UK Markets close in 8 mins

AS Ekspress Grupp: Consolidated unaudited interim report for the Second Quarter and First Half-Year of 2022

  • Oops!
    Something went wrong.
    Please try again later.
·15-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
Ekspress Grupp
Ekspress Grupp

In the 2nd quarter of 2022, the revenue of AS Ekspress Grupp totalled EUR 16.4 million and net profit totalled EUR 1.27 million. The revenue in the first 6 months of 2022 increased by 23% year-over-year to EUR 29.8 million and net profit increased by 12% to EUR 0.76 million. Digital revenue contributed 76% to the Group’s total revenue at the end of June. Digital revenue increased by 28% as compared to the same period last year.

The Group’s performance in the 2nd quarter met expectations: the consolidated revenue totalled EUR 16.4 million (Q2 2021: EUR 13.3 million), increasing by 23% as compared to the previous year. The Group’s online advertising sales were strong, attributable to the total market growth as well as special digital advertising solutions offered to the customers. Advertising buyers continue to invest an increasing share of their funds in online channels which opens up new opportunities for Ekspress Group companies. In the first 6 months of the year, the revenue totalled EUR 29.8 million, increasing by 23% as compared to the last year. The growth in the first 6 months of the year was strong; however, the Group is aware of higher risks arising from weaker economy and a potential recession in the second half of the year. Net profit growth of 12% as compared to the previous year was hindered by a higher share of advertising sales through agencies which has a higher cost base for the Group, as well as higher labour and other input prices (primarily paper, energy and services).

The number of digital subscriptions of AS Ekspress Grupp increased by 34% by the end of June as compared to the same period last year and totalled 151 thousand subscriptions. In a year-over-year comparison, the number of digital subscriptions continued to demonstrate strong growth, but the growth rate slowed down slightly in the 2nd quarter this year. As expected, on the one hand this slowdown is related to the fact that the reference base as compared to previous periods continues to increase while on the other hand the overall inflation forces some consumers to regularly review their expenses. The average prices of digital subscriptions have considerably continued to grow year after year.

The earnings before interest, tax, depreciation and amortisation (EBITDA) of Ekspress Grupp totalled EUR 2.22 million in the 2nd quarter and EUR 2.83 million in the first 6 months of the year. EBITDA growth was 1% both in the 2nd quarter as well as in the 1st half of the year as compared to the same period in 2021. Due to the growth of input prices and the pressure of the general economic environment on labour costs, the Group’s EBITDA margin has fallen from 12% to 9%. We are aiming to find opportunities in the new economic environment for more efficient process management and revenue growth.

The consolidated net profit was EUR 1.27 million in the 2nd quarter of 2022 and EUR 0.76 million in the first half of 2022. The net profit in the first 6 months of 2022 increased by 12% as compared to last year.

In May, AS Ekspress Grupp entered into a contract to acquire the operations of the news agency ELTA in Lithuania. The acquisition of the news agency ELTA is part of the Group’s organic growth strategy. The key purpose of the transaction is to enhance and modernize a news agency with one hundred years of experience, by offering a modern and objective source of information for the Lithuanian media and foreign channels, and to foster competition in the Lithuanian news production market.

The business environment in the first half of 2022 was volatile and it will create insecurity for the future, requiring flexibility and quick responses from the Group. Over the last two years, the Group has demonstrated its ability to quickly adapt to difficult conditions and maintain profitability even in weak economic conditions.


Q2 AND 6 MONTHS RESULTS


REVENUE

In the 2nd quarter of 2022, the consolidated revenue totalled EUR 16.4 million (Q2 2021: EUR 13.3 million). The revenue for the 2nd quarter increased by 23% year-over-year. The consolidated revenue for the first 6 months of 2022 totalled EUR 29.8 million (first 6 months 2021: EUR 24.3 million). The revenue for the first 6 months increased by 23% year-over-year. This growth was attributable to both online advertising revenue as well as digital subscriptions revenue. The share of the Group’s digital revenue in total revenue was 76% at the end of the 2nd quarter of 2022 (at the end of the 2nd quarter 2021: 72% of total revenue). Digital revenue for the first 6 months of 2022 increased by 28% as compared to the same period last year.

PROFITABILITY

In the 2nd quarter of 2022, the consolidated EBITDA totalled EUR 2.22 million (Q2 2021: EUR 2.20 million). In the 2nd quarter of 2022, EBITDA increased by 1% as compared to the previous year and the EBITDA margin was 14% (Q2 2021: 17%). The consolidated EBITDA for the first 6 months of 2022 totalled EUR 2.83 million (6 months 2021: EUR 2.80 million). In the first 6 months of 2022, EBITDA increased by 1% as compared to the previous year and the EBITDA margin was 9% (6 months 2021: 12%).

The consolidated net profit for the 2nd quarter of 2022 totalled EUR 1.27 million (Q2 2021: EUR 1.12 million). In the 2nd quarter of 2022, the net profit increased by 13% as compared to the previous year. In the first 6 months of 2022, the consolidated net profit was EUR 0.76 million (6 months 2021: EUR 0.68 million). In the first 6 months of 2022, the net profit increased by 12% as compared to the previous year. The revaluation profit from the final acquisition instalment of Biļešu Paradīze in the amount of EUR 0.2 million had a one-off effect on the net profit for the 2nd quarter.

EXPENSES

In the first 6 months of 2022, the cost of goods sold, marketing, general and administrative costs totalled EUR 29.20 million (6 months 2021: EUR 23.42 million). In the first 6 months of the year, operating expenses increased by EUR 5.78 million (25%), of which staff costs totalled EUR 3.31 million (26%). In the 2nd quarter of 2022, the number of employees increased by 13 people as compared to the same period last year and as of 30 June 2022, there were 145 employees more working at the Group as compared to the previous year. This growth is attributable to 47 employees of OÜ Geenius Meedia that was acquired at the end of 2021 and 98 employees of other media companies in Estonia, Latvia and Lithuania. In addition to inflationary pressures on salary growth, the employee cost base has increased due to additional expenditure related to the editorial staffs covering the war in Ukraine.

In the first 6 months of the year, one-off expenditure includes donations to Ukraine in the total amount of EUR 0.14 million (Q2 2022: additional donations of EUR 0.05 million).

The war in Ukraine has had a major negative effect on the GDP growth in the Baltic States. As a result, the economy has slowed down and created a high inflation environment (in June 2022, inflation was 21.9% in Estonia, 21% in Lithuania and 19.3% in Latvia as compared to the previous year). The Group has neither any operations nor any assets in Ukraine and Russia, and therefore, the war has only an indirect impact on the Group.

CASH POSITION

At the end of the reporting period, the Group had available cash in the amount of EUR 6.8 million and equity in the amount of EUR 52.1 million (56% of total assets). The comparable data as of 30 June 2021, including the printing services segment, were EUR 4.2 million and EUR 55.4 million (59% of total assets), respectively. As of 30 June 2022, the Group’s net debt was EUR 15.7 million (31 December 2021: EUR 11.3 million).

In the first 6 months of 2022, the Group’s cash flows from operating activities totalled EUR 2.57 million (6 months 2021: EUR 1.99 million, incl. printing services segment) that were positively impacted by the ticket sales platforms in Estonia and Latvia. The sales activity of the Latvian ticket sales platform has recovered and is in a better position due to higher ticket prices as compared to the pre-Covid-19 period.

In the first 6 months of 2022, the Group’s cash flows from investing activities totalled EUR -3.60 million (6 months 2021: EUR -1.42 million), of which EUR -2.34 million was related to development and acquisition of property, plant and equipment, indicating higher investments in products and technologies. In the first 6 months of the year, the Group invested EUR -1.31 million in new LED screens, partly to be funded with finance lease in the second half of 2022.

In the first 6 months of 2022, the Group’s cash flows from financing activities totalled EUR -3.14 million (6 months 2021: EUR -2.64 million), of which EUR -2.43 million was the dividend payment to the shareholders of AS Ekspress Grupp. Financing activities also include a net change in borrowings and principal lease payments, where the changes made to SEB loan contracts entered into in summer 2021 had a positive impact. In the first 6 months of 2021, treasury shares were purchased in the amount of EUR 0.45 million.

DIVIDENDS

At the regular General Meeting of Shareholders of AS Ekspress Grupp held on 2 May 2022, it was decided to pay a dividend of 8 euro cents per share in the total amount of EUR 2.43 million. Dividends were paid to shareholders on 20 May 2022.


Key financial indicators for segments


(EUR thousand)

Sales

 

Q2 2022

Q2 2021

Change %

6M 2022

6M 2021

Change %

12 months 2021

Media segment

16 062

12 904

24%

29 144

23 560

24%

52 093

 incl. revenue from all digital and online channels

12 494

9 939

26%

22 580

17 603

28%

40 453

 % of revenue from all digital and online channels

78%

77%

 

77%

75%

 

78%

Corporate functions

1 090

1 054

3%

2 182

2 106

4%

4 118

Inter-segment eliminations

(743)

(652)

 

(1 490)

(1 357)

 

(2 695)

TOTAL GROUP

16 409

13 306

23%

29 836

24 308

23%

53 516

 % of revenue from all digital and online channels

76%

75%

 

76%

72%

 

76%


(EUR thousand)

EBITDA

 

Q2 2022

Q2 2021

Change %

6M 2022

6M 2021

Change %

12 months 2021

Media segment

2 501

2 281

10%

3 394

3 076

10%

8 927

Corporate functions

(261)

(111)

-136%

(491)

(289)

-70%

(669)

Inter-segment eliminations

(24)

33

 

(70)

13

 

(18)

TOTAL GROUP

2 216

2 204

1%

2 832

2 800

1%

8 240


EBITDA margin

Q2 2022

Q2 2021

6M 2022

6M 2021

12 months 2021

Media segment

16%

18%

12%

13%

17%

TOTAL GROUP

14%

17%

9%

12%

15%

 

Consolidated balance sheet (unaudited)

(EUR thousand)

30.06.2022

31.12.2021

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

6 793

10 962

Trade and other receivables

10 786

9 323

Corporate income tax prepayment

181

2

Inventories

293

266

Total current assets

18 053

20 553

Non-current assets

 

 

Other receivables and investments

1 617

1 671

Deferred tax asset

42

42

Investments in joint ventures

833

1 011

Investments in associates

2 170

2 210

Property, plant and equipment

9 100

7 964

Intangible assets

61 017

60 807

Total non-current assets

74 779

73 705

TOTAL ASSETS

92 831

94 258

LIABILITIES

 

 

Current liabilities

 

 

Borrowings

2 379

3 201

Trade and other payables

17 621

17 664

Corporate income tax payable

40

82

Total current liabilities

20 040

20 947

Non-current liabilities

 

 

Long-term borrowings

20 098

19 018

Other long-term liabilities

601

601

Total non-current liabilities

20 699

19 619

TOTAL LIABILITIES

40 739

40 566

EQUITY

 

 

Minority interest

138

140

Capital and reserves attributable to equity holders of parent company:

 

 

Share capital

18 478

18 478

Share premium

14 277

14 277

Treasury shares

(362)

(384)

Reserves

2 048

1 920

Retained earnings

17 513

19 261

Total capital and reserves attributable to equity holders of parent company

51 954

53 552

TOTAL EQUITY

52 092

53 692

TOTAL LIABILITIES AND EQUITY

92 831

94 258


Consolidated statement of comprehensive income (unaudited)

(EUR thousand)

Q2 2022

Q2 2021

6M 2022

6M 2021

12 months 2021

Continuing operations

 

 

 

 

 

Sales

16 409

13 306

29 836

24 308

53 516

Cost of sales

(12 407)

(9 691)

(23 441)

(18 693)

(39 674)

Gross profit

4 002

3 615

6 395

5 615

13 842

Other income

198

212

317

318

929

Marketing expenses

(783)

(682)

(1 437)

(1 099)

(2 359)

Administrative expenses

(2 170)

(1 747)

(4 317)

(3 623)

(7 435)

Other expenses

(43)

(25)

(85)

(49)

(113)

Operating profit /(loss)

1 205

1 373

873

1 162

4 864

Interest income

9

8

19

17

35

Interest expenses

(178)

(181)

(347)

(362)

(709)

Other finance income/(costs)

210

(11)

197

4

339

Net finance cost

41

(184)

(131)

(341)

(335)

Profit/(loss) on shares of joint ventures

(87)

(63)

(220)

(170)

(281)

Profit/(loss) on shares of associates

143

32

273

67

161

Profit /(loss) before income tax

1 302

1 157

794

718

4 409

Income tax expense

(31)

(34)

(36)

(39)

(276)

Net profit /(loss) from continuing operations

1 271

1 124

759

679

4 133

Net profit /(loss) from discontinued operation

0

123

0

304

(1 876)

Net profit /(loss) for the reporting period

1 271

1 247

759

982

2 257

Net profit /(loss) for the reporting period attributable to

 

 

 

Equity holders of the parent company

1 272

1 246

761

980

2 243

Minority interest

(1)

1

(2)

2

14

Total comprehensive income /(loss)

1 271

1 247

759

982

2 257

Comprehensive income /(loss) for the reporting period attributable to

Equity holders of the parent company

1 272

1 246

761

980

2 243

Minority interest

(1)

1

(2)

2

14

Earnings per share (euro) - continuing operations

Basic earnings per share

0.0419

0.0371

0.0251

0.0224

0.1362

Diluted earnings per share

0.0405

0.0357

0.0242

0.0216

0.1316

Earnings per share (euro)

Basic earnings per share

0.0419

0.0412

0.0251

0.0325

0.0742

Diluted earnings per share

0.0405

0.0396

0.0242

0.0312

0.0716


Consolidated cash flow statement (unaudited)

(EUR thousand)

6M 2022

6M 2021*

12 months
 2021*

Cash flows from operating activities

 

 

 

Operating profit /(loss) for the reporting year

873

1 524

3 060

Adjustments for (non-cash):

 

 

 

Depreciation and amortisation

1 959

2 281

4 162

(Gain)/loss on sale, write-down and impairment of property, plant and equipment

2

36

(10)

Change in value of share option

18

19

36

Loss on sale of discontinued operation

0

0

2 077

Cash flows from operating activities:

 

 

 

Trade and other receivables

(1 385)

(1 150)

(1 599)

Inventories

(27)

160

(33)

Trade and other payables

1 572

(390)

1 464

Income tax paid

(262)

(212)

(281)

Interest paid

(181)

(277)

(803)

Net cash generated from operating activities

2 569

1 992

8 073

Cash flows from investing activities

 

 

 

Acquisition of subsidiaries/ associates (less cash acquired) and
other investments / cash paid-in equity-accounted investees

(1 971)

(201)

(3 325)

Disposal of discontinued operation, net of cash disposed of

0

0

6 326

Receipts of other investments

10

51

51

Interest received

1

2

3

Purchase of property, plant and equipment and intangible assets

(2 335)

(1 268)

(2 786)

Proceeds from sale of property, plant and equipment and intangible assets

40

1

3

Loans granted

(30)

(82)

(212)

Loan repayments received

86

0

156

Dividends received

601

78

828

Net cash used in investing activities

(3 598)

(1 419)

1 044

Cash flows from financing activities

 

 

 

Dividends paid

(2 425)

0

(3 028)

Payment of lease liabilities

(851)

(954)

(1 814)

Loans received / Repayments of bank loans

136

(1 235)

864

Purchases of treasury shares

0

(446)

(446)

Net cash used in financing activities

(3 140)

(2 635)

(4 424)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(4 169)

(2 062)

4 693

Cash and cash equivalents at the beginning of the period

10 962

6 269

6 269

Cash and cash equivalents at the end of the period

6 793

4 207

10 962

*No adjustments have been made to the consolidated cash flows for 2021 in accordance with the requirements of IFRS. Cash flows related to the printing services segment are still consolidated line-by-line.


Signe Kukin
Group CFO
AS 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, magazines and books. The Group also operates an electronic ticket sales platform and ticket sales sites in Estonia and Latvia. Ekspress Grupp that launched its operations in 1989 employs more than 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.

Attachment


Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting