Baltic States – CIS, Estonia, Markets and Companies, Retail, Textile

Revenue in the third quarter fell 46.5% to 17.3 million euros, whereas net profit moved up 46.6% from 3.6 million to 5.3 million euros, Silvano told the stock exchange late on Friday.

The business environment on Silvano's core markets remained intact during the third quarter of the year, the company said.

"Clearly enough for both the supply and demand side, the retailers in our core markets have to great extent adjusted their price point, reflected in somewhat higher price inflation in the consumer segment. Low demand for commodities, including oil, created worrying assumptions with regard to the value of the national currencies in our core markets – Russia, Belarus, Kazakhstan and others. Nevertheless, the countries indicated that some gunpowder is still left, somewhat winning back the losses against the major currencies of the world," it said.

On average, in the third quarter of 2015 the Russian rouble traded at a 46% to the euro compared to the third quarter of  2014, the Belarus rouble retreated by 33%, and the Ukrainian hryvnia depreciated by about 42%.

"On the other hand, we have noted some healthier trends in the economies of our core markets, that is, the rentals which are affecting the profitability of our own shops and the franchise business have started to retreat. When previously the dropping customer traffics at stores remained unnoticed by landlords, the current indicates much more flexibility to meet the outcry of the retailers regarding the rental cost. Whether and to which extent this tendency will compensate for the reduction in business is yet unclear," the report added.

Consumption of the group's products deteriorated in the consumer market of Russia in the third quarter, where sales totaled 8.7 million euros against 17.0 million euros in the respective period a year ago. Nine-month sales totaled 27.1 million euros in 2015 compared to 47.6 million euros in the first nine months 2014, indicating a backdrop of 43.1%. Notwithstanding the heavy windfalls, the group's financial position and profitability speak of the timely downsizing process that has enabled to retain the profit generation ability in general, Silvano said.