EESTI TELEKOM

ANNOUNCEMENT

31.03.99 

 

COMMENTS TO CONSOLIDATED (IAS) RESULTS OF ESTONIAN TELECOM (AS EESTI 

TELEKOM; ETL) FOR THE YEAR ENDED DECEMBER 31, 1998

 

The consolidated results of AS Eesti Telekom represent the results of AS 

Eesti Telekom as the parent company as well as the results of AS Eesti 

Telefon (Estonian Telephone Company), AS Eesti Mobiiltelefon (Estonian 

Mobile Telephone Company) and their subsidiaries (AS Esmofon, AS Tarvin 

and AS Teabeliin). During the first half of 1998, AS Eesti Telekom sold 

its whole interest in the following companies: AS EsData (a data 

communications company; 15%), Eesti Kaugotsingu AS (a paging company; 

60%) and Telemedia Eesti AS (a phone directories publishing company; 

48.72%). AS Eesti Telekom did not establish new subsidiaries or acquire 

any business interest in any other company in 1998. Also, the 51% 

interest of AS Eesti Telekom in AS Eesti Telefon and AS Eesti 

Mobiiltelefon did not change throughout the year.

Consolidated reports are prepared in accordance with the International 

Accounting Standards (IAS).

Net profit of AS Eesti Telekom as the parent company in 1998 amounted to 

318 million kroons representing a growth by 43% (net profit in 1997 was 

233 mln EEK). The main source of income for AS Eesti Telekom is 

financial  income from subsidiaries and associated companies (332 mln. 

EEK in 1998; 213 mln. EEK in 1997, growth of 55.8%). Most of the 

expenses formed operating expenses amounting to 45 million kroons in 

1998 (in 1997 9 mln EEK) This item mostly comprises expenses related to 

the public listing of the company and the preparations to the 

restructuring.

Consolidated net sales of AS Eesti Telekom Group increased 1.4 times in 

1998, reaching 2 890 million kroons (2 058 mln EEK in 1997). Total 

operating revenues were 2 928 mln EEK (2 106 mln EEK in 1997), 

representing a growth of 39%.

Operating expenses increased from 997 mln  EEK in 1997 to 1 402 mln EEK 

in 1998, i.e. at the same rate with the net sales.

There was a noticeable 1.5 times increase in depreciation charges in 

1998 – from 483 mln. EEK in 1997 to 722 mln. EEK in 1998. This can be 

explained by substantial growth in fixed assets, increase in 

depreciation rates and also by the extraordinary 99 mln. EEK value 

adjustments of real property carried out by AS Eesti Telefon in the 4th 

quarter of 1998 (see AS Eesti Telefon financial statements for the year 

ended December 31st, 1998).

Total consolidated income of the group before taxes and minority 

interest was 747 mln EEK. (growth by 30%). Effective consolidated income 

tax rate was 14.3% in 1998 (25.8% in 1997). Reduction in effective tax 

rate was caused by income tax exemptions on investments outside Tallinn.

The consolidated net income of AS Eesti Telekom for 1998 was 318 mln. 

EEK, representing a growth of 43% compared to 223 mln. EEK in 1997.

Group’s consolidated assets increased by 16% during the year (3 280 mln 

EEK and 3 807 mln. EEK at the end of 1997 and 1998, respectively). Non-

current assets by the end of 1998 totaled to 2 977 mln EEK (2 649 mln 

EEK in 1997). Current assets grew from 630 million kroons to 830 

million.

Equity of AS Eesti Telekom Group by the end of 1998 amounted to 1 587 

million kroons (1 326 mln EEK in 1997) representing  20% growth.

Non-current and current liabilities of the Group grew by 7% amounting to 

1 210 million kroons by the end of 1998. Volume of interest-bearing 

liabilities decreased by 91 mln. EEK, representing 711 mln. EEK (102 

mln. EEK short-term and 610 mln. EEK long-term liabilities).