Profit of Tallinna Vesi grows to EUR 24 mln in 2018

TALLINN – The sales revenue of listed Estonian water company Tallinna Vesi rose 5 percent on year to 62.8 million euros in 2018, while the company's net profit grew 3.4-fold to 24.2 million euros.

The group's sales revenue during the fourth quarter of 2018 was 16.2 million euros, up by 1.6 percent or 260,000 euros compared to the same period in 2017. Gross profit in the fourth quarter of 2018 was 8.4 million euros, showing a decrease of 4.7 percent or 410,000 euros. The net profit for the quarter was 5.01 million euros, while the company saw a net loss of 10.4 million euros in the same quarter of 2017, Tallinna Vesi told the stock exchange.

Decrease in gross profit was related to lower storm water treatment and disposal service and fire hydrants service revenues accompanied by higher chemicals and asset maintenance costs and other costs of goods and services sold. It was balanced by higher water and wastewater revenues accompanied by higher construction services related profit and lower electricity costs and pollution tax expenses, the company said in the stock exchange statement.

According to Tallinna Vesi, there has been an increase in private customers' revenues of 2.6 percent to 6.59 million euros and sales to corporate customers within the service area increased by 2.9 percent to 5.30 million euros. Sales of construction, design and asphalting services were 1.64 million euros, increasing by 8.8 percent or 130,000 euros year-on-year. However, the sales of storm water disposal and treatment services dropped both within the main service area and in surrounding municipalities due to lower level of precipitation. 

The gross profit of the fourth quarter of 2018 was 8.38 million euros, showing a decrease of 4.7 percent, which was mainly due to increased sales from water and wastewater services, accompanied by higher chemicals and asset maintenance costs. The operating profit of Tallinna Vesi was 5.3 million euros and net profit 5.01 million euros.

In 2018 as a whole, 83.7 percent of sales comprised of sales of water and wastewater services to domestic and commercial customers within and outside of the service area. Altogether 5.7 percent of sales were the fees received from the City of Tallinn for operating and maintaining the storm water system and fire hydrants, 9.6 percent from construction and asphalting services and 1.1 percent from other works and services.

The group's net financial income and expenses have resulted a net expense of 990,000 euros, compared to net expense of 940,000 euros in the twelve months of 2017. The increase was mainly impacted by lower positive change in the fair value of the swap contracts year-on-year, balanced by lower interest costs, worth respectively -190,000 euros and +140,000 euros.

In the twelve months of 2018, the group invested 10.4 million euros into fixed assets.  As of the end of the year, non-current tangible assets amounted to 179.2 million euros and total non-current assets amounted to 179.85 million euros.

At the end of the fourth quarter of 2018, the total number of employees was 310 compared to 312 at the end of the same period in 2017. The full time equivalent (FTE) was respectively 296 in 2018 compared to the 300 in 2017. Average number of employees during the twelve months was 316 in both 2018 and in 2017.

At that, the company is still waiting for a judgment from the ongoing international arbitration proceedings regarding Tallinna Vesi's water tariffs.