VIISNURK

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO FINANCIAL RESULTS 06/2000



H1 2000 was a successful one for AS Viisnurk. During the first half-

year the company's net sales grew ca 60% y-o-y; net profit figure is 

ca 2.7 higher than during the same period last year. 

AS Viisnurk net sales in H1 2000 amounted to EEK 121.4 mln (EEK 76.6 

mln in H1 1999) and net profit EEK 13.7 mln (EEK 5 mln in H1 1999). 

Significant growth is mainly due to continuos focus on the export 

markets (share of exports 84%), existence of stable co-operation 

partners and successful exploitation of favorable economic conditions 

on Viisnurk's target markets.



As at 30.06.2000 AS Viisnurk does not own subsidiaries, thus the 

financial reports reflect only the results of the parent company.



AS Viisnurk turnover by sub-units (in EEK mln):



                      H1 2000        H1 1999

Ski factory              17.4           11.5

Furniture factory        60.2           29.4

Particle board factory   38.4           29.9

Other                     5.4            5.8



In H1 the ski factory's financial results were greatly affected by 

the seasonal nature of ski sales. Due to increased number of orders, 

however, the factory's output was higher than during the same period 

last year. In H1 2000 the ski factory produced 95,092 pairs of ski, 

which is ca 54% more than in H1 last year. Sale of hockey sticks 

generated ~6% or EEK 995 thousand income.



Furniture factory's turnover and profit indicate continuous rapid 

growth, also the factory's profitability ratios have substantially 

improved. In H1 2000 the furniture factory's profit margin was 13.8%, 

up from 1.3% in H1 1999. 

At the end of May Viisnurk made a co-operation agreement with 

consultation company Baltic Goldratt Network to secure the furniture 

factory's growth potential and improve the information systems. The 

share of exports in furniture factory's turnover have grown to 96%.



Compared with H1 19999 the particle board factory's turnover is 

higher due to enhanced activity on the Estonian and European 

construction markets. 



The activities of sawmill, bought at the end of last year, have been 

successful. In addition to producing lumber for Viisnurk's own 

factories, the sawmill has sold lumber to other customers for EEK 2.5 

mln.



In H1 Viisnurk's balance sheet volume grew by ca 25%. The major 

change on the balance sheet occurred on long-term liabilities 

account, due to payment of the first part of loan program by 

Hüvitusfond. The loan program was made to finance the construction 

of a new glued solid wood panels production factory. Viisnurk 

issued bonds in the amount EUR 2 mln, to be redeemed on 31.05.2004; 

the issue was managed by Hüvitusfond. 



On the assets account the volume of inventories have grown by EEK 

24.8 mln (incl. EEK 21 mln at ski factory) and tangible fixed assets 

by EEK 14.8 mln.





Andrus Aljas

CFO

+372 44 78 355