Income statement
 
Consolidated net sales of first quarter 2010 was 49.0 mil. kroons/3.1 mil. euros (53.1 mil. kroons/3.4 mil. euros in same period of 2009) representing a 8% decrease on the first quarter compared to Q1 2009. The Group’s gross margin in the first quarter of 2010 was 24.5% compared to 19.5% in the first quarter of 2009. Consolidated operating profit amounted to 3.4 mil. kroons/219 thousand euros (0.3 mil. kroons/17 thousand euros in same period 2009). The consolidated operating margin of net sales was 7.0% (0.5% in Q1 2009).
 
Consolidated net profit amounted to 3.0 mil. kroons/191 thousand euros, compared to net loss 0.6 mil. kroons/43 thousand euros in Q1 2009), and the net margin was 6.1% (-1.3% in Q1 2009). In Q1 2010, the Group’s return on equity was 4.0% (-1.0% in Q1 2009) and return on assets was 2.2% (-0.4% in Q1 2009).
 
 
Position of financial statement
 
As of 31.3.2010 the total assets of Viisnurk amounted to 135.1 mil. kroons/8.6 mil. euros (31.12.2009: 132.8 mil. kroons/8.5 mil. euros). The liabilities of the company accounted for 44.9% (31.12.2009: 46.2%) thereof, i.e. 60.7 mil. kroons/3.9 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
 
Receivables and prepayments have increased by 5.0 mil. kroons/0.3 mil. euros i.e. 26% decrease with 3 months. The reason of increase of receivables is small sales in December 2009, which essentially lowered the amount of receivables at the end of December.
 
Inventories decreased by 2.1 mil. kroons/0.1 mil. euros to reach 44.1 mil. kroons/2.8 mil. euros on 31.3.2010. (31.12.2009: 41.9 mil. kroons/2.7 mil. euros). Property, plant and intangibles decreased by 1.6 mil. kroons/0.1 mil. euros mainly as a result of depreciation.
 
Short-term loans decreased by 1.5 mil. kroons/0.1 mil. euros and amounted to 6.5 mil. kroons/0.4 mil. euros in 31 March 2010 (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 23.9 mil. kroons/1.5 mil. euros (31.12.2009: 22.9 mil. kroons/1.5 mil. euros). Current and non-current liabilities decreased by 0.6 mil. kroons/38 thousand euros to 60.7 mil. kroons/3.9 mil. euros (31.12.2009: 61.3 mil. kroons/3.9 mil. euros).
 
 
Divisional review:
 
Net sales by business segments
 
th. EEK
th. EUR
% of net sales
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Furniture Factory
26,086
27,598
1,667
1,764
53.2%
52.0%
Skano
6,528
8,934
417
571
13.3%
16.8%
Building Materials Division
19,422
20,387
1,242
1,303
39.6%
38.4%
Elimination
(3,034)
(3,833)
(194)
(245)
(6.1)%
(7.2)%
TOTAL
49,012
53,086
3,132
3,393
100.0%
100.0%
 
Net sales by geographical segments
 
th. EEK
th. EUR
% of net sales
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Finland
22,692
21,704
1,450
1,387
46.3%
40.9%
Russia
9,722
12,514
622
799
19.8%
23.6%
Estonia
7,110
7,871
454
503
14.5%
14.8%
Ukraine
2,385
2,894
152
185
4.9%
5.5%
Sweden
2,110
559
135
36
4.3%
1.1%
Lithuania
1,442
2,218
92
142
2.9%
4.2%
Latvia
762
2,368
49
151
1.6%
4.5%
Germany
690
743
44
48
1.4%
1.4%
Kazakhstan
639
629
41
40
1.3%
1.2%
India
226
0
14
0
0.5%
0.0%
Belarusian
104
119
7
8
0.2%
0.2%
Portugal
0
1,245
0
79
0.0%
2.3%
Other countries
1,130
222
72
15
2.3%
0.4%
TOTAL
49,012
53,086
3,393
3,393
100.00%
100.00%
 
Regarding the markets, turnover has increased in Sweden, Finland and Kazakhstan. Turnover has decreased in most in Portugal, Russia and Latvia.
 
Profit by business segments
 
th. EEK
th. EUR
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Furniture Factory
2,330
1,616
149
103
Skano
(68)
(778)
(4)
(50)
Building Materials Division
1,543
(248)
98
(16)
Elimination
(379)
(325)
(24)
(20)
TOTAL
3,426
265
219
17
Net financial costs
(440)
(938)
(28)
(60)
NET PROFIT
2,986
(673)
191
(43)
 
 
Furniture Division
 
The net sales of AS Viisnurk Furniture Division in the first quarter amounted to 29.6 mil. kroons/1.9 mil. euros (2009: 32.7 mil. kroons/2.1 mil. euros). As compared to the Q1 of previous year the turnover of the division has decreased by 3.1 mil. kroons/0.2 mil. euros (9.5%).
 
 
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 in Vilnius, Kaunas, two in Kiev, Donetsk and Kharkiv at the end of the first quarter. There were opened one store in Kiev and decided to close one store in Vilnius.
 
Retail sales by countries
 
th. EEK
th. EUR
% of net sales
Number of stores
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Q1 2010
Q1 2009
31.03.10
31.03.09
Estonia
2,443
2,200
156
141
37.4%
24.6%
2
2
Latvia
387
1,730
24
110
5.9%
19.4%
1
1
Lithuania
1,427
2,110
91
135
21.9%
23.6%
3
3
Ukraine
2,271
2,894
145
185
34.8%
32.4%
4
4
TOTAL
6,528
8,934
416
571
100.0%
100.0%
10
10
 
The retail sale drastically decreased in Latvia. The readiness for purchase is very low in Latvia. The sale in Estonia has increased and in Lithuania and Ukraine decreased. Within the first quarter this year the retail sale has decreased by 26.9% as compared to the same period last year.
 
 
Furniture Factory
 
The Furniture Factory’s sales in the first quarter in one of the company’s basic target market in Finland has increased and on other – In Russia, decreased. Also there is smaller sales to Skano. Our clients does not estimate demands recovering in near future.
 
The net sales of the Furniture Factory in the first quarter amounted to 26.1 mil. kroons/1.7 mil. euros and profit to 2.3 mil. kroons/149 thousand euros. In the same period last year, the turnover of the factory totalled to 27.6 mil. kroons/1.8 mil. euros and the profit 1.6 mil. kroons/103 thousand euros. As compared to the previous year the turnover of the factory has decreased by 1.5 mil. kroons/97 thousand euros and the profit has increased by 0.7 mil. kroons/46 thousand euros.
 
Furniture Factory sales by countries
 
th EEK
th EUR
% of net sales
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Russia
13,329
10,328
852
660
51.1%
37.4%
Finland
7,977
11,691
510
747
30.6%
42.4%
Kazakhstan
639
629
41
40
2.4%
2.3%
Estonia
494
306
32
20
1.9%
1.1%
Germany
451
620
29
40
1.7%
2.2%
Belarusian
104
119
7
8
0.4%
0.4%
Others
66
72
4
5
0.3%
0.3%
Subsidiaries
3,026
3,833
193
245
11.6%
13.9%
TOTAL
26,086
27,598
1,668
1,765
100.0%
100.0%
 
 
Building Materials Division
 
The net sales of the Building Materials Division in the first quarter amounted to 19.4 mil. kroons/1.2 mil. euros and profit to 1.5 mil. kroons/98 thousand euros. In the same period last year, the turnover of the division totalled to 20.4 mil. kroons/1.3 mil. euros and the loss 0.2 mil. kroons/16 thousand euros. As compared to the previous year the turnover of the division has decreased by 1.0 mil. kroons/62 thousand euros and the profit has increased by 1.8 mil. kroons/114 thousand euros.    
Net sales by geographical segments
 
th. EEK
th. EUR
% of net sales
 
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Q1 2010
Q1 2009
Finland
9,363
11,376
598
727
48.2%
55.8%
Estonia
4,173
5,365
267
343
21.5%
26.3%
Sweden
2,110
559
135
36
10.9%
2.7%
Russia
1,745
823
112
53
9.0%
4.0%
Latvia
375
638
24
41
1.9%
3.1%
Germany
239
123
15
8
1.2%
0.6%
India
226
0
14
0
1.2%
0.0%
Ukraine
114
0
7
0
0.6%
0.0%
Lithuania
15
108
1
7
0.1%
0.5%
Portugal
0
1,245
0
80
0.0%
6.1%
Other countries
1,064
150
68
10
5.4%
0.7%
TOTAL
19,424
20,387
1,241
1,305
100.0%
100.0%
 
The biggest growth has been in sales to Sweden, There were no sales to Portugal. The sales in our biggest market, in Finland has decreased.
 
 
Forecast and development
 
Skano. According to preliminary plans Skano do not plan openings of new stores in 2010. Company needs to minimize risks related to expanding in cool economical situation and keep sufficient liquidity. Management consider about new openings in Ukraine – two stores in Dnipropetrovs’k and one store in Kiev.
 
Furniture Factory. For 2010 management forecasts continuously small sales in retail market, also in markets not related in Skano retail business, and it means continously small production volume in furniture factory. Agreements with employees to use shortened working time are effective until 31.03.2011.
 
Building Materials Division. Based on low demand for building materials in target markets management 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.
 
In all business segments management looking for new markets and main tension is focused into Near- and Far-East countries.
 
 
 
Consolidated balance sheet
 
Th EEK
Th EEK
Th EUR
Th EUR
 
31.3.2010
31.12.2009
31.3.2010
31.12.2009
 
 
 
 
 
Cash and bank
2,875
6,091
184
389
Receivables and prepayments
23,784
18,810
1,520
1,202
Inventories
44,058
41,912
2,816
2,680
Total current assets
70,717
66,813
4,520
4,271
 
 
 
 
 
Investment property
2,893
2,893
185
185
Tangible fixed assets
61,469
63,083
3,928
4,031
Intangible fixed assets
12
14
1
1
Total fixed assets
64,374
65,990
4,114
4,217
 
 
 
 
 
TOTAL ASSETS
135,091
132,803
8,634
8,488
 
 
 
 
 
 
 
 
 
 
Debt obligations
6,537
8,048
418
514
Payables and prepayments
23,864
22,742
1,525
1,454
Short-term provisions
79
118
5
8
Total current liabilities
30,480
30,908
1,948
1,976
 
 
 
 
 
Non-current debt obligations
27,084
27,084
1,731
1,731
Non-current provisions
3,132
3,303
200
211
Total non-current liabilities
30,216
30,387
1,931
1,942
 
 
 
 
 
Total liabilities
60,696
61,295
3,879
3,918
 
 
 
 
 
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
307
406
20
26
Retained profits
15,914
15,759
1,017
1,007
Net profit for the year
2,986
155
191
10
Total equity
74,395
71,508
4,755
4,570
 
 
 
 
 
TOTAL LIABILITIES AND EQUITY
135,091
132,803
8,634
8,488
 
           
Consolidated income statement
 
 
Th EEK
Th EEK
Th EUR
Th EUR
 
1st quarter 2010
1st quarter 2009
1st quarter 2010
1st quarter 2009
 
 
 
 
 
RETURN ON SALES
49,012
53,086
3,132
3,393
 
 
 
 
 
Cost of production sold
(37,027)
(42,728)
(2,366)
(2,731)
 
 
 
 
 
Gross profit
11,985
10,358
766
662
 
 
 
 
 
Marketing expenses
(7,208)
(8,878)
(460)
(567)
General administrative expenses
(1,482)
(1,516)
(95)
(97)
Other income
501
1,058
32
67
Other expenses
(370)
(756)
(24)
(48)
 
 
 
 
 
Operating profit
3,426
266
219
17
Financial income and financial expenses
(440)
(939)
(28)
(60)
 
 
 
 
 
Profit (loss) before taxes
2,986
(673)
191
(43)
 
 
 
 
 
NET PROFIT (LOSS) FOR THE PERIOD
2,986
(673)
191
(43)
 
 
 
 
 
Basic earnings per share
0.66
(0.15)
0.04
(0.01)
Diluted earnings per share
0.66
(0.15)
0.04
(0.01)
 
 
 
 
 
Currency translation differences
(99)
(123)
(6)
(6)
 
 
 
 
 
TOTAL COMPREHENSIVE INCOME
2,887
(796)
185
(49)
 
 
Einar Pähkel
CFO
+372 447 8331
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