HÜVITUSFOND

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO THE FINANCIAL RESULTS 1999



In 1999 Hüvitusfond earned net income in amount of EEK 96.1 million. 

The profit figure was mainly due to more conservative general 

investment policies and beneficial investments in money and capital 

markets.



In 1999 the fund earned EEK 163.4 million in interest income, of 

which income from investments in debt securities accounted for more 

than half. Interest expenses totaled EEK 46.7 million, incl. mostly 

interest paid on bonds. Net interest income was EEK 116.7 million 

(EEK 83.9 million last year).



Income from trading portfolio (stock exchange listed shares and money 

market instruments) was EEK 28.1 million (EEK 282.9 million loss in 

1998).



Income from investment portfolio (bonds, less liquid shares and 

units) was EEK 1.7 million (EEK 16.3 million loss in 1998). 



Interest income from bonds in investment portfolio is shown on 

interest income account on income statement.



Hüvitusfond's operating profit in 1999 totaled EEK 121.4 million 

(operating loss EEK 346.1 million in 1998).



Loss from subsidiaries and associated companies was EEK 25.3 million 

(EEK 23.9 million loss in 1998). Loss was mainly due to expenses 

related to establishment of subsidiary AS Werol Tehased.



Bonds issued by Hüvitusfond for Privatization Vouchers (EVPs) are 

carried at face value on the balance sheet under liabilities. As the

fund is not allowed to conduct transactions with EVPs (except issue 

of bonds), the EVPs earned from issue of bonds are canceled and not 

carried on the balance sheet under assets accounts, but carried at

face value as expenses made during the reporting period. 

In 1999 Hüvitusfond earned net income in amount of EEK 96.1 million, 

of which the amount of bonds issued in 1999 (EEK 113.7 million) will 

be deducted; hence Hüvitusfond posted EEK 17.5 million net loss in 

1999. In 1998 Hüvitusfond posted EEK 370 million loss (EEK 71.9 

million worth of bonds issued, and EEK 442 million loss).



In 1999 Hüvitusfond's assets grew by EEK 168 million, and liabilities 

decreased by EEK 133.3 million. In 1999 the fund redeemed EEK 240 

million worth of international debt securities, and issued new bonds 

for EEK 113.7 million. 



As of 31.12.1999 the fund's owners equity stood at EEK 1,021.9 

million, compared to EEK 720.3 million at end-1998. In 1999 the 

fund's revenues from privatization amounted to EEK 319.2 million; 

Hüvitusfond's total revenues from privatization are EEK 1,621.7 

million.    



Due to changes in accounting policies, Hüvitusfond will from now on 

prepare its balance sheet and income statement in accordance with the 

principles of International Accounting Standards (IAS). As the 

reporting principles were changed in 1999, the results of 1998 are 

adjusted under new accounting principles. For comparability and 

clarity purposes Hüvitusfond will also present its 1999 balance sheet 

and transactions reports prepared under respective schemes provided 

by the Ministry of Finance, in addition to statements prepared under 

IAS.





Jaanus Kosemaa

Public Relations Manager

+372 66 51 800