KALEV

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO CONSOLIDATED FINANCIAL RESULTS, 9M 2000



AS Kalev consolidated 9m net profit stood at EEK 9.3 mln, growing 

annually by EEK 24 mln.



The company brought profit mainly due to application of modern 

management models, which have created a basis for efficient and 

effective resources management. Kalev enhanced the efficiency of 

its activities by launching the result-based reallocation of 

resources as well as direct decrease in production, administrative 

and personnel expenses.



The company's 9m consolidated net turnover remained on last year's 

level, amounting to EEK 230 mln. In 9 months Kalev sold more than 

5,800 tons of confectionery products, of which exports accounted for 

30%. Due to seasonal nature of the market, the sales of sweets 

usually grow in Q4 (in average the Q4 sales account for 1/3 of 

Kalev's annual sales).



This year Kalev opened its internet shop Jõulunet (Christmas-net), 

and anticipates to make 10% of total Christmas sales through the 

internet shop. Kalev intends to continue to sell a selection of 

its products over the internet next year, especially during the 

holidays. Based on this year's Christmas sales project Kalev will 

evaluate the possibilities to sell full selection of its products 

year-round also over the internet. AS Kalev is currently the leader 

on Estonian sweets market with 45% market share.



As at 30.09.2000 AS Kalev balance sheet size had dropped by EEK 65.6 

mln y-o-y. The balance sheet size dropped mainly because of 

provisions made on short and long-term receivables at the end of last 

year, due to revaluation of subsidiaries' assets and partial repayment 

of long-term syndicate loan in Q1 2000. 

In Q3 the company sold its shareholding in subsidiary Tsharodeika. 

The investments to subsidiary were down-valued to zero already during 

the previous periods, and claims against Tsharodeika were in most 

part written off in 1999, thus the sale of shareholding did not bring 

substantial loss or profit.





Kristina Seimann

PR manager

+372 62 83 858