Management report

 Field of activity

 The enterprise was founded in 1900, but the actual name it has got since 1970. Today, AS “Latvijas balzams” is a leading producer of alcoholic beverages. Totally, company produces more than 130 different kinds of alcoholic beverages. AS “Latvijas balzams” major shareholder is “S.P.I. Distilleries. B.V.” which owns 89.52% shares of the company’s equity capital.

 The activity of enterprise year 2009 first nine months

 AS “Latvijas balzams” is the biggest producer of alcoholic beverages in Latvia, as well as one of the largest taxpayers in Latvia. During first nine months of 2009 AS “Latvijas balzams” paid 34.2 millions lats to the state budget, including excise tax amounting to 26.3 million lats. 

 The unaudited turnover of the company in the first nine months of year 2009 was 60.1 million lats, which is by 23.8% less than during first nine months of 2008. The decrease in turnover at local market was 27.6% as compared to the same period in 2008. In comparison with 2008, the export market sales decreased by 18%, or 5 787 thousands lats. During the first nine months of year 2009, the sales to the EU countries decreased by 14.6% in comparison with the same period in 2008. Between them, sales to Lithuania decreased by 23.3% and to Estonia increased by 7.1% as compared to the same period in 2008. Decrease of sales is related to the increase of excise tax, illegal alcohol trade and decrease of economical activity in the region. The top focus sales markets are Baltic States, Poland and Scandinavia; meanwhile new export markets are being acquired. 

 The unaudited profit for the reporting period was 2 444 thousands lats, that is 22.8% less than in the first nine months of 2008 (3 165 thousands lats).

 Future perspectives of activity

 Despite of hard economic situation in country and low consumption power company aims to hold existing market share as well as to continue with export development by improving its product portfolio. In the last quarter of 2009 AS “Latvijas balzams” priorities will be control of production cost and increase of production effectiveness.

 AS Latvijas balzams

Chairman of the Board                                                              Karlis Andersons

  Riga, 27 November, 2009