Baltika sees growing losses, bigger sales

  • 2003-11-20
  • Baltic Business News
TALLINN - Estonia's largest garment maker Baltika will have a few holes to mend after the company reported last week that its third-quarter losses reached 6.9 million kroons (445,000 euros), up from 3.1 million kroons a year ago.

On the upside, the company's consolidated turnover in the third quarter was 144.2 million kroons, or 11.2 percent more than a year ago.
"Owing to strong retail sales, the third quarter proved to be the best of this year," said Meelis Milder, chairman of the management board of Baltika.
As a result of the third-quarter results, nine-month sales this year increased by 3.86 million kroons — or 1.1 percent compared with the same period of the previous year — and amounted to 365.2 million kroons.
In nine months Baltika has lost 30.4 million kroons. Its sales and earnings forecast for the year was 280 million and 2 million kroons respectively.
Wholesale sales of Baltika's own products in the third quarter totaled 47.28 million kroons, which was less than that of the previous year by 11.5 million kroons. The volume of wholesale contracts approved in the second half of the year, however, was greater than in the first half.
Analysts said that one of the most significant factors influencing the group's growing losses was the fact that Baltika's inventories have fallen by 16 million kroons over the past year. Last year Baltika built up large stocks due to the shorter than expected fall season, and this year its sales were affected by extremely hot weather in July and August, which meant that the company was forced to lower prices for its autumn season.
Ulle Jarv, finance director, said that in addition to seasonal fluctuations, Estonians have also started buying fewer clothes.
"People are overburdened with housing loans," Jarv said.
Still, there was some good news for the group. Sales of the Monton brand, which celebrated its first anniversary in 2003, comprised 75.3 percent of Baltika's nine-month sales and totaled 170.5 million kroons.
Baltika operates in Estonia, Latvia, Lithuania, Ukraine, Poland and Sweden. In the third quarter Baltika opened three new stores, one in Latvia and two in Ukraine. The company now controls 8,870 square meters of retail space in 56 stores in six countries.
The group currently employs 1,778 people, of which 292 are outside Estonia.