Eesti Telekom                 FINANCIAL RESULTS           07/15/2004 09:00



Q2 AND HY1 2004 RESULTS, EUR



AS EESTI TELEKOM AND SUBSIDIARY COMPANIES



Financial  statements  are prepared in  thousands  of  euros

(EUR)

INCOME STATEMENT

                           6 months 6 months to      2003

                                 to    30 June          

                            30 June       2003

                               2004   Restated

Revenues                                         

Net sales                   159,370    145,575   305,360

Other revenues                  811      1,097     1,942

Total revenues              160,181    146,672   307,302

Operating expenses                                      

Materials, consumables,    (56,036)   (45,294) (106,226)

supplies and services

Other operating expenses   (15,594)   (13,772)  (29,224)

Personnel expenses         (19,207)   (16,387)  (34,010)

Other expenses                (744)      (754)   (2,503)

Total operating expenses   (91,581)   (76,207) (171,963)

Profit from operations       68,600     70,465   135,339

before depreciation

Depreciation and           (26,614)   (28,746)  (56,302)

amortisation

Profit from operations       41,986     41,719    79,037

Net financial income /         (24)      3,682     3,545

(expenses) from

associates

Other net financing           1,264      1,196     2,140

items

Profit before tax            43,226     46,597    84,722

Income tax on dividends    (24,473)   (18,280)  (18,280)

Profit after tax             18,753     28,317    66,442

Minority interest                19          -     (259)

Net profit for the           18,772     28,317    66,183

period

Earnings per share                               

Basic earnings per share       0,14       0,21      0.48

(in euros)

Diluted earnings per           0,14       0,21      0.48

share (in euros)



BALANCE SHEET



                            30 June   31 Dec   30 June

                               2004     2003      2003

                                              Restated

ASSETS                                         

Non-current assets                             

Property, plant and         133,173  145,454   150,848

equipment

Goodwill                        673      657       125

Licenses, patents and         6,763    7,274     1,939

trademarks

Investments in                1,039    1,063     1,384

subsidiaries and

associates

Other investments               173      173       173

Other non-current assets        595      438       146

Total non-current assets    142,416  155,059   154,615

Current assets                                        

Inventories                   7,177    6,226     6,741

Trade receivables            37,135   31,063    28,959

Other receivables            13,971   14,053    12,636

Investments held for          1,825    3,113     3,102

trading

Cash and cash equivalents    69,976   84,414    72,371

Total current assets        130,084  138,869   123,809

TOTAL ASSETS                272,500  293,928   278,424

EQUITY AND LIABILITIES                                

Equity                                                

Issued capital               88,169   87,971    87,971

Reserves                     31,550   29,937    29,937

Translation reserve               -      (1)       (2)

Retained earnings            75,977   80,187    80,187

Net profit for the period    18,772   66,183    28,317

Total equity                214,468  264,277   226,410

Minority interest               846      865       607

Non-current liabilities                               

Interest-bearing loans and      119      236       512

borrowings - due after one

year

Provisions                      542      561       469

Total non-current               661      797       981

liabilities

Current liabilities                                   

Trade payables               12,223   14,447     8,989

Other current liabilities    10,939   10,343    12,898

Tax liabilities              31,181    2,281    26,498

Interest-bearing loans and    1,970      533     1,389

borrowings - due within

one year

Provisions                      212      385       652

Total current liabilities    56,525   27,989    50,426

TOTAL EQUITY AND            272,500  293,928   278,424

LIABILITIES





CASH FLOW STATEMENT



                                   6 months   6 months

                                         to         to

                                    30 June    30 June

                                       2004       2003

Operating activities                         

Profit from operations               41,986     41,719

Adjustments for:                                      

Depreciation and amortisation        26,614     28,746

(Profit) from sales and write-        (173)      (545)

off of fixed assets

Operating cash flow before           68,427     69,920

movements in working capital

Change in current receivables       (6,256)      (559)

Change in inventories                 (797)      (876)

Change in current liabilities         2,349      (496)

Cash generated by operations         63,723     67,989

Interest paid                             7       (40)

Net cash from operating              63,730     67,949

activities

Investing activities                         

Purchases of property, plant and   (11,718)    (8,126)

equipment

Purchases of licenses                 (484)       (74)

Proceeds from sales of property,        332        669

plant and equipment

Acquisition of subsidiaries           (247)          -

Proceeds from sales subsidiaries          -      4,355

Purchases of trading investments    (1,876)    (3,101)

Proceeds on disposal of trading       3,164      5,052

investments

Loans granted                         (408)       (32)

Cash receipt from repayment of            2          3

loans

Interest received                     1,937      1,470

Net cash used in investing          (9,298)        216

activities

Financing activities                         

Repayment of long-term                  (3)       (11)

convertible debt

Proceeds from nonconvertible             15         15

long-term debt

Repayment of nonconvertible long-     (236)      (354)

term debt

Repayment of long-term                    -      (744)

borrowings

Repayment of obligations under         (25)          -

finance lease

Repayment of short-term                (11)          -

borrowings

Shares issuance (Rights               1,776      1,496

Offering)

Dividends paid                     (70,377)   (52,683)

Net cash used in financing         (68,861)   (52,281)

activities

Net increase in cash and cash      (14,429)     15,884

equivalents

Cash and cash equivalents at         84,414     56,497

beginning of year

Effect of foreign exchange rate         (9)       (10)

changes

Cash and cash equivalents at end     69,976     72,371

of period





Hille Võrk

Financial Manager

6 272 460