Eesti Telekom                 FINANCIAL RESULTS           03/11/2004 09:00



AUDITED RESULTS, EEK



FINANCIAL STATEMENTS

INCOME STATEMENTS

Financial statements are prepared in thousands of kroons

(EEK)

                                         CONSOLIDATED

                                      2003       2002

                                             Restated

Revenues                                    

Revenue                          4,777,858  4,468,627

Other operating income              3, 393     91,737

Total revenues                   4,808,251  4,560,364

Operating expenses                                   

Change in work-in-progress               -      (452)

Materials, consumables,         (1,662,093) (1,455,050)

supplies and services

Other operating expenses         (457,253)  (427,532)

Personnel expenses               (532,140)  (503,698)

Other expenses                    (39,164)   (42,730)

Total operating expenses        (2,690,650) (2,429,462)

Profit / (loss) from operations  2,117,601  2,130,902

before depreciation

Depreciation and amortisation    (880,941) (1,000,468)

Profit / (loss) from operations  1,236,660  1,130,434

Net income/(expenses) from          55,462    (5,153)

subsidiaries and associates

Other net financing items           33,495      6,443

Profit before tax                1,325,617  1,131,724

Income tax on dividends          (286,022)   (91,298)

Profit after tax                 1,039,595  1,040,426

Minority interest                  (4,047)          -

Net profit for the period        1,035,548  1,040,426

Earnings per share (in kroons)                       

Basic earnings per share              7.53       7.57

Diluted earnings per share            7.53       7.57



BALANCE SHEETS

Financial statements are prepared in thousands of kroons

(EEK)

                                     CONSOLIDATED

                                      2003       2002

                                             Restated

ASSETS                                      

Non-current assets                          

Property, plant and equipment    2,275,868  2,673,673

Goodwill                            10,287      3,687

Licences, patents and              113,808     38,853

trademarks

Investments in subsidiaries and     16,638     22,696

associates

Other investments                    2,700      2,710

Other non-current assets             6,852      2,048

Total non-current assets         2,426,153  2,743,667

Current assets                              

Inventories                         97,417     91,769

Trade and other receivables        705,930    644,851

Investments held for trading        48,709     79,054

Cash and cash equivalents        1,320,802    883,989

Total current assets             2,172,858  1,699,663

TOTAL ASSETS                     4,599,011  4,443,330

EQUITY AND LIABILITIES                               

Capital and reserves                                 

Issued capital                   1,376,445  1,373,833

Reserves                           468,410    447,348

Translation reserve                   (11)       (25)

Accumulated profits              2,290,218  2,078,979

Total capital and reserves       4,135,062  3,900,135

Minority interest                   13,540          -

Non-current liabilities                     

Interest-bearing loans and           3,694     12,095

borrowings

Provisions                           8,777      7,666

Total non-current liabilities       12,471     19,761

Current liabilities                         

Trade and other payables           423,567    478,802

Interest-bearing loans and           8,346     35,055

borrowings

Provisions                           6,025      9,577

Total current liabilities          437,938    523,434

TOTAL EQUITY AND LIABILITIES     4,599,011  4,443,330





CASH FLOW STATEMENTS

Financial statements are prepared in thousands of kroons

(EEK)

                                     CONSOLIDATED

                                      2003       2002

Operating activities                        

Profit / (loss) from operations  1,236,660  1,130,434

Adjustments for:                                     

Depreciation and amortization      880,941  1,000,468

(Profit) / loss from sales and     (6,231)   (54,718)

write-off of fixed assets

        Increase in retirement       2,273          -

benefit provisions

Operating cash flow before       2,113,643  2,076,184

working capital changes

Change in current receivables     (43,213)   (94,409)

Change in inventories              (3,006)     13,335

Change in current liabilities     (70,512)      2,198

Cash generated by operations     1,996,912  1,997,308

Interest paid                      (1,868)    (9,395)

Income tax paid                  (286,022)   (91,298)

Net cash from / (used in)        1,709,022  1,896,615

operating activities

                                                     

Investing activities                                 

Purchase of property, plant and  (473,180)  (593,035)

equipment

Purchase of licences              (90,263)   (33,682)



nses

Proceeds from sales of              30,652     85,421

property, plant and equipment

Acquisition of subsidiaries       (24,593)       (26)

Proceeds from sales of              68,137          -

subsidiaries

Acquisition of associated                -   (10,000)

companies

Repayment of long-term                   -          -

promissory note

Purchase of trading investments   (48,709)  (236,942)

Proceeds on disposal of trading     79,079    218,868

investments

Loans granted                      (2,248)      (440)

Cash receipts from repayment of         60         86

loans

Dividends received                       8         96

Interest received                   28,941     16,736

Net cash from / (used in)        (432,116)  (552,918)

investing activities

                                                     

Financing activities                                 

Proceeds from long-term                  -        484

convertible debt

Repayment of long-term               (224)       (10)

convertible debt

Proceeds from nonconvertible           360      1,576

long-term debt

Repayment of nonconvertible       (13,326)    (5,308)

long-term debt

Repayment of long-term            (23,273)   (79,238)

borrowings

Repayments of obligations under    (1,066)   (17,769)

finance lease liabilities

Repayment of short-term              (810)          -

borrowings

Shares issuance (Rights             23,413          -

Offering)

Dividends paid                   (824,309)  (755,617)

Net cash used in financing       (839,235)  (855,882)

activities

                                                     

Net increase in cash and cash      437,671    487,815

equivalents

Cash and cash equivalents at       883,989    403,633

beginning of year

Effect of foreign exchange rate      (858)    (7,459)

changes

Cash and cash equivalents at     1,320,802    883,989

end of year





Hille Võrk

Financial Manager

6272460