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TALLINNA KAUBAMAJA SALES RESULTS FOR THE FIRST QUARTER OF 2011

The consolidated non-audited sales revenue of the Tallinna Kaubamaja Group was 96.1 million euros in the first quarter of 2011

The consolidated non-audited sales revenue of the Tallinna Kaubamaja Group was 96.1 million euros in the first quarter of 2011. The sales revenue for the 1st quarter of 2010 was 93.7 million euros. The sales revenue increased by 2.5%, showing a growth in all retail trade segments of the Group. The reference basis was influenced by the sales tax levied in Tallinn effective since June 2010, which reduced the sales revenue of the Group for the first quarter of 2011 by 0.5 million euros.

From 01.01.2011, the Group has adjusted its accounting policies for sales revenue, so that all regular revenues are now recognised in the sales revenue. Previously, certain regular revenues which were not directly related to the principal activity were recognised in other operating income. The reference data for 2010 have been adjusted for the change in the accounting policies. According to the adjusted accounting policies, the recognised sales revenue for the first quarter of 2010 would include an additional amount of 2.2 million euros.

The consolidated sales revenue of the supermarket segment was 72.2 million euros in the first quarter of 2011, which was 1.5% more than in the same period of the previous year. In the first quarter of 2011, the average monthly consolidated sales revenue per square metre of sales area was 0.34 thousand euros per month, a year-on year growth of 1.6%. In comparable stores, the average monthly revenue from sales of goods per square metre of sales area was 0.34 thousand euros in the first three months of 2011, showing a year-on-year growth of 0.9%. In the first quarter of 2011, 7.7 million purchases were made at the Selver stores in Estonia, which exceeded the number of purchases for the same period of the previous year by 0.4%. The growth of the sales revenue of Selver in the first quarter stems from sales campaigns which are very successful and meet the target customer's expectations, as well as from consistent work on the assortment of goods. The expected setback in consumption after the changeover to the euro did not occur. The sales results have been greatly influenced by the significant rise of food prices in Estonia which, according to Statistics Estonia, varied between 11.4% and 13.2% in the first quarter. Due to the pressure from the escalated price increase, the sales volumes of food products have clearly decreased. Compared to the previous year, additional factors with a negative impact on the increase of sales revenue are the continued tightening of competition on the retail trade market and the sales tax levied in Tallinn. Due to the closedown of the stores in Latvia, Selver generated no sales revenue in Latvia. The revenue from sales of goods in Latvia was 21.1 thousand euros in 2010. The Selver chain comprises 35 stores and a central kitchen.

The sales revenue of the department stores segment was 16.9 million euros in the first 3 months of 2011, a year-on-year growth of 2.0%. The sales revenue of the department stores per square metre of sales area was 0.66 thousand euros per month in the first 3 months, which is 1.6% more than in the same period of the previous year. Compared to the previous year, however, Kaubamaja was closed on January 1, 2011, due to the implementation of the new ERP system and the discount campaign of the season started one week later in January. The sales revenue was positively influenced by the 2=3 campaign in February. The sales revenue of OÜ TKM Beauty Eesti which operates the I.L.U. cosmetics stores was 0.6 million euros in the first quarter of 2011, a year-on-year growth of 27.2%. Compared to the first quarter of the previous year, the I.L.U. chain opened its fourth store at Kristiine Centre in Tallinn in September 2010. In the second quarter of 2011, the fifth store of the I.L.U. chain should be opened in Tallinn.

In the real estate business segment, the non-Group sales revenue of the first quarter of 2011 was 0.6 million euros, which was a year-on-year reduction of 5% due to decreased rental rates.

4258 passenger vehicles were sold in Estonia in the first quarter, which is 71% more than a year ago. The sales revenue of the car segment for the 1st quarter of 2011 with the exclusion of inter-segmental transactions was 3.8 million euros, which was 31.1% more than in the same period of the previous year. In the first three months of the year, a total of 202 cars were sold, i.e. 61 cars more than in the same period of the previous year.

In the first quarter of 2011, the sales revenue of the footwear segment was 2.6 million euros, a year-on-year growth of 3.2%. The stores in Hiiumaa and at Foorum Centre in Tallinn were closed in the first quarter of 2011. The Suurtüki store at Ülemiste Centre was closed for renovation and the twelfth SHU footwear store was opened there after the reconstruction, on April 7. With that, the repositioning of footwear stores owned by Tallinna Kaubamaja AS was completed and the last Suurtüki store was closed. The subsequent plans aim at a continued active expansion of the SHU footwear stores outside Tallinn in the second quarter. Of the 26 stores of the Group's two footwear store chains, 23 are presently situated in Estonia and 3 in Latvia.

Raul Puusepp, Chairman of the Board