Estonia, Good for Business, Markets and Companies, Retail

The sales revenue of the first nine months was 389.5 million euros; this result was better by 8.0% compared to the first nine months of 2013, when the sales revenue was 360.5 million euros.

The consolidated unaudited net profit of the group during the third quarter of 2014 was 5.6 million euros; due to income tax paid on the share capital payment, this is 9.8% less than the profit of the same period in the previous year.

In the first nine months of 2014, the net profit of the group was 10.3 million euros that is 21.3% higher than the profit of the same period of the previous year, when the profit was 8.5 million euros. Profit before taxes was 12.7 million euros during the first nine months, demonstrating a 3.1% increase as compared to the same time previous year.

The group said that the sales revenue of the group during the third quarter was as high as expected, considering the new Selver stores and renewed selection; however, this was supported by the improved real purchase power of consumers resulting from increased wages and the decreased consumer prices, similarly to the increase of retail sales in the entire Estonia. Overall, most of the group segments demonstrated an increase in sales during the first nine months. Only the turnover of footwear segment has decreased during the first nine months due to reorganisation in key stores. According to Statistics Estonia, Estonia has experienced an overall drop in the retail turnover of the retail segment of department stores starting from February. The decrease was especially fast during summer months.

The turnover of the department store segment of the group started to decrease slightly during the third quarter, but still demonstrated a smaller-than-average decline in the country. Trade in the department stores of the group was rendered difficult by the traffic restrictions that were implemented because of the reconstruction of the streets in the centres of Tallinn and Tartu that made access to the department stores complicated. The net profit was higher by almost one fifth – this was achieved by optimising dividends and payments of the share capital. The group achieved a 3.1% growth of profit before taxes; despite this, the greatest challenge of the reporting period is finding opportunities to increase efficiency, in order to compensate for the increased labour expenses (the total increase was 14% in nine months). Overall, the marginal has been pressured by the renewed selection in the footwear segment during the first nine months.