AS Tallinna Vesi’s sales revenue in the 1st quarter increased to €12 million

AS Tallinna Vesi’s sales revenue increased by 2.3% in the first quarter of 2022 compared to the previous year and reached €12.05 million. The sales revenue growth was attributable to the commercial customers' increased consumption of water services.

AS Tallinna Vesi’si sales from water services sold to commercial customers reached €3.84 million in the first quarter of 2022, showing a 18% increase on the same period last year. “The main factor behind the growth of sales revenue was the easement of the restrictions resulting from the slowdown in the spread of the coronavirus, which enabled the full reopening of the capital's hospitality sector,” said Aleksandr Timofejev, Chairman of the Board of AS Tallinna Vesi. As a result, the occupancy rates improved and the volume of water services consumed by commercial customers increased.

AS Tallinna Vesi’s sales from water services sold to private customers decreased 4% compared to the first quarter of last year, reaching €4.9 million. “The decline in consumption volumes for private customers was also linked to the easement of restrictions for preventing the spread of the coronavirus, which resulted in our customers spending more time outside the home than before,” Timofejev said.

AS Tallinna Vesi's gross profit for the first quarter of 2021 was €4.38 million, showing a decrease of 15.4% over the year. The decrease in gross profit is mainly related to the growth in direct operational costs, including costs of chemicals and electricity, which increased 51% compared to the same period last year. The Company's operating profit was €3 million in the first quarter, showing a decrease of €1.66 million compared to the same period last year.

The Company's net profit was €2.88 million in the first quarter of 2022, which is €1.67 million less than in the same period of 2021. The decrease in net profit was influenced by changes in operating profit and net financial costs.

According to AS Tallinna Vesi’s dividends policy the Company aims to distribute 50-80% of the Company's annual profit as dividends to its shareholders. On 28 April, the Company's Supervisory Council approved the Board’s dividend proposal to the general meeting of shareholders to pay the shareholders a dividend of €0.65 per share of the annual profit in 2021. The payout is equal to 80% of the net profit for 2021.

In the first three months of the year, the Company reconstructed nearly 600 meters of water pipes and more than 2600 meters of sewers. “In 2022, we aim to renovate at least 16 kilometres of water pipes and sewers. Currently, arrangements have already been made for the renovation of 17 kilometres of pipes,” said Timofejev. Extensive renovation work will take place this year on Järvevana Road and Tulika, Kotka, Sõle and Lõime Streets. The sewer pipes will also be renovated in Astangu area. In cooperation with the energy group Utilitas, pipes will be renovated in Kesk-Luha, Uue-Maailma, Õllepruuli and Tuvi Streets.

AS Tallinna Vesi works closely with the City of Tallinn in preparing a public water supply and sewerage development plan for the next 12-year period. The plan will be completed in the summer of 2022 and it will serve as a basis for preparing the development and investment plan of the Company, to develop Tallinn’s water and sewerage network in co-operation with the City of Tallinn.

AS Tallinna Vesi started and continued with investment projects, which will ensure the sustainability of water and sewerage services. Such as the renovation of the main pumping station shaft, the effluent outlet tower and the aeration tanks in Paljassaare that are part of the wastewater treatment process. At the water treatment side, renovation works are carried out on the filters that are part of the treatment process and at the water pumping station in Rummu Street.

The quality indicators of Tallinna Vesi in the first quarter of 2022 were at a very good level - the company provided a reliable and high-quality water and wastewater service. The quality of tap water provided by AS Tallinna Vesi was at an excellent level in the first quarter of 2022, being 100% compliant with all quality requirements. During the first three months of the year, the Company took 842 water samples.

Treated wastewater also fully compliant with all regulations and standards. Treated wastewater is discharged from the wastewater treatment plant into the Baltic Sea, in which it directly affects the marine environment. Significantly lower levels of nitrogen and phosphorus in the effluent discharged into the sea is a proof of the excellent level of treated effluent.

Snowy winter and cold weather conditions in the first months of the year as usually affected the level of water loss and the number of sewer collapses. Although the parameters were slightly higher in the first quarter, they showed a decrease due to the milder weather conditions in March. Despite the increase, customers were guaranteed a continuous and high-quality water and wastewater service in the first quarter.

MAIN FINANCIAL INDICATORS

€ million,except key ratios	1st quarter			Change 2022/ 2021
€ million,except key ratios	2022	2021	2020	Change 2022/ 2021
Sales	12.05	11.78	13.18	2.3%
Gross profit	4.38	5.18	6.06	-15.4%
Gross profit margin %	36.36	43.97	45.96	-17.3%
Operating profit before depreciation and amortisation	4.64	6.23	7.18	-25.4%
Operating profit before depreciation and amortisation margin %	38.53	52.83	54.48	-27.1%
Operating profit	3.00	4.66	5.67	-35.5%
Operating profit - main business	2.92	4.50	5.62	-35.2%
Operating profit margin %	24.92	39.55	43.02	-37.0%
Profit before taxes	2.91	4.57	5.56	-36.4%
Profit before taxes margin %	24.13	38.78	42.15	-37.8%
Net profit	2.88	4.55	5.56	-36.7%
Net profit margin %	23.88	38.59	42.15	-38.1%
ROA %	1.12	1.77	2.09	-36.7%
Debt to total capital employed %	54.17	54.83	54.81	-1.2%
ROE %	2.46	3.97	4.70	-38.0%
Current ratio	3.20	4.48	5.87	-28.6%
Quick ratio	3.13	4.42	5.83	-29.2%
Investments into fixed assets	2.78	2.28	3.59	21.9%
Payout ratio %	na	na	na

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	1st quarter	1st quarter	12 months
€ thousand	2022	2021	2020

Revenue	12,053	11,784	53,294
Cost of goods and services sold	-7,670	-6,603	-32,715
GROSS PROFIT	4,383	5,181	20,579

Marketing expenses	-199	-121	-462
General administration expenses	-1,131	-1,551	-4,438
Other income (+)/ expenses (-)	-48	1,151	3,099
OPERATING PROFIT	3,005	4,660	18,778

Financial income	1	5	8
Financial expenses	-97	-95	-387
PROFIT BEFORE TAXES	2,909	4,570	18,399

Income tax on dividends	-30	-21	-2,234

NET PROFIT FOR THE PERIOD	2,879	4,549	16,165
COMPREHENSIVE INCOME FOR THE PERIOD	2,879	4,549	16,165

Attributable profit to:
Equity holders of A-shares	2,879	4,548	16,165
B-share holder	0.00	0.60	0.00

Earnings per A share (in euros)	0.14	0.23	0.81
Earnings per B share (in euros)	0	600	0

STATEMENT OF FINANCIAL POSITION
€ thousand	31/03/2022	31/03/2021	31/12/2021

ASSETS
CURRENT ASSETS
Cash and cash equivalents	37,570	47,122	36,559
Trade receivables, accrued income and prepaid expenses	6,228	6,514	6,637
Inventories	922	809	702
TOTAL CURRENT ASSETS	44,720	54,445	43,898

NON-CURRENT ASSETS
Property, plant and equipment	212,732	203,516	211,546
Intangible assets	690	634	729
TOTAL NON-CURRENT ASSETS	213,422	204,150	212,275
TOTAL ASSETS	258,142	258,595	256,173

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current portion of long-term lease liabilities	464	393	421
Current portion of long-term loans	3,630	3,630	3,630
Trade and other payables	6,587	5,943	7,835
Prepayments	3,302	2,182	3,604
TOTAL CURRENT LIABILITIES	13,983	12,148	15,490

NON-CURRENT LIABILITIES
Deferred income from connection fees	37,727	35,611	37,241
Leases	1,297	1,331	1,236
Loans	80,348	83,966	80,336
Provision for possible third party claims	6,018	8,424	6,018
Deferred tax liability	402	276	372
Other payables	68	35	60
TOTAL NON-CURRENT LIABILITIES	125,860	129,643	125,263
TOTAL LIABILITIES	139,843	141,791	140,753

EQUITY
Share capital	12,000	12,000	12,000
Share premium	24,734	24,734	24,734
Statutory legal reserve	1,278	1,278	1,278
Retained earnings	80,287	78,792	77,408
TOTAL EQUITY	118,299	116,804	115,420
TOTAL LIABILITIES AND EQUITY	258,142	258,595	256,173

CASH FLOWS STATEMENT	3 months	3 months	12 months
€ thousand	2022	2021	2021

CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit	3,005	4,660	18,778
Adjustment for depreciation/amortisation	1,639	1,567	6,520
Adjustment for revenues from connection fees	-134	-125	-510
Other non-cash adjustments	0	-1,204	-3,610
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets	-3	0	-29
Change in current assets involved in operating activities	202	402	380
Change in liabilities involved in operating activities	-811	-54	938
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES	3,898	5,246	22,467

CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property, plant and equipment, and intangible assets	-3,327	-2,923	-13,734
Compensations received for construction of pipelines, incl connection fees	665	508	2,892
Proceeds from sales of property, plant and equipment and intangible assets	3	0	29
Interest received	1	1	11
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES	-2,658	-2,414	-10,802

CASH FLOWS USE D IN FINANCING ACTIVITIES
Interest paid and loan financing costs, incl swap interests	-117	-121	-460
Lease payments	-112	-102	-408
Repayment of loans	0	0	-3,636
Dividends paid	0	0	-12,842
Withheld income tax paid on dividends	0	0	-158
Income tax paid on dividends	0	0	-2,116
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES	-229	-223	-19,620

CHANGE IN CASH AND CASH EQUIVALENTS	1,011	2,609	-7,955

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	36,559	44,514	44,514

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	37,570	47,123	36,559