Merko Ehitus                  FINANCIAL RESULTS                 11/04/2002



FINANCIAL RESULTS, 9M 2002



COMMENTARY TO 9M 2002 FINANCIAL RESULTS 



Merko Ehitus group 9M 2002 consolidated and unaudited net sales amounted to

1140,6 million EEK (72,9 million EUR), and net profit was 74,3 million EEK

(4,8 million EUR).  

The respective figures year ago were net sales of 894,9 million EEK (57,2

million EUR) and net profit of 55,9 million EEK (3,6 million EUR).



Merko Ehitus group deals in the field of construction and with activities

concerned to that, in Estonia, Latvia and Lithuania. Companies of the group

9M 2002 net sales and consolidated net sales (sales outside the group) were

(in thousand EEK):



                                                Net sales       including

                                                             consolidated

                                                                net sales

Estonian companies			

        Construction		

        AS Merko Ehitus                          717 217         709 244

        AS Gustaf (100% partnership)              83 016          79 432

        AS Merko Tartu (66% partnership)          68 199          58 927

        Tallinna Teede AS (100% partnership)      90 796          86 324

        Production of structures for small houses		

        OÜ Matek (71,6% partnership)              25 289          24 746

        Construction

        AS Normanni Linnagrupp (50% partnership)   2 095               -

        Production of concrete

        AS Tartu Maja Betoontooted 

        (25% partnership)                         91 315               -

        Telecommunication

        AS Telegrupp (45% partnership)            29 546               -

Latvian companies

        Construction		

        SIA Merks (100% partnership)              63 736          63 736

Lithuanian companies

        Construction		

        UAB Merko Statyba (100% partnership)     118 162         118 162





Companies of the group 9M 2002 net sales and consolidated net sales

(sales outside the group) were (in thousand EUR):



                                                Net sales      including

                                                            consolidated

                                                               net sales

Estonian companies			

        Construction		

        AS Merko Ehitus                          45 838           45 329

        AS Gustaf (100% partnership)              5 306            5 077

        AS Merko Tartu (66% partnership)          4 359            3 766

        Tallinna Teede AS (100% partnership)      5 803            5 517

        Production of structures for small houses

        OÜ Matek (71,6% partnership)              1 616            1 582

        Construction

        AS Normanni Linnagrupp (50% partnership)    134                -

        Production of concrete

        AS Tartu Maja Betoontooted

        (25% partnership)                         5 836                -

        Telecommunication

        AS Telegrupp (45% partnership)            1 888                -

Latvian companies

        Construction 

        SIA Merks (100% partnership)              4 074            4 074

Lithuanian companies

        Construction

        UAB Merko Statyba (100% partnership)      7 552            7 552



Merko Ehitus group 9M 2002 consolidated data illustrating financial ratios

were:



                                               9M 2002             9M 2001



Net profit margin                               6,5 %               6,2 %

Operating profit margin                         6,3 %               6,0 %

Return on equity (per year)                    38,6 %              40,4 %

Return on assets (per year)                    16,5 %              15,7 %

Current ratio                                   1,5                 1,6

Invoice turnover (per year)                     5,2                 7,3

Equity-to-assets ratio                         39,9 %              43,5 %





Year 2002 9M consolidated and unaudited income statement and balance sheet

are compiled in accordance with the principles of the International

Accounting Standards (IAS), and correspond with the Estonian legal acts

regulating the accounting principles used. 





INCOME STATEMENT 9M 2002

consolidated, unaudited in thousand EEK and EUR

				

                                           EEK                   EUR	

                                   2002.a.     2001.a.    2002.a.    2001.a.

                                   9 months    9 months   9 months   9 months



Sales                             1 140 571     894 868     72 896     57 192

				

Cost of sales                     1 021 130     811 520     65 262     51 865

				

Gross profit                        119 441      83 348      7 634      5 327

				

Marketing expenses                    9 517       9 353        608        598

Administrative expenses              35 208      26 879      2 250      1 718

Other operating income                5 252       7 786        336        498

Other operating expenses              8 117       1 489        519         95

				

Operating profit                     71 851      53 413      4 592      3 414

				

Financial income from stocks of 

associated companies                  2 124       1 399        136         89

incl. Equity method gains             2 124       1 399        136         89

Income from other noncurrent 

financial investment                     10           0          1          0

Foreign exchange gain                 1 181       3 030         75        194

Other interest and similar income     4 502       5 759        288        368

Total financial income                7 817      10 188        500        651

				

Financial expenses related to 

associated companies                    591       1 138         38         73

incl. Equity method gains               591       1 138         38         73

Interest expense                        444          76         28          5

Foreign exchange loss                 3 615       5 407        231        346

Other financial expenses                 78          17          5          1

Total financial expenses              4 728       6 638        302        424

				

Profit(-loss) from normal operations 74 940      56 963      4 790      3 641

				

Net profit(loss) for the fin. year   74 940      56 963      4 790      3 641



Minority interest                       620       1 090         40         70



Net profit (- loss) for the group    74 320      55 873      4 750      3 571

				

Net profit (- loss) per share 

(basic and diluted, in EEK and EUR)    8,40        6,31       0,54       0,40





BALANCE SHEET AS OF 31.09.2002

consolidated, unaudited in thousand EEK and EUR



                                        EEK                      EUR	

                              30.09.2002   31.12.2001  30.09.2002  31.12.2001

ASSETS				





Cash and cash equivalents         51 552       60 814       3 295       3 887

				

Marketable securities             20 965       18 516       1 340       1 183

				

Accounts receivable              290 393      186 861      18 559      11 943

Allowance for doubtful receivables   -38          -53          -2          -3

Total accounts receivable        290 355      186 808      18 557      11 939

				

Receivables from subsidiary and

parent companies                       2        1 735           0         111

Receivables from associated comp.  6 118        6 941         391         444

Other short-term receivables      25 864       43 112	    1 653       2 755

Total other receivables           31 984       51 788       2 044       3 310

				

Interest receivable                  506          739          32          47

Other accrued income                 481          254          31          16

Total accrued income                 987          993          63          63

				

Prepaid taxes                      5 491        6 850         351         438

Other prepaid expenses             3 722        1 534         238          98

Total prepaid expenses             9 213        8 384         589         536

				

Raw materials                      2 974        4 041         190         258

Work-in-progress                  18 925        9 092       1 210         581

Finished goods                     1 571          855         100          55

Merchandise purchased for resale  45 579       32 667       2 913       2 088

Prepayments to suppliers          37 758          567       2 413          36

Construction-in-progress           6 718        5 821         429         372

Due from customers                56 815       35 281       3 631       2 255

Total inventories                170 340       88 324      10 887       5 645

				

TOTAL CURRENT ASSETS             575 396      415 627      36 774      26 563

				

Shares in associated companies    21 175       12 489       1 353         798

Long-term receivables from 

associated companies                 929          100          59           6

Other shares, holdings and debt 

securities                        12 281        1 800         785         115

Miscellaneous long-term receivabl.11 913        7 588         761         485

Long-term accounts receivable         59            0           4           0

Total long-term financial assets  46 357       21 977       2 963       1 405

				

Land                               1 998          797         128          51

Buildings                         13 544       26 934         866       1 721

Accumulated real-estate

investments depreciation          -4 876       -6 755        -312        -432

Prepayments for real-estate 

investments                       11 655       10 655         745         681

Total real-estate investments     22 321       31 631       1 427       2 022

				

Land and buildings                 7 953       15 289         508         977

Ground lease                       6 718          458         429          29

Plant and equipment               65 943       64 064       4 215       4 094

Other equipment and fixtures      18 293       16 105       1 169       1 029

Accumulated depreciation         -48 813      -46 914      -3 120      -2 998

Self-constructed physical assets 

under construction                   161          173          10          11

Prepayments for noncurrent

physical assets                      187            0          12           0

Total noncurrent physical assets  50 442       49 175       3 224       3 143

				

Purchased concessions, patents, 

licenses, etc.                       139           97           9           6

Goodwill                          -5 757       -6 773        -368        -433

Total intangible assets           -5 618       -6 676        -359        -427

				

TOTAL NON-CURRENT ASSETS         113 502       96 107       7 254       6 142

				

TOTAL ASSETS                     688 898      511 734      44 028      32 706

				

				

Debentures (except bank loans)    15 266        4 533         976         290

Short-term loans from financial

institutions                          13            8           1           1

Total debt obligations            15 279        4 541         977         290

				

Customer prepayments              23 705        9 865       1 515         630

				

Accounts payable to suppliers    156 341      122 504       9 992       7 829

				

Payables to associated companies     851        1 493          54          95

				

Tax liabilities                   12 780       11 842         817         757

				

Payables to employees             13 452       10 165         860         650

Dividends payable                    795            0          51           0

Interest payable                       2           10           0           1

Other accrued expenses               786          941          50          60

Total accrued expenses            15 035       11 116         961         710

				

Provisions for construction

warranty liability                 3 692        3 737         236         239

Due to customers                 164 844       94 572      10 535       6 044

Other current provisions             158          155          10          10

Total current provisions         168 694       98 464      10 781       6 293

TOTAL CURRENT LIABILITIES        392 685      259 825      25 097      16 606

				

Non-convertible debt               7 321          204         468          13

Accounts payable to suppliers      9 551        7 478         610         478

TOTAL NON-CURRENT LIABILITIES     16 872        7 682       1 078         491



TOTAL LIABILITIES                409 557      267 507	   26 175      17 097



OWNERS' EQUITY

Share capital                     88 500       88 500       5 656       5 656

Share premium                      2 950        2 950         189         189

Mandatory legal reserve            8 850        8 205         566         524

Retained earnings                 99 540       49 213       6 362       3 145

Net profit (- loss) for the 

financial year                    74 320       88 312       4 750       5 644

Exchange rate differences            505        1 218          32          78

TOTAL OWNERS' EQUITY             274 665      238 398      17 554      15 236

				

Minority interest                  4 676        5 829         299         373

				

TOTAL LIABILITIES AND OWNERS' 

EQUITY                           688 898      511 734      44 028      32 706





Ülo Metsaots

Management Board member

+372 6 105 110