Viisnurk                      FINANCIAL RESULTS                 08/13/2003



FINANCIAL RESULTS, 6 MONTHS 2003



The net sales of Viisnurk AS for the first half of 2003 were 188.6 mil.

kroons (12.1 mil. euros) and the net profit 3.2 mil. kroons (0.2 mil.

euros). In the same period of the last year, the net sales totalled 175.8

mil. kroons (11.2 mil. euros) and the net profit 3.7 mil. kroons (0.2 mil.

euros).



In the 2nd quarter, the company exposed the profit of 2.6 mil. kroons (0.17

mil. euros) at the net sales of 97.4 mil. kroons (6.2 mil. euros). The net

sales and net profit of Viisnurk for the 2nd quarter of 2002 were 94 mil.

and 4.8 mil. kroons (6 mil. and 0.3 mil. euros), respectively.



The earnings of Viisnurk before interest, taxes, depreciation and

amortization (EBITDA) amounted to 11.7 mil. kroons/0.75 mil. euros (i.e. the

EBITDA margin was 12%) in the 2nd quarter, and 21.8 mil. kroons (1.4 mil.

euros) in the first half of the year.





Divisional Review



- The Furniture Division of Viisnurk AS, which incorporates the sawmill,

the Wood Panel and Furniture Factories, earned 2.8 mil. kroons (0.18 mil.

euros) of profit at the net sales of 118.2 mil. kroons (7.6 mil. euros) in

the first half of the year. As compared to the same period of the previous

year, the net sales of the Furniture Division increased by 5%, but the

profit slumped by approximately a half. In the 2nd quarter, the net sales of

the Furniture Division totalled 60.6 mil. kroons (3.9 mil. euros) and the

operations resulted in the loss of 2.2 mil. kroons (0.14 mil. euros). The

half-yearly results were divided between various subdivisions of the

Furniture Division as follows: in the period, the sawmill earned 3.1 mil.

kroons (0.2 mil. euros) of profit at the net sales of 10.9 mil. kroons/0.7

mil. euros (the net sales for 2002 were 13.3 mil. kroons/0.85 mil. euros and

the profit 0.4 mil. kroons/0.03 mil. euros); the Wood Panel Factory incurred

a loss of 9.6 mil. kroons (0.6 mil. euros) at the net sales of 23.3 mil.

kroons/1.5 mil. euros (cf. a loss of 7 mil. kroons/0.45 mil. euros at the

net sales of 10.5 mil. kroons/0.7 mil. euros in 2002), and the Furniture

Factory earned the profit of 9.3 mil. kroons (0.6 mil. euros) at the net

sales of 84 mil. kroons/5.4 mil. euros (the net sales amounted to 88.9 mil.

kroons/5.7 mil. euros and the profit 12 mil. kroons/0.8 mil. euros in the

same period of the last year). Whereas the results of the sawmill and the

Furniture Factory for the 2nd quarter complied with the plans, the loss of

the Wood Panel Factory exceeded the estimates. The Wood Panel Factory

suffered from the lack of orders to suit its product portfolio, thus the

factory had to operate with the limited capacity in the 2nd quarter of the

year. On one hand, it was due to the seasonal nature of the industrial

sector; one the other hand, the market situation is incessantly low,

especially for pine panels.  After the vacation period in summer, the

Furniture Division of Viisnurk will focus even more on processing birch,

including all activities from producing sawn timber, furniture blanks and

edge-glued panels to manufacturing and marketing solid wood furniture of

birch. The product development process of furniture lines is mainly related

to birch to enable more internal orders for both the sawmill and the Wood

Panel Factory in the future, and make use of the synergy within the

divisions.

- The economic activities of the Sports Goods Division for the first half

of the year resulted in 22.2 mil. kroons (1.4 mil. euros) of net sales and

3.8 mil. kroons (0.24 mil. euros) of loss. Compared to the last year, the

sales of the division grew by 7.6%, but the loss increased by 1.7 mil.

kroons (0.1 mil. euros). However, the division started to earn profit again

in the 2nd quarter of the year, making 1.2 mil. kroons (0.1 mil. euros) of

profit at the net sales of 13 mil. kroons (0.83 mil. euros). Both the

increase in the output of hockey sticks and the renewal of the quality

management system of the production process of cross-country skis had an

important role in it. The production capacities of the current year for both

cross-country skis and hockey sticks are fully covered with agreements,

including the ones made with such major customers as Rossignol, Exel,

Skilom, Itech, Hespeler and Louisville.

- The current year has been the most successful for the Building

Materials Division. The net sales of 47.6 mil. kroons (3 mil. euros) and the

profit of 12.1 mil. kroons (0.77 mil. euros) were achieved in the first half

of the year. The net sales escalated by 15% and the profit by 25% compared

to the previous financial year. In the 2nd quarter, the net sales of the

division totalled 23.6 mil. kroons (1.5 mil. euros) and the profit 6.7 mil.

kroons (0.43 mil. euros). The increase was triggered by the strength of the

construction sector, which kept the demand for environmentally friendly

Isoplaat boards high, and the successful marketing activities in introducing

Isotex interior finishing boards to builders.  An operating contract with

regard to the heat generation unit, which was included in the Building

Materials Division at the beginning of the year, was entered into with

Fortum Termest at the end of the 2nd quarter; as a result, Fortum took the

assets of the boiler house of Viisnurk on lease and hired all the staff. The

Furniture Division has entered into purchase agreements for heat energy with

Ülejõe Soojusvõrk and Pärnu Soojus, the subsidiaries of the Swedish company

Vattenfall. Energy-related contracts provide Viisnurk with an opportunity to

concentrate its human and material resources on the development of its core

activities.

- As to other activities, the sale of the real estate investment of

Viisnurk by the Pärnu River, which was not involved in the production

process, was of significance as 2.3 mil. kroons (0.15 mil. euros) of

extraordinary return was earned. Means of transport and drivers as well as

the staff involved in cleaning, maintenance and repairs of office facilities

and premises were transferred from Viisnurk under the service contract with

Minu Vara Lääne in the 2nd quarter of the year.





INCOME STATEMENT                                                            

thousand kroons                                                             

                           2nd quarter  2nd quarter   Half year    Half year

                                  2003         2002        2003         2002

                                                                            

RETURN ON SALES                 97,373       93,997     188,570      175,787

                                                                            

Cost of production sold       (85,014)     (78,939)   (164,862)    (151,873)

                                                                            

Gross profit                    12,359       15,058      23,708       23,914

                                                                            

Marketing expenses             (6,094)      (5,003)    (11,710)      (9,633)

                                                                            

General administrative         (3,535)      (2,497)     (6,244)      (4,993)

expenses

                                                                            

Other income                     2,784          262       3,158          513

                                                                            

Other expenses                   (777)        (407)     (1,379)        (988)

                                                                            

Operating profit                 4,737        7,413       7,533        8,813

                                                                            

Financial income and           (2,112)      (2,573)     (4,322)      (5,069)

financial expenses

                                                                            

NET PROFIT FOR THE PERIOD        2,625        4,840       3,211        3,744

                                                                            

Basic earnings per share          0.58         1.08        0.71         0.83

Diluted earnings per share        0.58         1.08        0.71         0.83





INCOME STATEMENT                                                            

thousand euros                                                              

                           2nd quarter  2nd quarter   Half year    Half year

                                  2003         2002        2003         2002

                                                                            

RETURN ON SALES                  6,223        6,007      12,052       11,235

                                                                            

Cost of production sold        (5,433)      (5,045)    (10,537)      (9,706)

                                                                            

Gross profit                       790          962       1,515        1,529

                                                                            

Marketing expenses               (389)        (320)       (748)        (616)

                                                                            

General administrative           (226)        (160)       (399)        (319)

expenses

                                                                            

Other income                       178           17         201           33

                                                                            

Other expenses                    (50)         (25)        (88)         (64)

                                                                            

Operating profit                   303          474         481          563

                                                                            

Financial income and             (135)        (165)       (276)        (324)

financial expenses

                                                                            

NET PROFIT FOR THE PERIOD          168          309         205          239

                                                                            

Basic earnings per share          0.04         0.07        0.05         0.05

Diluted earnings per share        0.04         0.07        0.05         0.05





BALANCE SHEET                                                    

                          Thou. kroons Thou. kroons  Thou. euros Thou. euros

                            30.06.2003  31.12.2002   30.06.2003  31.12.2002

                                                                 

Cash and bank                    2,693       1,764          172         113

Customer receivables            54,736      54,143        3,498       3,460

Other receivables                1,915       1,916          122         122

Prepayments                      4,472       4,447          286         284

Inventories                     79,693      58,602        5,093       3,746

Total current assets           143,509     120,872        9,171       7,725

                                                                 

Long-term financial              1,436       1,436           92          92

investments

Real estate investments          2,619       2,792          167         178

Tangible fixed assets          206,109     219,008       13,173      13,998

Intangible fixed assets            651         785           42          50

Total fixed assets             210,815     224,021       13,474      14,318

                                                                 

TOTAL ASSETS                   354,324     344,893       22,645      22,043

                                                                 

                                                                 

Debt obligations                34,800      38,773        2,224       2,478

Customer prepayments             1,498         620           96          40

Supplier payables               38,049      30,978        2,432       1,980

Taxes payable                    7,818       5,944          499         380

Accrued expenses                14,381      12,267          919         784

Short-term provisions                        1,493                       95

Total current liabilities       96,546      90,075        6,170       5,757

                                                                 

Non-current debt               111,522     111,773        7,128       7,144

obligations

Total non-current              111,522     111,773        7,128       7,144

liabilities

                                                                 

Total liabilities              208,068     201,848       13,298      12,901

                                                                 

Share capital (nominal          44,991      44,991        2,875       2,875

value)

Issue premium                   11,332      11,332          724         724

Mandatory capital reserve        4,499       4,499          288         288

Retained profits                82,223     101,855        5,255       6,510

Net profit for the year          3,211    (19,632)          205     (1,255)

Total equity                   146,256     143,045        9,347       9,142

                                                                 

TOTAL LIABILITIES AND          354,324      344,893      22,645      22,043

EQUITY





Andrus Aljas

Business controller

+372 44 78355