2010 I quarter and 3 months consolidated interim report (unaudited)


Directors' report
                                                               
Changes in the Group's operations in the first quarter of 2010                  

Changes in the Group's Estonian operations                                      
There have not been any significant changes in the Group's Estonian operations  
compared with the fourth quarter of 2009. By the end of 2009 all major          
restructuring activities had been completed and from 2010 the Group conducts its
core business in Estonia through two subgroups - Nordecon Ehitus and Nordecon   
Infra that specialise in buildings and infrastructure construction respectively.
The parent of the Group acts as a holding company, providing strategic          
management and Group-wide support services.                                     

Changes in the Group's foreign operations                                       
Latvia                                                                          
The Group entered the Latvian market at the beginning of 2007 when the          
acquisition of OÜ Kaurits provided the Group with a significant interest in a   
Latvian company - SIA Abagars (later Nordecon Infra SIA). In order to avoid     
subsequent conflicts of interest, the Group acquired the majority shareholding  
in the Latvian entity in May 2008. The core business of the Latvian company was 
construction of water and wastewater networks. Business volumes in Latvia grew  
rapidly and the company won and performed numerous large public procurement     
projects. However, rapid business growth was accompanied by growth in           
operational risks which, in combination with drastic deterioration in the       
economic environment, caused difficulties in collecting payments from customers 
including parties related to state and local governments.
                       
As a result, in February 2010 the board of Nordecon International AS resolved to
divest the Group's 56% interest in Nordecon Infra SIA since it was evident that 
in the foreseeable future the entity would be operating with a loss. The stake  
was sold to an individual (a non-controlling shareholder). After the            
transaction, the Group does not have any ownership interests in companies       
domiciled in Latvia. The financial aspects of the transaction are described in  
greater detail in note 4 to the interim consolidated financial statements.      
In the next few years, the Group will continue project-based business in Latvia 
through its Estonian subsidiaries, involving partners where necessary. However, 
the continuation of project-based operations assumes the availability of        
profitable projects.                                                            

Belarus                                                                         
The Group has signed a contract with a Finnish food industry company under which
it is going to build a factory in Belarus. The project will be performed through
the Group's wholly-held Belarusian subsidiary Eurocon Stroi IOOO whose          
establishment was completed in January 2010. At the moment, this is the Group's 
only project in Belarus. The Group used a similar strategy, i.e. contracts      
tendered by well-known Nordic or Baltic companies, for penetrating the Ukrainian
market more than ten years ago. The Group is not holding any negotiations       
regarding other projects and according to the corporate development strategy    
penetration of the Belarusian market in 2010 is not a priority. The year 2010   
and the above project will serve as a basis for getting to know the market and  
conducting subsequent analyses.                                                 

Ukraine                                                                         
There have been no significant changes in the Group's Ukrainian operations      
compared with the fourth quarter of 2009.                                       


Major changes in the Group's structure in the first quarter of 2010             

Nordecon International AS                                                       
In January, the establishment proceedings of Eurocon Stroi IOOO, a company      
founded by Nordecon International AS and Nordecon Ehitus AS, were completed. The
shareholders' interests are 70% and 30% respectively. The company was           
established for performing project-based construction work. Since Belarus is one
of the Group's target markets, then in line with the corporate strategy the     
majority shareholding in the entity belongs to the Group's parent company.      

In February, Nordecon International AS sold its 56% stake in the Latvian        
subsidiary Nordecon Infra SIA along with interests in its subsidiaries. The     
subsidiary was sold to an external party (a non-controlling shareholder). After 
the transaction, the Group has no ownership interests in companies registered in
Latvia.                                                                         

AS Eston Ehitus                                                                 
In March, AS Eston Ehitus established a subsidiary OÜ Kaasa Vara. The share     
capital of the subsidiary is 40 thousand kroons (3 thousand euros). At the      
moment, the company does not conduct active business operations. The company was
established for performing the corporate rehabilitation plans of major debtors  
of AS Eston Ehitus.                                                             

Eurocon Ukraine TOV                                                             
In March, Eurocon Ukraine TOV sold its 99% stake in the subsidiary Bukovina     
Development TOV. The entity did not conduct any active business operations.     
After the transaction, the Group has no ownership interest in Bukovina          
Development TOV.                                                                

Significant structural changes after the reporting date                         
Nordecon International AS                                                       
In April, Nordecon International AS sold 100% of its shares in the Finnish      
subsidiary Estcon OY to Group company Nordecon Betoon OÜ that is going to use   
the subsidiary for performing concrete works in Finland. Finland is not one of  
the Group's target markets. Therefore, transfer of the investment is not in     
contradiction with the Group's general investment holding strategy.             


Financial review                                                                

Margins                                                                         
Nordecon International Group ended the first quarter of 2010 with a gross loss  
of 23.7 million kroons (1.5 million euros). The comparative period (first       
quarter of 2009) ended with a gross profit of 36.9 million kroons (2.4 million  
euros). The loss is mainly attributable to the seasonal nature of the           
construction business, unfavourable weather conditions and stiff competition.   
The seasonal nature of gross profit development is presented in the following   
table:                                                                          
--------------------------------------------------------------------------------
| Percentage of annual  |      Q1 |        Q2 |       Q3 |       Q4 |    Total |
| gross profit          |         |           |          |          |          |
--------------------------------------------------------------------------------
| 2006                  |     10% |       20% |      33% |      37% |     100% |
--------------------------------------------------------------------------------
| 2007                  |     13% |       30% |      26% |      31% |     100% |
--------------------------------------------------------------------------------
| 2008                  |     28% |       38% |      20% |      13% |     100% |
--------------------------------------------------------------------------------
| 2009                  |     27% |       35% |      59% |     -21% |     100% |
--------------------------------------------------------------------------------
The past winter was considerably harsher for construction companies than the    
previous ones. Abundance of snow and temperature fluctuations did not allow     
continuing work on the majority of active projects or making preparations for   
new ones. On the other hand, regardless of the number of projects in progress   
and suspension of construction activity, companies were incurring their fixed   
operating costs. Moreover, the long and snowy winter had a strong impact on road
care and maintenance activities that are performed mostly in that period.       
Performance of fixed-price maintenance contracts in the first quarter of 2010   
proved highly unprofitable because snow clearing and de-icing operations were   
much more time and labour consuming than usual. 
                                
Notwithstanding the seasonal impacts, we regret to report that the decline in   
gross profit, which started in 2008 owing to a significant deterioration in the 
operating environment, has continued. In all of the Group's markets profit      
margins have dropped year-over-year primarily on account of a steep decline in  
demand. The main sector-specific trend has been the increasing excess of        
construction capacities over the number of projects on offer. Demand that is    
insufficient for meeting the needs of all market players has heightened pressure
for lowering the prices. In the light of the new trends emerging in the         
construction market, the Group intends to continue streamlining its internal    
processes (improving the efficiency of purchase of services, cost cutting, etc) 
so as to maintain its gross margin at a level that would ensure that the year   
will end in an operating profit.
                                                
Due to the incurrence of a gross loss, the Group was unable to cover its        
administrative expenses that totalled 18.3 million kroons (1.2 million euros).  
Compared with the first quarter of 2009, the Group has cut its administrative   
expenses by 51%. Owing to a larger than expected decrease in revenue, which may 
be attributed to seasonal factors, the ratio of administrative expenses to      
revenue rose to 10.4% (Q1 2009: 5.3%). However, management believes that the    
implementation of additional cost-cutting measures should reduce the Group's    
annual administrative expenses by around a third compared with 2009. This should
ensure that the annual ratio of administrative expenses to revenue will be at   
the 5% level targeted by management.
                                            
Because of the above circumstances, the Group ended the first quarter of 2010   
with an operating loss of 45.6 million kroons (2.9 million euros) (Q1 2009:     
operating loss of 3.5 million kroons/0.2 million euros).                        
The Group's net loss for the period amounted to 25.1 million kroons (1.6 million
euros). Consolidated operating loss was reduced by non-recurring finance income 
from the sale of the loss-generating Latvian operations (for further            
information, see note 4 to the consolidated interim financial statements). The  
loss attributable to owners of the parent Nordecon International AS amounted to 
20.6 million kroons (1.3 million euros).                                        

Cash flows                                                                      
The Group's operating activities for the first quarter of 2010 resulted in a net
cash inflow of 36.9 million kroons (2.4 million euros), a significant           
improvement the net outflow of 79.6 million kroons (5.9 million euros) posted   
for the first quarter of 2009. The positive operating cash flow results from    
effective collection of receivables for work delivered in prior periods, a      
decrease in employee bonuses (the gross loss did not allow making bonus         
payments) and the deferral of some settlement terms of projects started in 2009 
to 2010 (e.g. those of institutions funded from the state budget). Despite the  
above, customers' contractual settlement terms have become longer (particularly 
in the case of public sector entities) and owing to the ongoing economic        
downturn there occur significant settlement delays that give rise to overdue    
accounts. The Group's ability to maintain a positive net operating cash flow    
depends on how well it can adapt to the new economic environment (e.g. by       
extending settlement terms with subcontractors) and the extent to which         
operating costs can be cut.
                                                     
The Group's investing activities generated a net outflow of 7.4 million kroons  
(0.5 million euros) compared with a net outflow of 75.2 million kroons (4.8     
million euros) for the first quarter of 2009. A significant proportion of cash  
outflows from investing activities (9.9 million kroons/0.6 million euros) are   
attributable to outflows related to the disposal of the subsidiary Nordecon     
Infra SIA and the discontinuance of its consolidation.
                          
Financing activities for the first quarter of 2010 resulted in a net cash       
outflow of 61.2 million kroons (3.9 million euros) while in the first quarter of
2009 financing activities generated a net cash inflow of 38.2 million kroons    
(2.4 million euros). The structure of financing cash flows has changed because  
the Group has reduced borrowing and is settling its existing loan liabilities.  

Key financial figures and ratios                                                
--------------------------------------------------------------------------------
| Figure / ratio            |   Q1 2010 |    Q1 2009 |    Q1 2008 |       2009 |
--------------------------------------------------------------------------------
| Weighted average number   | 30,756,72 | 30,756,728 | 30,756,728 | 30,756,728 |
| of shares (1)             |         8 |            |            |            |
--------------------------------------------------------------------------------
| Earnings per share (in    |     -0.67 |       0.23 |       1.50 |      -1.49 |
| kroons)                   |           |            |            |            |
--------------------------------------------------------------------------------
| Earnings per share (in    |     -0.04 |       0.01 |       0.10 |      -0.09 |
| euros)                    |           |            |            |            |
--------------------------------------------------------------------------------
| Revenue growth            |    -70.2% |     -23.6% |      38.2% |     -37.5% |
--------------------------------------------------------------------------------
| Average number of         |       745 |      1,223 |      1,102 |      1,128 |
| employees                 |           |            |            |            |
--------------------------------------------------------------------------------
| Revenue per employee (in  |       236 |        483 |        702 |      2,144 |
| thousands of kroons)      |           |            |            |            |
--------------------------------------------------------------------------------
| Revenue per employee (in  |        15 |         31 |         45 |        137 |
| thousands of euros)       |           |            |            |            |
--------------------------------------------------------------------------------
| Personnel expenses to     |     29.6% |      16.7% |      13.6% |      15.0% |
| revenue                   |           |            |            |            |
--------------------------------------------------------------------------------
| Administrative expenses   |     10.4% |       6.3% |       5.6% |       5.2% |
| to revenue                |           |            |            |            |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA (in thousands of   |-30,791(2) |     14,813 |     77,166 |  4,308 (2) |
| kroons)                   |           |            |            |            |
--------------------------------------------------------------------------------
| EBITDA (in thousands of   |    -1,968 |        947 |      4,932 |        275 |
| euros)                    |           |            |            |            |
--------------------------------------------------------------------------------
| EBITDA margin             |    -17.5% |       2.5% |      10.0% |       0.2% |
--------------------------------------------------------------------------------
| Gross margin              |    -13.5% |       6.2% |      13.1% |       5.6% |
--------------------------------------------------------------------------------
| Operating margin          |    -25.9% |      -0.6% |       7.9% |      -5.2% |
--------------------------------------------------------------------------------
| Operating margin          |    -25.9% |      -0.7% |       7.6% |      -5.4% |
| excluding gains on asset  |           |            |            |            |
| sales                     |           |            |            |            |
--------------------------------------------------------------------------------
| Net margin                |    -14.3% |      -0.1% |       5.8% |      -3.7% |
--------------------------------------------------------------------------------
| Return on invested        |     -1.7% |       0.5% |       3.9% |      -4.1% |
| capital                   |           |            |            |            |
--------------------------------------------------------------------------------
| Return on assets          |     -2.6% |      -0.2% |       2.8% |      -6.0% |
--------------------------------------------------------------------------------
| Return on equity          |     -3.6% |      -0.1% |       5.4% |     -11.4% |
--------------------------------------------------------------------------------
| Equity ratio              |     44.0% |      37.5% |      38.0% |      37.1% |
--------------------------------------------------------------------------------
| Gearing                   |     22.8% |      31.8% |      18.9% |      26.4% |
--------------------------------------------------------------------------------
| Current ratio             |      1.74 |       1.28 |       1.65 |       1.47 |
--------------------------------------------------------------------------------
|                           |  31 March |   31 March |   31 March |     31 Dec |
|                           |      2010 |       2009 |       2008 |       2009 |
--------------------------------------------------------------------------------
| Order book (in thousands  | 1,386,332 |  1,714,175 |  3,368,680 |  1,530,661 |
| of kroons)                |           |            |            |            |
--------------------------------------------------------------------------------
| Order book (in thousands  |    88,603 |    109,556 |    215,298 |     97,827 |
| of euros)                 |           |            |            |            |
--------------------------------------------------------------------------------
(1) For comparability, the weighted average number of shares is the number of 
shares after the bonus issues.                                                  
(2) On calculating EBITDA, non-cash expenses included depreciation and 
amortisation as well as impairment losses on goodwill.                          
--------------------------------------------------------------------------------
| Earnings per share (EPS) = net       | Operating margin excluding gains on   |
| profit attributable to equity        | asset sales = (operating profit -     |
| holders of the parent / weighted     | gains on sale of property, plant and  |
| average number of shares outstanding | equipment - gains on sale of real     |
| Revenue per employee = revenue /     | estate) / revenue                     |
| average number of employees          | Net margin = net profit for the       |
| Personnel expenses to revenue =      | period / revenue                      |
| personnel expenses / revenue         | Return on invested capital = (profit  |
| Administrative expenses to revenue = | before tax + interest expense) / the  |
| administrative expenses / revenue    | period's average (interest-bearing    |
| EBITDA = earnings before interest,   | liabilities + equity)                 |
| taxes, depreciation and              | Return on assets = operating profit / |
| amortisation                         | the period's average total assets     |
| EBITDA margin = EBITDA / revenue     | Return on equity = net profit for the |
| Gross margin = gross profit /        | period /the period's average total    |
| revenue                              | equity                                |
| Operating margin = operating profit  | Equity ratio = total equity / total   |
| / revenue                            | equity and liabilities                |
|                                      | Gearing = (interest-bearing           |
|                                      | liabilities - cash and cash           |
|                                      | equivalents) / (interest bearing      |
|                                      | liabilities + equity)                 |
|                                      | Current ratio = total current assets  |
|                                      | / total current liabilities           |
--------------------------------------------------------------------------------

Performance by geographical market                                              
In the first quarter of 2010, revenue earned outside Estonia accounted for      
around 4% of the Group's total revenue. A year ago, the contribution of foreign 
markets was around 17%. The decrease results from the Group's decision to sell  
its Latvian operations in 2010 (see also the chapter Major changes in the       
Group's structure in the first quarter of 2010). In addition, in contrast to the
first quarter of 2009, the Group did not earn any revenue from Lithuania. The   
Group's Ukrainian revenues have remained stable compared with the first quarter 
of 2009. Further information on the Group's vision of its further operations in 
Latvia, Lithuania and Ukraine can be found in the chapter Outlooks of the       
Group's geographical markets.                                                   
--------------------------------------------------------------------------------
|                       |    Q1 2010 |     Q1 2009 |     Q1 2008 |        2009 |
--------------------------------------------------------------------------------
| Estonia               |        96% |         83% |         82% |         86% |
--------------------------------------------------------------------------------
| Ukraine               |         4% |          3% |         16% |          3% |
--------------------------------------------------------------------------------
| Lithuania             |         0% |          2% |          2% |          0% |
--------------------------------------------------------------------------------
| Latvia                |         0% |         12% |          0% |         11% |
--------------------------------------------------------------------------------
Revenue distribution between different geographical segments is a consciously   
deployed strategy by which the Group avoids excessive reliance on a single      
market. Although in the long-term perspective the Group's strategy foresees     
increasing foreign operations, in the short-term perspective the Group will     
focus on its home market and seizing opportunities in an environment that it    
knows best and where the risks are smaller.                                     

Performance by business line                                                    
The core business of Nordecon International Group is general contracting and    
project management in buildings and infrastructure construction. The Group is   
involved, among other things, in the construction of commercial and industrial  
buildings and facilities, road construction and maintenance, environmental      
engineering, concrete works and real estate development. 
                       
Consolidated revenue for the first quarter of 2010 amounted to 176.0 million    
kroons (11.2 million euros), a 70% decrease from the 590.7 million kroons (37.8 
million euros) generated in the first quarter of 2009. Above all, the downturn  
is attributable to a significant decline in the demand for construction services
in all of the Group's markets and exceptionally snowy and cold winter that had  
the strongest impact on the Infrastructure segment where most operations are    
performed outdoors. In addition, the absolute revenue figure has been impacted  
by stiff competition that has lowered the construction prices.
                  
The Group aims to maintain the revenues generated by its business segments      
(Buildings and Infrastructure) in balance as this helps disperse risks and      
provides a more solid foundation under stressed circumstances when one segment  
experiences shrinkage. In view of estimated demand for apartments, in subsequent
years the proportion of housing construction revenue will remain within the     
strategically set 20% limit.                                                    

Segment revenue                                                                 
In the first quarter of 2010, the revenue generated by the Buildings segment    
clearly exceeded that of the Infrastructure segment. The situation is somewhat  
paradoxical because for some time most of the construction market tenders have  
been for the Infrastructure segment (projects financed by the state and with the
support of the EU structural funds). This is also reflected in the Group's order
book where 77% of active construction contracts are related to the              
Infrastructure segment. The Group's management believes that the situation that 
emerged in the first quarter is temporary and in subsequent quarters the        
contribution of the Infrastructure segment will increase. The larger revenue of 
the Buildings segment can be explained by tough weather conditions, which       
prevailed during the period and had the strongest adverse impact on the         
Infrastructure segment. If in buildings construction some work can also be done 
indoors, then during an exceptionally cold and snowy winter proper construction 
of roads, complex structures and outdoor networks is practically impossible.    
In the first three months of 2010, the Buildings and Infrastructure segments    
generated revenue of 126.0 million kroons (8.1 million euros) and 48.5 million  
kroons (3.1 million euros) respectively. The corresponding figures for the first
quarter of 2009 were 339.5 million kroons (21.7 million euros) and 246.5 million
kroons (15.8 million euros) respectively.                                       

Revenue distribution between segments*                                          
--------------------------------------------------------------------------------
| Business segments             |  Q1 2010 |   Q1 2009 |   Q1 2008 |      2009 |
--------------------------------------------------------------------------------
| Buildings                     |      72% |       58% |       80% |       45% |
--------------------------------------------------------------------------------
| Infrastructure                |      28% |       42% |       20% |       55% |
--------------------------------------------------------------------------------
* In connection with the entry into force of IFRS 8 Operating Segments, the     
Group has changed segment reporting in its financial statements. In Directors'  
report the Ukrainian and EU Buildings segments which are disclosed separately in
the financial statements are presented as a single segment. In addition, the    
segment information presented in Directors' report does not include the         
disclosures on “other segments” that are presented in the financial statements. 

Revenue distribution within segments                                            
Distribution of projects within the Buildings segment has changed significantly 
compared with a year ago as well as historical annual averages. There are two   
main reasons for this. The scarcity of projects forces companies to compete in  
all market segments and the number of contracts awarded is small compared with  
bids made. Such a situation does not allow concentrating on a specific business 
area. Another important factor is the overall economic environment. During the  
past year, private companies' investments in commercial and industrial buildings
and facilities have been almost nonexistent while mainly local governments'     
investments in schools, nurseries and public buildings have increased, partly   
thanks to the support received from the EU structural funds. The proportion of  
industrial buildings in the Group's portfolio is large mainly because of the    
ongoing construction of the Ahtme peak load boiler plant. The Group builds      
apartment buildings for external customers as a general contractor, not a       
developer. Revenue distribution within the segment should remain similar        
throughout the rest of the year.		                                              
--------------------------------------------------------------------------------
| Revenue distribution in the   |  Q1 2010 |   Q1 2009 |   Q1 2008 |      2009 |
| Buildings segment             |          |           |           |           |
--------------------------------------------------------------------------------
| Commercial buildings          |      22% |       75% |       63% |       66% |
--------------------------------------------------------------------------------
| Industrial and warehouse      |      28% |        8% |       14% |       10% |
| facilities                    |          |           |           |           |
--------------------------------------------------------------------------------
| Public buildings              |      34% |       12% |       15% |       18% |
--------------------------------------------------------------------------------
| Apartment buildings           |      16% |        4% |        8% |        6% |
--------------------------------------------------------------------------------

In the Infrastructure segment, a major revenue source is road maintenance, which
in the first quarter contributed around 66% of the revenue generated by the road
construction and maintenance sub-segment. In the second quarter, road           
construction will begin which will contribute a major proportion of revenue also
in 2010. The annual proportion of hydraulic engineering that contributed a      
minimal percentage of revenue in the first quarter depends on the ports'        
investment policy, which in the current economic climate is very conservative.  
The construction of other engineering facilities (water and wastewater networks)
is an area where the Group has won many tenders. Therefore, the contribution of 
other engineering projects will remain relatively large throughout the year. The
contribution of environmental engineering is expected to increase compared with 
2009.                                                                           
--------------------------------------------------------------------------------
| Revenue distribution in the   |  Q1 2010 |   Q1 2009 |   Q1 2008 |      2009 |
| Infrastructure segment        |          |           |           |           |
--------------------------------------------------------------------------------
| Road construction and         |      52% |       20% |       41% |       49% |
| maintenance                   |          |           |           |           |
--------------------------------------------------------------------------------
| Civil engineering (including  |       3% |       22% |       11% |       12% |
| hydraulic engineering)        |          |           |           |           |
--------------------------------------------------------------------------------
| Other engineering             |      30% |       17% |        5% |       31% |
--------------------------------------------------------------------------------
| Environmental engineering     |      15% |       41% |       43% |        8% |
--------------------------------------------------------------------------------

Order book                                                                      
At 31 March 2010, the Group's order book stood at 1,386 million kroons (88.6    
million euros), approximately 19% down from the 1,714 million kroons (109.6     
million euros) posted a year ago. Over the past quarters, the decline in the    
Group's order book has decelerated and levelled off at around 1,350 to 1,500    
million kroons (86 to 95 million euros). In a situation where in many segments  
of the construction market the decrease in input prices has ceased or been      
replaced by a rise, the Group's management will focus, above all, on improving  
the profitability of the contract portfolio, not its size or growth rate.       
--------------------------------------------------------------------------------
|                               |  Q1 2010 |   Q1 2009 |   Q1 2008 |      2009 |
--------------------------------------------------------------------------------
| Order book, in thousands of   | 1,386,33 | 1,714,175 | 3,368,680 | 1,530,661 |
| kroons                        |        2 |           |           |           |
--------------------------------------------------------------------------------
| Order book, in thousands of   |   88,603 |   109,556 |   215,298 |    97,827 |
| euros                         |          |           |           |           |
--------------------------------------------------------------------------------
The order book of the Infrastructure segment has grown year-over-year. At 31    
March 2010 it accounted for 77% of the Group's total order book (31 March 2009: 
65%). On the other hand, the total value of the portfolio has decreased due to  
the downturn in the construction market. In absolute terms, the order book      
figures have also been influenced by a major fall in construction prices        
compared with previous periods. This trend is going to change.                  
Between the reporting date (31 March 2010) and the date of release of this      

report, Group companies have been awarded additional construction contracts of  
approximately 205 million kroons (13 million euros).                            


People and personnel expenses                                                   
In the first quarter of 2010, the Group (including the parent and the           
subsidiaries) employed, on average, 745 people including around 350 engineers   
and technical personnel (ETP). The significant decrease in the number of staff  
is attributable to the continuing enforcement of the Group's cost-cutting policy
as well as the divestment of the Latvian subsidiary Nordecon Infra SIA in the   
first quarter of 2010. At the end of 2009, the Nordecon Infra subgroup employed 
over 160 people. In addition to disposals of companies, the number of staff has 
decreased on account of downsizing (lay-offs and termination of contracts). In a
market situation where construction volumes may shrink even further, the number 
of staff may decrease also during the year. However, due to the seasonal nature 
of the business, in the second and third quarters the number of staff should    
increase because additional staff will be hired for the performance of specific 
projects under fixed term contracts. 
                                           
Average number of the Group's employees (including the parent and its           
subsidiaries):                                                                  
--------------------------------------------------------------------------------
|                     |     Q1 2010 |     Q1 2009 |      Q12008 |         2009 |
--------------------------------------------------------------------------------
| ETP                 |         354 |         499 |         456 |          467 |
--------------------------------------------------------------------------------
| Workers             |         391 |         624 |         646 |          661 |
--------------------------------------------------------------------------------
| Total average       |         745 |       1,223 |       1,102 |        1,128 |
--------------------------------------------------------------------------------
The Group's personnel expenses for the first quarter of 2010 including all      
associated taxes totalled 52.1 million kroons (3.3 million euros), a 47%        
decrease compared with the 98.5 million kroons (6.3 million euros) incurred in  
the first quarter of 2009.
                                                      
Personnel expenses have declined on account of downsizing and the cutting of    
basic salaries. In 2009, employee salaries were lowered at all Group entities;  
the average pay-cut for engineers and technical personnel was 15%. The          
performance pay of project staff that is linked to the projects' profit margins 
has also dropped. 
                                                              
In the first quarter of 2010, the remuneration of the members of the council of 
Nordecon International AS including social security charges amounted to 392     
thousand kroons (25 thousand euros). The corresponding figure for the first     
quarter of 2009 was also 392 thousand kroons (25 thousand euros). The           
remuneration and benefits of the members of the board of Nordecon International 
AS including social security charges totalled 567 thousand kroons (36 thousand  
euros) compared with 886 thousand kroons (57 thousand euros) for the first      
quarter of 2009. The remuneration of the board has decreased because in the     
comparative period the board had three members whereas currently the number is  
two.                                                                            


Share and shareholders                                                          
                                                             
ISIN code		EE3100039496                                                         
Short name of the security	NCN1T                                                
Nominal value	10.00 kroons / 0.64 euros                                         
Total number of securities issued	30,756,728                                    
Number of listed securities 	30,756,728                                         
Listing date 	   18 May 2006 

The share capital of Nordecon International AS consists of 30,756,728 ordinary  
shares with a par value of 10 Estonian kroons each. Owners of ordinary shares   
are entitled to dividends as distributed from time to time. Each share carries  
one vote at the general meetings of Nordecon International AS.                  

Summarised trading results                                                      
Share trading history (EEK)                                                     
--------------------------------------------------------------------------------
| Price                         |      Q1 2010 |       Q1 2009 |       Q1 2008 |
--------------------------------------------------------------------------------
| Open                          |        25.35 |         16.43 |         76.51 |
--------------------------------------------------------------------------------
| High                          |        40.68 |         20.34 |         76.51 |
--------------------------------------------------------------------------------
| Low                           |        25.03 |          8.61 |         58.05 |
--------------------------------------------------------------------------------
| Last closing price            |        30.04 |          9.54 |         62.59 |
--------------------------------------------------------------------------------
| Traded volume                 |    2,014,452 |       881,595 |       758,958 |
--------------------------------------------------------------------------------
| Turnover, millions            |        66.15 |         10.55 |         49.70 |
--------------------------------------------------------------------------------
| Listed volume (31 March),     |       30,757 |        30,757 |        30,757 |
| thousands                     |              |               |               |
--------------------------------------------------------------------------------
| Market capitalisation (31     |       923.94 |        293.42 |      1,925.08 |
| March), millions              |              |               |               |
--------------------------------------------------------------------------------


Share trading history (EUR)                                                     
--------------------------------------------------------------------------------
| Price                         |       Q12010 |       Q1 2009 |       Q1 2008 |
--------------------------------------------------------------------------------
| Open                          |         1.62 |          1.05 |          4.89 |
--------------------------------------------------------------------------------
| High                          |         2.60 |          1.30 |          4.89 |
--------------------------------------------------------------------------------
| Low                           |         1.60 |          0.55 |          3.71 |
--------------------------------------------------------------------------------
| Last closing price            |         1.92 |          0.61 |          4.00 |
--------------------------------------------------------------------------------
| Traded volume                 |    2,014,452 |       881,595 |       758,958 |
--------------------------------------------------------------------------------
| Turnover, millions            |         4.23 |          0.67 |          3.18 |
--------------------------------------------------------------------------------
| Listed volume (31 March),     |       30,757 |        30,757 |        30,757 |
| thousands                     |              |               |               |
--------------------------------------------------------------------------------
| Market capitalisation (31     |        59.05 |         18.75 |        123.04 |
| March), millions              |              |               |               |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Shareholder structure                                                           
The largest shareholders of Nordecon International AS at 31 March 2010          
--------------------------------------------------------------------------------
| Shareholder                                |    Number of |        Ownership |
|                                            |       shares |         interest |
--------------------------------------------------------------------------------
| AS Nordic Contractors                      |   16,507,464 |            53.67 |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken Ab Clients   |    2,702,282 |             8.79 |
--------------------------------------------------------------------------------
| State Street Bank and Trust Omnibus        |    1,147,911 |             3.73 |
| Account A Fund                             |              |                  |
--------------------------------------------------------------------------------
| ING Luxembourg S.A.                        |    1,111,853 |             3.61 |
--------------------------------------------------------------------------------
| Ain Tromp                                  |      678,960 |             2.21 |
--------------------------------------------------------------------------------
| ASM Investments OÜ                         |      519,600 |             1.69 |
--------------------------------------------------------------------------------
| SEB Pank AS                                |      427,033 |             1.39 |
--------------------------------------------------------------------------------
| Aivo Kont                                  |      339,480 |             1.10 |
--------------------------------------------------------------------------------
The shareholder structure of Nordecon International AS at 31 March 2010         
--------------------------------------------------------------------------------
|                                     |          Number of |         Ownership |
|                                     |       shareholders |          interest |
--------------------------------------------------------------------------------
| Shareholders with interest          |                  2 |             62.46 |
| exceeding 5%                        |                    |                   |
--------------------------------------------------------------------------------
| Shareholders with interest between  |                  6 |             13.74 |
| 1% and 5%                           |                    |                   |
--------------------------------------------------------------------------------
| Shareholders with interest below 1% |              2,031 |             23.80 |
--------------------------------------------------------------------------------
| Total                               |              2,039 |            100.00 |
--------------------------------------------------------------------------------

Shares controlled by members of the council of Nordecon International AS at 31  
March 2010                                                                      
--------------------------------------------------------------------------------
| Council                |                 |       Number of |       Ownership |
|                        |                 |          shares |        interest |
--------------------------------------------------------------------------------
| Toomas Luman (AS       | Chairman of the |      16,559,144 |           53.84 |
| Nordic Contractors, OÜ | Council         |                 |                 |
| Luman ja Pojad)(1)     |                 |                 |                 |
--------------------------------------------------------------------------------
| Ain Tromp              | Member of the   |         678,960 |            2.21 |
|                        | Council         |                 |                 |
--------------------------------------------------------------------------------
| Alar Kroodo (ASM       | Member of the   |         519,600 |            1.69 |
| Investments OÜ) (1)    | Council         |                 |                 |
--------------------------------------------------------------------------------
| Andri Hõbemägi         | Member of the   |          40,000 |            0.13 |
|                        | Council         |                 |                 |
--------------------------------------------------------------------------------
| Tiina Mõis             | Member of the   |               0 |            0.00 |
|                        | Council         |                 |                 |
--------------------------------------------------------------------------------
| Meelis Milder          | Member of the   |               0 |            0.00 |
|                        | Council         |                 |                 |
--------------------------------------------------------------------------------
(1) Companies controlled by the individual 

Shares controlled by members of the board of Nordecon International AS at 31    
March 2010                                                                      
--------------------------------------------------------------------------------
| Board                  |                |       Number of |        Ownership |
|                        |                |          shares |         interest |
--------------------------------------------------------------------------------
| Jaano Vink             | Chairman of    |          34,000 |            0.11% |
|                        | the Board      |                 |                  |
--------------------------------------------------------------------------------
| Priit Tiru             | Member of the  |               0 |            0.00% |
|                        | Board          |                 |                  |
--------------------------------------------------------------------------------

Members of the board and council of Nordecon International AS and companies     
controlled by them have not been granted any share options under which they     
could acquire shares in Nordecon International AS in subsequent periods.        


Outlooks of the Group's geographical markets                                    

Estonia                                                                         
According to assessment of the Group's management, in 2010 the Estonian         
construction market will be characterised by the following features:            
- Total demand in the construction market will remain heavily dependent on
public procurement tenders and projects performed with the support of the
European Union funds. Project initiation success depends on the administrative
capabilities of the central and local government which have improved compared
with previous periods. However, the demand resulting from public sector
projects will not be able to compensate for the steep contraction of the
buildings construction market that remains abandoned by most private companies
and individuals. Accordingly, the Group's management forecasts that by the end
of 2010 the total volume of the construction market will have decreased by over
50% compared with 2008. 

- The number of residential and general buildings construction companies is 
decreasing. Companies engaged in the sector are seeking opportunities for       
penetrating also other market segments such as infrastructure.  This has        
heightened competition which, in turn, has increased the number of companies    
going bankrupt or needing corporate rehabilitation. The trend will continue in  
2010. The Group does not forecast a significant number of mergers or takeovers  
because in the current market situation this would not have sufficient business 
rationale.                                                                      

- In 2010 the decrease in construction prices is expected to cease after which
the prices are expected to start rising compared with 2008-2009. In such a
situation, performance of construction contracts concluded at unreasonably low
margins or below cost may have extremely adverse consequences and may cause
serious financial difficulties for companies that have not noticed the trend or
have been forced to ignore it due to cash flow problems. 

- Banks have divided companies operating in the construction market into
different risk categories. Banks' risk exposures still include the real estate
and investment loans granted to companies that were engaged in real estate
development. In 2010, the survival of a number of companies will depend on the
banks' risk management principles.  On the other hand, the banks have announced
that they are again ready to start financing the construction sector although
to a limited extent. 

- In 2009 building materials manufacturers that had significantly increased
their output during the growth phase of the market experienced continuing
shrinkage in demand and, consequently, greater strain in meeting the
obligations taken for increasing their capacities. To date, the decline in
building materials prices 
has halted and in 2010 prices are expected to start rising. Because of the
increasing importance of infrastructure projects, the key competitive
advantages will include industry-specific (engineering and technical)
expertise, experience and references as well as the availability of relevant
resources. 

- Shrinkage in construction volumes has caused continuously rising unemployment 
among construction workers. The ensuing growth in the supply of labour will help
construction companies control their personnel expenses.                        
Construction projects' financing principles have changed. There are now         
additional requirements to the funding to be provided by the builder during the 
construction period.  Moreover, contractual settlement terms have lengthened and
there are settlement defaults. All this will increase the companies' liquidity  
risks.                                                                          

Nordecon International Group operates in accordance with its long-term          
objectives that are adjusted for changes in the external environment.           
The Group has prepared for changes in the economic environment by:              
- Sustaining focus on cost-cutting and seeking effective technical solutions
that should halt year-over-year decrease in profit margins in 2010 and
ultimately ensure profitability 
- Upholding the practice of conducting thorough preliminary analyses of the 
customers' solvency and creditworthiness and dealing resolutely with the        
collection of overdue receivables 
- Mitigating risks through a more conservative portfolio design that takes into 
account the fact that input prices have turned (or are turning) to a rise 
- Focusing primarily on the home market 

Latvia and Lithuania                                                            
In February 2010, the Group sold its loss-generating Latvian subsidiary Nordecon
Infra SIA whose core business was construction of water and wastewater networks.
According to the Group's assessment, the Latvian construction market will be    
undergoing extensive adjustment to the recessionary environment through         
2010-2011. Therefore, in the next few years the Group will continue operating in
Latvia on a project basis, through its Estonian subsidiaries, involving partners
where necessary. Continuation of project-based business assumes that the        
projects can be performed profitably. The decision does not change the Group's  
strategic objectives in the Latvian market, i.e. the objective of operating in  
Latvia in the future through local subsidiaries engaged in buildings and        
infrastructure construction (see the chapter The Group's structure by 2013).    

Recent economic developments in Lithuania have been similar to the ones in the  
other Baltic countries. Slowdown in investment, both in the public and private  
sectors, and similar factors have had a direct impact on the construction       
market. The commercial and residential construction markets (the Group as a     
general contractor not a developer) have contracted visibly and the launch of   
any new private sector projects in the near future is unlikely.
                 
In response to this, the operations of the Group's Lithuanian subsidiary        
Nordecon Statyba UAB (formerly UAB Eurocon LT) have been essentially suspended  
and the Group is monitoring the market situation. The temporary suspension of   
operations does not cause any major costs for the Group. The Group's management 
does not exclude the possibility that the Lithuanian operations will remain     
suspended also after 2010. The decision does not change the Group's strategic   
objectives in the Lithuanian construction market (see the chapter The Group's   
structure by 2013) and does not imply the sale or liquidation of the company.   

Ukraine                                                                         
In Ukraine, the Group will continue mainly as a general contractor and project  
manager in the construction of commercial buildings and production facilities.  
In 2009, the number of projects started in the buildings construction market    
decreased substantially. The situation in the sector is not expected to improve 
until after the first half of 2010. This implies, above all, the need for tight 
cost control.
                                                                   
Activities on development projects that require major investment have been      
suspended to minimise the risks until the situation in the Ukrainian and global 
financial markets eases up (the Group has currently an interest in two          
development projects that have been conserved).                                 

The main risks in the Ukrainian market are connected with the low administrative
efficiency of the central and local governments and the judicial system,        
inflation, and the availability of quality construction inputs. Demand is mainly
undermined by the customers' lack of financing. To date, the weakening of the   
local currency that began in 2008 has stopped and the Group's exposure to       
market-based currency risk has decreased considerably. It is also clear that the
political climate has stabilised after the presidential elections, which may    
pave the way for an improvement in the general economic climate. This, in turn, 
would revive investment by local and foreign companies who account for a        
significant proportion of the Group's customers in the Ukrainian market.        

Notwithstanding the above, the Group believes that the construction market of a 
country with a population of 46 million will offer excellent business           
opportunities also in the future. The Group's key success factor is relatively  
little competition among project management companies (the Group offers flexible
construction management in combination with European practices and competencies)
compared with the real needs of a normally functioning construction market. The 
Group's management is confident that the current crisis in the Ukrainian        
construction market and economy as a whole will transform the local             
understanding and expectations of general contracting and project management in 
the construction business, which will improve the Group's position in the       
long-term perspective significantly.                                            

Description of the main risks                                                   

Business risks                                                                  
To mitigate the risks arising from the seasonal nature of the construction      
business (primarily the weather conditions during the winter months), the Group 
has acquired road maintenance contracts that generate year-round business. In   
addition, Group companies are constantly seeking new technical solutions that   
would allow working more efficiently under changeable weather conditions.       
To manage their daily construction risks, Group companies purchase Contractors' 
All Risks insurance. Depending on the nature of the project, both general frame 
agreements and specially tailored project-specific contracts are used. In       
addition, as a rule, subcontractors are required to secure the performance of   
their obligations with a bank guarantee issued for the benefit of a Group       
company. To remedy builder-caused deficiencies which may be detected during the 
warranty period, all Group companies create warranties provisions. At 31        
December 2010, the provisions (including current and non-current ones) totalled 
14.3 million kroons (0.9 million euros). The corresponding figure at 31 March   
2009 was 13.9 million kroons (0.9 million euros).                               

Credit risk                                                                     
For credit risk management, a potential customer's settlement behaviour and     
creditworthiness are analysed already in the tendering stage. Subsequent to the 
signature of a contract, the customer's settlement behaviour is monitored on an 
ongoing basis from the making of an advance payment to adherence to the         
contractual settlement schedule, which usually depends on the documentation of  
the delivery of work performed. We believe that the system in place allows us to
respond to customers' settlement difficulties with sufficient speed. As at the  
end of the reporting period, our customers' settlement behaviour was good,      
considering the economic situation; however, there were also some large problem 
customers. The proportion of overdue receivables has increased, increasing the  
probability of credit losses also in subsequent periods. In accordance with the 
Group's accounting policies, all receivables that are more than 180 days overdue
or in respect of which no additional settlement agreements have been reached are
recognised as an expense.                                                       

In the first quarter of 2010, net gain on doubtful receivables (recoveries of   
items written down in previous periods exceeded the amount of items written down
in the reporting period) amounted to 0.1 million kroons (0 million euros). In   
the first quarter of 2009, net loss on doubtful receivables amounted to 0.9     
million kroons (0.1 million euros).                                             

Liquidity risk                                                                  
Free funds are placed in overnight or fixed-interest term deposits with the     
largest banks in the markets where the Group operates. To ensure timely         
settlement of liabilities, approximately two weeks' working capital is kept in  
current accounts or overnight deposits. Where necessary, overdraft facilities   
are used. At the reporting date, the Group's current assets exceeded its current
liabilities 1.74-fold (31 March 2009: 1.28-fold) and available cash funds       
totalled 193.7 million kroons (12.4 million euros) (31 March 2009: 179.6 million
kroons / 11.5 million euros), providing a sufficient liquidity buffer for       
operating in an economic environment that is more complicated than in the       
previous year.
                                                                  
Interest rate risk                                                              
The Group's interest-bearing liabilities to banks have mainly fixed interest    
rates. Finance lease liabilities have floating interest rates and are linked to 
EURIBOR. At 31 March 2010, the Group's interest-bearing loans and borrowings    
totalled 456.0 million kroons (29.1 million euros), a 209.8 million kroon (13.4 
million euro) decrease year-over-year. Interest expense for the first quarter of
2010 amounted to 4.6 million kroons (0.3 million euros). Compared with the first
quarter of 2009, interest expense has contracted by 3.8 million kroons (0.2     
million euros) thanks to a decline in the EURIBOR base rate and a decrease in   
loans and borrowings.
                                                           
The Group's interest rate risk results mainly from two factors: an increase in  
the base rate for floating interest rates (EURIBOR) and insufficient operating  
cash flow that may render the Group unable to settle its interest expense. The  
first factor is mitigated by fixing, where possible, the interest rates of      
liabilities during the period of low market interest rates. The realisation of  
the cash flow risk depends on the success of operating activities. The Group    
does not use derivatives to hedge the interest rate risk.                       

Currency risk                                                                   
As a rule, construction contracts and subcontractors' service contracts are made
in the currency of the host country: in Estonia in Estonian kroons (EEK) and in 
Ukraine in Ukrainian hryvnas (UAH). In connection with shrinkage in operations  
in Latvia and Lithuania, currency risks in those countries are no longer        
relevant. Services purchased from other countries are mostly priced in euros,   
which does not constitute a currency risk for the Group's Estonian entities.    

The Group's foreign exchange gains and losses result mainly from its Ukrainian  
operations because the Ukrainian national currency floats against the euro and, 
consequently, against the Estonian kroon. To date, the weakening of the         
Ukrainian hryvna against the euro that began in the last quarter of 2008 has    
ceased. The Group's exchange gains and losses for the first quarter of 2010     
resulted in a net exchange gain of 2.7 million kroons (0.2 million euros). In   
the first quarter of 2009, the Group's exchange differences resulted in a gain  
of 2.1 million kroons (0.1 million euros).                                      


Condensed consolidated interim statement of financial position                  
--------------------------------------------------------------------------------
| EEK`000                               |    31 March 2010 |  31 December 2009 |
--------------------------------------------------------------------------------
| ASSETS                                |                  |                   |
--------------------------------------------------------------------------------
| Current assets                        |                  |                   |
--------------------------------------------------------------------------------
| Cash and cash equivalents             |          193,650 |           225,191 |
--------------------------------------------------------------------------------
| Trade and other receivables           |          437,984 |           644,704 |
--------------------------------------------------------------------------------
| Prepayments                           |           23,064 |            30,595 |
--------------------------------------------------------------------------------
| Inventories                           |          381,598 |           389,328 |
--------------------------------------------------------------------------------
| Non-current assets held for sale      |            5,020 |             4,617 |
--------------------------------------------------------------------------------
| Total current assets                  |        1,041,316 |         1,294,435 |
--------------------------------------------------------------------------------
| Non-current assets                    |                  |                   |
--------------------------------------------------------------------------------
| Investments in equity accounted       |            2,181 |             2,191 |
| investees                             |                  |                   |
--------------------------------------------------------------------------------
| Other investments                     |              414 |               414 |
--------------------------------------------------------------------------------
| Trade and other receivables           |           33,502 |            33,329 |
--------------------------------------------------------------------------------
| Investment property                   |           87,975 |            87,975 |
--------------------------------------------------------------------------------
| Property, plant and equipment         |          173,297 |           204,115 |
--------------------------------------------------------------------------------
| Intangible assets                     |          244,767 |           268,233 |
--------------------------------------------------------------------------------
| Total non-current assets              |          542,137 |           596,257 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                          |        1,583,453 |         1,890,692 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES                           |                  |                   |
--------------------------------------------------------------------------------
| Current liabilities                   |                  |                   |
--------------------------------------------------------------------------------
| Loans and borrowings                  |          180,363 |           262,959 |
--------------------------------------------------------------------------------
| Trade payables                        |          234,353 |           377,925 |
--------------------------------------------------------------------------------
| Other payables                        |           66,867 |            94,580 |
--------------------------------------------------------------------------------
| Deferred income                       |          107,515 |           136,438 |
--------------------------------------------------------------------------------
| Provisions                            |            8,078 |            10,364 |
--------------------------------------------------------------------------------
| Total current liabilities             |          597,176 |           882,266 |
--------------------------------------------------------------------------------
| Non-current liabilities               |                  |                   |
--------------------------------------------------------------------------------
| Loans and borrowings                  |          275,636 |           294,328 |
--------------------------------------------------------------------------------
| Trade payables                        |            5,006 |             4,846 |
--------------------------------------------------------------------------------
| Other payables                        |            1,500 |             1,500 |
--------------------------------------------------------------------------------
| Provisions                            |            7,041 |             7,041 |
--------------------------------------------------------------------------------
| Total non-current liabilities         |          289,183 |           307,715 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                     |          886,359 |         1,189,981 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                |                  |                   |
--------------------------------------------------------------------------------
| Share capital                         |          307,567 |           307,567 |
--------------------------------------------------------------------------------
| Statutory capital reserve             |           40,024 |            40,012 |
--------------------------------------------------------------------------------
| Translation reserve                   |           -3,767 |            -3,201 |
--------------------------------------------------------------------------------
| Retained earnings                     |          324,685 |           345,280 |
--------------------------------------------------------------------------------
| Total equity attributable to equity   |          668,509 |           689,658 |
| holders of the parent                 |                  |                   |
--------------------------------------------------------------------------------
| Non-controlling interest              |           28,585 |            11,053 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                          |          697,094 |           700,711 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY          |        1,583,453 |         1,890,692 |
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
| EUR`000                               |    31 March 2010 |  31 December 2009 |
--------------------------------------------------------------------------------
| ASSETS                                |                  |                   |
--------------------------------------------------------------------------------
| Current assets                        |                  |                   |
--------------------------------------------------------------------------------
| Cash and cash equivalents             |           12,376 |            14,392 |
--------------------------------------------------------------------------------
| Trade and other receivables           |           27,992 |            41,204 |
--------------------------------------------------------------------------------
| Prepayments                           |            1,474 |             1,955 |
--------------------------------------------------------------------------------
| Inventories                           |           24,389 |            24,883 |
--------------------------------------------------------------------------------
| Non-current assets held for sale      |              321 |               295 |
--------------------------------------------------------------------------------
| Total current assets                  |           66,552 |            82,729 |
--------------------------------------------------------------------------------
| Non-current assets                    |                  |                   |
--------------------------------------------------------------------------------
| Investments in equity accounted       |              139 |               140 |
| investees                             |                  |                   |
--------------------------------------------------------------------------------
| Other investments                     |               26 |                26 |
--------------------------------------------------------------------------------
| Trade and other receivables           |            2,141 |             2,130 |
--------------------------------------------------------------------------------
| Investment property                   |            5,623 |             5,623 |
--------------------------------------------------------------------------------
| Property, plant and equipment         |           11,076 |            13,045 |
--------------------------------------------------------------------------------
| Intangible assets                     |           15,643 |            17,143 |
--------------------------------------------------------------------------------
| Total non-current assets              |           34,649 |            38,108 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                          |          101,201 |           120,837 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES                           |                  |                   |
--------------------------------------------------------------------------------
| Current liabilities                   |                  |                   |
--------------------------------------------------------------------------------
| Loans and borrowings                  |           11,527 |            16,806 |
--------------------------------------------------------------------------------
| Trade payables                        |           14,978 |            24,154 |
--------------------------------------------------------------------------------
| Other payables                        |            4,274 |             6,045 |
--------------------------------------------------------------------------------
| Deferred income                       |            6,871 |             8,720 |
--------------------------------------------------------------------------------
| Provisions                            |              516 |               662 |
--------------------------------------------------------------------------------
| Total current liabilities             |           38,167 |            56,387 |
--------------------------------------------------------------------------------
| Non-current liabilities               |                  |                   |
--------------------------------------------------------------------------------
| Loans and borrowings                  |           17,616 |            18,811 |
--------------------------------------------------------------------------------
| Trade payables                        |              320 |               310 |
--------------------------------------------------------------------------------
| Other payables                        |               96 |                96 |
--------------------------------------------------------------------------------
| Provisions                            |              450 |               450 |
--------------------------------------------------------------------------------
| Total non-current liabilities         |           18,482 |            19,667 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                     |           56,649 |            76,054 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                |                  |                   |
--------------------------------------------------------------------------------
| Share capital                         |           19,657 |            19,657 |
--------------------------------------------------------------------------------
| Statutory capital reserve             |            2,558 |             2,557 |
--------------------------------------------------------------------------------
| Translation reserve                   |             -241 |              -205 |
--------------------------------------------------------------------------------
| Retained earnings                     |           20,751 |            22,067 |
--------------------------------------------------------------------------------
| Total equity attributable to equity   |           42,726 |            44,077 |
| holders of the parent                 |                  |                   |
--------------------------------------------------------------------------------
| Non-controlling interest              |            1,826 |               706 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                          |           44,552 |            44,784 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY          |          101,201 |           120,837 |
--------------------------------------------------------------------------------


Condensed consolidated interim statement of comprehensive income                
--------------------------------------------------------------------------------
|  EEK`000                        |      Q1 2010 |      Q1 2009 |         2009 |
--------------------------------------------------------------------------------
| Revenue                         |      175,996 |      590,664 |    2,418,880 |
--------------------------------------------------------------------------------
| Cost of sales                   |     -199,727 |     -553,809 |   -2,282,575 |
--------------------------------------------------------------------------------
| Gross profit / loss             |      -23,731 |       36,855 |      136,305 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution expenses           |       -1,997 |       -2,223 |       -9,416 |
--------------------------------------------------------------------------------
| Administrative expenses         |      -18,268 |      -37,404 |     -125,206 |
--------------------------------------------------------------------------------
| Other operating income          |          676 |        1,689 |       25,592 |
--------------------------------------------------------------------------------
| Other operating expenses        |       -2,245 |       -2,423 |     -154,014 |
--------------------------------------------------------------------------------
| Operating loss                  |      -45,565 |       -3,506 |     -126,739 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income                  |       39,234 |       18,775 |       86,513 |
--------------------------------------------------------------------------------
| Finance expenses                |      -18,790 |      -13,782 |      -33,934 |
--------------------------------------------------------------------------------
| Net finance income              |       20,444 |        4,993 |       52,579 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share of loss of equity         |          -10 |       -2,644 |       -7,666 |
| accounted investees             |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss before income tax          |      -25,131 |       -1,157 |      -81,826 |
--------------------------------------------------------------------------------
| Income tax expense              |            0 |          618 |       -7,618 |
--------------------------------------------------------------------------------
| Loss for the period             |      -25,131 |         -539 |      -89,444 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income /    |              |              |              |
| expense:                        |              |              |              |
--------------------------------------------------------------------------------
| Exchange differences on         |         -566 |       -1,480 |          905 |
| translating foreign operations  |              |              |              |
--------------------------------------------------------------------------------
| Total other comprehensive       |         -566 |       -1,480 |          905 |
| income / expense for the period |              |              |              |
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE EXPENSE FOR |      -25,697 |       -2,019 |      -88,539 |
| THE PERIOD                      |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss attributable to:           |              |              |              |
--------------------------------------------------------------------------------
| - Owners of the parent          |      -20,595 |        7,046 |      -45,740 |
--------------------------------------------------------------------------------
| - Non-controlling interests     |       -4,536 |       -7,585 |      -43,704 |
--------------------------------------------------------------------------------
| Loss for the period             |      -25,131 |         -539 |      -89,444 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive expense     |              |              |              |
| attributable to:                |              |              |              |
--------------------------------------------------------------------------------
| - Owners of the parent          |      -21,161 |        8,438 |      -44,835 |
--------------------------------------------------------------------------------
| - Non-controlling interests     |       -4,536 |      -10,457 |      -43,704 |
--------------------------------------------------------------------------------
| Total comprehensive expense for |      -25,697 |       -2,019 |      -88,539 |
| the period                      |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable |              |              |              |
| to owners of the parent:        |              |              |              |
--------------------------------------------------------------------------------
| Basic earnings per share (EEK)  |        -0.67 |         0.23 |        -1.49 |
--------------------------------------------------------------------------------
| Diluted earnings per share      |        -0.67 |         0.23 |        -1.49 |
| (EEK)                           |              |              |              |
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
| EUR`000                         |      Q1 2010 |      Q1 2009 |         2009 |
--------------------------------------------------------------------------------
| Revenue                         |       11,248 |       37,750 |      154,595 |
--------------------------------------------------------------------------------
| Cost of sales                   |      -12,765 |      -35,395 |     -145,883 |
--------------------------------------------------------------------------------
| Gross profit / loss             |       -1,517 |        2,355 |        8,711 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution expenses           |         -128 |         -142 |         -602 |
--------------------------------------------------------------------------------
| Administrative expenses         |       -1,168 |       -2,391 |       -8,002 |
--------------------------------------------------------------------------------
| Other operating income          |           43 |          108 |        1,636 |
--------------------------------------------------------------------------------
| Other operating expenses        |         -144 |         -155 |       -9,843 |
--------------------------------------------------------------------------------
| Operating loss                  |       -2,912 |         -224 |       -8,100 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income                  |        2,508 |        1,200 |        5,529 |
--------------------------------------------------------------------------------
| Finance expenses                |       -1,201 |         -881 |       -2,169 |
--------------------------------------------------------------------------------
| Net finance income              |        1,307 |          319 |        3,360 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share of loss of equity         |           -1 |         -169 |         -490 |
| accounted investees             |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss before income tax          |       -1,606 |          -74 |       -5,230 |
--------------------------------------------------------------------------------
| Income tax expense              |            0 |           39 |         -487 |
--------------------------------------------------------------------------------
| Loss for the period             |       -1,606 |          -34 |       -5,717 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income /    |              |              |              |
| expense:                        |              |              |              |
--------------------------------------------------------------------------------
| Exchange differences on         |          -36 |          -95 |           58 |
| translating foreign operations  |              |              |              |
--------------------------------------------------------------------------------
| Total other comprehensive       |          -36 |          -95 |           58 |
| income / expense for the period |              |              |              |
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE EXPENSE FOR |       -1,642 |         -129 |       -5,659 |
| THE PERIOD                      |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loss attributable to:           |              |              |              |
--------------------------------------------------------------------------------
| - Owners of the parent          |       -1,316 |          450 |       -2,923 |
--------------------------------------------------------------------------------
| - Non-controlling interests     |         -290 |         -485 |       -2,793 |
--------------------------------------------------------------------------------
| Loss for the period             |       -1,606 |          -34 |       -5,717 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive expense     |              |              |              |
| attributable to:                |              |              |              |
--------------------------------------------------------------------------------
| - Owners of the parent          |       -1,352 |          539 |       -2,865 |
--------------------------------------------------------------------------------
| - Non-controlling interests     |         -290 |         -668 |       -2,793 |
--------------------------------------------------------------------------------
| Total comprehensive expense for |       -1,642 |         -129 |       -5,659 |
| the period                      |              |              |              |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable |              |              |              |
| to owners of the parent:        |              |              |              |
--------------------------------------------------------------------------------
| Basic earnings per share (EUR)  |        -0.04 |         0.01 |        -0.10 |
--------------------------------------------------------------------------------
| Diluted earnings per share      |        -0.04 |         0.01 |        -0.10 |
| (EUR)                           |              |              |              |
--------------------------------------------------------------------------------


Condensed consolidated interim statement of cash flows                          
--------------------------------------------------------------------------------
|                               |       EEK`000        |        EUR`000        |
--------------------------------------------------------------------------------
|                               |  Q1 2010 |   Q1 2009 |   Q1 2010 |    Q12009 |
--------------------------------------------------------------------------------
| Cash flows from operating     |          |           |           |           |
| activities                    |          |           |           |           |
--------------------------------------------------------------------------------
| Cash receipts from customers  |  344,499 |   661,510 |    22,017 |    42,278 |
--------------------------------------------------------------------------------
| Cash paid to suppliers        | -224,911 |  -585,205 |   -14,374 |   -37,401 |
--------------------------------------------------------------------------------
| VAT paid                      |  -20,906 |   -23,439 |    -1,336 |    -1,498 |
--------------------------------------------------------------------------------
| Cash paid to and for          |  -61,594 |  -126,515 |    -3,937 |    -8,086 |
| employees                     |          |           |           |           |
--------------------------------------------------------------------------------
| Income tax paid               |     -168 |    -6,002 |       -11 |      -384 |
--------------------------------------------------------------------------------
| Net cash from / used in       |   36,920 |   -79,651 |     2,359 |    -5,091 |
| operating activities          |          |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing     |          |           |           |           |
| activities                    |          |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of property,      |     -811 |      -530 |       -52 |       -34 |
| plant and equipment           |          |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of intangible     |        0 |    -7,500 |         0 |      -479 |
| assets                        |          |           |           |           |
--------------------------------------------------------------------------------
| Proceeds from sale of         |      422 |     1,130 |        27 |        72 |
| property, plant and equipment |          |           |           |           |
| and intangible assets         |          |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries,  |        0 |    -6,776 |         0 |      -433 |
| net of cash acquired          |          |           |           |           |
--------------------------------------------------------------------------------
| Cash outflow on the disposal  |   -9,899 |         0 |      -633 |         0 |
| of subsidiaries               |          |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of associates     |        0 |    -6,000 |         0 |      -383 |
--------------------------------------------------------------------------------
| Proceeds from disposal of     |        0 |     6,724 |         0 |       430 |
| associates                    |          |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of interests in   |        0 |   -20,000 |         0 |    -1,279 |
| joint ventures                |          |           |           |           |
--------------------------------------------------------------------------------
| Loans granted                 |   -1,173 |   -53,747 |       -75 |    -3,435 |
--------------------------------------------------------------------------------
| Repayment of loans granted    |    2,660 |     6,092 |       170 |       389 |
--------------------------------------------------------------------------------
| Dividends received            |       31 |         0 |         2 |         0 |
--------------------------------------------------------------------------------
| Interest received             |    1,325 |     5,457 |        85 |       349 |
--------------------------------------------------------------------------------
| Net cash used in investing    |   -7,445 |   -75,150 |      -476 |    -4,803 |
| activities                    |          |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing     |          |           |           |           |
| activities                    |          |           |           |           |
--------------------------------------------------------------------------------
| Proceeds from loans received  |   19,121 |   122,911 |     1,222 |     7,855 |
--------------------------------------------------------------------------------
| Repayment of loans received   |  -65,749 |   -63,576 |    -4,202 |    -4,063 |
--------------------------------------------------------------------------------
| Payment of finance lease      |  -11,127 |   -12,462 |      -711 |      -796 |
| liabilities                   |          |           |           |           |
--------------------------------------------------------------------------------
| Interest paid                 |   -3,390 |    -8,374 |      -217 |      -535 |
--------------------------------------------------------------------------------
| Other payments made           |      -86 |      -315 |        -6 |       -20 |
--------------------------------------------------------------------------------
| Net cash used in / from       |  -61,231 |    38,184 |    -3,914 |     2,440 |
| financing activities          |          |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow                 |  -31,756 |  -116,617 |    -2,031 |    -7,454 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at  |  225,191 |   296,184 |    14,392 |    18,930 |
| beginning of period           |          |           |           |           |
--------------------------------------------------------------------------------
| Effect of exchange rate       |      215 |        76 |        15 |         5 |
| fluctuations                  |          |           |           |           |
--------------------------------------------------------------------------------
| Decrease  in cash and cash    |  -31,756 |  -116,617 |    -2,031 |    -7,454 |
| equivalents                   |          |           |           |           |
--------------------------------------------------------------------------------
| Cash and cash equivalents at  |  193,650 |   179,643 |    12,376 |    11,481 |
| end of period                 |          |           |           |           |
--------------------------------------------------------------------------------


Nordecon International is a group of construction companies whose core business
is general contracting and construction management in the construction of
buildings and infrastructures in Estonia, Lithuania and Ukraine. In addition,
in Estonia our companies act as independent contractors in road construction
and maintenance, environmental engineering, the assembly of reinforced concrete
elements, and the performance of cast-on-site concrete works. The parent of the
Group is Nordecon International AS, a company registered and located in
Tallinn, Estonia. In addition to the parent company, there are more than 15
subsidiaries in the Group. The consolidated revenue of the Group in 2009 was
2.4 billion kroons (155 million euros). Currently Nordecon International Group
employs nearly 750 people. Since 18 May 2006, the company's shares have been
quoted in the main list of the NASDAQ OMX Tallinn Stock Exchange. 

1 euro = 15.6466 kroons


Raimo Talviste
Nordecon International AS
Head of Finance and Investor Relations
Tel: +372 615 4445
Email: raimo.talviste@nordecon.com 
www.nordecon.com

Attachments

nordecon_q1_report_2010.pdf