Saku Õlletehas                FINANCIAL RESULTS                 05/27/2004



FINANCIAL RESULTS, FIRST QUATER 2004



BALANCE SHEET 

(In thousands)                        EEK                      EUR

                            31.3.04 31.3.03 31.12.03 31.3.04 31.3.03 31.12.03

 

ASSETS                                                                       

 Cash and bank               13,689    2,938   22,023      875    188   1,408

 Trade receivables (Note 2)  33,429   23,834   35,308    2,136  1,523   2,256

 Other receivables and        3,737    5,485    3,882      239    351     248

prepayments (Note 3)

 Inventories (Note 4)       120,790  125,102  113,652    7,719  7,995   7,264

TOTAL CURRENT ASSETS        171,645  157,359  174,865   10,969 10,057  11,176

                                                                             

Non-current assets                                                           

 Long-term financial assets  13,760   16,000   14,060      880  1,023     899

(Note 9)

 Long-term receivables           36       76       45        2      5       3

(Note 5)

 Property, plant and        246,831  251,064  245,843   15,776 16,046  15,712

equipment (Note 6)

 Intangible assets (Note 7)     585    1,012      719       37     64      46

TOTAL NON-CURRENT ASSETS    261,212  268,152  260,667   16,695 17,138  16,660

TOTAL ASSETS                432,857  425,511  435,532   27,664 27,195  27,836

                                                                             

LIABILITIES AND EQUITY                                                       

Current liabilities                                                          

 Debt obligations (Note 8)      712    1,231      907       46     79      58

 Trade payables              17,699   15,530   12,226    1,131    992     782

 Payables to group              980    8,806    4,600       63    562     294

companies (Note 14)

 Deposit liability (Notes    22,713   26,830   29,209    1,451  1,715   1,867

4, 6)

 Tax liabilities (Note 10)   15,559   19,005   15,809      994  1,215   1,010

 Payables to employees        2,460    3,170    4,288      157    202     274

 Dividends payable                    40,000                    2,557        

 Other accrued expenses       5,641    4,954    1,599      361    317     102

 Provisions                     149               373       10             24

TOTAL CURRENT LIABILITIES    65,913  119,526   69,011    4,213  7,639   4,411

                                                                             

Non-current liabilities                                                      

 Non-convertible debt (Note     258    1,287      419       16     82      27

8)

TOTAL NON-CURRENT               258    1,287      419       16     82      27

LIABILITIES

                                                                             

Equity (Note 12)                                                             

 Share capital               80,000   80,000   80,000    5,113  5,113   5,113

 Capital reserve              8,000    8,000    8,000      511    511     511

 Other reserves              44,070   44,070   44,070    2,817  2,817   2,817

 Accumulated profits        234,032  179,262  179,262   14,957 11,457  11,457

 Net profit/loss for the        584   -6,634   54,770       37   -424   3,500

period

TOTAL EQUITY                366,686  304,698  366,102   23,435 19,474  23,398

TOTAL LIABILITIES AND       432,857  425,511  435,532   27,664 27,195  27,836

EQUITY

  

INCOME STATEMENT                                                       

(In thousands)                      EEK                       EUR      

                          January-January-          January-January-   

                           March   March             March   March     

                            2004    2003     2003     2004    2003   2003

Revenue                                                                   

 Sales revenue (Note 13)   84,358   76,864  463,362   5,391   4,913 29,614

 Other revenue (Note 15)       82      191      736       5      12     47

Total revenue              84,440   77,055  464,098   5,396   4,925 29,661

                                                                          

Expenses (Note 16)                                                        

 Changes in work in                                                       

progress and finished

  goods inventories        -6,820   -6,243      453    -436    -399     29

 Materials, consumables    41,014   33,694  185,104   2,621   2,154 11,830

and supplies used

 Other operating expenses  24,946   23,883  112,158   1,594   1,526  7,168

 Personnel expenses        13,162   12,489   52,091     841     798  3,329

 Depreciation and          10,936   11,618   46,216     699     743  2,954

amortisation expense

 Other expenses               720      354    4,688      46      22    300

Total expenses             83,958   75,795  400,710   5,365   4,844 25,610

                                                                          

PROFIT FROM OPERATIONS        482    1,260   63,388      31      81  4,051

                                                                          

 Financial income and         102     -212     -936       6     -14    -60

expenses (Note 17)

                                                                          

PROFIT FOR THE PERIOD         584    1,048   62,452      37      67  3,991

BEFORE TAX

                                                                          

 Income tax expense                  7,682    7,682             491    491

                                                                          

NET PROFIT/LOSS FOR THE       584   -6,634   54,770      37    -424  3,500

PERIOD

                                                                          

Basic earnings per share     0.07    -0.83     6.85    0.00   -0.05   0.44

(Note 18)

Diluted earnings per         0.07    -0.83     6.85    0.00   -0.05   0.44

share (Note 18)

                                                                          



Review of operations and performance



In  Q1 the beverage sales of Saku Brewery Ltd amounted to

11.3m  litres, 1.8m litres or 18% up on the corresponding

period of 2003.  Revenues for the period amounted to  EEK

84.4m (€5.4m), EEK 7.4m (€0.5m) or 9.6% up on a year ago.

The  main  contributors to growth  were  other  alcoholic

beverages and beers. If in Q1 of 2003 sales of beers  and

other  alcoholic beverages accounted for 86%  and  4%  of

total  sales  respectively,  then  in  Q1  of  2004   the

corresponding figures were 82% and 8%. Although according

to  the  Estonian Breweries Association in  Q1  the  beer

market  grew by 16%, the revenue potential of  beers  was

adversely affected by stiff competition in the strong and

cheap  beers segment and because of the enlarging of  the

segment. At the end of Q1, Saku Brewery Ltd as the market

leader   held   42%  of  the  total  beer   market,   the

corresponding figure for total accumulated 2003 was 42%.



During  a year Saku Brewery has aggressively enlarged  in

other  beverages markets as cider and gin long drink  and

entered  into  kvas  and lemonades  markets.  The  cider

market continued growing at swift pace, attaining  a  75%

increase  on  a  year ago. Saku Brewery Ltd  tripled  its

cider sales and succeeded in increasing its share in  the

cider market from 18% in Q1 of 2003 to 34%.  In the first

quarter the company doubled its gin long drink sales  and

reached to 21% market share. In the same period last year

it was 9%.



Expenses of the period amounted to EEK 84.0m (€5.4m),  an

EEK  8.2m  (€0.5m) or 10.8% increase on a year  ago.  The

largest   growth  occurred  in  expenses  on   materials,

consumables  and  supplies,  largely  because  of  bigger

sales. In addition, the volume of beverages sold in  one-

way  packaging  (cans, PET packaging) has almost  doubled

compared  to  Q1  of  2003, which has  increased  related

materials expenses.



Operating  profit for Q1 amounted to EEK 0.5m  (€31,000),

somewhat less than the EEK 1.3m (€81,000) earned  a  year

ago.  Net  profit for the period amounted  to         EEK

0.6m (€37,000) against the EEK 6.6m (€0.4m) loss incurred

in  Q1  of  2003. The difference results from income  tax

payable  on dividends, which is recognised in the  income

statement  of  the  period  in  which  the  dividend   is

declared.  In 2003 the general meeting which  decided  to

distribute  dividends took place in March.  In  2004  the

meeting  convened in April, which is why the arising  tax

expense will be recognised in the accounts for Q2.



In  the first quarter Saku Brewery Ltd and the leader  of

the  Finnish  beer  market  Oy Sinebrychoff  Ab  made  an

agreement  according to which from May 2004  Sinebrychoff

began  to  distribute  Saku  Originaal  in  Finland.  The

agreement covers marketing and sales. Saku Originaal will

be   available   among  the  Sinebrychoff  portfolio   in

recyclable  cans.   Objective is to increase  exports  of

Saku  Brewery  in Finnish market and to  sell  2  million

litres Saku Originaal in Finland in the fist year.



On  February  Saku  Brewery Ltd  as  the  first  Estonian

brewery  began canning the well-known international  beer

brand  Carlsberg for the Baltic market. Inclusion  of  an

international  beer  brand in Saku  Brewery’s  production

process  requires  linking  the  Estonian  factory   into

Carlsberg’s stringent worldwide quality control system.

The purpose of the 0.5-litre beer products that is canned

in Estonia is to increase Carlsberg’s sales in Estonia to

1.2m  litres per year, to seize 25% of the local  premium

beers  market, and to export an additional 350,000 litres

to the Latvian and Lithuanian markets.



In  the  quarter Saku Brewery Ltd finished its 23  m  EEK

investment in PET product filling equipment to expand  in

beverages market.

The  company has expanded last year in cider and gin long

drink markets and entered into kvas and lemonade market.





FINANCIAL RATIOS                      January-  January-

                                        March     March

                                        2004      2003

                                                

Operating margin (operating profit  /      0.6%      1.6%

total revenue)

Net   margin  (net  profit  /   total      0.7%     -8.6%

revenue)

Return on assets (net profit /             0.1%     -1.5%

average total assets)

Return on equity (net profit /             0.2%     -2.0%

average equity)

Non-current asset turnover ratio            0.3       0.3

(total revenue / average non-current

assets)

Total assets turnover ratio (total          0.2       0.2

revenue / average total assets)





Kristina Seimann

Communication Manager

+372 6 508 303