MOST SIGNIFICANT FINANCIAL INDICATORS Eesti Telekom Group -------------------------------------------------------------------------------- | | Q1 2007 | Q1 | Change % | | | | 2006 | | -------------------------------------------------------------------------------- | Total revenues, million EUR | 95.6 | 84.8 | 12.8 | -------------------------------------------------------------------------------- | EBITDA, million EUR | 34.6 | 33.3 | 4.1 | -------------------------------------------------------------------------------- | Margin, % | 36.2 | 39.2 | | -------------------------------------------------------------------------------- | EBIT, million EUR | 27.1 | 22.4 | 21.0 | -------------------------------------------------------------------------------- | Margin, % | 28.4 | 26.4 | | -------------------------------------------------------------------------------- | EBT, million EUR | 28.1 | 23.1 | 21.7 | -------------------------------------------------------------------------------- | Net profit for the period, million | 28.1 | 23.1 | 21.7 | | EUR | | | | -------------------------------------------------------------------------------- | EPS, EUR | 0.20 | 0.17 | 21.7 | -------------------------------------------------------------------------------- | CAPEX, million EUR | 7.5 | 8.3 | -10.3 | -------------------------------------------------------------------------------- | Net gearing, % | -35.4 | -44.2 | | -------------------------------------------------------------------------------- | ROA, % | 29.6 | 24.3 | | -------------------------------------------------------------------------------- | ROE, % | 43.9 | 36.5 | | -------------------------------------------------------------------------------- Elion Group (fixed-line communications) -------------------------------------------------------------------------------- | | Q1 2007 | Q1 | Change % | | | | 2006 | | -------------------------------------------------------------------------------- | Total revenues, million EUR | 49.8 | 43.8 | 13.7 | -------------------------------------------------------------------------------- | EBITDA, million EUR | 13.9 | 13.9 | -0.7 | -------------------------------------------------------------------------------- | Margin, % | 27.9 | 31.9 | | -------------------------------------------------------------------------------- | EBIT, million EUR | 9.7 | 8.1 | 18.1 | -------------------------------------------------------------------------------- | Margin, % | 19.3 | 18.6 | | -------------------------------------------------------------------------------- | EBT, million EUR | 9.7 | 8.4 | 16.3 | -------------------------------------------------------------------------------- | Net profit for the period, million | 9.7 | 8.4 | 16.3 | | EUR | | | | -------------------------------------------------------------------------------- | CAPEX, million EUR | 4.4 | 4.4 | -0.6 | -------------------------------------------------------------------------------- | ROA, % | 19.7 | 17.8 | | -------------------------------------------------------------------------------- | ROE, % | 31.1 | 27.5 | | -------------------------------------------------------------------------------- EMT Group (mobile communications) -------------------------------------------------------------------------------- | | Q1 2007 | Q1 | Change % | | | | 2006 | | -------------------------------------------------------------------------------- | Total revenues, million EUR | 55.2 | 48.2 | 14.5 | -------------------------------------------------------------------------------- | EBITDA, million EUR | 21.1 | 19.7 | 7.0 | -------------------------------------------------------------------------------- | Margin, % | 38.2 | 40.9 | | -------------------------------------------------------------------------------- | EBIT, million EUR | 17.8 | 14.7 | 21.4 | -------------------------------------------------------------------------------- | Margin, % | 32.3 | 30.5 | | -------------------------------------------------------------------------------- | EBT, million EUR | 18.3 | 14.9 | 23.1 | -------------------------------------------------------------------------------- | Net profit for the period, million | 18.3 | 14.9 | 23.1 | | EUR | | | | -------------------------------------------------------------------------------- | CAPEX, million EUR | 3.1 | 3.9 | -21.2 | -------------------------------------------------------------------------------- | ROA, % | 47.7 | 39.0 | | -------------------------------------------------------------------------------- | ROE, % | 78.7 | 62.7 | | -------------------------------------------------------------------------------- CHAIRMAN'S STATEMENT Sales revenues, operating costs, and profit The first quarter of 2007 was successful for the Eesti Telekom Group—the numbers for turnover and profits both increased. The sales revenues for the first quarter of 2007 exceeded the results for the same period in 2006 by 13% reaching 95.6 million EUR. The principal part of the supplemental sales revenues were generated in the field of mobile communications. The rapid growth of EMT Group sales revenues continued, and in the first quarter of 2007, exceeded the indicators for the same period in 2006 by 15%, reaching 84.8 million EUR. The growth of EMT Group sales revenues came primarily from the group's primary activity. The sales revenues of the Group's parent company increased by 14% compared to the same period in 2006. During the year, the client base of AS EMT increased significantly. As of 31 March 2007, the operator has 763 thousand customers (measured by the number of active SIM cards), which is 88 thousand more than a year ago (31 March 2006: 675 thousand). At the same time, the beginning of the year has traditionally been a slow period for the growth of the customer base. Thus, in the first quarter of this year, AS EMT added 4 thousand customers (net growth). The number of AS EMT contractual clients at the end of the first quarter was 437 thousand. In a year, the number of clients has increased by 22 thousand (31 March 2006: 415 thousand). The rate of growth of contractual clients had already remained stable for several quarters. In the first quarter of 2007, the operator added 4 thousand new contractual customers (net growth). In a year, 66 thousand pre-paid call cards were added. At the end of the first quarter of 2007, the number of active pre-paid cards reached 326 thousand cards (31 March 260 thousand). The client base of pre-paid cards is strongly influenced by seasonal factors, as well as the level of marketing activity. The beginning of the year is a period of low activity for pre-paid cards; in addition, many of the cards acquired during the previous summer lose their validity. Thus, the net growth of pre-paid cards in the first quarter was zero, or the number of cards remained at the level achieved at the end of 2006. AS EMT assesses its market share based on active SIM cards to be approximately 48%. The customer base that has increased in a year has been raised through the use of various mobile communications services. The greatest positive influence on the growth of first quarter turnover was the increase in the number of call minutes. Compared to the same period in 2006, the number of call minutes initiated by EMT customers has increased by almost 25%. In addition to the increase in call volumes related to the addition of new customers, the number of average call minutes used per customer has also showed strong growth. The number of call minutes terminated in the EMT network also demonstrated strong growth, although somewhat more slowly than the increase of initiated call minutes. Since the dispute between the Communications Board and Tele2 Eesti AS and Elisa Eesti AS regarding the declaration of the given operators as undertakings with significant market power in the market of terminating voice calls in their own mobile telephone networks continues, then the termination fees of all three mobile operators remained at the same level during the first quarter (0.16 EUR per minute), and in the EMT network, the increase in terminated minutes was accompanied by a similar rate of increase for interconnection revenues. The fastest increase in AS EMT basic services continues to be demonstrated by message services and mobile Internet. The number of SMSs and MMSs sent during the first quarter of 2007 increased by almost 12% compared to the same period in 2006. However, the volume of mobile data communications has increased by more than 80% during the year. Mobile data communications is a very rapidly developing field. On the one hand, the expanding EDGE, 3G and 3.5G coverage areas are constantly improving the quality of the service. On the other hand, new communication services are continually being introduced. In the given situation, it is EMT's goal to primarily increase the number of mobile data communications users and to popularize various services. Therefore, several discount packages have been designed for mobile data communications and the increase in revenues earned from mobile data communications was markedly slower than the increase in data volumes. Strong growth was also shown in the first quarter by revenues from monthly fees - the level of the first quarter of 2006 was exceeded by 21%, whereby the increase is not related so much to monthly fees from traditional call packages but increasingly to fees for specified additional services. As a new service in this field, AS EMT introduced a mobile version of Microsoft Windows Live Messenger (MSN) with a monthly fee in March. The service is based on a JAVA application that the customers can download to their phones from the EMT Surfport similarly to games or rings. Messenger enables text-based conversations and the use of emoticons. The Messenger service was designed in cooperation with companies in the TeliaSonera Group and Microsoft, and the project, which was managed from Estonia, will also be implemented in the companies of the entire TeliaSonera Group. The only field of basic activity, for which the revenues were lower in the first quarter of this year than last year was roaming. In the first quarter of 2007, the roaming revenues were 11% lower than for the same period in 2006. The EMT Group revenues for the retailing and wholesaling of telecommunications merchandise increased in the first quarter of 2007 compared to the same period in 2006 due to an expanded range of merchandise. In the first quarter of 2007, strong growth was also demonstrated by the sales revenues of the companies of the Elion Group that are active in the field of fixed communications. The sales revenues of the first quarter of this year exceeded the results for the same period of 2006 by 14%, reaching 49.8 million EUR. The greatest contribution to the increase of revenues from the field of fixed communications was provided by MicroLink Eesti, the Group's subsidiary that provides IT services, and the non-group revenues of which increased by 74%. The company that underwent restructuring at the beginning of 2006 has consolidated its market position in the provision of project-based solutions as well as mass solutions for business clients. Thus, an information system produced by MicroLink guaranteed the data processing related to the preparation and implementation of the recent parliamentary elections. MicroLink Eesti won the state procurement organized by the Tax and Customs Board for the purchase and introduction of an electronic document management system. A contract was signed with the Ministry of Social Affairs, based on which MicroLink Eesti will start to develop a national IT solution for digital pictures (the digital picture project will enable x-ray pictures and results of radiological analyses to be transmitted between hospitals). In the first quarter, in cooperation with ML Arvutid, the Arvuti Varukoopia package, which helps clients preserve and administer the most active and vulnerable data by preventing data losses in case of viruses, thefts, data deterioration or errors made by users, was developed as the first mass solution for business clients. In the first quarter of 2007 the fastest growth in the field of fixed telecommunications services was demonstrated by revenues from connection fees, which increased by 11% compared to last year. The principal engine for the growth of connection fees was the provision of integrated solutions—double and triple packages. During the year, the revenues from monthly fees for integrated solutions have increased by 45%. Of the integrated services, the one with the fastest growing number of users continues to be the Kodulahenduse triple package, which provides the customers with quality, digital television reception in addition to telephone calls and Internet connection. By the end of the first quarter of 2007, the number of Elion DigiTV customers had increased to 32.4 thousand (31 December 2007: 28 thousand). In February 2007, Elion was the first in Estonia to start transmitting new-generation high-resolution television (HDTV). In the last quarter, the possibility of listening to Estonian-language radio stations was added to the basic package for DigiTV clients. This spring, a remote video rental service should arrive on the market. Shortly, customers should have the opportunity to watch DigiTV on two TV sets from one connection and to record TV shows. During the first quarter of 2007, the growth of permanent Internet connections continued to increase. As of 31 March 2007, Elion had 148 thousand permanent connection customers (31 December 2006: 142 thousand; 31 March 2006: 115 thousand). Since increasingly more clients prefer to secure Internet connections as part of integrated solutions, the revenues earned from Internet connections provided as separate services decreased.. The number of Elion call connection at the end of March 2007 was 465 thousand (31 December 2006: 463 thousand; 31 March 2006: 457 thousand). The same trend is occurring in call connections as in Internet connections, or increasingly connections are part of double or triple packages and the revenues earned from monthly fees of separate call connections are decreasing. In the case of call connections, in addition to integrated solutions, discount packages continue to be popular, and therefore, monthly fees are lower than usual. The revenues earned from Elion Group call minutes decreased by 1% during the first quarter compared to the first quarter of 2006. There was an increase in revenues from interconnection fees, while the revenues earned from end consumers decreased by 9%. Elion assesses its market share for call minutes initiated in the fixed network to be 83% (December 2006: 83%). The market share of local call minutes is 84% (December 2006: 85%), 65% of international call minutes (December 2006: 65%), 69% of call minutes made to mobile phones (December 2006: 70%), and 97% of internal calling minutes (December 2005: 96%). Elion Group retail sales chain's revenues from sale of telecommunications and IT merchandise increased by 16% in the first quarter of 2007 compared to 2006. In the first quarter of 2007, Eesti Telekom Group operating costs increased by 18% compared to the same period on 2006, reaching 61.1 million EUR. The EMT Group operating costs increased by 19%, reaching 34.2 million EUR. The principal part of the supplemental operating costs is related to the Group's primary activity. Costs related to interconnection fees and roaming have increased by 20%. The given costs are caused primarily by greater volumes of inter- network traffic. Personnel costs have increased by 23%. The increase in personnel costs has been caused both by an increase in employees' salaries as well as an increase in the number of employees from 510 to 567 during the year. The operating costs of AS MWS, the wholesaler that supplies both the EMT and Elion Groups' retail sales chains has increased by 30%. The Elion Group operating costs increased by 20% in the first quarter, reaching 35.9 million EUR. Over half the additional operating costs are related to MicroLink Eesti, the operating costs of which have almost doubled in comparison to the first quarter of 2006. The second factor in the growth of Elion Group operating costs was the increase in costs for sales-related merchandise. As in the case of the EMT Group, an increase in personnel costs also influenced the growth of Elion Group operating costs. The Elion Group personnel costs increased 19% during the year. The number of employees at the Group has increased from 1,692 people at the end of March 2006 to 1,799 people at the end of March this year. The Eesti Telekom Group EBITDA was 34.6 million EUR in the first quarter of 2007, which is 4% more than the first quarter of 2006. The increase in EBITDA came from the mobile communications field. The EMT Group EBITDA grew by 7% compared to the first quarter of 2006 while the Elion Group EBITDA dropped by 1%. The EBITDA margin has decreased during the year, reaching 36% in the first quarter of this year (1st quarter 2006: 39%). The decrease in margin is caused by an increase in the percentage of lower margin activities in the Group's sales revenues. Thus the percentage of the IT segment in the consolidated sales turnover increased from 4% last year to 6% in the first quarter of this year. The Group's depreciation cost reached 7.5 million EUR in the first quarter of 2007, which is 31% less than in the first quarter of 2006. The past quarter was the last quarter in which the changes in the useful life span of fixed assets applied in May of 2006 still exerted an influence. Based on the data specified during the course of compiling the 2006 annual report, the influence of the implementation the new useful life spans on the Group's depreciation costs was approximately 0.9 million EUR per month. In the first quarter of 2007, the Eesti Telekom Group earned an operating profit of 27.1 million EUR, which is 21% more than in the first quarter of 2006. The Group's financial revenues (net) reached 1.0 million EUR (1st quarter 2006: 0.8 million EUR). The Eesti Telekom Group earned a net profit of 28.1 million EUR (1st quarter 2006: 23.1 million EUR) in the first quarter of 2007. The EPS reached 0.20 EUR (1st quarter 2006: 2006: 0.17 EUR). Balance sheet and cash flows As of 31 March 2007, the Eesti Telekom Group balance sheet was 330.7 million EUR (31 December 2006: 307.5 million EUR). The tangible fixed assets have decreased by 0.4 million EUR during the quarter reaching 152.7 million EUR (31 December 2006: 153,1 million EUR) by the end of March. Compared to the end of 2006, the current assets have increased by 23.5 million EUR. The remainder of cash, cash equivalents, and short-term financial investments has increased by 15.2 million EUR reaching 104.0 million EUR by the end of the period. The increase is caused by a strongly positive cash flow from operations in the first quarter. Trade receivables and other short-term receivables have increased by 8.7 million EUR. The growth resulted from the expansion of MicroLink Eesti activities and the more active provision of financial services by Elion Enterprises. As of 31 March 2007, Eesti Telekom Group equity totaled 291.0 million EUR (31 December 2006: 262.9 million EUR). The increase in equity resulted from the first quarter profit. The Group's long-term liabilities remained at the same level as the end of the year, reaching 2.3 million EUR (31 December 2006: 2.4 million EUR). Short-term liabilities decreased by 4.7 million EUR, reaching 37.5 million EUR (31 December 2006: 42.2 million EUR). The reduction resulted from a decrease in Elion Group indebtedness to suppliers. As of 31 March 2007, the Group's net debt was -103.7 million EUR and the net gearing was -36% (31 December 2006: -88.4 million EUR and -34%). The Eesti Telekom Group cash flow from operations in the first quarter of 2007 was 22.9 million EUR (1st quarter 2006: 31.1 million EUR). The reduction in cash flow from operations resulted primarily from an increase in short-term receivables. In the first quarter, the Group's cash flow from investment activities reached 50.0 million EUR (1st quarter 2006: 31.2 million EUR). This year, as well as in the first quarter of 2006, the principal part of the cash flow from investment activities resulted from short-term financial investments. In the first quarter, cash flow for the acquisition of tangible and intangible fixed assets totaled 7.5 million EUR (1st quarter 2006: 8.2 million EUR). In the first quarter of this year, the EMT Group invested 3.1 million EUR (1st quarter 2006: 3.9 million EUR). The investments were primarily made in the network, foremost for the development of a network that enables quality data communications. Important investments were also made in the development of mobile applications. The Elion Group investments totaled 4.4 million EUR (1st quarter 2006: 4.4 million EUR). In the case of the Elion Group, the primary field of investment continues to be the expansion of the coverage area for permanent connections and digital TV reception, but also the creation of special solutions for business clients. In the first quarter of 2007, cash flow into financing activities was less than 0,1 million EUR (1st quarter 2006: 0,09 million EUR). Ownership structure of AS Eesti Telekom In the first quarter of 2007, there were no significant changes in the ownership structure of AS Eesti Telekom. TeliaSonera AB (through Baltic Tele AB), the majority owner of Eesti Telekom, continues to own 54% of the company's shares. The Estonian government continues to own 27% of AS Eesti Telekom shares. In February, the Government of the Republic decided to transfer 3% of its shares (4,138,636 shares) to the Estonian Development Fund. The goal of the Development Fund founded in November 2006 is to stimulate and support changes in the Estonian economy that should help to update the economy, guarantee the growth of exports, and create new jobs that require high qualifications. The Development Fund will be financed from earmarked investment capital, the main part of which will comprise AS Eesti Telekom shares. The Development Fund may use the resources received from dividends or from the sale of the shares for investment activities. As of 31 March 2007, the AS Eesti Telekom shares had not been transferred to the Development Fund. As of 31 March 2007, 19.1% of the AS Eesti Telekom shares could be freely traded. As of the end of the first quarter, 42% of the freely traded shares had been converted to GDRs traded on the London Stock Exchange. As of 31 March 2007, the 10 largest shareholders in AS Eesti Telekom were: -------------------------------------------------------------------------------- | | Number of | Participation | | | securities | | -------------------------------------------------------------------------------- | Baltic Tele AB | 74,110,079 | 53.7207% | -------------------------------------------------------------------------------- | Ministry of Finance / State Treasury | 37,485,100 | 27.1721% | -------------------------------------------------------------------------------- | Deutsche Bank Trust Company (GDR | 10,978,638 | 7.9582% | | accounts) | | | -------------------------------------------------------------------------------- | Skandinaviska Enskilda Banken AB | 2,074,890 | 1.5040% | | clients | | | -------------------------------------------------------------------------------- | ING Luxembourg S.A. | 1,526,330 | 1.1064% | -------------------------------------------------------------------------------- | Danske Bank clients | 1,378,842 | 0.9995% | -------------------------------------------------------------------------------- | Bank Austria Creditanstalt AG clients | 1,366,948 | 0.9909% | -------------------------------------------------------------------------------- | Morgan Stanley Co International Equity | 1,018,400 | 0.7382% | | clients | | | -------------------------------------------------------------------------------- | The Northen Trust Company | 470,000 | 0.3407% | -------------------------------------------------------------------------------- | ABN Amro Bank | 430,550 | 0.3121% | -------------------------------------------------------------------------------- The regular general meeting of AS Eesti Telekom shareholders will take place on 22 May 2007 at 1 pm in Tallinn at the National Library. Starting on 23 April 2007, the 2006 annual report and draft resolutions for the general meeting with be available on the Internet at http://www.telekom.ee and at Eesti Telekom at Roosikrantsi 2, Tallinn on workdays from 10 am to 2 pm. Questions related to the general meeting can be submitted through the AS Eesti Telekom website, by telephone at 6 311 212, or by e-mail to mailbox@telekom.ee. Dividends The Management Board of AS Eesti Telekom will make a proposal at the shareholders' general meeting to distribute and pay out 83.8 million EUR or 0.61 EUR per share as dividends, based on the number of dividend-paying shares, or 137,954,528 shares. In 2006, 79.4 million EUR was distributed as dividends among the shareholders, or 0.575 EUR per share. INCOME STATEMENT In thousand of EUR -------------------------------------------------------------------------------- | | I Quarter | I Quarter | 2006 | | | 2007 | 2006 | | -------------------------------------------------------------------------------- | Net sales | 95,645 | 84,810 | 368,626 | -------------------------------------------------------------------------------- | Cost of production | (54,400) | (48,261) | (208,359) | -------------------------------------------------------------------------------- | Gross profit | 41,245 | 36,549 | 160,267 | -------------------------------------------------------------------------------- | Sales, administrative, and | (14,250) | (14,366) | (58,086) | | research & development expenses | | | | -------------------------------------------------------------------------------- | Other operating revenues | 200 | 372 | 3,387 | -------------------------------------------------------------------------------- | Other operating expenses | (67) | (130) | (345) | -------------------------------------------------------------------------------- | Operating profit | 27,128 | 22,425 | 105,223 | -------------------------------------------------------------------------------- | Finance income | 1,001 | 736 | 2,734 | -------------------------------------------------------------------------------- | Finance costs | (35) | (57) | (125) | -------------------------------------------------------------------------------- | Finance income, net | 966 | 679 | 2,609 | -------------------------------------------------------------------------------- | Net income / (expenses) from | 13 | (6) | 12 | | associated companies | | | | -------------------------------------------------------------------------------- | Profit before tax | 28,107 | 23,098 | 107,844 | -------------------------------------------------------------------------------- | Income tax on dividends | - | - | (23,863) | -------------------------------------------------------------------------------- | Net profit for the period | 28,107 | 23,098 | 83,981 | -------------------------------------------------------------------------------- | Attributable to: | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 27,999 | 23,098 | 83,689 | -------------------------------------------------------------------------------- | Minority interest | 108 | - | 292 | -------------------------------------------------------------------------------- | | 28,107 | 23,098 | 83,981 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share for profit | | | | | attributable to the equity holders | | | | | of the parent during the reporting | | | | | period (expressed in EUR) | | | | -------------------------------------------------------------------------------- | Basic earnings per share | 0.20 | 0.17 | 0.61 | -------------------------------------------------------------------------------- | Diluted earnings per share | 0.20 | 0.17 | 0.61 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBITDA | 34,646 | 33,275 | 140,268 | -------------------------------------------------------------------------------- | Depreciation, amortization and | (7,518) | (10,850) | (35,045) | | write-downs | | | | -------------------------------------------------------------------------------- BALANCE SHEET In thousand of EUR -------------------------------------------------------------------------------- | | 31 March | 31 December | 31 March | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 131,090 | 130,673 | 114,581 | -------------------------------------------------------------------------------- | Intangible fixed assets | 13,201 | 13,681 | 10,781 | -------------------------------------------------------------------------------- | Investments in associates | 1,115 | 1,102 | 95 | -------------------------------------------------------------------------------- | Other financial fixed assets | 7,336 | 7,615 | 3,289 | -------------------------------------------------------------------------------- | Total non-current assets | 152,742 | 153,071 | 128,746 | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 8,690 | 9,120 | 5,698 | -------------------------------------------------------------------------------- | Trade and other receivables | 65,243 | 56,511 | 52,099 | -------------------------------------------------------------------------------- | Short-term investments | 10,429 | 68,057 | 35,142 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 93,567 | 20,733 | 89,874 | -------------------------------------------------------------------------------- | Total | 177,929 | 154,421 | 182,813 | -------------------------------------------------------------------------------- | Assets classified as | 68 | 49 | 1,129 | | held-for-sale | | | | -------------------------------------------------------------------------------- | Total current assets | 177,997 | 154,470 | 183,942 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 330,739 | 307,541 | 312,688 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | Capital and reserves | | | | | attributable to equity holders | | | | | of the parent | | | | -------------------------------------------------------------------------------- | Share capital | 88,169 | 88,169 | 88,169 | -------------------------------------------------------------------------------- | Share premium | 22,753 | 22,753 | 22,753 | -------------------------------------------------------------------------------- | Statutory legal reserve | 8,817 | 8,817 | 8,817 | -------------------------------------------------------------------------------- | Retained earnings | 142,832 | 59,143 | 138,495 | -------------------------------------------------------------------------------- | Net profit for the period | 27,999 | 83,689 | 23,098 | -------------------------------------------------------------------------------- | Total capital and reserves | 290,570 | 262,571 | 281,332 | | attributable to equity holders | | | | | of the parent | | | | -------------------------------------------------------------------------------- | Minority interest | 429 | 321 | - | -------------------------------------------------------------------------------- | Total equity | 290,999 | 262,892 | 281,332 | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Interest bearing loans and | 164 | 200 | 252 | | borrowings | | | | -------------------------------------------------------------------------------- | Retirement benefit obligations | 495 | 506 | 430 | -------------------------------------------------------------------------------- | Provisions | 1,281 | 1,414 | - | -------------------------------------------------------------------------------- | Non-interest bearing | 330 | 329 | 66 | | liabilities | | | | -------------------------------------------------------------------------------- | Total non-current liabilities | 2,270 | 2,449 | 748 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Trade and other payables | 36,907 | 41,631 | 30,084 | -------------------------------------------------------------------------------- | Interest bearing loans and | 165 | 175 | 116 | | borrowings | | | | -------------------------------------------------------------------------------- | Retirement benefit obligations | 55 | 55 | 55 | -------------------------------------------------------------------------------- | Provisions | 343 | 339 | 353 | -------------------------------------------------------------------------------- | Total current liabilities | 37,470 | 42,200 | 30,608 | -------------------------------------------------------------------------------- | Total liabilities | 39,740 | 44,649 | 31,356 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 330,739 | 307,541 | 312,688 | -------------------------------------------------------------------------------- CASH FLOW STATEMENT In thousand of EUR -------------------------------------------------------------------------------- | | I Quarter 2007 | I Quarter 2006 | -------------------------------------------------------------------------------- | Operating activities | | | -------------------------------------------------------------------------------- | Net profit for the period | 28,107 | 23,098 | -------------------------------------------------------------------------------- | Adjustments for: | | | -------------------------------------------------------------------------------- | Depreciation, amortisation and impairment | 7,518 | 10,850 | | of fixed and intangible assets | | | -------------------------------------------------------------------------------- | (Profit) / loss from sales and discards of | (1) | (32) | | fixed assets | | | -------------------------------------------------------------------------------- | Net (income) / expenses from associated | (13) | (6) | | companies | | | -------------------------------------------------------------------------------- | Provisions | (123) | (147) | -------------------------------------------------------------------------------- | Financial items | (374) | (1,367) | -------------------------------------------------------------------------------- | Miscellaneous non-cash items | (20) | 145 | -------------------------------------------------------------------------------- | Cash flow before change in working capital | 35,094 | 32,541 | -------------------------------------------------------------------------------- | Change in current receivables | (7,854) | 4,685 | -------------------------------------------------------------------------------- | Change in inventories | 427 | (144) | -------------------------------------------------------------------------------- | Change in current liabilities | (4,762) | (5,970) | -------------------------------------------------------------------------------- | Change in working capital | (12,189) | (1,429) | -------------------------------------------------------------------------------- | Cash flow from operating activities | 22,905 | 31,112 | -------------------------------------------------------------------------------- | Investing activities | | | -------------------------------------------------------------------------------- | Intangible and tangible fixed assets | (7,482) | (8,160) | | acquired | | | -------------------------------------------------------------------------------- | Intangible and tangible fixed assets | 8 | 9 | | divested | | | -------------------------------------------------------------------------------- | Shares, participations and operations | - | (3,779) | | acquired | | | -------------------------------------------------------------------------------- | Net change in interest-receivables short | 57,623 | 44,301 | | maturities | | | -------------------------------------------------------------------------------- | Net cash changes of other long-term | (190) | (1,207) | | receivables | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | 49,959 | 31,164 | -------------------------------------------------------------------------------- | Cash flow before financing activities | 72,864 | 62,276 | -------------------------------------------------------------------------------- | Financing activities | | | -------------------------------------------------------------------------------- | Repayment of borrowings | - | (2) | -------------------------------------------------------------------------------- | Repayment of finance lease liabilities | (29) | (88) | -------------------------------------------------------------------------------- | Cash flow used in financing activities | (29) | (90) | -------------------------------------------------------------------------------- | | 72,835 | 62,186 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at beginning of | 20,733 | 27,507 | | year | | | -------------------------------------------------------------------------------- | Cash flow for the year | 72,835 | 62,186 | -------------------------------------------------------------------------------- | Effect of foreign exchange rate changes | (1) | 181 | -------------------------------------------------------------------------------- | Cash and cash equivalents at end of period | 93,567 | 89,874 | -------------------------------------------------------------------------------- Hille Võrk AS Eesti Telekom, CFO Phone: +372 6 311 212 Email: hille.vork@telekom.ee