Consolidated net sales of second quarter 2011 was 4.3 mil. euros, representing a 34% increase on the second quarter compared to the same period 2010. At the same time, consolidated net profit amounted to 271 thousand euros, representing a 38% increase compared to second quarter 2010 (197 thousand euros in Q2 2010). This is the positive trend, compared to Q1 2011 the sales is similar (+0.7%), and profit is 2.6 times better. Increase of profit is excellent, especially for the reason that in June there were additional startup costs of the softboard factory at Püssi in the amount of 38 thousand euros. The first test run of Püssi factory was at the last week of July and management plans to achieve the readiness for capacity operations at late autumn.
According to segments, the sales of construction materials showed up the highest growth, namely 51%. Retail sale made a 20% growth; the result was 38 thousand euros loss caused by change of exchange rate of the Ukrainian hryvnia, and continuously weak demand in Latvia and Ukraine. The sales of Furniture factory increased by 17% compared to Q2 2010. The profit of Furniture factory was 189 thousand euros and Building Materials Division 142 thousand euros.
Income statement
Consolidated net sales of second quarter 2011 was 4.3 mil. euros (3.2 mil. euros in same period of 2011) representing a 34% increase on the second quarter compared to Q2 2010. The Group’s gross margin in the second quarter of 2011 was 24.2% compared to 24.8% in the second quarter of 2010. Consolidated operating profit amounted to 298 thousand euros (225 thousand euros in same period 2010). The consolidated operating margin of net sales was 6.9% (7.0% in Q2 2010).
Consolidated net profit amounted to 271 thousand euros, compared to 197 thousand euros in Q2 2010, and the net margin was 6.3% (6.1% in Q2 2010). In Q2 2011, the Group’s return on equity was 4.7% (4.0% in Q2 2010) and return on assets was 2.0% (2.2% in Q2 2010).
Position of financial statement
As of 30.6.2011 the total assets of Viisnurk amounted to 13.5 mil. euros (31.12.2010: 9.1 mil. euros). The liabilities of the company accounted for 57.6% (31.12.2010: 41.5%) thereof, i.e. 7.8 mil. euros (31.12.2010: 3.8 mil. euros). The assets increase caused by purchase of softboard factory located in Püssi. Price of factory was 4 mil. euros. Increase of liabilities caused by loan token for buy the Püssi factory.
Receivables and prepayments have increased by 0.7 mil. euros i.e. 61% increase with 6 months. The reason of increase of receivables is small sales in December 2010, which essentially lowered the amount of receivables at the end of December.
Inventories increased by 0.4 mil. euros to reach 2.9 mil. euros on 30.6.2011. (31.12.2010: 2.5 mil. euros). Property, plant and intangibles increased by 4 mil. euros as a result of acquisition of Püssi factory.
Short-term loans decreased by 0.7 mil. euros and amounted to 0.7 mil. euros in 30 June 2011 (31.12.2010: 1.4 mil. euros). Short-term loan 0.6 mil. euros refinanced and over classified to long term. Supplier payables, tax liabilities, other payables, including payables to employees, and provisions amounted to 1.9 mil. euros (31.12.2010: 1.5 mil. euros). Current and non-current liabilities increased by 4.0 mil. euros to 7.8 mil. euros (31.12.2010: 3.8 mil. euros).
Divisional review
Net sales by business segments
|
|
th. EUR
|
% of net sales
|
||
|
|
Q2 2011
|
Q2 2010
|
Q2 2011
|
Q2 2010
|
|
Furniture Factory
|
1,830
|
1,559
|
42.4%
|
48.3%
|
|
Skano
|
497
|
414
|
11.5%
|
12.8%
|
|
Building Materials Division
|
2,206
|
1,458
|
51.2%
|
45.2%
|
|
Elimination
|
(221)
|
(203)
|
(5.1)%
|
(6.3)%
|
|
TOTAL
|
4,312
|
3,228
|
100.0%
|
100.0%
|
Net sales by geographical segments
|
|
th. EUR
|
% of net sales
|
||
|
|
Q2 2011
|
Q2 2010
|
Q2 2011
|
Q2 2010
|
|
Finland
|
1,723
|
1,285
|
40.0%
|
39.8%
|
|
Russia
|
1,141
|
726
|
26.5%
|
22.5%
|
|
Estonia
|
708
|
626
|
16.4%
|
19.4%
|
|
Ukraine
|
199
|
78
|
4.6%
|
2.4%
|
|
Sweden
|
128
|
116
|
3.0%
|
3.6%
|
|
Lithuania
|
111
|
142
|
2.6%
|
4.4%
|
|
Latvia
|
91
|
78
|
2.1%
|
2.4%
|
|
Kazakhstan
|
42
|
37
|
1.0%
|
1.1%
|
|
Denmark
|
39
|
22
|
0.9%
|
0.7%
|
|
Germany
|
31
|
31
|
0.7%
|
1.0%
|
|
Other countries
|
99
|
87
|
2.2%
|
2.7%
|
|
TOTAL
|
4,312
|
3,228
|
100.00%
|
100.00%
|
Regarding the markets, turnover has increased in Russia and Finland. The percentage of turnover has decreased in most in Estonia, Sweden and Lithuania.
Profit by business segments
|
th. EUR
|
Q2 2011
|
Q2 2010
|
|
Furniture Factory
|
189
|
164
|
|
Skano
|
(39)
|
(2)
|
|
Building Materials Division
|
142
|
98
|
|
Elimination
|
6
|
(35)
|
|
TOTAL
|
298
|
225
|
|
Net financial costs
|
(25)
|
(28)
|
|
Income tax
|
(2)
|
0
|
|
NET PROFIT
|
271
|
197
|
Weakening of Ukrainian hryvnia and continuously small sales in Latvia and Ukraina mostly causes loss of Skano.
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 13 stores in Tallinn (2), Pärnu, Riga, Vilnius, Kaunas, Kiev (3), Donetsk, Kharkiv and Dnipropetrovs’k (2) at the end of the second quarter.
Retail sales by countries
|
|
th. EUR
|
% of net sales
|
Number of stores
|
|||
|
|
Q2 2011
|
Q2 2010
|
Q2 2011
|
Q2 2010
|
30.06.11
|
30.06.10
|
|
Estonia
|
152
|
161
|
30.6%
|
39.0%
|
3
|
2
|
|
Latvia
|
55
|
41
|
11.1%
|
9.8%
|
1
|
1
|
|
Lithuania
|
100
|
134
|
20.1%
|
32.4%
|
2
|
2
|
|
Ukraine
|
190
|
78
|
38.2%
|
18.8%
|
7
|
5
|
|
TOTAL
|
497
|
414
|
100.0%
|
100.0%
|
13
|
10
|
Despite of the growth of retail sales, Skano results with loss. The main reasons are weak purchase power in Latvia and Ukraine and loss from currency exchange rate of hryvnia (19 thousand euros).
Furniture Production
The Furniture Factory’s sales in the second quarter in the company’s basic target market in Russia and Finland have increased. Our clients does not estimate significant increase of demand in near future.
The net sales of the Furniture Factory in the second quarter amounted to 1.8 mil. euros and profit to 189 thousand euros. In the same period last year, the turnover of the factory totalled to 1.6 mil. euros and the profit 164 thousand euros. As compared to the previous year the turnover of the factory has increased by 272 thousand euros and the profit has increased 25 thousand euros.
Furniture factory sales by countries
|
|
th EUR
|
% of net sales
|
||
|
|
Q2 2011
|
Q2 2010
|
Q2 2011
|
Q2 2010
|
|
Russia
|
798
|
560
|
43.6%
|
35.9%
|
|
Finland
|
740
|
733
|
40.4%
|
47.0%
|
|
Kazakhstan
|
42
|
37
|
2.3%
|
2.4%
|
|
Estonia
|
17
|
25
|
0.9%
|
1.6%
|
|
Other countries
|
12
|
0
|
0.7%
|
0.0%
|
|
Subsidiaries
|
221
|
203
|
12.1%
|
13.1%
|
|
TOTAL
|
1,830
|
1,558
|
100.0%
|
100.0%
|
Building Materials Division
The net sales of the Building Materials Division in the second quarter amounted to 2.2 mil. euros and profit to 142 thousand euros. In the same period last year, the turnover of the division totalled to 1.5 mil. euros and the profit 98 thousand euros. As compared to the previous year the turnover of the division has increased by 748 thousand euros and the profit has decreased by 44 thousand euros. The costs related to start of Püssi factory were 38 thousand euros.
Net sales by geographical segments
|
|
th. EUR
|
% of net sales
|
||
|
|
Q2 2011
|
Q2 2010
|
Q2 2011
|
Q2 2010
|
|
Finland
|
983
|
552
|
44.6%
|
37.9%
|
|
Estonia
|
540
|
439
|
24.5%
|
30.1%
|
|
Russia
|
343
|
166
|
15.5%
|
11.4%
|
|
Sweden
|
128
|
116
|
5.8%
|
8.0%
|
|
Denmark
|
39
|
22
|
1.8%
|
1.5%
|
|
Latvia
|
36
|
37
|
1.6%
|
2.5%
|
|
Germany
|
31
|
31
|
1.4%
|
2.1%
|
|
Ukraine
|
8
|
0
|
0.4%
|
0.0%
|
|
India
|
8
|
9
|
0.4%
|
0.6%
|
|
Other countries
|
90
|
86
|
4.1%
|
5.9%
|
|
TOTAL
|
2,206
|
1,458
|
100.0%
|
100.0%
|
Forecast and development
Skano. We do not expect significant growth of retail sale in the third quarter of 2011. Therefore we shall continue to save the costs and do not plan any extension of the retail chain.
Furniture factory. In the third quarter of 2011 we expect similar turnover as in the preceding quarters in the furniture factory, but the volume will still remain lower than the production capabilities would allow. Therefore the workload is continuously low in the furniture factory. Agreements have been concluded with the employees for application of undertime until 31.03.2012. From April 1, 2011 the business hours were extended, however for most of the employees the weekly number of business hours will remain below 40.
Building Materials Division. At the main production line the production is performed in four shifts round the clock in Pärnu softboard factory. On interior finishing panel lines of Isotex one or two shifts are used as necessary. Management expects for third quarter comparable sales number as in second quarter. At the same time management’s priority is raising the effectiveness and profitability.
AS Viisnurk acquired a softboard factory in Püssi for 4 million euros at the auction on 25.5.2011. The total cost of the construction and equipment of the factory was ca 14.7 million euros. The first test run of Püssi factory was at the end of July and management plans to achieve the readiness for capacity operations at late autumn. We estimate that it will be possible to produce up to 70,000 m3 of softboard a year in new softboard factory and the turnover of the factory could be around 7-8 million euros per year. The estimated production at Püssi factory will 1,500 m3 of softboard in August, and all of that is covered by orders.
After the acquisition of the Püssi factory production of natural softboards will be the biggest segment of the Group. Management plans to prepare the new strategy by autumn, to act more strongly on the ecologically friendly building materials market and offer natural and energy efficient solutions.
Consolidated statement of financial position
|
Th EUR
|
30.6.2011
|
31.12.2010
|
30.6.2010
|
|
|
|
|
|
|
Cash and bank
|
276
|
1,011
|
134
|
|
Receivables and prepayments
|
1,927
|
1,198
|
1,725
|
|
Inventories
|
2,850
|
2,484
|
3,011
|
|
Total current assets
|
5,053
|
4,693
|
4,870
|
|
|
|
|
|
|
Investment property
|
185
|
185
|
185
|
|
Tangible fixed assets
|
8,211
|
4,217
|
4,044
|
|
Intangible fixed assets
|
18
|
20
|
1
|
|
Total fixed assets
|
8,414
|
4,422
|
4,230
|
|
|
|
|
|
|
TOTAL ASSETS
|
13,467
|
9,115
|
9,100
|
|
|
|
|
|
|
|
|
|
|
|
Debt obligations
|
662
|
1,383
|
520
|
|
Payables and prepayments
|
1,904
|
1,462
|
1,706
|
|
Short-term provisions
|
3
|
8
|
3
|
|
Total current liabilities
|
2,569
|
2,853
|
2,229
|
|
|
|
|
|
|
Non-current debt obligations
|
4,984
|
733
|
1,731
|
|
Non-current provisions
|
198
|
198
|
206
|
|
Total non-current liabilities
|
5,182
|
931
|
1,937
|
|
|
|
|
|
|
Total liabilities
|
7,751
|
3,784
|
4,166
|
|
|
|
|
|
|
Share capital at nominal value
|
2,875
|
2,875
|
2,875
|
|
Issue premium
|
364
|
364
|
364
|
|
Statutory capital reserve
|
288
|
288
|
288
|
|
Currency translation
|
28
|
16
|
0
|
|
Retained profits
|
1,788
|
1,017
|
1,017
|
|
Net profit for the year
|
373
|
771
|
390
|
|
Total equity
|
5,716
|
5,331
|
4,934
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
13,467
|
9,115
|
9,100
|
Consolidated statement of comprehensive income
|
Th EUR
|
2nd q 2011
|
2nd q 2010
|
6 m 2011
|
6 m 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETURN ON SALES
|
4,313
|
3,227
|
8,336
|
6,360
|
|
|
|
|
|
|
|
Cost of production sold
|
(3,270)
|
(2,427)
|
(6,448)
|
(4,794)
|
|
|
|
|
|
|
|
Gross profit
|
1,043
|
800
|
1,888
|
1,566
|
|
|
|
|
|
|
|
Marketing expenses
|
(603)
|
(479)
|
(1,184)
|
(940)
|
|
General administrative expenses
|
(147)
|
(128)
|
(246)
|
(223)
|
|
Other income
|
58
|
46
|
62
|
78
|
|
Other expenses
|
(53)
|
(14)
|
(93)
|
(38)
|
|
|
|
|
|
|
|
Operating profit
|
298
|
225
|
427
|
443
|
|
Financial income and financial expenses
|
(25)
|
(28)
|
(50)
|
(53)
|
|
|
|
|
|
|
|
Profit before taxes
|
273
|
197
|
377
|
390
|
|
Prepaid income tax
|
(2)
|
0
|
(4)
|
0
|
|
|
|
|
|
|
|
NET PROFIT FOR THE PERIOD
|
271
|
197
|
373
|
390
|
|
Basic earnings per share |
0.06
|
0.04
|
0.08
|
0.09
|
|
Diluted earnings per share
|
0.06
|
0.04
|
0.08
|
0.09
|
|
Currency translation differences |
(3)
|
(20)
|
12
|
(26)
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME
|
268
|
177
|
385
|
364
|
|
|
|
|
|
|
|
|
|
|
|
|