Report
Shana Gavron

LHV Institutional Baltic Insight, February 4th, 2021

* Tallink Grupp’s (TAL1T ET’) PAX flows considerably deteriorated since October 2020, following the renewed movement restrictions for tourists imposed by the Finnish government at the end of September 2020. The trend continued in January this year, as additional travel limitations were introduced on 27th January. Please also refer to the table in the attachment.
* Tallinna Vesi (TVEAT ET) announced that a significant transaction and changes in the structure of shareholders are about to take place in the near future. On 3rd February 2021, the City of Tallinn (the ‘City’), United Utilities (Tallinn) B.V. (‘UU’), United Utilities PLC, and OÜ Utilitas (‘Utilitas’) entered into an agreement, whereby UU sells its whole 35.3% stake in TVE (a total of 7,060,870 A-shares) to the City and Utilitas in equal parts at a price of EUR 14.20 per share.
* Klaipedos Nafta (KNF1L LH) reported its Q4 2020 results on 29th January 2021, revealing a significant decline in revenues and deterioration in the underlying profitability. KNF’s reported financial figures are substantially impacted by IFRS 16 for lease accounting (effective from 1st January 2019) as well as the changed financing setup for the Floating Storage and Regasification Unit (‘FSRU’) vessel from the beginning of this year. Please also refer to the table in the attachment. Apranga APB (APG1L LH) announced that it has generated a total retail turnover (incl. VAT) of EUR 6.7m (-66.6% y-o-y) for January 2021. The turnover plummeted by 69.6% y-o-y and 84.4%y-o-y in Lithuania and Latvia, respectively, while it dropped 29.0% in Estonia.
Underlyings
Apranga

Apranga APB is a Lithuania-based company that is principally engaged in the retail trade of apparel. Apranga Group, which consists of a parent company Apranga APB and its 16 wholly owned subsidiaries (located in Lithuania, Estonia and Latvia) control numerous stores and outlets in such Baltic States as Lithuania, Latvia and Estonia. Apranga Group develops trade systems and single-brand stores of five different types: ZARA franchise stores; APRANGA family fashion stores; Aprangos Galerija young fashion; Dshop a Desigual brand franchise shops; CITY business fashion stores and a franchise store Betty Barclay in Latvia, and Luxury clothes, footwear and accessories stores, which comprise franchise stores, such as Emporio Armani, GF Ferre, Hugo Boss, MaxMara, Burberry Limited, Mados linija and others. In February 2014 it established a subsidiary Apranga MDE OU which operates Massimo Dutti stores in Estonia under agreement with Inditex.

AS Tallinna Vesi

Tallinna Vesi is a water utility in Estonia providing drinking water and wastewater disposal services to over 400,000 people in Tallinn and in several neighbouring municipalities. Co. has the exclusive right to provide water and sewerage services in Tallinn's main service area until the year 2020. Co.'s activities included the production, treatment and distribution of water; storm and wastewater disposal and treatment. Co.'s main operating activity principally comprises the sales of water and treatment of wastewater to domestic and commercial customers within and outside of the service area, and fees received from the City of Tallinn for operating and maintaining the storm water system.

Klaipedos Nafta AB

Klaipedos Nafta AB. Klaipedos Nafta AB is a Lithuania-based company involved in the export and import of oil products and crude oil. The Company's activities include transhipment of crude oil and oil products, unloads crude oil and oil products from tankers into railway cars, temporary storage of crude oil and oil products, determination of quality parameters of oil product, injects chemical additives into oil products, accepts oily water from ships, supply of fuel and water to ships and provides moors tankers. As of December 31, 2011, the Company's major shareholder was Lithuanian Ministry of Energy with a stake of 70.63%. On December 17, 2012, the Company registered its new subsidiary, LitGas, which specializes in the distribution of gas.

Tallink Group

Tallink Grupp AS is a ferry operator providing mini-cruise and passenger transport services in the Baltic Sea region. The Company also offers cargo services on the various routes between Finland-Sweden, Estonia-Finland, Estonia-Sweden, Finland-Germany, and Latvia-Sweden under the brand names of Tallink and Silja Line. In addition, the Group operates four hotels in Tallinn and one in Riga. As of March 28, 2013, the Company's major shareholder was Infortar AS with a stake of 35.81%.

Provider
LHV PANK
LHV PANK

LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.

The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.

The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.

Analysts
Shana Gavron

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