AS Ekspress Grupp: Consolidated unaudited interim report for Q3 and 9 months of 2024
The revenue of AS Ekspress Grupp for the 3rd quarter of 2024 increased by 2%, totalling EUR 16.8 million and EBITDA decreased by 19%, totalling EUR 2.0 million. The revenue for the first nine months of 2024 also increased year-over-year by 2%, totalling EUR 52.7 million and EBITDA decreased by 9%, totalling EUR 5.5 million. At the end of September, digital revenue made up 88% of the Group’s total revenue. Digital revenue increased by 8% as compared to the same period last year. The digital subscription revenue of the Group’s media companies and the number of people with digital subscriptions grew strongly year-over-year in all three countries. The revenue from ticket platforms and the advertising revenue from outdoor screens have also seen strong growth.
The 3rd quarter was successful both in terms of increasing the revenue from ticket platforms as well as the advertising revenue from outdoor screens. Digital subscriptions also increased strongly. The advertising revenue of media companies decreased due to the overall weak economic environment in the Baltic States. The revenue of Ekspress Grupp in the 3rd quarter totalled EUR 16.8 million, increasing by 2% as compared to the same period last year. The 9-month revenue also increased by 2%.
In a year-over-year comparison, the Group received nearly 43 000 new digital subscriptions in the Baltic States, i.e. 24% more than at the end of September last year. At the end of September 2024, digital subscriptions totalled 223 000. The Group’s digital revenue is increasingly based on digital subscription revenue and it makes up an increasingly larger recurring revenue base without the need for additional sales activity (and costs). We have enhanced the quality and volume of the content offered by the Group’s media companies in order to be the leader in the digital subscription field in all Baltic States. The Group is gradually moving towards its financial strategic goals and wishes to offer paid digital content to at least 340 000 subscribers by the year 2026.
In the 3rd quarter, Ekspress Grupp’s earnings before interest, tax, depreciation and amortisation (EBITDA) totalled EUR 2.0 million, decreasing by 19%. The 9-month EBITDA totalled EUR 5.5 million, decreasing by 9%. Lower profitability is due to the decline in the advertising market as a result of the general economic environment and the increasing pressure of input costs. The net profit for the 3rd quarter of 2024 was 0.3 million, which is 0.6 million less as compared to last year. The Group’s nine-month net profit totalled 0.1 million, which is 0.7 million less than last year. The decrease in net profit is also mainly due to higher interest rates related to the increase in Euribor and the increase in depreciation expenses resulting from the Group’s investments.
The Group’s liquidity continues to be strong. The Management Board considers it important to maintain liquidity reserves both for the use of potential new acquisitions and for situations related to further cooling of the economy. As of 30 September 2024, the Group’s available cash totalled EUR 5.4 million (30.09.2023: EUR 6.1 million). In May 2024, the Group paid dividends of 6 euro cents per share to its shareholders in the total amount of EUR 1.8 million.
Q3 AND 9 MONTHS RESULTS
REVENUE
In the 3rd quarter of 2024, the consolidated revenue totalled EUR 16.8 million (Q3 2023: EUR 16.5 million). The revenue for the 3rd quarter increased by 2% year-over-year. The consolidated revenue for the first 9 months of 2024 totalled EUR 52.7 million (9 months 2023: EUR 51.8 million). The revenue for the first 9 months of the year increased by 2% as compared to the previous year. The growth is attributable to the increase in digital subscription revenue as well as increase in the volume of ticket sales platforms and digital outdoor screens. The share of the Group’s digital revenue in total revenue was 88% in the first 9 months of 2024 (9 months 2023: 83% of total revenue). Digital revenue for the first 9 months of 2024 increased by 8% as compared to the same period last year.
PROFITABILITY
In the 3rd quarter of 2024, the consolidated EBITDA totalled EUR 2.0 million (Q3 2023: EUR 2.4 million). EBITDA decreased by -19% as compared to last year and the EBITDA margin was 12% (Q3 2023: 15%). In the first 9 months of 2024, the consolidated EBITDA totalled EUR 5.5 million (9 months 2023: EUR 6.0 million). EBITDA decreased by -9% as compared to last year and the EBITDA margin was 10% (9 months 2023: 12%). Lower profitability is due to the decline in the advertising market as a result of the general economic environment and the increasing pressure of input costs.
The consolidated net profit for the 3rd quarter of 2024 totalled EUR 0.31 million (Q3 2023: EUR 0.95 million), decreasing by -68%. The consolidated net profit for the first 9 months of 2024 totalled EUR 0.11 million (9 months 2023: EUR 0.83 million). The decrease in net profit is also primarily related to higher interest rates due to the increase in Euribor rates and higher depreciation expenses arising from the Group’s investments.
EXPENSES
In the first 9 months of 2024, the cost of goods sold, marketing, and general and administrative costs totalled EUR 52.0 million (9 months 2023: EUR 49.3 million). Operating expenses increased by EUR 2.7 million (+5%) as compared to the same period last year. Labour costs increased the most, by EUR 0.9 million (+3%).
CASH POSITION
At the end of the reporting period, the Group had available cash in the amount of EUR 5.4 million and equity in the amount of EUR 55.3 million (52% of total assets). The comparable data as of 30 September 2023 were EUR 6.1 million and 54.0 million (55% of total assets), respectively. As of 30 September 2024, the Group’s net debt totalled EUR 15.6 million (30 September 2023: EUR 14.3 million).
In the first 9 months of 2024, the Group’s cash flows from operating activities totalled EUR 3.1 million (9 months 2023: EUR 6.9 million).
In the first 9 months of 2024, the Group’s cash flows from investing activities totalled EUR -5.3 million (9 months 2023: EUR -3.0 million), of which EUR -3.0 million was related to the development and acquisition of tangible and intangible assets, demonstrating higher investments in products and technologies.
In the first 9 months of 2024, the Group’s cash flows from financing activities totalled EUR -2.1 million, of which EUR -1.8 million is the dividend payment to the shareholders of AS Ekspress Grupp (9 months 2023: EUR -5.2 million, of which EUR -1.0 million is the share buy-back and EUR -1.5 million is the dividend payment to the shareholders of AS Ekspress Grupp). The financing activities also include the net change in borrowings in the amount of EUR 1.0 million and lease liabilities in the amount of EUR -1.7 million.
DIVIDENDS
At the regular general meeting of shareholders of AS Ekspress Grupp held on 3 May 2024, it was decided to pay a dividend of 6 euro cents per share in the total amount of EUR 1.8 million. Dividends were paid to shareholders on 22 May 2024.
SEGMENT OVERVIEW
Key financial indicators for segments
| (EUR thousand) | Sales | ||||||
| Q3 2024 | Q3 2023 | Change % | 9M 2024 | 9M 2023 | Change % | 12 months 2023 | |
| Media segment | 16 780 | 16 455 | 2% | 52 592 | 52 088 | 1% | 73 365 |
| advertising revenue | 8 936 | 9 413 | -5% | 29 315 | 30 219 | -3% | 42 074 |
| subscriptions (incl. single-copy sales) | 5 012 | 4 665 | 7% | 15 089 | 13 884 | 9% | 19 016 |
| marketplaces | 940 | 861 | 9% | 2 604 | 2 099 | 24% | 3 434 |
| outdoor screens | 1 066 | 823 | 29% | 3 117 | 2 349 | 33% | 3 530 |
| sale of other goods and services | 827 | 692 | 19% | 2 467 | 3 538 | -30% | 5 311 |
| Corporate functions | 194 | 167 | 16% | 548 | 2 474 | -78% | 2 642 |
| Inter-segment eliminations | (167) | (131) | (483) | (2 789) | (2 920) | ||
| TOTAL GROUP | 16 806 | 16 490 | 2% | 52 657 | 51 773 | 2% | 73 086 |
| incl. revenue from all digital channels | 14 913 | 14 146 | 5% | 46 232 | 42 942 | 8% | 60 460 |
| % of revenue from all digital channels | 89% | 86% | 88% | 83% | 83% | ||
| (EUR thousand) | EBITDA | ||||||
| Q3 2024 | Q3 2023 | Change % | 9M 2024 | 9M 2023 | Change % | 12 months 2023 | |
| Media segment | 2 374 | 2 852 | -17% | 6 676 | 6 974 | -4% | 11 695 |
| Corporate functions | (380) | (416) | 9% | (1 221) | (977) | -25% | (1 477) |
| Inter-segment eliminations | (12) | 3 | 10 | (4) | (1) | ||
| TOTAL GROUP | 1 982 | 2 440 | -19% | 5 466 | 5 992 | -9% | 10 217 |
| EBITDA margin | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12 months 2023 |
| Media segment | 14% | 17% | 13% | 13% | 16% |
| TOTAL GROUP | 12% | 15% | 10% | 12% | 14% |
Consolidated statement of financial position (unaudited)
| (EUR thousand) | 30.09.2024 | 31.12.2023 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 5 351 | 9 606 |
| Trade and other receivables | 13 618 | 13 143 |
| Corporate income tax prepayment | 211 | 24 |
| Inventories | 353 | 321 |
| Total current assets | 19 533 | 23 094 |
| Non-current assets | ||
| Other receivables and investments | 1 752 | 1 628 |
| Deferred tax asset | 132 | 130 |
| Investments in joint ventures | 973 | 851 |
| Investments in associates | 2 416 | 2 197 |
| Property, plant and equipment | 9 661 | 10 384 |
| Intangible assets | 70 920 | 67 482 |
| Total non-current assets | 85 853 | 82 672 |
| TOTAL ASSETS | 105 386 | 105 766 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 3 055 | 4 353 |
| Trade and other payables | 23 470 | 23 046 |
| Corporate income tax payable | 0 | 39 |
| Total current liabilities | 26 525 | 27 438 |
| Non-current liabilities | ||
| Long-term borrowings | 23 542 | 21 765 |
| Other long-term liabilities | 22 | 22 |
| Total non-current liabilities | 23 564 | 21 787 |
| TOTAL LIABILITIES | 50 090 | 49 225 |
| EQUITY | ||
| Share capital | 18 576 | 18 478 |
| Share premium | 14 277 | 14 277 |
| Treasury shares | (5) | (1 057) |
| Reserves | 2 364 | 2 285 |
| Retained earnings | 20 084 | 22 558 |
| TOTAL EQUITY | 55 296 | 56 541 |
| TOTAL LIABILITIES AND EQUITY | 105 386 | 105 766 |
Consolidated statement of comprehensive income (unaudited)
| (EUR thousand) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 | 12 months 2023 |
| Sales | 16 806 | 16 490 | 52 657 | 51 773 | 73 086 |
| Cost of sales | (13 594) | (12 384) | (41 853) | (40 131) | (55 046) |
| Gross profit | 3 211 | 4 107 | 10 804 | 11 642 | 18 040 |
| Other income | 409 | 167 | 698 | 348 | 581 |
| Marketing expenses | (640) | (649) | (2 321) | (2 011) | (2 803) |
| Administrative expenses | (2 455) | (2 253) | (7 851) | (7 180) | (9 582) |
| Other expenses | (39) | (122) | (134) | (262) | (737) |
| Operating profit /(loss) | 486 | 1 250 | 1 196 | 2 537 | 5 499 |
| Interest income | 23 | 12 | 84 | 32 | 60 |
| Interest expenses | (476) | (383) | (1 384) | (1 059) | (1 499) |
| Other finance income/(costs) | (16) | (14) | (39) | (35) | (55) |
| Net finance cost | (468) | (384) | (1 339) | (1 063) | (1 494) |
| Profit/(loss) on shares of joint ventures | 122 | 69 | 243 | (726) | (661) |
| Profit/(loss) on shares of associates | 173 | 65 | 423 | 196 | 239 |
| Profit /(loss) before income tax | 312 | 1 000 | 524 | 943 | 3 583 |
| Income tax expense | (7) | (52) | (416) | (113) | (232) |
| Net profit /(loss) for the reporting period | 305 | 949 | 108 | 830 | 3 351 |
| Net profit /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | 305 | 949 | 108 | 828 | 3 349 |
| Minority interest | 0 | 0 | 0 | 2 | 2 |
| Total comprehensive income /(loss) | 305 | 949 | 108 | 830 | 3 351 |
| Comprehensive income /(loss) for the reporting period attributable to | |||||
| Equity holders of the parent company | 305 | 949 | 108 | 828 | 3 349 |
| Minority interest | 0 | 0 | 0 | 2 | 2 |
| Earnings per share (euro) | |||||
| Basic earnings per share | 0.0098 | 0.0315 | 0.0035 | 0.0275 | 0.1113 |
| Diluted earnings per share | 0.0098 | 0.0305 | 0.0035 | 0.0267 | 0.1081 |
Consolidated cash flow statement (unaudited)
| (EUR thousand) | 9M 2024 | 9M 2023 | 12 months 2023 |
| Cash flows from operating activities | |||
| Operating profit /(loss) for the reporting year | 1 196 | 2 537 | 5 499 |
| Adjustments for (non-cash): | |||
| Depreciation and amortisation | 4 266 | 3 455 | 4 719 |
| (Gain)/loss on sale, write-down and impairment of property, plant and equipment | 25 | 165 | 387 |
| Change in value of share option | 0 | 24 | 26 |
| Cash flows from operating activities: | |||
| Trade and other receivables | (576) | 211 | (1 539) |
| Inventories | (32) | 3 | (35) |
| Trade and other payables | (84) | 1 518 | 4 921 |
| Income tax paid | (644) | (184) | (263) |
| Interest paid | (1 025) | (852) | (1 476) |
| Net cash generated from operating activities | 3 127 | 6 876 | 12 239 |
| Cash flows from investing activities | |||
| Acquisition of subsidiaries/ associates (less cash acquired) and other investments / cash paid-in equity-accounted investees |
(2 579) | (1 310) | (1 469) |
| Receipts of other investments | 0 | 13 | 13 |
| Interest received | 82 | 6 | 28 |
| Purchase of property, plant and equipment and intangible assets (Note 5) | (3 036) | (2 405) | (3 391) |
| Proceeds from sale of property, plant and equipment and intangible assets | 6 | 25 | 275 |
| Loans granted | (12) | 0 | 0 |
| Loan repayments received | 4 | 0 | 8 |
| Dividends received | 204 | 674 | 674 |
| Net cash used in investing activities | (5 331) | (2 997) | (3 862) |
| Cash flows from financing activities | |||
| Dividends paid | (1 848) | (1 488) | (1 488) |
| Payment of lease liabilities | (1 708) | (1 446) | (2 004) |
| Change in overdraft balance | 533 | 0 | 0 |
| Proceeds from borrowings | 2 240 | 0 | 0 |
| Repayments of bank loans | (1 763) | (1 260) | (1 727) |
| Proceeds from share issuance | 98 | 0 | 0 |
| Proceeds from sale of treasury shares | 397 | 0 | 0 |
| Purchases of treasury shares | 0 | (1 000) | (1 000) |
| Net cash used in financing activities | (2 052) | (5 195) | (6 219) |
| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (4 256) | (1 316) | 2 158 |
| Cash and cash equivalents at the beginning of the period | 9 606 | 7 448 | 7 448 |
| Cash and cash equivalents at the end of the period | 5 351 | 6 132 | 9 606 |
Argo Rannamets
CFO
AS Ekspress Grupp
E-mail address: argo.rannamets@egrupp.ee
AS Ekspress Grupp is the leading Baltic media group whose key activities include web media content production, and publishing of newspapers, magazines and books. The Group also operates an electronic ticket sales platform and ticket sales offices in Estonia and Latvia. Ekspress Grupp launched its operations in 1989 and employs almost 1100 people.
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