AS Ekspress Grupp: Consolidated unaudited interim report for Q4 and
12 months of 2022
In the 4th quarter of 2022, the revenue
of AS Ekspress Grupp totalled EUR 19.2 million and net profit
totalled EUR 2.4 million. The revenue for the 12-month period
totalled EUR 64.1 million, increasing by 20% as compared to the
previous year. The net profit for the 12-month period totalled EUR
4.1 million which is at the same level as in the previous year.
Digital revenue increased by 23% and digital revenue made up 78% of
the Group’s total revenue at the end of December.
The Group’s performance in 2022 was solid,
despite the extremely unstable environment and the related effects
in the economy. The Group’s revenue in the 4th quarter grew
strongly as compared to the same period in 2021. The consolidated
revenue for the quarter totalled EUR 19.2 million (Q4 2021: EUR
15.9 million), increasing by 20% as compared to the previous year.
The Group’s online advertising sales continued to grow at the time
when the total market did not increase. The Group’s media companies
managed to successfully increase their sales as opposed to their
competitors by offering better solutions to their advertising
customers in reaching consumers. 12-month revenue totalled EUR 64.1
million, also increasing by 20% as compared to the previous year.
In addition to advertising sales, 12-month revenue was also boosted
by the higher number of digital subscriptions and the growth in the
average price of both paper as well as digital products. Demand for
the events offered through the Group’s ticket business platforms
also picked up. The sales volumes of outdoor screens increased due
to the more extensive digital outdoor screen network where 27 new
screens were added.
The number of digital subscriptions of AS
Ekspress Grupp increased by 12% year-over-year by the end of
December 2022 and totalled 146.6 thousand subscriptions. The number
of digital subscriptions continued to grow rapidly, which is a
proof that the paid content model is sustainable and has an
increasingly more important role on the revenue side of the Group’s
media companies. Despite the fact that the expenses of the people
in the Baltic States are being more scrutinized due to inflation
and general price rally, reader’s interest in independent
journalism remained high because of the disturbing events last
year. Delfi’s solid market leadership position in all Baltic States
makes readers prefer the portal with the most comprehensive
content.
The earnings before interest, tax, depreciation
and amortisation (EBITDA) of Ekspress Grupp totalled EUR 3.8
million in the 4th quarter and EUR 8.9 million over the 12-month
period. EBITDA increased both in the 4th quarter as well as over
the 12-month period, by 19% and 8%, respectively. The Group has
found it challenging to maintain its EBITDA margin due to the
growth in input prices (primarily paper, printing and energy costs)
and the general pressure from the economic environment on wage
costs. Still, given the cost pressures, we are satisfied that due
to revenue growth, we managed to maintain the 12-month EBITDA
margin at around 14% (12 months 2021: 15%). The ability to maintain
profitability and react quickly, especially if market developments
are longer term than shown by current forecasts, will remain key
topics for the Group in subsequent periods.
The consolidated net profit in the 4th quarter
of 2022 totalled EUR 2.4 million and 12-month net profit totalled
EUR 4.1 million. 12-month net profit remained at the same level (12
months 2021: EUR 4.1 million). Despite the Group demonstrating
moderate, 8% EBITDA growth, net profit stayed at the same level as
in 2021. The higher loss of the joint venture AS Express Post for
the period and the increase of the Group’s depreciation charge due
to higher capital expenditures as compared to the same period last
year had a negative impact on the Group’s net profit in 2022. In
addition, the revenue for 2021 included one-off finance income in
the amount of EUR 0.4 million for fair value adjustment of the
future commitment related the purchase price of the ticket sales
platform.
In December 2022, the Group acquired a 100%
ownership interest in one of the most popular Lithuanian news
portals lrytas.lt. The acquisition of the news portal Lrytas forms
an organic part of the Group’s strategy. The main purpose for the
acquisition is the growth of the digital media business in the
region’s largest market. The news portal has an average of
420 000 daily readers (source: Gemius) and the portal’s
advertising revenue totals about EUR 3 million per year. The common
goal of Lrytas and Ekspress Grupp is to provide captivating and
independent content for its readers. After the transaction, Lrytas
will continue to operate as an independent media company.
The Management Board of Ekspress Grupp rates the
Group’s 12-month performance as positive: the Group managed to
increase its digital revenue base (both turnover and share of
digital revenue, as well as the number of digital subscribers) and
maintain decent profitability despite the unstable economic
environment and the growth of both input prices and wage costs.
This demonstrates that over the last two years, Ekspress Grupp has
managed to quickly and efficiently adapt to the changed economic
environment while adhering to its chosen strategy. Contradictory
future forecasts require the readiness to be flexible and react
promptly in the coming quarters.
At the end of the reporting period, the Group
had available cash in the amount of EUR 7.4 million and equity in
the amount of EUR 55.4 million (56% of total assets). The
comparable data as of 31 December 2021 were EUR 11.0 million and
EUR 53.7 million (57% of total assets), respectively. Given the
Group’s cash position, at 8 February 2023 the Group announced a
share buyback programme approved by the shareholders in May 2022.
In the buyback offer targeting all shareholders, the Group offers
shareholders from 15 February to 6 March 2023 the opportunity to
sell Ekspress Grupp’s shares back at the price of EUR 1.70 per
share. The maximum volume of shares to be bought back is up to EUR
1 million (up to 588,235 shares). The purpose of share buyback is
to take advantage of attractive market conditions to create value
for shareholders by buying back own shares and using them for the
reduction of share capital or for other purposes (e.g. sale of
shares or use them for share option program).
The results of the buyback offer may affect the
amount of dividends paid out of the Group's 2022 profits. The
Management Board will make a proposal regarding the dividends to be
paid out of the profit for 2022 along with the notice to call an
ordinary general meeting, proceeding from the previously approved
dividend policy and the volume of the shares to be bought back
under the share buyback offer. The Group will pay out at least 30%
of the last year’s net profit as dividends under the condition that
there will be sufficient monetary funds available to fund key
operations and make new strategic investments. In case the economic
environment significantly slows down or the cash flows are smaller
than expected for other reasons, the Group may lower the dividend
pay-out ratio or decide not to pay dividends.
Q4 AND 12 MONTHS RESULTS
REVENUE
In the 4th quarter of 2022, the consolidated
revenue totalled EUR 19.2 million (Q4 2021: EUR 15.9 million). The
revenue for the 4th quarter increased by 20% year-over-year. The
consolidated revenue for the 12 months of 2022 totalled EUR 64.1
million (12 months 2021: EUR 53.5 million). The revenue for the
12-month period increased by 20% year-over-year. This growth was
attributable to both online advertising revenue as well as digital
subscription revenue. The share of the Group’s digital revenue in
total revenue was 78% at the end of the 4th quarter of 2022 (at the
end of Q4 2021: 76% of total revenue). Digital revenue for the 12
months of 2022 increased by 23% as compared to the same period last
year.
PROFITABILITY
In the 4th quarter of 2022, the consolidated
EBITDA totalled EUR 3.8 million (Q4 2021: EUR 3.2 million). In the
4th quarter of 2022, EBITDA increased by 19% as compared to last
year and the EBITDA margin was 20% (Q4 2021: 20%). The consolidated
EBITDA for the 12 months of 2022 totalled EUR 8.9 million (12
months 2021: EUR 8.2 million). In the 12 months of 2022, EBITDA
increased by 8% as compared to the previous year and the EBITDA
margin was 14% (12 months 2021: 15%).
The consolidated net profit for the 4th quarter
of 2022 totalled EUR 2.4 million (Q4 2021: EUR 2.3 million). In the
4th quarter of 2022, net profit increased by 6% as compared to the
previous year. The consolidated net profit for the 12 months of
2022 totalled EUR 4.1 million (12 months 2021: EUR 4.1 million).
The Group demonstrated modest EBITDA growth of 8% while the net
profit stayed at the same level as in 2021. The net profit for 2022
declined due the higher loss of the joint venture AS Express Post
for the period and the Group’s higher depreciation charge resulting
from higher capital expenditures as compared to the same period
last year. In addition, the comparable base for 2021 is higher due
to recognition of one-off finance income in the amount of EUR 0.4
million for fair value adjustment of the future commitment related
to the purchase price of the ticket sales platform.
EXPENSES
In the 12 months of 2022, the cost of goods
sold, marketing, and general and administrative costs totalled EUR
60.0 million (12 months 2021: EUR 49.5 million). In the 12 months
of the year, operating expenses increased by EUR 10.5 million
(+21%). Staff costs in the amount of EUR 5.4 million (+20%)
increased the most. The significant growth in input expenses is
linked to the outsourcing of the printing service related to print
media as well as the home delivery service, total growth was EUR
1.0 million (+17%).
As of 31 December 2022, the Group employed 884
employees which is 143 more as compared to the same period last
year (31.12.2021: 741 employees). This growth is attributable to 66
employees who were transferred from the companies acquired, incl.
OÜ Geenius Meedia, ELTA news agency in Lithuania and the news
portal lrytas.lt acquired in December 2022. 77 employees were hired
in other companies in Estonia, Latvia and Lithuania. Given the high
inflationary and rising interest rate environment, we have
selectively adjusted the salaries of Group employees and set up
one-off support measures. In addition, cost reductions and
individual redundancies were carried out in Latvia already in the
3rd quarter of 2022, as its advertising sales have failed to meet
the Group’s internal targets.
In the 12 months of the year, the one-off
expenditure includes donations to Ukraine in the total amount of
EUR 0.2 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 inflationary environment
(in December 2022, inflation was 17.5% in Estonia, 20.0% in
Lithuania and 20.7% in Latvia as compared to the previous year)
which is currently one of the highest in the Eurozone. The
inflationary environment will be a challenge in 2023. However, the
positive news is that it is in a downward trend as compared to
October data. 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 7.4 million and equity in
the amount of EUR 55.4 million (56% of total assets). The
comparable data as of 31 December 2021 were EUR 11.0 million and
EUR 53.7 million (57% of total assets), respectively. As of 31
December 2022, the Group’s net debt was EUR 13.3 million (31
December 2021: EUR 6.1 million).
In the 12 months of 2022, the Group’s cash flows
from operating activities totalled EUR 8.0 million (12 months 2021:
EUR 8.1 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 12 months of 2022, the Group’s cash flows
from investing activities totalled EUR -10.6 million (12 months
2021: EUR 1.0 million, incl. the sale of a discontinued operation
in the amount of EUR 6.3 million), of which EUR -3.7 million was
related to development and acquisition of property, plant and
equipment and intangible assets, indicating higher investments in
products and technologies. In the 12 months of the year, the Group
invested EUR -1.9 million in new LED screens, which has been
partially funded with a finance lease.
In the 12 months of 2022, the Group’s cash flows
from financing activities totalled EUR -0.9 million (12 months
2021: EUR -4.4 million), of which EUR -2.4 was the dividend payment
to the shareholders of AS Ekspress Grupp. Financing activities also
include a net change in borrowings in the amount of EUR 3.3 million
and lease liabilities in the amount of EUR -1.8 million. When
making investments in 2022, the Group has used debt in moderate
amounts in the form of bank loans.
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 |
|
Q4 2022 |
Q4 2021 |
Change % |
12 months 2022 |
12 months 2021 |
Change % |
Media segment |
18 803 |
15 608 |
20% |
62 690 |
52 093 |
20% |
advertising revenue |
11 623 |
10 171 |
14% |
37 613 |
33 781 |
11% |
subscriptions (incl single-copy sales) |
4 677 |
3 629 |
29% |
16 819 |
13 311 |
26% |
marketplaces |
822 |
408 |
101% |
2 232 |
1 013 |
120% |
outdoor screens |
749 |
569 |
31% |
2 396 |
1 448 |
65% |
sale of other goods and services |
933 |
830 |
12% |
3 630 |
2 539 |
43% |
Corporate functions |
1 157 |
1 013 |
14% |
4 500 |
4 118 |
9% |
Inter-segment eliminations |
(776) |
(677) |
|
(3 050) |
(2 695) |
|
TOTAL GROUP |
19 185 |
15 943 |
20% |
64 141 |
53 516 |
20% |
incl. revenue from all digital channels |
15 342 |
12 610 |
22% |
49 928 |
40 453 |
23% |
% of revenue from all digital channels |
80% |
79% |
|
78% |
76% |
|
(EUR thousand) |
EBITDA |
|
Q4 2022 |
Q4 2021 |
Change % |
12 months 2022 |
12 months 2021 |
Change % |
Media segment |
4 175 |
3 449 |
21% |
10 183 |
8 927 |
14% |
Corporate functions |
(319) |
(245) |
-30% |
(1 122) |
(669) |
-68% |
Inter-segment eliminations |
(61) |
(15) |
|
(171) |
(18) |
|
TOTAL GROUP |
3 795 |
3 189 |
19% |
8 891 |
8 240 |
8% |
EBITDA margin |
Q4 2022 |
Q4 2021 |
12 months 2022 |
12 months 2021 |
Media segment |
22% |
22% |
16% |
17% |
TOTAL GROUP |
20% |
20% |
14% |
15% |
Consolidated balance sheet (unaudited)
(EUR thousand) |
31.12.2022 |
31.12.2021 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
7 448 |
10 962 |
Trade and other receivables |
11 661 |
9 323 |
Corporate income tax prepayment |
49 |
2 |
Inventories |
286 |
266 |
Total current assets |
19 444 |
20 553 |
Non-current assets |
|
|
Other receivables and investments |
1 580 |
1 671 |
Deferred tax asset |
60 |
42 |
Investments in joint ventures |
1 017 |
1 011 |
Investments in associates |
2 279 |
2 210 |
Property, plant and equipment |
8 736 |
7 964 |
Intangible assets |
66 720 |
60 807 |
Total non-current assets |
80 392 |
73 705 |
TOTAL ASSETS |
99 836 |
94 258 |
LIABILITIES |
|
|
Current liabilities |
|
|
Borrowings |
3 393 |
3 201 |
Trade and other payables |
19 004 |
17 664 |
Corporate income tax payable |
25 |
82 |
Total current liabilities |
22 422 |
20 947 |
Non-current liabilities |
|
|
Long-term borrowings |
21 948 |
19 018 |
Other long-term liabilities |
43 |
601 |
Total non-current liabilities |
21 991 |
19 619 |
TOTAL LIABILITIES |
44 413 |
40 566 |
EQUITY |
|
|
Minority interest |
147 |
140 |
Capital attributable to equity holders of parent
company: |
|
|
Share capital |
18 478 |
18 478 |
Share premium |
14 277 |
14 277 |
Treasury shares |
(334) |
(384) |
Reserves |
2 059 |
1 920 |
Retained earnings |
20 796 |
19 261 |
Total capital attributable to equity holders of parent
company |
55 276 |
53 552 |
TOTAL EQUITY |
55 423 |
53 692 |
TOTAL LIABILITIES AND EQUITY |
99 836 |
94 258 |
Consolidated statement of comprehensive income
(unaudited)
(EUR thousand) |
Q4 2022 |
Q4 2021 |
12 months 2022 |
12 months 2021 |
Continuing
operations |
|
|
|
|
Sales |
19 185 |
15 943 |
64 141 |
53 516 |
Cost of sales |
(13 473) |
(11 132) |
(48 185) |
(39 674) |
Gross
profit |
5 712 |
4 811 |
15 956 |
13 842 |
Other income |
263 |
320 |
789 |
929 |
Marketing
expenses |
(847) |
(766) |
(2 979) |
(2 359) |
Administrative
expenses |
(2 381) |
(2 013) |
(8 823) |
(7 435) |
Other expenses |
(7) |
(51) |
(146) |
(113) |
Operating
profit /(loss) |
2 740 |
2 301 |
4 797 |
4 864 |
Interest income |
9 |
9 |
36 |
35 |
Interest expenses |
(208) |
(172) |
(738) |
(709) |
Other finance
income/(costs) |
(14) |
401 |
179 |
339 |
Net finance
cost |
(214) |
239 |
(523) |
(335) |
Profit/(loss) on
shares of joint ventures |
85 |
(153) |
(242) |
(281) |
Profit/(loss) on
shares of associates |
(1) |
78 |
325 |
161 |
Profit /(loss)
before income tax |
2 610 |
2 465 |
4 357 |
4 409 |
Income tax
expense |
(173) |
(156) |
(302) |
(276) |
Net profit
/(loss) from continuing operations |
2 438 |
2 310 |
4 055 |
4 133 |
Net profit /(loss)
from discontinued operation |
0 |
0 |
0 |
(1 876) |
Net profit
/(loss) for the reporting period |
2 438 |
2 310 |
4 055 |
2 257 |
Net profit /(loss) for the reporting period attributable
to |
|
|
Equity holders of the parent company |
2 431 |
2 300 |
4 048 |
2 243 |
Minority interest |
7 |
10 |
7 |
14 |
Total
comprehensive income /(loss) |
2 438 |
2 310 |
4 055 |
2 257 |
Comprehensive income /(loss) for the reporting period
attributable to |
|
|
Equity holders of the parent company |
2 431 |
2 300 |
4 048 |
2 243 |
Minority interest |
7 |
10 |
7 |
14 |
Earnings per share (euro) - continuing
operations |
Basic earnings per share |
0.0801 |
0.0760 |
0.1335 |
0.1362 |
Diluted earnings per share |
0.0776 |
0.0734 |
0.1294 |
0.1316 |
Earnings per share (euro) |
|
Basic earnings per share |
0.0801 |
0.0760 |
0.1335 |
0.0742 |
Diluted earnings per share |
0.0776 |
0.0734 |
0.1294 |
0.0716 |
Consolidated cash flow statement
(unaudited)
(EUR thousand) |
12 months 2022 |
12 months 2021* |
Cash flows from operating activities |
|
|
Operating profit /(loss) for the reporting year |
4 797 |
3 060 |
Adjustments for (non-cash): |
|
|
Depreciation and amortisation |
4 084 |
4 162 |
(Gain)/loss on sale, write-down and impairment of property, plant
and equipment |
29 |
(10) |
Change in value of share option |
29 |
36 |
Loss on sale of discontinued operation |
0 |
2 077 |
Cash flows from operating activities: |
|
|
Trade and other receivables |
(1 939) |
(1 599) |
Inventories |
(9) |
(33) |
Trade and other payables |
2 188 |
1 464 |
Income tax paid |
(401) |
(281) |
Interest paid |
(767) |
(803) |
Net cash generated from operating activities |
8 011 |
8 073 |
Cash flows from investing activities |
|
|
Acquisition of subsidiaries/ associates (less cash acquired) and
other investments /cash paid-in equity-accounted investees |
(7 632) |
(3 325) |
Disposal of discontinued operation, net of cash disposed of |
0 |
6 326 |
Receipts of other investments |
10 |
51 |
Interest received |
2 |
3 |
Purchase of property, plant and equipment and intangible
assets |
(3 748) |
(2 786) |
Proceeds from sale of property, plant and equipment and intangible
assets |
66 |
3 |
Loans granted |
(30) |
(212) |
Loan repayments received |
86 |
156 |
Dividends received |
601 |
828 |
Net cash used in investing activities |
(10 645) |
1 044 |
Cash flows from financing activities |
|
|
Dividends paid |
(2 425) |
(3 028) |
Payment of lease liabilities |
(1 751) |
(1 814) |
Loans received / Repayments of bank loans |
3 296 |
864 |
Purchases of treasury shares |
0 |
(446) |
Net cash used in financing activities |
(880) |
(4 424) |
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS |
(3 514) |
4 693 |
Cash and cash equivalents at the beginning of the period |
10 962 |
6 269 |
Cash and cash equivalents at the end of the period |
7 448 |
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 as well as publishing of newspapers, magazines
and books. The Group also operates an electronic ticket sales
platform and ticket offices and provides an outdoor screen service
in Estonia and Latvia. Ekspress Grupp launched its operations in
1989 and it employs almost 1600 people.
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