AS Tallinna Vesi´s financial results for the 4th quarter of 2020

AS Tallinna Vesi’s sales revenue for the fourth quarter of 2020 were €13.17 million, showing a decrease of 18.3% compared to the same period last year. This was a result of reduced tariffs and lower commercial consumption, linked to the coronavirus outbreak.

Sales to private customers in the main service area decreased by 15.2% to €5.13 million, mainly resulting from the reductions in tariffs, that became effective already at the end of 2019. The impact of reduced tariffs was partly balanced by higher consumption of apartment blocks, which is the largest private customer segment of the Company. Again, this was linked to the coronavirus, and more people working from home, therefore increasing consumption.

In the main service area, the sales revenue from commercial customers dropped by 25.7% to €3.81 million, which was a consequence of lower tariffs, as well as 16.9% lower consumption by businesses. The hospitality sector has seen the greatest impact from the pandemic.

The gross profit for the 4^th quarter of 2020 was €5.64 million, showing a reduction of 29.4%, which is attributable to the lower sales revenue. The operating profit was €5.76 million, which is a reduction of €5.31 compared to the previous year. The main factors impacting the operating profit were reduced tariffs and lower sales revenues connected to a decline in consumption.

The net profit for the 4th quarter of 2020 was €5.39 million, showing a decrease of €5.56 million compared to the same period of 2019. The decline in the net profit, was predominantly a consequence of lower operating profits. Deferred tax also contributed to the decrease in net profit, whilst lower interest costs had a positive impact on profitability.

Coronavirus also had an impact on the construction sector in Tallinn, with many projects being postponed, causing a downturn in water and wastewater connections activity. In the 4th quarter, our subsidiary Watercom continued to work on the major projects secured in 2019, both in Tallinn and across Estonia. The sales revenue from constructions services for the 4^th quarter was €1.31 million, indicating a 31.1% decline compared to the same period of 2019. The decrease in revenue was largely due to the lower revenue from pipe construction services, which were partly balanced by higher revenues from road construction services.

On 28 January 2021, AS Tallinna Vesi acquired a full shareholding in the company with the business name ASTV Green Energy OÜ in the Republic of Estonia. The main business activity of the company is initially gas production. The company is a start-up and no active economic activity has been conducted.

MAIN FINANCIAL INDICATORS

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 debt

Karl Heino Brookes

Chairman of the Management Board

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