Eesti Post                    FINANCIAL RESULTS                 08/29/2003



INTERMEDIARY RESULTS, 6 MONTHS 2003



Eesti Post AS’s budgeted revenues for first 6 months were  315

088  thousand kroons or 20 137 thousand euros, actual revenues

amounted  to 316 138 thousand kroons or 20 205 thousand  euros

(100.3%).  Revenues increased by 1 050 thousand kroons  or  67

thousand  euros  (1.6%)  in  comparison  with  previous  year.

Planned  increase of revenues for current year is 5.8%,  which

is  accomplishable due to seasonal sales increase in December.

Company’s  revenues  were positively affected  by  success  in

logistics and direct marketing division (value-added services)

and  successful  export activities. Main negative  effect  was

consumers’ increasing use of electronic messaging, as well  as

increasing  popularity  of e-banking  services.  The  revenues

according to segments were as follows:



Express  services experienced the biggest increase in revenues

both  in  monetary  (6  755 thousand  kroons  or           432

thousand  euros) and percentage (14.9%) terms. There  were  no

considerable  changes  in pricing of services.  Total  revenue

from  express  services segment amounted to  52  027  thousand

kroons or 3 325 thousand euros.



The  revenues  improved mainly due to increased capacities  in

ELS  brand  products, packet sector (37-47%), and mail  sector

(68%).   Luna-packets  (mail-order  selling)  experienced   an

increase  of  814 thousand kroons  or             52  thousand

kroons  (3.3%). Another considerable increase  came  from  EMS

brand products (international express mail service), amounting

to 821 thousand kroons or 52 thousand euros (82%).



Main  negative effect to revenues came from traditional parcel

services, -615 thousand kroons or -39 thousand euros (-11.1%).



Direct  marketing sector gave the second biggest  increase  in

revenues,  1 063 thousand kroons or 68 thousand euros  (1.7%).

There  were no considerable price changes of services  in  the

segment.  Total revenues from direct marketing sector amounted

to 62 989 thousand kroons or 4 026 thousand euros.



The  biggest increase in direct marketing sector revenues came

from  non-addressed  advertising,  amounting  to       1   854

thousand kroons or 118 thousand euros (19.2%). The advertising

campaign  for parliament elections in spring did  not  have  a

considerable effect on revenues in direct marketing sector.



Revenues  from in-take of orders for periodicals decreased  by

140  thousand  kroons or 9 thousand euros  (-5.7%),  addressed

advertising and catalogue delivery services decreased  by  761

thousand kroons 49 thousand kroons      (-4.3%).



Mail  service segment’s revenues decreased by  2 319  thousand

kroons  or 148 thousand euros (-1.9%). The total revenue  from

mail  services was 122 420 thousand kroons or 7  824  thousand

euros.  From second half of 2003, the company set new discount

rates  in  agreement with clients. New maximum discount  rates

amount  to 23%, in comparison with 15% previously. The  change

affects  the  mail service intermediaries the most.  The  main

reason for the decision was disagreement between Eesti Post AS

and  National  Communications Board in interpretation  of  the

term  "consumer".  Due to the described  change,  the  company

expects an increase in revenues in second half of the year.



An increase of revenues, amounting to 2 684 thousand kroons or

172  thousand  euros (56.5%) was achieved in  registered  mail

sector.  The  main reason for that was change in  legislation,

according   to  which  some  certain  messages  delivered   by

companies  and  state institutions have  to  be  delivered  by

registered mail.



A decrease in revenues occurred in traditional mail sector, -4

992 thousand kroons or -319 thousand euros            (-4.2%),

mainly caused by seasonal sale decrease in January and growing

trends  in use of electronic mail. Revenue was also negatively

affected   by   decrease  of  international   final   payments

(international  mail  transmission),  amounting  to   -1   991

thousand kroons or -127 thousand euros (-22.5%).



In  financial intermediation, the revenues decreased by -2 874

thousand kroons or -184 thousand euros (-6.7%). Total revenues

from  financial  intermediation amounted to  39  772  thousand

kroons  or  2  542 thousand euros. Starting from  the  current

year,  the  firm  changed  some  of  its  commission  fees  in

receiving payments - the fee was standardized at the level  of

8 kroons (0.51 euros) for all payments. In addition to changes

in  price schemes, the reduction in revenues occurred  due  to

the  increasing  share of customers using  the  Internet  bank

services.



Increase  in  revenues by 145 thousand kroons  or  9  thousand

euros (13.5%) was achieved in Postbank services.



The  reduction  in  revenues  was  mainly  caused  by  falling

commission  on payments of pensions and welfare  aids  in  the

amount  of  -2 549 thousand kroons or -163 thousand  euros  (-

11%).



Other  revenues  increased by 4 661  thousand  kroons  or  298

thousand  euros  (12.5%).  No significant  changes  in  prices

occurred in the given segment. Other revenues amount to 38 930

thousand kroons or 2 488 thousand euros.



Increasing  revenues from service exports by  3  937  thousand

kroons  252  thousand euros (+315%) is also a  positive  sign.

Furthermore, the income from retail sales increased by  1  294

thousand   kroons  83  thousand  euros  (8.4%)  which   mainly

comprised of sales of consumer goods in the countryside.



Changes  in  revenues  from  customs  services  and  rent   of

facilities were not significant.



AS Eesti Post budgeted expenses for the first half of the year

were  301  623  thousand  kroons or  19  277  thousand  euros,

company’s  operating expenses were 298 608 thousand kroons  or

19 084 thousand euros (99% of the budget). Company’s operating

expenses  rose  by 21 126 thousand kroons or  1  350  thousand

euros as compared to the same period last year (7.6%). For the

current year, the firm has budgeted a growth rate of 6.4 % for

expenses.  The  main drivers of the growth  in  expenses  were

personnel expenses with the amount of 9 990 thousand kroons or

638  thousand  euros (5.9%), cost of goods  sold  with  4  844

thousand kroons 310 thousand euros (10.7%) and other operating

expenses  with  5  362 thousand kroons or 343  thousand  euros

(12.9%).



The  growth in personnel expenses is planned for this year due

to  the  centralization of management function to Tallinn  and

the  respective  reduction of employees in the  firm.  Average

number  of employees as compared to the same period last  year

has dropped by 40 amounting now to 4 010.



The  growth  in cost of goods sold derives from the  increased

costs  of mail delivery, electricity expenses due to the harsh

winter and growth in volumes in retail sales.



The  reasons  behind  increased  operating  expenses  lie   in

marketing  expenses, consignment costs and  more  conservative

accounting for doubtful debts.



In total, the company achieved a profit on ordinary activities

of  15  714 thousand kroons 1 004 thousand euros in the  first

six  months, which is 16 545 thousand kroons or 1 057 thousand

euros  less than the year before, but    2 010 thousand kroons

or   128   thousand   euros  (17.75%)  more   than   budgeted.

Disproportionally  high  profit in  the  first  half  of  2002

resulted from uneven distribution of construction, repair  and

personnel  expenses.  This year, all the  expenses  have  been

distributed equally over the year.





Distribution of profit in 2002:



       January         3 255.7 thousand kroons or 208 thousand

       euros

       2  months       6 631.4 thousand kroons or 424 thousand

       euros

       3  months        16  269.7 thousand  kroons  or  1  040

       thousand euros

       4  months        25  449.7 thousand  kroons  or  1  626

       thousand euros

       5  months        33  601.1 thousand  kroons  or  2  147

       thousand euros

       6  months        32  313.1 thousand  kroons  or  2  065

       thousand euros

       7  months        29  388.1 thousand  kroons  or  1  878

       thousand euros

       8  months        23  801.0 thousand  kroons  or  1  521

       thousand euros

       9  months        27  442.5 thousand  kroons  or  1  754

       thousand euros

       10  months       31  229.2 thousand  kroons  or  1  996

       thousand euros

       11  months       27  785.5 thousand  kroons  or  1  776

       thousand euros

       12  months       34  030.6 thousand  kroons  or  2  175

       thousand euros





For the second half of the current financial year the firm  is

expecting  dynamic growth of the profit. Net  profit  for  the

accounting  period is 12 390 thousand kroons or  792  thousand

euros,  of which the income tax on dividends has already  been

deducted.



Company’s  cash  flows  in the period were  -17  359  thousand

kroons  or  -1 109 thousand euros, as compared to     -38  363

thousand  kroons  or 2 452 thousand euros in the  same  period

last year. Due to the significantly enhanced management of the

cash  flows,  the  liquidity ratios of the company  have  been

improved  -  current  ratio  has  risen  from  1.15  to  1.29.

Recovering of the negative cash flows was caused by the switch

to  new  investment  strategy, which foresees  increasing  the

share of external financing in funding investment projects.









AS Eesti Post, Management Board









Condensed balance sheet



                               in thousand of   in thousand of

                                   kroons            euros

                          Note  30 Jun  31 Dec   30 Jun  31 Dec

                                  2003    2002     2003    2002

ASSETS                                                         

Current assets                                                 

Cash and cash equivalents      103 996 121 294    6 647   7 752

Customer receivables            51 723  49 220    3 306   3 146

Other receivables                2 513   2 723      161     174

Accrued income                  22 706  22 012    1 451   1 407

Prepaid expenses                 1 257   1 598       80     102

Inventories                     15 229  14 736      973     942

TOTAL CURRENT ASSETS           197 424 211 584   12 618  13 523

                                                           

Non-current assets                                             

Shares and other                 1 375   1 375       88      88

securities

Long-term receivables            6 060   6 114      387     391

Investment property        1    15 581  16 069      996   1 027

Property, plant and        2   327 939 343 298   20 959  21 941

equipment

Intangible assets                7 130   7 379      456     472

TOTAL NON-CURRENT ASSETS       358 085 374 234   22 886  23 918

                                                           

TOTAL ASSETS                   555 509 585 818   35 503  37 441

                                                           

LIABILITIES AND EQUITY                                           

Current liabilities                                              

Short-term borrowings      3    19 919  16 104    1 273   1 029

Prepayments received            41 069  79 615    2 625   5 088

Supplier payables               49 572  65 239    3 168   4 170

Taxes payable                   14 646  16 584      936   1 060

Accrued expenses                23 230  24 049    1 485   1 537

Deferred income            4     4 200   4 229      268     270

Total current liabilities      152 636 205 820    9 755  13 154

Non-current liabilities                                          

Long-term borrowings       3   130 543 106 665    8 343   6 817

Other long-term                  2 584   4 302      165     275

liabilities

Total non-current              133 128 110 967    8 508   7 092

liabilities

TOTAL LIABILITIES              285 764 316 788   18 264  20 246

                                                           

MINORITY INTEREST                2 668   3 244      170     207

                                                                 

Shareholders' equity       5                                     

Share capital                  107 175 107 175    6 850   6 850

Reserves                         8 811   7 110      563     454

Retained earnings              138 700 117 471    8 865   7 508

Net profit                      12 390  34 031      792   2 175

TOTAL SHAREHOLDERS'            267 077 265 787   17 069  16 987

EQUITY

                                                           

TOTAL LIABILITIES AND          555 509 585 818   35 503  37 441

EQUITY









Condensed income statement



                              in thousand of  in thousand of

                                  kroons          euros

                        Note       6       6       6       6

                              months  months  months  months

                               ended   ended   ended   ended

                             30 June 30 June 30 June 30 June

                                2003    2002    2003    2002

Income                                                

Net sales                    303 599 298 235  19 403  19 061

Government grants         4    7 500   6 850     479     438

Other operating income         5 039   6 066     322     388

Total income              6  316 138 311 151  20 205  19 886

                                                      

Operating expenses                                    

Raw materials and             50 070  45 226   3 200   2 890

consumables used

Administrative expenses       46 824  41 462   2 993   2 650

Staff costs                  178 426 168 436  11 403  10 765

Depreciation and        1, 2  22 018  21 106   1 407   1 349

amortisation

Other expenses                 1 271   1 252      81      80

Total operating              298 608 277 482  19 084  17 734

expenses

                                                      

Profit from operations        17 530  33 669   1 120   2 152

                                                      

Financial income and                                  

expenses

Interest income                  831     837      53      53

Interest expense              -2 652  -2 231    -169    -143

Foreign exchange gains            61       2       4       0

and losses

Other financial income           -57     -17      -4      -1

and expenses

Total financial income        -1 816  -1 410    -116     -90

and expenses

                                                      

Profit on ordinary            15 714  32 259   1 004   2 062

activities

Income tax expense        5    3 900       0     249       0

Group profit before           11 814  32 259     755   2 062

minority interest

Minority interest                576     264      37      17

Net profit                    12 390  32 522     792   2 079

                                                        

Basic earnings per        8    11.56   30.34    0.74    1.94

share (expressed in

kroons/euros per share)

Diluted earnings per      8    11.56   30.34    0.74    1.94

share (expressed in

kroons/euros per share)





Inge Rumessen

PR Manager

056 356 326