Tallinna Vesi increased its sales and profit in the second quarter
July 28 2023 - 1:00AM
Tallinna Vesi increased its sales and profit in the second quarter
AS Tallinna
Vesi’s sales increased
to €15.41 million and operating
profit to €4.13 million
in the second quarter.
According to the
Company's interim report for the second
quarter of 2023, the increase in sales
resulted from price
increase to cover higher
production costs.
In the second quarter, sales from water services
provided to both private and commercial customers increased. Sales
revenue from water services sold to AS Tallinna Vesi’s commercial
customers was €4.42 million in the second quarter, which is 4.1%
more than last year. Sales from water services sold to private
customers increased 23.2%t compared to the same period last year
and totaled €6.15 million.
The Company’s operating profit was €4.13 million
in the second quarter. Operating profit grew by €1.05 million
compared to the second quarter of last year. The operating profit
for the six months of 2023 was €8.20 million, showing an increase
of €2.11 million from the previous year.
The Company’s net profit was €2.31 million in
the second quarter of 2023, which is €1.36 million more than in the
same period last year.
According to Aleksandr
Timofejev, Chief
Executive Officer of Tallinna Vesi, the increase in net profit is
related to the change of price for water services that was applied
from the fourth quarter of last year. “The recovery in net profit
was driven by the increase in production costs being reflected in
sales,” he explained.
The quality indicators remaining stable at high
levels indicate that Tallinna Vesi provides reliable water and
wastewater services – water samples taken during the six months of
2023 confirmed that tap water meets 100% of the high quality
standards established for drinking water. “High quality drinking
water is a valuable resource that cannot be taken for granted.
Behind the excellent water quality, there are many people, a lot of
strategic work and science,” Timofejev said.
Clean tap water has been ensured by an efficient
water treatment process, regular monitoring and ongoing
preventative maintenance work on the water network. “At the
beginning of 2023, we introduced the ice pigging technique for the
maintenance of water pipes, and in six months we have washed 73 km
of water network with ice,” Timofejev pointed out. Ice pigging is a
unique pipe cleaning technology in which an ice slurry made of
water and table salt is pumped through the pipeline.
Early in July this year, Tallinna Vesi provided
clean drinking water at the XIII Youth Song and Dance Festival
“Püha on maa” (“Sacred is the land”), by taking more than 100,000
litres of pure drinking water to the festival rehearsals and
performances. This way, Aleksandr Timofejev says, the singers,
dancers and the audience together managed to avoid the spending of
resources related to the production, transport and handling of more
than 200 thousand plastic bottles. At the Song and Dance Festival,
water was provided from water tanks, as well as from drinking water
taps that were set up at the Tallinn Song Festival Grounds and
Kalev Stadium. These taps are stationary and remain at the service
of the people of Tallinn and its visitors.
Wastewater analyses confirmed that the
wastewater treated in the second quarter contained significantly
less pollutants than required by law. This indicator is important
as the quality of treated effluent has a direct impact on the
Baltic Sea and on the environment. “In the six months of 2023, we
have taken 355 tons of debris, 89 tons of grit, 938 tons of
nitrogen and 126 tons of phosphorus out of the wastewater,”
Timofejev pointed out.
The level of water loss in the water network
dropped in the second quarter. Ongoing rehabilitation of water
pipes contribute to reducing water losses. In 2023, Tallinna Vesi
has rehabilitated 14 kilometers of networks and extensive
reconstruction works continue over the summer as planned.
The biggest project at the Wastewater Treatment
Plant in 2023 is the reconstruction of digesters, which will result
in Tallinna Vesi producing even more biogas from sludge generated
during the wastewater treatment process. In parallel, construction
works are currently underway at the Wastewater Treatment Plant at
Paljassaare for the construction of a cogeneration plant, which
will allow to produce not only the heat energy, but also most of
the electricity needed for the wastewater treatment process from
biogas in the future. The cogeneration plant is scheduled to be
launched in the fourth quarter.
AS Tallinna Vesi entered into loan agreements
totaling €131 million. The loan agreements concluded will
facilitate AS Tallinna Vesi’s capital investment program during
2023-2025. In 2023, the Company will invest €35 million to meet the
Company's strategy and the objectives set out in the Public Water
Supply and Sewerage System Development Plan adopted by the City.
The loan agreements will facilitate the following major projects:
reconstruction of digesters and construction of a combined heat and
power plant at the Wastewater Treatment Plant, reconstruction of
filters and clarifiers at the Water Treatment Plant, and
investments to the reconstruction and construction of networks.
On May 17-19, the very first ISO/IEC 27001:2013
certification took place and the certificate issued certifies that
our information security management system meets the requirements
of ISO/IEC 27001:2013. The certificate issued to AS Tallinna Vesi
is valid until 26/06/2026.
AS Tallinna Vesi is the largest water utility in
Estonia, providing services to more than 24,900 private customers
and businesses and 470,000 end consumers in Tallinn and its
surrounding municipalities. Tallinna Vesi is listed on the main
list of the Nasdaq Tallinn Stock Exchange. The largest
shareholdings in the Company are held by the City of Tallinn
(55.06%) and the energy group Utilitas (20.36%). 24.58% of the
Company's shares are free floating on the Nasdaq Tallinn stock
exchange.
Main financial indicators
€ millionexcept key ratios |
Quarters 2 |
Variance 2023/ 2022 |
6 months |
Variance 2023/ 2022 |
2023 |
2022 |
2021 |
2023 |
2022 |
2021 |
Sales |
15.41 |
13.00 |
12.97 |
18.5% |
30.01 |
25.05 |
24.75 |
19.8% |
Gross profit |
5.80 |
4.42 |
5.23 |
31.3% |
11.52 |
8.80 |
10.41 |
30.8% |
Gross profit margin % |
37.66 |
33.98 |
40.34 |
10.8% |
38.38 |
35.12 |
42.07 |
9.3% |
Operating profit before
depreciation and amortisation |
6.10 |
4.69 |
6.80 |
29.9% |
12.11 |
9.34 |
13.03 |
29.8% |
Operating profit before
depreciation and amortisation margin % |
39.57 |
36.09 |
52.44 |
9.6% |
40.37 |
37.26 |
52.63 |
8.4% |
Operating profit |
4.13 |
3.08 |
5.20 |
34.0% |
8.20 |
6.09 |
9.86 |
34.7% |
Operating profit - main business |
3.81 |
2.83 |
4.96 |
34.9% |
7.73 |
5.74 |
9.46 |
34.5% |
Operating profit margin % |
26.79 |
23.70 |
40.09 |
13.1% |
27.33 |
24.29 |
39.83 |
12.5% |
Profit before taxes |
3.41 |
2.98 |
5.11 |
14.5% |
6.93 |
5.88 |
9.68 |
17.9% |
Profit before taxes margin
% |
22.12 |
22.88 |
39.40 |
-3.3% |
23.11 |
23.48 |
39.10 |
-1.6% |
Net profit |
2.31 |
0.96 |
3.07 |
141.8% |
5.81 |
3.84 |
7.62 |
51.6% |
Net profit margin % |
15.02 |
7.36 |
23.70 |
104.1% |
19.37 |
15.31 |
30.80 |
26.6% |
ROA % |
0.90 |
0.38 |
1.21 |
137.4% |
2.27 |
1.52 |
2.22 |
48.8% |
Debt to total capital employed
% |
57.66 |
57.09 |
57.20 |
1.0% |
57.66 |
57.09 |
57.20 |
1.0% |
ROE % |
2.06 |
0.85 |
2.75 |
142.0% |
5.26 |
3.46 |
5.27 |
52.1% |
Current ratio |
1.31 |
1.81 |
2.75 |
-27.6% |
1.31 |
1.81 |
2.75 |
-27.6% |
Quick ratio |
1.24 |
1.75 |
2.69 |
-29.1% |
1.24 |
1.75 |
2.69 |
-29.1% |
Investments into fixed
assets |
5.77 |
2.85 |
5.57 |
16.6% |
10.44 |
7.73 |
5.63 |
35.1% |
Payout
ratio % |
- |
78.52 |
80.42 |
|
- |
78.52 |
80.42 |
|
Gross profit margin – Gross profit / Net salesOperating profit
margin – Operating profit / Net salesOperating profit before
depreciation and amortisation – Operating profit + depreciation and
amortisationOperating profit before depreciation and amortisation
margin – Operating profit before depreciation and amortisation /
Net salesNet profit margin – Net profit / Net salesROA – Net profit
/ Average Total assets for the periodDebt to Total capital employed
– Total liabilities / Total capital employedROE – Net profit /
Average Total equity for the periodCurrent ratio – Current assets /
Current liabilitiesQuick ratio – (Current assets – Stocks) /
Current liabilitiesPayout ratio – Total Dividends per annum/ Total
Net Income per annumMain business – water services related
activities, excl. connections profit and government grants,
construction services, doubtful receivables
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
€ thousand |
|
|
|
|
As of 30 June |
As of 31 December |
ASSETS |
|
|
|
Note |
2023 |
2022 |
2022 |
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
3 |
12,952 |
23,541 |
12,650 |
|
Trade receivables,
accrued income and prepaid expenses |
|
|
8,601 |
6,643 |
8,989 |
|
Inventories |
|
|
|
|
1,246 |
982 |
1,197 |
TOTAL
CURRENT ASSETS |
|
|
|
22,799 |
31,166 |
22,836 |
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
|
|
Property, plant,
and equipment |
|
|
4 |
236,263 |
215,830 |
229,869 |
|
Intangible
assets |
|
|
|
5 |
817 |
637 |
688 |
TOTAL NON-CURRENT ASSETS |
|
|
|
237,080 |
216,467 |
230,557 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
|
|
|
259,879 |
247,633 |
253,393 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
Leases |
|
|
|
955 |
662 |
883 |
|
Loans |
|
|
|
3,615 |
3,630 |
3,630 |
|
Trade and other
payables |
|
|
|
9,555 |
9,665 |
10,225 |
|
Prepayments |
|
|
|
|
3,313 |
3,296 |
3,749 |
TOTAL
CURRENT LIABILITIES |
|
|
|
17,438 |
17,253 |
18,487 |
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
|
|
|
|
Deferred income
from connection fees |
|
|
|
41,190 |
38,130 |
39,150 |
|
Leases |
|
|
|
|
2,105 |
1,063 |
1,607 |
|
Loans |
|
|
|
|
82,739 |
78,540 |
76,708 |
|
Provision for
possible third-party claims |
|
|
6 |
6,018 |
6,018 |
6,018 |
|
Deferred tax
liability |
|
|
|
|
264 |
303 |
496 |
|
Other
payables |
|
|
|
|
84 |
70 |
101 |
TOTAL NON-CURRENT LIABILITIES |
|
|
|
132,400 |
124,124 |
124,080 |
TOTAL
LIABILITIES |
|
|
|
|
149,838 |
141,377 |
142,567 |
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Share capital |
|
|
|
|
12,000 |
12,000 |
12,000 |
|
Share premium |
|
|
|
|
24,734 |
24,734 |
24,734 |
|
Statutory legal
reserve |
|
|
|
1,278 |
1,278 |
1,278 |
|
Retained earnings |
|
|
|
|
72,029 |
68,244 |
72,814 |
TOTAL EQUITY |
|
|
|
|
110,041 |
106,256 |
110,826 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY |
|
|
|
259,879 |
247,633 |
253,393 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
€ thousand |
|
|
|
Quarter 2 |
6 months |
For the year ended 31
December |
|
|
|
|
Note |
2023 |
2022 |
2023 |
2022 |
2022 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
7 |
15,405 |
13,002 |
30,005 |
25,054 |
54,558 |
Cost of
goods and services sold |
9 |
-9,603 |
-8,583 |
-18,490 |
-16,254 |
-37,660 |
GROSS
PROFIT |
|
|
5,802 |
4,419 |
11,515 |
8,80 |
16,898 |
|
|
|
|
|
|
|
|
|
|
Marketing
expenses |
9 |
-205 |
-189 |
-419 |
-388 |
-703 |
General
administration |
9 |
-1,317 |
-1,094 |
-2,620 |
-2,225 |
-4,399 |
Other
income (+)/ expenses (-) |
10 |
-153 |
-55 |
-275 |
-102 |
-476 |
OPERATING
PROFIT |
|
4,127 |
3,081 |
8,201 |
6,085 |
11,320 |
|
|
|
|
|
|
|
|
|
|
Financial
income |
|
11 |
26 |
1 |
36 |
3 |
8 |
Financial
expenses |
|
11 |
-747 |
-108 |
-1,302 |
-205 |
-682 |
PROFIT BEFORE TAXES |
|
3,406 |
2,974 |
6,935 |
5,883 |
10,646 |
|
|
|
|
|
|
|
|
|
|
Income tax |
12 |
-1,093 |
-2,017 |
-1,121 |
-2,047 |
-2,240 |
|
|
|
|
|
|
|
|
|
|
NET PROFIT FOR THE PERIOD |
|
2,313 |
957 |
5,814 |
3,836 |
8,406 |
COMPREHENSIVE INCOME FOR THE PERIOD |
|
2,313 |
957 |
5,814 |
3,836 |
8,406 |
|
|
|
|
|
|
|
|
|
|
Attributable profit to: |
|
|
|
|
|
|
Equity holders of
A-shares |
|
2,313 |
957 |
5,814 |
3,836 |
8,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
A-share (in euros) |
13 |
0,12 |
0,05 |
0,29 |
0,19 |
0,42 |
CONSOLIDATED STATEMENT OF CASH FLOWS
€ thousand |
|
6 months |
For the year ended 31
December |
|
|
|
Note |
2023 |
2022 |
2022 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
Operating
profit |
|
8,200 |
6,085 |
11,320 |
|
|
Adjustment for
depreciation/amortisation |
4,5,9,10 |
3,914 |
3,250 |
6,817 |
|
|
Adjustment for revenues from
connection fees |
10 |
-292 |
-269 |
-544 |
|
|
Other non-monetary
adjustments |
6 |
-157 |
0 |
0 |
|
|
Profit (-)/loss
(+) from sale of property, plant and equipment, and intangible
assets |
-22 |
-12 |
-32 |
|
Change in current
assets involved in operating activities |
343 |
-271 |
-2,841 |
|
Change
in liabilities involved in operating activities |
|
-526 |
-485 |
309 |
TOTAL CASH
FLOWS FROM OPERATING ACTIVITIES |
|
11,460 |
8,298 |
15,029 |
|
|
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
|
Acquisition of property, plant, and equipment, and intangible
assets |
-10,495 |
-7,351 |
-20,701 |
|
Compensations
received for construction of pipelines, incl. connection fees |
|
1,724 |
1,215 |
1,593 |
|
Proceeds from sale
of property, plant and equipment, and intangible assets |
|
24 |
13 |
53 |
|
Interest received |
|
36 |
3 |
9 |
TOTAL CASH
FLOWS USED IN INVESTING ACTIVITIES |
|
-8,711 |
-6,120 |
-19,046 |
|
|
|
|
|
|
|
CASH FLOWS USED IN FINANCING ACTIVITIES |
|
|
|
|
|
Interest
paid and loan financing costs, incl. swap interests |
|
-1,243 |
-218 |
-616 |
|
Lease
payments |
|
-593 |
-230 |
-524 |
|
Received
loans |
|
45,500 |
0 |
0 |
|
Repayment of
loans |
|
-39,318 |
-1,818 |
-3,636 |
|
Dividends
paid |
12 |
-6,515 |
-12,835 |
-12,835 |
|
Withheld income
tax paid on dividends |
12 |
-278 |
-95 |
-165 |
|
Income
tax paid on dividends |
12 |
0 |
0 |
-2116 |
TOTAL CASH FLOWS USED IN FINANCING ACTIVITIES |
|
-2,447 |
-15,196 |
-19,892 |
CHANGE IN CASH AND CASH EQUIVALENTS |
|
302 |
-13,018 |
-23,909 |
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE PERIOD |
|
12,650 |
36,559 |
36,559 |
CASH AND
CASH EQUIVALENTS AT THE END OF THE
PERIOD |
|
12,952 |
23,541 |
12,650 |
Marta Kuningas
Communications Specialist
AS Tallinna Vesi
(+372) 626 2200
marta.kuningas@tvesi.ee
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