Profits

 

Consolidated net sales of third quarter 2009 was 47.4 mil. kroons/3.0 mil. euros (66.0 mil. kroons/4.2 mil. euros in same period of 2008) representing a 28.1% decrease on the third quarter compared to Q3 2008. The Group’s gross margin in the third quarter of 2009 was 19.9% compared to 21.7% in the third quarter of 2008. Consolidated operating loss amounted to 0.8 mil. kroons/53 thousand euros (operating profit 3.5 mil. kroons/223 thousand euros in 2008). The consolidated operating margin of net sales was -1.7% (5.3% in Q3 2008).

 

Consolidated net loss amounted to 0.8 mil. kroons/53 thousand euros, compared to net profit 3.5 mil. kroons/223 thousand euros in Q3 2008), and the net margin was -3.2% (3.5% in Q3 2008). In Q3 2009, the Group’s return on equity was -2.2% (3.2% in Q3 2008) and return on assets was -1.1% (1.3% in Q3 2008).

 

The relocation of furniture store in Latvia had the biggest impact for the result of Q3 . The sum of write off of building costs of the store was 904 thousand kroons/58 thousand euros. Depreciation of the Ukrainian hryvnia against euro resulted in a foreign exchange loss in the amount of 746 thousand kroons/48 thousand euros.

 

 

Position of financial statement

 

As of the end of September 2008 the total assets of Viisnurk amounted to 142.7 mil. kroons/9.1 mil. euros (31.12.2008: 163.8 mil. kroons/10.5 mil. euros). The liabilities of the company accounted for 51% (31.12.2008: 57%) thereof, i.e. 73.1 mil. kroons/4.7 mil. euros (31.12.2008: 92.6 mil. kroons/5.9 mil. euros).

 

Receivables and prepayments have increased by 6.8 mil. kroons/0.4 mil. euros i.e. 35% increase with 9 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 19.5 mil. kroons/1.2 mil. euros to reach 48.6 mil. kroons/3.1 mil euros at 30 September 2009 (31.12.2008: 68,1 mil. kroons/4,4 mil. euros). The decrease of amount of inventory wass one of the main targets to pass crisis and assure liquidity. Property, plant and intangibles decreased by 4.9 mil. kroons/0.3 mil. euros mainly caused by depreciation.

 

Current liabilities decreased by 6.6 mil. kroons/0.4 mil euros and amounted in 30 September 2009 11.1 mil. kroons/0.7 mil. euros (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 30.9 mil. kroons/2.0 mil. euros (31.12.2008: 43.8 mil. kroons/2.8 mil. euros). Current and non-current liabilities decreased by 19.5 mil. kroons/1.2 mil. euros to 73.1 mil. kroons/4.7 mil. euros (31.12.2008: 92.6 mil. euros/5.9 mil kroons).

 

 

Divisional review:

 

Net sales by business segments

	th. EEK		th. EUR		% of net sales
	Q3 2009	Q3 2008	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Furniture Factory	22,232	32,321	1,422	2,066	46.9%	49.0%
Skano	5,898	9,655	376	618	12.4%	14.6%
Building Materials Division	22,218	28,701	1,420	1,834	46.8%	43.5%
Elimination	(2,901)	(4,685)	(186)	(300)	(6.1%)	(7.1%)
TOTAL	47,447	65,992	3,032	4,218	100.0%	100.0%

 

Net sales by geographical segments

	th. EEK		th. EUR		% of net sales
	Q3 2009	Q3 2008	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Finland	21,661	26,388	1,385	1,686	45.7%	40.0%
Estonia	10,379	14,287	663	913	21.9%	21.6%
Russia	7,417	13,564	474	866	15.6%	20.6%
Ukraine	1,801	3,397	115	218	3.8%	5.1%
Lithuania	1,610	1,977	103	126	3.4%	3.0%
Latvia	1,382	3,077	89	197	2.9%	4.7%
Sweden	1,184	1,148	75	74	2.5%	1.7%
Kazakhstan	1,115	1,106	71	70	2.3%	1.7%
Germany	308	544	20	35	0.6%	0.8%
Byelorussia	89	0	5	0	0.2%	0.0%
Portugal	0	320	0	20	0.0%	0.5%
Other countries	501	186	32	13	1.1%	0.3%
Total	47,447	65,994	3,032	4,218	100.00%	100.00%

 

Concerning the markets, turnover has been decreased in all bigger markets. Relatively is the biggest increase into Finland and decrease into Russia.

 

Gross profit by business segments

	th. EEK		th. EUR
	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Furniture Factory	1,668	3,926	107	251
Skano	2,725	5,271	174	337
Building Materials Division	5,022	4,968	321	318
Elimination	40	(37)	3	(2)
TOTAL	9,455	14,128	605	904

 

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
	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Furniture Factory	370	1,915	24	123
Skano	(3,044)	(76)	(194)	(5)
Building Materials Division	1,507	1,691	96	108
Elimination	341	(36)	21	(2)
TOTAL	(826)	3,494	(53)	224
Net financial costs	(682)	(1,195)	(43)	(77)
PROFIT BEFORE TAXES	(1,508)	2,299	(96)	147
Income tax	0	0	0	0
NET PROFIT	(1,508)	2,299	(96)	147

 

 

Furniture Division

 

The net sales of AS Viisnurk Furniture Division in third quarter amounted to 25.2 mil. kroons/1.6 mil. euros (2008: 37.3 mil. kroons/2.4 mil. euros) and the economical result 2.3 mil. kroons/149 thousand euros as a loss (2008 profit 1.8 mil. kroons/116 thousand euros). As compared to the Q3 of previous year the turnover of the division has decreased by 12.1 mil. kroons/772 thousand euros (32.3%).

 

 

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, two inVilnius, Kaunas, Kiev, Donetsk, Kharkiv and Odessa at the end of the third quarter.

 

As a result of unexpected economical situation, openings of new stores are freezed.    

Retail sales by countries

	th. EEK		th. EUR		% of net sales		Number of stores
	Q3 2009	Q3 2008	Q3 2009	Q3 2008	Q3 2009	Q3 2008	30.9.09	30.9.08
Estonia	1,883	2,814	120	180	31.9%	29.1%	2	2
Latvia	831	2,257	53	144	14.1%	23.4%	1	1
Lithuania	1,508	1,848	96	118	25.6%	19.1%	3	3
Ukraine	1,675	2735	107	175	28.4%	28.3%	4	5
TOTAL	5,897	9,654	376	617	100.0%	100.0%	10	11

 

The retail sale of the Furniture Division decreased most in Latvia. The furniture store in Kaunas has removed into Vilnius. Within the third quarter this year the retail sale has decreased by 38.9% as compared to the same period last year.

 

 

Furniture Production

 

The Furniture factory’s sales in the third 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
	Q3 2009	Q3 2008	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Finland	11,257	13,415	720	857	50.6%	41.5%
Russia	6,336	12,374	406	792	28.5%	38.3%
Kazakhstan	1,115	1,106	71	70	5.0%	3.4%
Germany	197	315	13	20	0.9%	1.0%
Others	426	426	24	27	1.9%	1.3%
Subsidiaries	2,901	4,685	188	300	13.0%	14.5%
TOTAL	22,232	32,321	1,422	2,066	100.0%	100.0%

 

 

Building Materials Division

 

The net sales of the Building Materials Division in third quarter amounted to 22.2 mil. kroons/1.4 mil. euros and profit to 1.5 mil. kroons/96 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 decreased by 6.5 mil. kroons/414 thousand euros and the profit has decreased by 0.2 mil. kroons/12 thousand euros.
           

Net sales by geographical segments

	th. EEK		th. EUR		% of net sales
	Q3 2009	Q3 2008	Q3 2009	Q3 2008	Q3 2009	Q3 2008
Finland	10,404	12,973	665	829	46.8%	45.2%
Estonia	8,280	11,083	529	708	37.3%	38.6%
Portugal	0	320	0	20	0.0%	1.1%
Russia	1,081	1,190	68	75	4.9%	4.1%
Latvia	551	816	35	51	2.5%	2.8%
Sweden	1,184	1,148	75	74	5.3%	4.0%
Germany	111	229	7	15	0.5%	0.8%
Lithuania	101	129	7	8	0.5%	0.4%
Ukraine	126	662	8	43	0.6%	2.3%
Other countries	380	151	24	10	1.7%	0.5%
TOTAL	22,218	28,701	1,418	1,833	100.0%	100.0%

 

 

 

Consolidated statement of financial position

	Th EEK	Th EEK	Th EUR	Th EUR
	30.9.2009	31.12.2008	30.9.2009	31.12.2008
Cash and bank	3,439	6,913	220	442
Receivables and prepayments	26,325	19,568	1,682	1,250
Inventories	48,637	68,096	3,109	4,351
Total current assets	78,401	94,577	5,011	6,043
Investment property	2,893	2,893	185	185
Tangible fixed assets	61,415	66,333	3,925	4,239
Intangible fixed assets	16	21	1	1
Total fixed assets	64,324	69,247	4,111	4,425
TOTAL ASSETS	142,725	163,824	9,122	10,468
Debt obligations	11,113	17,722	711	1,132
Payables and prepayments	30,863	43,646	1,972	2,790
Short-term provisions	25	115	1	7
Total current liabilities	42,001	61,483	2,684	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	73,142	92,624	4,675	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	735	253	47	14
Retained profits	15,759	9,717	1,007	621
Net profit for the year	(2,099)	6,042	(134)	386
Total equity	69,583	71,200	4,447	4,548
TOTAL LIABILITIES AND EQUITY	142,725	163,824	9,122	10,468

 

           

Consolidated statement of comprehensive income

 

Th EEK	Q3 2009	Q3 2008 (adjusted)	9 m 2009	9 m 2008 (adjusted)
RETURN ON SALES	47,447	65,994	151,670	218,022
Cost of production sold	(37,992)	(51,649)	(120,044)	(168,269)
Gross profit	9,455	14,345	31,626	49,753
Marketing expenses	(8,559)	(10,097)	(26,374)	(31,044)
General administrative expenses	(1,021)	(1,526)	(4,054)	(4,785)
Other income	390	1,260	1,722	2,518
Other expenses	(1,090)	(491)	(2,666)	(1,427)
Operating profit	(825)	3,491	254	15,015
Financial income and financial expenses	(683)	(1,192)	(2,353)	(2,910)
Profit/loss before taxes	(1,508)	2,299	(2,099)	12,105
Prepaid income tax	0	0	0	(1,674)
PROFIT/LOSS FOR THE PERIOD	(1,508)	2,299	(2,099)	10,431
Basic earnings per share	(0.34)	0.51	(0.47)	2.32
Diluted earnings per share	(0.34)	0.51	(0.47)	2.32
Currency translation differences	259	(1,377)	482	(301)
TOTAL COMPREHENSIVE INCOME	(1,249)	922	(1,617)	10,130

 

Th EUR	Q3 2009	Q3 2008 (adjusted)	9 m 2009	9 m 2008 (adjusted)
RETURN ON SALES	3,032	4,218	9,693	13,934
Cost of production sold	(2,428)	(3,301)	(7,672)	(10,755)
Gross profit	604	917	2,021	3,179
Marketing expenses	(547)	(645)	(1,686)	(1,983)
General administrative expenses	(65)	(98)	(259)	(306)
Other income	25	80	110	160
Other expenses	(70)	(31)	(170)	(91)
Operating profit	(53)	223	16	959
Financial income and financial expenses	(43)	(76)	(150)	(185)
Profit/loss before taxes	(96)	147	(134)	774
Prepaid income tax	0	0	0	(107)
PROFIT/LOSS FOR THE PERIOD	(96)	147	(134)	667
Basic earnings per share	(0.02)	0.03	(0.03)	0.15
Diluted earnings per share	(0.02)	0.03	(0.03)	0.15
Currency translation differences	17	(88)	33	(20)
TOTAL COMPREHENSIVE INCOME	(79)	59	(101)	647

 

 

Einar Pähkel

CFO

+372 447 8331