AS Ekspress Grupp: Consolidated unaudited interim report for the
Third Quarter and Nine Months of 2021
In the 3rd quarter of 2021, the revenue
of AS Ekspress Grupp totalled EUR 13.3 million and the revenue for
the first nine months of the year totalled EUR 37.6 million. The
Group’s net profit for the 3rd quarter of 2021 was EUR 1.15 million
and the net profit for the first 9 months of the year was EUR 1.82
million. At the end of September, the share of the Group's digital
revenue was 74% of total revenue
In the 3rd quarter of 2021, the consolidated
revenue totalled EUR 13.3 million (3rd quarter 2020: EUR 10.9
million), increasing by 22%. The revenue growth is attributable to
the online advertising market which continues to grow as compared
to traditional media channels. The advertising customers have
adapted to the circumstances and the growth of the advertising
business in all countries demonstrates that the majority of
companies have been able to digitalise their businesses more; they
have opened or adapted their ways of trading to e-channels and the
need to advertise has recovered. However, the revenue of both
ticket sales platforms as well as outdoor screens continues to be
under pressure which is directly attributable to the effects of the
COVID-19 pandemic. The effect is especially evident in the Latvian
market where restrictions are currently considerably stricter than
in other countries.
The number of the digital subscriptions of AS
Ekspress Grupp increased by 75% by the end of September 2021 as
compared to the same period last year and was approximately 122
thousand subscriptions.
The additional growth in digital subscriptions
is primarily attributable to new customers and it demonstrates that
more readers who have not yet become subscribers to the Group's
products are being addressed. The Group is able to come up with
topics for an increasingly larger number of customers and thus
those readers who have read articles for free also decide to sign
up for digital subscriptions. The Group has also managed to keep
its current digital subscribers for a longer period of time,
lowering the share of those cancelling their subscriptions and
increasing the average life of the subscription.
The earnings before interest, tax, depreciation
and amortisation (EBITDA) of Ekspress Grupp totalled EUR 2.25
million in the 3rd quarter and EUR 5.05 million in the first 9
months of the year which is 38% and 62%, respectively, higher as
compared to the same period in 2020. Strong sales of online
advertising and digital subscriptions in all Baltic States and
continued cost reductions have helped improve profitability. The
net profit in the 3rd quarter totalled EUR 1.15 million which is
48% higher than in the same period last year. The net profit for
the first 9 months of the year totalled EUR 1.82 million which is
six times higher than in the same period last year (9 months 2020:
EUR 0.29 million).
At the beginning of September 2021, the Group
concluded an agreement to sell Printall AS. The transaction was
completed on 6 September 2021, as a result of which the Group
incurred a sales loss in the amount of EUR 2.3 million and
according to the agreement, after the adjustments to the sales
price, the Group received a net amount of EUR 6.3 million. At the
beginning of 2026, the Group will receive another EUR 0.7 million,
contingent upon the results of Printall in 2025. As a result of the
transaction, the Group will exit the business with high CAPEX
requirements that is not in line with the Group's digital revenue
growth strategy. Availability of new capital will provide
additional capacity for the Group to fund the digital area, both
organically as well as through making new acquisitions. In this
report, Ekspress Grupp presents the results for the 3rd quarter and
9 months of the current year as well as comparable periods in
compliance with the requirements of IFRS set for interim reports,
i.e. for its continuing operations. The loss from the sale of
Printall and its operating results have been recognised as
discontinued operations and are included in the Group's
comprehensive income statement.
As of 30 September 2021, the Group had available
cash in the amount of EUR 12.4 million (30 September 2020: EUR 5.8
million). The Group’s liquidity continues to be good. In order to
strengthen the Group’s liquidity position and make more effective
use of equity, the Group signed amendments to the loan agreements
with AS SEB Pank in July 2021. The maturity dates of loans were
extended by 5 years and monthly payments were reduced from EUR 0.2
million to EUR 0.06 million per month.
Due to its strong liquidity position and
additional available funds from the sale of Printall AS, the
Management Board of Ekspress Grupp made a proposition to the
shareholders on 13 October 2021 to distribute extraordinary
dividends of 10 euro cents per share in the total amount of EUR
3.03 million. Shareholder resolutions will be adopted without
calling an extraordinary general meeting on 4 November 2021. The
shareholders included in the share register of shareholders on 19
November 2021 will be entitled to receive dividends and dividends
will be distributed on 23 November 2021.
The Supervisory Board of AS Ekspress Grupp has
approved the Group's dividends policy according to which Ekspress
Grupp will distribute at least 30% of its annual profit as
dividends starting from 2022.
Q3 AND 9 MONTHS RESULTS
In accordance with the decision of the
extraordinary general meeting of shareholders of AS Ekspress Grupp
from 13 July 2021, AS Ekspress Grupp and OÜ Trükitung concluded a
sales agreement on 3 September 2021, according to which Ekspress
Grupp sold its 100% ownership interest in its subsidiary Printall
AS. The transaction was completed as of 6 September 2021. In the
consolidated interim report for the 3rd quarter and the first 9
months of the year, the information is presented about continuing
operations where the revenue and expenses of discontinued
operations are shown in a separate line in the comprehensive income
statement "Gain/-loss from discontinued operations". Until the
sale, the business of Printall AS used to be recognised a separate
printing services segment which the Group will disclose as a
discontinued operation starting from this period. In the
comprehensive income statement of the interim report and the
segment overview, the comparative information of continuing
operations has been restated. No restatements have been made to the
consolidated balance sheet and cash flows in accordance with the
requirements of IFRS. The assets of the printing services segment
continue to be consolidated line-by-line in the balance sheet as of
31 December 2020, because the sale of Printall AS was not yet
recognised as a discontinued operation as of 31 December 2020.
REVENUE
In the 3rd quarter of 2021, the consolidated
revenue from continuing operations totalled EUR 13.3 million (3rd
quarter 2020: EUR 10.9 million). Revenue increased by 22%
year-over-year in the 3rd quarter. Both advertising as well as
digital subscription revenue increased. The consolidated revenue
from continuing operations for the first nine months of 2021
totalled EUR 37.6 million (first nine months of 2020: EUR 31.0
million). At the end of the 3rd quarter of 2021, the share of the
Group's digital revenue accounted for 74% of total revenue (at the
end of 3rd quarter 2020: 69% of total revenue). Digital revenue
increased by 30% as compared to the same period last year.
PROFITABILITY
In the 3rd quarter of 2021, the consolidated
EBITDA of continuing operations totalled EUR 2.25 million (3rd
quarter 2020: EUR 1.63 million). In the 3rd quarter of 2021, EBITDA
increased by 38% as compared to the previous year and the EBITDA
margin was 17.0% (3rd quarter 2020: 14.9%). Strong sales of online
advertising, digital subscriptions and tight cost controls in all
Baltic States have helped to improve profitability. The
consolidated EBITDA of continuing operations for the first nine
months of 2021 totalled EUR 5.05 million (first nine months of
2020: EUR 3.12 million) increasing by 62% compared to last
year.
In the 3rd quarter of 2021, the consolidated net
profit from continuing operations totalled EUR 1.15 million (3rd
quarter 2020: EUR 0.77 million), which is EUR 0.37 million and 48%
higher as compared to 2020. The consolidated net profit from
continuing operations for the first nine months of 2021 totalled
EUR 1.82 million (first nine months of 2020: EUR 0.29 million),
which is EUR 1.53 million and 532% better as compared to 2020.
CASH POSITION
At the end of the reporting period, the Group
had available cash in the amount of EUR 12.4 million and equity in
the amount of EUR 54.4 million (61% of total assets). The
comparable data as of 30 September 2020, including the printing
services segment, were EUR 5.8 million and EUR 52.6 million (55% of
total assets), respectively. As of 30 September 2021, the Group's
net debt was EUR 6.2 million (30 September 2020: EUR 16.5 million).
As of 30 September 2021, the cash position was positively impacted
by net cash proceeds from the sale of the ownership interest in
Printall AS in the amount of EUR 6.3 million (incl. premature
payment of the outstanding loan balance of Printall AS to AS SEB
Pank under the loan contract in the amount of EUR 2.06 million, see
Note 7).
The cash position in 2020 was impacted by the
agreements concluded with the banks due to the COVID-19 related
state of emergency. Agreements were concluded with AS SEB Pank to
suspend loan payments in the period March-August 2020 (EUR 1.2
million) and with AS Citadele banka in the period of June-November
2020 (EUR 0.3 million). The salary subsidy received from the
Estonian Unemployment Insurance Fund (EUR 1.14 million) and the
postponement of the payment of tax arrears (EUR 1.60 million) due
to the state of emergency for the period of 24 months had an
additional positive impact on the Group's cash position last
year.
DIVIDENDS AND DIVIDEND
POLICY
In conjunction with the sale of Printall AS, the
Group's Management Board has proposed to the shareholders to
distribute extraordinary dividends of 10 euro cents per share in
the total amount of EUR 3.03 million. Shareholder resolutions will
be adopted without calling the extraordinary general meeting of
shareholders on 4 November 2021. The shareholders included in the
register of shareholders on 19 November 2021 will be entitled to
receive dividends and dividends will be distributed on 23 November
2021.
The Supervisory Board of AS Ekspress Grupp has
approved the Group's dividends policy, according to which Ekspress
Grupp will pay at least 30% of the annual profit as dividends
starting from 2022.
Key financial indicators for
segments (continuing operations)
(EUR thousand) |
Sales |
|
Q3 2021 |
Q3 2020 |
Change % |
9 months 2021 |
9 months 2020 |
Change % |
12 months 2020 |
Media segment |
12 925 |
10 750 |
20% |
36 485 |
30 667 |
19% |
43 728 |
incl. revenue from all digital and online
channels |
10 061 |
7 812 |
29% |
27 664 |
21 338 |
30% |
30 963 |
% of revenue from all digital and online
channels |
78% |
73% |
|
76% |
70% |
|
71% |
Corporate functions |
999 |
693 |
44% |
3 106 |
1 728 |
80% |
2 761 |
Inter-segment eliminations |
(660) |
(529) |
|
(2 018) |
(1 417) |
|
(1 975) |
TOTAL GROUP |
13 265 |
10 914 |
22% |
37 573 |
30 978 |
21% |
44 514 |
% of revenue from all digital and online
channels |
76% |
72% |
|
74% |
69% |
|
70% |
(EUR thousand) |
EBITDA |
|
Q3 2021 |
Q3 2020 |
Change % |
9 months 2021 |
9 months 2020 |
Change % |
12 months 2020 |
Media segment |
2 401 |
1 729 |
39% |
5 478 |
3 491 |
57% |
6 601 |
Corporate functions |
(134) |
(90) |
-49% |
(423) |
(325) |
-30% |
(720) |
Inter-segment eliminations |
(16) |
(11) |
|
(3) |
(43) |
|
43 |
TOTAL GROUP |
2 251 |
1 628 |
38% |
5 051 |
3 122 |
62% |
5 924 |
EBITDA margin |
Q3 2021 |
Q3 2020 |
9 months 2021 |
9 months 2020 |
12 months 2020 |
Media segment |
19% |
16% |
15% |
11% |
15% |
TOTAL GROUP |
17% |
15% |
13% |
10% |
13% |
Consolidated balance sheet (unaudited)
(EUR thousand) |
30.09.2021 |
31.12.2020 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
12 364 |
6 269 |
Trade and other receivables |
8 858 |
9 450 |
Corporate income tax prepayment |
209 |
7 |
Inventories |
312 |
2 756 |
Total current assets |
21 743 |
18 482 |
Non-current assets |
|
|
Other receivables and investments |
1 662 |
982 |
Deferred tax asset |
30 |
30 |
Investments in joint ventures |
1 007 |
1 661 |
Investments in associates |
2 094 |
2 253 |
Property, plant and equipment |
6 191 |
14 134 |
Intangible assets |
56 702 |
56 635 |
Total non-current assets |
67 687 |
75 696 |
TOTAL ASSETS |
89 430 |
94 177 |
LIABILITIES |
|
|
Current liabilities |
|
|
Borrowings |
1 671 |
3 613 |
Trade and other payables |
14 385 |
15 251 |
Corporate income tax payable |
130 |
81 |
Total current liabilities |
16 187 |
18 945 |
Non-current liabilities |
|
|
Long-term borrowings |
16 846 |
18 589 |
Other long-term liabilities |
2 046 |
2 025 |
Total non-current liabilities |
18 892 |
20 613 |
TOTAL LIABILITIES |
35 079 |
39 558 |
EQUITY |
|
|
Minority interest |
130 |
126 |
Capital and reserves attributable to equity holders of
parent company: |
|
|
Share capital |
18 478 |
18 478 |
Share premium |
14 277 |
14 277 |
Treasury shares |
(384) |
(209) |
Reserves |
1 911 |
1 758 |
Retained earnings |
19 939 |
20 189 |
Total capital and reserves attributable to equity holders
of parent company |
54 221 |
54 493 |
TOTAL EQUITY |
54 351 |
54 619 |
TOTAL LIABILITIES AND EQUITY |
89 430 |
94 177 |
Consolidated statement of comprehensive income
(unaudited)
(EUR thousand) |
Q3 2021 |
Q3 2020 |
9 months 2021 |
9 months 2020 |
12 months 2020 |
Continuing operations |
|
|
|
|
|
Sales |
13 265 |
10 914 |
37 573 |
30 978 |
44 514 |
Cost of sales |
(9 849) |
(8 482) |
(28 543) |
(24 874) |
(34 013) |
Gross profit |
3 415 |
2 432 |
9 030 |
6 105 |
10 501 |
Other income |
291 |
521 |
609 |
1 036 |
1 691 |
Marketing expenses |
(494) |
(478) |
(1 593) |
(1 376) |
(1 905) |
Administrative expenses |
(1 799) |
(1 529) |
(5 422) |
(4 718) |
(6 930) |
Other expenses |
(13) |
(20) |
(62) |
(88) |
(286) |
Operating profit /(loss) |
1 401 |
925 |
2 563 |
959 |
3 071 |
Interest income |
9 |
7 |
25 |
19 |
28 |
Interest expenses |
(175) |
(182) |
(537) |
(672) |
(860) |
Other finance income/(costs) |
(67) |
(28) |
(62) |
(46) |
634 |
Net finance cost |
(233) |
(204) |
(574) |
(699) |
(198) |
Profit/(loss) on shares of joint ventures |
42 |
99 |
(128) |
107 |
102 |
Profit/(loss) on shares of associates |
16 |
(48) |
83 |
(75) |
(129) |
Profit /(loss) before income tax |
1 226 |
773 |
1 944 |
292 |
2 846 |
Income tax expense |
(81) |
(1) |
(120) |
(3) |
(280) |
Net profit from continuing operations |
1 145 |
772 |
1 823 |
289 |
2 566 |
Net profit /(loss) from discontinued operation |
(2 230) |
310 |
(1 926) |
633 |
(30) |
Net profit /(loss) for the reporting period |
(1 085) |
1 081 |
(103) |
921 |
2 536 |
Net profit /(loss) for the reporting period attributable
to |
|
|
|
Equity holders of the parent company |
(1 087) |
1 074 |
(107) |
906 |
2 510 |
Minority interest |
2 |
7 |
4 |
15 |
26 |
Total comprehensive income /(loss) |
(1 085) |
1 081 |
(103) |
921 |
2 536 |
Comprehensive income /(loss) for the reporting period
attributable to |
|
|
Equity holders of the parent company |
(1 087) |
1 074 |
(107) |
906 |
2 510 |
Minority interest |
2 |
7 |
4 |
15 |
26 |
Earnings per share (euro) - continuing
operations |
|
|
|
|
|
Basic earnings per share |
0.04 |
0.03 |
0.06 |
0.01 |
0.09 |
Diluted earnings per share |
0.04 |
0.02 |
0.06 |
0.01 |
0.08 |
Earnings per share (euro) |
|
|
|
|
|
Basic earnings per share |
(0.04) |
0.04 |
0.00 |
0.03 |
0.08 |
Diluted earnings per share |
(0.03) |
0.03 |
0.00 |
0.03 |
0.08 |
Consolidated cash flow statement (unaudited)
(EUR thousand) |
9 months 2021 |
9 months 2020 |
12 months 2020 |
Cash flows from operating activities |
|
|
|
Operating profit for the reporting year |
709 |
1 593 |
3 078 |
Adjustments for (non-cash): |
|
|
|
Depreciation and amortisation |
3 349 |
2 974 |
3 968 |
(Gain)/loss on sale, write-down and impairment of property, plant
and equipment |
35 |
(1) |
986 |
Change in value of share option |
27 |
0 |
0 |
Loss on sale of discontinued operation |
2 077 |
0 |
0 |
Cash flows from operating activities: |
|
|
|
Trade and other receivables |
(1 370) |
1 880 |
3 274 |
Inventories |
(79) |
214 |
375 |
Trade and other payables |
337 |
327 |
(1 201) |
Cash generated from operations |
5 086 |
6 987 |
10 480 |
Income tax paid |
(272) |
(91) |
(263) |
Interest paid |
(405) |
(453) |
(903) |
Net cash generated from operating activities |
4 409 |
6 443 |
9 314 |
Cash flows from investing activities |
|
|
|
Acquisition of subsidiaries/ associates (less cash acquired) and
other investments /cash paid-in equity-accounted investees |
(201) |
(203) |
(425) |
Disposal of discontinued operation, net of cash disposed of |
6 326 |
0 |
0 |
Receipts of other investments |
51 |
84 |
16 |
Interest received |
3 |
1 |
2 |
Purchase of property, plant and equipment and intangible
assets |
(1 901) |
(1 623) |
(2 562) |
Proceeds from sale of property, plant and equipment and intangible
assets |
3 |
29 |
308 |
Loans granted |
(130) |
(187) |
(331) |
Dividends received |
828 |
150 |
150 |
Net cash used in investing activities |
4 978 |
(1 750) |
(2 841) |
Cash flows from financing activities |
|
|
|
Payment of lease liabilities |
(1 389) |
(693) |
(949) |
Change in overdraft |
0 |
(1 018) |
(1 018) |
Loans received / Repayments of bank loans |
(1 455) |
(868) |
(1 884) |
Proceeds from share issuance |
0 |
0 |
600 |
Purchases of treasury shares |
(446) |
0 |
(600) |
Net cash used in financing activities |
(3 290) |
(2 579) |
(3 851) |
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS |
6 096 |
2 114 |
2 621 |
Cash and cash equivalents at the beginning of the period |
6 269 |
3 647 |
3 647 |
Cash and cash equivalents at the end of the period |
12 364 |
5 760 |
6 269 |
Signe KukinGroup CFOAS Ekspress Grupp Telephone:
+372 669 8381
E-mail address: signe.kukin@egrupp.ee
AS Ekspress Grupp is the
leading Baltic media group whose key activities include web media
content production, publishing of newspapers and magazines. The
Group also manages the electronic ticket sales platform and ticket
sales sites in Latvia and Estonia. Ekspress Grupp that launched its
operations in 1989 employs almost 1400 people, owns leading web
media portals in the Baltic States and publishes the most popular
daily and weekly newspapers as well as the majority of the most
popular magazines in Estonia.
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