AS Tallinna Vesi´s financial results for the 3rd quarter of 2021

AS Tallinna Vesi’s sales revenue for the 3rd quarter of 2021 was €13.61 million, showing a 2.5% increase on the same period last year. The revenue was reflected by higher commercial consumption due to the easement of COVID-19 restrictions and increase in construction revenues.

Sales to private customers in the main service area remained at the same level amounting to €4.89 million.

In the main service area, the sales revenue from commercial customers increased by 3.0% to €3.83 million as a result of their consumption being higher by €0.11 million. As a result of slight easement of the pandemic restrictions the hospitality sector reopened in June, and less people were working at home.

The gross profit for the 3rd quarter of 2021 was €5.36 million, being 7.5% lower due to higher cost of goods and services sold. The operating profit was €5.50 million, having decreased by €0.26 compared to the same period last year. The main factor impacting the operating profit was also related to higher cost of goods and services sold.

The net profit for the 3rd quarter of 2021 was €5.34 million, showing a decrease of €0.30 million compared to the same period in 2020. The increase in the net profit was mainly impacted by lower operating profit, accompanied by lower interest costs.

In the 3rd quarter of 2021 the construction revenue of subsidiary Watercom increased year-on-year due to pipe and road construction procurements won during 2020 and the first nine months of 2021 in Tallinn and surrounding municipalities. The sales revenue from construction services for the 3rd quarter was €2.23 million, indicating a 30.5% increase compared to the same period in 2020.

MAIN FINANCIAL INDICATORS

€ million,except key ratios	3rd quarter			Change 2021/ 2020	9 months			Change 2021/ 2020
€ million,except key ratios	2021	2020	2019	Change 2021/ 2020	2021	2020	2019	Change 2021/ 2020
Sales	13.61	13.28	16.49	2.5%	38.36	38.55	47.30	-0.5%
Gross profit	5.36	5.80	8.92	-7.5%	15.78	16.59	25.97	-4.9%
Gross profit margin %	39.40	43.69	54.12	-9.8%	41.12	43.04	54.91	-4.5%
Operating profit before depreciation and amortisation	7.17	7.35	9.01	-2.4%	20.20	20.66	25.47	-2.3%
Operating profit before depreciation and amortisation margin %	52.67	55.33	54.63	-4.8%	52.64	53.60	53.85	-1.8%
Operating profit	5.50	5.77	7.52	-4.6%	15.36	16.03	21.01	-4.2%
Operating profit - main business	5.15	5.44	7.19	-5.2%	14.61	15.37	20.37	-4.9%
Operating profit margin %	40.42	43.43	45.60	-6.9%	40.04	41.58	44.42	-3.7%
Profit before taxes	5.41	5.64	7.33	-4.1%	15.09	15.70	20.35	-3.9%
Profit before taxes margin %	39.72	42.45	44.47	-6.4%	39.32	40.73	43.03	-3.4%
Net profit	5.34	5.64	7.33	-5.3%	12.96	11.34	16.81	14.3%
Net profit margin %	39.21	42.45	44.47	-7.6%	33.78	29.43	35.53	14.8%
ROA %	2.13	2.24	2.89	-5.0%	5.10	4.40	6.64	16.0%
Debt to total capital employed %	55.54	57.73	59.29	-3.8%	55.54	57.73	59.29	-3.8%
ROE %	4.87	5.42	7.27	-10.0%	11.55	10.20	16.21	13.2%
Current ratio	3.07	3.66	5.14	-16.1%	3.07	3.66	5.14	-16.1%
Quick ratio	3.01	3.62	5.10	-16.9%	3.01	3.62	5.10	-16.9%
Investments into fixed assets	4.32	5.91	4.65	-27.0%	9.95	13.77	10.76	-27.7%
Payout ratio %	na	77.70	72.05		na	77.70	72.05

Gross profit margin – Gross profit / Net salesOperating profit before depreciation and amortisation – Operating profit + depreciation and amortisationOperating profit before depreciation and amortisation margin – Operating profit before depreciation and amortisation / Net salesOperating profit margin – Operating profit / Net salesNet profit margin – Net profit / Net salesROA – Net profit / Average Total assets for the periodDebt to Total capital employed – Total liabilities / Total capital employedROE – Net profit / Average Total equity for the periodCurrent ratio – Current assets / Current liabilitiesQuick ratio – (Current assets – Stocks) / Current liabilitiesPayout ratio - Total Dividends per annum/ Total Net Income per annumMain business – water services related activities, excl. connections profit and government grants, construction services, doubtful receivables

STATEMENT OF COMPREHENSIVE INCOME	3rd quarter	3rd quarter	9 months	9 months	12 months
€ thousand	2021	2020	2021	2020	2020

Revenue	13,611	13,276	38,363	38,545	51,717
Cost of goods and services sold	-8,248	-7,476	-22,588	-21,954	-29,491
GROSS PROFIT	5,363	5,800	15,775	16,591	22,226

Marketing expenses	-108	-94	-332	-320	-433
General administration expenses	-847	-1,123		-3,631	-4,576
Other income (+)/ expenses (-)	1,093	1,182	3,308	3,387	4,567
OPERATING PROFIT	5,501	5,765	15,361	16,027	21,784

Financial income	1	3	8	28	31
Financial expenses	-96	-113	-283	-357	-473
PROFIT BEFORE TAXES	5,406	5,635	15,086	15,698	21,342

Income tax on dividends	-70	0	-2,126	-4,355	-4,610

NET PROFIT FOR THE PERIOD	5,336	5,635	12,960	11,343	16,732
COMPREHENSIVE INCOME FOR THE PERIOD	5,336	5,635	12,960	11,343	16,732

Attributable profit to:
Equity holders of A-shares	5,336	5,634	12,960	11,342	16,731
B-share holder	0.00	0.60	0.00	0.60	0.60

Earnings per A share (in euros)	0.27	0.28	0.65	0.57	0.84
Earnings per B share (in euros)	0	600	0	600	600

STATEMENT OF FINANCIAL POSITION
€ thousand	30/09/2021	30/09/2021	31/12/2020

ASSETS
CURRENT ASSETS
Cash and cash equivalents	36,143	45,868	44,514
Trade receivables, accrued income and prepaid expenses	6,858	6,827	7,019
Inventories	849	695	701
TOTAL CURRENT ASSETS	43,850	53,390	52,234

NON-CURRENT ASSETS
Property, plant and equipment	208,002	198,839	202,802
Intangible assets	532	598	629
TOTAL NON-CURRENT ASSETS	208,534	199,437	203,431

TOTAL ASSETS	252,384	252,827	255,665

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Current portion of long-term lease liabilities	386	397	393
Current portion of long-term loans	3,630	3,631	3,630
Trade and other payables	7,182	7,757	7,084
Derivatives	0	28	0
Prepayments	3,096	2,757	2,445
TOTAL CURRENT LIABILITIES	14,294	14,570	13,552

NON-CURRENT LIABILITIES
Deferred income from connection fees	36,226	33,278	34,564
Leases	1,185	1,465	1,400
Loans	82,144	85,791	83,978
Provision for possible third party claims	6,018	10,832	9,628
Deferred tax liability	264	0	255
Other payables	38	25	32
TOTAL NON-CURRENT LIABILITIES	125,875	131,391	129,857
TOTAL LIABILITIES	140,169	145,961	143,409

EQUITY
Share capital	12	12	12,000
Share premium	24,734	24,734	24,734
Statutory legal reserve	1,278	1,278	1,279
Retained earnings	74,203	68,854	74,243
TOTAL EQUITY	112,215	106,866	112,256

TOTAL LIABILITIES AND EQUITY	252,384	252,827	255,665

CASH FLOWS STATEMENT	9 months	9 months	12 months
€ thousand	2021	2020	2020

CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit	15,361	16,027	21,784
Adjustment for depreciation/amortisation	4,837	4,634	6,283
Adjustment for revenues from connection fees	-379	-341	-542
Other non-cash adjustments	-3,610	-3,610	-4,814
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets	0	-14	-14
Change in current assets involved in operating activities	24	221	140
Change in liabilities involved in operating activities	537	-249	-215
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES	16,770	16,668	22,622

CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property, plant and equipment, and intangible assets	-9,491	-10,114	-15,682
Compensations received for construction of pipelines, incl connection fees	1,933	1,618	1,998
Proceeds from sales of property, plant and equipment and intangible assets	0	32	32
Interest received	11	34	35
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES	-7,547	-8,430	-13,617

CASH FLOWS USE D IN FINANCING ACTIVITIES
Interest paid and loan financing costs, incl swap interests	-353	-519	-719
Lease payments	-307	-452	-555
Received loans	0	0	0
Repayment of loans	-1,818	-1,818	-3,636
Dividends paid	-12,841	-19,888	-19,888
Withheld income tax paid on dividends	-159	-113	-113
Income tax paid on dividends	-2,116	-4,355	-4,355
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES	-17,594	-27,145	-29,266

CHANGE IN CASH AND CASH EQUIVALENTS	-8,371	-18,907	-20,261

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	44,514	64,775	64,775

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	36,143	45,868	44,514