AS Ekspress Grupp: Consolidated unaudited interim report for Q2 and
6 months of 2023
The revenue of AS Ekspress Grupp for the 2nd
quarter of 2023 increased by 13% to EUR 18.5 million and EBITDA
increased by 8% to EUR 2.4 million. The revenue for the first 6
months of 2023 increased by 18% to EUR 35.3 million and EBITDA
increased by 25% to EUR 3.6 million as compared to last year. The
Group’s net profit for the 2nd quarter totalled EUR 0.6 million and
for the first 6 months it totalled EUR 0.2 million, decreasing by
71% as compared to the same period last year. At the end of June,
the share of digital revenue was 82% of the Group’s total revenue.
Digital revenue increased by 28% as compared to the same period
last year.
The Group continued to be successful in
increasing its sales volumes in both advertising and digital
subscriptions. The 2nd quarter was successful in terms of
increasing the market share in advertising as well as increasing
the average price of digital subscriptions. The Group’s 2nd
quarter’s revenue grew strongly and increased by 13% as compared to
the same period last year. In terms of the first 6 months of the
year, the total revenue increased by 18%. Excluding from revenue
the acquisitions made in Lithuania (news portal Lrytas and news
agency ELTA) in the second half of 2022, revenue growth was 12% in
the first 6 months of the year. Advertising revenue was strong in
Estonia and Lithuania where the market has been stable so far and
the volumes have remained at the same level as last year.
In Latvia, the total market volume decreased,
and the advertising revenue earned by Ekspress Group in Latvia is
about 4% less than last year. This decrease has been offset by the
increase in sales revenue of the ticket platform and digital
screens. The ticket platform operated by the Group successfully
sold the tickets for the Jubilee Song and Dance Festival held in
Riga, which increased both the number of tickets sold as well as
the company's sales.
The inflationary environment and high-interest
rates will increase the risks to advertising revenue in all Baltic
States in the second half of the year.
The number of digital subscriptions of AS
Ekspress Grupp increased by 24% year-over-year (Q2: 9%, 6 months:
20%) and totalled 175.4 thousand subscriptions. The number of the
Group’s digital subscriptions continued their fast growth in the
first 6 months of the year, making up an increasingly higher share
of the Group’s revenue base. The Group has added nearly 34 000
readers with digital subscriptions in the Baltic States over the
last year or 24% more as compared to the end of June last year. The
Group's digital revenue base is increasingly based on the sales
revenue from digital subscriptions. We have strengthened the
quality and volume of content offered by the Group's media
companies so as to be the leader in the field of digital
subscriptions in all Baltic States. The Group is moving towards its
strategic financial goals and aims to offer digital paid content to
at least 340 000 subscribers by the year 2026.
The earnings before interest, tax, depreciation
and amortisation (EBITDA) of Ekspress Grupp totalled EUR 2.4
million in the 2nd quarter, growing by 8%. The EBITDA in the first
6 months of the year totalled EUR 3.6 million, increasing by 25%.
Profitability was positively impacted by successful sales of online
advertising and digital subscriptions in Estonia and Lithuania, and
the volume growth of ticket sales platforms and digital outdoor
screens.
The net profit in the first 6 months of 2023
totalled EUR 0.2 million, which is 71% lower as compared to the
previous year. Including one-off extraordinary expenses, the net
loss for the first 6 months of the year totalled EUR -0.1 million.
The decrease in net profit is mainly due to the one-off costs
related to the liquidation of the home delivery services of Express
Post and its unprofitable operations in the first 6 months of the
year in the total amount of EUR -0.6 million. The home delivery
services of Express Post were liquidated in the first 6 months of
the year and one-off liquidation expenses and unprofitable
operations will no longer incur in the next quarters of the Group.
In addition, the level of net profit has been impacted by higher
interest rates resulting from the increase in the Euribor and
higher depreciation expenses resulting from the Group's
investments. The negative impact of interest is twofold and
manifested itself as an additional expense of EUR 0.3 million in
the results for the first 6 months of the year.
The Group’s liquidity is solid, and we consider
it important to keep liquidity reserves for possible new
acquisitions as well as for the possible economic cooldown. As of
30 June 2023, the Group’s monetary funds totalled EUR 6.1 million
(31.12.2022: EUR 7.4 million). In the first 6 months of the year,
the Group repurchased shares in the amount of EUR 1 million and
paid dividends to the shareholders in the amount of EUR 1.5
million. Thus, in the first 6 months of 2023 the Group made
payments to the shareholders in the total amount of EUR 2.5
million.
Q2 AND 6 MONTHS RESULTS
REVENUE
In the 2nd quarter of 2023, the consolidated
revenue totalled EUR 18.5 million (Q2 2022: EUR 16.4 million). The
revenue for the 2nd quarter increased by 13% year-over-year. The
consolidated revenue for the first 6 months of 2023 totalled EUR
35.3 million (6 months 2022: EUR 29.8 million). The revenue for the
first 6 months of the year increased by 18% as compared to the
previous year. This growth was attributable to both online
advertising revenue as well as digital subscription revenue. The
share of the Group’s digital revenue in total revenue was 82% in
the first 6 months of 2023 (6 months 2022: 76% of total revenue).
Digital revenue for the first 6 months of 2023 increased by 28% as
compared to the same period last year.
PROFITABILITY
In the 2nd quarter of 2023, the consolidated
EBITDA totalled EUR 2.4 million (Q2 2022: EUR 2.2 million). EBITDA
increased by 8% as compared to last year and the EBITDA margin was
13% (Q2 2022: 14%). In the first 6 months of 2023, the consolidated
EBITDA totalled EUR 3.6 million (6 months 2022: EUR 2.8 million).
EBITDA increased by 25% as compared to last year and the EBITDA
margin was 10% (6 months 2022: 9%). Profitability has been driven
by successful sales of online advertising and digital subscriptions
in Estonia and Lithuania, and the volume growth or ticket sales
platforms and digital outdoor screens.
In the 2nd quarter of 2023, the consolidated net
profit totalled 0.6 million (Q2 2022: EUR 1.3 million). In the
first 6 months of 2023, the consolidated net profit, excluding
extraordinary expenses, totalled EUR 0.2 million (6 months 2022:
EUR 0.8 million). In the first 6 months of 2023, the net profit
decreased by 71% as compared to last year. Including one-off
extraordinary expenses, the net loss for the first 6 months of the
year totalled EUR -0.1 million. The decrease in net profit is
mainly due to higher interest rates resulting from the increase in
the Euribor and higher depreciation expenses resulting from the
Group's investments. The negative impact of interest is twofold and
manifests itself as an additional expense of EUR 0.3 million in the
results for the first 6 months of the year. The results for the
first 6 months of the year were also impacted by the one-off costs
in the amount of EUR 0.3 million related to the liquidation of the
home delivery services of AS Express Post and the higher operating
loss in the amount of EUR 0.3 million earned by the joint venture
in the first 6 months of the year. Thus, the negative effect of the
liquidation and the unprofitable operations of Express Post on the
Group’s net profit was EUR 0.6 million higher than in the same
period last year. The home delivery services of Express Post were
liquidated in the first 6 months of the year and the Group will no
longer incur any additional losses on this business in the second
half of the year.
In the first 6 months of 2022, the positive
one-off impact on the net profit in the amount of EUR 0.2 million
was attributable to the profit which arose on the revaluation of
the final payment related to the acquisition of Biļešu
Paradīze.
EXPENSES
In the first 6 months of 2023, the cost of goods
sold, marketing, and general and administrative costs totalled EUR
34.0 million (6 months 2022: EUR 29.2 million). Operating expenses
increased by EUR 4.8 million (+17%) as compared to the same period
last year. Labour costs increased the most, by EUR 2.9 million
(+18%).
In the first 6 months of 2023, the Group
employed 974 employees on average which is 112 employees more as
compared to the same period last year (6 months 2022: 862
employees). This growth is attributable to 88 employees who were
transferred from the acquired companies, incl. ELTA news agency in
Lithuania acquired in May 2022 and the news portal lrytas.lt
acquired in December 2022. 24 employees were hired from other
companies in Estonia, Latvia and Lithuania.
CASH POSITION
At the end of the reporting period, the Group
had available cash in the amount of EUR 6.1 million and equity in
the amount of EUR 53.1 million (51% of total assets). The
comparable data as of 30 June 2022 were EUR 6.8 million and 52.1
million (56% of total assets), respectively. As of 30 June 2023,
the Group’s net debt totalled EUR 14.7 million (30 June 2022: EUR
10.5 million).
In the first 6 months of 2023, the Group’s cash
flows from operating activities totalled EUR 4.4 million (6 months
2022: EUR 2.6 million), 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 2023, the Group’s cash
flows from investing activities totalled EUR -1.5 million (6 months
2022: EUR -3.6 million), of which EUR -1.2 million was related to
the development and acquisition of tangible and intangible assets,
demonstrating higher investments in products and technologies. In
the first 6 months of the year, the Group invested EUR -0.9 million
in new LED screens using a finance lease.
In the first 6 months of 2023, the Group’s cash
flows from financing activities totalled EUR -4.3 million (6 months
2022: EUR -3.1 million), of which EUR -1.0 million is the share
buy-back and EUR -1.5 million is the dividend payment to the
shareholders of AS Ekspress Grupp. The financing activities also
include the net change in borrowings in the amount of EUR -0.8
million and lease liabilities in the amount of EUR -0.9
million.
SHARE BUY-BACK AND DIVIDENDS
Within the framework of the share buy-back
programme, on 9 March 2023 AS Ekspress Grupp purchased 588 235
shares at the price of EUR 1.70 per share in the total amount of
EUR 1.0 million.
At the regular general meeting of shareholders
of AS Ekspress Grupp held on 4 May 2023, it was decided to pay a
dividend of 5 euro cents per share in the total amount of EUR 1.49
million. Dividends were paid to shareholders on 24 May 2023.
SEGMENT OVERVIEW
Key financial indicators for
segments
(EUR thousand) |
Sales |
|
Q2 2023 |
Q2 2022 |
Change % |
6M 2023 |
6M 2022 |
Change % |
12 months 2022 |
Media segment |
18 766 |
16 062 |
17% |
35 634 |
29 144 |
22% |
62 690 |
advertising revenue |
11 124 |
9 562 |
16% |
20 805 |
17 402 |
20% |
37 613 |
subscriptions (incl. single-copy sales) |
4 658 |
4 050 |
15% |
9 219 |
7 936 |
16% |
16 819 |
marketplaces |
603 |
475 |
27% |
1 239 |
828 |
50% |
2 232 |
outdoor screens |
837 |
637 |
31% |
1 526 |
1 039 |
47% |
2 396 |
sale of other goods and services |
1 543 |
1 338 |
15% |
2 845 |
1 938 |
47% |
3 630 |
Corporate functions |
1 081 |
1 090 |
-1% |
2 308 |
2 182 |
6% |
4 500 |
Inter-segment eliminations |
(1 320) |
(743) |
|
(2 658) |
(1 490) |
|
(3 050) |
TOTAL GROUP |
18 528 |
16 409 |
13% |
35 283 |
29 836 |
18% |
64 141 |
incl. revenue from all digital channels |
15 412 |
12 494 |
23% |
28 796 |
22 580 |
28% |
49 928 |
% of revenue from all digital channels |
83% |
76% |
|
82% |
76% |
|
78% |
(EUR thousand) |
EBITDA |
|
Q2 2023 |
Q2 2022 |
Change % |
6M 2023 |
6M 2022 |
Change % |
12 months 2022 |
Media segment |
2 643 |
2 501 |
6% |
4 121 |
3 394 |
21% |
10 183 |
Corporate functions |
(240) |
(261) |
8% |
(561) |
(491) |
-14% |
(1 122) |
Inter-segment eliminations |
(4) |
(24) |
|
(8) |
(70) |
|
(171) |
TOTAL GROUP |
2 399 |
2 216 |
8% |
3 552 |
2 832 |
25% |
8 891 |
EBITDA margin |
Q2 2023 |
Q2 2022 |
6M 2023 |
6M 2022 |
12 months 2022 |
Media segment |
14% |
16% |
12% |
12% |
16% |
TOTAL GROUP |
13% |
14% |
10% |
9% |
14% |
Consolidated balance sheet (unaudited)
(EUR thousand) |
30.06.2023 |
31.12.2022 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
6 111 |
7 448 |
Trade and other receivables |
17 298 |
11 661 |
Corporate income tax prepayment |
144 |
49 |
Inventories |
259 |
286 |
Total current assets |
23 813 |
19 444 |
Non-current assets |
|
|
Other receivables and investments |
1 580 |
1 580 |
Deferred tax asset |
69 |
60 |
Investments in joint ventures |
690 |
1 017 |
Investments in associates |
2 030 |
2 279 |
Property, plant and equipment |
9 165 |
8 736 |
Intangible assets |
66 982 |
66 720 |
Total non-current assets |
80 517 |
80 392 |
TOTAL ASSETS |
104 330 |
99 836 |
LIABILITIES |
|
|
Current liabilities |
|
|
Borrowings |
2 558 |
3 393 |
Trade and other payables |
25 734 |
19 004 |
Corporate income tax payable |
82 |
25 |
Total current liabilities |
28 375 |
22 422 |
Non-current liabilities |
|
|
Long-term borrowings |
22 852 |
21 948 |
Other long-term liabilities |
41 |
43 |
Total non-current liabilities |
22 893 |
21 991 |
TOTAL LIABILITIES |
51 268 |
44 413 |
EQUITY |
|
|
Minority interest |
0 |
147 |
Capital and reserves attributable to equity holders of parent
company: |
|
|
Share capital |
18 478 |
18 478 |
Share premium |
14 277 |
14 277 |
Treasury shares |
(1 057) |
(334) |
Reserves |
2 275 |
2 059 |
Retained earnings |
19 089 |
20 796 |
Total capital and reserves attributable to equity holders of
parent company |
53 062 |
55 276 |
TOTAL EQUITY |
53 062 |
55 423 |
TOTAL LIABILITIES AND EQUITY |
104 330 |
99 836 |
Consolidated statement of comprehensive income
(unaudited)
(EUR thousand) |
Q2 2023 |
Q2 2022 |
6M 2023 |
6M 2022 |
12 months 2022 |
Sales |
18 528 |
16 409 |
35 283 |
29 836 |
64 141 |
Cost of sales |
(14 107) |
(12 407) |
(27 748) |
(23 441) |
(48 185) |
Gross
profit |
4 422 |
4 002 |
7 535 |
6 395 |
15 956 |
Other income |
110 |
198 |
181 |
317 |
789 |
Marketing
expenses |
(791) |
(783) |
(1 362) |
(1 437) |
(2 979) |
Administrative
expenses |
(2 376) |
(2 170) |
(4 927) |
(4 317) |
(8 823) |
Other expenses |
(120) |
(43) |
(140) |
(85) |
(146) |
Operating profit
/(loss) |
1 245 |
1 205 |
1 287 |
873 |
4 797 |
Interest income |
10 |
9 |
19 |
19 |
36 |
Interest expenses |
(347) |
(178) |
(677) |
(347) |
(738) |
Other finance
income/(costs) |
(11) |
210 |
(21) |
197 |
179 |
Net finance
cost |
(347) |
41 |
(679) |
(131) |
(523) |
Profit/(loss) on
shares of joint ventures |
(242) |
(87) |
(795) |
(220) |
(242) |
Profit/(loss) on
shares of associates |
2 |
143 |
130 |
273 |
325 |
Profit /(loss)
before income tax |
658 |
1 302 |
(57) |
794 |
4 357 |
Income tax
expense |
(46) |
(31) |
(62) |
(36) |
(302) |
Net profit /(loss)
for the reporting period |
612 |
1 271 |
(118) |
759 |
4 055 |
Net
profit /(loss) for the reporting period attributable to |
|
Equity holders of the parent company |
613 |
1 272 |
(120) |
761 |
4 048 |
Minority interest |
(1) |
(1) |
2 |
(2) |
7 |
Total comprehensive
income /(loss) |
612 |
1 271 |
(118) |
759 |
4 055 |
Comprehensive income /(loss) for the reporting period
attributable to |
Equity holders of the parent company |
613 |
1 272 |
(120) |
761 |
4 048 |
Minority interest |
(1) |
(1) |
2 |
(2) |
7 |
Earnings per share (euro) |
Basic earnings per share |
0.0205 |
0.0419 |
(0.0040) |
0.0251 |
0.1335 |
Diluted earnings per share |
0.0199 |
0.0405 |
(0.0039) |
0.0242 |
0.1294 |
Consolidated cash flow statement (unaudited)
(EUR thousand) |
6M 2023 |
6M 2022 |
12 months 2022 |
Cash flows from operating activities |
|
|
|
Operating profit /(loss) for the reporting year |
1 287 |
873 |
4 797 |
Adjustments for (non-cash): |
|
|
|
Depreciation and amortisation |
2 265 |
1 959 |
4 084 |
(Gain)/loss on sale, write-down and impairment of property, plant
and equipment |
(4) |
2 |
29 |
Change in value of share option |
16 |
18 |
29 |
Cash flows from operating activities: |
|
|
|
Trade and other receivables |
(5 409) |
(1 385) |
(1 939) |
Inventories |
26 |
(27) |
(9) |
Trade and other payables |
6 885 |
1 572 |
2 188 |
Income tax paid |
(108) |
(262) |
(401) |
Interest paid |
(540) |
(181) |
(767) |
Net cash generated from operating activities |
4 420 |
2 569 |
8 011 |
Cash flows from investing activities |
|
|
|
Acquisition of subsidiaries/ associates (less cash acquired) and
other investments / cash paid-in equity-accounted investees |
(949) |
(1 971) |
(7 632) |
Receipts of other investments |
13 |
10 |
10 |
Interest received |
2 |
1 |
2 |
Purchase of property, plant and equipment and intangible
assets |
(1 232) |
(2 335) |
(3 748) |
Proceeds from sale of property, plant and equipment and intangible
assets |
3 |
40 |
66 |
Loans granted |
0 |
(30) |
(30) |
Loan repayments received |
0 |
86 |
86 |
Dividends received |
674 |
601 |
601 |
Net cash used in investing activities |
(1 489) |
(3 598) |
(10 645) |
Cash flows from financing activities |
|
|
|
Dividends paid |
(1 488) |
(2 425) |
(2 425) |
Payment of lease liabilities |
(940) |
(851) |
(1 751) |
Loans received / Repayments of bank loans |
(840) |
136 |
3 296 |
Purchases of treasury shares |
(1 000) |
0 |
0 |
Net cash used in financing activities |
(4 268) |
(3 140) |
(880) |
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS |
(1 337) |
(4 169) |
(3 514) |
Cash and cash equivalents at the beginning of the period |
7 448 |
10 962 |
10 962 |
Cash and cash equivalents at the end of the period |
6 111 |
6 793 |
7 448 |
Signe Kukin
Group CFO
AS Ekspress Grupp
Telephone: +372 669 8381
E-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 offices in Estonia and Latvia. Ekspress Grupp launched its
operations in 1989 and employs almost 1100 people.
Ekspress Grupp As (LSE:0JPX)
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Ekspress Grupp As (LSE:0JPX)
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