ELMO Rent AS unaudited interim financial statements for the six months period ended 30 June 2023
Management report
The main objective of ELMO Rent AS (hereinafter ELMO) in 2023 is to increase the profitability of the short-term lease business and to ensure rapid growth in teledriven (remotely controlled) technology abroad. Due to the closure of unprofitable parts of the business (some returns of involved cars, advertising channels, rental point contracts) and the late opening of the purchase limit for new cars (purchasing of new cars were delayd), the consolidated unaudited revenue for the first half of 2023 decreased from €713,332 in the first half of 2022 to €394,696, a decrease of 45%. The biggest drop in turnover was due to lower sales of older cars, i.e. lower sales revenue from the older fleet (€63,198 in the first half of 2023 compared to €322,833 in the first half of 2022, i.e. car sales revenue fell by 80%). Short-term rental income was most affected by the smaller car fleet (in order to increase turnover and profit per car, the number of unprofitable cars was reduced and the fleet size was on average almost 10% smaller in the first half of 2023), which also led to a decrease in short-term rental income of almost 10% (€312,826 in the first half of 2023 compared to €347,660 in the first half of 2022). At the same time, revenue per car increased by 15% compared to the first half of 2022.
The period ended with a profit of €264,638, due to the capitalisation of technology costs incurred in previous periods, i.e. the costs incurred were recognised as an investment in fixed assets for an amount of €1,630,442. Before the capitalisation, the first half of 2023 generated a loss of €1,365,804, mainly due to investments in the development and sales of teledriven technology in several foreign countries and the investment in the new business strategy in short term rental – doorstep delivery of the car to the customer’s door.
The costs of the teledriven technology were capitalised, i.e. the direct costs of materials, subcontractors, staff, sales and legal costs were moved from costs as investment in fixed assets to development. This overview and capitalisation have also become a condition for closing the round aimed at private investors in the second stage.
The balance sheet total of ELMO on 30.06.2023 was €4,866,599 (30.06.2022: €3,574,449), an increase of 36% in comparison with the same period in 2022. Current assets comprised €530,458 of assets (30.06.2022: €1,109,917), i.e. 11% of total assets (30.06.2022: 31%). Fixed assets comprised €4,336,141 (30.06.2022: €2,464,532), i.e. 89% (30.06.2022: 69%) of the balance sheet total. The liabilities of ELMO totalled €4,024,060 (30.06.2022: €2,256,704) and the company’s equity amounted to €842,539 (30.06.2022: €1,317,745).
The company increased its workforce by 21%. As at 30.06.2023, the company had 34 employees. Labour expenses (including taxes) for the 2023 amounted to €511,949 (first half of 2022: €302,377), i.e. an increase of 69%.
In total, the fleet of ELMO decreased by 10% in the first half of 2023, which with the existing vehicles helped ELMO prevent 140 516 kg of Co2 from getting into the air on the city roads of Tallinn and Tartu in the first half of 2023 (189 245 kg of Co2 in the first half of 2022), which is 26% less than the year before. The reduction in the car fleet was due to the management’s focus on increasing turnover and profit per car (reducing the number of unprofitable vehicles) and, secondly, the closure of stage I of the funding round (March 2023), which took longer than planned and did not allow for the purchase of new cars by the start of the 2023 season.
2,694 new customers joined ELMO in the first half of 2023 (3,701 customers in the same period in 2022), which is 27% less than in 2022. The decrease was caused by the management’s focus on activating and retaining the existing customer base, which resulted in the focus shifting away from finding new customers. The number of registered customers of ELMO as at 30.06.2023 was 24,608.
ELMO has contributed and will continue to actively contribute to the expansion of the new business line of delivering cars to the door (for which there is rapidly growing demand, where the share of delivery to the door has already increased to 20% of all rental sessions) and the development of teledriven technology with the introduction of the service on public streets, which provides a prerequisite for strong sales growth also in the future as well and for selling on international markets. The company is constantly analysing and developing the market and its service portfolio with the aim of ensuring innovation and growth of business volumes. Expanding the service and product portfolio and entering a new customer segment gives ELMO the prerequisite to achieve the set goals.
In order to develop teledriven technology and the new generation delivery to the door car-sharing service, ELMO is raising capital from private investors in two stages within the framework of non-public placings. The company will use the raised capital mainly to bring teledriven vehicle technology to the streets and expand to foreign markets, as well as to expand the service of delivery to the door. Stage I ended in March 2023 and €2.6 million was raised (€1 million for working capital, €1 million for the purchase of new electric cars and €0.6 million for an additional option). Stage II, which started in May 2023, aims to raise up to €3 million for the development of teledriven technology, international sales and recruitment of engineers (capital will be raised for the subsidiary Elmo Remote OÜ).
ELMO also works actively with companies in the field, the Transport Administration, the Ministry of Economic Affairs and Communications, the Police and Border Guard Board, and others in the steering group of the Traffic Act and technical conditions concerning teledriven and self-driving vehicles, with the aim of establishing new requirements by the end of 2023. The amendments to the Act and the requirements also serve as an input to the same documents to be drawn up by the EU Commission. In addition to the amendments made to the Act, ELMO has been actively contributing to obtaining special permits in all target countries and cities, with the aim of launching teledriven cars in at least three countries by 2023.
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Key financial ratios for the consolidated report. |
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01.2023 - 06.2023 |
01.2022 - 06.2022 |
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Turnover growth/decrease (%) |
-45% |
209% |
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Net profit margin (%) |
67% |
-115% |
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Current ratio (in times) |
0.3 |
1.4 |
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ROA (%) |
5% |
-23% |
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ROE (%) |
31% |
-62% |
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Formulas used to calculate the ratios: |
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Turnover growth/decrease (%) = (sales revenue in reporting period – sales revenue in reference period) / in reference period * 100 |
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Net profit margin (%) = net profit / sales revenue * 100 |
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Current ratio (in times) = current assets / current liabilities |
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ROA (%) = net profit / total assets * 100 |
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ROE (%) = net profit / total equity * 100 |
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Consolidated balance sheet
(euros)
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30.06.2023 |
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30.06.2022 |
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Assets |
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Current assets |
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Cash |
41,968 |
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105,926 |
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Receivables and prepayments |
453,986 |
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986,877 |
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Inventories |
34,504 |
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17,114 |
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Total current assets |
530,458 |
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1,109,917 |
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Fixed assets |
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Property, plant and equipment |
2,488,664 |
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2,464,532 |
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Intangible assets |
1,847,477 |
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0 |
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Total fixed assets |
4,336,141 |
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2,464,532 |
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Total assets |
4,866,599 |
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3,574,449 |
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Liabilities and equity |
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Payables |
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Current liabilities |
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Loans payable |
796,917 |
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463,472 |
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Payables and prepayments |
748,502 |
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342,098 |
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Total current liabilities |
1,545,419 |
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805,570 |
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Long-term liabilities |
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Loans payable |
2,478,641 |
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1,451,134 |
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Total long-term liabilities |
2,478,641 |
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1,451,134 |
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Total liabilities |
4,024,060 |
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2,256,704 |
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Equity |
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Share capital at nominal value |
245,636 |
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245,636 |
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Share premium |
2,286,645 |
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2,286,645 |
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Other reserves |
10,000 |
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10,000 |
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Retained loss |
-1,964,289 |
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-407,208 |
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Profit (loss) for financial year |
264,547 |
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-817,328 |
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Total equity held by shareholders of parent company |
842,539 |
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1,317,745 |
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Total equity |
842,539 |
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1,317,745 |
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Total liabilities and equity |
4,866,599 |
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3,574,449 |
Consolidated income statement
(euros)
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01.01.2023-30.06.2023 |
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01.01.2022-30.06.2022 |
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Sales revenue |
394,696 |
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713,332 |
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Other operating revenue |
46,376 |
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25,274 |
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Capitalised costs in production of fixed assets for own use |
1,630,442 |
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0 |
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Goods, raw material and services |
-392,998 |
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-629,016 |
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Other operating expenses |
-464,862 |
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-341,162 |
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Staff costs |
-511,949 |
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-302,377 |
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Depreciation and impairment of fixed assets |
-269,583 |
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-226,678 |
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Other operating expenses |
-41,476 |
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-1,788 |
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Operating profit (loss) |
390,645 |
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-762,415 |
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Interest expenses |
-126,008 |
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-54,940 |
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Other financial income and expenses |
0 |
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27 |
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Profit (loss) before income tax |
264,638 |
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-817,328 |
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Income tax |
-91 |
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0 |
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Profit (loss) for reporting period |
264,547 |
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-817,328 |
Consolidated statement of cash flows
(euros)
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01.01.2023-30.06.2023 |
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01.01.2022-30.06.2022 |
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Cash flows from operating activities |
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Operating profit (loss) |
390,646 |
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-762,415 |
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Adjustments |
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Depreciation and impairment of fixed assets |
269,583 |
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226,678 |
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Profit (loss) on sales of non-current assets |
-18,157 |
|
195,257 |
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Other adjustments |
-1,630,533 |
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-31,639 |
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Total adjustments |
-1,379,107 |
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390,296 |
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Change in receivables and prepayments related to operating activities |
235,068 |
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-338,695 |
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Change in inventories |
-8,193 |
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0 |
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Change in liabilities and advances relating to operating activities |
115,856 |
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12,101 |
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Total cash flow from operating activities |
-645,731 |
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-698,713 |
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Cash flow from investing activities |
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Paid upon acquisition of tangible and intangible assets |
-234,160 |
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-283,636 |
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Proceeds from sale of property, plant and equipment and intangible assets |
155,387 |
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15,000 |
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Loans granted |
0 |
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-2 |
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Total cash flow from investing activities |
-78,773 |
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-268,638 |
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Cash flow from financing activities |
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Borrowings |
1,357,029 |
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0 |
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Repayments of borrowings |
-297,223 |
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-110,105 |
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Finance lease principal repayment |
-199,176 |
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-160,157 |
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Interest paid |
-126,008 |
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-52,661 |
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Received from issue of shares |
0 |
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1,367,733 |
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Total cash flow from financing activities |
734,621 |
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1,044,810 |
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Total cash flow |
10,118 |
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77,459 |
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Cash and cash equivalents at beginning of period |
31,850 |
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28,467 |
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Net change in cash and cash equivalents |
10,118 |
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77,459 |
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Cash and cash equivalents at end of period |
41,968 |
|
105,926 |
Consolidated statement of changes in equity
(euros)
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Share capital at nominal value |
Share premium |
Other reserves |
Retained loss |
Total |
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31.12.2021 |
220,000 |
918,913 |
10,000 |
-407,208 |
741,705 |
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Loss for reporting period |
0 |
0 |
0 |
-817,328 |
-817,328 |
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Share capital issued |
25,636 |
1,367,732 |
0 |
0 |
1,393,368 |
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30.06.2022 |
245,636 |
2,286,645 |
10,000 |
-1,224,536 |
1,317,745 |
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Loss for reporting period |
0 |
0 |
0 |
-739,753 |
-739,753 |
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31.12.2022 |
245,636 |
2,286,645 |
10,000 |
-1,964,289 |
577,992 |
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Profit for financial year |
0 |
0 |
0 |
264,547 |
264,547 |
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30.06.2023 |
245,636 |
2,286,645 |
10,000 |
-1,699,742 |
842,539 |
A more detailed overview of the results of ELMO Rent AS for the first half of 2023 can be found in the attached document.
Additional information:
Enn Laansoo, Jr.
CEO, Member of the Management Board
enn@elmorent.ee
ELMO is an Estonian company focused on the development of innovative deep tech technology for teledriven cars (see elmoremote.com) and the provision of an environmentally friendly vehicle sharing service (see elmorent.ee). ELMO is the first car rental company in Estonia to be awarded the Responsible Car Rental Quality Label.
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