Kalev                         FINANCIAL RESULTS                 12/02/2003



FINANCIAL RESULTS 3 MONTHS 2003/2004



COMMENTS ON FINANCIAL RESULTS



The consolidated net sales of Kalev Ltd in the

first quarter of the financial year 2003/2004

totalled 70.3 million kroons (4.5 million euros).

Compared to the same period last year, the net

sales remained approximately on the same level

(the 1st quarter of 2002/2003 - 69.7 million

kroons or 4.45 million euros).



The consolidated net loss of the company in the

first quarter amounted to 15.9 million kroons

(1.01 million euros). The net profit of the

company amounted to 4.7 million kroons (302,000

euros) in the same period last year. Decrease in

net profit was conditioned by the following

factors.



In connection with the relocation of the company

to a new plant building, Kalev Ltd stopped, on 30

April 2003, production in the chocolate department

in Pärnu Rd in Tallinn. In May, the company

launched the disassembly of the production

equipment, and moved to the new plant building in

the period between May and middle of June. In

September 2003 (after receiving from the

Veterinary and Food Board a fixed-term certificate

for manufacturing food products in the following

categories: cocoa and cocoa products, chocolate

products and marzipan), Kalev Ltd re-launched most

of its daily production in the new plant building.



During the time when production was suspended, the

company sold previously manufactured chocolate

confectionery products as well as sugar

confectionery products manufactured in the caramel

plant in Pärnu Rd in Tallinn. However, previously

manufactured goods and additional products

outsourced from Kaliningrad Oblast failed to fully

cover the needs during the period the production

was suspended. Therefore, sales of confectionery

products decreased by 10.7 million kroons (0.68

million euros), compared to the same period last

year.



Expenses related to the relocation and assembly of

production equipment as well as launch of

production had their effect on the formation of

net loss. The general administrative expenses of

the 1st quarter of the financial year 2003/2004

included single costs in the total amount of 15.2

million kroons (0.97 million euros), including:



- Launch of production (i.e. testing,

technological residues, utilisation of goods of

inferior quality): 5.9 million kroons (0.38 million 

euros);



- Installation of production equipment: 5.8

million kroons (0.37 million euros).



Sales of confectionery products of Kalev Ltd

totalled nearly 1,600 tons in the first quarter of

the financial year 2003/2004 - a decrease of

approximately 20.5%, compared to the same period

last year. Decrease in total sales was the result

of goods deficit in certain product groups, which

was conditioned by the 4-month suspension of

production activities.



Home market constituted 70% of the total sales;

30% of the sales were exported. In the given

period, Latvia and the Ukraine remained the main

export countries of the company. In addition to

the above countries, Kalev Ltd also exported its

products to Russia, Scandinavian countries and the

United States. The 6.5% increase in the share of

export in total sales of confectionery products

was conditioned by the specifics of the export

product portfolio - majority of export products

are manufactured in the caramel department of

Kalev Ltd in Tallinn, and production in this

department was not suspended upon relocation to

the new plant building.



In the 1st quarter of 2003/2004, the marketing

activities of Kalev Ltd were a little less active

as regards the launch of new products and

organisation of consumer campaigns. The only new

product launched by the company was Mõnus Maius

(mixture of toffee and corn flakes), which is

manufactured by Kalev Ltd’s subsidiary AS Kalev

Paide Tootmine. The main focus of Kalev Ltd in the

given period lies in making preparations for and

successfully organising the sales of the Christmas

season. Results of these activities will be

reflected in the 2nd quarter reports of Kalev Ltd

(positive results estimated).







BALANCE SHEET (consolidated, unaudited)

in kroons



ASSETS                 30.09.03         30.09.02        30.06.03

                       

CURRENT ASSETS         EEK              EEK             EEK

CASH AND BANK          56 194 104        5 312 105       8 591 080

CUSTOMER RECEIVABLES   94 183 944       40 299 127      90 024 044

PREPAID EXPENSES        2 757 500        3 362 500       5 308 235

INVENTORIES            37 050 060       43 121 516      40 726 937

TOTAL CURRENT ASSETS  190 185 608       92 095 248     144 650 296

                                                        

NON-CURRENT ASSETS                                      

MISCELLANEOUS LONG-      330 180           887 180         330 180

TERM RECEIVABLES

TANGIBLE ASSETS       284 881 300      241 561 746     255 038 885

REAL ESTATE            65 829 095       62 651 253      75 573 095

INVESTMENTS

INTANGIBLE ASSETS         217 715          279 373         217 715

TOTAL NON-CURRENT     351 258 290      305 379 553     331 159 875

ASSETS

                                                        

TOTAL ASSETS          541 443 898      397 474 801     475 810 171

                                                        

LIABILITIES AND                                         

OWNER’ EQUITY

                                                        

LIABILITIES                                             

CURRENT LIABILITIES    31 481 460       46 701 004       27 346 235

PREPAYMENTS FROM       17 051 772           47 619          497 042

CUSTOMERS

SUPPLIER PAYABLES      74 484 354       43 081 248       76 162 122

TAXES PAYABLE           2 870 465        4 238 551        4 537 792

OTHER PAYABLES          9 439 879        6 929 574       10 275 440

TOTAL CURRENT         135 327 930      100 997 995      118 818 631

LIABILITIES

                                                        

NON-CURRENT           181 385 875       71 531 343      114 781 525

LIABILITIES

                                                          1 600 000

TOTAL NON-CURRENT     181 385 875       71 531 343      116 381 525

LIABILITIES

                                                        

MINORITY INTEREST                       16 625 942      

OWNER’S EQUITY                                          

SHARE CAPITAL          78 775 000       78 775 000       78 775 000

REVALUATION RESERVE    17 159 388      112 812 302       17 159 388

STATUTORY LEGAL         1 537 837                         1 537 837

RESERVE

RETAINED EARNINGS     143 137 790       11 978 865      110 675 117

NET PROFIT FOR        -15 879 922        4 753 353       32 462 673

THE FINANCIAL YEAR

TOTAL OWNER’S EQUITY  224 730 093      208 319 520      240 610 015

                                                        

TOTAL LIABILITIES     541 443 898      397 474 801      475 810 171







BALANCE SHEET (consolidated, unaudited)

in euros



ASSETS                 30.09.03         30.09.02        30.06.03

                      

CURRENT ASSETS            EUR              EUR             EUR

CASH AND BANK          3 591 449         339 505         549 069

CUSTOMER RECEIVABLES   6 019 436       2 575 617       5 753 570

PREPAID EXPENSES         176 236         214 902         339 257

INVENTORIES            2 367 924       2 755 960       2 602 919

TOTAL CURRENT ASSETS  12 155 045       5 885 944       9 244 815

                                                        

NON-CURRENT ASSETS                                      

MISCELLANEOUS LONG-       21 102          56 701          21 102

TERM RECEIVABLES

TANGIBLE ASSETS       18 207 187       15 438 570     16 299 914

REAL ESTATE            4 207 235        4 004 135      4 829 989

INVESTMENTS

INTANGIBLE ASSETS         13 914           17 855         13 914

TOTAL NON-CURRENT     22 449 439       19 517 261     21 164 919

ASSETS

                                                        

TOTAL ASSETS          34 604 484       25 403 205     30 409 734

                                                        

LIABILITIES AND OWNER’                                  

EQUITY

                                                        

LIABILITIES                                             

CURRENT LIABILITIES    2 012 027        2 984 731       1 747 738

PREPAYMENTS FROM       1 089 804            3 043          31 767

CUSTOMERS

SUPPLIER PAYABLES      4 760 406        2 753 387       4 867 634

TAXES PAYABLE            183 456          270 892         290 017

OTHER PAYABLES           603 317          442 879         656 719

TOTAL CURRENT          8 649 009        6 454 932       7 593 875

LIABILITIES

                                                        

NON-CURRENT           11 592 641        4 571 674       7 335 858

LIABILITIES

                                                          102 258

TOTAL NON-CURRENT     11 592 641        4 571 674       7 438 116

LIABILITIES

                                                        

MINORITY INTEREST                       1 062 589       

OWNER’S EQUITY                                          

SHARE CAPITAL          5 034 627        5 034 627       5 034 627

REVALUATION RESERVE    1 096 682        7 210 002       1 096 682

STATUTORY LEGAL           98 285                           98 285

RESERVE

RETAINED EARNINGS      9 148 149          765 587        

                                                        7 073 411

NET PROFIT FOR THE    -1 014 909          303 794       2 074 738

FINANCIAL YEAR

TOTAL OWNER’S EQUITY  14 362 834       13 314 010      15 377 743

                                                        

TOTAL LIABILITIES     34 604 484       25 403 205      30 409 734









INCOME STATEMENT (consolidated, unaudited)      

in kroons

                       

                       01.07.-30.09.2003  01.07.-30.09.2002

                       

                       EEK                EEK

NET SALES              70 319 933         69 674 969

                                          

COST OF GOODS SOLD     49 483 080         48 561 898

                                          

GROSS PROFIT           20 836 853         21 113 071

                                          

MARKETING EXPENSES     10 831 890         10 494 072

ADMINISTRATIVE AND     24 101 438          6 691 652

GENERAL EXPENSES

OTHER OPERATING INCOME  1 128 826          3 294 179

OTHER OPERATING         1 074 764          1 191 149

EXPENSES

                                          

OPERATING PROFIT      -14 042 413          6 030 377

                                          

FINANCIAL INCOME          274 905            136 645

FINANCIAL EXPENSES      2 112 414          1 440 136

                                          

PROFIT BEFORE INCOME  -15 879 922          4 726 886

TAX

                                          

MINORITY INTEREST                           -26 467

                                          

NET PROFIT            -15 879 922          4 753 353

                                          

EARNINGS PER SHARE       -2.02              0.60









INCOME STATEMENT (consolidated, unaudited)     

in euros



                       01.07.-30.09.2003  01.07.-30.09.2002

                       

                       EUR                EUR

NET SALES              4 494 251          4 453 031

                                          

COST OF GOODS SOLD     3 162 537          3 103 663

                                          

GROSS PROFIT           1 331 714          1 349 368

                                          

MARKETING EXPENSES       692 282            670 692

ADMINISTRATIVE AND     1 540 359            427 673

GENERAL EXPENSES

OTHER OPERATING INCOME    72 145            210 536

OTHER OPERATING           68 690             76 128

EXPENSES

                                          

OPERATING PROFIT        -897 471            385 410

                                          

FINANCIAL INCOME          17 570              8 733

FINANCIAL EXPENSES       135 008             92 041

                                          

PROFIT BEFORE INCOME  -1 014 909            302 102

TAX

                                          

MINORITY INTEREST       0                    -1 692

                                          

NET PROFIT            -1 014 909            303 794

                                          

EARNINGS PER SHARE        0.13               0.04





Ruth Roht

PR manager

6 283 858