BALTIKA

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO FINANCIAL RESULTS, Q1 2001



The Q1 2001 consolidated reports reflect the results of the following 

subsidiaries and associated companies:



                              31.03.2001        31.03.2000

                               holding %         holding %

AS Baltika (parent)

AS Virulane (Estonia)            75.02 %           55.15 %

AS Baltman (Estonia)               100 %             100 %

SIA Baltman (Latvia)                   -             100 %

Baltmano Prekyba (Lithuania)       100 %             100 %

Baltika Sweden (Sweden)            100 %             100 %

AS Elina STC (Estonia)            50.1 %            37.5 %

Baltika Poland (Poland)            100 %             100 %

OY Baltinia AB (Finland)           100 %             100 %

Baltika Ukraina (Ukraine)          100 %                 -





In Q1 2001 AS Baltika increased holding in AS Virulane to 75.02% 

and in AS Elina STC to 50.1%.



Baltika’s consolidated and unaudited net sales in Q1 2001 amounted to 

EEK 109.3 mln, providing EEK 20.6 mln (23%) annual growth. Sales of 

manufactured output amounted to EEK 83 mln (EEK 15.6 mln or 23% 

more than in Q1 2000) and turnover of subcontracting works EEK 25.6 

mln (EEK 5.0 mln or 24% more than in 2000).

Exports accounted for 74% (EEK 80.5 mln) of net sales, providing EEK 

18.2 mln annual growth; manufactured output accounted for 76% of net 

sales.



Sales by markets (EEK Mio):



			Q1 2001     Q1 2000

Estonia                    28.1        26.4

Latvia, Lithuania          21.5        21.4

Scandinavia                27.3        26.0

Russia, Ukraine            22.3         6.7

Great Britain               7.2         6.9

Poland                      0.9         1.2

USA                         1.3           0



Development of retail sales of Baltika Group continues. Four new

stores were opened in Q1: 2 in Lithuania, 1 in Ukraine and 

1 in Estonia. Investments made into development of retail sales 

(opening of new stores and renovation of old stores) amounted 

to EEK 4 million.



In Q1 2001 AS Baltika consolidated and unaudited net profit was EEK 

7.0 mln (EEK 5.3 mln in Q1 2000, respectively), incl. group's profit 

EEK 6.6 mln (EEK 4.4 mln in Q1 2000, respectively).

Compared with Q1 2000 results group's consolidated net profit grew by 

EEK 2.2 million (51.9% y-o-y growth).



Consolidated total assets amounted to EEK 245 mln, having increased 

in three months by EEK 11.7 mln (incl. current assets by EEK 5,9 mln).

Supply of raw materials and goods inventories that the company 

acquired to support the sales of manufactured output, and investments 

made into opening of new sales premises decreased the cash account 

by EEK 11.6 mln.



AS Baltika financial ratios as of 31.03.2001:



                           		    31.03.2001  31.03.2000

  

- gross margin (gross profit/net sales)          7.4 %      6.9 %

- profit margin (net profit/net sales)           6.1 %      4.9 %

- ROE (net profit/owners equity)                 4.9 %      3.6 %

- ROA (net profit/average cost of assets)        2.8 %      2.0 %

- Quick ratio           			 0.85       0.99

((current assets - inventories)/current liabilities)



The accounting principles used for compilation of Q1 2001 financial 

reports are in accordance with the accounting principles used for 

compilation of financial reports for the same period last year. 

The accounting principles are in accordance with the International 

Accounting Standards and accounting practices

The interim report is not audited.





Ülle Järv

Management Board member

+372 63 02 741