EESTI TELEKOM

ANNOUNCEMENT

24.05.99

 

COMMENTARY ON ESTONIAN TELEPHONE COMPANY UNAUDITED FINANCIAL RESULTS 

OF THE FIRST QUARTER OF 1999

 

Net sales and net profit of Estonian Telephone Company of the first 

quarter of the first quarter of 1999 were 573 mln kroons and 67 mln 

kroons respectively (500 mln kroons and 75 mln kroons in the first 

quarter of 1998). Profit before income tax amounted to 68 mln kroons 

which is 11% lower the corresponding result for the same period in 

1998 (77 mln kroons).

 

Total revenue of Estonian Telephone Company Group in the first 

quarter of 1999 amounted to 577 mln kroons, exceeding the result of 

the same period in 1998 by 13% (total revenue of the first quarter of 

1998 – 503 mln kroons). Growth in total revenue resulted mainly from 

growing main services revenue (call revenue grew by 16% and revenue 

from monthly fees grew by 20% in comparison with the same period of 

1998). Revenue from extra-services grew by 100% and data services 

revenue grew by 34% compared with the first quarter of 1998.

 

Share of call revenue in total revenue in the first quarter of 1999 

amounted to 60% (59% in the first quarter of 1998), and share of 

monthly fees amounted to 16% (15%).

 

Decrease in net profit in comparison with the first quarter of 1998 

essentially resulted from higher depreciation payments in the first 

quarter of 1999. Depreciation in the first quarter of 1999 amounted 

to 160 mln kroons (107 mln kroons in the first quarter of 1998). 

Downward revaluation of Estonian Telephone Company’s real estate 

objects by 16 mln kroons is included.

 

The ratio of net profit into total revenue in the first quarter of 

1999 was 11% (15% in the first quarter of 1998).

 

Total assets of Estonian Telephone Company grew from 2 553 mln kroons 

at the end of the first quarter of 1998 to 2 761 mln kroons by the 

end of the first quarter of 1999. Equity capital increased from 1 174 

mln kroons to 1 210 mln kroons. Non-current assets of the company 

grew from 2 111 mln kroons at the end of the first quarter of 1998 to 

2 196 mln kroons by the end of the first quarter of 1999.

 

Net sales and net profit of AS Teabeliin – a 60% subsidiary of 

Estonian Telephone Company – in the first quarter of 1999 were 7 mln 

kroons and 0,5 mln kroons respectively (corresponding results of the 

first quarter of 1998 were 6 mln kroons and 0,7 mln kroons).

 

Some accounting principles of Estonian Telephone Company were changed 

in the beginning of 1999. Gross amounts of transactions between 

operators are presented in statements instead of netted amounts used 

before.

 

Changes were introduced into tariffs of main services on February 1, 

1999: monthly fees were lifted and connection fees were cut. Starting 

from May 1, 1999, call set-up fee was established and minute tariffs 

were cut.

 

Business activities of the company are mainly financed from main 

services revenue.

 

Consolidated income statement and balance sheet of the first quarter 

of 1999 were prepared in accordance with principles of the 

International Accounting Standards (IAS) and in accordance with 

effective legal acts regulating accounting in the Republic of 

Estonia.

 

Financial statements of 1998 of Estonian Telephone Company were 

prepared in accordance with principles the Estonian Accounting 

Standards (EAS). Netting method was used in preparing of the 

statements but adjustments have been made into the statements using 

partitial gross method to make the statements comparable.