AS Tallinna Vesi´s financial results for the 4th quarter of 2021

The sales revenue of the Tallinna Vesi increased by 3.1% in 2021, reaching 53.29 million. The growth in sales revenue resulted from the increase in sales of construction services. Tallinna Vesi earned €14.93 million on sales in the 4th quarter of 2021.

In 2021, revenue from the sale of water services remained at a level similar to 2020. The revenue from construction services increased over the year, as a number of large pipe and road construction projects were carried out.

The sales from water services sold to commercial customers in the main service area increased by 1.5% in the 4th quarter, reaching €3.9 million. “The main contributor to the growth of sales revenue in the 4th quarter was the increase in water consumption in Tallinn’s hospitality and entertainment businesses,” Aleksandr Timofejev, Chief Executive Officer of AS Tallinna Vesi said. The sales revenue from services sold to private customers of Tallinna Vesi was €5 million in the 4th quarter, showing a decline of 1.8% compared to the year before.

The Company’s gross profit for the 4th quarter of 2021 was €4.8 million, showing a decrease of €0.8 million over the year. “The decrease in gross profit was related to higher cost of goods and services that were 34.4% more expensive than in the comparative period of the year before,” Timofejev said. The biggest impact came from the increase in the market price for electricity and the electricity costs, increasing by 139.1% due to that. The Company’s gross profit for 2021 amounted to €20.6 million, showing a decrease of €1.6 million compared to 2020.

The Company’s operating profit for the 4th quarter of the year was €3.4 million, showing a decrease of €2.3 million compared to the same period in 2020. The operating profit for 2021 amounted to €18.8 million, being 13.8% lower than in the same period of 2020. In addition to the increased electricity costs, the decrease in commercial profit was attributed to the retaining of the provision for potential third-party claims at the third quarter end level.

The Company’s net profit for the 4th quarter of 2021 was €3.2 million, showing a decrease of €2.2 million compared to the same period of 2020. The net profit for 2021 was €16.2 million, whereas in 2020 the same figure stood at €16.7 million.

The sale of construction services provided by the subsidiary Watercom grew 110.8% or 1.4 million euros in the 4th quarter compared to the previous year. The sales from construction services for 2021 totalled 7.3 million euros, growing 40.3% or 2.1 million euros compared to the same period the year before. The growth in revenue is mainly attributable to the pipe and road construction projects won in the procurements that were carried out in 2020 and 2021.

Tallinna Vesi has increased investments in fixed assets to secure sustainable infrastructure and continuity of its service. Investments in pipes increased significantly already in 2021, when a total of nearly 16 km of water and sewage pipes were reconstructed. The volume of investments in fixed assets planned for 2022 amounts to €25 million.

Over the next years, the investments will be planned based on the public water supply and sewerage development plan for the next 12 years, to be completed in cooperation with the City of Tallinn this year, and the pipe reconstruction program prepared in cooperation with the Tallinn Technical University. “The investments made and forthcoming will help us to secure high-quality drinking water for the people of Tallinn, but also keep the natural environment around us cleaner,” Timofejev said.

To provide additional value to customers through digitalization, the Company started installing remote water meters in 2021. „With smart meters, water metering becomes more accurate and there is no longer need for reporting the water meter readings. In the future, we will be able to proactively inform customers about water leaks. Also, remote water meters will allow to notify our customers when water leaks occur in their buildings,” Timofejev described. The plan is to cover the entire service area with remote water meters by 2026.

In addition to investments in the water and sewage network, the Company has started to reduce its environmental impact, by mapping its CO2 footprint last year. To reduce that footprint, 100% of the energy used in Tallinna Vesi’s facilities and in the treatment process is now generated from renewable energy resources. A cogeneration unit shall be set up in the wastewater treatment plant in Paljassaare, to allow the use of biogas from the wastewater treatment process to generate 30% of electricity and 100% of heat energy needed to run the treatment plant.

To finance these investments, the Company plans to use additional loan capital and continue with the established dividend policy.

Main financial indicators

€ million,
except key ratios
4th quarter Change 2021/ 2020 12 months Change 2021/ 2020
2021 2020 2019 2021 2020 2019
Sales 14.93 13.17 16.12 13.4% 53.29 51.72 63.42 3.0%
Gross profit 4.80 5.64 7.98 -14.7% 20.58 22.23 33.95 -7.4%
Gross profit margin % 32.17 42.78 49.49 -24.8% 38.61 42.97 53.53 -10.1%
Operating profit before depreciation and amortisation 5.10 7.41 12.72 -31.1% 25.30 28.07 38.18 -9.9%
Operating profit before depreciation and amortisation margin % 34.17 56.23 78.86 -39.2% 47.47 54.27 60.21 -12.5%
Operating profit 3.42 5.76 11.06 -40.6% 18.78 21.78 32.08 -13.8%
Operating profit – main business 2.91 5.51 10.82 -47.2% 17.52 20.88 31.19 -16.1%
Operating profit margin % 22.89 43.71 68.61 -47.6% 35.23 42.12 50.57 -16.3%
Profit before taxes 3.31 5.64 10.95 -41.3% 18.40 21.34 31.30 -13.8%
Profit before taxes margin % 22.19 42.85 67.93 -48.2% 34.52 41.27 49.36 -16.3%
Net profit 3.21 5.39 10.95 -40.5% 16.17 16.73 27.76 -3.4%
Net profit margin % 21.47 40.91 67.93 -47.5% 30.33 32.35 43.77 -6.2%
ROA % 1.26 2.12 4.21 -40.5% 6.32 6.45 10.83 -2.1%
Debt to total capital employed % 54.94 56.09 56.05 -2.1% 54.94 56.09 56.05 -2.1%
ROE % 2.82 4.92 9.95 -42.7% 14.20 14.69 25.43 -3.3%
Current ratio 2.83 3.85 5.48 42.3% 2.83 3.85 5.48 -26.5%
Quick ratio 2.79 3.80 5.44 43.2% 2.79 3.80 5.44 -26.6%
Investments into fixed assets 5.43 5.65 5.33 -3.9% 15.38 19.42 16.09 -20.8%
Payout ratio % na 77.70 72.05   na 77.70 72.05  

Gross profit margin – Gross profit / Net sales
Operating profit before depreciation and amortisation – Operating profit + depreciation and amortisation
Operating profit before depreciation and amortisation margin – Operating profit before depreciation and amortisation / Net sales
Operating profit margin – Operating profit / Net sales
Net profit margin – Net profit / Net sales
ROA – Net profit / Average Total assets for the period
Debt to Total capital employed – Total liabilities / Total capital employed
ROE – Net profit / Average Total equity for the period
Current ratio – Current assets / Current liabilities
Quick ratio – (Current assets – Stocks) / Current liabilities
Payout ratio – Total Dividends per annum/ Total Net Income per annum
Main business – water services related activities, excl. connections profit and government grants, construction services, doubtful receivables

STATEMENT OF COMPREHENSIVE INCOME 4th quarter 4th quarter   12 months 12 months
€ thousand 2021 2020   2021 2020
           
Revenue 14,931 13,172   53,294 51,717
Cost of goods and services sold -10,127 -7,537   -32,715 -29,491
GROSS PROFIT 4,804 5,635   20,579 22,226
           
Marketing expenses -130 -113   -462 -433
General administration expenses -1,047 -945   -4,438 -4,576
Other income (+)/ expenses (-) -209 1,180   3,099 4,567
OPERATING PROFIT 3,418 5,757   18,778 21,784
           
Financial income 1 3   8 31
Financial expenses -104 -116   -387 -473
PROFIT BEFORE TAXES 3,315 5,644   18,399 21,342
           
Income tax on dividends -108 -255   -2,234 -4,610
           
NET PROFIT FOR THE PERIOD 3,207 5,389   16,165 16,732
COMPREHENSIVE INCOME FOR THE PERIOD 3,207 5,389   16,165 16,732
           
Attributable profit to:          
Equity holders of A-shares 3,207 5,388   16,165 16,731
B-share holder 0.00 0.60   0.00 0.60
           
Earnings per A share (in euros) 0.16 0.27   0.81 0.84
Earnings per B share (in euros) 0 600   600 600
STATEMENT OF FINANCIAL POSITION    
€ thousand 31/12/2021 31/12/2020
     
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents 36,559 44,514
Trade receivables, accrued income and prepaid expenses 6,637 7,019
Inventories 702 701
TOTAL CURRENT ASSETS 43,898 52,234
     
NON-CURRENT ASSETS    
Property, plant and equipment 211,546 202,802
Intangible assets 729 629
TOTAL NON-CURRENT ASSETS 212,275 203,431
TOTAL ASSETS 256,173 255,665
     
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Current portion of long-term lease liabilities 421 393
Current portion of long-term loans 3,630 3,630
Trade and other payables 7,835 7,085
Prepayments 3,604 2,445
TOTAL CURRENT LIABILITIES 15,490 13,553
     
NON-CURRENT LIABILITIES    
Deferred income from connection fees 37,241 34,564
Leases 1,236 1,400
Loans 80,336 83,978
Provision for possible third party claims 6,018 9,628
Deferred tax liability 372 255
Other payables 60 32
TOTAL NON-CURRENT LIABILITIES 125,263 129,857
TOTAL LIABILITIES 140,753 143,410
     
EQUITY    
Share capital 12,000 12,000
Share premium 24,734 24,734
Statutory legal reserve 1,278 1,278
Retained earnings 77,408 74,243
TOTAL EQUITY 115,420 112,255
TOTAL LIABILITIES AND EQUITY 256,173 255,665
CASH FLOWS STATEMENT 12 months 12 months
€ thousand 2021 2020
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Operating profit 18,778 21,784
Adjustment for depreciation/amortisation 6,520 6,283
Adjustment for revenues from connection fees -510 -542
Other non-cash adjustments -3,610 -4,814
Profit/loss(+) from sale and write off of property, plant and equipment, and intangible assets -29 -14
Change in current assets involved in operating activities 380 140
Change in liabilities involved in operating activities 938 -215
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES 22,467 22,622
     
CASH FLOWS USED IN INVESTING ACTIVITIES    
Acquisition of property, plant and equipment, and intangible assets -13,734 -15,682
Compensations received for construction of pipelines, incl connection fees 2,892 1,998
Proceeds from sales of property, plant and equipment and intangible assets 29 32
Interest received 11 35
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES -10,802 -13,617
     
CASH FLOWS USE D IN FINANCING ACTIVITIES    
Interest paid and loan financing costs, incl swap interests -460 -719
Lease payments -408 -555
Repayment of loans -3,636 -3,636
Dividends paid -12,842 -19,888
Withheld income tax paid on dividends -158 -113
Income tax paid on dividends -2,116 -4,355
TOTAL CASH FLOW USED IN FINANCING ACTIVITIES -19,620 -29,266
     
CHANGE IN CASH AND CASH EQUIVALENTS -7,955 -20,261
     
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 44,514 64,775
     
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 36,559 44,514

Aleksandr Timofejev

CEO

Member of the Management Board

+372 62 62 200

[email protected]

Kristi Ojakäär

CFO

Member of the Management Board

+372 62 62 200

[email protected]

Attachment

  • Tegevusaruanne Q4’21 Eng


(GlobeNewsWire)