SAKU ÕLLETEHASE AS                 FINANCIAL RESULTS              31.08.2005



FINANCIAL RESULTS FOR THE FIRST HALF OF 2005

                             

BALANCE SHEET                                                                

(In thousands)                        EEK                         €      

                              30.6.    30.6.   31.12.    30.6.  30.6.  31.12.

                              2005     2004     2004     2005   2004    2004

                                                                         

ASSETS                                                                       

 Cash and bank               13,786   22,701   36,461      881  1,451   2,330

 Trade receivables (Note 2)  97,356   68,503   43,319    6,222  4,378   2,768

 Other receivables and        8,936   10,856    6,766      571    693     432

prepayments (Note 3)

 Inventories (Note 4)       123,630  140,856  109,674    7,901  9,002   7,009

TOTAL CURRENT ASSETS        243,708  242,916  196,220   15,575 15,524  12,539

                                                                             

Non-current assets                                                           

 Long-term financial         10,420   12,087   11,029      668    773     707

investments (Note 5)

 Property, plant and        242,228  250,763  239,295   15,480 16,027  15,293

equipment  (Note 6)

 Intangible assets (Note 7)     453      455      596       28     29      38

TOTAL NON-CURRENT ASSETS    253,101  263,305  250,920   16,176 16,829  16,038

                                                                             

TOTAL ASSETS                496,809  506,221  447,140   31,751 32,353  28,577

                                                                             

LIABILITIES AND EQUITY                                                       

Current liabilities                                                          

 Debt obligations (Note 8)   43,207      531      140    2,761     34       9

 Trade payables              28,576   27,211   16,266    1,826  1,739   1,039

 Other payables (Note 13)     4,060   56,039      471      259  3,582      30

 Tax liabilities (Note 9)    44,532   35,036   23,314    2,846  2,239   1,490

 Payables to employees        2,890    2,928    3,095      185    187     198

 Other accrued expenses       7,542    9,370    3,078      482    599     196

 Short-term provisions       26,554   32,884   24,636    1,697  2,101   1,575

(Note 10)

TOTAL CURRENT LIABILITIES   157,361  163,999   71,000   10,056 10,481   4,537

                                                                             

Non-current liabilities                                                      

Finance lease liabilities                 58                        4        

(Note 8)

TOTAL NON-CURRENT                         58                        4        

LIABILITIES

                                                                             

Equity (Note 11)                                                             

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

 Statutory 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        188,070  194,032  194,032   12,020 12,400  12,401

 Net profit for the period   19,308   16,062   50,038    1,234  1,027   3,198

TOTAL EQUITY                339,448  342,164  376,140   21,695 21,868  24,040

                                                                             

TOTAL LIABILITIES AND       496,809  506,221  447,140   31,751 32,353  28,577

EQUITY

  



INCOME STATEMENT                                                       

(In thousands)                      EEK                       €        

                          January-January-         January-January-    

                            June   June              June    June      

                            2005   2004     2004     2005    2004    2004

Revenue                                                                   

 Sales revenue (Note 12)  304,108 255,073  530,865  19,436  16,302  33,928

 Other revenue (Note 14)      118     144      705       8       9      46

Total revenue             304,226 255,217  531,570  19,444  16,311  33,974

                                                                          

Expenses                                                                  

 Changes in work in                                                       

progress and finished

  goods inventories        -5,105 -10,870   -6,105    -326    -694    -390

 Materials, consumables   137,773 118,814  241,305   8,805   7,593  15,422

and supplies used

 (Note 15)

 Other operating expenses  73,917  64,249  125,292   4,724   4,106   8,008

(Note 15)

 Personnel expenses (Note  36,172  29,472   58,081   2,312   1,884   3,712

15)

 Depreciation and          23,500  21,931   45,025   1,502   1,401   2,878

amortization expense

 (Notes 6, 7)

 Other expenses (Note 15)   1,170   1,459    3,915      75      93     250

Total expenses            267,427 225,055  467,513  17,092  14,383  29,880

                                                                          

PROFIT FROM OPERATIONS     36,799  30,162   64,057   2,352   1,928   4,094

                                                                          

 Financial income and         193     -46       35      12      -3       2

expenses (Note 16)

                                                                          

PROFIT FOR THE PERIOD      36,992  30,116   64,092   2,364   1,925   4,096

BEFORE TAX

                                                                          

 Income tax expense        17,684  14,054   14,054   1,130     898     898

                                                                          

NET PROFIT FOR THE PERIOD  19,308  16,062   50,038   1,234   1,027   3,198

                                                                          

Basic earnings per share     2.41    2.01     6.25    0.15    0.13    0.40

(Note 17)

Diluted earnings per         2.41    2.01     6.25    0.15    0.13    0.40

share (Note 17)

     

     

     

INCOME STATEMENT, Q2                                   

(In thousands)                  EEK               €

                             Q2       Q2      Q2      Q2

                            2005     2004    2005    2004

Revenue                                                   

 Sales revenue             194,608 170,715  12,438  10,911

 Other revenue                  99      62       7       4

Total revenue              194,707 170,777  12,445  10,915

                                                          

Expenses                                                  

 Changes in work in                                       

progress and finished

 goods inventories            -340  -4,050     -21    -258

 Materials, consumables     86,602  77,800   5,534   4,972

and supplies used

 Other operating expenses   45,821  39,303   2,928   2,512

 Personnel expenses         17,696  16,310   1,131   1,043

 Depreciation and           11,590  10,995     741     702

amortization expense

 Other expenses                663     739      43      47

Total expenses             162,032 141,097  10,356   9,018

                                                          

PROFIT FROM OPERATIONS      32,675  29,680   2,089   1,897

FOR Q2

                                                          

 Financial income and          -51    -148      -4      -9

expenses

                                                          

PROFIT FOR Q2 BEFORE TAX    32,624  29,532   2,085   1,888

                                                          

 Income tax expense         17,684  14,054   1,130     898

                                                          

NET PROFIT FOR Q2           14,940  15,478     955     990

                                                          

Basic earnings per share      1.87    1.93    0.12    0.12

Diluted earnings per          1.87    1.93    0.12    0.12

share





Review of operations and performance



In  the  first half of 2005 Saku Õlletehase AS sold  39.3m

litres  of  beverages, 6.8m litres or 21% up on  the  same

period in 2004. Revenues totalled EEK 304.2m (€19.4m),  an

EEK  49.0m (€3.1m) or 19.2% improvement on a year ago. The

main   growth  drivers  were  beer  and  other   alcoholic

beverages.



According  to the Estonian Breweries Association,  in  the

first six months of 2005 the Estonian beer market grew  by

roughly   13%.  The  accumulated  market  share  of   Saku

Õlletehase  AS was 44.8% (a year ago: 41.5%). The  upswing

in  market share was facilitated by a successful launch of

products  in  novel high-quality AM packaging in  February

2005  which  added value to the entire beer category.  The

company has launched a new upper economy beer brand  Blond

during  the period and there was held successful  consumer

games  for  the  main brand Saku Original,  which  is  the

biggest beer brand in Estonia.



Saku  Õlletehas exported 12% from its total volume, mainly

to  the  Baltic states and also to Finland. Finnish export

is  distributed by Sinebrychoff OY, which  is  the  market

leader in Finnish beer market.



The company has expanded his activities on other beverages

markets. Sturdy growth continued also in the cider and gin

long drink markets which expanded by 10.3% and 60.5% on  a

year  ago  respectively. Saku Õlletehase AS increased  its

sales  in the local cider market by 9.9% and in the  local

long  drink market by 106.6%, maintaining its position  in

the  former (a 33.4% share in 2005 against 33.5% in  2004)

and improving its position in the latter (a 26.6% share in

2005 against 20.7% in 2004).



Expenses  for  the  first half of the  year  totalled  EEK

267.4m (€17.1), EEK 42.4m (€2.7m) or 18.8% up on the  same

period in 2004. The largest growth occurred in the cost of

materials, consumables and supplies, largely on account of

expanded sales and production volumes. Compared to a  year

ago,  the  volume  of beverages sold in one-way  packaging

(cans and PET) has grown 52% to 73% of overall sales  (58%

a  year  ago), triggering an increase in related materials

costs.  Rising  operating volumes and proactive  marketing

magnified  transport  and  advertising  expenses   whereas

personnel    expenses   increased   primarily    due    to

organisational changes implemented in the first quarter.



The  growth  in operating volumes and market share  had  a

definite positive impact on our results of operation: Saku

Õlletehase  AS  ended  the first  half  of  2005  with  an

operating  profit  of  EEK  36.8m  (€2.4m),  an  EEK  6.6m

(€424,000) improvement on a year ago, and a net profit  of

EEK 19.3m (€1.2m) (EEK 16.1m (€1.0m) a year ago).





FINANCIAL RATIOS                      January-  January-

                                        June      June

                                        2005      2004

                                                

Operating margin (operating profit  /     12.1%     11.8%

total revenue)

Net   margin  (net  profit  /   total      6.3%      6.3%

revenue)

Return on assets (net profit /             4.1%      3.4%

average total assets)

Return on equity (net profit /             5.4%      4.5%

average equity)

Non-current asset turnover ratio            1.2       1.0

(total revenue / average non-current

assets)

Total assets turnover ratio (total          0.6       0.5

revenue / average total assets)





Liia Rikson

Assistant to Management Board

Tel + 372 6508 301