ESTIKO

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO FINANCIAL RESULTS, Q1 2000



The accounting principles for compiling Estiko group financial reports were 

changed during this financial year, in accordance with permit No. 40 issued 

by the Estonian Accounting Board on 14.04.2000. As of the current financial 

year, the income statements of companies of Estiko group are compiled under 

scheme No. 2 instead of scheme No. 1. Thus the Q1 1999 results were 

recalculated under income statement scheme No. 2.



In consolidated financial reports the related companies are treated as 

single business unit. In consolidated statements the financial reports of 

parent company and subsidiaries are consolidated under row-by-row method, 

through elimination of reciprocal receivables, liabilities and financial 

transactions. The minority share of subsidiaries' net profit and net assets 

are presented on separate row. The Q1 results are unaudited.



In Q1 2000 the consolidated and unaudited net sales of AS Estiko stood at 

EEK 36.5 mln, and net profit at EEK 0.6 mln. In Q1 1999 the net sales were 

EEK 35.7 mln (2.2% y-o-y growth in Q1 2000) and net profit EEK 0.9 mln (33% 

y-o-y decline). Cost of goods sold increased 10.3% on annual basis, mainly 

due to increase in prices of raw materials during the last half year. 



In Q1 2000 the consolidated and unaudited net sales of Estiko production 

sector stood at EEK 29.9 mln, and net loss at EEK 0.7 mln. In Q1 1999 the 

production sector's net sales were EEK 26.9 mln (9.7% y-o-y growth in Q1 

2000) and net profit EEK 1.2 mln. Lower net profit was mainly due to 

substantially increased prices of raw materials and currency risk related  

to strong USD. The prices of raw materials have stabilized by today.



In Q1 2000 the consolidated and unaudited net sales of Estiko real estate 

sector stood at EEK 6.6 mln, and net profit at EEK 1.1 mln. In Q1 1999 the 

real estate sector's net sales were EEK 6.9 mln and net loss EEK 0.04 mln. 

In Q1 the company sold 217 m2 of business premises in Emajõe Ärikeskus 

(Emajõe Business Center) to BICO.





Ellen Tohvri

Management Board chairman

+372 73 08 302