Once again, the company beat our estimates posting an impressive profit growth. The weaker consumer is a challenge this year, but we believe Tallinna Kaubamaja (TKM) will show healthy profits and foresee the 16-year dividend run to continue.

Q4 profits were much better than expected. Management managed to offset almost all last year’s cost inflation. We reiterate our 2022 dividend forecast despite a lower than normal free cash flow. Only minor adjustments are made to our estimates, and our target price is unchanged.

Sales was above, and gross profit in line with forecast. Record high energy costs resulted in lower than expected EBIT; however, we see no risk to the 16-year consecutive dividend run and forecast continued attractive yield.

Sales and earnings were in line with estimates. We expect continued high inflation for the remainder of the year and therefore lower our sales and earnings estimates, while our dividend forecast is unchanged.

Despite double-digit Q1/22 inflation, all segments improved their EBIT margin, as prices were increased, and operating expenses were minimized. We expect the Lidl market entry to impact discount chains rather than premium retailers. We raise our estimates and Base case Fair value.

Tallinna Kaubamaja (TKM) has paid dividends every year since 2004, and following a better than expected Q4/21, we foresee attractive dividends from 2021 profits. The recent buy-out of ICA in Sweden imply share price upside.

The Q3/21 report was another show of strength with improving margins resulting in 48% better than expected earnings. We raise our dividend forecast and Base case share price.

The Car segment drove sales above our forecast while all segments reported better than expected profits. Security services forms a potential new high growth segment. We upgrade our estimates and Fair value. Once again, the segment diversification results in a solid pandemic performance.

We see strong pandemic recovery growth in the upcoming quarter and continued solid performance by the Car segment. The estimated 2021 dividend is below the 5-yr average but set to recover already next year together with a +50% EPS growth.

Uppsägningarna under det andra halvåret 2020 innebär att Tallink är dimensionerad för reserestriktioner. Vi tror på positivt kassaflöde i år men om vi har fel kommer statliga lån att skydda nedsidan. Utsikten på kort sikt är utmanande men värderingen är låg baserat på normaliserad vinst.