ESTIKO

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO INTERIM REPORTS, Q3 2000



AS Estiko profitability and operating ratios:



                                                9m 2000    9m 1999 

Gross margin					  20.3%     21.5%

Operating margin			           9.5%     11.1%

Profit margin					   5.4%      5.9%

ROE                                                7.5%      8.5%

ROA                                                3.8%      3.4%

Current ratio                                      1.24      1.28

Equity-to-assets ratio                            51.5%     40.3%

Earnings per share                                 1.11      1.18



Gross margin (gross profit / net sales)

Operating margin (operating profit / net sales)

Profit margin (net profit / net sales)

ROE (net profit / owners equity)

ROA (net profit / total assets)

Current ratio (current assets / current liabilities)

Equity-to-assets ratio (owners equity / total assets)

Earnings per share (net earnings per share, in EEK)



In 9m Estiko group's consolidated and unaudited turnover stood at EEK 

122.0 million, and net profit at EEK 6.6 million. Compared with 9m 

1999 results, the turnover grew by 11.9% or EEK 13.0 million. In 9m 

1999 the group's net profit was EEK 0.1 million lower.



In Q3 2000 the group's net sales amounted to EEK 39.4 million, and 

the group earned EEK 3.3 million of net profit (EEK 36.9 mln and EEK 

3.4 mln in Q3 1999, respectively).



9m 2000 gross margins: 25.8% in Q3, 19.9% in Q2, 14.8% in Q1, and 

20.3% in 9m.  Last year's gross margins: 24.2% in Q3, 19.3% in Q2, 

21.0% in Q1 and 21.5% in 9m. In Q2 the gross margin grew mainly due 

to realization of high sales margin product groups and seasonal 

nature of sales of profit-yielding products.



9m 2000 profit margins: 8.4% in Q3, 5.9% in Q2, 1.6% in Q1 and 5.4% 

in 9m. Last' year's profit margins: 9.2% in Q3, 6.1% in Q2, 2.4% in 

Q1 and 5.9% in 9m.



The group operates in two main fields: production and real estate 

administration. 





PRODUCTION



In Q3 2000 AS Estiko-Plastar unaudited turnover was EEK 32.2 million, 

and net profit EEK 2.0 million. Compared with Q2 2000 the turnover was 

EEK 6.6 mln lower (down from EEK 39.8 mln), due to collective vacation 

of employees in July.



9m unaudited turnover was EEK 103.0 mln (EEK 87.3 mln in 9m 1999; EEK 

15.7 mln or 17.9% y-o-y growth), and net profit EEK 4.1 million (EEK 

6.3 million in 9m 1999, EEK 2.2 mln y-o-y drop). The 9m profit margin 

fell on annual basis from 7.2% to 4.0%. 



Lower profit was mainly due to 1.4 times increase in prices of 

polyethylene, compared with the last year's prices. The cost of 

polyethylene accounts for 75% of total cost of materials, thus 

increase of polyethylene prices also increases substantially the 

expenses. The collective vacation of employees in July was one of the 

most important factors behind the drop in Q3 profit figure. 

The Management Board of AS Estiko-Plastar has started to develop the 

company's new strategies, with an aim to integrate the targets that 

the company must achieve in order to stay competitive also based on 

innovation and skills, and not just based on its material assets.





KINNISVARA



As of 30.09.2000 Estiko group real estate sector consists of the 

following companies:

AS Emajõe Ärikeskus             holding  80%

AS Estiko Investeeringud        holding 100%

AS Estiko-Soojus                holding 100%

AS Tartu Toidukaubad            holding 100%





In Q3 Estiko group's real estate sector's unaudited net sales amounted 

to EEK 6.2 mln, and net profit EEK 1.3 mln. AS Emajõe Ärikeskus posted 

EEK 3.1 mln loss.



9m unaudited net sales were EEK 19.0 mln, and net profit EEK 2.5 mln 

(in 9m 1999 EEK 21.7 mln net turnover and EEK 0.3 mln net loss).





Ellen Tohvri

Management Board chairman

+372 73 08 302