Rakvere Lihakombinaat         FINANCIAL RESULTS                 08/11/2003



FINANCIAL RESULTS, 6 MONTHS 2003



RAKVERE LIHAKOMBINAAT GROUP

COMMENT ON FINANCIAL RESULTS



Group companies as at 30 June 2003:



				Country 	Partici-  	Partici-	

				of location	pation	  	pation 

						30.06.03	31.12.02

AS Rakvere Lihakombinaat 

(the parent company)		Estonia	

AS Ekseko			Estonia		98,4%		98,2%

	AS Ekseko’s subsidiaries:

	OÜ Paistu Põldur	Estonia		100%		100%

	OÜ Põlva Peekon		Estonia		100%		100%

	OÜ Paistu Põllumees	Estonia		100%		100%

AS Linnulihatooted		Estonia		76%		76%

AS RLK Kinnisvarahaldus		Estonia		100%		100%

AS Rigas Miesnieks		Latvia		92,86%		92,47%

OÜ Klaipedos Maisto Produktai	Lithuania	100%		100%

	OÜ Klaipedos Maisto 

	Produktai subsidiary:

	OÜ Pentinuotis		Lithuania	100%		100%		



As of 30 June 2003 Rakvere Lihakombinaat Group had 1,331 employees (1,271 

employees as of 30 June 2002.



In the second quarter of 2003 economic growth in the Baltics exceeded that 

of the EU countries. Due to the anticipated EU membership, Baltic states' 

economies are in a situation characterised by highest ever reliability and 

practically similar interest rates with the EU. Consumption of red meat has 

remained stable while consumption of white meat continues to increase.



Due to importation of subsidised pork from Poland the Baltic pork market in 

the second quarter was characterised by oversupply, tougher competition and 

resulting decrease in prices. 



In Estonia business suffered from import ban imposed for six weeks by 

Lithuanian authorities. Decrease of raw material prices affected primarily 

our pig farm Ekseko. Competition on the Estonian meat products' market 

continued to tighten with industry investments into production facilities 

financed from SAPARD.



In Latvia Rakvere market share continued to increase, while competition 

tightened and price level decreased.



In Estonia Rakvere Group invested into environmental protection systems at 

Ekseko pig farm.

In Latvia Rakvere Group continued investing into upgrading Rigas Miesnieks 

to EU standards and into constructing a logistics center to the Rigas 

Miesnieks facility. 





Sales and financial results



The net sales of Rakvere Lihakombinaat Group in the first 6 months of 2003 

totalled 559 million kroons or 

35 744 th. euros (589 million kroons or 37 626 th. euros in 2002). The net 

sales fell 5% by 29,4 million kroons (1 882 th. euros) as compared to last 

year. The sales volume total was 19.7 th. tons in the Baltic States. This 

constitutes a 1,1 th. ton or 6% increase compared to last year.



The net profit of Rakvere Lihakombinaat Group was 13.6 million kroons or 

871 th. euros (in 2002, adjusted and comparable data amounted to 28,3 

million kroons (1 808 th. euros). 









Highlights of financial results of Rakvere Lihakombinaat Group, millions 

of kroons (th. euros)



			6 months 2003	6 months 2002	12 months 2002

					adjusted*

-------------------------

Net sales		559,3 (35 744)	588,7 (37 626)	 1 226.5 (78 389)				

Operating expenses	541,0 (34 576)	553,3 (35 362)	 1 137.3 (72 687)   	   

Operating profit	 18,3 ( 1 168)	 35,4 ( 2 264)	    89.2 ( 5 702)     

Net profit	         13,6 (   871)	 28,3 ( 1 808)	    75.8 ( 4 847)



Investments		 39,3  (2 512) 	 33,7  (2 157)	    73.8  (4 714)		        	



* A new standard - IAS 41: Agriculture - entered into force on 1 January 

2003. Pursuant to the standard, biological assets shall be recorded on the 

balance sheet at their fair value less point-of-sale costs and the income 

statement lays down the change in the fair value of biological assets. The 

corresponding change has also been introduced to the comparative data of 

the first 6 months of 2002 (operating profit growth of 0,3 million kroons 

or 19,6 th. euros, and net profit growth of 0,3 million kroons or 19,1 th. 

euros).



Forecast 



Situation on the raw material market will continue to change with Latvia 

having imposed import tariffs on pork. 

In order to maintain the advance trust into their economies, Baltic states 

need quick EU membership. The time period before EU accession may bring some 

unexpected dynamics to the Baltic meat products' market.





Made in Rakvere on 11 August 2003



Olle Horm

Rakvere Lihakombinaat

Chairman of the Board







RAKVERE LIHAKOMBINAAT GROUP 				

BALANCE SHEET 				

				Thousand Estonian 	Thousand Euros

				kroons				

ASSETS				30.06.03    31.12.02	30.06.03   31.12.02

					    adjusted		   adjusted



Current assets				

Cash and bank			 23 349	    15 259	 1 492	     975

Trade receivables		 81 834	    89 260	 5 230	   5 704

Tax receivables			  3 904	     5 548	   249	     355

Other short-term receivables	  8 636	     6 199	   552	     396

Inventories			 89 118	   100 274	 5 696	   6 409

Biological assets		 56 119	    59 481	 3 587	   3 802

Total current assets		262 960	   276 021	16 806	  17 640

				

Non-current assets				

Long-term financial assets	  3 253	     4 535	   208	     290

Tangible fixed assets		420 746	   415 726	26 891	  26 570

Other intangible assets		  4 434	     2 029	   283	     130

Total non-current assets	428 433	   422 290	27 382	  26 990

				

T OT A L  A S S E T S:		691 393	   698 311	44 188	  44 630

				

LIABILITIES AND OWNERS’ EQUITY				

				

Current liabilities				

Loans and lease payables	  1 021	     2 768	    65	     177

Supplier payables		 71 401	    68 566	 4 563	   4 382

Tax payables			  9 659	    11 827	   617	     756

Other current liabilities	 18 528	    16 039	 1 184	   1 025

Total current liabilities	100 609	    99 200	 6 430	   6 340

				

Long-term loans and lease 

payable				122 022	   142 821	 7 799	   9 128

Total liabilities		222 631	   242 021	14 229	  15 468

				

Minority interest		  3 350	     3 541	   214	     226

				

Owners’ equity				

Share capital			377 217	   377 217	24 108	  24 108

Mandatory legal reserve		  9 734	     5 942	   622	     380

Retained earnings		 78 650	    68 820	 5 027	   4 399

Unrealised translation 

differences			   -188	       770	   -12	      49

Total owners’ equity		465 413	   452 749	29 745	  28 936

				

TOTAL LIABILITIES AND 

OWNERS’ EQUITY :		691 393	   698 311	44 188	  44 630





RAKVERE LIHAKOMBINAAT GROUP				

INCOME STATEMENT				

				Thousand Estonian 	Thousand Euros

 		  	       	kroons

				 6 m 2003   6 m 2002    6 m 2003   6 m 2002

					    adjusted		  adjusted*

Revenue	

		

Net sales			 559 274     588 722	 35 744	   37 626

Change in fair value of 

biological assets		  -3 363       1 701	   -215       109

Other revenue			   5 309       1 763	    339	      113

Total revenue			 561 219     592 186	 35 868	   37 847

				

Change in work-in-progress and 

finished goods 			  -3 790	-255	   -242	      -16

Materials, consumables and 

supplies			-356 136    -378 366	-22 761	  -24 182

Other operating expenses	 -80 222     -77 684	 -5 127	   -4 965

Personnel expenses		 -76 161     -74 627	 -4 868	   -4 770

Depreciation and write-downs of 

non-current assets		 -24 993     -22 836	 -1 597	   -1 459

Other expenses			  -1 634      -2 988	   -104	     -191

				

Operating profit		  18 282      35 430	  1 168	    2 264

				

Financial income/expenses				

Net foreign exchange 

gain/loss			    -657      -1 093	    -42	      -70

Interest and other financial 

income				   1 118       1 184	     71	       76

Interest and other financial 

expenses			  -5 243      -7 028	   -335	     -449

Total financial income/expenses	  -4 783      -6 937	   -306	     -443

				

Profit before taxes		  13 500      28 493	    863	    1 821

Minority interest		    -123	 200	     -8	       13

				

Net profit			  13 623      28 293	    871     1 808

				

Earnings per share		    0,36	0,75	  0,023	    0,048





Olle Horm

Chairman of the Board

032 29 221