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



2002 PRELIMINARY RESULTS, EUR



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 ended 31 December 2002.



Financial highlights

                                2002         2001  Change, %

Total revenue, mEUR              296          274          8

EBITDA, mEUR                     136          123         10

EBITDA margin, %                  46           45           

EBIT, mEUR                        72           51         42

EBIT margin, %                    24           19           

Profits  before  taxes,           72           52         40

mEUR

Net   profits  for  the           66           50         33

period, mEUR

EPS, EUR                        0.48         0.36         33

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

Investments, mEUR                 40           61        -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 296 mln EUR, 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 159 mln EUR,

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 136, up by 10%. The EBITDA

margin was 46% (2001: 45%). Depreciation was 12% lower  than

a  year  ago, amounting to 64 mln EUR. A strong and positive

cash  flow  has led to positive net financing costs  to  the

extent  of 0.4 mln EUR (2001: -0.7 mln EUR). Income  tax  on

dividends, paid in 2002, amounted to 6 mln EUR (2001: 2  mln

EUR). The net profit of the Eesti Telekom Group in 2002  was

66  mln EUR, or 0.48 EUR per share (2001 respectively 50 mln

EUR and 0.36 EUR).



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  4.0

               mln EUR. The gain was

               accounted  as  "other

               revenues".

Total expenses                        AS    Eesti   Telefon

                                      released  a  2.9  mln

                                      EUR  reserve  related

                                      to  the  OÜ  Albufent

                                      claim.

Income    from                        AS Eesti Telefon sold

associates                            its  ownership in  AS

                                      Teabeliin.  2.1   mln

                                      EUR   of  profit  was

                                      accounted  as  income

                                      from associates.

Depreciation                          AS Eesti Telefon made

                                      a  6.0 mln EUR write-

                                      off,   accounted   as

                                      depreciation.



The consolidated revenues of the Eesti Telefon Group in 2002

were  168  mln  EUR, down by 9% compared to 2001.  Operating

expenses amounted to 107 mln EUR, down by 16%. The EBITDA of

the  Group was 61 mln EUR, 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 18 mln EUR 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 153 mln EUR,  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

157  mln EUR, up by 11%. The operating expenses of the Group

were  81 mln EUR, up by 10%. The EBITDA of the Group was  77

mln EUR and the EBITDA margin was 49%. The net profit of the

EMT  Group  in  2002 was 55 mln EUR, 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 27.0 EUR, and the average for 2002

was  27.9  EUR (December 2001: 28.1 EUR, 2001 average:  28.9

EUR).  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 284 mln EUR (end of 2001: 271  mln  EUR).

Non-current assets were reduced, from the beginning  of  the

year,  by 25 mln EUR. Current assets were up by 37 mln  EUR.

Current  and non-current interest bearing loans were reduced

by  5  mln  EUR. By the end of 2002, net debt of  the  Group

amounted to -58 mln EUR, and net gearing was -23%.



The  balance of the cash and cash equivalents of  the  Eesti

Telekom  Group grew by 32 mln EUR during 2002. Net operating

cash  flow was 121 mln EUR (2001: 111 mln EUR). Cash outflow

into investing activities was 34 mln EUR (2001: 58 mln EUR).

Cash outflow into financing activities was 55 mln EUR (2001:

63  mln EUR). Dividends were paid out to the shareholders in

the amount of 48 mln EUR:







Investments



The  Eesti Telefon Group invested 21 mln EUR in 2002  (2001:

32  mln EUR). 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 19 mln EUR in 2002 (2001:  29  mln

EUR). 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   0.3   mln   EUR    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 4.5 mln EUR per license.

The  second  stage would be an auction of the  licenses  not

issued during the first stage, with an initial price of  4.5

mln  EUR 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 1.1 mln EUR 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 2.2 euro-cents  at peak  time,

1.8 euro-cents at off-peak time, and 0.9 euro-cents 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 0.9 to 2.2

euro-cents,  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  0.20 EUR/min to 0.19  EUR/min,  and  the

discounted termination fee from the current 0.179 EUR/min to

0.176 EUR/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 0.35 EUR per share (a total of 48

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

the  B-share was paid dividends in the total amount  of  639

EUR.  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%.





Definitions



Net debt - long term and short term debt, less cash and cash

equivalents, and short term investments

ROA  -  Net profit for the period, expressed as a percentage

of average total assets

ROE  -  Pre-tax  profit  for  the  period,  expressed  as  a

percentage of average equity



EUR/Latvian latt exchange rates

End January, 2002 (acquisition of SIA Connecto Latvia): 1

LVL = 1.8001 EUR

End December, 2002: 1 LVL = 1.6294 EUR



AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

INCOME STATEMENT

Financial  statements  are prepared in  thousands  of  euros

(EUR)



                                2002          2001

Revenue                               

Net sales                    285,513       265,516

Change in work-in-progress        47            34

Capitalized self-              4,179         5,568

constructed assets

Other revenue                  5,863         2,714

Total revenue                295,602       273,832

                                                  

Operating expenses                                

Materials, consumables,       91,881        82,492

supplies and services

Other operating expenses      32,002        31,634

Personnel expenses            32,779        34,177

Other expenses                 2,733         2,117

Total expenses               159,395       150,420

                                                  

Profit from operations       136,207       123,412

before depreciation and

amortization

                                                  

Depreciation and              63,988        72,582

amortization

                                                  

Profit from operations        72,219        50,830

                                                  

Income/ expenses from           -353         1,715

subsidiaries and

associated companies (net)

Other net financing items        393          -749

                                                  

Profit before tax             72,259        51,796

                                                  

Income tax on dividends        5,835         1,977

                                                  

Profit after tax              66,424        49,819

                                                  

Minority interest                  0            36

                                                  

Net profit from ordinary      66,424        49,783

activities

                                                  

Net profit for the period     66,424        49,783

                                                  

Earnings per share                                

Basic earnings per share        0.48          0.36

(in EUR)

Diluted earnings per share      0.48          0.36

(in EUR)



AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

BALANCE SHEET

Financial statements are prepared in thousands of euros

(EUR)



                                 2002        2001

                                                 

ASSETS                                

Current assets                        

Cash and cash                  61,532      29,669

equivalents

Trade receivables, net         27,328      25,777

Other receivables               1,086         685

Accrued income                  7,994       6,342

Prepaid expenses                4,455       1,800

Inventories                     5,949       6,648

Total current assets          108,344      70,921

                                                 

Non-current assets                               

Long term financial             1,729       1,692

assets

Tangible assets, net          170,814     194,538

Intangible assets, net          2,719       3,588

Total non-current assets      175,262     199,818

                                                 

TOTAL ASSETS                  283,606     270,739

                                      

EQUITY AND LIABILITIES                

Current liabilities                   

Interest bearing loans          2,282       5,635

and borrowings

Customer prepayments              184         590

Accounts payable to            15,611      16,677

suppliers

Other payables                      0          11

Tax liabilities                 1,885       2,090

Accrued expenses               12,067       9,756

Provisions                      1,028       1,117

Prepaid revenue                    94         661

Total current                  33,151      36,537

liabilities

                                      

Non-current liabilities               

Interest bearing loans          1,263       3,139

and borrowings

Other long-term payables            0           0

Total non-current               1,263       3,139

liabilities

                                      

Equity                                

Issued capital                 87,804      87,804

Share premium                  19,810      19,810

Statutory legal reserve         8,781       8,781

Retained earnings              66,375      64,885

Net profit for the             66 424      49,783

period

Foreign exchange                   -2           0

differences

Total equity                  249,192     231,063

                                                 

TOTAL EQUITY AND              283,606     270,739

LIABILITIES



AS EESTI TELEKOM AND SUBSIDIARY COMPANIES

CASH FLOW STATEMENT

Financial statements are prepared in thousands of euros

(EUR)



                                     2002      2001

Cash flow from operating                   

activities

Profit before tax and minority     72,259    51,796

interest

Adjustments for:                           

 Depreciation                      63,988    72,582

 Profit/loss from sales and        -3,499        94

write-off of fixed assets

 Income/ expense from                 353    -1,715

subsidiaries and associates

 Profit (-) / loss (+) from             0       500

revaluation of investments

 Interests income/ expense,        -1,060      -196

net

 Other non-cash adjustments           -15       -19

Operating profit before           132,026   123,042

working capital changes

                                           

 Change in current                 -5,419    -3,618

receivables

 Change in inventories                768     2,889

 Change in current                   -230   -10,188

liabilities (except loans)

Adjusted cash generated from      127,145   112,125

operations

 Interest paid                       -490      -970

 Income tax paid                   -5,835         0

Net cash flow from operating      120,820   111,155

activities

                                           

Cash flow from investing                   

activities

Purchase of tangible assets       -37,869   -58,454

Purchase of licenses               -2,153    -2,296

Purchase of shares,                  -639    -1,406

investments and other

Proceeds from sales of              5,459       730

tangible assets

Proceeds from sales of                  0         0

investments

Proceeds from sales of                  0     2,780

associates

Loans granted                         -27      -305

Cash receipts from repayment            4         5

of loans

Dividends received                      6        12

Interest received                   1,070     1,245

Net cash flow from investing      -34,149   -57,689

activities

                                           

Cash flow from financing                   

activities

Proceeds from convertible long-        31        28

term debt

Repayment of convertible long-         -1        -1

term debt

Repayment of unsecured short-           0    -6,391

term bonds

Proceeds from nonconvertible           35         0

long-term debt

Repayment of nonconvertible          -380      -334

long-term debt

Repayment of long-term             -5,064    -6,713

borrowings

Proceeds from finance lease             0         0

liabilities

Payment of finance lease           -1,136    -1,063

liabilities

Proceeds from short-term                0     5,000

borrowings

Repayment of short-term                 0    -5,000

borrowings

Dividends paid                    -48,293   -48,293

Net cash flow from financing      -54,808   -62,767

activities

                                           

Net increase / - decrease in       31,863    -9,301

cash and cash equivalents

                                           

Cash and cash equivalents at       29,669    38,970

beginning of year

Cash and cash equivalents at       61,532    29,669

end of period





Hille Võrk

Financial Manager

6272460