RAKVERE LIHAKOMBINAAT

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO CONSOLIDATED FINANCIAL RESULTS, 3M 2001



Subsidiaries of Rakvere Lihakombinaat group are as follows (holding

in subsidiary %): AS Rakvere Lihakombinaat - parent company, 

AS Rigas Miesnieks (92.47%), AS Ekseko (97.40%), AS Linnulihatooted 

(76%), Rakveres Mesos Produktai Vilnius (100%).

The number of employees of Rakvere Lihakombinaat group as at 31.03.2001

amounted to 1,155 (the respective figure as at 31.03.2000 totaled 1,169).



Economic growth has influenced increase in consumption of meat products

in all the Baltic states. Increase in consumption of pork is modest,

whereas demand for poultry has increased considerably. Consumption of

beef is slightly decreasing.



The "mad cow disease" which began last autumn, and foot-and-mouth 

epidemic outspreading in Great Britain at beginning of year, have not had 

any significant influences on consumption of meat at beginning of year.

The epidemic has not reached the Baltic states mainly due to rapid and

efficient application of protection measures within the Baltic countries.



At beginning of year the demand for pork and poultry exceeded the supply

in the Baltic markets, being one of the significant reasons for 

exceptionally high price level of raw materials. In this market situation 

the subsidiary Ekseko is the strongest asset of Rakvere Lihakombinaat group.



Net sales and financial ratios



The 3m 2001 unaudited and consolidated net sales of Rakvere Lihakombinaat 

group amounted to EEK 225.4 million (EEK 186.7 million in 3m 2000). 

Net sales increased by 20.7% or EEK 38.7 million as compared to 

the previous year. Net sales increased mainly due to increase in prices.

Net sales in the Baltic states totaled EEK 6.8 mln, which is 9,7% or 

EEK 0.6 mln (27.2%) more than during the same period last year.



In 3m 2001 Rakvere Lihakombinaat group consolidated and unaudited

net profit totaled EEK 10.3 mln (EEk 6.6 mln in 3m 2000), 

56% or EEK 3.7 mln more than last year.

Q1 financial results were in compliance with goals achieved as 

the result of growth in efficiency, which has been a priority during

the year.



Financial ratios illustrating the activities of Rakvere Lihakombinaat

group (in million EEK):



		 		3m 2001	3m 2000	12m 2000

Net sales		 	225.4		186.7		 891.6

Expenses 			212.5		182.0		 886.6

Operating profit	 	 12.9		  4.7		   5.0

Net profit		 	 10.3		  6.6		   1.2		 

Acquisition of 

tangible assets	        5.4		 15.4		  49.7





Forecast for the current year



The management is of the opinion that positive trend will continued 

until the year end, and year 2001 will show better financial results

than 2000. In addition, the situation with cattle diseases is 

expected to stabilize by year end. 

Increase in net sales causes increase in credit risk. Possible expenses 

related to customer insolvency, however, will have no significant 

impact on group's financial results.



Financial ratios illustrating the parent company's activities

(AS Rakvere Lihakombinaat), in million EEK:



		 	       3m 2001	         3m 2000	12m 2000

Net sales		 	174.0		  152.2	         703.8

Expenses 			168.7		  145.8	         688.7

Operating profit	 	  5.3		    6.4	          15.1

Net profit		 	  4.5		    5.0	          11.2





Olle Horm

Management Board chairman

+372 32 29221