PRO KAPITAL

ANNOUNCEMENT



NEW PROFIT FORECAST



Today the Management Board of Pro Kapital Group decided to revise the 

group's this year's profit forecast, and increase it from EEK 40 mln 

to EEK 120 mln. 



Increase in the profit forecast was due to AS Pro Kapital Eesti 

Management Board's decision to sell 50% of Kristiine Kaubanduskeskus 

shares during the current year. The forecast was based on presumption 

that the aforementioned public offering will be successful. The 

profit forecast is also higher by the profit amount forecasted by 

the Domina subsidiary concern.



However, the group's net result will be negatively affected lower-

than-forecasted sales results of Estonian and Latvian subsidiary 

concerns, expenses related with purchase of Domina HCA subsidiary 

concern and anticipated loss of the Lithuanian subsidiary concern. 

The forecasts were made with an assumption that the first sales 

contracts on Vilnius-located premises are made in year 2000. Income 

from sale and rental of premises will highly likely be postponed to 

the next year due to the decision to open a residence-type hotel. 

Adjustment of the building to conditions set by Domina Management, 

which will operate the hotel under Domina Luxury Apartments 

trademark, requires additional investments.



The previously published profit forecast of AS Pro Kapital Grupp did 

not contain the amortization of goodwill from purchase of shares in 

AS Rotermanni Kvartal and AS Tondi Kvartal, as the need for such was 

not clear at the time when the profit forecast was made. The goodwill 

in consolidated financial reports proceeds from differences in the 

acquisition price and the companies' net assets amounts. The 

difference proceeds from the balance sheet values of the acquired 

companies, which are in accordance with their sales price under 

principle of conservatism. AS Pro Kapital Grupp acquired the 

companies on presumption that the estates owned by these companies 

will be developed and sold within the period of ten years. 

Amortization of goodwill will impact the group's results negatively 

also during the next four years. 



The consolidated profit forecast for year 2000, in net amount of EEK 

40 mln, was approved by the Management Board on 02.02.2000. the 

forecast was made based on the company's real estate portfolio, 

amount of estates to be sold and stage of development activities in 

Latvia and Lithuania.





Ilona Saari

Member of Board, PK Group

+372 614 4924