30.08.2000, Tallinna Farmaatsiatehas, TLN

TALLINNA FARMAATSIATEHAS

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO UNAUDITED FINANCIAL RESULTS, H1 2000



COMMENTARY TO INCOME STATEMENT



The H1 2000 net sales of Tallinna Farmaatsiatehase AS amounted to 46,302 th.

EEK. Compared to the same period of previous year the sales increased by

15,310 th. EEK, up by 49.4% (net turnover in H1 1999 was 30,992 th. EEK).  

The total operating income increased by 23,824 th. EEK (71.6%).



Compared to the same period last year, the operating expenses increased 

by 18,758 th. EEK (operating expenses in H1 1999 were 31,199 th. EEK and in

H1 2000 49,958 th. EEK), from which the increase in expenses for materials

14,573 th. EEK was related to the increase in production volume by 2 times.

In other operating expenses were shown commissions in the amount of 3,634 th.

EEK and write-off of the uncollectible accounts in the amount of 1,362 th.EEK.



Possible income from abovementioned debtors in future will be shown under other

operating income. By July 31, 2000 income from abovementioned debtors

amounted to 268,8 th. EEK.



Compared to the same period last year, the operating profit increased 

by 4,984 th. EEK, up by 230 % (operating profit in H1 1999 was 2,162 th. EEK 

and in H1 2000 7,146 th. EEK), and net profit increased by 5,496 th. EEK 

(-1,700 th. EEK loss in H1 1999, and net profit in H1 2000 was 3,796 th. EEK).



COMMENTARY TO BALANCE SHEET



As of June 30, 2000 the Balance capacity was 96,269 th. EEK. Compared 

to the net balance at the beginning of year 2000, assets have increased 

the most – finished goods reserve increased in the amount of 6,658 th. EEK,

caused by finished goods preparation, related to ointment department

reconstruction. Current assets in total increased by 1,018 th. EEK (1.7%).



Current liabilities decreased by 4,456 th. EEK (17.2%). Shareholders' equity 

increased by 3,797 th. EEK (31.5%) on the account of H1 2000 net profit.



FINANCIAL INDICATORS



Comparison of financial indicators between H1 of 1999 and H1 of 2000:



							 1999		2000

Gross profit margin					  7.0		15.4

Net profit margin	 		 	 	 -5.5		 8.2

Return on equity (ROE)				        -25.0		24.0

Return on total assets (ROA)				 -1.8		 3.9

Proportion of capital and reserves and all assets	  6.8		16.4

Income of accounts receivable (by days)                 124.0		97.0

Earnings per share (EEK)			  	  0		 3.04





Raivo Unt

Financial Director

+372 6120201