RAKVERE LIHAKOMBINAAT

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO GROUP'S FINANICAL RESULTS, H1 2000



In H1 2000 AS Rakvere Lihakombinaat consolidated (AS Rakvere 

Lihakombinaat, AS Rigas Miesnieks, AS Ekseko, AS Linnulihatooted, 

Rigas Miesnieks Trading, Rakveres Mesos Produktai Vilnius) and 

unaudited net sales were EEK 407.8 mln (EEK 371.4 mln in H1 1999), 

and net loss was EEK 5.3 mln (net profit EEK 0.2 mln in H1 1999)



In H1 2000 the parent company's (Rakvere Lihakombinaat) 

unconsolidated net sales were EEK 326.7 mln, which is EEK 64 mln 

(19.6%) more than during the same period last year. In H1 2000 RLK's 

net profit stood at EEK 2.7 mln.



Rigas Miesnieks, the largest subsidiary of AS Rakvere Lihakombinaat, 

made net sales of EEK 88.3 mln (1 LVL = 27.359 EEK) in H1 2000. 

Compared with the previous financial year Rigas Miesnieks net sales 

fell by 5.7 %.



The group's and parent company's higher net sales are mainly due to 

increase in the parent company's export volumes to Latvian and 

Lithuanian markets. 



The market share of the parent company (based on data from Estonian 

Meat Association) stood at 34.3% at the end of H1 2000 (1.9% more 

than last year). At the end of H1 the market share of RLK's finished 

products stood at 33.1% (2.2% more than last year). Since the end of 

1999 the price of pork has sharply risen. In H1 1999 the pries of 

pork were in the nadir on the world markets (average price 13 EEK/kg). 



The net loss posted by the group, and lower profit of the parent 

company, are mainly due to sharp increase in prices of raw materials 

(especially pork) in H1 2000.



At the end of H1 2000 Rakvere Lihakombinaat paid up to 25.50 EEK/kg 

for pork to Estonian farmers, and imported pork at price of 25 

EEK/kg.



AS Ekseko (subsidiary of Rakvere Lihakombinaat) is the largest pig 

raising company in Estonia. At the end of H1 2000 the company had 

52,000 pigs.





Teet Soorm

CFO

+372 32 29 231