Notice of correction to Baltika’s Unaudited Financial Results, Fourth Quarter and 12 months of 2021
28 February 2022 - 8:40PM
Notice of correction to Baltika’s Unaudited Financial Results,
Fourth Quarter and 12 months of 2021
Baltika hereby submits a statement of adjusted financial
statement, with the balance sheet and income statement appended as
comparison tables.
Baltika Group ended the fourth quarter with a
net loss of 890 thousand euros. The loss for the same period last
year was 1,352 thousand euros. Despite the ongoing pandemic of
COVID-19, the quarter results have improved 462 thousand euros
year-over-year due to Baltika Group’s strong focus on fixed costs
reduction, which led to operating expense decreasing by 694
thousand euros. The year-end result includes a reserve for the
expense of closing stores in 2022 in the amount of 90 thousand
euros, reduction of deferred tax assets reserve in the amount of 60
thousand euros, stock provision of 100 thousand euros.
The Group's sales revenue for the fourth quarter
was 2,614 thousand euros, decreasing by 34% compared to the same
period last year with a drop of 30% in retail sales due to 27 store
closures and decreased 65% in e-store sales. For the sake of
transparency, another main reason for the decline in sales was
related to the fact that our Group decided as going forward
strategy to trade with only one womenswear brand (new Ivo Nikkolo)
and to fully discontinue menswear. Additionally, in the
fourth-quarter further restrictions due to COVID-19 were forced in
Latvia with the full store closures from mid-October till
mid-November and then with the weekend closures from mid of
November till 21 December.
The gross profit for the quarter was 1,671
thousand euros, decreasing by 25% i.e. 551 thousand euros compared
to the same period of the previous year (Q4 2020: 2,222 thousand
euros). The company's gross profit margin was 63.9% in the fourth
quarter, which is 8 percentage points higher than the margin of the
same quarter of the previous year (Q4 2020: 55,9%). The positive
increase in gross profit margin is due to Baltika Group selling
more full-price stock to end customers with lower volumes of
discounted items.
The Group's distribution and administrative
expenses in the fourth quarter were 2,289 thousand euros,
decreasing by 23% i.e. 694 thousand euros compared to the same
period last year. The majority of this relevant cost saving came
from a reduction in retail operational costs. One-off costs related
to the closure of stores and other non-recurring expenses related
to business activities during the 12 months amounted to 877
thousand euros. Consistent and significant reductions in
distribution and administrative expenses is a part of Baltika
Group's ongoing restructuring plan, a focus area, which has led
head office expenses to decrease by 240 thousand euros.
12 months total gross profit amounts to 6,120
thousand euros, compared to the prior year 9,676 thousand euros
(decreasing 36,8%) and the largest decline was from January till
May, when most stores were closed for part of the period due to the
COVID-19 pandemic. The result of the fourth quarter was most
affected by the closure of stores in the Latvian market. Operating
expenses in the 12 months amounted to 9,551 thousand euros,
decreasing by 34,5% that is 5,036 thousand euros due to the
strategic decision to close 27 unprofitable stores throughout the
Baltics. Other operating income totalled 59 thousand euros in the
fourth quarter, which is mainly the Latvian government's business
support for closed stores of 56 thousand euros.
The financial expenses for the year were 330
thousand euros and the income tax expense was 65 thousand euros due
to the change in the deferred tax reserve in the amount of 80
thousand euros. The net loss for the year was 2,900 thousand euros
(the amount for the same period last year was 376 thousand euros).
In addition, Group´s lockdown-related operating expenses were
approximately 30% higher than what Group has received through
various support schemes with a negative impact on our yearly result
estimated at around 500 thousand euros. Last year's profit included
a one-off positive reorganization impact in the amount of 5,905
thousand euros.
Baltika Group ended the year with cash and cash
equivalents of 614 thousand euros, using the bank's overdraft
facility in the amount of 1,985 thousand euros (out of the limit of
3,000 thousand euros) at the end of the year. Baltika will continue
to implement the strategy - develops modern high-quality products
in its women's fashion brand Ivo Nikkolo, which is available in
Estonia, Latvia, Lithuania, and in our e-store. There is a strong
focus on accessories, where a wide range of quality products is
available in all stores.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
Note |
31 Dec 2021 |
31 Dec 2020 |
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
3 |
|
614 |
1,427 |
Trade and other receivables |
|
4 |
|
696 |
318 |
Inventories |
|
5 |
|
2,491 |
3,467 |
Total current assets |
|
|
|
3,801 |
5,212 |
Non-current assets |
|
|
|
|
|
Deferred income tax asset |
|
|
|
80 |
140 |
Other non-current assets |
|
4 |
|
172 |
111 |
Property, plant and equipment |
|
6 |
|
855 |
1,218 |
Right-of-use assets |
|
8 |
|
5,956 |
9,199 |
Intangible assets |
|
7 |
|
631 |
597 |
Total non-current assets |
|
|
|
7,694 |
11,265 |
TOTAL ASSETS |
|
|
|
14,495 |
16,477 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Borrowings |
|
9 |
|
364 |
252 |
Lease liabilities |
|
8 |
|
1,692 |
3,127 |
Trade and other payables |
10,11 |
|
2,438 |
3,019 |
Total current liabilities |
|
|
4,494 |
6,398 |
Non-current liabilities |
|
|
|
|
Borrowings |
9 |
|
2,425 |
874 |
Lease liabilities |
8 |
|
4,264 |
6,493 |
Total non-current liabilities |
|
|
6,689 |
7,367 |
TOTAL LIABILITIES |
|
11,183
13,765 |
|
|
|
EQUITY |
|
|
Share capital at par value |
12 |
5,408
5,408 |
Reserves |
12 |
4,431
3,931 |
Retained earnings |
|
-6,627
-6,250 |
Net profit (loss) for the period |
|
-2,900
-377 |
TOTAL EQUITY |
|
312
2,712 |
TOTAL LIABILITIES AND EQUITY |
|
11,495
16,477 |
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE
INCOME
Note 4Q 2021
4Q 2020 12m 2021 12m 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
13,14 |
2,614 |
3,978 |
11,770 |
19,480 |
Client bonus provision |
|
11,14 |
0 |
250 |
0 |
250 |
Revenue after client bonus provision |
|
|
2,614 |
4,228 |
11,770 |
19,730 |
Cost of goods sold |
|
15 |
-943 |
-2,006 |
-5,650 |
-10,054 |
Gross profit |
|
|
1,671 |
2,222 |
6,120 |
9,676 |
|
|
|
|
|
|
|
Distribution costs |
|
16 |
-1,960 |
-2,575 |
-8,084 |
-12,234 |
Administrative and general expenses |
|
17 |
-329 |
-408 |
-1,467 |
-2,353 |
Other operating income (-expense) |
|
18 |
-128 |
-318 |
926 |
5,442 |
Operating profit (loss) |
|
|
-746 |
-1,079 |
-2,505 |
531 |
|
|
|
|
|
|
|
Finance costs |
|
19 |
-79 |
-126 |
-330 |
-761 |
Profit (loss) before income tax |
|
|
-825 |
-1,205 |
-2,835 |
-230 |
|
|
|
|
|
|
|
Income tax expense |
|
|
-65 |
-147 |
-65 |
-147 |
|
|
|
|
|
|
|
Net profit (loss) for the period |
|
|
-890 |
-1,352 |
-2,900 |
-377 |
Total comprehensive income (loss) |
|
|
|
|
|
|
for the period |
|
|
-890 |
-1,352 |
-2,900 |
-377 |
|
|
|
|
|
|
|
Basic earnings per share from net profit (loss) |
|
|
|
|
|
|
for the period, EUR |
|
20 |
-0,01 |
-0,03 |
-0,05 |
-0,01 |
Diluted earnings per share from net profit (loss) |
|
|
|
|
|
|
for the period, EUR |
|
20 |
-0,01 |
-0,03 |
-0,05 |
-0,01 |
Flavio PeriniChairman of Management Board,
CEOflavio.perini@baltikagroup.com
- Baltika_Interim_report_4Q 2021
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