The net sales of Viisnurk AS in the first nine months of 2005 amounted to 165.8 mil. Estonian kroons (10.6 mil. euros) and net profit to 6.8 mil. kroons (436 thousand euros). In the 3^rd quarter of the accounting year, the net sales amounted to 47.3 mil. kroons (3 mil. euros) and net profit to 0.4 mil. kroons (25 thousand euros). The outcomes of the 3^rd quarter were affected by the annual collective vacation of the divisions in July. The net profit of nine months has almost doubled compared to the previous year.  The net profit of the nine month of last year was 3.5 mil. kroons (226 thousand euros).

 

As of 30.09.2005 the total assets of Viisnurk AS amounted to 153.5 mil. kroons (9.8 mil. euros).  The liabilities of the company accounted for 58% thereof, i.e. 89.3 mil. kroons (5.7 mil. euros). The enterprise has reduced its liabilities by 61.8 mil. kroons (3.9 mil. euros) compared to the beginning of the year. At the beginning of the accounting year the debt to equity ratio of Viisnurk was 72.5 %.

(Thousand kroons)	Net sales		Profit
	2005 9m	2004 9m	2005 9m	2004 9m
Furniture Division	89 574	119 127	4 395	3 336
Building Materials Division	76 132	73 062	11 025	14 991
Terminated business activities	162	83 619	-1 445	-9 581
Other activities	0	524	0	4 936
TOTAL	165 868	276 332	13 975	13 682
Unallocated expenses			4 586	6 728
OPERATING PROFIT			9 389	6 954
Net financial expenses			2 563	3 421
NET PROFIT			6 826	3 533

(Thousand euros)	Net sales		Profit
	2005 9m	2004 9m	2005 9m	2004 9m
Furniture Division	5 725	7 614	281	213
Building Materials Division	4 866	4 670	705	958
Terminated business activities	10	5 344	-93	-612
Other activities	0	33	0	316
TOTAL	10 601	17 661	893	875
Unallocated expenses			293	430
OPERATING PROFIT			600	445
Net financial expenses			164	219
NET PROFIT			436	226

 

 

The nine-month net sales of Viisnurk AS Furniture Division were 89.6 mil. kroons (5.7 mil. euros) and the economic result 4.4 mil. kroons (281 thousand euros) as a profit. Compared to the same period last year, the turnover of the division has decreased by 29.5 mil. kroons (1.9 mil. euros) but the profit has increased by 1 mil. kroons (68 thousand euros). The division finished the 3rd quarter with a profit of 1.3 mil. kroons (82 thousand euros).

 

The current situation of the furniture division corresponds to the plan. The division has a stable client portfolio and a considerably improved cost structure that enables to earn profit even in case of reduced sales volumes. Today Viisnurk AS is finishing restructuring the product portfolio, which means that the company will stop co-operation with customers of lower profitability and unprofitable customers, in addition to that contracts with new clients to gradually increase the volume of production and sales during the year 2006 have been concluded.

 

The Furniture Division continues the implementation of development plans related to increasing the percentage of sale of the division’s own products and expanding the retail business of furniture. Among the division’s own products the new product line of pine was successfully introduced at Barntrup furniture fair in Germany; within the project for expanding the retail business, preparations were made for opening a furniture store of the subsidiary Skano OÜ in Riga in November this year. This will be the third retail store of the Furniture Division in addition to Pärnu and Tallinn.

 

Skano is the trademark for own brands of the Furniture Division of Viisnurk AS and the retail furniture stores of the enterprise bare the same name.

 

 

Building Materials Division

 

The nine-month net sales of the Building Materials Division amounted to 76.1 mil. kroons (4.9 mil. euros) and profit to 11 mil. kroons (705 thousand euros). Last year, the turnover of the division totalled 73.1 mil. kroons (4.7 mil. euros) and the profit 15 mil. kroons (958 thousand euros) within the same period.

 

The drop in the profitability of the division is due to some stiffening of competition of one of our main products – building boards – both in Estonia and in other target markets. In previous periods, the fibreboard producers in Europe have significantly raised their production capacity and this has caused temporary increase in the stock of the producers. For restoring profitability the Building Materials Division will continue taking measures to increase the output of Isotex interior finishing boards of higher margin by entering new markets in the neighbourhood in Sweden, Ukraine and Russia and by actively developing products and technology.

 

 

The divisions of Viisnurk AS that were closed in 2004 resulted in a loss of 1.5 mil. kroons (93 thousand euros) during the first nine months of 2005. This was mainly due to the storage of the divisions’ assets prior to sales and costs related to the sales process.

 

 

 

 

 

 

 

 

Andrus Aljas
Member of Management Board
+372 447 8355