TALLINNA KAUBAMAJA

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO FINANCIAL RESULTS, Q1 2000



No changes have been made in the accounting principles used for 

compiling of Tallinna Kaubamaja AS financial reports; no changes have 

been made in the group's holdings in its subsidiaries nor the group's 

structure. The financial reports of subsidiaries are consolidated 

row-by-row, by eliminating reciprocal receivables, liabilities and 

economic activities. Results of subsidiary (Rävala Parkla AS) are 

consolidated on equity method, i.e. only Kaubamaja's share of 

subsidiary's financial result is reflected in the group reports. 

The quarterly financial statements are unaudited.



Q1 2000 was successful for Tallinna Kaubamaja AS. Group net sales 

stood at EEK 226.3 million, providing 10% or EEK 21.7 million growth 

y-o-y (EEK 204.6 mln in Q1 1999). In Q1 the group posted EEK 7.2 mln 

net profit, providing EEK 8.8 mln annual increase (EEK 1.6 mln loss 

in Q1 1999). Substantial increase in profit figure was mainly from 

increased sales, a large share of which was contributed by the youth 

department of Tallinn Department Store in February. Number of clients 

of Kadaka Selver has doubled since the first quarter of last year.



In Q1 the group balance sheet size grew by EEK 50.1 million, 

amounting to EEK 427.4 million on 31.03.2000. Growth in balance sheet 

size was mainly due to increased inventories (+ EEK 28.3 million) and 

tangible fixed assets (+ EEK 23.9 million). Increase in inventories 

is directly due to seasonal nature of the group's activities (ca 30% 

of group turnover is from sale of seasonal goods). Increase in 

tangible fixed assets is due to building, furniture and equipment of 

new Selver-chain store, to be opened at the end of May. Kaubamaja 

took a short-term loan and opened a credit line in order to raise 

funds for investments and increase the volume of inventories. In Q1 

Kaubamaja also made an issue of commercial papers in the amount of 

EEK 20 million. The issue will be redeemed in five equal tranches by 

20.11.2000. Due to increased current liabilities, the group's debt 

ratio (total debt/total assets) increased in Q1 from 57.51% 

(31.12.1999) up to 60.76% (31.03.2000). Current ratio (current 

assets/current liabilities) fell from 1.12 (31.12.1999) to 0.97 

(31.03.2000). As at 31.03.2000 earnings per share stood at EEK 1.06.



at the end of May the group's subsidiary A-Selver will open its third 

Selver-chain store in Pirita, Tallinn. Construction of Selver store 

in Järve, Tallinn, is to be completed this fall; the store's 

technological project, however, is completed and selection of 

personnel, furniture and equipment for the store is currently in 

progress.





Urmo Vallner

Management Board member

+372 6 400 200