Baltika's unaudited financial results, first quarter of 2023
31 May 2023 - 3:00PM
Baltika's unaudited financial results, first quarter of 2023
Despite a challenging economic environment,
there are several areas where developments are moving in the right
direction for the Group. Processes related to cost optimization,
efficiency improvement, and profitability enhancement continue, and
decisions made in previous periods are already having a positive
impact on the Group's financial results.
The Group's total sales revenue for the first
quarter across all channels was 2,160 thousand euros, increasing by
4% compared to the same period last year (Q1 2022: 2,075 thousand
euros). The first-quarter gross profit was 1,150 thousand euros (Q1
2022: 849 thousand euros), representing a 35% increase compared to
the same period last year. The gross profit margin for this quarter
improved by 12 percentage points compared to the same time last
year and was 53%. The Group's operating loss in the first quarter
was 586 thousand euros, decreasing by 54% compared to the same
period last year. In the first quarter, e-commerce sales accounted
for 12% (Q1 2022: 16%) of the Group's total revenue.
In the first quarter of the year, we continued
working on updating our network of stores:
- In January, we closed our Ivo Nikkolo store in Vilnius
Akropolis shopping center in Lithuania due to the end of the lease
agreement. The new Ivo Nikkolo concept store opened in November
2022 in Vilnius Panorama shopping center in Lithuania has been
well-received by our former Vilnius Akropolis center
customers.
- In February, we reopened the Ivo Nikkolo brand store located at
Suur-Karja 14 address. The store was closed in November 2020 when
the legendary location of the Suur-Karja street store became
commercially challenging due to the absence of tourists during the
COVID pandemic.
- In March, we opened a new Ivo Nikkolo concept store in Latvia.
We replaced our old Ivo Nikkolo store in Galleria Riga shopping
center with a new Ivo Nikkolo conept store.
In February, the Group began preparations for
entering the Business-to-Business (B2B) market. In the B2B segment,
the Group's focus is on finding business partners for wholesale and
consignment sales both within and outside the Baltics. The goal of
entering the B2B segment is to support the growth of Ivo Nikkolo
product sales, increase brand awareness, and stabilize the Group's
liquidity position.
The Group has continued its commitment to
addressing environmental changes. At the beginning of January, we
joined the packaging circular system called Tango for e-commerce
platforms. The aim of joining the system is to reduce the amount of
single-use packaging waste generated from shopping on our
e-commerce platform. Our customers now have the option to order
their products in reusable packaging called Low imPACK and receive
a deposit refund upon returning the packaging. Among clothing
retail companies, the Group is the first to have joined the
e-commerce packaging circular system with its Ivo Nikkolo brand
e-store.
The Group's marketing and general administrative
expenses in the first quarter were 1,870 thousand euros, decreasing
by 15% compared to the same period last year (Q1 2022: 2,193
thousand euros). The Group has been able to effectively reduce
marketing and general administrative expenses through consistent
cost-cutting measures, efficiency improvements, and the closure of
unprofitable stores.
The Group's management evaluates the results of
the first quarter as positive. The Group managed to increase the
sales revenue of Ivo Nikkolo products and significantly improve the
gross profitability of the Group. The consistent increase in
efficiency and the closure of unprofitable stores have gradually
improved the Group's financial indicators. Increasing efficiency
will continue to be a focus for the Group going forward.
The Group remains committed to its chosen
strategy and continues its implementation by:
- Developing modern and high-quality products in its women’s
fashion brand, Ivo Nikkolo, which are available in Estonia, Latvia,
and Lithuania, as well as through the Group’s e-commerce platform
in other European countries.
- Continuing to enhance its omnichannel strategy and the
functionality of its e-commerce platform.
- Opening new Ivo Nikkolo concept stores in the Baltics.
- Exploring and developing new business opportunities both within
and outside the Baltics.
Ongoing quarter
The group's sales revenue for the period of April
1, 2023, to May 29, 2023, was 1,518 thousand euros, remaining at a
similar level compared to the same period last year (April 1, 2023,
to May 29, 2023: 1,532 thousand euros). The retail sales efficiency
(sales per square meter per month, EUR) was 114 EUR, increasing by
16% compared to the same period last year.
In April, Ivo Nikkolo presented a contemporary
feminine clothing and accessory collection at two of the largest
fashion events in the Baltics, namely Tallinn Fashion Week (April
1, 2023) and Riga Fashion Week (April 20, 2023).
On May 10, 2023, we closed our Ivo Nikkolo store in
Klaipeda Akropolis shopping center in Lithuania due to the
expiration of the lease agreement.
Consolidated statement of financial
position
|
March 31, 2023 |
Dec 31, 2022 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
129 |
222 |
Trade and other receivables |
3,165 |
3,285 |
Inventories |
2,066 |
1,960 |
Total current assets |
5,359 |
5,467 |
Non-current assets |
|
|
Deferred income tax asset |
91 |
91 |
Trade and other receivables |
2,796 |
2,756 |
Other non-current assets |
111 |
107 |
Property, plant, and equipment |
1,364 |
1,269 |
Right-of-use assets |
4,066 |
4,596 |
Intangible assets |
567 |
586 |
Total non-current assets |
8,994 |
9,405 |
TOTAL ASSETS |
14,353 |
14,872 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current liabilities |
|
|
Borrowings |
3,275 |
3,096 |
Lease liabilities |
1,493 |
1,813 |
Trade and other payables |
2,405 |
1,741 |
Total current liabilities |
7,173 |
6,650 |
Non-current liabilities |
|
|
Borrowings |
1,061 |
1,070 |
Lease liabilities |
2,908 |
3,296 |
Trade and other payables |
143 |
147 |
Total non-current liabilities |
4,113 |
4,513 |
TOTAL LIABILITIES |
11,286 |
11,163 |
|
|
|
EQUITY |
|
|
Share capital at par value |
5,408 |
5,408 |
Reserves |
4,431 |
4,431 |
Retained earnings (-losses) |
-6,772 |
-6,130 |
TOTAL EQUITY |
3,067 |
3,709 |
TOTAL LIABILITIES AND EQUITY |
14,353 |
14,872 |
Consolidated statement of profit or loss and other
comprehensive income
|
Q1 2023 |
Q1 2022 |
|
|
|
|
|
|
Revenue |
2,160 |
2,075 |
Cost of goods sold |
-1,010 |
-1,226 |
Gross profit |
1,150 |
849 |
|
|
|
Distribution costs |
-1,602 |
-1,831 |
Administrative and general expenses |
-268 |
-362 |
Other operating income (-expense) |
133 |
82 |
Operating profit (-loss) |
-586 |
-1,262 |
|
|
|
Interest income |
39 |
0 |
Interest expense |
-94 |
-83 |
Profit (-loss) before income tax |
-641 |
-1,345 |
|
|
|
Income tax expense |
0 |
0 |
|
|
|
Total comprehensive income (-loss) for the
period |
-641 |
-1,345 |
|
|
|
|
|
|
Basic earnings per share from net profit (-loss) for the period,
EUR |
-0.01 |
-0.02 |
|
|
|
Diluted earnings per share from net profit (-loss) for the period,
EUR |
-0.01 |
-0.02 |
Brigitta KippakChairman of The Management Board,
CEObrigitta.kippak@baltikagroup.com
- Baltika Interim Report 1Q 2023
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