AS Tallinna Vesi’s sales were boosted by consumption of commercial
customers
In the second quarter of 2022,
AS Tallinna
Vesi's net sales grew to
€13 million, the increase in net sales was
mainly due to increased consumption of water services
among commercial
customers.
AS Tallinna Vesi’s sales from water services
provided to commercial customers in the second quarter of this year
was €4.24 million, which is about 23% more than last year. The
consumption of water services among commercial customers mainly
increased in the hospitality and entertainment sector, such as
hotels and spas, restaurants, cultural institutions, and in the
transport sector.
According to Aleksandr
Timofejev, Chairman of
the Board of AS Tallinna Vesi, hotels and spas were able to provide
their services to customers in the second quarter of this year in a
volume that is comparable to pre-COVID times. “Lifting of the
COVID-19 related restrictions at the end of the first quarter had a
strong positive impact on the consumption of commercial customers –
water consumption in hotels and spas increased by more than 140% in
the second quarter compared to a year ago,” Timofejev
explained.
Sales from water services provided to private
customers in the second quarter fell 1.2% to €4.99 million as a
result of the decline in consumption of the largest private
customer group - apartment buildings and private houses.
AS Tallinna Vesi’s gross profit for the second
quarter of 2022 was €4.42 million. The Company's gross profit for
six months fell by 15% due to an increase in operational costs.
Rising costs of chemicals, electricity and gas had the biggest
impact on cost growth. To minimise this impact, the Company seeks
to reduce the amount of chemicals used in treatment processes and,
if possible, consumes electricity smartly by monitoring the
electricity exchange price and timing consumption accordingly.
The Company’s operating profit for the second
quarter was €3.1 million. Operating profit fell by €2.12 million
compared to the second quarter of last year. The operating profit
for the six months of 2022 was €6.1 million, showing a decrease of
€3.77 million compared to the previous year, and this is due to
higher electricity costs and the retaining of the provision for
potential third-party claims at the level of the third quarter of
2021. When eliminating the impact of the change in operating profit
resulting from the provision for potential third-party claims, the
Company’s operating profit would have been €4 million in the second
quarter of 2021. Operating profit for the second quarter of 2022
would be 22.9% or €0.91 million lower compared to the same period
last year.
The Company’s net profit for the second quarter
of 2022 was €0.96 million, showing a decrease of €2.12 million
compared to the same period last year. The decrease in net profit
was affected by changes in operating profit and net financial
costs.
In the first half of 2022, AS Tallinna Vesi
renovated nearly 10,000 metres of pipelines. “The reconstruction of
pipelines has been progressing as planned in the first six months
and work will continue in the second half of the year,” Timofejev
said.
In the second quarter, extensive reconstruction
work was started and continued on Järvevana Road, Sõle, Kolde, Ehte
and Sitsi Streets, Astangu area and Ussimäe Road. “On Järvevana
Road, we are currently renovating 900 metres of a water supply
pipeline, which is one of Tallinn's largest for its diameter and
number of consumers and supplies water to the residents in
Mustamäe, Haabersti and Kristiine city districts. Large-scale sewer
system renovations are being done in Astangu area. Reconstruction
works are carried out using eco-friendly no-dig methods that do not
require digging up the roads and also cause less disturbance to
residents and the traffic,” Timofejev pointed out.
In May, AS Tallinna Vesi signed a contract with
Telia Eesti AS to install smart water meters for all its customers
by 2026. According to Timofejev, the first 260 smart water meters
have already been installed and a larger number of new meters will
be delivered this August, after which these will be installed
following the regular verification program. “Smart water meters
have been long expected by our customers, which is why I am glad we
have found the best way to deliver this solution and make monthly
invoicing process more convenient. In addition, by installing smart
meters, we will make our processes more digital, we will be able to
monitor the water network more efficiently and faster identify any
water leaks,” he said.
In order to ensure the continuity of the service
provided by the Company and the sustainability of its processes, AS
Tallinna Vesi continued with several large projects in the second
quarter, including the renovation of the water pumping station in
Rummu Road, which ensures high-quality drinking water to Lasnamäe
and Pirita city districts, and the renovation of the filters that
are part of the water treatment process. At the wastewater
treatment plant, work continues on strategically important projects
such as renovating the main pumping station shaft and the effluent
outlet tower, the first of which plays an important role in
receiving the wastewater at the treatment plant and the second in
discharging treated effluent into the sea.
Over the six months of 2022, the Company has
continued to provide reliable and high-quality water and wastewater
services, as reflected in the very high level of quality
indicators. In the first half of the year, the Company took 1,681
water samples. The quality of tap water was excellent, 100% in line
with all quality requirements. According to Timofejev, excellent
quality of tap water has been ensured with an effective water
treatment process, ongoing preventative maintenance work on the
water network and investments in water pumping stations made in
recent years that created a secondary chlorination facility across
the various city districts. This allows to keep the sanitary status
of treated water in the water network and maintain the excellent
quality of tap water with hot weather as well.
Also, the wastewater treated at the wastewater
treatment plant and discharged to the Baltic Sea met all the strict
requirements both in the second quarter and throughout the first
half of 2022. “The quality of effluent directly affects the marine
environment, which is why we monitor the amounts of pollutants in
wastewater received at the treatment plant and in effluent leaving
the treatment plant. Pollutant parameters that are significantly
lower than the limits required by law is a proof of the excellent
level of treated effluent,” Timofejev explained.
The level of water loss in the water network
remained low in the second quarter – 14.3%, similarly to the
previous year. In the half-year view, the level of water loss is
somewhat higher than last year because of the snowy and cold winter
that made it difficult to detect leaks and access pipelines in the
first quarter.
AS Tallinna Vesi is the largest water utility in
Estonia, providing services to more than 24,600 private customers
and businesses and 470,000 end consumers in Tallinn and its
surrounding municipalities: Cities of Maardu and Saue and Harku
Municipality. Tallinna Vesi is listed on the main list of the
Nasdaq Tallinn Stock Exchange.
Main financial indicators
€million,except
key ratios |
2nd quarter |
Change 2022/ 2021 |
6 months |
Change 2022/ 2021 |
2022 |
2021 |
2020 |
2022 |
2021 |
2020 |
Sales |
13.00 |
12.97 |
12.09 |
0.3% |
25.05 |
24.75 |
25.27 |
1.2% |
Gross
profit |
4.42 |
5.23 |
4.73 |
-15.5% |
8.80 |
10.41 |
10.79 |
-15.5% |
Gross profit
margin % |
33.98 |
40.34 |
39.16 |
-15.8% |
35.12 |
42.07 |
42.70 |
-16.5% |
Operating profit
before depreciation and amortisation |
4.69 |
6.80 |
6.14 |
-31.0% |
9.34 |
13.03 |
13.32 |
-28.3% |
Operating profit
before depreciation and amortisation margin % |
36.09 |
52.44 |
50.76 |
-31.2% |
37.26 |
52.63 |
52.70 |
-29.2% |
Operating
profit |
3.08 |
5.20 |
4.59 |
-40.7% |
6.09 |
9.86 |
10.26 |
-38.3% |
Operating profit - main business |
2.83 |
4.96 |
4.32 |
-43.1% |
5.74 |
9.46 |
9.94 |
-39.3% |
Operating profit
margin % |
23.70 |
40.09 |
37.99 |
-40.9% |
24.29 |
39.83 |
40.61 |
-39.0% |
Profit before
taxes |
2.98 |
5.11 |
4.51 |
-41.8% |
5.88 |
9.68 |
10.06 |
-39.2% |
Profit before
taxes margin % |
22.88 |
39.40 |
37.29 |
-41.9% |
23.48 |
39.10 |
39.82 |
-40.0% |
Net profit |
0.96 |
3.07 |
0.15 |
-68.9% |
3.84 |
7.62 |
5.71 |
-49.7% |
Net profit
margin % |
7.36 |
23.70 |
1.27 |
-68.9% |
15.31 |
30.80 |
22.59 |
-50.3% |
ROA % |
0.38 |
1.21 |
0.06 |
-68.7% |
1.52 |
3.02 |
2.22 |
-49.5% |
Debt to total
capital employed % |
57.09 |
57.20 |
59.63 |
-0.2% |
57.09 |
57.20 |
59.63 |
-0.2% |
ROE % |
0.85 |
2.75 |
0.14 |
-69.0% |
3.46 |
6.96 |
5.27 |
-50.3% |
Current
ratio |
1.81 |
2.75 |
3.23 |
-34.2% |
1.81 |
2.75 |
3.23 |
-34.2% |
Quick ratio |
1.75 |
2.69 |
3.18 |
-34.9% |
1.75 |
2.69 |
3.18 |
-34.9% |
Investments into
fixed assets |
2.85 |
5.57 |
2.52 |
-48.8% |
5.63 |
7.85 |
6.11 |
-28.3% |
Payout ratio % |
na |
80.42 |
77.70 |
|
na |
80.42 |
77.70 |
|
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 |
2nd quarter |
2nd quarter |
|
6 months |
6 months |
|
12 months |
€ thousand |
2022 |
2021 |
|
2022 |
2021 |
|
2021 |
|
|
|
|
|
|
|
|
Revenue |
13,002 |
12,968 |
|
20,054 |
24,752 |
|
53,294 |
Cost of goods and services sold |
-8,583 |
-7,737 |
|
-16,254 |
-14,340 |
|
-32,715 |
GROSS
PROFIT |
4,419 |
5,231 |
|
8,800 |
10,412 |
|
20,579 |
|
|
|
|
|
|
|
|
Marketing
expenses |
-189 |
-104 |
|
-388 |
-224 |
|
-462 |
General
administration expenses |
-1,094 |
-992 |
|
-2,225 |
-2,544 |
|
-4,438 |
Other income (+)/ expenses (-) |
-55 |
1,064 |
|
-102 |
2,215 |
|
3,099 |
OPERATING PROFIT |
3,081 |
5,199 |
|
6,085 |
9,859 |
|
18,778 |
|
|
|
|
|
|
|
|
Financial
income |
1 |
2 |
|
3 |
7 |
|
8 |
Financial
expenses |
-108 |
-91 |
|
-205 |
-187 |
|
-387 |
Other financial income (+)/ expenses (-) |
|
|
|
|
|
|
|
PROFIT
BEFORE TAXES |
2,974 |
5,110 |
|
5,883 |
9,679 |
|
18,399 |
|
|
|
|
|
|
|
|
Income tax on
dividends |
-2,017 |
-2,036 |
|
-2,047 |
-2,056 |
|
-2,234 |
|
|
|
|
|
|
|
|
NET PROFIT FOR THE PERIOD |
957 |
3,074 |
|
3,836 |
7,623 |
|
16,165 |
COMPREHENSIVE INCOME FOR THE PERIOD |
957 |
3,074 |
|
3,836 |
7,623 |
|
16,165 |
|
|
|
|
|
|
|
|
Attributable profit to: |
|
|
|
|
|
|
|
Equity holders
of A-shares |
957 |
3,074 |
|
3,836 |
7,623 |
|
16,165 |
|
|
|
|
|
|
|
|
Earnings per A
share (in euros) |
0.05 |
0.15 |
|
0.19 |
0.38 |
|
0.81 |
STATEMENT OF FINANCIAL POSITION |
|
|
|
|
€ thousand |
30/06/2022 |
30/06/2021 |
|
31/12/2021 |
|
|
|
|
|
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash
equivalents |
23,541 |
37,011 |
|
36,559 |
Trade
receivables, accrued income and prepaid expenses |
6,643 |
5,990 |
|
6,637 |
Inventories |
982 |
835 |
|
702 |
TOTAL
CURRENT ASSETS |
31,166 |
43,836 |
|
43,898 |
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
Property, plant
and equipment |
215,830 |
205,295 |
|
211,546 |
Intangible
assets |
637 |
583 |
|
729 |
TOTAL NON-CURRENT ASSETS |
216,467 |
205,878 |
|
212,275 |
TOTAL
ASSETS |
247,633 |
249,714 |
|
256,173 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Current portion
of long-term lease liabilities |
662 |
390 |
|
421 |
Current portion
of long-term loans |
3,630 |
3,630 |
|
3,630 |
Trade and other
payables |
9,665 |
9,067 |
|
7,835 |
Prepayments |
3,296 |
2,880 |
|
3,604 |
TOTAL
CURRENT LIABILITIES |
17,253 |
15,967 |
|
15,490 |
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
|
Deferred income
from connection fees |
38,130 |
35,988 |
|
37,241 |
Leases |
1,063 |
1,277 |
|
1,236 |
Loans |
78,540 |
82,154 |
|
80,336 |
Provision for
possible third party claims |
6,018 |
7,221 |
|
6,018 |
Deferred tax
liability |
303 |
195 |
|
372 |
Other payables |
70 |
34 |
|
60 |
TOTAL NON-CURRENT LIABILITIES |
124,124 |
126,869 |
|
125,263 |
TOTAL
LIABILITIES |
141,377 |
142,836 |
|
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 |
68,244 |
68,866 |
|
77,408 |
TOTAL EQUITY |
106,256 |
106,878 |
|
115,420 |
TOTAL
LIABILITIES AND EQUITY |
247,633 |
249,714 |
|
256,173 |
CASH
FLOWS STATEMENT |
6 months |
6 months |
|
12 months |
€ thousand |
2022 |
2021 |
|
2021 |
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
Operating
profit |
6,085 |
9,859 |
|
18,778 |
Adjustment for
depreciation/amortisation |
3,250 |
3,168 |
|
6,520 |
Adjustment for
revenues from connection fees |
-269 |
-251 |
|
-510 |
Other non-cash
adjustments |
0 |
-2,407 |
|
-3,610 |
Profit/loss(+)
from sale and write off of property, plant and equipment, and
intangible assets |
-12 |
0 |
|
-29 |
Change in
current assets involved in operating activities |
-271 |
892 |
|
380 |
Change in liabilities involved in operating activities |
-485 |
126 |
|
938 |
TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES |
8,298 |
11,387 |
|
22,467 |
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
Acquisition of
property, plant and equipment, and intangible assets |
-7,351 |
-5,084 |
|
-13,734 |
Compensations
received for construction of pipelines, incl connection fees |
1,215 |
1,351 |
|
2,892 |
Proceeds from
sales of property, plant and equipment and intangible assets |
13 |
0 |
|
29 |
Interest received |
3 |
9 |
|
11 |
TOTAL
CASH FLOWS USED IN INVESTING ACTIVITIES |
-6,120 |
-3,724 |
|
-10,802 |
|
|
|
|
|
CASH FLOWS USE D IN FINANCING ACTIVITIES |
|
|
|
|
Interest paid
and loan financing costs, incl swap interests |
-218 |
-204 |
|
-460 |
Lease
payments |
-230 |
-205 |
|
-408 |
Repayment of
loans |
-1,818 |
-1,818 |
|
-3,636 |
Dividends
paid |
-12,835 |
-12,841 |
|
-12,842 |
Withheld income
tax paid on dividends |
0 |
0 |
|
-158 |
Income tax paid on dividends |
-95 |
-98 |
|
-2,116 |
TOTAL
CASH FLOW USED IN FINANCING ACTIVITIES |
-15,196 |
-15,166 |
|
-19,620 |
|
|
|
|
|
CHANGE
IN CASH AND CASH EQUIVALENTS |
-13,018 |
-7,503 |
|
-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 |
23,541 |
37,011 |
|
36,559 |
Laura KorjusHead of CommunicationsAS Tallinna Vesi(+372) 626
2271laura.korjus@tvesi.ee
Grafico Azioni Tallinna Vesi As (LSE:0JPY)
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