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