HÜVITUSFOND

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO UNAUDITED FINANCIAL RESULTS, H1 2000



In H1 2000 Hüvitusfond earned net income in amount of EEK 34 million. 



In H1 the fund earned EEK 64.9 million in interest income, whereas 

more than half of net interest income was earned from investments in 

bonds. Interest expenses totaled EEK 19.8 million, mostly including 

interest paid on bonds. Net interest income was EEK 45.1 million (EEK 

62.8 million last year). Lower interest income was due to decreased 

interest rates and Hüvitusfond's strategy to invest in lower-risk 

instruments. 



Income from trading portfolio (stock exchange listed shares and money 

market instruments) was EEK 8 million (EEK 19.6 million in 

previous period). Lower income was mainly due to decreased volume of

portfolio during the comparable periods.



Income from investment portfolio (bonds, less liquid shares and 

units) was EEK 3.8 million (EEK 2 million in H1 1999). Interest

income from bonds in investment portfolio is shown on interest income 

account on income statement.



Provisions for doubtful accounts totaled EEK 1.9 million, compared to 

EEK 2.8 million in H1 1999.



In H1 Hüvitusfond earned EEK 46.1 million of gross profit (EEK 72.9 

million in H1 1999). In H1 the fund saw EEK 12 million loss from 

subsidiaries (EEK 4 million loss during the same period last year). 

The loss was due to expenses related with launch of AS Werol Tehased 

and revaluation of shares of A/S Latio Nams.



Hüvitusfond's operating profit in H1 totaled EEK 34 million 

(EEK 69 million in H1 1999). The fund did not issue bonds in H1, 

hence the fund's net profit in H1 amounted to EEK 34 million.



In H1 Hüvitusfond's total assets decreased by EEK 9 million due to 

redemption of bonds (total volume EEK 42 million). 

As of 30.06.00 the fund's owners equity stood at EEK 1,061.2 million.





Jaanus Kosemaa

PR manager

+372 66 51 800