E-Malt.com News article: 3314

Finland: Finish brewery Olvi Group has recently posted its interim report for the period 1 January to 30 June 2004 (6 months). At 63.84 million euro, the Olvi Group`s net sales were 19.1% higher in the first half of 2004 against the previous year (53.60 million euro). The Group`s operating profit for the period amounted to 4.01 million euro (3.82 million euro). The operating profit of the parent company Olvi plc decreased to 1.97 (2.68) million euro due to intense price competition. The Estonian subsidiaries posted good results. The Latvian and Lithuanian subsidiaries improved their earnings but remained in the red. The Group`s gross capital expenditure amounted to 13.34 million euro (5.90 million euro). Earnings per share stood at 0.35 (0.41) euro, with an equity to total assets ratio of 40.8 (42.9) percent. The Olvi Group comprises four brewing companies, one in Finland and one in each Baltic state, as well as one juice manufacturer in Estonia.

At 63.84 million euro, the Olvi Group's net sales were 19.1% higher than the previous year (53.60 million euro). The Group's operating profit for the period amounted to 4.01 million euro (3.82 million euro). The operating profit of the parent company Olvi plc decreased to 1.97 (2.68) million euro due to intense price competition. The Estonian subsidiaries posted good results. The Latvian and Lithuanian subsidiaries improved their earnings but remained in the red. The Group's gross capital expenditure amounted to 13.34 million euro (5.90 million euro). Earnings per share stood at 0.35 (0.41) euro, with an equity to total assets ratio of 40.8 (42.9) percent.

The Group's net sales from January to June totalled 63.84 million euro (53.60 million euro). After eliminations, the parent company Olvi plc accounted for 54.2 percent of the total (62.4%).

The Group's operating profit amounted to 4.01 million euro (3.82 million euro), and the net profit for the period under review was 1.73 (2.00) million euro.

Total sales of the parent company Olvi plc amounted to 50.4 million litres, 6.2 percent more than a year earlier. Olvi’s domestic sales increased by 8.2 per cent to 44.7 (41.3) million litres. Olvi’s tax-free sales and exports from January to June totalled 5.8 million litres, 6.5 per cent less than in the previous review period. The parent company Olvi plc's operating profit in the period under review amounted to 1.97 (2.68) million euro. Profitability was impacted by cool and rainy weather in May and June, as well as intense price competition in the industry.

The total sales of the Estonian subsidiary AS Tartu Õlletehas amounted to 48.7 (28.4) million litres. The company’s sales increased by 20.3 million litres, 13.8 million of which is attributable to the sales of AS Ösel Foods products. The company was acquired by Olvi Group in November last year. AS Tartu Õlletehas recorded a good operating profit.

From January to June, the sales of A/S Cesu Alus operating in Latvia totalled 13.7 (8.7) million litres. The company’s operating profit for the period under review improved on the previous year but remained in the red. The company is the second largest brewery in Latvia and has a market share of 16.0 per cent. The company has decided to make an investment in the boiling room to increase its beer production capacity. The investment will be introduced into use in the summer of 2005.

Eva Sietinsone (27) was appointed Managing Director of A/S Cesu Alus. Ms. Sietinsone has been employed at the A/S Cesu Alus brewery since 2002. She transferred to Managing Director on 2 August 2004 from the position of Director of Finance and Administration.

In the period under review, the domestic sales of AB Ragutis operating in Lithuania totalled 13.7 (10.7) million litres. The company’s operating profit improved during the period under review compared to the corresponding period last year. However, the company still booked a loss.

During the period under review, the Olvi Group's gross capital expenditure amounted to 13.34 million euro (5.90 million euro). The gross capital expenditure includes 5.7 million euro worth of shares in A/S Cesu Alus subscribed by AS A. Le Coq on 20 June 2004, which increased the holdings of the latter from 90.87 percent to 96.06 percent. The parent company Olvi plc accounted for 3.30 million euro and the subsidiaries in the Baltic states for 10.04 million euro of the total.

The Group’s average number of personnel during the period under review was 1058 (914), 340 (338) of them in Finland, 368 (277) in Estonia, 164 (118) in Latvia and 186 (181) in Lithuania. The 2004 figure for Estonia includes the personnel of AS Ösel Foods.

Olvi plc’s registered share capital was 9,873,004.00 euro on 30 June 2004. The share capital is divided into 933,064 K shares and 4,003,438 A shares. The share’s nominal value is 2 euro.

The Olvi plc A share is quoted on the Main List maintained by the Helsinki Exchanges. A total of 639,282 Olvi plc shares changed hands from January to June, totalling 8.59 million euro in trading volume. The traded shares represented 16.0 percent of the total number of A shares. The average share price was 13.44 euro, with a low of 12.00 euro quoted in June and a high of 14.18 euro quoted in April.

The company does not hold any of its own shares, and the company’s Board of Directors has not exercised its authorisation to acquire or sell the company’s shares.

A total of 28,000 Olvi plc share warrants issued to the personnel and the parent company’s Board of Directors in 1999 changed hands from January to June, totalling 0.31 million euro in trading volume. The average price of the warrants was 11.22 euro, with a low of 10.31 euro quoted in January and a high of 12.00 euro also quoted in January.

At the end of the period under review, Finnish shareholders accounted for 96.9 percent and non-Finnish shareholders for the remaining 3.1 percent of Olvi plc's ownership. On 15 July 2004, Olvi plc had 4,455 shareholders in the book-entry system of securities.

The Olvi Group’s earnings development is highly dependent on the development of volumes and prices on the market. The cool start of the summer and promotional pricing of beer have hampered the result in Finland. However, the Baltic breweries have improved their results, and this favourable development is estimated to continue in the latter half of the year. The Olvi Group’s full-year sales and operating profit are expected to increase on the previous year.


25 September, 2004