Profits lower for Tallinna Vesi

TALLINN - Tallinna Vesi, the Tallinn water company, posted a 41.9 million kroons (2.6 million euro) loss in the first half of 2010 despite the fact that sales made a slight 1.4 percent increase compared to the same period last year.  During the first nine months of 2010, Tallinna Vesi’s total sales increased by 2.1 percent, to 582.3 million kroons. The company’s underlying operating profit for the first nine months of 2010, from water and wastewater related activities, decreased by 6.8 percent to 292.0 million kroons compared to the first nine months of 2009.

In total, the company’s operating profit for main and other activities for the 3rd quarter of 2010 was 101.5 million kroons, a decrease of 8.3 million compared to the same period in 2009.
In July, Tallinna Vesi took over the assets and operations of Maardu Vesi. Work is currently ongoing in connecting pipes between Maardu and Tallinn for the delivery of quality surface water from Lake Ulemiste to Maardu, and for the removal of Maardu’s wastewater for treatment at the Paljassaare wastewater treatment plant. Designs have also been completed for giving more than 3,000 properties in Muuga access to the public water and wastewater system, for reconstructing sewerage pipes in the Vana-Narva road area and for rebuilding the pipe network in Kallavere.

The connection pipes between Maardu and Tallinn will be built by the second half of 2011 and the Muuga network will be completed by the end of 2012.  This expansion has been significant and positive for Tallinna Vesi, as the third quarter results indicate.
Although the overall company picture is positive, as of September this year, the total number of employees was 319 compared to 349 in September 2009. The decrease in staff size is primarily due to reorganization in various departments at the end of 2009.

At the end of the quarter, Sept. 30, 2010, the Group consisted of two companies. The subsidiary Watercom is wholly owned by Tallinna Vesi. Watercom will focus on pursuing the parent company’s non-regulated business opportunities across Estonia. Additional news in employment involve the reinstatement of Siiri Lahe in the role of chief financial officer. Lahi resumed the role that was temporarily held by Stephen Howard on Oct. 21, following maternity leave.
In accordance with the signed Services Agreement, the company submitted its 2011 tariff application to the City of Tallinn. Discussions with the City of Tallinn are ongoing and, as in previous years, the application is being analyzed based upon the original business plan and the Ofwat regulatory model.

As a consequence of the Anti-Monopoly Bill, the City of Tallinn can only recommend, but no longer approve, or make final decisions on the tariffs that will be applied from Jan. 1, 2011. “Therefore, at this point in time the company is unable to say what next year’s tariffs will be as it is unclear at the moment how the [authority] intends to analyze and proceed with the tariff applications,” said Ian Plenderleith, chairman of the board at Tallinna Vesi.
No employees could be reached for comment and Priit Koff, head of public relations, would not comment on anything for this article.