005 in Barntrup. Viisnurk AS has displayed its products at the fair for several years already.

 

 

Building Materials Division

 

The six-month net sales of the Building Materials Division amounted to 53.8 mil kroons (3.4 mil euros) and profit to 9.6 mil kroons (614 thousand euros).

Last year, the turnover of the division totalled 48.9 mil kroons (3.1 mil euros) and the profit 9.1 mil kroons (584 thousand euros) within the same period. The increasing sales of the division’s product line Isotex (which has a higher upgrading level), making up already more than a third of the sales of the accounting period, can be regarded as a positive trend.

 

 

The divisions of Viisnurk AS that were closed in 2004 resulted in a loss of 1.1 mil kroons (73 thousand euros) during the first six months of 2005. This was mainly due to the storage of the divisions’ assets prior to sales and costs related to the sales process. The extraordinary expenses of the 2^nd quarter amounted to 0.2 mil kroons (13 thousand euros). By today, the sales processes of both the Sports Goods Division and the Wood Division have been completed. The respective costs will not be included in the coming periods.