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



AUDITED RESULTS, EUR



FINANCIAL STATEMENTS



INCOME STATEMENTS

Financial statements are prepared in thousands of euros

(EUR)

INCOME STATEMENTS

                                          CONSOLIDATED

                                       2003         2002

                                                Restated

Revenues                                     

Revenue                             305,360      285,597

Other operating income                1,942        5,863

Total revenues                      307,302      291,460

Operating expenses                                      

Change in work-in-progress                -         (29)

Materials, consumables,           (106,226)     (92,995)

supplies and services

Other operating expenses           (29,224)     (27,324)

Personnel expenses                 (34,010)     (32,192)

Other expenses                      (2,503)      (2,731)

Total operating expenses          (171,963)    (155,271)

Profit / (loss) from operations     135,339      136,189

before depreciation

Depreciation and amortisation      (56,302)     (63,941)

Profit / (loss) from operations      79,037       72,248

Net income/(expenses) from            3,545        (329)

subsidiaries and associates

Other net financing items             2,140          411

Profit before tax                    84,722       72,330

Income tax on dividends            (18,280)      (5,835)

Profit after tax                     66,442       66,495

Minority interest                     (259)            -

Net profit for the period            66,183       66,495

Earnings per share (in euros)                           

Basic earnings per share               0.48         0.48

Diluted earnings per share             0.48         0.48



BALANCE SHEETS

Financial statements are prepared in thousands of euros

(EUR)

BALANCE SHEETS

                                      CONSOLIDATED

                                       2003         2002

                                                Restated

ASSETS                                       

Non-current assets                           

Property, plant and equipment       145,454      170,879

Goodwill                                657          236

Licences, patents and                 7,274        2,483

trademarks

Investments in subsidiaries and       1,063        1,451

associates

Other investments                       172          173

Other non-current assets                439          130

Total non-current assets            155,059      175,352

Current assets                                          

Inventories                           6,226        5,865

Trade and other receivables          45,116       41,213

Investments held for trading          3,113        5,052

Cash and cash equivalents            84,414       56,497

Total current assets                138,869      108,627

TOTAL ASSETS                        293,928      283,979

EQUITY AND LIABILITIES                                  

Capital and reserves                                    

Issued capital                       87,971       87,804

Reserves                             29,937       28,591

Translation reserve                     (1)          (2)

Accumulated profits                 146,370      132,870

Total capital and reserves          264,277      249,263

Minority interest                       865            -

Non-current liabilities                      

Interest-bearing loans and              236          773

borrowings

Provisions                              561          490

Total non-current liabilities           797        1,263

Current liabilities                          

Trade and other payables             27,071       30,601

Interest-bearing loans and              533        2,240

borrowings

Provisions                              385          612

Total current liabilities            27,989       33,453

TOTAL EQUITY AND LIABILITIES        293,928      283,979





CASH FLOW STATEMENTS

Financial statements are prepared in thousands of euros

(EUR)

                                      CONSOLIDATED

                                       2003         2002

Operating activities                         

Profit / (loss) from operations      79,037       72,248

Adjustments for:                                        

Depreciation and amortization        56,302       63,941

(Profit) / loss from sales and        (399)      (3,497)

write-off of fixed assets

        Increase in retirement          145            -

benefit provisions

Operating cash flow before          135,085      132,692

working capital changes

Change in current receivables       (2,762)      (6,033)

Change in inventories                 (192)          852

Change in current liabilities       (4,506)          140

Cash generated by operations        127,625      127,651

Interest paid                         (119)        (600)

Income tax paid                    (18,280)      (5,835)

Net cash from / (used in)           109,226      121,216

operating activities

                                                        

Investing activities                                    

Purchase of property, plant and    (30,241)     (37,902)

equipment

Purchase of licences                (5,769)      (2,153)



nses

Proceeds from sales of                1,959        5,459

property, plant and equipment

Acquisition of subsidiaries         (1,573)          (2)

Proceeds from sales of                4,355            -

subsidiaries

Acquisition of associated                 -        (639)

companies

Repayment of long-term                    -            -

promissory note

Purchase of trading investments     (3,113)     (15,143)

Proceeds on disposal of trading       5,054       13,988

investments

Loans granted                         (144)         (28)

Cash receipts from repayment of           4            6

loans

Dividends received                        1            6

Interest received                     1,850        1,070

Net cash from / (used in)          (27,617)     (35,338)

investing activities

                                                        

Financing activities                                    

Proceeds from long-term                   -           31

convertible debt

Repayment of long-term                 (14)          (1)

convertible debt

Proceeds from nonconvertible             23          101

long-term debt

Repayment of nonconvertible           (852)        (339)

long-term debt

Repayment of long-term              (1,487)      (5,064)

borrowings

Repayments of obligations under        (68)      (1,136)

finance lease liabilities

Repayment of short-term                (52)            -

borrowings

Shares issuance (Rights               1,496            -

Offering)

Dividends paid                     (52,683)     (48,293)

Net cash used in financing         (53,637)     (54,701)

activities

                                                        

Net increase in cash and cash        27,972       31,177

equivalents

Cash and cash equivalents at         56,497       25,797

beginning of year

Effect of foreign exchange rate        (55)        (477)

changes

Cash and cash equivalents at         84,414       56,497

end of year





Hille Võrk

Financial Manager

6272460