Linda Nektar
Company Announcement The Interim Report for the 12 months of 2022 (unaudited)

Management report

In H2 2022 AS Linda Nektar's (The Company´s) products experienced solid demand thus resulting in good volume performance. At the same time, external challenges from supply chain constraints, driven by the war in Ukraine led to higher input costs and negatively impacted profitability during the period. The inflationary pressures were led by rising energy costs while supply chain constraints causing momentarily fear for availability of certain raw materials on the market was rapidly driving prices.

For the full 12-month period of 2022 revenues were EUR 3.8m, largely in line with management's guidance of EUR 3.6m, while net profitability improved by a couple of percentage points to 7.15% (3.95% in 2021).

In the coming periods the Company strongly believes in the continuity of recognised megatrends in consumer behaviour. The demand for calorie-reduced and low-alcoholic fermented drinks is increasing in popularity. In addition, fermented ready to drink beverages (often known as RTD) are supported by the trend of premiumisation in the category. Consumers have a desire for natural ingredients, with fermentation seen as sustainable production. Premiumisation and innovative products are expected to drive growth in the low-and-no alcohol and RTD segments. The Company is well positioned with a focus on customised, high value-added ingredients for its customers which help them to create innovative fermented drinks. Together with its customers the Company seeks and expects growth in the customer base as well as geographical distribution.

Looking into 2023 the Baltic and Finnish markets, where the Company´s products are mainly delivered, the business environment remains challenging with an uncertain macro situation. High inflation and uncertainty among consumers can be expected to affect the purchasing power for certain goods, calling for a preparedness to undertake recipe and/or product changes.

At the end of 2022 the Company experienced a downward development in raw material prices, as the market prices of several agricultural commodities have fallen from record levels in the European market. At the same time, the transfer of more favourable commodity prices to production costs and consumer prices still takes time. Ukraine war developments bring, however, a shadow of uncertainty and volatility, and the circumstances can rapidly change.

Financial review

In 2022 AS Linda Nektar (The Company´s) unaudited turnover was EUR 3,786,852 (12 months 2021: EUR 3,110,589). This marked an increase of 21.7% year-on-year. The 12 months of 2022 generated a net profit of EUR 270,903 (12 months 2021: EUR 122,715).

As of 31 December 2022, the Company's total assets came to EUR 4,137,806 (31.12.2021: EUR 3,809,320) marking an increase of 8.6% year-on-year. Current assets amounted to EUR 1,474,446 (31.12.2021: EUR 1,532,607) or 35.6% of total assets. Fixed assets amounted to EUR 2,663,360 (31.12.2021: EUR 2,276,713) or 64.4% of the balance sheet total. The liabilities of AS Linda Nektar totalled EUR 369,467 (31.12.2021: EUR 153,870) and equity amounted to EUR 3,768,339 (31.12.2021: EUR 3,655,450).

As of 31 December 2022, there were no loan commitments, while cash and cash equivalents came to EUR 294,451 (31.12.2021: EUR 651,135). The Company retains its conservative financial leverage policy. Operating cash flow for the 12 months of 2022 was stable at EUR 552,831 (12 months 2021: EUR 560,581).

The Company continues to actively make investments into R&D in order to support future sales growth, improve production efficiency and promote the achievement of responsibility targets with regard to energy efficiency and carbon neutrality. During the period the Company was close to completing investments in new equipment lifting its technical levels, fermentation capacity, and degree of automation. The Company´s quality assurance system was also improved, achieving certification according to the FSSC 22000 standard. A total of EUR 821,626 was invested into fixed assets (12 months 2021: EUR 554,705). Some investments will be implemented through support provided by the Agricultural Registers and Information Board (ARIB). A subsidy of EUR 217,863.25 will be paid out if the granted investment project is implemented no later than September 2023.

The Company will also continue its investments into solar energy supply thus lowering its carbon footprint and energy related costs. In 2022 the Estonian Agricultural Registers and Information Board as part of the Rural Development Plan measure 4.2.6 'Investment Support' granted EUR 66,938 for construction of a solar park. The subsidy will be paid out if the investment is implemented no later than November 2024.

Depreciation costs for the 12 months of 2022 amounted to EUR 435,004 (12 months 2021: EUR 399,020).

In 2022, the Company paid EUR 158,014 in dividends (12 months 2021: EUR 158,014). The income tax cost on dividends was EUR 27,584 (12 months 2021: EUR 28,514).

As of 31 December 2022, the Company had 14 employees, one Management Board Member and four Supervisory Board Members. Labour costs for the 12 months of 2022 (including taxes) amounted to EUR 476,525 (12 months 2021: EUR 431,138).

Management's revenue guidance for the whole of 2023 is more or less similar to that achieved in 2022, hence EUR 3.8m.

Financial Ratios

20222021
Current Ratio = Current Assets / Current Liabilities x 3.99 9.96
Quick ratio = (Current Assets - Inventories) / Current Liabilities x 2.19 7.92
Working Capital = Current Assets - Current Liabilities 1 104 979 1 378 737
Equity Ratio = Total Equity / Total Assets*100 % 91.07 95.96
Net Profit Margin= Net Profit / Sales Revenue*100 % 7.15 3.95
Debt to Assets= Total Liabilities / Total Assets x 0.09 0.04

Statement of financial position

(In Euros)

31.12.202230.06.202231.12.202130.06.2021
Assets
Current assets
Cash and cash equivalents 294 451 694 213 651 135 577 163
Receivables and prepayments 515 099 675 334 568 144 672 351
Inventories 664 896 611 203 313 328 365 189
Total current assets1 474 4461 980 7501 532 6071 614 703
Non-current assets
Receivables and prepayments 45 6 20 4
Property, plant and equipment 2 647 768 2 196 030 2 269 900 2 179 875
Intangible assets 15 547 5 055 6 793 8 531
Total non-current assets2 663 3602 201 0912 276 7132 188 410
Total assets4 137 8064 181 8413 809 3203 803 113
Liabilities and equity
Liabilities
Current liabilities
Payables and prepayments 369 467 321 109 153 870 169 987
Total current liabilities369 467321 109153 870169 987
Total liabilities369 467321 109153 870169 987
Equity
Issued capital 1 580 143 1 580 143 1 580 143 1 580 143
Share premium 617 517 617 517 617 517 617 517
Statutory reserve capital 80 084 80 084 73 948 73 948
Retained earnings (loss) 1 219 692 1 219 692 1 261 127 1 261 127
Reporting period profit (loss) 270 903 363 296 122 715 100 391
Total equity3 768 3393 860 7323 655 4503 633 126
Total liabilities and equity4 137 8064 181 8413 809 3203 803 113

Income statement

(In Euros)

20222022 H220212021 H2
Revenue 3 786 852 1 603 948 3 110 589 1 545 852
Other income 13 824 13 824 3 587 4 575
Changes in inventories of finished goods
and work in progress		 224 182 -12 849 -129 648 -75 088
Raw materials and consumables used -2 528 575 -1 063 424 -1 800 469 -908 273
Other operating expenses -284 899 -169 658 -177 526 -93 967
Employee expenses -476 525 -254 875 -431 138 -228 737
Depreciation and impairment loss (reversal) -435 004 -208 386 -399 020 -197 133
Significant impairment of current asset 0 0 -23 783 -23 783
Other expenses -1 428 -1 000 -1 431 -1 156
Operating profit (loss)298 427-92 420151 16122 290
Interest income 60 27 68 34
Profit (loss) before tax298 487-92 393151 22922 324
Income tax expense -27 584 0 -28 514 0
Reporting period profit (loss)270 903-92 393122 71522 324

Statement of cash flows

(In Euros)

20222022 H220212021 H2
Cash flows from operating activities
Operating profit (loss) 298 427 -92 420 151 161 22 290
Adjustments
Depreciation and impairment loss (reversal) 435 004 208 386 399 020 197 133
Profit (loss) from sale of non-current assets 0 0 -1 395 -1 395
Other adjustments -13 790 -13 790 0 0
Total adjustments421 214194 596397 625195 738
Changes in receivables and prepayments related to operating activities 53 020 160 196 -139 093 104 191
Changes in inventories -353 268 -55 393 139 833 51 861
Changes in payables and prepayments related to operating activities 147 232 -26 419 39 569 -25 385
Income tax refund (paid) -27 584 0 -28 514 0
Proceeds from government grants 13 790 13 790 0 0
Total cash flows from operating activities552 831194 350560 581348 695
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets -751 561 -594 139 -619 200 -302 257
Proceeds from sales of property, plant and equipment and intangible assets 0 0 27 500 27 500
Interest received 60 27 68 34
Total cash flows from investing activities-751 501-594 112-591 632-274 723
Cash flows from financing activities
Proceeds from issuing shares 0 0 5 034 0
Dividends paid -158 014 0 -158 014 0
Total cash flows from financing activities-158 0140-152 9800
Total cash flows-356 684-399 762-184 03173 972
Cash and cash equivalents at beginning of period 651 135 694 213 835 166 577 163
Change in cash and cash equivalents-356 684-399 762-184 03173 972
Cash and cash equivalents at end of period 294 451 294 451 651 135 651 135

Statement of changes in equity

(In Euros)

Issued capital Share premium Statutory reserve capital Other reserves Retained earnings (loss)Total
31.12.20201 575 109617 51770 67226 1771 396 2403 685 715
Reporting period profit (loss) 0 0 0 0 100 391 100 391
Issue of equity 5034 0 0 -26 177 26 177 5 034
Declared dividends 0 0 0 0 -158 014 -158 014
Changes in reserves 0 0 3 276 0 -3 276 0
30.06.20211 580 143617 51773 94801 361 5183 633 126
Reporting period profit (loss) 0 0 0 0 22 324 22 324
31.12.20211 580 143617 51773 94801 383 8423 655 450
Reporting period profit (loss) 0 0 0 0 363 296 363 296
Declared dividends 0 0 0 0 -158 014 -158 014
Changes in reserves 0 0 6 136 0 -6 136 0
30.06.20221 580 143617 51780 08401 582 9883 860 732
Reporting period profit (loss) 0 0 0 0 -92 393 -92 393
31.12.20221 580 143617 51780 08401 490 5953 768 339

Additional information:

Kadri Rauba
Member of Management Board

AS Linda Nektar
Address: Kobela, Antsla parish
66407 Võrumaa, Estonia
Telephone: +372 785 5768
E-mail: info@lindanektar.ee

Attachments:
Interim Reportl_H2_2022_EN.pdf

Attachments

Disclaimer

Linda Nektar AS published this content on 17 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2023 07:55:09 UTC.