Eesti Telekom                 FINANCIAL RESULTS           02/06/2003 09:00



2002 PRELIMINARY RESULTS, EEK



6 February 2003



          THE PRELIMINARY FINANCIAL RESULTS OF 2002

                             

Eesti  Telekom,  the  leading provider of  telecommunication

services  in Estonia, hereby announces its results  for  the

financial year ending 31 December 2002.



Financial highlights

                                2002         2001  Change, %

Total revenues, mEEK           4,625        4,285          8

EBITDA, mEEK                   2,131        1,931         10

EBITDA margin, %                  46           45           

EBIT, mEEK                     1,130          795         42

EBIT margin, %                    24           19           

Profits  before  taxes,        1,131          810         40

mEEK

Net   profits  for  the        1,039          799         33

period, mEEK

EPS, EEK                        7.57         5.67         33

No. of A- shares         137,383,178  137,383,178           

Investments, mEEK                627          953        -34

Net gearing, %                   -23           -9           

ROA, %                            24           18           

ROE, %                            30           22           





Commenting on these financial results, Chairman Jaan  Männik

stressed:



"Year 2002 was a good year."



For further information, please contact:



Krister Björkqvist                      +372  6272 465

CFO



Hille Võrk                              +372 6272 460

Financial Manager





CHAIRMAN’S STATEMENT

Revenues, expenses, and profits



During  2002,  consolidated revenues of  the  Eesti  Telekom

Group amounted to 4,625 mln EEK, showing an increase of  8%,

compared  to 2001. Mobile communication was the main  growth

area.  At  the same time, fixed data communication  revenues

were  also  growing fast. Operating expenses were 2,494  mln

EEK,  up  by  6%.  The growth results from higher  costs  of

materials  and services. Personnel costs were  down  by  4%,

compared to 2001. The EBITDA of the Group was 2,131,  up  by

10%. The EBITDA margin was 46% (2001: 45%). Depreciation was

12%  lower  than a year ago, amounting to 1,001 mln  EEK.  A

strong  and  positive  cash flow has  led  to  positive  net

financing  costs to the extent of 6 mln EEK (2001:  -12  mln

EEK). Income tax on dividends, paid in 2002, amounted to  91

mln  EEK  (2001: 31 mln EEK). The net profit  of  the  Eesti

Telekom Group in 2002 was 1,039 mln kroons, or 7.57 EEK  per

share (2001 respectively 779 mln EEK and 5.67 EEK).



The  results  of   2001  and 2002  were  influenced  by  the

following extraordinary factors:



                       2002                   2001

Total revenues AS Eesti Telefon sold  

               property    with    a

               capital  gain  of  63

               mln EEK. The gain was

               accounted  as  "other

               revenues".

Total expenses                        AS    Eesti   Telefon

                                      released a 46 mln EEK

                                      reserve  related   to

                                      the    OÜ    Albufent

                                      claim.

Income    from                        AS Eesti Telefon sold

associates                            its  ownership in  AS

                                      Teabeliin. 33 mln EEK

                                      of     profit     was

                                      accounted  as  income

                                      from associates.

Depreciation                          AS Eesti Telefon made

                                      a  94  mln EEK write-

                                      off,   accounted   as

                                      depreciation.



The consolidated revenues of the Eesti Telefon Group in 2002

were  2,627 mln EEK, down by 9% compared to 2001.  Operating

expenses amounted to 1,667 mln EEK, down by 16%. The  EBITDA

of  the  Group was 960 mln EEK, up by 10%. The EBITDA margin

rose  remarkably  - from 31% in 2001 to  37%  in  2002.  The

EBITDA  margin of the parent company even reached  40%.  The

Eesti  Telefon Group earned 286 mln EEK of net profit during

2002.



The  decrease of the revenues of the Eesti Telefon Group was

caused  by  the  parent  company of  the  Group.  The  total

revenues of AS Eesti Telefon amounted to 2,392 mln EEK, down

by   11%.   This   decrease  was  caused  by   lower   voice

communications revenues. Domestic call revenues were down by

18%,  international call revenues were down by 7%. The  fall

resulted  from  a tightening of the market - more  and  more

domestic  calls are made by mobile phones instead  of  fixed

phones.  Revenues from calls from fixed to  mobile  networks

were 8% lower, and Internet dial-up revenues were 42% lower.

The  decrease  in  voice  communications  revenues  resulted

mainly from lower mobile transit revenues. Starting 2002,  a

large part of mobile calls went directly from the network of

one  operator  to  the  network of another  (interconnection

costs  were  down as well). Main line revenues of  AS  Eesti

Telefon were up by 20%. Revenues from the Internet and  data

communications were up by 73%.



The  decrease of the operating expenses resulted mainly from

lower  mobile transit costs. Lower number of employees  also

led  to significantly lower personnel costs - down by 8%  in

the Eesti Telefon Group and down by 13% at AS Eesti Telefon.

The  number  of Eesti Telefon Group employees fell  in  2002

from 2,045 employees, at the end of 2001, to 1,999 employees

by the end of 2002. The number parent company employees fell

from 1,552 to 1,420.



Intensity  of the competition between fixed operators,  that

started in 2001 with the opening up of the market, decreased

in  2002.  There  is  now more actual competition  with  the

mobile operators. The market shares of AS Eesti Telefon have

stabilised. As of the end of 2002, the company estimates its

share  of  total  call  minutes to be 89%  (2001:  91%),  of

domestic  call  minutes  88% (90%),  of  international  call

minutes 70% (70%), of fixed to mobile minutes 75% (75%)  and

of Internet dial-up minutes 95% (96%).



Subsidiary companies of the Eesti Telefon Group, as  opposed

to the parent company, reported growth in 2002. Optimisation

of the customer service and sales network in AS Telefonipood

resulted in a 12% growth in the operating revenues and  with

a  39%  growth in the EBITDA in 2002. The operating revenues

of  the Connecto Group (AS Connecto and SIA Connecto Latvia)

were  up by 23%. The EBITDA of the Connecto Group was up  by

48%.  A framework agreement for the construction of networks

was  concluded in December 2002 between SIA Connecto  Latvia

and   Latvia’s   largest  telecommunications   company   SIA

Lattelekom.  In  accordance with  the  concluded  agreement,

Connecto   Latvia   will  begin  to   plan   and   construct

Lattelekom’s    fibre-optic   and   copper    cable    based

telecommunications  networks.  The  agreement   offers   SIA

Connecto  Latvia the possibility to develop in the  area  of

fixed  networks,  through  the  provision  of  planning  and

construction  services.   AS  Connecto  acquired   the   ISO

certificate in 2002. Possessing the certificate is almost  a

standard  precondition  for participation  in  biddings  for

government  contracts.





The  total  revenues of the EMT Group, in 2002, amounted  to

2,457  mln  EEK,  up by 11%. The operating expenses  of  the

Group were 1,260 mln EEK, up by 10%. The EBITDA of the Group

was  1,197  mln EEK and the EBITDA margin was 49%.  The  net

profit  of the EMT Group in 2002 was 856 mln EEK, up by  13%

compared to 2001.



The  total revenues and the operating expenses of the parent

company, AS EMT, were up by 9% and 6% respectively. Revenues

from SMS and data had the highest growth-rate, exceeding the

corresponding figure in 2001 by 35%. Revenues  from  prepaid

cards  grew  also  significantly,  by  21%.  Revenues   from

domestic and roaming calls were both growing. Revenues  from

monthly  fees  remained at the same level as  in  2001.  The

expenditure  growth  was  mainly caused  by  interconnection

charges.



The number of customers of AS EMT reached 427,500 by the end

of  2002. The company had 280,300 contractual customers  and

147,200  prepaid-card users. The client base grew by 44,800.

The  net growth of contractual customers was 24,600, and the

net  growth  of  pre-paid card users  was  20,200.   By  the

Communications   Board  estimates,  mobile  penetration   in

Estonia  reached  61%  by the end of  September  2002.   The

market  share  of AS EMT should be around 50%.  The  monthly

ARPU  in December 2002 was 423 EEK, and the average for 2002

was 437 EEK (December 2001: 439 EEK, 2001 average: 452 EEK).

The  fall  in ARPU, in December 2002, was caused by  several

year-end  campaigns and the applying of favourable rates  in

December.



The  number of EMT Group employees grew from 384, at the end

of  2001,  to 406, by the end of 2002. The number of  parent

company employees grew from 293 to 295.



Balance sheet and cash flow



At  the  end of 2002, the total assets of the Eesti  Telekom

Group  amounted  to 4,437 mln EEK (end of  2001:  4,236  mln

EEK). Non-current assets were reduced, from the beginning of

the  year, by 384 mln EEK. Current assets were up by 586 mln

EEK.  Current  and non-current interest bearing  loans  were

reduced by 82 mln EEK. By the end of 2002, net debt  of  the

Group amounted to -907 mln EEK, and net gearing was -23%.



The  balance of the cash and cash equivalents of  the  Eesti

Telekom Group grew by 499 mln EEK during 2002. Net operating

cash  flow  was  1,890 mln EEK (2001: 1,739 mln  EEK).  Cash

outflow into investing activities was 534 mln EEK (2001: 903

mln EEK). Cash outflow into financing activities was 858 mln

EEK  (2001:  982 mln EEK). Dividends were paid  out  to  the

shareholders in the amount of 756 mln EEK:



Investments



The  Eesti Telefon Group invested 334 mln EEK in 2002 (2001:

495 mln EEK). The number of main lines in use at the end  of

December  was 465,121 (a penetration of 34.2 lines  per  100

people).  The net decrease in the number of main  lines  was

36,600.  The  abandoned lines were mainly analoge  lines  of

residential   customers.  The  number  of   business   lines

increased  by  more  than 1,200. The  number  of  lines  per

employee was 328. 13,600 new ADSL connections were installed

during 2002. The total number of Atlas ADSL connections  was

30,482  at  the  end  of December 2002  (a  penetration  2.2

connections per 100 people).



In  May  2002,  AS  Eesti Telefon made the  Eurovision  Song

Contest   visible   and  audible  for   the   whole   World.

International communication possibilities with  36  European

countries, television transmission, communication  solutions

for  the  press-centre  and for over  1,000  people  at  the

concert   hall     were   provided.   State   of   the   art

telecommunication  solutions  -  wireless   Internet,   web-

transmission of the concert to the clients having  permanent

Internet connections in Estonia - were used in parallel with

the more traditional ones.



In  September 2002, an important stage was completed in  the

establishing  of  a  nationwide fibre-optic  cable  backbone

network,  and  all  county centres  were  connected  to  the

network.  This  network  is based  upon  the  cable-circuits

principle.  Therefore,  in  case  of  a  possible  technical

failure,  network traffic is automatically  redirected,  and

the connection is not interrupted.



At the end of November 2002, Eesti Telefon established up  a

new  nationwide data communication network. The speed of the

new  network  exceeds  the previous one  by  64  times.  The

network  is  based  upon  DWDM  (dense  wavelength  division

multiplex) technology. This technology improves the  quality

and flexibility of the data communication.



In  February 2002, the Eesti Telefon Group expanded  through

the  acquisition  of  a  new  firm.  So  as  to  extend  its

activities beyond Estonia, AS Connecto, a subsidiary of  the

Group,   acquired  100%  of  the  shares  of   the   network

construction  company  SIA Connecto Latvia  (previously  SIA

Link), which operates in Latvia.



The  EMT  Group invested 294 mln EEK in 2002 (2001: 456  mln

EEK). The majority of investments made by EMT went into base

stations  and  exchanges, and IT systems. GPRS  roaming  was

offered  to  clients  in neighbouring countries.  It  became

possible to pay for public transit fares with m-payments. At

the end of the year, the  EMT electronic self-service bureau

was redone.



In  December  2002,  AS  EMT and AS Eesti  Telefon  together

launched  a  nationwide wireless Internet  connection.  This

system   offers  high-speed  connection  in  WiFi  (Wireless

Fidelity) areas and slower connections everywhere in Estonia

through  GPRS. And clients desiring extra security can  make

use of the Virtual Private Network (IP-VPN) service.



Both   subsidiary  companies  of  the  Eesti  Telekom  Group

invested    an    additional   5    mln    EEK    into    AS

Sertifitseerimiskeskus.



Changing the telecommunication landscape



Fixed communication

AS  Eesti  Telefon  expects major changes  in  the  Estonian

telecommunications sector in 2003. During the  last  decade,

attention  was  concentrated on getting rid of  the  waiting

list,  digitalisation,  voice  communication  quality,  rate

rebalancing. In the coming years, data communication and IP-

based transmission will have the highest priority. Based  on

the results of Eesti Telefon, the revenues from Internet and

data communication have multiplied during the last couple of

years.  The capacity of the international data communication

connections of the company grew threefold in 2002, exceeding

the  capacity of the voice communication connections for the

first time. The new DWDM network enables the capacity to  be

expanded dozens of times.







Mobile communication

For  five  years already, the Estonian mobile communications

market  has  been  shared  by  three  operators  -  AS  EMT,

Radiolinja,  and  Tele2. In August 2002, two  new  operators

announced their intention to enter the market. Each  of  the

current  operators has built it’s own physical network.  The

newcomers will act as virtual network providers. One of  the

new  operators,  OÜ Vetrelson Haldus, plans  to  start  bulk

purchases  of  call  minutes  from  other  operators.  These

minutes  will  be used for introducing new services  to  the

Estonian market. But this newcomer had not actually  started

its  operations by the end of 2002. The second new operator,

Citygsm,  will  launch a prepaid-card at  the  beginning  of

2003,  making  use  of  Radiolinja’s existing  network.  The

prepaid-card  will  make it possible  to  use  all  services

offered  to  contractual customers.  The  company  hopes  to

attract up to 20,000 customers.



The  issuing of the third generation mobile network licenses

has  been repeatedly postponed in Estonia. 2003 is the  next

likely deadline. According to a project being debated in the

Riigikogu (Parliament), four third generation licenses would

be  issued  for  a ten-year period. At the  first  stage,  a

direct  offer would be made to the existing licensed  mobile

operators in Estonia, with a fee of 70 mln EEK per  license.

The  second  stage would be an auction of the  licenses  not

issued during the first stage, with an initial price  of  70

mln  EEK per license. A precondition for the licensee  would

be  the  obligation to establish, within seven years of  the

issuing   of   the  license,  a  third  generation   network

encompassing at least 30% of the Estonian population.



However, it is the opinion of the management of AS EMT, that

for a small market like Estonia, four licenses are too many.

If  four  licenses are issued, the capacity of the frequency

band  of each operator would be quite limited, leading to  a

lower  efficiency of investments, and to higher  prices  for

the final consumers.





Relations with state regulators



Fulfilment of the obligations arising from the agreement for

the termination of the concession agreement

On  29  December 2000, the agreement for the termination  of

the  concession agreement was concluded between the Republic

of  Estonia  and  AS Eesti Telefon. The agreement  regulates

some aspects of the relationship between the company and the

state  until  1 January 2004. With the agreement,  AS  Eesti

Telefon  accepted an obligation to ensure that  95%  of  the

applications for telephone connections submitted to AS Eesti

Telefon after 28 February 2003 will be satisfied within  two

weeks of the payment of the invoice, and to eliminate by  28

February 2003, at the latest, the waiting list of those  who

had  submitted  applications  before the concluding  of  the

agreement.



In  2001  and 2002, AS Eesti Telefon invested 17.3  mln  EEK

into the elimination of the aforementioned waiting list.  By

the  end  of 2002, the waiting list of subscribers resulting

from  applications received before the end of 2000, had been

reduced  from  24,290 to 200. The remaining 200 applications

are  expected to be taken care of at the beginning of  2003.

New  applications for a fixed phone connection are fulfilled

within 10 business days in 98% of the cases.



Being named an SMP enterprise

On  18  November 2002, the Communications Board declared  AS

EMT  to  be an operator with significant market power (SMP),

for 2003, in the public mobile telephone service market. The

Communications Board justified this SMP declaration with the

statement  that the EMT national market share  exceeded  the

level  established by the competition assessment  procedures

--   at  least  25%  of the turnover of  the  public  mobile

telephone  services market. For the year 2002,  AS  EMT  was

also  declared  to  be an operator with  significant  market

power in the public mobile telephone service market



On  November 18, the Communications Board declared AS  Eesti

Telefon  to  be an operator with SMP for 2003 in the  public

telephone service market, public leased line service market,

and    public    interconnection   service    market.    The

Communications  Board based the determination  of  operators

with  significant market power for 2003 on the market shares

of  2001.  The market share of AS Eesti Telefon amounted  to

89.22  per  cent  of the turnover of the telephone  services

market,  72.84 per cent of the turnover of the  leased  line

service  market, and 59.02 per cent of the turnover  of  the

interconnection service market in 2001. For the  years  2001

and  2002, AS Eesti Telefon was also declared to  be  as  an

operator  with  significant  market  power  in  the   public

telephone service market, public leased line service market,

and public interconnection service market



Litigation with the Estonian Competition Board

On  24  April 2001, the Competition Board issued a  precept,

based on the Competition Act, prohibiting Eesti Telefon from

levying a per-minute rate of 34 senti at peak time, 28 senti

at  off-peak time, and 14 senti at night for voice calls  in

its  network. The Competition Board thereby instructed Eesti

Telefon  to  levy  rates  lower  than  those  which  it  had

established on 1 April 2001. Eesti Telefon is of the opinion

that the basic price of 14 to 34 senti, for calls within the

network,  is cost-based. Therefore, Eesti Telefon  disagreed

with the precept of the Competition Board, and contested  it

in  court in May 2001. The first and the second level courts

made  their decisions in favor of AS Eesti Telefon  and  the

Competition Board appealed to the Supreme Court,  which,  on

December  18,  annulled the earlier judgments and  forwarded

the  case  to  the  Administrative Court for  revision.  The

Supreme  Court  found that the precept  of  the  Competition

Board  regarding  minute  rates of the  voice  communication

services within a network is inadequate for making the final



judgment.  The  Administrative and the  Circuit  Court  had,

according  to the Supreme Court, not assessed all pieces  of

evidence. The Supreme Court considered it necessary for  the

Administrative   Court  to  use  the   assistance   of   the

Communications Board when revising the case.



Reducing termination fees of calls made into mobile networks

The Communications Board started procedures in November 2002

to  reduce  the termination fees of calls made  into  mobile

networks.  The Board analysed interconnection  fees  of  the

mobile  operators  and  came  to  the  conclusion  that  the

operators  have  not  based their charges  on  a  reasonable

profit  percentage,  as determined by the  Telecommunication

Act.  The  profit  share in the interconnection  charges  of

Estonian  operators significantly exceeds the  corresponding

share in the charges levied by operators of other countries.

The  opinion  of  the  Communications Board  is  that  lower

interconnection charges would improve the quality of  mobile

calls  made from abroad to Estonia, and would lead to  lower

retail  rates.  On  January 31, 2003, AS EMR  announced  its

intention to reduce the termination fee from March  1,  2003

from  the  current  3.06 EEK/min to 2,90  EEK/min,  and  the

discounted termination fee from the current 2,80 EEK/min  to

2,75 EEK/min.





Annual General Meeting of  the Shareholders



The  Annual General Meeting of the Shareholders of AS  Eesti

Telekom  took  place  on 17 May 2002. The  meeting  approved

Annual  Report 2001, and the proposal for the allocation  of

the  net profits. It was decided that the owners of A-shares

would  be  paid dividends of 5.50 EEK per share (a total  of

756 mln EEK, or 97% of the net profits of 2001).   The owner

of  the  B-share was paid dividends in the total  amount  of

10,000  EEK. The list of shareholders entitled to  dividends

was fixed on 5 June 2002, and the dividends were paid out on

19 June 2002.



The  General Meeting authorised AS Eesti Telekom to acquire,

within  one year, AS Eesti Telekom A-series shares, so  that

the  total  nominal value of own shares  held  by  AS  Eesti

Telekom  does not exceed the legal limits; and so  that  the

price  payable  per share does not exceed the highest  price

paid  for  an AS Eesti Telekom A share on the Tallinn  Stock

Exchange,  on the day of acquiring the shares. Any  possible

share  buy-back  must be approved by the  AS  Eesti  Telekom

Council. No share buy-backs have taken place to date.



Changes in the ownership structure



On 26 March 2002, Sonera of Finland and Telia of Sweden, the

strategic partners of AS Eesti Telekom, announced that  they

are  planning to merge. On 9 December 2002, the merger  took

place, and the merged company continued its operations under

the name TeliaSonera.



TeliaSonera  owns 49% of the shares of AS Eesti Telekom.  In

accordance  with  the shareholders agreement,  concluded  in

December  1998,  the company has agreed not  to  acquire  in

excess  of  49%  of  the issued shares prior  to  the  fifth

anniversary of the agreement becoming effective, or the date

on which the government’s holding of shares falls below 10%.







AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

INCOME STATEMENT

Financial  statements are prepared in thousands of  Estonian

kroons (EEK)



                                       2002        2001

Revenue                                     

Net sales                         4,467,322   4,154,438

Change in work-in-progress              742         529

Capitalized self-constructed         65,384      87,112

assets

Other revenue                        91,736      42,461

Total revenue                     4,625,184   4,284,540

                                                       

Operating expenses                                     

Materials, consumables,           1,437,637   1,290,730

supplies and services

Other operating expenses            500,733     494,962

Personnel expenses                  512,880     534,754

Other expenses                       42,756      33,118

Total expenses                    2,494,006   2,353,564

                                                       

Profit from operations            2,131,178   1,930,976

before depreciation and

amortization

                                                       

Depreciation and                  1,001,191   1,135,661

amortization

                                                       

Profit from operations            1,129,987     795,315

                                                       

Income/ expenses from                -5,519      26,828

subsidiaries and associated

companies (net)

Other net financing items             6,148     -11,719

                                                       

Profit before tax                 1,130,616     810,424

                                                       

Income tax on dividends              91,298      30,932

                                                       

Profit after tax                  1,039,318     779,492

                                                       

Minority interest                         0         557

                                                       

Net profit from ordinary          1,039,318     778,935

activities

                                                       

Net profit for the period         1,039,318     778,935

                                                       

Earnings per share                                     

Basic earnings per share (in           7.57        5.67

kroons)

Diluted earnings per share             7.57        5.67

(in kroons)

AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

BALANCE SHEET

Financial statements are prepared in thousands of Estonian

kroons (EEK)



                                  2002         2001

                                                   

ASSETS                                  

Current assets                          

Cash and cash equivalents      962,763      464,217

Trade receivables, net         427,595      403,324

Other receivables               16,995       10,716

Accrued income                 125,082       99,242

Prepaid expenses                69,705       28,158

Inventories                     93,082      104,013

Total current assets         1,695,222    1,109,670

                                        

Non-current assets                      

Long term financial assets      27,058       26,464

Tangible assets, net         2,672,669    3,043,869

Intangible assets, net          42,541       56,139

Total non-current assets     2,742,268    3,126,472

                                                   

TOTAL ASSETS                 4,437,490    4,236,142

                                        

EQUITY AND LIABILITIES                  

Current liabilities                     

Interest bearing loans and      35,705       88,166

borrowings

Customer prepayments             2,879        9,237

Accounts payable to            244,259      260,932

suppliers

Other payables                       0          168

Tax liabilities                 29,496       32,697

Accrued expenses               188,813      152,644

Provisions                      16,086       17,482

Prepaid revenue                  1,464       10,350

Total current liabilities      518,702      571,676

                                        

Non-current liabilities                 

Interest bearing loans and      19,761       49,115

borrowings

Other long-term payables             0            0

Total non-current               19,761       49,115

liabilities

                                        

Equity                                  

Issued capital               1,373,833    1,373,833

Share premium                  309,964      309,964

Statutory legal reserve        137,384      137,384

Retained earnings            1,038,553    1,015,235

Net profit for the period    1,039,318      778,935

Foreign exchange                   -25            0

differences

Total equity                 3,899,027    3,615,351

                                        

TOTAL EQUITY AND             4,437,490    4,236,142

LIABILITIES



AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

CASH FLOW STATEMENT

Financial statements are prepared in thousands of Estonian

kroons (EEK)



                                   2002          2001

Cash flow from operating                 

activities

Profit before tax and         1,130,616       810,424

minority interest

Adjustments for:                         

 Depreciation                 1,001,191     1,135,661

 Profit/loss from sales         -54,748         1,473

and write-off of fixed

assets

 Income/ expense from             5,519       -26,828

subsidiaries and

associates

 Profit (-) / loss (+)                0         7,823

from revaluation of

investments

 Interests income/              -16,582        -3,070

expense, net

 Other non-cash                    -254          -309

adjustments

Operating profit before       2,065,742     1,925,174

working capital changes

                                         

 Change in current              -84,794       -56,615

receivables

 Change in inventories           12,022        45,210

 Change in current               -3,592      -159,419

liabilities (except

loans)

Adjusted cash generated       1,989,378     1,754,350

from operations

 Interest paid                   -7,663       -15,179

 Income tax paid                -91,298             0

Net cash flow from            1,890,417     1,739,171

operating activities

                                         

Cash flow from investing                 

activities

Purchase of tangible           -592,518      -914,606

assets

Purchase of licenses            -33,682       -35,928

Purchase of shares,             -10,000       -21,996

investments and other

Proceeds from sales of           85,421        11,426

tangible assets

Proceeds from sales of                0             0

investments

Proceeds from sales of                0        43,500

associates

Loans granted                      -425        -4,770

Cash receipts from                   60            84

repayment of loans

Dividends received                   96           181

Interest received                16,736        19,487

Net cash flow from             -534,312      -902,622

investing activities

                                         

Cash flow from financing                 

activities

Proceeds from convertible           484           440

long-term debt

Repayment of convertible            -10           -15

long-term debt

Repayment of unsecured                0      -100,000

short-term bonds

Proceeds from                       543             7

nonconvertible long-term

debt

Repayment of                     -5,952        -5,223

nonconvertible long-term

debt

Repayment of long-term          -79,238      -105,038

borrowings

Proceeds from finance                 0             0

lease liabilities

Payment of finance lease        -17,769       -16,629

liabilities

Proceeds from short-term              0        78,233

borrowings

Repayment of short-term               0       -78,233

borrowings

Dividends paid                 -755,617      -755,617

Net cash flow from             -857,559      -982,075

financing activities

                                         

Net increase / - decrease       498,546      -145,526

in cash and cash

equivalents

                                         

Cash and cash equivalents       464,217       609,743

at beginning of year

Cash and cash equivalents       962,763       464,217

at end of period





Hille Võrk

Financial Manager

6272460