August 17th, 2016
Background Information
AS Linda Nektar is an Estonian-based beverage company with origins in the 1940s. The company is providing fermented beverages for the drinks industry focusing on unpacked fruit wines under a Business-to-Business model. The company’s production facility is located in a logistically favourable position relative to the Baltic and Northern European markets.
Extensive R&D efforts have led to breakthroughs in the field of aroma stripping and recovery and this, along with the planned geographical expansion, will be the key focal points in the coming years.
The shares of Linda Nektar are admitted to trading on Nasdaq Baltic First North Market.
The Certified Adviser for AS Linda Nektar is AS LHV Pank.
Report of activities
Management Report
The six-month results of the Company have been positive, meeting expectations with regard to increased production volumes and turnover. The sales revenue of AS Linda Nektar for the first six months of 2016 was 2,113,661 euros (first six months of 2015: 1,446,303 euros), showing a 46% y-o-y increase. The Company completed the first half of the year with a net profit of 411,552 euros. The net profit of the same period of the previous year was 242,090 euros, reflecting a 70% y-o-y increase. No changes were made in the product portfolio of the enterprise. Demand for the products of AS Linda Nektar have been generally stable.
AS Linda Nektar has continued its targeted investments in 2016. The investments included construction and repair works, purchases of production equipment for expanding and automating production as well as procurements in the aroma technology area developed by the enterprise. In total, 508,434 euros were invested in property, plant and equipment (first six months of 2015: 194,235 euros). Depreciation expenses in the first half of the year amounted to 167,848 euros (first six months of 2015: 107,697 euros), which have increased due to the aforementioned investments.
Development costs in the first half of the year amounted to 88,159 euros (first six months of 2015: 87,840 euros). In the first half of the 2016 financial year, the second and third payments in the total amount of 81,745 euros were received from the ‘Development project of Linda Nektar production enterprises’ supported by Enterprise Estonia. As at 30 June 2016, the targeted financing received is recorded on the balance sheet as a short-term liability in the final amount of 155,857 euros and that does not have an effect on the profit. Upon the completion of the project in the second half of 2016 and after the fulfilment of the related terms and conditions, the targeted financing will be recorded as operating income.
In the first half of the year, the enterprise paid dividends for the performance of the 2015 financial year in the amount of 141,760 euros. The income tax expense entailed in the payment of dividends to the shareholders amounted to 35,440 euros.
As at 30 June 2016, the enterprise had 11 employees - 1 member of the management and 3 supervisory board members. The salary expenses of the first six months of 2016 (including taxes) were 174,372 euros (first six months of 2015: 152,924 euros). Labour costs have increased due to employee salary increases and the payment of performance-related pay.
The enterprise continues to be mainly focused on product and technology development as well as plans concerning the introduction of new aroma technology and the expansion of production.
| Financial Ratios: | January - June 2016 | January - June 2015 | |
| Current Ratio = Current Assets/ Current Liabilities | x | 3.96 | 6.61 |
| Quick ratio = (Current Assets – Inventories) / Current Liabilities | x | 3.16 | 5.88 |
| Working Capital = Current Assets - Current Liabilities | 1,340,468 | 1,817,296 | |
| Equity Ratio = Total Equity / Total Assets | % | 89.55 | 91.47 |
| Net Profit Margin = Net Profit / Sales Revenue | % | 19.47 | 16.74 |
| Debt to Assets = Total Liabilities / Total Assets | x | 0.10 | 0.09 |
Kadri Rauba
CEO
Interim Financial Statements
The interim report is prepared according to the Accounting Principles Generally Accepted in Estonia. The interim report follows same accounting principles that were used in the annual report. Interim report is compiled in euros (EUR).
Balance sheet
(In euros)
| 30.06.2016 | 31.12.2015 | 30.06.2015 | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 744 903 | 991 984 | 1 359 386 |
| Receivables and prepayments* | 689 546 | 364 401 | 546 489 |
| Inventories | 359 642 | 339 693 | 235 517 |
| Total current assets | 1 794 091 | 1 696 078 | 2 141 392 |
| Non-current assets | |||
| Receivables and prepayments | 0 | 0 | 582 |
| Property, plant and equipment | 2 367 273 | 1 996 019 | 1 653 359 |
| Intangible assets | 179 193 | 209 860 | 3 911 |
| Total non-current assets | 2 546 466 | 2 205 879 | 1 657 852 |
| Total assets | 4 340 557 | 3 901 957 | 3 799 244 |
| Liabilities and equity | |||
| Liabilities | |||
| Current liabilities | |||
| Payables and prepayments | 297 766 | 210 703 | 249 984 |
| Government grants ** | 155 857 | 74 112 | 74 112 |
| Total current liabilities | 453 623 | 284 815 | 324 096 |
| Total liabilities | 453 623 | 284 815 | 324 096 |
| Equity | |||
| Issued capital | 1 575 109 | 1 575 109 | 1 575 109 |
| Share premium | 617 517 | 617 517 | 673 573 |
| Statutory reserve capital | 24 818 | 2 812 | 2 812 |
| Retained earnings (loss) | 1 257 938 | 981 564 | 981 564 |
| Profit for period (loss) | 411 552 | 440 140 | 242 090 |
| Total equity | 3 886 934 | 3 617 142 | 3 475 148 |
| Total liabilities and equity | 4 340 557 | 3 901 957 | 3 799 244 |
* Normal business fluctuations of production
** Grants received before the revenue recognition criteria are satisfied are recognised as a liability on the balance sheet. (IFRS for SMEs 24.4 (c)). Such liability shall be recognised on the balance sheet as non-current depending on when conditions attaching to the grant are met. (Estonian GAAP 12)
Income statement
(In euros)
| 01.01.2016 - 30.06.2016 | 01.01.2015 - 30.06.2015 | |
| Revenue | 2 113 661 | 1 446 303 |
| Changes in inventories of finished goods and work in progress | 18 642 | 36 743 |
| Raw materials and consumables used | -1 170 116 | -700 306 |
| Other operating expenses * | -173 020 | -247 780 |
| Employee expense | -174 372 | -152 924 |
| Depreciation and impairment loss (reversal) | -167 848 | -107 697 |
| Other expense | -1 | -204 |
| Operating profit (loss) | 446 946 | 274 135 |
| Other financial income and expense | 46 | 230 |
| Profit (loss) before tax | 446 992 | 274 365 |
| Income tax expense | -35 440 | -32 275 |
| Annual period profit (loss) | 411 552 | 242 090 |
* Technology development costs 88 159 euros (6 months 2015: 87 840 euros)
Statement of cash flows
(In euros)
| 01.01.2016 - 30.06.2016 | 01.01.2015 - 30.06.2015 | |
| Cash flows from operating activities | ||
| Profit (loss) | 446 946 | 274 135 |
| Adjustments | 0 | 0 |
| Depreciation and impairment loss (reversal) | 167 848 | 107 697 |
| Total adjustments | 167 848 | 107 697 |
| Changes in receivables and prepayments related to operating activities | -325 145 | -348 719 |
| Changes in inventories | -19 949 | 7 485 |
| Changes in payables and prepayments related to operating activities | 127 507 | 85 267 |
| Income tax refund (paid) | -35 440 | -32 275 |
| Proceeds from government grants * | 81 745 | 74 112 |
| Total cash flows from operating activities | -171 282 | -214 130 |
| Cash flows from investing activities | 0 | 0 |
| Purchase of property, plant and equipment and intangible assets | -548 879 | -209 546 |
| Interest received | 46 | 230 |
| Total cash flows from investing activities | -548 833 | -209 316 |
| Cash flows from financing activities | 0 | 0 |
| Proceeds from issuing shares | 0 | 820 002 |
| Dividends paid | -141 760 | -129 100 |
| Total cash flows from financing activities | -141 760 | 690 902 |
| Total cash flows | -247 081 | 649 288 |
| Cash and cash equivalents at beginning of period | 991 984 | 710 098 |
| Change in cash and cash equivalents | -247 081 | 649 288 |
| Cash and cash equivalents at end of period | 744 903 | 1 359 386 |
* 2nd and 3rd instalment of the “AS Linda Nektar Development Project” of Enterprise Estonia 81 745 euros
Statement of changes in equity
(In euros)
| Issued capital | Share premium | Statutory reserve capital | Retained earnings (loss) | Total | |
| 31.12.2014 | 28 116 | 0 | 2 812 | 2 511 228 | 2 542 156 |
| Profit for period (loss) | 0 | 0 | 0 | 242 090 | 242 090 |
| Issue of equity | 146 429 | 673 573 | 0 | 0 | 820 002 |
| Dividends paid | 0 | 0 | 0 | -129 100 | -129 100 |
| Other changes in equity | 1 400 564 | 0 | 0 | -1 400 564 | 0 |
| 30.06.2015 | 1 575 109 | 673 573 | 2 812 | 1 223 654 | 3 475 148 |
| 31.12.2015 | 1 575 109 | 617 517 | 2 812 | 1 421 704 | 3 617 142 |
| Profit for period (loss) | 0 | 0 | 0 | 411 552 | 411 552 |
| Issue of equity | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | 0 | 0 | 0 | -141 760 | -141 760 |
| Other changes in equity | 0 | 0 | 22 007 | -22 007 | 0 |
| 30.06.2016 | 1 575 109 | 617 517 | 24 819 | 1 669 489 | 3 886 934 |
* As of 30 June 2016 the Company had 53 shareholders.
Information prepared by: Kadri Rauba AS Linda Nektar CEO Address: Kobela Borough, Antsla vald, 66407 Võrumaa, Estonia Phone: +372 785 5768 E-mail: info@lindanektar.ee
