Saku Õlletehas                FINANCIAL RESULTS                 05/29/2003



RESULTS OF THE FIRST QUARTER OF 2003



Review of operations and results



According to the Estonian Breweries Association,  in  the

first  quarter  the total volume of the beer  market  was

16.7m  litres, 5 percent down on the same period of 2002.

Saku  Brewery  Ltd retained the leading position  with  a

strong 44.3 percent of the market, a share similar to the

end  of the first quarter of 2002. The shares of imported

beers and Saaremaa Õlletehas grew to 6.9 percent and  0.4

percent respectively.



Saku Brewery Ltd ended the first quarter of 2003 with net

sales of EEK 133.3m (EUR 8.5m), a 2.1 percent decline  on

the  EEK  136.1m (EUR 8.7m) attained in the first quarter

of  2002. Compared to a year ago, sales of packaging  and

self-produced beers decreased by EEK 4.2m and EEK (0,27 m

EUR)  1.7m  (0,11 m EUR) respectively, whereas  sales  of

imported beers grew by EEK 1.3m (0,08 m EUR). Results may

be  considered  satisfactory  because  according  to  the

Estonian  Breweries Association in the first quarter  the

domestic beer market shrank by 5 percent.



In  quantitative terms, Saku Brewery Ltd sold 9.6m litres

of beverages, a 0.2 percent increase on the first quarter

of 2002. Beer sales amounted to 8.3m litres, allowing the

largest  beer  producer to maintain its market  share  on

same level despite of a falling market in I quater.

Exports  accounted  for 10 percent  of  sales.  The  main

export  markets were the other Baltic countries,  Finland

and the USA.



Positive  developments occurred in the cider  market  and

the sales of our Kiss line. Compared to the first quarter

of  2002,  the cider market grew by 16 percent and  cider

sales by Saku Brewery by 25 percent. The figures for  the

first  four months of 2003 reflect a continuation in  the

trend:  a  24  percent overall growth of the market  and,

thanks  to  new  canned products and the  launch  of  the

tropical-flavoured Kiss Exotic, a 70 percent increase  in

the sales of Kiss.



Operating  profit for the period amounted  to  EEK  1.26m

(EUR 81,000), a slight improvement on the same period  of

2002  (EEK  730,000 and EUR 47,000). However,  due  to  a

change   in   the  guidelines  issued  by  the   Estonian

Accounting Standards Board, which became effective at the

beginning  of  2003  and  require  that  in  contrast  to

previously  applied  accounting principles  dividend  tax

should  be  recognised as an expense in the period  where

the  dividend is declared, the period ended in a loss  of

EEK 6,634,000 (EUR 424,000).



Expenses for the first quarter were 1.1 percent, i.e. EEK

1.5m  (EUR 98,000) larger than the ones incurred  in  the

first   quarter  of  2002.  Due  to  various   forecasted

campaigns   conducted   in  the   first   quarter,   also

advertising expenses proved EEK 1.8m (EUR 115,000) larger

than a year ago.





FINANCIAL RATIOS                       January-  January-

                                         March     March

                                         2003      2002

                                                 

Operating margin (operating  profit  /      0.9%      0.5%

total revenue)

Net   margin  (net  profit   /   total     -4.7%      0.5%

revenue)

Return on assets (net profit / average     -1.6%      0.2%

total assets)

Return on equity (net profit / average     -2.0%      0.2%

equity)

Non-current asset turnover ratio             0.5       0.5

(total revenue / average non-current

assets)

Total assets turnover ratio (total           0.3       0.3

revenue / average total assets)

                     

                                                                             

BALANCE SHEET                                                                

(In thousands)                        EEK                        EUR     

                            31.3.03 31.3.02 31.12.02 31.3.03 31.3.02 31.12.02

                                                                         

ASSETS                                                                       

Cash and bank                 2,938    3,208    3,296      188    205     211

Trade receivables (Note 2)   23,834   30,339   29,051    1,523  1,939   1,857

Other receivables and         5,485    3,794    2,645      351    243     169

prepayments (Note 3)

Inventories (Note 4)        100,161   92,283   90,917    6,401  5,898   5,811

TOTAL CURRENT ASSETS        132,418  129,624  125,909    8,463  8,285   8,048

                                                                             

Non-current assets                                                           

Long-term financial          16,000   16,818   16,000    1,023  1,074   1,023

investments (Note 5)

Long-term receivables (Note 6)   76      164       98        5     10       6

Tangible assets (Notes 7,8) 251,064  254,176  260,597   16,046 16,245  16,655

Intangible assets (Note 7)    1,012      674    1,147       64     43      73

TOTAL NON-CURRENT ASSETS    268,152  271,832  277,842   17,138 17,372  17,757

TOTAL ASSETS                400,570  401,456  403,751   25,601 25,657  25,805

                                                                             

LIABILITIES AND EQUITY                                                       

Current liabilities                                                          

Debt obligations (Note 8)     1,231    1,580    7,154       79    101     457

Trade payables               17,419   23,585   22,150    1,114  1,507   1,417

Payables to the parent and    8,806      563      282      562     36      18

group companies (Note 11)

Tax liabilities (Note 9)     19,005   11,426   12,376    1,215    730     791

Payables to employees         3,170    2,590    4,607      202    165     294

Dividends payable            40,000   40,000             2,557  2,557        

Other accrued expenses        4,954    1,026    3,463      317     65     222

Provisions                                        676                      43

TOTAL CURRENT LIABILITIES    94,585   80,770   50,708    6,046  5,161   3,242

                                                                             

Non-current liabilities                                                      

Non-convertible debt (Note8)  1,287    3,106    1,711       82    199     109

TOTAL NON-CURRENT             1,287    3,106    1,711       82    199     109

LIABILITIES

                                                                             

Equity                                                                       

Share capital                80,000   80,000   80,000    5,113  5,113   5,113

Capital reserve               8,000    8,000    8,000      511    511     511

Other reserves               44,070   44,070   44,070    2,817  2,817   2,817

Accumulated profits         179,262  184,838  180,441   11,456 11,813  11,532

Profit/loss for the period   -6,634      672   38,821     -424     43   2,481

TOTAL EQUITY                304,698  317,580  351,332   19,473 20,297  22,454

TOTAL LIABILITIES AND       400,570  401,456  403,751   25,601 25,657  25,805

EQUITY

  



INCOME STATEMENT                                                       

(In thousands)                      EEK                       EUR      

                          January-January-          January-January-   

                           March   March             March   March     

                            2003    2002     2002     2003    2002   2002

Revenue                                                                   

Net sales (Note 10)       133,253  136,148  768,445   8,517   8,701 49,113

Change in work in                                                         

progress and

finished goods              6,243    1,142     -964     399      73    -62

inventories

Other revenue (Note 12)       191      340    2,416      12      22    154

Total revenue             139,687  137,630  769,897   8,928   8,796 49,205

                                                                          

Expenses (Note 13)                                                        

Materials, consumables     90,089   89,038  493,747   5,758   5,690 31,556

and supplies

Other operating expenses   23,883   24,014  132,724   1,526   1,535  8,483

Personnel expenses         12,489   12,131   53,872     798     775  3,443

Depreciation               11,618   10,514   43,410     743     672  2,774

Other expenses                348    1,203    5,932      22      77    379

Total expenses            138,427  136,900  729,685   8,847   8,749 46,635

                                                                          

OPERATING PROFIT            1,260      730   40,212      81      47  2,570

                                                                          

Financial income (Note 14)      6       98      125               6      8

Financial expenses (Note 14)  218      156    1,516      14      10     97

                                                                          

PROFIT FOR THE PERIOD       1,048      672   38,821      67      43  2,481

BEFORE TAXES

                                                                          

INCOME TAX EXPENSE          7,682                       491               

                                                                          

NET PROFIT FOR THE PERIOD  -6,634      672   38,821    -424      43  2,481

                                                                          

Basic earnings per share    -0.83     0.08     4.85   -0.05    0.01   0.31

(Note 15)

Diluted earnings per        -0.83     0.08     4.85   -0.05    0.01   0.31

share (Note 15)





Kristina Seimann

PR Manager

+372 6 508 303