Rakvere Lihakombinaat         FINANCIAL RESULTS           10/29/2002 10:00



FINANCIAL RESULTS, III QUARTER 2002



COMMENT ON CONSOLIDATED FINANCIAL RESULTS: FIRST 9 MONTHS, 2002



Rakvere Lihakombinaat Group includes the following companies (ownership %): 

AS Rakvere Lihakombinaat - parent company, AS Rigas Miesnieks (92,47%), 

AS Ekseko (98,2%), AS Linnulihatooted (76%) and Klaipedos Maisto Produktai 

(100%). The Rakvere Lihakombinaat Group employed 1,264 employees as of  

September 30, 2002 (1,200 employees as of  September 30, 2001).



Economic growth together with the rise in consumption has facilitated the 

increase in the consumption of meat and meat products in the all Baltic 

States. The beautiful summer of this year and an exceptionally long 

barbecue season ensured record sales of summer products. Compared to l

ast year, pork and poultry sales have increased remarkably, whereas beef 

consumption has stayed more or less on the same level.

 

In the beginning of this year, pork supply exceeded the demand. 

Subsequently, the corresponding raw material prices dropped. Although 

the market price for pork rose in the summer, the price level was 

considerably lower than the same period last year. According to the 

estimations, the price level for pork has stabilised and is

approaching the average price level in Europe.



The sales of the company have increased and the market shares have grown in 

Estonia, Latvia and Lithuania. Supported by the powerful trademarks of the 

group (Rakvere, Valla, Rigas Miesnieks and Klaipedos Maistas), the increase 

in the sales volume of finished goods has been especially remarkable. The 

contractual pig farming carried out by Ekseko together with Estonian farmers, 

is continually developing and supplying the Rakvere Group with high-quality 

raw material.



The most important investments made by the Rakvere group were undertaken in 

the Rakvere Lihakombinaat aimed at ensuring that the plant complies with EU 

requirements applied to production enterprises. The investment programme for 

EU compliance is now nearing completion.  Subsidiary company Rigas Miesnieks 

received the certificate of  ISO 9001:2000 in September and the certificate 

of HACCP in October.





Sales and financial results

   

The consolidated and unaudited net sales of Rakvere Lihakombinaat in the 

first 9 months of 2002 totalled 914,5  million kroons or 58,4 million euros 

( 778,6 million kroons or 49,8 million euros during the same period in 2001). 

The sales increased by 135,9 million kroons (8,7 million euros) or 17,5% 

compared to last year. The sales volume was 26,9 th. tons in the Baltic 

States. This constitutes a 5,8 th. ton or 27,6 % increase compared to last 

year.



The consolidated and unaudited net profit of Rakvere Lihakombinaat Group for 

the first 9 months reached 59,2 million kroons or  3,8 million euro (61,8 

million kroons or 3,95 million euro during the same period last year). The 

consolidated net profit decreased by 2,7  million kroons or 4% compared to 

the same period last year.

The group’s result is in line with targets and builds on the measures that 

the Rakvere Lihakombinaat group has been implementing during the last year. 

The fact why the result was lower than in the previous year is attributable 

to low pork prices and additional costs that were incurred by the EU 

compliance project and by the launch of ready-made products of Lithuania’s 

Klaipedos Maistas.







Highlights of the financial results of Rakvere Lihakombinaat Group, 

millions of kroons (million of euros):



			9 months 2002	9 months 2001	12 months 2001



Net sales		914,5 (58,4)	778,6 (49,8)	1 070,1 (68,3)

Operating expenses	845,5 (54,0)	706,4 (45,2)	  989,7 (63,3)

Operating profit         69,0  (4,4)     72,2  (4,6)       80,4  (5,1)  

Net profit		 59,2  (3,8)     61,8  (3,95)      65,0  (4,2)



Investments		 43,2  (2,8)	 46,2  (2,95)	   71,2  (4,6)





Forecast for 2002



We believe that the situation continues to improve and performance targets 

will be met. The market share of the Rakvere group is expected to strengthen 

in all Baltic markets also for the rest of the year. Although changes in 

trade structures are increasing credit risks, their impact is expected to 

remain insignificant in terms of the result of the Rakvere Lihakombinaat 

group.





Olle Horm

Rakvere Lihakombinaat

Chairmen of the Board

032 29 211











RAKVERE LIHAKOMBINAAT GROUP 				

BALANCE SHEET 				

				Thousand Estonian 	Thousand Euros

				kroons			

				30.09.02   31.12.01	30.09.02   31.12.01

ASSETS				

				

Current assets				

Cash and bank			 25 127	    11 787	 1 606	      753

Customer receivables		 80 974	    89 379	 5 175	    5 712

Other short-term receivables	 13 654	    17 273	   873	    1 104

Inventories			154 149	   152 538	 9 852	    9 749

Total current assets		273 904	   270 977	17 506	   17 319

				

Non-current assets				

Long-term financial assets	  7 190	     2 176	   460	      139

Tangible fixed assets		401 897	   413 442	25 686	   26 424

Other intangible assets		  2 262	     2 832	   145	      181

Total non-current assets	411 350	   418 450	26 290	   26 744

				

T OT A L  A S S E T S:		685 254	   689 427	43 796	   44 062

				

LIABILITIES AND OWNERS’ EQUITY				

				

Current liabilities				

Loans and lease payables	  1 475	    29 312	    94      1 873

Supplier payables		 68 570	    61 251	 4 382	    3 915

Other current liabilities	 58 899	   123 231	 3 764	    7 876

Total current liabilities	128 944	   213 794	 8 241	   13 664

				

Long-term loans and lease 

payable				117 064	    94 117	 7 482	    6 015

Total liabilities		246 007	   307 911	15 723	   19 679

				

Minority interest		  3 651	     3 570	   233	      228

				

Owners’ equity				

Share capital			377 217	   377 217	24 108	   24 108

Statutory reserve		  5 942	     2 690	   380	      172

Retained earnings		 51 128	    -4 772	 3 268	     -305

Foreign exchange reserve	  1 309	     2 811	    84	      180

Total owners’ equity		435 596	   377 946	27 840	   24 155

				

TOTAL LIABILITIES AND 

OWNERS’ EQUITY :		685 254	   689 427	43 796	   44 062













RAKVERE LIHAKOMBINAAT GROUP				

INCOME STATEMENT				

			       Thousand Estonian 	Thousand Euros

 		  	       kroons			

			       9 m 2002	  9 m 2001	9 m 2002   9 m 2001

Revenue				

Net sales		        914 526	   778 573	 58 449	   49 760

Other revenue			  3 098	     3 363	    198	      215

Total revenue			917 625	   781 936	 58 647	   49 975

				

Change in work-in-progress 

and finished goods 		   -616	    12 890	    -39	      824

Materials, consumables and 

supplies		       -579 127	  -510 425	-37 013	  -32 622

Other operating expenses       -117 404	   -80 950	 -7 503	   -5 174

Personnel expenses	       -111 047	   -96 471	 -7 097	   -6 166

Depreciation and write-downs 

of non-current assets		-34 922	   -33 532	 -2 232	   -2 143

Other expenses			 -5 459	    -1 253	   -349	      -80

				

Operating profit		 69 049	    72 195	  4 413	    4 614

				

Financial income/expenses				

Net foreign exchange gain/loss	 -1 285	    -2 302	    -82	     -147

Interest and other 

financial income		  1 893	     3 219	    121	      206

Interest and other 

financial expenses		-10 071	   -10 696	   -644	     -684

Total financial 

income/expenses			 -9 463	    -9 779	   -605	     -625

				

Profit before taxes		 59 587	    62 416	  3 808	    3 989

Minority interest		   -435	      -597	    -28	      -38

				

Net profit			 59 152	    61 819	  3 780	    3 951

				

Earnings per share		   1,57	      1,64	   0,10	     0,10





Olle Horm

Chairman of the Board

032 29 211