Baltika announced to the stock exchange today that the group ended the half-year with a net profit of close to 1,5 million euros, which derives from significant reduction in distribution and administrative expenses, restructuring of creditors’ claims in accordance to the restructuring plan and the reverse of the impairment of the right to use the property arising from the lease agreements for the production buildings.
Baltika has decreased distribution and administrative expenses in the first half of the year by 3 million euros compared to the same period last year. According to Baltika’s CEO Flavio Perini, consistent and significant reduction in distribution and administrative expenses is a part of Baltika Group’s ongoing restructuring plan, and during the COVID-19 crisis the company has taken radical steps to reduce fixed costs at an accelerated tempo and in proportion with the lost sales.
“Baltika’s focus is to reduce distribution and administrative expenses and increase the sales numbers in our offline stores and e-store. We’ll definitely review our offline store network to strongly boost our omni-channel sales. Important is to integrate all sales channels which has to be supported by well-performing IT and logistics. It is crucial that our products are attractive to the customers, so we are working on new product offer and getting ready for upcoming seasons,“ commented Perini on company’s next steps.
„All these significant changes will definitely improve our year end cash flow position and will represent a fundamental step to drive this company forward to a financially sustainable business model which might then lead Baltika to the international expansion in the future,“ he added.
In the first half of the year, the group’s sales revenue decreased by 50% compared to the same period last year and amounted to 9,8 million euros. The weak recurring financial results for the first half of the year is related to the global COVID-19 pandemic and the consequent closure of stores for almost two months.
“But our e-shop showed a very strong sales result, where the sales revenue in the conditions of the COVID-19 crisis increased in the first half of the year by 15% compared to the previous year,” noted Perini. Baltika Group is the largest clothing design company in the Baltics and employing 421 people across the Group. Baltika Group develops and operates clothing brands Monton, Baltman, and Ivo Nikkolo.
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