AS Ekspress Grupp: Consolidated unaudited interim report for the
First Quarter of 2022
In the 1st quarter of 2022, the revenue
of AS Ekspress Grupp increased by 22% to EUR 13.4 million and
EBITDA increased by 3% to EUR 0.62 million. Due to the seasonality
of the Group’s business, as expected the Group’s net loss in the
1st quarter of 2022 totalled EUR 0.51 million. Digital revenue
contributed 78% to the Group’s total revenue at the end of March.
Digital revenue increased by 36% as compared to the same period
last year.
The Group’s performance in the 1st quarter met
expectations: the consolidated revenue totalled EUR 13.4 million
(1st quarter 2021: EUR 11.0 million), increasing by 22% as compared
to the previous year. Revenue growth in the 1st quarter was
primarily attributable to the growth in online advertising and
digital subscription revenue. The total advertising market has not
changed substantially in terms of its size as compared to the
previous year, but the online advertising market has continued to
grow as compared to traditional media channels. Revenue growth was
as expected but it was still negatively impacted by Russia’s
offensive in Ukraine due to which several planned campaigns were
postponed by advertising customers, primarily in Lithuania and
Latvia. The wider impact of the war on the economies of the Baltic
States is currently difficult to predict. The revenue of Geenius
Meedia that was acquired at the end of 2021 totalled EUR 0.5
million in the 1st quarter, i.e. contributing ca 5% to the Group’s
sales.
The number of the digital subscriptions of AS
Ekspress Grupp increased by 50% by the end of March 2022 as
compared to the same period last year and totalled 146 thousand.
Õhtuleht and Delfi Lithuania demonstrated the strongest growth. The
growth of digital subscriptions also met expectations, but the
number of subscribers increased at the end of February, because
during turbulent times in the world, the readers are more
interested in high-quality and objective journalism.
The earnings before interest, tax, depreciation
and amortisation (EBITDA) of Ekspress Grupp totalled EUR 0.62
million in the 1st quarter which is 3% more as compared to the same
period in 2021. Due to the seasonality of the business, the Group
incurred a net loss of EUR 0.51 million in the 1st quarter. In the
1st quarter, the financial aid to Ukraine in the amount of EUR 0.09
million was recognised as a one-off expense. Operating expenses
increased by EUR 2.54 million (22%) in the 1st quarter of which
staff costs made up EUR 1.78 million (29%). In the 1st quarter, the
number of employees increased by 18%, i.e. by 132 people, 46
employees of whom came from OÜ Geenius Meedia acquired at the end
of 2021 and 86 employees from other media companies in Estonia,
Latvia and Lithuania. In addition to the pressure on wages due to
the general price inflation, the employee-related cost base has
increased on account of additional expenditures of the editorial
offices covering the warfare in Ukraine.
Due to the military operation launched in
Ukraine on 24 February, the editorial offices in all our media
companies are working 24/7. This will put enormous pressure on the
work of the editorial offices as well as journalists. Our editorial
offices are used to covering crises, and their work was reorganised
quickly and efficiently. Special Russian language portals targeting
Ukrainian refugees were launched operatively in Estonia, Latvia and
Lithuania. The real estate portal Kinnisvara24.ee that is co-owned
by Ekspress Grupp developed as special real estate environment at
the request of the Ministry of Social Affairs for the refugees who
wish to find accommodation, and for the people of Estonia who wish
to advertise accommodation for the Ukrainian refugees.
At the beginning of March, AS Ekspress Grupp, AS
Postimees Grupp and AS Eesti Post operating under the trademark of
Omniva concluded a contract, according to which Omniva will acquire
all shares of AS Express Post from the media houses. Before entry
into force, the transaction needs to be approved by the Estonia
Competition Authority that has up to 5 months to develop a
position. The operations of several parallel home delivery networks
are getting more complicated in Estonia each year, despite
continuous improvements of efficiency in both delivery
organisations and state subsidies in rural areas. The Group is keen
on offering affordable newspaper subscriptions for as long as
possible, and in a country the size of Estonia, the merger of
postal companies is the only possible outcome. As a result of the
merger of Express Post and Omniva, a larger and stronger postal
organisation will be established, from which all parties will gain,
primarily the subscribers of newspapers and magazines.
Q1 RESULTS
REVENUE
In the 1st quarter of 2022, the consolidated
revenue totalled EUR 13.4 million (1st quarter 2021: EUR 11.0
million). Revenue increased by 22% year-over-year in the 1st
quarter. Both online advertising as well as digital subscriptions
revenue contributed to this growth. The share of the Group’s
digital revenue in the total revenue was 78% at the end of the 1st
quarter of 2022 (at the end of the 1st quarter 2021: 70% of total
revenue). Digital revenue increased by 36% as compared to the same
period last year.
PROFITABILITY
In the 1st quarter of 2022, the consolidated
EBITDA totalled EUR 0.62 million (1st quarter 2021: EUR 0.60
million). In the 1st quarter of 2022, EBITDA increased by 3% as
compared to the previous year and the EBITDA margin was 5% (1st
quarter 2021: 5%). In the 1st quarter of 2022, the consolidated net
loss totalled EUR -0.51 million (1st quarter 2021: EUR -0.45
million).
EXPENSES
In the 1st quarter of 2022, the cost of goods
sold, marketing, and general and administrative costs totalled EUR
13.84 million (1st quarter 2021: EUR 11.30 million). In the 1st
quarter of 2022, operating expenses increased by EUR 2.54 million
(22%), of which staff costs were EUR 1.78 million (29%). In the 1st
quarter of 2022, the number of employees increased by 18% (+132
employees, incl. 46 employees from the acquisition of OÜ Geenius
Meedia at the end of 2021 and 86 employees from other media
companies in Estonia, Latvia and Lithuania). In addition to the
pressure on wages due to the general price inflation, the
employee-related cost base has increased on account of additional
expenditures of the editorial offices covering the warfare in
Ukraine.
In the 1st quarter, the financial aid to Ukraine
in the amount of EUR 0.09 million was recognised as a one-off
expense.
CASH POSITION
At the end of the reporting period, the Group
had available cash in the amount of EUR 8.9 million and equity in
the amount of EUR 53.2 million (57% of total assets). The
comparable data as of 31 March 2021, including the printing
services segment, were EUR 4.6 million and EUR 54.1 million (58% of
total assets), respectively. As of 31 March 2022, the Group’s net
debt was EUR 12.7 million (31 December 2021: EUR 11.3 million).
In the 1st quarter of 2022, the Group’s cash
flows from operating activities totalled EUR 0.54 million (1st
quarter 2021: EUR 0.54 million, incl. printing services
segment).
In the 1st quarter of 2022, the Group’s cash
flows from investing activities totalled EUR -1.80 million (1st
quarter 2021: EUR -0.70 million), of which EUR -1,63 million was
related to development and acquisition of property, plant and
equipment and intangible assets, indicating higher investments in
products and technologies. In the 1st quarter, the Group invested
EUR -1.18 million in new LED screens, partly to be funded with a
finance lease in the 2nd and 3rd quarter of 2022.
In the 1st quarter of 2022, the Group’s cash
flows from financing activities totalled EUR -0.82 million (1st
quarter 2021: EUR -1.54 million). Financing activities were
primarily related to the net changes in borrowings and principal
payments of the lease liability, where the changes made to SEB loan
contracts entered into in summer 2021 had a positive impact. In the
1st quarter of 2021, treasury shares were purchased in the amount
of EUR 0.42 million.
DIVIDENDS
In February 2022, the Management Board of the
Group made a proposal to the shareholders to distribute dividends
from the net profit of 2021 in the amount of 5 euro cents per
share, i.e. in the total amount of EUR 1.51 million. As of
28.04.2022, the shareholders Hans Luik and HHL Rühm OÜ have
submitted a new draft resolution to pay dividends of 8 euro cents
per share, i.e. in the total amount of EUR 2.42 million. The
decision on dividend distribution will be made at the General
Meeting of Shareholders on 2 May 2022.
Key financial indicators for
segments
(EUR thousand) |
Sales |
|
Q1 2022 |
Q1 2021 |
Change % |
12 months 2021 |
Media segment |
13 081 |
10 656 |
23% |
52 093 |
incl. revenue from all digital and online
channels |
10 434 |
7 663 |
36% |
40 453 |
% of revenue from all digital and online
channels |
80% |
72% |
|
78% |
Corporate functions |
1 092 |
1 052 |
4% |
4 118 |
Inter-segment eliminations |
(747) |
(706) |
|
(2 695) |
TOTAL GROUP |
13 426 |
11 002 |
22% |
53 516 |
% of revenue from all digital and online
channels |
78% |
70% |
|
76% |
(EUR thousand) |
EBITDA |
|
Q1 2022 |
Q1 2021 |
Change % |
12 months 2021 |
Media segment |
893 |
795 |
12% |
8 927 |
Corporate functions |
(230) |
(179) |
-29% |
(669) |
Inter-segment eliminations |
(46) |
(20) |
|
(18) |
TOTAL GROUP |
616 |
596 |
3% |
8 240 |
EBITDA margin |
Q1 2022 |
Q1 2021 |
12 months 2021 |
Media segment |
7% |
7% |
17% |
TOTAL GROUP |
5% |
5% |
15% |
Consolidated balance sheet (unaudited)
(EUR thousand) |
31.03.2022 |
31.12.2021 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
8 878 |
10 962 |
Trade and other receivables |
9 517 |
9 323 |
Corporate income tax prepayment |
120 |
2 |
Inventories |
272 |
266 |
Total current assets |
18 787 |
20 553 |
Non-current assets |
|
|
Other receivables and investments |
1 645 |
1 671 |
Deferred tax asset |
42 |
42 |
Investments in joint ventures |
1 041 |
1 011 |
Investments in associates |
2 367 |
2 210 |
Property, plant and equipment |
8 781 |
7 964 |
Intangible assets |
60 924 |
60 807 |
Total non-current assets |
74 801 |
73 705 |
TOTAL ASSETS |
93 587 |
94 258 |
LIABILITIES |
|
|
Current liabilities |
|
|
Borrowings (Note 5) |
2 754 |
3 201 |
Trade and other payables |
18 087 |
17 664 |
Corporate income tax payable |
73 |
82 |
Total current liabilities |
20 913 |
20 947 |
Non-current liabilities |
|
|
Long-term borrowings |
18 846 |
19 018 |
Other long-term liabilities |
601 |
601 |
Total non-current liabilities |
19 447 |
19 619 |
TOTAL LIABILITIES |
40 361 |
40 566 |
EQUITY |
|
|
Minority interest |
139 |
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 |
(367) |
(384) |
Reserves |
1 929 |
1 920 |
Retained earnings |
18 771 |
19 261 |
Total capital and reserves attributable to equity holders
of parent company |
53 088 |
53 552 |
TOTAL EQUITY |
53 227 |
53 692 |
TOTAL LIABILITIES AND EQUITY |
93 587 |
94 258 |
Consolidated statement of comprehensive income
(unaudited)
(EUR thousand) |
Q1 2022 |
Q1 2021 |
12 months 2021 |
Continuing operations |
|
|
|
Sales |
13 426 |
11 002 |
53 516 |
Cost of sales |
(11 034) |
(9 002) |
(39 674) |
Gross profit |
2 393 |
2 000 |
13 842 |
Other income |
119 |
106 |
929 |
Marketing expenses |
(655) |
(417) |
(2 359) |
Administrative expenses |
(2 147) |
(1 876) |
(7 435) |
Other expenses |
(42) |
(24) |
(113) |
Operating profit /(loss) |
(332) |
(211) |
4 864 |
Interest income |
10 |
9 |
35 |
Interest expenses |
(169) |
(181) |
(709) |
Other finance income/(costs) |
(14) |
16 |
339 |
Net finance cost |
(172) |
(157) |
(335) |
Profit/(loss) on shares of joint ventures |
(133) |
(107) |
(281) |
Profit/(loss) on shares of associates |
130 |
35 |
161 |
Profit /(loss) before income tax |
(508) |
(440) |
4 409 |
Income tax expense |
(4) |
(5) |
(276) |
Net profit /(loss) from continuing operations |
(512) |
(445) |
4 133 |
Net profit /(loss) from discontinued operation |
0 |
180 |
(1 876) |
Net profit /(loss) for the reporting period |
(512) |
(264) |
2 257 |
Net profit /(loss) for the reporting period attributable
to |
|
Equity holders of the parent company |
(511) |
(265) |
2 243 |
Minority interest |
(1) |
1 |
14 |
Total comprehensive income /(loss) |
(512) |
(264) |
2 257 |
Comprehensive income /(loss) for the reporting period
attributable to |
Equity holders of the parent company |
(511) |
(265) |
2 243 |
Minority interest |
(1) |
1 |
14 |
Earnings per share (euro) - continuing
operations |
|
Basic earnings per share |
(0.02) |
(0.01) |
0.14 |
Diluted earnings per share |
(0.02) |
(0.01) |
0.13 |
Earnings per share (euro) |
|
|
|
Basic earnings per share |
(0.02) |
(0.01) |
0.07 |
Diluted earnings per share |
(0.02) |
(0.01) |
0.07 |
Consolidated cash flow statement (unaudited)
(EUR thousand) |
Q1 2022 |
Q1 2021* |
12 months 2021* |
Cash flows from operating activities |
|
|
|
Operating profit /(loss) for the reporting year |
(332) |
4 |
3 060 |
Adjustments for (non-cash): |
|
|
|
Depreciation and amortisation |
948 |
1 111 |
4 162 |
(Gain)/loss on sale, write-down and impairment of property, plant
and equipment |
(7) |
(1) |
(10) |
Change in value of share option |
9 |
10 |
36 |
Loss on sale of discontinued operation |
0 |
0 |
2 077 |
Cash flows from operating activities: |
|
|
|
Trade and other receivables |
(214) |
192 |
(1 599) |
Inventories |
(6) |
10 |
(33) |
Trade and other payables |
378 |
(573) |
1 464 |
Cash generated from operations |
|
|
|
Income tax paid |
(131) |
(88) |
(281) |
Interest paid |
(104) |
(128) |
(803) |
Net cash generated from operating activities |
542 |
536 |
8 073 |
Cash flows from investing activities |
|
|
|
Acquisition of subsidiaries/ associates (less cash acquired) and
other investments /cash paid-in equity-accounted investees |
(257) |
(80) |
(3 325) |
Disposal of discontinued operation, net of cash disposed of |
0 |
0 |
6 326 |
Receipts of other investments |
0 |
51 |
51 |
Interest received |
1 |
2 |
3 |
Purchase of property, plant and equipment and intangible
assets |
(1 627) |
(628) |
(2 786) |
Proceeds from sale of property, plant and equipment and intangible
assets |
25 |
1 |
3 |
Loans granted |
(30) |
(40) |
(212) |
Loan repayments received |
86 |
0 |
156 |
Dividends received |
0 |
0 |
828 |
Net cash used in investing activities |
(1 803) |
(696) |
1 044 |
Cash flows from financing activities |
|
|
|
Dividends paid |
0 |
0 |
(3 028) |
Payment of lease liabilities |
(402) |
(498) |
(1 814) |
Loans received / Repayments of bank loans |
(420) |
(618) |
864 |
Purchases of treasury shares |
0 |
(422) |
(446) |
Net cash used in financing activities |
(823) |
(1 537) |
(4 424) |
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS |
(2 084) |
(1 697) |
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 |
8 878 |
4 571 |
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 KukinGroup CFOAS Ekspress Grupp Telephone:
+372 669 8381E-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.
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