Management report
In H1 2022 AS Linda Nektar (The Company´s) unaudited turnover was EUR 2,182,904 This marked an increase of 39.5% year-on-year (H1 2021: EUR 1,564,737). The first 6 months of 2022 generated a net profit of EUR 363,296 (H1 2021: EUR 100,391). The company’s performance was successfully secured through production and product portfolio adjustments together with cost-saving measures.
The segments of low and non-alcoholic beverages are considered to be one of the fastest growing areas in the industry and a constantly growing variety of taste profiles and ingredients. The development is driven by global mega trends where consumers are choosing healthier and naturally produced alternatives. Focusing on fermented ingredients for the beverage industry the Company provides tools and key components for the bottlers and their customers to meet this demand. As the growth in the low and non-alcoholic category has been eyed across the globe, it is prudent to note where the gains will be for the sector. Overall, there has been increased interest from both existing and new potential customers for new product development.
The Company’s operating environment has had limited exposure to the inflationary pressures of various commodity prices. Due to the war in Ukraine, costs have continued to increase significantly especially in raw materials, energy, fuel and freight. We have increased prices towards our customers during H1 2022 to mitigate the impact from higher costs. The Company has no direct impact from the Russia – Ukraine conflict (indirect impacts are seen in commodity and other input pricing volatility). However, business operations continue to involve some uncertainties due to raw material price increases, ongoing supply-chain disruptions and other inflationary impacts.
As of 30 June 2022, the Company’s total assets came to EUR 4,181,841 (30.06.2021: EUR 3,803,113) marking an increase of 10% year-on-year. Current assets amounted to EUR 1,980,750 (30.06.2021: EUR 1,614,703) or 47.4% of total assets. Fixed assets amounted to EUR 2,201,091 (30.06.2021: EUR 2,188,410) or 52.6% of the balance sheet total. The liabilities of AS Linda Nektar totalled EUR 321,109 (30.06.2021: EUR 169,987) and equity capital amounted to EUR 3,860,732 (30.06.2021: EUR 3,633,126).
As of 30 June 2022, there were no loan commitments, while cash and cash equivalents came to EUR 694,213 (30.06.2021: EUR 577,163). The Company retains its conservative financial leverage policy. Operating cash flow for the first 6 months of 2022 was a positive EUR 358,481 (H1 2021: EUR 211,887).
A total of EUR 151,010 was invested into fixed assets (H1 2021: EUR 243,181). Some investments will be implemented through support provided by the Agricultural Registers and Information Board (ARIB). In 2021 the Estonian Agricultural Registers and Information Board as part of Rural Development Plan measure 4.2.1 ‘Investment Support’ granted EUR 217,863.25 for the extension of fermentation capacity. The subsidy will be paid out if the investment is implemented no later than September 2023. Assets acquired with the help of government grants are recorded in the balance sheet at net acquisition cost, i.e., the acquisition cost, less government grants received for the purpose of acquiring assets.
Depreciation costs for the first 6 months of 2022 amounted to EUR 226,618 (H1 2021: EUR 201,888).
In H1 2022, the Company paid EUR 158,014 in dividends (H1 2021: EUR 158,014). The income tax cost on dividends was EUR 27,584 (H1 2021: EUR 28,514).
As of 30 June 2022, the Company had 13 employees, one Management Board Member, and four Supervisory Board Members. Labour costs for the first 6 months of 2022 (including taxes) amounted to EUR 221,650 (H1 2021: EUR 202,401).
Management’s guidance for revenues in 2022 remains at EUR 3.6m. This reflects ca. 16% year-on-year growth (incorporating both volume and pricing considerations).
Financial Ratios:
|
January - June 2022 |
January - June 2021 |
||
| Current Ratio = Current Assets / Current Liabilities | x | 6.17 | 9.50 |
| Quick ratio = (Current Assets – Inventories) / Current Liabilities | x | 4.27 | 7.35 |
| Working Capital = Current Assets - Current Liabilities | 1,659,641 | 1,444,716 | |
| Equity Ratio = Total Equity / Total Assets*100 | % | 92.32 | 95.53 |
| Net Profit Margin= Net Profit / Sales Revenue*100 | % | 16.64 | 6.42 |
| Debt to Assets= Total Liabilities / Total Assets | x | 0.08 | 0.04 |
Statement of financial position
(In Euros)
| 30.06.2022 | 31.12.2021 | 30.06.2021 | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 694 213 | 651 135 | 577 163 |
| Receivables and prepayments | 675 334 | 568 144 | 672 351 |
| Inventories | 611 203 | 313 328 | 365 189 |
| Total current assets | 1 980 750 | 1 532 607 | 1 614 703 |
| Non-current assets | |||
| Receivables and prepayments | 6 | 20 | 4 |
| Property, plant and equipment | 2 196 030 | 2 269 900 | 2 179 875 |
| Intangible assets | 5 055 | 6 793 | 8 531 |
| Total non-current assets | 2 201 091 | 2 276 713 | 2 188 410 |
| Total assets | 4 181 841 | 3 809 320 | 3 803 113 |
| Liabilities and equity | |||
| Liabilities | |||
| Current liabilities | |||
| Payables and prepayments | 321 109 | 153 870 | 169 987 |
| Total current liabilities | 321 109 | 153 870 | 169 987 |
| Total liabilities | 321 109 | 153 870 | 169 987 |
| Equity | |||
| Issued capital | 1 580 143 | 1 580 143 | 1 580 143 |
| Share premium | 617 517 | 617 517 | 617 517 |
| Statutory reserve capital | 80 084 | 73 948 | 73 948 |
| Retained earnings (loss) | 1 219 692 | 1 261 127 | 1 261 127 |
| Reporting period profit (loss) | 363 296 | 122 715 | 100 391 |
| Total equity | 3 860 732 | 3 655 450 | 3 633 126 |
| Total liabilities and equity | 4 181 841 | 3 809 320 | 3 803 113 |
Income statement
(In Euros)
| 2022 H1 | 2021 H1 | |
| Revenue | 2 182 904 | 1 564 737 |
| Changes in inventories of finished goods and work in progress | 237 031 | -54 560 |
| Raw materials and consumables used | -1 465 151 | -892 196 |
| Other operating expenses | -115 241 | -83 558 |
| Employee expenses | -221 650 | -202 401 |
| Depreciation and impairment loss (reversal) | -226 618 | -201 888 |
| Other expenses | -428 | -1 263 |
| Operating profit (loss) | 390 847 | 128 871 |
| Interest income | 33 | 34 |
| Profit (loss) before tax | 390 880 | 128 905 |
| Income tax expense | -27 584 | -28 514 |
| Reporting period profit (loss) | 363 296 | 100 391 |
Statement of cash flows
(In Euros)
| 2022 H1 | 2021 H1 | |
| Cash flows from operating activities | ||
| Operating profit (loss) | 390 847 | 128 871 |
| Adjustments | ||
| Depreciation and impairment loss (reversal) | 226 618 | 201 888 |
| Total adjustments | 226 618 | 201 888 |
| Changes in receivables and prepayments related to operating activities | -107 176 | -243 284 |
| Changes in inventories | -297 875 | 87 972 |
| Changes in payables and prepayments related to operating activities | 173 651 | 64 954 |
| Income tax refund (paid) | -27 584 | -28 514 |
| Total cash flows from operating activities | 358 481 | 211 887 |
| Cash flows from investing activities | ||
| Purchase of property, plant and equipment and intangible assets | -157 422 | -316 944 |
| Interest received | 33 | 34 |
| Total cash flows from investing activities | -157 389 | -316 910 |
| Cash flows from financing activities | ||
| Proceeds from issuing shares | 0 | 5 034 |
| Dividends paid | -158 014 | -158 014 |
| Total cash flows from financing activities | -158 014 | -152 980 |
| Total cash flows | 43 078 | -258 003 |
| Cash and cash equivalents at beginning of period | 651 135 | 835 166 |
| Change in cash and cash equivalents | 43 078 | -258 003 |
| Cash and cash equivalents at end of period | 694 213 | 577 163 |
Statement of changes in equity
(In Euros)
| Issued capital | Share premium | Statutory reserve capital | Other reserves | Retained earnings (loss) | Total | |
| 31.12.2020 | 1 575 109 | 617 517 | 70 672 | 26 177 | 1 396 240 | 3 685 715 |
| 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 |
| 30.06.2021 | 1 580 143 | 617 517 | 73 948 | 0 | 1 361 518 | 3 633 126 |
| Reporting period profit (loss) | 0 | 0 | 0 | 0 | 22 324 | 22 324 |
| 31.12.2021 | 1 580 143 | 617 517 | 73 948 | 0 | 1 383 842 | 3 655 450 |
| 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 |
| 30.06.2022 | 1 580 143 | 617 517 | 80 084 | 0 | 1 582 988 | 3 860 732 |