Tallinna Kaubamaja            FINANCIAL RESULTS           05/23/2003 16:30



UNAUDITED RESULTS FOR Q1 2003



The consolidated unaudited net sales of Tallinna Kaubamaja Group for the 1st

Quarter 2003 were 364,7 million kroons (23,3 million euros). The net sales of

the comparable period of last year were 338,2  million kroons (21,6 million

euros).



The average sales area in the 1st Quarter 2003 was 31 640 sq m and within the

same period last year 25 570  sq m.



The increase in net sales of the Group in the 1st quarter of 2003 was 7,8 per

cent and the increase in sales area was 24 per cent.



The net sales of the group was influenced by drastically increased supply in

retail sector in the 4th Quarter last year when several new shopping centres

were opened. In the current year the competition situation will be more

stable.



The consolidated net loss of the Group for the 1st Quarter was 1,2 million

kroons (0,07 million euros). The net result is a decrease of 10 million kroons

(0,64 million euros) over the comparable period when the profit of the Group

was 8,9 million kroons (0,6 million euros).



The bottom line of the Group was influenced by vast expansion of the Selver

supermarket chain last year: five new supermarkets were opened, three of them

in the last Quarter. The shopping habits of customers are slow to change and

the competition in the retail sector is tough, therefore the working up of new

stores and redistribution of market share will take a year or two depending on

concrete location. Partly the economic result was influenced by the fact that

three out of five new stores are operating outside Tallinn, where the

purchasing power of customers is lower than in the capital.



The advertising and marketing costs of the Group as a whole increased two-fold

and specifically in Selver three-fold and per sales area of Selver two-fold.

The increase in the advertising and marketing costs of Selver was caused by

bigger communication costs related to repositioning of the supermarket chain

in the retail market whereby the price level was considerably reduced. The

repositioning will not give immediate economic effect; its influence will be

spread over longer period. A positive effect of the increase in advertising

and marketing costs of Selver was an increase in number of purchases by 1,6

times.



In the 1st Quarter 2003 the parent company Tallinna Kaubamaja incurred an

extraordinary cost of 1,5 million kroons (0,1 million euros) in connection

with the taxation of share options assessed by the Tax Office as a result of a

tax audit concerning fringe benefits. Altogether the costs incurred in

connection with the assessment amount to 3,5 million kroons (0,22 million

euros) including 2 million kroons (0,13 million euros) in the 4th Quarter of

last year. Tallinna Kaubamaja has disputed the assessment.



TALLINNA KAUBAMAJA AS

Consolidated unaudited balance sheet

                    in thousands of EEK/EUR

                     Q1 2003          Q1 2002           31.12.2002

                    The Group         The Group         The Group

 ASSETS                EEK      EUR      EEK      EUR      EEK       EUR

Current assets

Cash and bank          22 657    1 448   24 263    1 551    34 258    2 189

Trade receivables       4 898      313    2 128      136    10 250      655

Other receivables       3 512      224    2 524      161     3 454      221

Accrued income             85        5       88        6        98        6

Prepaid expenses        6 671      426    6 078      388     7 611      486

Inventories           176 028   11 250  184 934   11 819   163 442   10 446

Total current assets  213 852   13 668  220 015   14 062   219 112   14 004

Non-current assets

L-T financial assets

Shares of assoc. co.    4 229      270    3 029      194     3 943      252

Long-t receivables     12 028      769   12 028      769    12 028      769

Total L-T fin. ass.    16 257    1 039   15 057      962    15 971    1 021

Tangible fixed ass.   533 401   34 091  436 196   27 878   542 744   34 688

Intangible assets      -1 290      -82   -1 631     -104    -1 384      -88

Total non-curr. ass.  548 368   35 047  449 622   28 736   557 331   35 620

TOTAL ASSETS          762 220   48 715  669 637   42 798   776 443   49 624



LIABILITIES AND OWNERS’ EQUITY

Debt liabilities       72 550    4 637  104 036    6 649    76 192    4 870

Cust. advances          1 583      101        0        0     3 648      233

Supplier payables     123 084    7 866  105 540    6 745   148 158    9 469

Other payables         20 300    1 297   19 263    1 231    28 739    1 837

Total current liab.   217 518   13 902  228 838   14 625   256 737   16 408

Long-term debt liab.  169 833   10 854   33 032    2 111   143 663    9 182

Total non-curr.liab.  169 833   10 854   33 032    2 111   143 663    9 182

Total liabilities     387 350   24 756  261 870   16 737   400 400   25 590

Owners’ equity

Share capital          67 882    4 338   67 882    4 338    67 882    4 338

Statutory reserve       7 269      465    7 269      465     7 269      465

Reval. reserve of FA  155 468    9 936  159 846   10 216   156 490   10 002

Retained earnings     145 424    9 294  163 916   10 476    99 390    6 352

Net profit             -1 174      -75    8 854      566    45 012    2 877

Total owners’ equity  374 870   23 959  407 767   26 061   376 044   24 034

TOTAL LIAB. AND EQ.   762 220   48 715  669 637   42 798   776 443   49 624



TALLINNA KAUBAMAJA AS

Consolidated unaudited profit and loss statement

                    in thousands of EEK/EUR

                      2003              2002               2002

                    3 months          3 months          12 months

                    The Group         The Group         The Group

                       EEK      EUR      EEK      EUR      EEK       EUR

Operating income

Net sales             364 718   23 310  338 185   21 614 1 532 325   97 933

Other op. income       11 503      735    8 272      529    41 689    2 664

Total op. income      376 221   24 045  346 457   22 143 1 574 014  100 598

Operating expenses

Cost of goods sold   -278 394  -17 793 -253 850  -16 224-1 147 961  -73 368

Other op. expenses    -46 329   -2 961  -36 705   -2 346  -177 111  -11 319

Personnel expenses    -32 340   -2 067  -32 573   -2 082  -130 413   -8 335

Depreciation          -14 718     -941  -12 475     -797   -54 989   -3 514

Depreciation of FA    -14 812     -947  -12 558     -803   -55 319   -3 536

Depr. of  goodwill         94        6       82        5       329       21

Other expenses         -3 049     -195     -687      -44    -8 168     -522

Total op. expenses   -374 830  -23 956 -336 290  -21 493-1 518 643  -97 059

Operating profit        1 391       89   10 167      650    55 371    3 539

Financial income          553       35      788       50     3 208      205

Fin. inc. on shares

in subsidiaries           286       18      184       12     1 099       70

Interest income           267       17      604       39     2 109      135

Financial expenses     -3 118     -199   -2 101     -134   -13 566     -867

Interest expenses      -3 097     -198   -2 090     -134   -13 397     -856

Other fin. expenses       -21       -1      -11       -1      -169      -11

Net profit             -1 174      -75    8 854      566    45 012    2 877





Katrin Mühls

CFO

+372 6 673 373