Last update: 20.07.2024 17:11 (GMT+3)
Eesti Telekom FINANCIAL RESULTS 14.10.2004
AS EESTI TELEKOM FINANCIAL RESULTS FOR FIRST NINE MONTHS OF 2004
Eesti Telekom, the leading provider of telecommunication services in Estonia,
hereby announces its results for the nine-month period ending 30 September 2004.
Financial highlights
Q3 Q3 Change 9 9 Change
2004 2003 , months months ,
% 2004 2003 %
Total revenues, 85 79 6,6 245 226 8,3
million EUR
EBITDA, million EUR 36 36 -0,7 105 107 -2,0
EBITDA margin, % 42,5 45,6 42,7 47,2
EBIT, million EUR 23 22 3,7 65 64 1,7
EBIT margin, % 27,5 28,3 26,7 28,4
Profit before taxes, 24 23 3,6 67 69 -3,7
million EUR
Net profit for 23 23 3,6 42 51 -17,2
period, million EUR
EPS, EUR 0,17 0,16 0,31 0,37
CAPEX, million EUR 7 11 -41,9 19 20 -4,0
Net gearing, % -29,7 -30,2 -29,7 -30,2
ROA, % 34,6 32,5 19,6 23,9
ROE, % 41,7 38,3 35,6 37,9
In commenting on the results of the Eesti Telekom Group, Jaan Männik, Chairman of
the Management Board, emphasised: "The defining points of the 3rd quarter are the
strong sales growth and high profitability together with kept market shares and
success in new areas."
For further information, please contact:
Jaan Männik, CEO +372 6311 212
Hille Võrk, CFO +372 6272 460
CHAIRMAN'S STATEMENT
Financial results
The rapid growth of the Eesti Telekom Group's total revenues continued in the
third quarter. The group's consolidated revenues reached 85 million euros, which
is an increase of 7% in comparison to the third quarter of 2003. The mobile
communications sector continues to be the engine for this growth. The summer
brought heightened competition, discount packages and a rapid increase in the
company's customer base in this area. Whereas mobile penetration in Estonia was
85% at the end of June, by the end of September that figure had already reached
89%. Over three months, AS EMT's customer base increased by 26.6 thousand, and
the operator maintained its roughly 47% market share. Positive developments also
took place in the customer base of the group's fixed communications operator,
Elion Enterprises Ltd. The company's offer of subscription to fixed telephone
services without having to pay subscription fees, earned the company 6,900 new
customers. In the third quarter, the growth in the number of permanent Internet
connections accelerated once again, and by the end of September the operator had
65 thousand permanent connection customers. In addition to its principal
activity, growth has also continued in the areas of retail sales and network
construction. The diversification of the offers made to customers in the area of
data communications led to record growth in computer sales in September.
Increased operating volumes have led to higher operating expenses. Operating
expenses for the third quarter of 2004 exceeded the corresponding indicator for
2003 by 13%, reaching 49 million euros. The majority of the increase in expenses
was caused by rising interconnection charges associated with the growth in
interconnected transactions. The expansion of our activities in the construction
and the wholesale and retail trade sectors has been accompanied by an increase in
the expenses connected with these sectors. The EBITDA of the Eesti Telekom Group
was 36 million euros in the third quarter, which is 0.2 million euros below the
result for the corresponding period of 2003. The EBITDA margin was 43% in the
third quarter of this year, which is lower than the corresponding result for 2003
(46%), but at the same level as during the first and second quarters of 2004.
In the third quarter of 2004, depreciation and amortisation decreased 8% in
comparison with the same period in 2003, and most of that change took place as a
result of the lower amortisation costs of the Elion Group. The Eesti Telekom
Group's profits from operations reached 23 million euros in the third quarter,
and thus increased 4% over the year. The group earned 23 million euros in net
profits, which also exceeds the third quarter results for 2003 by 4%.
The Eesti Telekom Group's total revenues for the first nine months of 2004
reached 245 million euros, which is an increase of 8% over the first nine months
of 2003, or a numerical increase of 19 million euros. The majority of the
increased revenue came from the mobile communications sector. The group's
operating expenses increased 18% over the nine months, reaching 140 million
euros. The net profit for the nine month period was 42 million euros, which is 9
million euros less than in the same period in 2003. The results for the first
nine months of 2003, however, includes the 3.8 million euros in capital gain
earned from the sale of the minority interest in Eltel networks (the former AS
Connecto). In addition, 18 million euros more in dividends were paid to
shareholders in 2004 than was the case in 2003, which led to an increase of 6
million euros in income tax on the dividends in comparison with 2003.
As of the end of September 2004, the total assets of the Eesti Telekom Group
amounted to 268 million euros (294 million euros in December 2003). Non-current
assets fell 19 million euros from the beginning of the year, and current assets
fell 7 million euros. Majority of the decline in current assets is in connection
with lower balance of cash and cash equivalents by 14 million euros which is
related to the payment of the dividends and the payment of income tax on the
dividends. The balance of trade receivables has increased by 5 million euros as a
result of the increased operating volume of AS EMT Esindused, and AS EMT's
balance with other operators. Accrued income has increased by 5 million euros as
a result of the increased volume of international calls at Elion Ettevõtted,
which has also resulted in an increase in international payments with longer
payment deadlines. As of the end of September, the group had long-term interest
bearing liabilities of 0.2 million euros and short-term interest bearing
liabilities amounting to 1.3 million euros (at the end of 2003 these figures were
0.3 million and 0.5 million euros respectively). At the end of September, net
debt was -71 million euros, and net gearing was -30%. The group's other short-
term liabilities decreased by 0.6 million euros, including a reduction of 3
million euros in trade payables.
The Eesti Telekom Group's cash flow from operating activities was 71 million
euros in the first nine months of 2004 (81 million euros in the first nine months
of 2003). The most important factor to influence the decrease in cash flow from
operating activities was the increased income tax on dividends. Cash outflow into
investment activities grew in comparison with 2003 - 11 million euros in the
first 9 months of 2003 (including the 4 million euros earned from the sale of the
minority holding in AS Connecto),
15 million euros in the first 9 months of 2004. Cash outflow into financing
activities was 69 million, including 70 million euros paid as dividends (53
million euros in the first 9 months of 2003, including
53 million euros paid as dividends).
Elion Group
Q3 Q3 Chang 9 9 Chan
2004 2003 e, months month ge,
% s %
2004 2003
Total revenues, million 43 42 2.6 128 121 5.2
EUR
EBITDA, million EUR 14 14 0.3 42 44 -3.6
EBITDA margin, % 32.6 33.4 32.9 35.9
EBIT, million EUR 7 6 21.4 19 18 9.1
EBIT margin, % 16.2 13.7 15.1 14.6
Profit before taxes, 7 6 22.6 20 21 -8.3
million EUR
Net profit for the period, 7 6 23.5 13 17 -23.
million EUR 4
CAPEX, million EUR 4 4 -9.9 10 8 20.8
ROA, % 21.0 16.6 12.7 16.1
ROE, % 26.1 20.6 22.7 26.2
The Elion Group's total revenues in the third quarter of 2004 reached 43 million
euros, surpassing the corresponding indicator for the third quarter of 2003 by 1
million euros. The decrease in EBITDA has also stabilised. EBITDA for the third
quarter of 2004 was at the same level as for the third quarter of 2003. The
EBITDA margin has fallen in comparison with the same period in 2003. In
comparison with the second quarter of 2004, the margin has risen by about one
percentage point.
The Elion Group's amortisation costs in the third quarter of 2004 were 1 million
euros less than expenses in the third quarter of 2003. The group's EBIT reached 7
million euros, having grown 1 million euros or 21% in one year. In the third
quarter the Elion Group earned 7 million euros in net profit, which is 1 million
euros more than in the third quarter of 2003.
The Elion Group's revenues from the internet grew by 14% in comparison with the
same period in 2003. The growth in the number of permanent connections, which
slowed somewhat during the first quarters of 2004, accelerated once again in the
third quarter. As of the end of September, Elion Ettevõtted AS had
65 thousand permanent connection subscriptions, which is an increase of 23
thousand in a period of one year.
The group's revenues from IT and data communications decreased 27% in comparison
with the third quarter of 2003. In 2003 Elion Enterprises Ltd was awarded the
public procurement for providing the computer classrooms of Tallinn schools with
computing equipment and high-speed data communications connections. Under the
agreement, 2 million euros worth of computers were sold to the Tallinn Education
Authority in July 2003, which explains the high level of data communications and
IT revenue in 2003. If that 2-million-euros transaction is removed from revenues
from IT and data communications in 2003, the increase in IT and data
communications revenues in the third quarter of 2004 would be 32%. There were
also extensive data communications and IT projects in the third quarter of 2004.
The construction of an extensive private network for AS Eesti Post, which
connected 42 larger post offices across Estonia, ended in August. In September
Elion signed an agreement to provide nearly 500 computer worksites to Tartu
schools, the city library and city government on the basis of operating lease. In
this category, however, Elion did not reach the level of 2003.
The Elion Group's revenue from voice communications were only 1% lower than the
figure for the third quarter of 2003. In the third quarter of 2004, several
positive developments took place in the area of voice communication customers. In
July Elion began a campaign that will last until 31 October, during which time
customers will be able to obtain a telephone connection without having to pay a
subscription fee. Over three months, the offer has been used by over 6,900
customers, 85% of whom were private individuals. About 20% of subscribers wished
to have a permanent Internet connection in addition to a telephone connection. At
the same time, the intensity of movement of numbers from one operator to another
is decreasing. Whereas in the first and second quarters of 2004, the number of
Elion Ettevõtted customers who took advantage of the opportunity to switch to
another operator's network was 333 and 703 respectively, in the third quarter
that figure was 240, most of whom were private individuals. As of the end of
September 2004, Elion possessed 428,188 main lines (31.7 lines per 100
inhabitants).
The fall in mobile phone call rates and the rapid growth in the number of users
of mobile phones has led to a decrease in the number of minutes of domestic calls
made from fixed-line telephones. As a result, revenue from domestic calls earned
in the third quarter of this year fell 19% in comparison with the previous year.
As concerns international calls and calls to mobile phones from the Elion
network, we have managed to keep the number of call minutes at the 2003 level.
Nevertheless, revenues from the said call types have fallen 1% and 3%
respectively from the third quarter of 2003, as a result of several discount
packages. Elion Enterprises Ltd estimates its market share of call minutes
initiated in the fixed-line network to be still at 87% (87% in September 2003).
Market share in domestic call minutes is 87% (87% last year also), whereas the
market share of call minutes made using mobile phones has fallen a little to 75%
this September (that figure was 76% in September 2003). At the same time, market
share in international call minutes has been regained. In September of this year
the company estimated its market share to be 70%, while the corresponding figure
was 68% in September of 2003. The market share for dial-up minutes remains at 95%
(95% in 2003 also).
In the third quarter, revenues from network services increased 19% in comparison
with the third quarter of 2003. This growth is the result of the increased volume
of international traffic and rental revenue from leased lines.
The greatest contribution to the growth of the Elion Group's total revenues was
made by AS Elion Esindus, which is involved with the retail sale of telephones
and computing equipment. Its revenues increased 58% in comparison with the third
quarter of 2003. In September the company sold more than 1,000 computers, which
is more than twice as much as in the previous best month for sales, and nearly
four times as much as in September 2003. In the first nine months of this year,
over 3,100 computers have been sold. The sustained efforts of AS Elion Ettevõtted
in strengthening its position in the area of IT and the past months' new offers
in the area of the Internet and data communications have certainly helped achieve
such sales figures. Thus in August and September, customers were able to purchase
the ADSL start-up package by instalment, and subscribers to the new Kodu-ADSL
permanent connection were offered an up to 42% cheaper monthly rate until the end
of November. In September, Elion became the first company in Estonia to introduce
a service combining a personal computer and a permanent connection. For a 35-
euros monthly fee, a customer can obtain a permanent Internet connection and a
rental computer with software. As of mid-September, the company reduced the price
of the ADSL start-up package aimed at home users by half, to 31 euros.
The revenues of the Eltel Group, the group of subsidiaries of the Elion Group
that are involved with network construction, increased 7% in the third quarter.
Elion Enterprises Ltd has decided to sell its present 51% share in the Eltel
Group's parent company Eltel Networks to Eltel Networks Corporation by the first
quarter of 2005 at the latest.
The operating expenses of the Elion Group were 4% or 1 million euros greater than
the results for the third quarter of 2003. As a result of the low margins in
retail, the increase in the revenues of AS Elion Esindus also led to an extensive
increase in operating costs. The company's operating expenses in the third
quarter of this year exceeded the corresponding indicator for 2003 by 58%. The
operating expenses of the Eltel Group were 6% higher than in the third quarter of
2003. The operating expenses of the parent company of the Elion Group fell 4% in
comparison with the 3rd quarter of 2003. The decrease in operating expenses is
mainly the result of the fall in purchased goods and services costs (the
corresponding indicator from the third quarter of 2003 was inflated by the above-
mentioned transaction for the sale of computers to the Tallinn Education
Authority). Because the introduction of the new "Elion" trademark took place in
the third quarter of 2003, this year's marketing costs are significantly smaller
in comparison with those of last year. The increase in the number of call minutes
made to the networks of foreign operators has led to an increase in
interconnection expenses.
In the third quarter of 2004, the Elion Group invested 4 million euros. In the
first nine months of 2004, a total of 10 million euros has been invested. The
majority of investments were made with the aim of satisfying customers' needs and
developing the network. The most significant investment projects were the
development of IT infrastructure, the expansion of the DSL network, the creation
of a data warehouse for Hansabank.
The total revenues of the Elion Group for the first nine months of 2004 reached
128 million euros, having grown 5% or 6 million euros in comparison with the
first nine months of 2003. The majority of the increase in revenue came from
retail sales and network construction. The revenues of the group's parent company
increased 0.3% or 0.3 million euros in comparison with the previous year. The
group's nine month operating expenses increased 10%, reaching 86 million euros.
The majority of the increase in operating expenses also arises from the expansion
of subsidiaries' operations. The operating expenses of the group's parent company
increased 2%. The main cause for this increase was the increase in
interconnection charges that accompanied the increase in call minutes to the
networks of foreign operators. The net profit of the Elion Group in the first
nine months of 2004 was 13 million euros, which is 4 million euros less than for
the corresponding period in 2003. The nine month result for 2003 did, however,
include the 4 million euros in profit earned from the sale of the minority
holding in Eltel Networks (formerly AS Connecto). In addition, Elion Ettevõtted
AS paid AS Eesti Telekom 6 million euros more in dividends than in 2003, which
led to an increase of 2 million euros in income tax from the dividends, in
comparison with 2003.
EMT Group
Q3 Q3 Chang 9 9 Chan
2004 2003 e, months month ge,
% s %
2004 2003
Total revenues, 51 45 12.5 143 127 12.0
million EUR
EBITDA, million EUR 22 23 -1.6 64 64 -0.6
EBITDA margin, % 44.0 50.3 44.7 50.4
EBIT, million EUR 17 17 -3.0 47 48 -0.8
EBIT margin, % 33.0 38.2 33.1 37.4
Profit before taxes, 17 17 -3.3 48 48 -1.1
million EUR
Net profit for the 17 17 -3.3 30 35 -14.
period, million EUR 3
CAPEX, million EUR 3 7 -59.3 9 12 -20.
7
ROA, % 63.2 65.8 34.0 41.9
ROE, % 85.7 79.7 66.4 77.4
The total revenues of the EMT Group in the third quarter of 2004 reached 51
million euros, which is an increase of 6 million euros in comparison with the
third quarter of 2003. The increase in the group's total revenues remained stable
at 12% during 2004. The EMT Group's third quarter operating costs were
28 million euros, which is an increase of 27% over the third quarter of 2003. The
increase in operating expenses has led to falling margins. The EMT Group's EBITDA
margin was 44% in the third quarter of 2004. In comparison with the third quarter
of 2003 EBITDA decreased 2%, to 22 million euros. The extensive investments made
by the EMT Group in the second half of 2003 have led to a certain increase in
depreciation costs. The depreciation and amortisation for the third quarter of
this year exceeded the corresponding figure for the third quarter of 2003 by 3%.
The group's EBIT reached 17 million euros, which is 0.5 million euros less than
the result for the third quarter of 2003.
In the third quarter of 2004 the total revenues of AS EMT, the parent company of
the EMT Group, increased 9% in comparison with the third quarter of 2003, to 44
million euros. The growth in total revenues is the result of the expansion of the
customer base. As of the end of September 2004, the operator had 557.3 thousand
customers (463.8 thousand in September 2003). The customer base had increased by
93.5 thousand during the year. The net increase during the third quarter was 26.6
thousand. The number of both contractual customers and pre-paid customers
increased. As of the end of September, AS EMT had 349.6 thousand contractual
customers (295.1 thousand in September 2003). During the quarter, the number of
contractual customers increased by 13.9 thousand. The additional of customers was
facilitated by the many discount offers made by the operator. Those who
subscribed between July and mid-August were relieved from the monthly fee until
May 2005. Customers who recommended a new contractual customer were also offered
the same exemption from the monthly fee. Customers who joined in September
obtained 128 euros of free call time. From mid-August, elderly people have been
offered a Seniors' Package that has no monthly fee and favourable call rates. In
September AS EMT introduced the Student Package, which is intended for students
and has a favourable monthly fee and call rates between friends. The monthly fee
and call rates of the Professional Package which targets business customers, were
reduced.
There were 207.7 thousand pre-paid card customers as of the end of September 2004
(168.7 thousand as of September 2003). During the third quarter, the number of
pre-paid cards in use increased by 12.8 thousand. The increase in the number of
pre-paid cards was partly the result of the change in the conditions for the use
of the pre-paid Simpel call card, which entered into effect on 21 September 2004.
Until September 2004, users of the card were able to use their call time for
making calls within a maximum of five months from the last loading, which was
supplemented with the possibility of receiving calls for 1 more month. As of
September, loaded calling time can be used to make calls for up to six months,
and calls can be received for up to one month, as before. The purpose of this
change was to harmonise the conditions of use of AS EMT's call cards with those
of call cards offered by other operators. Most of the increase in the number of
call cards, however, was caused by the addition of new customers. During the
quarter, several attractive offers were also made in the area of pre-paid cards.
Thus in summer months, start-up packages for pre-paid call cards were offered at
half the ordinary price, and in September customers could purchase two Simpel
start-up packages for the price of one. As of 1 July, per-minute calling rates
for users of the Simpel card were reduced. The expansion of the customer base has
been accompanied by increases in both the number of call minutes made by AS EMT
and incoming call minutes. The growth in AS EMT's total revenues in the third
quarter was largely the result of revenues earned from calls made by customers,
and revenues from interconnection services. The third important component of that
growth was revenue from roaming. In September 2004, an average of 24.2 euros in
revenue was earned per customer (June 2004: 25.1 euros; December 2003: 26.2
euros; September 2003: 27.0 euros).
The operating costs of the EMT Group's parent company increased in the third
quarter of 2004, rising 24% in comparison with the third quarter of 2003 and
amounting to 22 million euros. The increase in expenditures resulted mainly from
an increase in the customer base - interconnection payments on call minutes
outside the EMT network and roaming costs. The increasingly tough competition in
the Estonian mobile telephone market in the past year has led to a certain
increase in marketing expenses.
AS EMT's EBITDA decreased 3% in comparison with the third quarter of 2003,
amounting to 22 million euros.
In the third quarter of 2004 the total revenues of EMT Esindused AS, which is the
EMT Group's subsidiary that is involved with retail business, continued to rise
rapidly. The result for 2004 exceeded the total revenues for the third quarter of
2003 by 61%. The increase in total revenues was also accompanied by a 56% rise in
the company's operating expenses. In comparison with the previous year, the
margins of EMT Esindused AS have risen, and EBITDA for the third quarter of this
year was 0.2 million euros greater than in the previous year.
In the third quarter of 2004, the EMT Group invested 3 million euros. The
majority of the investments were made to ensure the quality of the company's
technological infrastructure. EMT continued to expand the range of the EDGE
service, which permits rapid data communications, and also increased the
bandwidth of the EMT Go mobile Internet environment.
The EMT Group's total revenues for the first nine months of 2004 reached 143
million euros, which is a 12% or 15 million kroon increase over the first nine
months of 2003. The majority of the increase in total revenues was the result of
the parent company's operations. The group's operating expenses for the first
nine months increased 25%, to 79 million euros. The majority of the increase in
operating expenses resulted from the increased customer base and direct costs
connected with the increase in the amount of call time. The EMT Group's EBITDA
for the first nine months was 64 million euros, which was the same level as that
of the 2003 result. The group earned a net profit of 30 million euros, which is 5
million euros less than in the first nine months of 2003. Whereas in 2003, AS EMT
paid AS Eesti Telekom 38 million euros in dividends, in 2004 the dividends
amounted to 51 million euros. As a result of the increased dividend volume, AS
EMT's income tax expenditure on dividends was 4 million euros greater than in
2003.
Relations with state regulator
Precept of the Estonian National Communications Board to Elion Ettevõtted AS
regarding the calculation of the domestic interconnection service charges
On 22 June 2004, the Estonian National Communications Board (ENCB) issued a
precept to Elion Ettevõtted AS, whereby the firm has to decrease domestic
interconnection service charges in its telephone network. Pursuant to the
precept, Elion has to apply charges, which were determined by the ENCB on the
basis Regulation no. 313 of the Government of the Republic of 11.12.2003,
entitled "Cost Accounting Methodology for Leased Line and Interconnection Service
Charges". The Estonian Government had approved this new regulation package,
which prescribes the cost accounting methodology of SMP, on 11 December 2003. It
was formulated in cooperation with the Danish consultation company Andersen
Management International AS, the Association of Estonian IT and Telecommunication
Companies, and the ENCB.
Elion filed a challenge regarding the ENCB's precept, as a result of which the
ENCB changed its earlier precept. Pursuant to the ENCB's new precept, Elion was
required to lower its domestic interconnection charges by an average of 17
percent by 1 October.
Elion Ettevõtted AS has performed the precept, and as a result the company's
revenues from interconnection charges will decrease by an estimated 0.9 million
euros per year.
Intention to declare Elion Ettevõtted AS an operator with significant market
power (SMP)
The ENCB notified Elion Ettevõtted AS on 7 September 2004 of its intention to
declare the company an operator with significant market power in the publicly
available telephone services market, the publicly available leased line services
market and the publicly available interconnection services market for the year
2005.
Elion Ettevõtted AS was declared an operator with significant market power in the
publicly available telephone services market, the publicly available leased line
services market and the publicly available interconnection services market for
the years 2001, 2002, 2003 and 2004. The company is not surprised by the ENCB's
intention to declare Elion Ettevõtted AS an SMP in the three above-mentioned
markets also in 2005.
Intention to declare AS EMT an operator with significant market power
On 7 September 2004, the ENCB sent AS EMT a letter in which it announced
its intention to declare AS EMT an operator with significant market power in the
publicly available mobile telephone services market for the year 2005.
AS EMT was also declared an operator with significant market power in the
publicly available mobile telephone services market for the years 2002, 2003 and
2004.
Disclosure of financial results in 2005
In 2005 the financial results of the Eesti Telekom Group will be disclosed on the
following dates:
Preliminary, unaudited results for 2004 4 February
Audited results for 2004 10 March
3-month results for 2005 22 April
6-month results for 2005 15 July
9-month results for 2005 21 October
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
All trends, margins and growth rates have been calculated on bases of data in
Estonian kroons with 1-kroon accuracy.
AS EESTI TELEKOM AND SUBSIDIARY COMPANIES
3rd QUARTER INCOME STATEMENT
Financial statements are prepared in thousands of euros (EUR)
Q3 2004 Q3 2003
Revenues
Net sales 84,123 79,038
Other revenues 507 351
Total revenues 84,630 79,389
Operating expenses
Materials, consumables, (32,025) (28,029)
supplies and services
Other operating expenses (8,034) (7,045)
Personnel expenses (8,317) (7,784)
Other expenses (311) (344)
Total operating expenses (48,687) (43,202)
Profit from operations 35,943 36,187
before depreciation
Depreciation and (12,664) (13,736)
amortisation
Profit from operations 23,279 22,451
Net financial income / (30) (70)
(expenses) from associates
Other net financing items 342 397
Profit before minority 23,591 22,778
interest
Minority interest (220) (223)
Net profit for the period 23,371 22,555
Earnings per share
Basic earnings per share (in 0.17 0.16
euros)
Diluted earnings per share 0.17 0.16
(in euros)
AS EESTI TELEKOM AND SUBSIDIARY COMPANIES
THE FIRST NINE MONTHS INCOME STATEMENT
Financial statements are prepared in thousands of euros (EUR)
9 months 9 months 2003
to to
30 30
September September
2004 2003
Restated
Revenues
Net sales 243,493 224,613 305,360
Other revenues 1,318 1,448 1,942
Total revenues 244,811 226,061 307,302
Operating expenses
Materials, consumables, (88,061) (73,323) (106,226)
supplies and services
Other operating expenses (23,628) (20,817) (29,224)
Personnel expenses (27,524) (24,171) (34,010)
Other expenses (1,055) (1,098) (2,503)
Total operating expenses (140,268) (119,409) (171,963)
Profit from operations 104,543 106,652 135,339
before depreciation
Depreciation and (39,278) (42,482) (56,302)
amortisation
Profit from operations 65,265 64,170 79,037
Net financial income / (54) 3,612 3,545
(expenses) from associates
Other net financing items 1,606 1,593 2,140
Profit before tax 66,817 69,375 84,722
Income tax on dividends (24,473) (18,280) (18,280)
Profit after tax 42,344 51,095 66,442
Minority interest (201) (223) (259)
Net profit for the period 42,143 50,872 66,183
Earnings per share
Basic earnings per share 0.31 0.37 0.48
(in euros)
Diluted earnings per share 0.31 0.37 0.48
(in euros)
AS EESTI TELEKOM AND SUBSIDIARY COMPANIES
BALANCE SHEET
Financial statements are prepared in thousands of euros (EUR)
30 31 30
September December September
2004 2003 2003
Restated
ASSETS
Non-current assets
Property, plant and 127,335 145,454 143,833
equipment
Goodwill 614 657 262
Licenses, patents and 6,433 7,274 6,930
trademarks
Investments in subsidiaries 1,010 1,063 1,314
and associates
Other investments 173 173 185
Other non-current assets 693 438 169
Total non-current assets 136,258 155,059 152,693
Current assets
Inventories 7,016 6,226 6,290
Trade receivables 35,824 31,063 29,964
Other receivables 16,389 14,053 11,431
Investments held for 1,825 3,113 3,101
trading
Cash and cash equivalents 70,425 84,414 73,076
Total current assets 131,479 138,869 123,862
TOTAL ASSETS 267,737 293,928 276,555
EQUITY AND LIABILITIES
Equity
Share 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 42,143 66,183 50,872
Total equity 237,839 264,277 248,965
Minority interest 1,066 865 829
Non-current liabilities
Interest-bearing loans and 177 236 358
borrowings - due after one
year
Retirement benefit 524 561 459
obligation
Total non-current 701 797 817
liabilities
Current liabilities
Trade payables 11,117 14,447 9,523
Other current liabilities 11,378 10,343 11,398
Tax liabilities 4,021 2,281 3,713
Interest-bearing loans and 1,330 533 547
borrowings - due within one
year
Provisions 285 385 763
Total current liabilities 28,131 27,989 25,944
TOTAL EQUITY AND 267,737 293,928 276,555
LIABILITIES
AS EESTI TELEKOM AND SUBSIDIARY COMPANIES
CASH FLOW STATEMENT
Financial statements are prepared in thousands of euros (EUR)
9 months to 9 months to
30 30
September September
2004 2004
Operating activities
Profit from operations 65,265 64,170
Adjustments for:
Depreciation and amortisation 39,278 42,482
Profit from sales and write-off of (522) (852)
fixed assets
Operating cash flow before movements 104,021 105,800
in working capital
Change in current receivables (7,133) 218
Change in inventories (636) (377)
Change in current liabilities (1,009) (6,207)
Cash generated by operations 95,243 99,434
Interest paid 57 (29)
Income tax on dividends paid (24,473) (18,280)
Net cash from operating activities 70,827 81,125
Investing activities
Purchases of property, plant and (18,207) (14,647)
equipment
Purchases of licenses (612) (4,951)
Proceeds from sales of property, 928 1,311
plant and equipment
Acquisition of subsidiaries (247) (853)
Proceeds from sales subsidiaries - 4,355
Purchases of other long-term - (12)
investments
Purchases of trading investments (1,876) (3,101)
Proceeds on disposal of trading 3,164 5,055
investments
Loans granted (762) (89)
Cash receipt from repayment of loans 4 3
Dividends received - 1
Interest received 2,308 1,687
Net cash used in investing (15,300) (11,241)
activities
Financing activities
Repayment of long-term convertible (3) (11)
debt
Proceeds from nonconvertible 32 23
long-term debt
Repayment of nonconvertible (354) (547)
long-term debt
Repayment of long-term borrowings - (1,487)
Repayment of obligations under (560) (68)
finance lease
Repayment of short-term borrowings (11) -
Shares issuance (Rights Offering) 1,776 1,496
Dividends paid (70,377) (52,683)
Net cash used in financing (69,497) (53,277)
activities
Net increase / (decrease) in cash (13,970) 16,607
and cash equivalents
Cash and cash equivalents at 84,414 56,497
beginning of year
Effect of foreign exchange rate (19) (28)
changes
Cash and cash equivalents at end of 70,425 73,076
period
Hille Võrk
Financial Manager
6 272 460
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