Tallinna Sadam                FINANCIAL RESULTS                 02/27/2004



ECONOMIC RESULTS 2003, UNAUDITED



SUMMARY OF ECONOMIC RESULTS



During  2003, 37.6 m tonnes of cargo passed through the harbours  of  Port  

of Tallinn, 0.6% less than in 2002 (in 2002, 37.9 m tonnes and a growth of  

17.1% respectively).  After consecutive growth years it was a year, when  the

cargo volume  in  Port  of  Tallinn  decreased. It was largely  influenced  

by  very difficult  ice  conditions in the beginning of 2003, causing 

difficulties  for the  movement of vessels in the Gulf of Finland. 

Due to the lack  of  the  ice breaking  conception of the Estonian state 

important shipping lanes  were  not managed  to  be  kept  ice-free, 

which in turn had a negative  impact  on  the reputation of the Estonian 

transit sector, as the planned cargo volumes  could not  be handled. 

To avoid a similar situation in the future the Estonian state

has started developing an ice breaking conception in the summer of 2003.



In 2003, the total turnover of the Baltic Sea east coast ports comprised 

256.7 m  tonnes, growing by 9.5% in a year (in 2002, the market volume was 

EEK 234.3 m  tonnes and the growth in market volume 12.7%). 

Due to the decrease in  2003 cargo volume Port of Tallinn cargo handling 

market share among the Baltic  Sea east coast ports decreased from 16.2% to 

14.7%.

     

In  2003,  5.86 m passengers passed through the harbours of Port of Tallinn,

which  was 1.4% less than in 2002 (in 2002, 5.95 m passengers and a growth of

3.6% respectively). As the number of line passengers on Tallinn-Helsinki 

route has  stabilised  (0.2% of decrease in 2003), there have  been  no 

significant changes  in the number of passengers during the last years. 

The main share  of the  decrease in the number of passengers in 2003 was 

caused by the decreasing of  the  share of overnight cruise passengers 

(mainly cruises in the  Gulf  of Finland).



In  2003, the operating revenues of Port of Tallinn totalled EEK 960.6 m (EUR

61.4 m), increasing by 0.2% in a year (in 2002, EEK 958.6 m (EUR 61.3 m) and

a  growth  of 7.2% respectively). Due to difficult ice conditions and reduced

passenger  fees  in  2003 the operating efficiency of the  company decreased,

which  is  evidenced by lag of 0.2% growth in operating revenues to the  7.7%

growth  in  operating expenses. Operating expenses totalled EEK 556.6 m (EUR

35.6  m),  resulting in an operating profit of EEK 404.0 m (EUR  25.8 m) and

profitability of  42.1% (in 2002,  EEK 516.8 m (EUR 33.0 m), EEK 441.8 m (EUR

28.2 m) and 46.1% respectively).



The 2003 net income of Port of Tallinn amounted to EEK 234,8 m (EUR 15,0 m),

being EEK 198,8 m (EUR 12,7 m) short of net income in 2002. The drop in net

income was mainly caused by the one-time ice breaking expense in 2003 (Port 

of Tallinn financed ice breaking works in Estonian ports) in the amount of 

EEK 119.3 m (EUR 7.6 m) and expenses due to changes in the "Income Tax Act"

(starting from 2003 the dividend payments of 100% state owned companies are

subject to income tax) in the amount of EEK 48.4 m (EUR 3.1 m). Without the

aforementioned expense the 2003 net income of Port of Tallinn would have been

EEK 402,5 m (EUR 25,7 m).



In 2003, the return on assets of Port of Tallinn decreased substantially

reaching 5.3%, compared to 11.0% in 2002. Without the one-time ice breaking

expense and income tax on dividends, the 2003 return on assets of Port of

Tallinn would have been 9.0%. The difference between 2003 adjusted return on

assets compared to that of 2002 is mainly caused by decreased efficiency and

the increase in asset base due to long-term sizable investments, which will

generate income mostly in future periods.



In 2003, a total of EEK 186.1 m (EUR 11.9 m) was paid to the owner in the 

form of dividend payment of EEK 137.7 m (EUR 8.8 m), together with tax on 

dividends in  the amount of EEK 48.4 m (EUR 3.1 m). 

Together with the financing of ice breaking expense for the Estonian state in

the amount of EEK 119.3 m (EUR  7.6 m) the total amount of EEK 305.4 m 

(EUR 19.5 m) was paid to the owner in 2003.



In 2003, Port of Tallinn invested a total of EEK 933.9 m (EUR 59.7m) into new

infrastructure  objects and the improvement of the existing  ones,  which was

almost three times more than in 2002 (in 2002, EEK 340.4 m (EUR 21.7) and 

21.6% less  respectively). Major part of the investments, a total of 

EEK 694.6 m (EUR  44.4  m) or  74% of the total volume was invested into 

water transport facilities.  

Larger  investment objects were related to  Muuga  Harbour:  coal terminal - 

EEK 291.8 m (EUR 18.6 m), berths no. 14 and 15 - EEK 114.8  m  (EUR 7.3  m) 

and berths no. 9A and 10A - EEK 105.0 m (EUR 6.7 m). In the Old  City

Harbour  EEK 73.2 m (EUR 4.7 m) was invested into the construction  of a new

cruise quay  and in Paldiski South Harbour EEK 57.4 m (EUR 3.7  m) into  the

reconstruction of berth no. 1.



In  2003, Port of Tallinn acquired 100% of AS EDI Vektor shares from the 

State Infocommunication Foundation (RIKS) and together with AS NT Marine 

established a subsidiary AS Green Marine (Port of Tallinn holding 51%). 

The goal of AS EDI Vektor  is  to  provide electronic data interchange (EDI) 

environment to the companies in the logistics sector. 

The goal of AS Green Marine is to  process port generated waste, management, 

maintenance and operation of hazardous ship waste and wastewater processing 

centres and cleaning and maintenance of port aquatory and territory.







BALANCE SHEET, in thousands, unaudited

                           31.12.2003 31.12.2002 31.12.2003 31.12.2002

ASSETS

                                  EEK        EEK        EUR        EUR

CURRENT ASSETS                                                 

Cash and bank                 155 516     42 533      9 939      2 718

Shares and other               10 041     17 894        642      1 144

securities

Customer receivables           83 719     87 414      5 351      5 587

Other short term                5 152        612        329         39

receivables

Accrued income                    363     10 432         23        667

Prepayments                    68 419      9 141      4 373        584

Inventories                     2 354      2 328        150        149

Total current assets          325 564    170 354     20 807     10 888

                                                               

NON-CURRENT ASSETS                                             

Other shares and                4 655      4 655        298        298

securities

Other long term                14 762     16 745        943      1 070

receivables

Tangible fixed assets       4 563 763  3 797 584    291 677    242 709

Total non-current assets    4 583 180  3 818 984    292 918    244 077

                                                               

TOTAL ASSETS                4 908 744  3 989 338    313 725    254 965

                                                               

LIABILITIES AND OWNER’S EQUITY

                                                                      

LIABILITIES                                                    

Current liabilities                                            

Customer prepayments for       13 176     13 904        842        889

goods and services

Supplier payables             207 861     47 807     13 285      3 055

Other short term payables          95        499          6         32

Taxes payable                  21 041     16 273      1 345      1 040

Accrued expenses              123 419     18 659      7 888      1 193

Short term provisions             622      1 316         40         84

Other unearned income           2 578      1 864        165        119

Total current liabilities     368 792    100 322     23 570      6 412

                                                               

Non-current liabilities                                        

Long term loan liabilities    725 866     70 000     46 391      4 474

Other long term loans          17 997     26 000      1 150      1 662

Total current liabilities     743 863     96 000     47 541      6 136

                                                               

Total liabilities           1 112 655    196 322     71 111     12 547

                                                               

Minority share                  1 960          0        125          0

                                                               

OWNER’S EQUITY                                                 

Share capital in nominal    2 650 000  2 750 000    169 365    175 757

value

Reserves                      262 111    240 433     16 752     15 366

Retained earnings             647 205    369 013     41 364     23 584

Profit for the year           234 813    433 570     15 007     27 710

Total owner’s equity        3 794 129  3 793 016    242 488    242 417

                                                               

TOTAL LIABILITIES AND       4 908 744  3 989 338    313 725    254 965



OWNER’S EQUITY





INCOME STATEMENT, unaudited, in EEK thousand

                            2003   2002    01.07.-   01.07.-

                                          31.12.03  31.12.02

Sales revenue            960 560 958 579    462 039   461 520

Other revenue             20 249  27 086      6 439    23 334

Materials, consumables    97 986  93 074     40 884    52 963

and supplies

Other operating expenses 155 596 115 272     92 028    72 193

Personnel expenses                                    

     a) salaries         109 229 113 026     62 497    63 930

     b) social taxes       36 402 37 572     20 883    21 215

Depreciation and value-  157 350 157 837     79 391    79 698

adjustments 

Other expenses            134 803 37 278      5 317    35 165

OPERATING PROFIT         289 443 431 606    167 478   159 690

Financial income and expenses

Financial income and                                  

expenses from

shares of subsidiaries      -555      0       -567         0

Financial income and                                  

expenses from

other long term              203      1        131         1

financial investments

Interest expense          -8 405 -3 972     -6 683    -1 800

Foreign exchange gain       -436   -311       -386      -281

(loss)

Other financial income     2 941  6 246      2 879     2 278

and expense

Total financial income    -6 252  1 964     -4 626       198

and expenses

                                                      

Profit from normal       283 191 433 570    162 852   159 888

operations

Income tax               -48 378      0     -1 402         0

NET PROFIT FOR THE       234 813 433 570    161 450   159 888

PERIOD





INCOME STATEMENT, unaudited, in EUR thousand

                                                            

                           2003    2002    01.07.-   01.07.-

                                          31.12.03  31.12.02

Sales revenue            61 391  61 264     29 530    29 496

Other revenue             1 294   1 731        412     1 491

Materials, consumables    6 262   5 948      2 613     3 385

and supplies

Other operating expenses  9 944   7 367      5 882     4 614

Personnel expenses                                    

     a) salaries          6 981   7 224      3 994     4 086

     b) social taxes      2 327   2 401      1 335     1 356

Depreciation and value-  10 056  10 088      5 074     5 094

adjustments

Other expenses            8 615   2 382        340     2 247

OPERATING PROFIT         18 499  27 585     10 704    10 206

Financial income and                                  

expenses

Financial income and                                  

expenses from

shares of subsidiaries      -35       0        -36         0

Financial income and                                  

expenses from

other long term              13       0          8         0

financial investments

Interest expense           -537    -254       -427      -115

Foreign exchange gain       -28     -20        -25       -18

(loss)



Other financial income      188     399        184       146

and expense

Total financial income     -400     126       -296        13

and expenses

                                                      

Profit from normal       18 099  27 710     10 408    10 219

operations

Income tax               -3 092       0        -90         0

NET PROFIT FOR THE       15 007  27 710     10 319    10 219

PERIOD





Erik Sakkov

Marketing Director

6318067