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Baltika’s Unaudited Financial Results, Third Quarter and 9 Months of 2021

·5-min read

Baltika Group ended the third quarter with a net loss of 392 thousand euros, which included one-off costs of 310 thousand euros mostly due to 8 store closures done during Q3 2021. The loss for the same period last year was 516 thousand euros.

The Group's sales revenue for the third quarter was 3,817 thousand euros, decreasing by 33% compared to the same period last year. The main reasons for the decrease in retail sales were represented by the closures of 37 unprofitable stores done in the meantime all over the Baltics as well as a delay in the arrival of goods in stores due to global supply problems, which had a negative impact on our sales results, particularly during August and September.

E-com sales revenue in the third quarter of 2021 decreased by 21% for approximately 84 thousand euro, mostly driven by the logical shift towards off-line stores due to the easing of all restrictions during the third quarter. However, the 9-month results still show strong sales growth of 6% and 22% increase in gross profit compared to the same period last year, despite the company's strategic decision to discontinue the Monton and Baltman brands.

The gross profit for the quarter was 1,920 thousand euros, decreasing by 963 thousand euros compared to the same period of the previous year (Q3 2020: 2,884 thousand euros) in line with the sales decrease as a logical consequence of a lower number of stores managed in our Group portfolio. The company's gross profit margin was 50,3% in the third quarter, which is 0,6 percentage points lower than the margin of the third quarter of the previous year (Q3 2020: 50,9%). The decrease in gross profit is mostly due to the sale of residual Baltman stock in our existing stores all over the Baltics and in particular in the Estonian market.

The Group's distribution and administrative expenses in the third quarter were 2,590 thousand euros, decreasing by 16% i.e., 498 thousand euros compared to the same period last year. More than 60% of the decrease in expense was related to cost reductions in a retail business, in particular with decrease in payroll costs by 24% compared to the same period last year.

In the first 9 months of the year, the group's revenue decreased by 41% compared to the same period last year to 9,156 thousand euros. Retail sales revenue decreased by 46%, while e-store sales revenue increased by 6%. The Group's 9-month result shows a loss, mainly caused by a negative impact of one cost due to 26 store closures executed during the last 9 months and also by COVID-19 restrictions in all Baltic countries which have affected our business already from 1 January 2021 until the end of May 2021. During the third quarter, our Omnichannel (on-line and off-line stores) has been affected also by well known global supply issues, which meant that seasonal autumn goods did not reach our retail network and e-store on time as originally planned.

Baltika Group's focus during the third quarter of 2021 was to optimize even further the whole store network with some important unprofitable store closures across the Baltics and to keep under strict control all operating expenses as well as on the renewed Ivo Nikkolo brand launch.


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note

30 Sept 2021

31 Dec 2020

ASSETS

Current assets

Cash and cash equivalents

3

773

1,427

Trade and other receivables

4

190

318

Inventories

5

2,954

3,467

Total current assets

3,917

5,212

Non-current assets

Deferred income tax asset

140

140

Other non-current assets

4

149

111

Property, plant and equipment

6

919

1,218

Right-of-use assets

8

6,484

9,199

Intangible assets

7

572

597

Total non-current assets

8,264

11,255

TOTAL ASSETS

12,181

16,477

LIABILITIES AND EQUITY

Current liabilities

Borrowings

9

358

252

Lease liabilities

8

1,955

3,127

Trade and other payables

10,11

3,083

3,019

Total current liabilities

5,396

6,398

Non-current liabilities

Borrowings

9

1,259

874

Lease liabilities

8

4,824

6,493

Total non-current liabilities

6,083

7,367

TOTAL LIABILITIES

11,479

13,765

EQUITY

Share capital at par value

12

5,408

5,408

Reserves

12

3,931

3,931

Retained earnings

-6,627

-6,250

Net profit (loss) for the period

-2,010

- 377

TOTAL EQUITY

702

2,712

TOTAL LIABILITIES AND EQUITY

12,181

16,477


CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE INCOME

Note

3Q 2021

3Q 2020

9m 2021

9m 2020

Revenue

13,14

3,817

5,658

9,156

15,502

Cost of goods sold

15

-1,896

-2,774

-4,707

-8,048

Gross profit

1,921

2,884

4,449

7,454

Distribution costs

16

-2,287

-2,806

-3,837

-7,006

Administrative and general expenses

17

-303

-718

-835

-1,510

Other operating income (-expense)

18

369

5,841

685

5,878

Operating profit (loss)

-300

4,139

-1,459

1,931

Finance costs

19

-92

-194

-251

-635

Profit (loss) before income tax

-392

-516

-2,010

975

Income tax expense

0

0

0

0

Net profit (loss) for the period

-392

-516

-2,010

975

Total comprehensive income (loss)
for the period

-392

-516

-2,010

975

Basic earnings per share from net profit (loss)
for the period, EUR

20

-0.01

-0.01

-0.04

0.02

Diluted earnings per share from net profit (loss)
for the period, EUR

20

-0.01

-0.01

-0.04

0.02

Flavio Perini
Chairman of Management Board, CEO
flavio.perini@baltikagroup.com



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