FENNIGER            FINANCIAL RESULTS          28.02.2005



Financial results 2004



The  loss of the consolidation group AS Fenniger in  2004

was 9 million kroons. The loss was planned. In comparison

with  2003,  the  loss increased by over 2.5  times,  the

reason  being  first  of all the marketing  costs  a  and

substantial  increase  of  administrative  and  financial

expenditure.



Income statement

The   sales   revenue  500,669  kroons  of  the   Latvian

subsidiary  came  from booking fees of the  half-finished

building,   from  rent,  and  from  consulting   services

provided.

In  the  year  2004,  the  sum of general  administrative

expenditure  was 5.25 million kroons. In comparison  with

the previous period, administrative expenditure increased

up  to 3.5 times. The main expenditure item were expenses

incurred for all kinds of consultations for the launching

and  management  of  the project,  the  costs  for  legal

assistance  expenses also increased more  than  3  times.

Additional  expenses were also caused by the  opening  of

the  new  sales  office in the old town of  Riga,  office

costs  increased  by almost 10 times as compared  to  the

previous accounting year.

The bonds' interest expenses and the issuing expenses  in

the   2004  first  half-year  interim  report  have  been

reflected  in  the financial expenses and  administrative

expenses respectively.

As  according to the auditor's opinion, based on the IAS-

23,  it  is  possible  to capitalize  the  aforementioned

expenses  - in the second half-year's interim report,  as

well  as  the  2004  Annual  Report   the  aforementioned

expenses   will be capitalized into the stocks  (cost  of

the building).



Balance sheet

The consolidated balance sheet total of AS Fenniger as at

31.12.2004 was 256,785,554 kroons. From the beginning  of

the  year, the balance sheet total has increased  by  213

million  kroons or by 6 times. The increase has first  of

all  been caused by the object under construction,  which

on  the balance sheet is reflected in inventories on  the

line building for sale.

The  cash at bank and in hand of the consolidation  group

has  increased by over 200 times, such tremendous  growth

was  caused  by  the deposits received from  buyers  upon

entering the preliminary sale contracts of the apartments

and commercial spaces.

The  advance payments and recoveries of taxes  have  also

increased,  this  is  caused by  the  input  VAT  of  the

building.  A positive fact worth mentioning is  that  the

repayment of the input VAT of the building by the Latvian

Tax  Board  has been carried out in a timely and  correct

manner.  As the sums involved are quite large, then  good

cooperation  with  taxation officials is  very  important

when it comes to the cash flow of the project.

In  the  year 2004, fixed assets have increased by almost

550  thousand  kroons; this growth has  been  caused  the

opening  of  the new sales office in Riga  –  investments

were made in office equipment.

The liabilities of the consolidation group have increased

more that 6 times, the liabilities have been increased by

the  bank  loan  taken from the Latvian AS Hansabanka  to

finance  the  building (the balance of the  end  of  2004

close  to 125 million kroons) and AS Fenniger’s issue  of

debt  instrument (31.12.2004 balance close to 27  million

kroons).





     BALANCE SHEET                  EEK

         ASSETS                 GROUP       GROUP

                           31.12.2004  31.12.2003

CURRENT ASSETS                               

Cash and bank              66 955 038     287 549

Customer receivables           15 875           0

Other receivables           1 338 305           0

Accrued income and          5 645 118   3 865 361

prepayments

Stock                     170 449 611  39 007 988

TOTAL CURRENT ASSETS      244 403 947  43 160 898

                                       

NONCURRENT ASSETS                      

                                       

Long-term receivables       2 089 372           0

Investment property         9 386 522           0

Tangible fixed assets         573 084      21 753

Intangible assets             332 629     332 629

TOTAL NONCURRENT ASSETS    12 381 607     354 382

                                       

TOTAL ASSETS              256 785 554  43 515 280

                                       

      LIABILITIES               GROUP       GROUP

                           31.12.2004  31.12.2003

                                                  

CURRENT LIABILITIES                    

                                       

Short-term loans            2 499 430     845 735

Customer advances for      73 641 337           0

goods and services

Supplier payables           7 842 761  13 104 719

Other short-term            4 614 347   7 746 113

payables

Taxes payable                   3 655           0

Accrued expenses and           32 055   2 436 717

unearned income

                                       

TOTAL CURRENT              88 633 585  24 133 284

LIABILITIES

                                       

NONCURRENT LIABILITIES                 

                                            

Long-term loans           163 006 523   2 952 857

Other long-term payables      907 017  13 109 742

                                                 

                                       



TOTAL NONCURRENT          163 913 540  16 062 599

LIABILITIES

                                       

TOTAL LIABILITIES         252 547 125  40 195 883

                                       

OWNER´S EQUITY                              

                                            

Share capital (par          1 100 000   1 000 000

value)

Unregistered share capital (par            50 000

value)

Share premium              23 050 000  13 100 000

Mandatory reserves            100 000     100 000

Unrealised exchange        -2 566 238  -2 533 889

differences

Retained earnings          -8 396 785  -5 148 702

Net profit (-loss) for     -9 048 588  -3 248 083

the financial year

PARENT COMPANY OWNER´S      4 238 389   3 319 326

SHARE

Minority share                     40          71

TOTAL OWNER´S EQUITY        4 238 429   3 319 397

                                       

TOTAL LIABILITIESAND      256 785 554  43 515 280

EQUITY





     BALANCE SHEET                 euros

         ASSETS                 GROUP       GROUP

                           31.12.2004  31.12.2003

CURRENT ASSETS                               

Cash and bank               4 279 207      18 378

Customer receivables            1 015           0

Other receivables              85 533           0

Accrued income and            360 789     247 042

prepayments

Stock                      10 893 716   2 493 064

TOTAL CURRENT ASSETS       15 620 259   2 758 484

                                                  

NONCURRENT ASSETS                      

                                       

Long-term receivables         133 535           0

Investment property           599 908           0

Tangible fixed assets          36 627       1 390

Intangible assets              21 259      21 259

TOTAL NONCURRENT ASSETS       791 329      22 649

                                       

TOTAL ASSETS               16 411 588   2 781 133

                                       

      LIABILITIES               GROUP       GROUP

                           31.12.2004  31.12.2003

                                                  

CURRENT LIABILITIES                    

                                       

Short-term loans              159 743      54 052

Customer advances for       4 706 539           0

goods and services

Supplier payables             501 244     837 544

Other short-term              294 910     495 067

payables

Taxes payable                     234           0

Accrued expenses and            2 049     155 735

unearned income

                                       

TOTAL CURRENT               5 664 719   1 542 398

LIABILITIES

                                       

NONCURRENT LIABILITIES                 

                                            

Long-term loans            10 418 016     188 722

Other long-term payables       57 969     837 865

                                       

                                       



TOTAL NONCURRENT           10 475 985   1 026 587

LIABILITIES

                                       

TOTAL LIABILITIES          16 140 703   2 568 985

                                       

OWNER´S EQUITY                              

                                            

Share capital (par             70 303      63 912

value)

Unregistered share                  0       3 196

capital (par value)

Share premium               1 473 163     837 243

Mandatory reserves              6 391       6 391

Unrealised exchange          -164 013    -161 945

differences

Retained earnings            -536 652    -329 062

Net profit (-loss) for       -578 310    -207 590

the financial year

PARENT COMPANY OWNER´S        270 882     212 144

SHARE

Minority share                      3           5

TOTAL OWNER´S EQUITY          270 885     212 148

                                       

TOTAL LIABILITIESAND       16 411 588   2 781 133

EQUITY



INCOME STATEMENT                         EEK

                                     GROUP        GROUP

                                      2004         2003

                                            

Revenue                            500 669            0

Cost of goods sold                   6 681            0

GROSS PROFIT                       493 988            0

                                            

Marketing expenses               2 249 928            0

Administrative expenses          5 252 447    1 454 185

Other revenue                       32 368       22 773

Other expenses                       6 804          796

OPERATING PROFIT (LOSS)         -6 982 823   -1 432 208

                                            

FINANCIAL INCOME AND EXPENSES   -4 257 785   -1 815 876

                                                       

interest expenses                 -838 811   -1 007 169

income from other noncurrent    -1 390 191      969 756

financial investments

foreign exchange gain (-loss)   -2 349 876   -1 009 071

other financial income and         321 093     -769 392

expenses

                                            

PROFIT (LOSS) BEFORE TAXES     -11 240 608   -3 248 084

Deferred tax gain                2 191 991            0

                                            

NET PROFIT (-LOSS) FOR THE YEAR              -3 248 084

PARENT COMPANY OWNER´S SHARE    -9 048 588   -3 248 083

MINORITY INTEREST                      -29           -1

                                            

Earnings per share                  -84,15       -32,48

Diluted earnings per share          -84,15       -32,48



INCOME STATEMENT                        euros

                                     GROUP        GROUP

                                      2004         2003

                                            

Revenue                             31 999            0

Cost of goods sold                     427            0

GROSS PROFIT                        31 572            0

                                            

Marketing expenses                 143 797            0

Administrative expenses            335 693       92 939

Other revenue                        2 069        1 455

Other expenses                         435           51

OPERATING PROFIT (LOSS)           -446 284      -91 535

                                            

FINANCIAL INCOME AND EXPENSES     -272 122     -116 055

                                                       

interest expenses                  -53 610      -64 370

income from other noncurrent       -88 849       61 979

financial investments

foreign exchange gain (-loss)     -150 184      -64 491

other financial income and          20 522      -49 173

expenses

                                            

PROFIT (LOSS) BEFORE TAXES        -718 406     -207 590

Deferred tax gain                  140 094            0

                                            

NET PROFIT (-LOSS) FOR THE        -578 312     -207 590

YEAR

PARENT COMPANY OWNER´S SHARE      -578 310     -207 590

MINORITY INTEREST                       -2            0

                                            

Earnings per share                   -5,38        -2,08

Diluted earnings per share           -5,38        -2,08





Meeli Puusepp

Financial Manager

681 9900