Rakvere Lihakombinaat         FINANCIAL RESULTS                 04/28/2003



FINANCIAL RESULTS 3 MONTHS 2003



RAKVERE LIHAKOMBINAAT GROUP

COMMENT ON FINANCIAL RESULTS



Group companies as at 31 March 2003:



				Country 	Partici-  	Partici-	

				of location	pation	  	pation 

						31.03.03	31.12.02

AS Rakvere Lihakombinaat 

(the parent company)		Estonia	

AS Ekseko			Estonia		98,4%		98,2%

	AS Ekseko’s subsidiaries:

	OÜ Paistu Põldur	Estonia		100%		100%

	OÜ Põlva Peekon		Estonia		100%		100%

	OÜ Paistu Põllumees	Estonia		100%		100%

AS Linnulihatooted		Estonia		76%		76%

AS RLK Kinnisvarahaldus		Estonia		100%		100%

AS Rigas Miesnieks		Latvia		92,47%		92,47%

OÜ Klaipedos Maisto Produktai	Lithuania	100%		100%

	OÜ Klaipedos Maisto 

	Produktai subsidiary:

	OÜ Pentinuotis		Lithuania	100%		100%		



As of 31 March 2003 Rakvere Lihakombinaat Group had 1,324 employees (1,241 

employees as of 31 March 2002.



In spite of the weakness in global economy, the Baltic economies continued 

to develop also at the beginning of 2003. While the total consumption of red 

meat has shown no signs of growth, the consumption of poultry in the Baltic 

market has been increasing.



The market situation in the Baltic countries at the beginning of the year has 

been dominated by an oversupply of pork that has resulted in the sharp fall 

of pork prices in the Baltic States during the first three months. Since the 

competition in the market of meat products it has had a downward effect on 

market prices in all Baltic countries.



The volumes of the Rakvere Lihakombinaat Group continued to grow from last 

year. No significant changes have taken place in market shares in any Baltic 

country. Pork production in Ekseko has been growing according to plan 

ensuring that the Group has a supply of own high-quality raw meat for use 

in its meat products.



The most important investments made by the Rakvere Lihakombinaat Group were 

undertaken in Rigas Miesnieks. The objective is to turn Rigas Miesnieks into 

an EU-compliant production enterprise. Another important investment target 

is the construction of a distribution centre that will form part of the Rigas 

Miesnieks production complex. Both investment projects are developing 

according to plans.



Sales and financial results



The net sales of Rakvere Lihakombinaat Group in the first 3 months of 2003 

totalled 267 million kroons or 17,034 th. euros (275 million kroons or 

17,575 th. euros in 2002). The net sales fell 3% by 8.5 million kroons 

(542 th. euros) as compared to last year. The sales volume was 9.5 th. tons 

in the Baltic States. This constitutes a 0.8 ton or 9.2% increase compared 

to last year.



The net profit of Rakvere Lihakombinaat Group was 3.4 million kroons or 

215 th. euros (in 2002, adjusted and comparable data amounted to 12.5 million 

kroons (802 th. euros). 









Highlights of financial results of Rakvere Lihakombinaat Group, millions 

of kroons (th. euros)



			3 months 2003	3 months 2002	12 months 2002

					adjusted*

-------------------------

Net sales		266.5 (17 034)	275.0 (17 576)	 1 226.5 (78 389)				

Operating expenses	260.9 (16 676)	259.2 (16 569)	 1 137.3 (72 687)	   

Operating profit	  5.6  (  358)	 15.8 ( 1 007)	    89.2 ( 5 702)     

Net profit	          3.4  (  215)	 12.5 (   802)	    75.8 ( 4 847)



Investments		17.2  ( 1 099) 	 13.6  (  870)	    73.8 ( 4 714)		        	



* A new standard - IAS 41: Agriculture - entered into force on 1 January 

2003. Pursuant to the standard, biological assets shall be recorded on the 

balance sheet at their fair value less point-of-sale costs and the income 

statement lays down the change in the fair value of biological assets. The 

corresponding change has also been introduced to the comparative data of 

the first 3 months of 2002 (operating profit growth of 1.7 million kroons 

or 110 th. euros, and net profit growth of 1.7 million kroons or 108 th. 

euros).



Forecast 



Oversupply of pork is likely to continue and the lowest level of the meat 

cycle has not yet been reached. Possible market restrictions together with 

the establishment of protective customs duties will probably have a 

significant effect on the economic activities of the Rakvere Group.



Made in Rakvere on 28 April 2003



Olle Horm

Rakvere Lihakombinaat

Chairman of the Board









RAKVERE LIHAKOMBINAAT GROUP 				

BALANCE SHEET 				

				Thousand Estonian 	Thousand Euros

				kroons				

ASSETS				31.03.03    31.12.02	31.03.03   31.12.02

					    adjusted		   adjusted



Current assets				

Cash and bank			 23 987	     15 259	 1 533	      975

Trade receivables		 70 276	     89 260	 4 491	    5 704

Tax receivables			  7 682	      5 548	   491	      355

Other short-term receivables	  7 054	      6 199	   451	      396

Inventories			102 772	    100 274	 6 568	    6 409

Biological assets		 58 367	     59 481	 3 730	    3 802

Total current assets		270 138	    276 021	17 264	   17 640

				

Non-current assets				

Long-term financial assets	  3 582	      4 535	   229	      290

Tangible fixed assets		418 417	    415 726	26 742	   26 570

Other intangible assets		  1 565	      2 029	   100	      130

Total non-current assets	423 564	    422 290	27 071	   26 990

				

T OT A L  A S S E T S:		693 702	    698 311	44 335	   44 630

				

LIABILITIES AND OWNERS’ EQUITY				

				

Current liabilities				

Loans and lease payables	  2 421	      2 768	   155	      177

Supplier payables		 66 791	     68 566	 4 268	    4 382

Tax payables			  8 918	     11 827	   570	      756

Other current liabilities	 16 046	     16 039	 1 026	    1 025

Total current liabilities	 94 177	     99 200	 6 019	    6 340

				

Long-term loans and lease 

payable				140 477	    142 821	 8 978	    9 128

Total liabilities		234 653	    242 021	14 997	   15 468

				

Minority interest		  3 252	      3 541	   208	      226

				

Owners’ equity				

Share capital			377 217	    377 217	24 108	   24 108

Mandatory legal reserve		  5 942	      5 942	   380	      380

Retained earnings		 72 181	     68 820	 4 613	    4 399

Unrealised translation 

differences			    457	        770	    29	       49

Total owners’ equity		455 797	    452 749	29 130	   28 936

				

TOTAL LIABILITIES AND OWNERS’ 

EQUITY :			693 702	    698 311	44 335	   44 630







RAKVERE LIHAKOMBINAAT GROUP				

INCOME STATEMENT				

				Thousand Estonian 	Thousand Euros

 		  	       	kroons

				 3 m 2003   3 m 2002    3 m 2003   3 m 2002

					    adjusted		   adjusted*

Revenue	

				

Net sales			  266 522    274 998	 17 034	    17 576

Change in fair value of 

biological assets		   -1 115      1 727	    -71	       110

Other revenue			    3 212	 886	    205	        57

Total revenue			  268 619    277 611	 17 168	    17 743

				

Change in work-in-progress 

and finished goods 		   -1 093	 839	    -70	        54

Materials, consumables and 

supplies		         -171 806   -179 438	-10 980	   -11 468

Other operating expenses	  -38 893    -34 014	 -2 486	    -2 174

Personnel expenses		  -37 798    -36 797	 -2 416	    -2 352

Depreciation and write-downs 

of non-current assets		  -12 612    -11 393	   -806	      -728

Other expenses			     -816     -1 052	    -52	       -67

				

Operating profit		    5 600     15 758	    358	     1 007

				

Financial income/expenses				

Net foreign exchange gain/loss	     -342	-238	    -22	       -15

Interest and other financial 

income				      687	 680	     44	        43

Interest and other financial 

expenses			   -2 671     -3 718	   -171	      -238

Total financial income/expenses	   -2 326     -3 276	   -149	      -209

				

Profit before taxes	       	    3 274     12 482	    209	       798

Minority interest		       87	  63	      6	         4

				

Net profit			    3 361     12 545	    215	       802

				

Earnings per share		     0,09	0,33	  0,006	     0,021





Olle Horm

Chairman of the Board

+372 32 29 211