Saku Õlletehas                FINANCIAL RESULTS                 08/28/2003



FINANCIAL RESULTS, SIX MONTHS OF 2003



BALANCE SHEET                                                                

(In thousands)                        EEK                        EUR     

                            30.6.03 30.6.02 31.12.02 30.6.03 30.6.02 31.12.02

                       

                                                                         

ASSETS                                                                       

Cash and bank                19,773    2,561    3,296    1,264    164     211

Trade receivables (Note 2)   55,956   50,777   29,051    3,576  3,245   1,857

Other receivables and         7,137    8,177    2,645      456    523     169

prepayments (Note 3)

Inventories (Note 4)        101,170   85,712   90,917    6,466  5,478   5,811

TOTAL CURRENT ASSETS        184,036  147,227  125,909   11,762  9,410   8,048

                                                                             

Non-current assets                                                           

Long-term financial          15,999   16,467   16,000    1,023  1,052   1,023

investments (Note 5)

Long-term receivables (Note      63      142       98        4      9       6

6)

Tangible assets (Notes 7,   243,682  271,505  260,597   15,574 17,352  16,655

8)

Intangible assets (Note 7)      979      601    1,147       62     38      73

TOTAL NON-CURRENT ASSETS    260,723  288,715  277,842   16,663 18,451  17,757

TOTAL ASSETS                444,759  435,942  403,751   28,425 27,861  25,805

                                                                             

LIABILITIES AND EQUITY                                                       

Current liabilities                                                          

Debt obligations (Note 8)     1,232   31,962    7,154       79  2,043     457

Trade payables               31,147   31,237   22,150    1,991  1,996   1,417

Payables to the parent and   47,797    2,059      282    3,055    131      18

group companies (Note 11)

Tax liabilities (Note 9)     23,350   24,427   12,376    1,492  1,561     791

Payables to employees         3,526    3,410    4,607      226    218     294

Other accrued expenses        6,894    1,493    3,463      441     95     222

Provisions                    2,052               676      131             43

TOTAL CURRENT LIABILITIES   115,998   94,588   50,708    7,415  6,044   3,242

                                                                             

Non-current liabilities                                                      

Non-convertible debt (Note      981    2,726    1,711       62    174     109

8)

TOTAL NON-CURRENT               981    2,726    1,711       62    174     109

LIABILITIES

                                                                             

Equity                                                                       

Share capital                80,000   80,000   80,000    5,113  5,113   5,113

Capital reserve               8,000    8,000    8,000      511    511     511

Other reserves               44,070   44,070   44,070    2,817  2,817   2,817

Accumulated profits         179,262  180,441  180,441   11,456 11,532  11,532

Profit/loss for the period   16,448   26,117   38,821    1,051  1,670   2,481

TOTAL EQUITY                327,780  338,628  351,332   20,948 21,643  22,454

TOTAL LIABILITIES AND       444,759  435,942  403,751   28,425 27,861  25,805

EQUITY

  





INCOME STATEMENT                                                       

(In thousands)                      EEK                       EUR      

                          January-January-          January-January-   

                            June    June              June    June     

                            2003    2002     2002     2003    2002   2002

Revenue                                                                   

Net sales (Note 10)       353,951  372,380  768,445  22,622  23,799 49,113

Change in work in                                                         

progress and

finished goods              6,271    3,171     -964     401     203    -62

inventories

Other revenue (Note 12)       321      459    2,416      20      30    154

Total revenue             360,543  376,010  769,897  23,043  24,032 49,205

                                                                          

Expenses (Note 13)                                                        

Materials, consumables    226,465  236,170  493,747  14,474  15,094 31,556

and supplies

Other operating expenses   59,740   60,728  132,724   3,818   3,882  8,483

Personnel expenses         25,302   26,309   53,872   1,617   1,681  3,443

Depreciation               23,050   21,314   43,410   1,473   1,362  2,774

Other expenses              1,027    4,612    5,932      66     295    379

Total expenses            335,584  349,133  729,685  21,448  22,314 46,635

                                                                          

OPERATING PROFIT           24,959   26,877   40,212   1,595   1,718  2,570

                                                                          

Financial income (Note         51      105      125       3       7      8

14)

Financial expenses (Note      880      865    1,516      56             97

14)                                                            55

                                                                          

PROFIT FOR THE PERIOD      24,130   26,117   38,821   1,542   1,670  2,481

BEFORE TAXES

                                                                          

Income tax expense          7,682                       491               

                                                                          

NET PROFIT FOR THE PERIOD  16,448   26,117   38,821   1,051   1,670  2,481

                                                                          

Basic earnings per share     2.06     3.26     4.85    0.13    0.21   0.31

(Note 15)

Diluted earnings per         2.06     3.26     4.85    0.13    0.21   0.31

share (Note 15)

                                                                          

     

Review of operations and results



According to the Estonian Breweries Association,  in  the

first  six months the total volume of the beer market  was

44,5  m  litres, 7% down on the same period of 2002.  The

main  reason was a cold weather in the season  -  in  the

spring and in the first half of the summer.



In  quantitative terms, Saku Brewery Ltd sold 26 m litres

of beverages, 3% decrease on the six months of 2002. Beer

sales  amounted to 22  m litres, 7% decrease on the  same

period  of the last year. Domestic sales amounted 19,3  m

litres. Decrease of the sales was caused by the shrank of

the  beer  market  by 7% in the period  because  of  cold

weather in the period.



According to the Estonian Breweries Association  Estonian

beer  market  was  devided by Saku Brewery  43,5%;  Tartu

Brewery 36,5%; Viru brewery 7,5%; Pärnu Brewery 3%;  Viru

Nigula Brewery1%; Saaremaa Brewery 0,4%, Sillamäe Brewery

0,1% and imported beer 8%.



Estonian cider market increased 25% compared to the  last

year  same period. Cider sales of Saku Brewery  grew  75%

compared to the last year, thanks to new canned products.



Saku  Brewery Ltd ended the first half of 2003  with  net

sales  of EEK 354.0m (EUR 22.6m), a decline of EEK  18.4m

(EUR 1.2m), i.e. 5 percent, on the EEK 372.4m (EUR 23.8m)

attained  in the same period in 2002. Roughly  EEK  17.3m

(EUR 1.1m) of the decline can be attributed to a decrease

in  the sales of bottles, which resulted from a shrinkage

in  the size of the beer market (-6.5 percent compared to

the  first half of 2002) and an increase in the share  of

canned  products. Sales of self-produced beers  decreased

by  EEK  6.3m  (EUR 0.4m), i.e. 3.5 percent, whereas  the

sales  of other self-produced alcoholic beverages  (cider

and  long  drinks) grew by an outstanding EEK  7.2m  (EUR

0.5m), i.e. 157.3 percent. Altogether, in monetary terms,

sales  of beverages remained on more or less on the  same

level as at the end of the first six months of 2002.



Expenses  for  the first half-year were  EEK  13.5m  (EUR

0.9m)  i.e. 3.9 percent smaller than a year ago. Although

the  share of containers in circulation decreased by  EEK

16.4m   (EUR   1.1m),  the  total  cost   of   materials,

consumables and supplies decreased by EEK 9.7m (EUR 0.6m)

only,  mostly  because of an increase  in  the  share  of

canned   products   and  inventories.   Other   operating

expenses,  personnel  expenses,  depreciation  and  other

expenses proved EEK 3.8m (EUR 0.2m) smaller than  a  year

ago.



Operating  profit  for  the  first  six  months  of  2003

amounted to EEK 25.0m (EUR 1.6m), a decrease of EEK  1.9m

(EUR 0.1m), i.e. 7.1 percent, on the EEK 26.9m (EUR 1.7m)

earned  in  the first half-year of 2002. The main  reason

for  the  decline  is the shrinkage of the  beer  market,

which brought about a decrease in the sale of beers.



Due  to a change in the guidelines issued by the Estonian

Accounting Standards Board, which became effective at the

beginning  of  2003  and  require  that  in  contrast  to

previously  applied  accounting principles  dividend  tax

should  be  recognised as an expense in the period  where

the  dividend  is  declared, net profit  for  the  period

amounted  to  EEK 16.4m (EUR 1.1m), i.e.  EEK  9.7m  (EUR

0.6m)  less  than at the end of the first six  months  of

2002  when  dividend tax was recognised directly  in  the

balance sheet.



Cash  flows  for  the period were EEK  34.1m  (EUR  2.2m)

larger  than a year ago, mostly because of less extensive

investment.





FINANCIAL RATIOS                      January-  January-

                                        June      June

                                        2003      2002

                                                

Operating margin (operating profit  /      6.9%      7.2%

total revenue)

Net   margin  (net  profit  /   total      4.6%      7.0%

revenue)

Return on assets (net profit /             3.9%      6.3%

average total assets)

Return on equity (net profit /             4.8%      7.5%

average equity)

Non-current asset turnover ratio            1.3       1.4

(total revenue / average non-current

assets)

Total assets turnover ratio (total          0.9       0.9

revenue / average total assets)





Kristina Seimann

PR Manager

+372 6 508 303