Saku Õlletehas             FINANCIAL RESULTS                     29.11.2004



SAKU BREWERY FINANCIAL RESULTS FOR 9 MONTHS 2004

                                                     

                                                                             

BALANCE SHEET                                                                

(In thousands)                        EEK                       €        

                            30.9.04 30.9.03 31.12.03 30.9.04 30.9.03 31.12.03  



ASSETS                                                                       

 Cash and bank               21,018  21,036   22,023   1,343   1,344    1,408

 Trade receivables (Note 2)  36,506  32,642   35,308   2,333   2,086    2,256

 Other receivables and        7,813  13,026    3,882     499     833      248

prepayments (Note 3)

 Inventories (Note 4)       130,168 133,218  113,652   8,319   8,514    7,264

TOTAL CURRENT ASSETS        195,505 199,922  174,865  12,494  12,777   11,176

                                                                             

Non-current assets                                                           

 Long-term financial assets  13,160  15,999   14,060     841   1,023      899

(Note 9)

 Long-term receivables           18      54       45       1       4        3

(Note 5)

 Property, plant and        246,611 234,861  245,843  15,762  15,010   15,712

equipment (Note 6)

 Intangible assets (Note 7)     342     863      719      22      55       46

TOTAL NON-CURRENT ASSETS    260,131 251,777  260,667  16,626  16,092   16,660

TOTAL ASSETS                455,636 451,699  435,532  29,120  28,869   27,836

                                                                             

LIABILITIES AND EQUITY                                                       

Current liabilities                                                          

 Debt obligations (Note 8)      420   1,057      907      27      68       58

 Trade payables              11,602  19,046   12,226     742   1,217      782

 Payables to group            9,272     918    4,600     593      59      294

companies (Note 14)

 Deposit liability (Notes    31,719  34,656   29,209   2,026   2,215    1,867

4, 6)

 Tax liabilities (Note 10)   21,036  14,874   15,809   1,344     951    1,010

 Payables to employees        2,999   3,761    4,288     192     240      274

 Other accrued expenses       7,672   9,975    1,599     491     638      102

 Provisions (Note 11)           336   2,190      373      21     140       24

TOTAL CURRENT LIABILITIES    85,056  86,477   69,011   5,436   5,528    4,411

                                                                             

Non-current liabilities                                                      

 Non-convertible debt (Note             631      419              40       27

8)

TOTAL NON-CURRENT                       631      419              40       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        194,032 179,262  179,262  12,400  11,456   11,457

 Net profit for the period   44,478  53,259   54,770   2,843   3,404    3,500

TOTAL EQUITY                370,580 364,591  366,102  23,684  23,301   23,398

TOTAL LIABILITIES AND       455,636 451,699  435,532  29,120  28,869   27,836

EQUITY

  



INCOME STATEMENT                                                       

(In thousands)                      EEK                       €        

                          January-January-         January-January-    

                          Septemb Septemb          Septemb Septemb     

                            er       er               er      er

                           2004     2003     2003    2004    2003    2003

                                                                          

Revenue                                                                   

 Sales revenue (Note 13)  416,027  370,023 463,362  26,589  23,648  29,614

 Other revenue (Note 15)      554      396     736      35      25      47

Total revenue             416,581  370,419 464,098  26,624  23,673  29,661

                                                                          

Expenses (Note 16)                                                        

 Changes in work in                                                       

progress and finished

  goods inventories        -7,581   -6,748     453    -484    -432      29

 Materials, consumables   188,962  147,609 185,104  12,077   9,434  11,830

and supplies used

 Other operating expenses  96,596   91,268 112,158   6,173   5,833   7,168

 Personnel expenses        44,237   38,105  52,091   2,827   2,435   3,329

 Depreciation and          32,749   34,330  46,216   2,093   2,194   2,954

amortization expense

 Other expenses             2,953    3,857   4,688     189     246     300

Total expenses            357,916  308,421 400,710  22,875  19,710  25,610

                                                                          

PROFIT FROM OPERATIONS     58,665   61,998  63,388   3,749   3,963   4,051

                                                                          

 Financial income and        -133   -1,057    -936      -8     -68     -60

expenses (Note 17)

                                                                          

PROFIT FOR THE PERIOD      58,532   60,941  62,452   3,741   3,895   3,991

BEFORE TAX

                                                                          

 Income tax expense        14,054    7,682   7,682     898     491     491

                                                                          

NET PROFIT FOR THE PERIOD  44,478   53,259  54,770   2,843   3,404   3,500

                                                                          

Basic earnings per share     5.56     6.66    6.85    0.36    0.43    0.44

(Note 18)

Diluted earnings per         5.56     6.66    6.85    0.36    0.43    0.44

share (Note 18)

                                                                          

     

Review of operations and performance



Saku  Brewery’s beverage sales for the first nine  months

amounted  to 52.7m litres, 7.8m litres or 17% up  on  the

same   period  in  2003.  Revenues  totalled  EEK  416.6m

(€26.6m),  an  EEK 46.2m (€3.0m) or 12.5% improvement  on

the preceding year. Results improved largely thanks to an

increase  in  the  sales  of  beer  and  other  alcoholic

beverages, and a rise in the sales of soft drinks. On the

other  hand,  sales  growth  was  adversely  affected  by

extremely  bad weather in the summer, the high season  in

beverage  sales.  Moreover, purchases  by  tourists  have

declined  on account of stiff competition in the  Finnish

retail  market, which has led Finnish distributors  to  a

price war and has caused Finnish beer prices to plummet.



According to the Estonian Breweries Association,  in  the

first  nine  months  the Estonian  beer  market  grew  by

approximately 12%. At the end of the period,  the  market

share  of Saku Brewery Ltd was 41.8% (a year ago: 42.7%).

Our  share has declined slightly due to the onslaught  of

cheaper  and  stronger beers whose prices have  decreased

considerably due to the launch of the plastic bottle  and

which  have  therefore managed to increase  their  market

share substantially.

Notwithstanding the growth in the relative importance of

cheap and strong beers in the market in general, Saku

Brewery succeeded in increasing its share in the premium

beers segment. The rise was related, above all, to

Cralsberg brand. Over the period it climbed 5% in the

premium beers market, largely on account of cans filled

at Saku Brewery. From 1 May Saku Originaal is distributed

by the Finnish Sinebrychoff brewery. Compared to the same

period last year, this has increased our Finnish exports

four-fold.



Saku  Brewery  has  expanded on other  beverages  markets

during  last years very rapidly. The cider and  gin  long

drink markets continued growing at a solid pace, with 37%

and  13% up on the same period in 2003 respectively.  Our

share  in  the cider market grew from 25% in the previous

year  to  34% and our share in the gin long drink  market

increased from 13% to 23%.



Expenses  for the first nine months totalled  EEK  357.9m

(€22.9m),  EEK  49.5m (€3.2m) or 16.0%  up  on  the  same

period  in 2003. The largest growth occurred in the  cost

of materials, consumables and supplies, triggered largely

by  an  increase  in  sales and production  volumes.  The

volume  of beverages sold in one-way packaging (cans  and

PET)  has  almost  doubled  over  the  year,  which   has

increased  related  materials  costs  considerably.   The

growth  in  output  has  also  increased  transport   and

personnel  expenses. Alcohol excise duties  was  amounted

over EEK 132m in the period.



Operating profit for the first nine months amounted to

EEK 58.7m (€3.7m), EEK 3.3m (€333,000) down on a year

ago. Profit has decreased due to stiff price competition,

a rise in cheaper market segments and extraordinarily bad

weather during the summer season. Net profit for the

period amounted to EEK 44.5m (€2.8m) against the

EEK 53.2m (€3.4m) earned a year ago.  Net profit

formation was also affected by income tax expense on

dividends, which was roughly twice as large as last year

because the final balance of corporate income tax that

had been paid before the income tax reform was used up on

on the distribution of  dividends in 2003.





FINANCIAL RATIOS                      January-  January-

                                      September September

                                        2004      2003

                                                

Operating margin (operating profit  /     14.1%     16.7%

total revenue)

Net   margin  (net  profit  /   total     10.7%     14.4%

revenue)

Return on assets (net profit /            10.0%     12.1%

average total assets)

Return on equity (net profit /            12.1%     14.9%

average equity)

Non-current asset turnover ratio            1.6       1.4

(total revenue / average non-current

assets)

Total assets turnover ratio (total          0.9       0.8

revenue / average total assets)







Additional information:

Kristina Seimann

Communication Manager

+372 6 508 303