Rakvere Lihakombinaat         FINANCIAL RESULTS                 08/12/2002



FINANCIAL RESULTS, 6 MONTHS 2002



COMMENT ON CONSOLIDATED FINANCIAL RESULTS: FIRST 6 MONTHS, 2002



Rakvere Lihakombinaat Group includes the following companies 

(ownership %): AS Rakvere Lihakombinaat - parent company, 

AS Rigas Miesnieks (92.47%), AS Ekseko (98%), AS Linnulihatooted 

(76%) and Rakveres Mesos Produktai Vilnius (100%). The Rakvere 

Lihakombinaat Group employed 1,271 employees as of June 30, 2002 

(1,191 employees as of June 30, 2001).



The positive economic growth has facilitated the increase in meat 

consumption in all Baltic countries: consumption of pork continues 

to climb, beef consumption has again started to grow and the 

consumption of white meat has developed favourably in all Baltic 

countries.



In the first half of the year, the supply of pork on the Baltic 

market exceeded the demand, as a result of which pork prices in 

the Baltic countries started to fall significantly. By now, the 

worst seems to be over as prices started to grow slightly in May. 

However, the current price level is significantly lower in comparison 

with the same time last year.



Sales of the Rakvere group went up strongly in the first half of the 

year and the company has increased the market share in all Baltic 

countries. Pig-raising in Ekseko has gone up significantly and the 

Rakvere group now produces most of the pork that the group companies 

need.



The most important investments made by the Rakvere group were 

undertaken in the Rakvere Lihakombinaat aimed at ensuring that the 

plant complies with EU requirements applied to production enterprises. 

The investment programme for EU compliance is now nearing completion.





Sales and financial results

   

The consolidated and unaudited net sales of Rakvere Lihakombinaat 

in the first 6 months of 2002 totalled 588,7  million kroons or 37.6 

million euros ( 493,5 million kroons or 31,5 million euros during the 

same period in 2001). The sales increased by 95,2 million kroons 

(6,1 million euros) or 19,3% compared to last year. The sales volume 

was 17,1 th. tons in the Baltic States. This constitutes a 3,5 th. 

ton or 25,8% increase compared to last year.



The consolidated and unaudited net profit of Rakvere Lihakombinaat 

Group for the first 6 months reached 28,0 million kroons or  1,8 

million euro (37,0 million kroons or 2,4 million euro during the 

same period last year). The consolidated net profit decreased by 

9,0  million kroons or 24% compared to the same period last year.

The group’s result is in line with targets and builds on the measures 

that the Rakvere Lihakombinaat group has been implementing during the 

last year. The fact why the result was lower than in the previous year 

is attributable to low pork prices and additional costs that were 

incurred by the EU compliance project and by the launch of ready-made 

products of Lithuania’s Klaipedas Maistas.



Highlights of the financial results of Rakvere Lihakombinaat Group, 

millions of kroons (million of euros):





			  6 months 2002	6 months 2001  12 months 2001



Net sales		   588,7 (37,6)	 493,5 (31,5)  1 070,1 (68,3)

Operating expenses	   553,6 (35,4)	 451,2 (31,8)	 989,7 (63,3)

Operating profit	    35,1  (2,2)	  42,3  (2,7) 	  80,4  (5,1)  

Net profit		    28,0  (1,8)   37,0  (2,4)     65,0  (4,2)

	

Investments		    33,7  (2,2)	  23,4  (1,5)     71,2  (4,6) 



Forecast for 2002



We believe that the situation continues to improve and performance 

targets will be met. The market share of the Rakvere group is expected 

to strengthen in all Baltic markets also for the rest of the year. 

Although changes in trade structures are increasing credit risks, 

their impact is expected to remain insignificant in terms of the 

result of the Rakvere Lihakombinaat group.







Olle Horm

Rakvere Lihakombinaat

Chairmen of the Board

032 29 221









RAKVERE LIHAKOMBINAAT GROUP 

BALANCE SHEET 

		          	Thousand	      Thousand

			        kroons	      	      Euros

				30.06.02   31.12.01   30.06.02   31.12.01

ASSETS				

				

Current assets				

Cash and bank			 10 752	    11 787	   687	   753

Customer receivables		 89 065	    89 379	 5 692	 5 712

Other short-term receivables	 12 140	    17 273	   776	 1 104

Inventories			150 888	   152 538	 9 643	 9 749

Total current assets		262 844	   270 977	16 799	17 319

				

Non-current assets

Long-term financial assets	 11 819	     2 176	   755	   139

Tangible fixed assets		405 677	   413 442	25 927	26 424

Other intangible assets		  2 405	     2 832	   154	   181

Total non-current assets	419 901	   418 450	26 836	26 744

				

T OT A L  A S S E T S:		682 745	   689 427	43 635	44 062

				

LIABILITIES AND OWNERS’ EQUITY				

				

Current liabilities				

Loans and lease payables	  2 752	    29 312	   176	 1 873

Supplier payables		 76 495	    61 251	 4 889	 3 915

Other current liabilities	 78 952	   123 231	 5 046	 7 876

Total current liabilities	158 198	   213 794	10 111	13 664

				

Long-term loans and lease 

payable				116 550	    94 117	 7 449	 6 015

Total liabilities		274 749	   307 911	17 560	19 679

				

Minority interest		  3 554	     3 570	   227	   228

				

Owners’ equity

Share capital			377 217	   377 217	24 108	24 108

Statutory reserve		  5 942	     2 690	   380	   172

Retained earnings		 19 969	    -4 772	 1 276	  -305

Foreign exchange reserve	  1 314	     2 811	    84	   180

Total owners’ equity		404 442	   377 946	25 848	24 155

				

TOTAL LIABILITIES		682 745	   689 427	43 635	44 062









RAKVERE LIHAKOMBINAAT GROUP

INCOME STATEMENT

	          		Thousand	       Thousand

			        kroons	      	       Euros

			    6 months 02 6 months 01 6 months 02 6 months 01

Revenue

				

Net sales			588 722	    493 518	 37 626	  31 541

Other revenue	       		  1 763	      3 037	    113	     194

Total revenue			590 485	    496 555	 37 739	  31 736

				

Change in work-in-progress 

and finished goods		  1 140	     13 281	     73	     849

Materials, consumables 

and supplies	  	       -378 366	   -320 613	-24 182	 -20 491

Other operating expenses	-77 684	    -62 494	 -4 965	  -3 994

Personnel expenses     		-74 627	    -62 330	 -4 769	  -3 984



Depreciation and write-downs 

of non-current assets		-22 836	    -21 436	 -1 459	  -1 370

Other expenses			 -2 988	       -685	   -191	     -44

				

Operating profit		 35 124	     42 278	  2 245	   2 702

				

Financial income/expenses			

Net foreign exchange 

gain/loss			 -1 093	       -416	    -70	     -27

Interest and other financial 

income				  1 184	      2 661	     76	     170

Interest and other financial 

expenses			 -7 028	     -7 248	   -449	    -463

Total financial income/expenses	 -6 937	     -5 003	   -443	    -320

				

Profit before taxes		 28 187	     37 275	  1 801	   2 382

Minority interest	 	   -194	       -284	    -12	     -18

				

Net profit		      	 27 993	     36 991	  1 789	   2 364

				

Earnings per share	     	   0,74	       0,98	   0,05	    0,06





Olle Horm

Chairmen of the Board

032 29 211