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Baltika’s Unaudited Financial Results, First Quarter of 2021

Baltika
·4-min read

Baltika Group ended the first quarter with a net loss of 1,655 thousand euros. The loss for the same period last year was 2,603 thousand euros. This signifies an improvement of 958 thousand euros despite the fact that 2020 first quarter was impacted from COVID-19 pandemia for less than one month opposed to current year.

The Group's sales revenue for the first quarter was 2,132 thousand euros, decreasing by 65% compared to the same period last year. Retail sales revenue in the first quarter decreased by 78%. The main reason for the decrease in retail sales was the second wave of COVID-19 and the restrictions in place in Latvia and Lithuania for full period and in Estonia fully from 11th March. Meanwhile e-com performance was very strong, and sales increased 89%.

The gross profit for the quarter was 873 thousand euros, decreasing by 1,874 thousand euros compared to the same period of the previous year (Q1 2020: 2,747 thousand euros) in line with the sales decrease. The company's gross profit margin was 40.9% in the first quarter, which is 3.9 percentage points lower than the margin of the first quarter of the previous year (Q1 2020: 44.8%). The decrease in gross profit margin is mainly because Estonian market was open and sales higher in January and February, which is sales period for all retails and the target set was to reduce prior year collections related inventory and increase Group´s cashflow with higher sales discounts.

The Group's distribution and administrative expenses in the first quarter were 2,636 thousand euros, decreasing by 47% i.e., 2,356 thousand euros compared to the same period last year. Over 70% of the decrease in expense relates to reduction in retail costs. The head-office distribution and administrative expense decreased a further 396 thousand euros compared to same period last year as all the changes in head-office took place after first quarter 2020.

Last year pandemic that saw the closing of stores for only a few weeks in the first quarter seems now nothing compared to what happened this year when half of market (Latvia and Lithuania) have been closed since mid of December 2020. Additionally, all our Estonian offline store were completely closed from 11th of March while different restrictions were already in place earlier. However, despite this unpredictability and difficult business scenario, Baltika managed to reach financial stability just in time and be proactive with stock management to remain in good financial position (only 66 thousand euros withdrawn from 3 000 thousand euros limit) to look forward for opening of offline stores to show the Ivo Nikkolo clothing collection and accessories.


Consolidated statement of financial position

31 March 2021

31 Dec 2020

ASSETS

Current assets

Cash and cash equivalents

356

1,427

Trade and other receivables

205

318

Inventories

3,651

3,467

Total current assets

4,212

5,212

Non-current assets

Deferred income tax asset

140

140

Other non-current assets

124

111

Property, plant and equipment

1,082

1,218

Right-of-use assets

8,079

9,199

Intangible assets

609

597

Total non-current assets

10,034

11,255

TOTAL ASSETS

14,246

16,477

LIABILITIES AND EQUITY

Current liabilities

Borrowings

347

252

Lease liabilities

3,139

3,127

Trade and other payables

3,479

3,019

Total current liabilities

6,959

6,398

Non-current liabilities

Borrowings

883

874

Lease liabilities

5,341

6,493

Total non-current liabilities

6,224

7,367

TOTAL LIABILITIES

13,189

13,765

EQUITY

Share capital at par value

5,408

5,408

Reserves

3,931

3,931

Retained earnings

-6,627

-6,250

Net profit (loss) for the period

-1,655

ˇ-377

TOTAL EQUITY

1,057

2,712

TOTAL LIABILITIES AND EQUITY

14,246

16,477


Consolidated statement of profit and loss and comprehensive income

1Q 2021

1Q 2020

Revenue

2,132

6,137

Cost of goods sold

-1,259

-3,390

Gross profit

873

2,747

Distribution costs

-2,141

-4,200

Administrative and general expenses

-495

-792

Other operating income (-expense)

234

37

Operating profit (loss)

-1,529

-2,474

Finance costs

-126

-266

Profit (loss) before income tax

-1,655

-2,603

Income tax expense

0

0

Net profit (loss) for the period

-1,655

-2,603

Basic earnings per share from net profit (loss)
for the period, EUR

-0.03

-0.05

Diluted earnings per share from net profit (loss)
for the period, EUR

-0.03

-0.05


Flavio Perini
Chairman of Management Board, CEO
flavio.perini@baltikagroup.com

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