FAKTO

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO THE FINANCIAL RESULTS, 9M 2000



Management Report, 9m 2000



AS Fakto and its subsidiaries form a group, which main fields of 

activity are sale of vehicles, car accessories and car parts, and 

car maintenance and repair works.



AS Fakto group consists of the following companies:

            AS Fakto holding		 Address

AS Fakto                        Osmussaare tee 10, TALLINN

AS Nissan Balti          65%    Osmussaare tee 10, TALLINN

AS Itaalia Auto         100%     Tammsaare tee 53, TALLINN

OÜ Nempe                100%    Osmussaare tee 10, TALLINN



The group's companies have concentrated on sale and maintenance of 

cars of Nissan and Fiat group (Fiat, Alfa Romeo and Lancia).

 

In 9m 2000 the companies of AS Fakto group sold a total of 1,042 new 

Nissan, Fiat and Alfa Romeo cars (348 more than in 9m 1999).



Sale of new cars by companies:



                  2000	  	 1999  	         Change      	  (%)

Nissan Balti	   909		  604		    305		 50.50%

incl. AS Fakto	   406		  358		     48		 13.41%

AS Itaalia Auto	   133		   90		     43		 47.78%

Total		 1,042		  694		    348		 50.14%



In 9m 2000 the company's net sales totaled EEK 291.6 million (EEK 

73.8 million or 33.9% y-o-y growth). 

Net sales by fields of activity:



                       2000	    1999      Change        (%)

Vehicles          237,625,125  163,451,109  74,174,017   45.38%

Services	    9,388,784    9,607,818    -219,034   -2.28%

Car parts	   36,753,868   37,881,255  -1,127,387   -2.98%

Garage equipment    3,469,220    4,503,291  -1,034,071  -22.96%

Car rental services   251,876      270,355     -18,479   -6.83%

Other sales 	    7,832,830    6,820,566   1,012,265   14.84%

Total             291,600,607  217,760,747  73,839,860   33.91%



Change in net sales on annual basis, by companies:

                    Fakto  	N-Balti    It.Auto     Nempe	   Group

Vehicles	     102,585    195,008     24,075         0     237,625

Services 	       8,618          0      2,272       201       9,389

Car parts 	      16,163     22,517      6,794     4,347      36,754

Car rental services       64          3          0     1,379         252

Garage equipment       3,475          0          0         0       3,469

Other sales  	       4,513      1,587        328       401       4,112

Total	             135,418    219,114     33,469     6,328     291,601





Sale of vehicles



Initial registration of vehicles at ARK (vehicle registration center) 

in 9m 2000:



                          2000    1999  Change        %

Total cars registered	16,387  18,643   2,256   -12.1%

incl. new cars		 7,097   4,978   2,119    42.6%



The above table indicates that even the initial registration of new 

cars has increased y-o-y by 42.6%, the total initial registration of 

vehicles at ARK has dropped by 12%. Decrease in imports of used 

vehicles (initial registration) might be due to sufficient supply of 

3-4 years old cars on the Estonian car market (mainly cars that were 

bought as brand new 3-4 years ago, and that are now being replaced).



Registration of new cars at ARK (vehicle registration center) in 9m 

2000, by models:



Model     2000   share  1999   share  1998   share   1997   share

Toyota     719  10.13%   472   9.48%    717  11.03%   686    9.83%

Peugeot    683   9.62%   422   8.48%    278   4.28%   360    5.16%

Volkswagen 668   9.41%   530  10.65%    663  10.20%   625    8.96%

Nissan     539   7.59%   342   6.87%    470   7.23%   514    7.37%

Mazda      532   7.50%   435   8.74%    406   6.24%   526    7.54%

Opel       451   6.35%   149   2.99%    404   6.21%   430    6.16%

Honda      382   5.38%   379   7.61%    621   9.55%   942   13.50%

Seat       319   4.49%    93   1.87%     51   0.78%    19    0.27%

Lada       297   4.18%     

Suzuki     270   3.80%   339   6.81%    199   3.06%   223    3.20%

Other    2,237   31.5% 1,817   36.5%  2,693   41.4% 2,651    38.0%

Total    7,097         4,978          6,502         6,976		 

Group      651   9.17%   411   8.26%    633   9.74%   768   11.01%



The market share on cars sold by companies in Fakto group has grown 

by 0.91% since 9m 1999.





Services and sale of car parts.



In 9m 2000 the consolidated net turnover from sale of services stood 

at EEK 9.4 million, which is EEK 219 thousand less than during the 

same period last year.

Sale of services by companies in 9m 2000:



		       2000       1999      Change        %

AS Fakto          6,952,585  8,257,211  -1,304,627  -15.80%

AS Itaalia Auto   2,262,534  1,939,604     322,930   16.65%

OÜ Nempe            173,665    202,713     -29,049  -14.33%

Group             9,388,784  9,607,818    -219,034   -2.28%



The group's net turnover from sale of services and car parts 

decreased by EEK 1.35 mln y-o-y, incl. EEK 1.1 mln drop in 

turnover from sale of car parts.



Sale of car parts by companies:



                       2000        1999      Change         %

AS Fakto         16,163,122  18,405,957  -2,242,835   -12.19%

AS Nissan Balti  22,516,843  24,031,124  -1,514,282    -6.30%

AS Itaalia Auto   6,794,284   6,430,106     364,179     5.66%

OÜ Nempe          4,346,735   4,170,530     176,206     4.23%

Group            36,753,868  37,881,255  -1,127,387    -2.98%

Other activities



Other activities include income from sales of car rental services, 

garage equipment, income from rent of premises and income from other 

sales that are not related with the company's main activity fields. 

In 9m the income from sales of other services totaled EEK 9.8 

million, i.e. EEK 1 million more than in 9m 1999.





Operating costs

 

Operating costs grew by EEK 1,519,802 compared with 9m 1999. 

Changes by expense accounts:



                                 2000         1999     Change

Personnel expenses         21,741,523   21,127,552    613,971

Other operating expenses   15,700,890   12,727,373  2,973,517

Depreciation		    4,465,798    5,216,452   -750,654

Total operating expenses   41,908,210   39,071,376  2,836,834



On the operating expenses account, the volume of other operating 

expenses has increased the most, mainly due to increased advertising 

expenses.

The advertising expenses have mainly increased on the account of this 

spring's car fair "Motorex 2000", where all companies of the group 

participated this year.





Toivo Urva

Management Board chairman

+372 63 89 200