SIGNIFICANT FINANCIAL INDICATORS
Eesti Telekom Group
--------------------------------------------------------------------------------
| | Q3 | Q3 | Change | 9 mos. | 9 mos. | Change, |
| | 2007 | 2006 | , % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| Total revenues, | 1,612 | 1,461 | 10.4 | 4,691 | 4,214 | 11.3 |
| million EEK | | | | | | |
--------------------------------------------------------------------------------
| EBITDA, million EEK | 627 | 587 | 6.9 | 1,760 | 1,690 | 4.2 |
--------------------------------------------------------------------------------
| Margin, % | 38.9 | 40.2 | | 37.5 | 40.1 | |
--------------------------------------------------------------------------------
| EBIT, million EEK | 504 | 464 | 8.6 | 1,396 | 1,264 | 10.4 |
--------------------------------------------------------------------------------
| Margin, % | 31.2 | 31.8 | | 29.8 | 30.0 | |
--------------------------------------------------------------------------------
| EBT, million EEK | 509 | 472 | 7.8 | 1,428 | 1,295 | 10.2 |
--------------------------------------------------------------------------------
| Net profit for the | 509 | 472 | 7.8 | 1,057 | 922 | 14.6 |
| period, million EEK | | | | | | |
--------------------------------------------------------------------------------
| EPS, EEK | 3.68 | 3.41 | 7.9 | 7.63 | 6.67 | 14.3 |
--------------------------------------------------------------------------------
| CAPEX, million EEK | 209 | 196 | 6.3 | 511 | 552 | -7.3 |
--------------------------------------------------------------------------------
| Net gearing, % | -20.1 | -27.8 | | | | |
--------------------------------------------------------------------------------
| ROA, % | 31.1 | 27.6 | | | | |
--------------------------------------------------------------------------------
| ROE, % | 46.3 | 42.0 | | | | |
--------------------------------------------------------------------------------
In connection with changes in the structure of the Eesti Telekom Group, as of 1
July 2007, the significant financial indicators of the Telekom Group are
recognized by the following business spheres: the mobile communications service
segment (EMT brand), broadband services segment (Elion brand) and IT services
segment (MicroLink brand).
Mobile communications segment
--------------------------------------------------------------------------------
| | Q3 | Q3 | Change | 9 mos. | 9 mos. | Change, |
| | 2007 | 2006 | , % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| Total revenues, | 1,050 | 923 | 13.8 | 2,914 | 2,560 | 13.8 |
| million EEK | | | | | | |
--------------------------------------------------------------------------------
| EBITDA, million EEK | 389 | 366 | 6.6 | 1,095 | 1,005 | 8.9 |
--------------------------------------------------------------------------------
| Margin, % | 37.0 | 39.5 | | 37.6 | 39.3 | |
--------------------------------------------------------------------------------
| EBIT, million EEK | 334 | 313 | 6.9 | 934 | 811 | 15.2 |
--------------------------------------------------------------------------------
| Margin, % | 31.8 | 33.9 | | 32.1 | 31.7 | |
--------------------------------------------------------------------------------
| EBT, million EEK | 334 | 315 | 6.2 | 946 | 821 | 15.2 |
--------------------------------------------------------------------------------
| Net profit for the | 334 | 315 | 6.2 | 696 | 567 | 22.8 |
| period, million EEK | | | | | | |
--------------------------------------------------------------------------------
| CAPEX, million EEK | 69 | 53 | 31.2 | 197 | 159 | 23.8 |
--------------------------------------------------------------------------------
| ROA, % | 52.2 | 42.5 | | | | |
--------------------------------------------------------------------------------
| ROE, % | 87.3 | 72.9 | | | | |
--------------------------------------------------------------------------------
Broadband services segment
--------------------------------------------------------------------------------
| | Q3 | Q3 | Change | 9 mos. | 9 mos. | Change, |
| | 2007 | 2006 | , % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| Total revenues, | 772 | 663 | 16.5 | 2,203 | 1,970 | 11.9 |
| million EEK | | | | | | |
--------------------------------------------------------------------------------
| EBITDA, million EEK | 234 | 218 | 7.3 | 668 | 686 | -2.5 |
--------------------------------------------------------------------------------
| Margin, % | 30.3 | 32.9 | | 30.3 | 34.8 | |
--------------------------------------------------------------------------------
| EBIT, million EEK | 172 | 154 | 11.7 | 484 | 468 | -3.4 |
--------------------------------------------------------------------------------
| Margin, % | 22.2 | 23.2 | | 22.0 | 23.8 | |
--------------------------------------------------------------------------------
| EBT, million EEK | 265 | 152 | 74.5 | 575 | 468 | -3.4 |
--------------------------------------------------------------------------------
| Net profit for the | 265 | 152 | 74.5 | 453 | 348 | 30.1 |
| period, million EEK | | | | | | |
--------------------------------------------------------------------------------
| CAPEX, million EEK | 136 | 137 | -0,7 | 298 | 376 | -20.8 |
--------------------------------------------------------------------------------
| ROA, % | 34.0 | 21.7 | | | | |
--------------------------------------------------------------------------------
| ROE, % | 31.7 | 32.7 | | | | |
--------------------------------------------------------------------------------
IT services segment
--------------------------------------------------------------------------------
| | Q3 | Q3 | Change | 9 mos. | 9 mos. | Change, |
| | 2007 | 2006 | , % | 2007 | 2006 | % |
--------------------------------------------------------------------------------
| Total revenues, | 90 | 78 | 15.5 | 273 | 207 | 31.8 |
| million EEK | | | | | | |
--------------------------------------------------------------------------------
| EBITDA, million EEK | 9 | 8 | 20.4 | 14 | 15 | -6.7 |
--------------------------------------------------------------------------------
| Margin, % | 10.1 | 9.7 | | 5.0 | 7.0 | |
--------------------------------------------------------------------------------
| EBIT, million EEK | 4 | 3 | 14.2 | -2 | 5 | -141.9 |
--------------------------------------------------------------------------------
| Margin, % | 4.3 | 4.3 | | -0.8 | 2.4 | |
--------------------------------------------------------------------------------
| EBT, million EEK | 3 | 6 | -48.3 | 4 | 14 | -71.2 |
--------------------------------------------------------------------------------
| Net profit for the | 3 | 6 | -48.3 | 4 | 14 | -71.2 |
| period, million EEK | | | | | | |
--------------------------------------------------------------------------------
| CAPEX, million EEK | 18 | 4 | 350.0 | 17 | 16 | 7.2 |
--------------------------------------------------------------------------------
| ROA, % | 4.2 | 10 | | | | |
--------------------------------------------------------------------------------
| ROE, % | 18.2 | 45.1 | | | | |
--------------------------------------------------------------------------------
CHAIRMAN'S STATEMENT
Sales revenues, operating costs, and profit
The positive trends of the first quarters of 2007 continued in the third
quarter. The sales revenues of the Eesti Telekom Group increased by 10% compared
to the same period in 2006, reaching 1,612 million EEK (3rd quarter 2006: 1,463
million EEK). A positive contribution to the sales revenues was made by all the
Group's principal fields of activity.
The consolidated turnover of the mobile communications services segment reached
1,050 million EEK, increasing by 14% compared to the same period in 2006 (3rd
quarter 2006: 925 million EEK). The main portion of the supplemental revenues
was earned from the Group's principal fields of activity. The revenue of the
Group's parent company, AS EMT, increased by 11% compared to the third quarter
of 2006 reaching 857 million EEK. The increase of revenues in the principal
activities was caused primarily by an increase in the number of call minutes
initiated from and completed in the EMT network and the growth of mobile data
communications.
The increase of the call minutes initiated from the EMT network results from the
client base that increased during the year, as well as the more active mobile
call use by the clients. Compared to the end of the third quarter 2006, the
client base of AS EMT was 5% larger at the end of September this year, reaching
759 thousand active SIM cards (September 2006: 721 thousand cards). During the
year, the number of both contractual as well as pre-paid card users increased.
The number of active contractual SIM cards at the end of September was 465
thousand, which is 39 thousand more than at the end of September 2006. At the
end of the quarter, the number of active pre-paid SIM cards was 294 thousand,
which is exactly as many as a year ago. EMT assesses its market share of active
SIM cards as 48%. The penetration of active cards in Estonia is 116%.
The increase in the number of call minutes initiated by EMT clients exceeded
the increase in the client base, reaching 11% in the third quarter of 2007
compared to the same period in 2006. In the third quarter of this year, the
average number of call minutes initiated per client was 3% more than at the same
time last year. The call minutes completed in the EMT networked showed an 11%
increase. In accordance with the declaration of the Estonian National
Communications Board of 23 March 2006, entitled “Regarding the determination of
undertakings with significant power in the wholesale market of voice call
termination on mobile networks”, a successive reduction in the termination fees
of mobile operators was to have taken effect on 1 July 2007. Since Tele2 Eesti
AS and Elisa Eesti AS have disputed the resolution of the Communications Board,
the termination fees of all three mobile operators remained at 2.50 EEK per
minute, and in the EMT network, the increase in terminated minutes was
accompanied by a similar rate of increase for interconnection revenues.
Very rapid growth continued to be shown by AS EMT mobile Internet revenues. In
the third quarter of this year, the revenues for mobile data communications
exceeded the revenues for the same period in 2006 by more than 50%. At the same
time, the volume of data transmitted increased sixfold. The number of AS EMT
mobile data communications users in September 2007 was 119 thousand, 20 thousand
more regular users than a year ago. The increase in popularity of mobile data
communications is caused, on the one hand, by the introduction in June of new
data communication packages based on monthly fees, which provided clients with
quality and high-speed data communications at conveniently controllable prices.
Clients can choose between packages costing 99 EEK, 199 EEK and 399 EEK, which
provide 30MB, 500MB or 3GB of data per month respectively. The mobile Internet
start-up package included a free 3.5G modem for loyal customers signing up for
the EMT Internet 399 package that provides high-speed mobile Internet access.
This provides the client with an opportunity to use Estonia's 3G network with
the largest coverage area and provides Internet connections with speeds
approaching those of ADSL. Secondly, the number of mobile Internet users has
been positively affected by the establishment of a price ceiling of 9 EEK per
day for the use of EMT SurfPort. This has made using the Internet on their
mobile phones affordable for many customers.
The increase in the ratio of services with fixed monthly fees has caused an
increase in the revenues earned from monthly fees. The monthly fees earned in
the third quarter of this year exceeded the results in the same period of 2006
by 23%.
A regulation applies to AS EMT, as it does to other mobile operators in the
European Community, which specifies that as of September 2007 the rate per
minute for outgoing calls made within the borders of the European Community
cannot exceed the maximum price established by the European Community. AS EMT
assesses that the effect of this regulation on its third quarter profit is
insignificant.
The revenues for the mobile communications services segment from retailing and
wholesaling telecommunications merchandise increased in the third quarter of
2007 compared to the same period of 2006 by almost 28%, due primarily to larger
mobile phone sales volumes.
The sales revenues for the broadband services segment increased by 17% compared
to the same period last year, reaching 772 million EEK (3rd quarter 2006: 663
million EEK). Domestic interconnection services and international call services
showed the greatest increase in revenues, 58% and 34% respectively. Revenues
from telecommunications and IT merchandise retailing increased by 25%. In the
third quarter of 2007, revenues from broadband business lines increased by 13%
compared to the same period in 2006. By the end of the third quarter the number
of Elion television clients had increased to 48.4 thousand.
Similarly to earlier quarters, the trend in connection fees for broadband
services is continuing, whereby the clients are replacing individual services
with service packages. In the last quarter, the number of Elion triple package
users increased by 8,360, reaching 44.8 thousand as of 30 September (30
September 2006: 16.7 thousand). As of the end of August, the Elion triple
package is also available to residents of multi-story buildings.
The popularity of the triple package has been significantly enhanced by the
offering of supplemental services. The remote video rental service that was
introduced to the market in the second quarter of this year has proved to be
very popular among clients due to the convenience and simplicity of its use.
During the third quarter, the number of rental reached 900 per day. The
selection of rental films, karaoke videos, and programs has also constantly
improved. Thanks to the development of the remote video rental system, Elion was
chosen as the winner in the Innovator 2007 category of the enterprise
competition organized by Enterprise Estonia.
The total number of Elion clients with permanent connections increased to 157
thousand by the end of September 2007 (30 September 2006: 125 thousand) and the
company assesses its market share based on clients with permanent connections to
be 56%. The revenues in the broadband services segment from monthly fees for
service packages increased this year by 66% compared to the third quarter of
2006. Based on the
increase in the volume and revenues of service packages, the revenues from
monthly fees for call connections and Internet connections fell by 11% and 8%
respectively.
In the third quarter, Elion introduced a computer protection service targeting
business clients, which includes a firewall, Internet traffic control, as well
as virus, spyware, and spam protection.
The call revenues in the broadband services segment increased in the third
quarter by 11% compared to the same period in 2006. The increase in revenues
resulted primarily from international call services and domestic interconnection
fees. At the same time, the revenues received from end consumers for domestic
call services decreased by 8%.
Elion assesses its market share for call minutes initiated in the fixed network
to be 82.1% (September 2006: 83%). The market share for local call minutes is
84.2% (September 2006: 84.4%), 65.3% for international call minutes (September
2006: 65.3%) and 69.5% for call minutes made to mobile phones (September
2006: 70.6%).
In the third quarter, the Communications Board completed the latest analysis of
market segments, which for Elion Enterprises, as the company with the largest
market share in the fixed market, again meant several designations as an
undertaking with significant market power.
The Communications Board declared Elion Enterprises an undertaking with
significant market power in the market for the final segments of permanent lines
and the market for trunk segments of permanent lines. As of 1 December 2007,
Elion has an access, non-discrimination, and transparency obligation in these
markets and an obligation for accounting separation, price controls, and cost
accounting. Elion does not anticipate that the given resolution with have a
negative impact on the company's financial results.
In addition, the Communications Board declared Elion Enterprises an undertaking
with significant market power in the markets for the access of private and
business clients at specific locations to telephone networks. Elion undertakes
to enable end consumers to access the services of the providers of telephone
services related to its network by dialing an operator code and by pre-selection
of a telephone service provider. Elion anticipates that this resolution will
entail approximately 3 million EEK of additional investments for its analog
stations.
Sales revenues for the IT services segment increased by 16% in the third quarter
compared to the same period last year, reaching 90 million EEK (3rd quarter
2006: 78 million EEK). The greatest increase was in revenues from the sale of IT
merchandise.
The operating costs of the Eesti Telekom Group increased by 13% in the third
quarter of 2007 compared to the same period in 2006, reaching 992 million EEK
(3rd quarter 2006: 877 million EEK).
The operating costs in the mobile communications services segment increased by
18% in the third quarter of 2006, reaching 663 million EEK (3rd quarter 2006:
561 million EEK). The principal part of the supplemental operating costs is
related to principal activities, in which the operating costs were 13% higher
than in the third quarter of 2006. The increase of the principal activity costs
are related to two basic cost categories—interconnection costs, the increase of
which resulted from an increase in the number of call minutes made by clients to
other networks and costs for roaming services, which are related to active
travel by customers and their use of their mobile phones outside of Estonia. In
the third quarter, the rapid increase in salary costs continued compared to the
same time last year, which was sustained by strong pressure on salaries in the
economy as a whole. The operating costs related to retail and wholesale trade of
the EMT Group increased approximately as much as the sales turnover.
The operating costs in the broadband services segment increased by 12% in the
third quarter compared to the same period last year, reaching 561 million EEK
(3rd quarter 2006: 503 million EEK). The principal part of the increase in
operating costs is related to the rapid growth of retail trade turnover as well
as to an increase
in the direct sale costs of call services and domestic interconnection services.
The third primary growth factor was the personnel costs in the last quarter.
The operating costs in the IT services segment increased in the third quarter by
15%, reaching 81 million EEK (3rd quarter 2006: 71 million EEK).
The Eesti Telekom Group EBITDA in the third quarter of 2007 reached 627 million
EEK, which was 7% more than in the third quarter of 2006 (3rd quarter 2006: 588
million EEK). EBITDA in the mobile communications services segment exceeded the
same period of 2006 by 6%, while the EBITDA in the broadband services segment
increased by 7%. The EBITDA margin in the third quarter of 2007 was 30%, which
is slightly lower than the margin for the corresponding period in 2006.
In the third quarter of 2007, the Group's depreciation cost reached 124 million
EEK, increasing by 1% compared to the same period in 2006.
In the third quarter, the Eesti Telekom Group earned an EBIT of 504 million EEK,
which is 8% more than in the third quarter of 2006 (3rd quarter 2006: 466
million EEK). The Group's (net) financial revenues in the third quarter were 6
million EEK, similarly to the same period of last year. On 1 July 2007, Elion
Enterprises sold its shares in AS MicroLink Eesti to AS Eesti Telekom. The
Group's internal unrealized profit from the sale of the shares was 93.7 million
EEK.
In the third quarter of 2007, the Eesti Telekom Group earned a net profit of 509
million EEK (3rd quarter 2006: 472 million EEK). The profit per share was 3.68
EEK (3rd quarter 2007: 3.41 EEK).
Balance sheet and cash flows
As of 30 September 2007, the Eesti Telekom Group balance sheet was 4,508 million
EEK (31 December 2006: 4,812 million EEK). Compared to the beginning of the
year, fixed assets of 141 million EEK were accrued, thereby bringing the
depreciated value by the end of the third quarter to 2,536 million EEK. The
accrual of the fixed assets was based primarily on the investments of the
Group's companies. In nine months, the Group's current assets have decreased by
445 million EEK, reaching 1,972 million EEK (31 December 2006: 2,417 million
EEK). The cash and cash equivalents as well as short-term financial investments
have decreased by 609 million EEK in connection with the dividends paid out in
June and income tax on the dividends paid out in July.
As of 30 September 2007, Eesti Telekom Group equity totaled 3,860 million EEK,
which is 253 million EEK less that at the end of 2006 (31 December 2006: 4,113
million EEK). The equity has decreased in connection with the payment of
dividends.
At the end of the third quarter, the Group had long-term obligations of 26
million EEK (31 December 2006: 38 million EEK) and short-term debt obligations
of 623 million EEK (31 December 2006: 660 million EEK).
The net debt of the Eesti Telekom Group at the end of the third quarter was -776
million EEK and the net debt to equity ratio was -20% (31 December 2006: -1383
million EEK and -34%).
The Eesti Telekom Group nine-month cash flow from operations was 1,232 million
EEK (9 months of 2006: 1,237 million EEK). The Group's cash flow from
investments was 151 million EEK (9 months of 2006: -191 million EEK). The cash
flow into tangible and intangible fixed assets in the first nine months was 512
million EEK (9 months of 2006: 551 million EEK). This year, the mobile
communications services segment has invested 197 million EEK in 9 months (9
months of 2006: 158 million EEK). The primary investment field was mobile data
communications—the expansion of the EDGE network, to cover the entire territory
of Estonia by the end of the year and the expansion of 3.5G into new areas of
Estonia. During the last quarter, super-high-speed mobile Internet (3.5G)
reached four new towns: Jõgeva, Otepää, Jõhvi and Rapla. Previously, 3G and
3.5G had covered Tallinn, Tartu, Pärnu, Kuressaare, Narva, Haapsalu, Rakvere and
Viljandi and their immediate vicinities. The investments in the broadband
services segment in 9 months of 2007 reached 298 million EEK (9 months of 2006:
376 million EEK). The principal part of the investments is for improving
permanent Internet connections and the availability of DigiTV, as well as for
developing network resources.
The Eesti Telekom Group cash flow from financing activities in the first 9
months was 1,312 million EEK (9 months of 2006: 1,243 million EEK), of which
1,311 million EEK was used to pay dividends (9 months of 2006: 1,242 million
EEK).
Ownership structure of AS Eesti Telekom
In the third quarter of 2007, the majority shareholder, TeliaSonera AB (through
its subsidiary Baltic Tele AB) increased its share in AS Eesti Telekom.
TeliaSonera acquired an additional 1,275,000 AS Eesti Telekom shares, thereby
increasing its participation to 59.25%.
The increase in the participation of TeliaSonera reduced the ratio of freely
traded shares (shares that do not belong to TeliaSonera AB, the Estonian state,
or the Development Fund). As of the end of the third quarter, the ratio of
freely traded shares was 13.5% of the total number of shares. Since the
beginning of the year, the number of shares traded on the London Stock Exchange
has decreased by almost 9 million. The ratio of freely traded shares converted
to GDRs was 19% by the end of the third quarter.
As of 3 October 2007, the 10 largest shareholders in AS Eesti Telekom were:
--------------------------------------------------------------------------------
| | Number of | Participation |
| | securities | |
--------------------------------------------------------------------------------
| Baltic Tele AB | 81,738,899 | 59.2506% |
--------------------------------------------------------------------------------
| Ministry of Finance / State Treasury | 33,346,464 | 24.1721% |
--------------------------------------------------------------------------------
| Estonian Development Fund | 4,138,636 | 3.0000% |
--------------------------------------------------------------------------------
| Deutsche Bank Trust Company (GDR | 3,542,898 | 2.5682% |
| accounts) | | |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken AB | 1,425,140 | 1.0330% |
| clients | | |
--------------------------------------------------------------------------------
| Danske Bank clients | 1,417,453 | 1.0275% |
--------------------------------------------------------------------------------
| ING Luxembourg S.A. | 1,335,330 | 0.9679% |
--------------------------------------------------------------------------------
| Bank Austria Creditanstalt AG clients | 1,207,410 | 0.8752% |
--------------------------------------------------------------------------------
| Morgan Stanley Co International Equity | 947,400 | 0.6867% |
| clients | | |
--------------------------------------------------------------------------------
| Clearstream Banking Luxembourg clients | 556,012 | 0.4030% |
--------------------------------------------------------------------------------
Shareholders' extraordinary general meeting
An extraordinary general meeting of the AS Eesti Telekom shareholders took place
on 6 September 2007. The general meeting recalled Terje Christoffersen, a
current member of the AS Eesti Telekom Supervisory Board and elected Lars
Klasson as a new member of the Supervisory Board.
New structure of the Eesti Telekom Group
As of 1 July 2007, the Management Board of AS Eesti Telekom expanded to include
the following people: Leho Tamm, Financial Director and Member of the Board, who
also continues in his current position as Financial Director of AS EMT; Valdur
Laid, Member of the Board, who also continues in his current position as
Chairman of Elion Enterprises; and Enn Saar, Member of the Board, who also
continues in his current position as Chairman of AS MicroLink Eesti.
In connection with the changes in the Supervisory Board of AS Eesti Telekom,
Mats Salomonsson was elected Chairman of the Supervisory Board at the last
meeting.
As of 1 July 2007, AS MicroLink Eesti AS is a direct 100% subsidiary of Eesti
Telekom. AS Eesti Telekom bought AS MicroLink Eesti from AS Microlink, a 100%
subsidiary of Elion Enterprises. From 1 July 2007 AS MicroLink, a holding
company, merged with Elion Enterprises AS. The entry to Commercial Register was
made on 28 September 2007.
Definitions
Net debt - Long- and short-term interest-bearing borrowings, less cash and cash
equivalents and short-term investments
ROA -Net profit for the last four quarters divided by the average total assets
for the same period
ROE - Pre-tax profit for last four quarters divided by the average equity for
the same period
CONSOLIDATED QUARTERLY DATA
In million of Estonian kroons (EEK)
--------------------------------------------------------------------------------
| | Q3 06 | Q4 06 | Q1 07 | Q2 07 | Q3 07 |
--------------------------------------------------------------------------------
| Sales | 1,461 | 1,554 | 1,497 | 1,582 | 1,612 |
--------------------------------------------------------------------------------
| OPEX | (877) | (1,045) | (957) | (994) | (992) |
--------------------------------------------------------------------------------
| Other revenue/expenses, | 2 | (3) | 2 | 2 | 7 |
| net | | | | | |
--------------------------------------------------------------------------------
| EBITDA | 587 | 506 | 542 | 590 | 627 |
--------------------------------------------------------------------------------
| Depreciation and | (122) | (124) | (118) | (123) | (124) |
| amortisation | | | | | |
--------------------------------------------------------------------------------
| EBIT | 464 | 383 | 424 | 468 | 504 |
--------------------------------------------------------------------------------
| Income / expenses from | - | (1) | - | (2) | (1) |
| associates | | | | | |
--------------------------------------------------------------------------------
| Other net financing items | 8 | 11 | 15 | 14 | 6 |
--------------------------------------------------------------------------------
| Profit before tax | 472 | 392 | 440 | 479 | 509 |
--------------------------------------------------------------------------------
| Income tax on dividends | - | - | - | (371) | - |
--------------------------------------------------------------------------------
| Net profit for the period | 472 | 392 | 440 | 108 | 509 |
--------------------------------------------------------------------------------
| Minority interest | 2 | 3 | 2 | 1 | 2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA margin, % | 40.16% | 32.57% | 36.22% | 37.31% | 38.91% |
--------------------------------------------------------------------------------
| EBIT margin, % | 31.75% | 24.62% | 28.36% | 29.55% | 31.24% |
--------------------------------------------------------------------------------
| Net margin, % | 32.30% | 25.21% | 29.38% | 6.8% | 31.55% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 4,314 | 4,812 | 5,175 | 4,392 | 4,508 |
--------------------------------------------------------------------------------
| - Non-current assets | 2,238 | 2,395 | 2,390 | 2,453 | 2,536 |
--------------------------------------------------------------------------------
| - Current assets | 2,076 | 2,417 | 2,785 | 1,939 | 1,972 |
--------------------------------------------------------------------------------
| - Cash and cash | 1,043 | 1,389 | 1,627 | 785 | 780 |
| equivalents and short- | | | | | |
| term investments | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and liabilities | 4,314 | 4,812 | 5,175 | 4,392 | 4,508 |
--------------------------------------------------------------------------------
| - Equity | 3,721 | 4,113 | 4,553 | 3,351 | 3,860 |
--------------------------------------------------------------------------------
| - Provisions | 11 | 36 | 34 | 31 | 31 |
--------------------------------------------------------------------------------
| - Non-current liabilities | 9 | 8 | 8 | 7 | 2 |
--------------------------------------------------------------------------------
| - Interest-bearing | 4 | 3 | 3 | 2 | 2 |
| borrowings | | | | | |
--------------------------------------------------------------------------------
| - Current liabilities | 572 | 654 | 580 | 1 003 | 616 |
--------------------------------------------------------------------------------
| - Interest-bearing | 3 | 3 | 3 | 2 | 2 |
| borrowings | | | | | |
--------------------------------------------------------------------------------
III QUARTER CONSOLIDATED INCOME STATEMENT
In thousand of Estonian kroons (EEK)
--------------------------------------------------------------------------------
| | Notes | III Quarter | III Quarter |
| | | 2007 | 2006 |
--------------------------------------------------------------------------------
| Net sales | 2.1 (a) | 1,612,450 | 1,460,711 |
--------------------------------------------------------------------------------
| Cost of production | 2.1 (a) | (895,240) | (798,049) |
--------------------------------------------------------------------------------
| Gross profit | | 717,210 | 662,662 |
--------------------------------------------------------------------------------
| Sales, administrative, and | 2.1 (a) | (220,696) | (200,791) |
| research & development expenses | | | |
--------------------------------------------------------------------------------
| Other operating revenues | 2.1 (a) | 8,568 | 3,468 |
--------------------------------------------------------------------------------
| Other operating expenses | 2.1 (a) | (1,328) | (1,691) |
--------------------------------------------------------------------------------
| Operating profit | | 503,754 | 463,648 |
--------------------------------------------------------------------------------
| Finance income | | 6,565 | 8,263 |
--------------------------------------------------------------------------------
| Finance costs | | (1,050) | (146) |
--------------------------------------------------------------------------------
| Finance income, net | 2.1 (a) | 5,515 | 8,117 |
--------------------------------------------------------------------------------
| Net income / (expenses) from | 2.1 (a) | (618) | 78 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 2.1 (a) | 508,651 | 471,843 |
--------------------------------------------------------------------------------
| Attributable to: | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | 2.1 (a) | 507,022 | 469,777 |
--------------------------------------------------------------------------------
| Minority interest | 2.1 (a) | 1,629 | 2,066 |
--------------------------------------------------------------------------------
| | | 508,651 | 471,843 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share for profit | 7 (e) | | |
| attributable to the equity | | | |
| holders of the parent during the | | | |
| reporting period (expressed in | | | |
| EEK) | | | |
--------------------------------------------------------------------------------
| Basic earnings per share | | 3.68 | 3.41 |
--------------------------------------------------------------------------------
| Diluted earnings per share | | 3.68 | 3.41 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | 2.1 (a) | 627,348 | 585,533 |
--------------------------------------------------------------------------------
| Depreciation, amortization and | 2.1 (a) | (123,594) | (121,885) |
| write-downs | | | |
--------------------------------------------------------------------------------
THE FIRST NINE MONTHS CONSOLIDATED INCOME STATEMENT
In thousand of Estonian kroons (EEK)
--------------------------------------------------------------------------------
| | Notes | 9 months | 9 months | 2006 |
| | | to | to | |
| | | 30 | 30 | |
| | | September | September | |
| | | 2007 | 2006 | |
--------------------------------------------------------------------------------
| Net sales | 2.1 | 4,691,385 | 4,213,488 | 5,767,734 |
| | (b), | | | |
| | 2.3 | | | |
--------------------------------------------------------------------------------
| Cost of production | 2.1 (b) | (2,616,50 | (2,333,650 | (3,260,113 |
| | | 2) | ) | ) |
--------------------------------------------------------------------------------
| Gross profit | | 2,074,883 | 1,879,838 | 2,507,621 |
--------------------------------------------------------------------------------
| Sales, administrative, and | 2.1 (b) | (690,307) | (666,335) | (908,854) |
| research & development | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other operating revenues | 2.1 (b) | 14,832 | 57,563 | 53,011 |
--------------------------------------------------------------------------------
| Other operating expenses | 2.1 (b) | (3,660) | (7,304) | (5,405) |
--------------------------------------------------------------------------------
| Operating profit | | 1,395,748 | 1,263,762 | 1,646,373 |
--------------------------------------------------------------------------------
| Finance income | | 36,141 | 31,617 | 42,768 |
--------------------------------------------------------------------------------
| Finance costs | 2.1 (b) | (1,818) | (1,548) | (1,950) |
--------------------------------------------------------------------------------
| Finance income, net | | 34,323 | 30,069 | 40,818 |
--------------------------------------------------------------------------------
| Net income / (expenses) from | 2.1 (b) | (2,427) | 1,617 | 193 |
| associated companies | | | | |
--------------------------------------------------------------------------------
| Profit before tax | | 1,427,644 | 1,295,448 | 1,687,384 |
--------------------------------------------------------------------------------
| Income tax on dividends | | (370,897) | (373,377) | (373,377) |
--------------------------------------------------------------------------------
| Net profit for the period | 2.1 (b) | 1,056,747 | 922,071 | 1,314,007 |
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | 2.1 (b) | 1,051,954 | 920,005 | 1,309,443 |
--------------------------------------------------------------------------------
| Minority interest | 2.1 (b) | 4,793 | 2,066 | 4,564 |
--------------------------------------------------------------------------------
| | | 1,056,747 | 922,071 | 1,314,007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share for | 7 (d) | | | |
| profit attributable to the | | | | |
| equity holders of the parent | | | | |
| during the reporting period | | | | |
| (expressed in EEK) | | | | |
--------------------------------------------------------------------------------
| Basic earnings per share | | 7.63 | 6.67 | 9.49 |
--------------------------------------------------------------------------------
| Diluted earnings per share | | 7.63 | 6.67 | 9.49 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | 2.1 (b) | 1,759,876 | 1,688,538 | 2,194,709 |
--------------------------------------------------------------------------------
| Depreciation, amortization | 2.1 (b) | (364,128) | (424,776) | (548,336) |
| and write-downs | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
In thousand of Estonian kroons (EEK)
--------------------------------------------------------------------------------
| | Notes | 30 | 31 December | 30 |
| | | September | 2006 | September |
| | | 2007 | | 2006 |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Property, plant and | 3 | 2,210,598 | 2,044,595 | 1,966,909 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Intangible fixed assets | 3 | 193,783 | 214,046 | 198,094 |
--------------------------------------------------------------------------------
| Investments in associates | 2.2, 5 | 14,820 | 17,247 | 17,300 |
--------------------------------------------------------------------------------
| Other financial fixed | | 116,978 | 119,139 | 55,526 |
| assets | | | | |
--------------------------------------------------------------------------------
| Total non-current assets | 2.2 | 2,536,179 | 2,395,027 | 2,237,829 |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | 6 | 175,458 | 142,692 | 122,232 |
--------------------------------------------------------------------------------
| Trade and other | | 1,014,983 | 884,212 | 898,036 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Short-term investments | | 413,411 | 1,064,859 | 806,802 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 366,747 | 324,405 | 235,664 |
--------------------------------------------------------------------------------
| Total | | 1,970,599 | 2,416,168 | 2,062,734 |
--------------------------------------------------------------------------------
| Assets classified as | | 1,531 | 771 | 13,443 |
| held-for-sale | | | | |
--------------------------------------------------------------------------------
| Total current assets | 2.2 | 1,972,130 | 2,416,939 | 2,076,177 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 2.2 | 4,508,309 | 4,811,966 | 4,314,006 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Capital and reserves | 7 | | | |
| attributable to equity | | | | |
| holders of the parent | | | | |
--------------------------------------------------------------------------------
| Share capital | | 1,379,545 | 1,379,545 | 1 379 545 |
--------------------------------------------------------------------------------
| Share premium | | 356,018 | 356,018 | 356 018 |
--------------------------------------------------------------------------------
| Statutory legal reserve | | 137,955 | 137,955 | 137 955 |
--------------------------------------------------------------------------------
| Retained earnings | | 924,263 | 925,388 | 925 388 |
--------------------------------------------------------------------------------
| Net profit for the period | | 1,051,954 | 1,309,443 | 920 005 |
--------------------------------------------------------------------------------
| Total capital and reserves | 2.2 | 3,849,735 | 4,108,349 | 3 718 911 |
| attributable to equity | | | | |
| holders of the parent | | | | |
--------------------------------------------------------------------------------
| Minority interest | 2.2 | 9,823 | 5,030 | 2 532 |
--------------------------------------------------------------------------------
| Total equity | | 3,859,558 | 4,113,379 | 3 721 443 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Interest bearing loans and | 8 | 1,656 | 3,124 | 3,812 |
| borrowings | | | | |
--------------------------------------------------------------------------------
| Retirement benefit | 9 | 3,510 | 7,912 | 6,367 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Provisions | 10 | 20,502 | 22,124 | - |
--------------------------------------------------------------------------------
| Non-interest bearing | | 2 | 5,152 | 5,157 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total non-current | 2.2 | 25,670 | 38,312 | 15,336 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Trade and other payables | | 613,913 | 651,365 | 569,435 |
--------------------------------------------------------------------------------
| Interest bearing loans and | 8 | 2,286 | 2,742 | 2,815 |
| borrowings | | | | |
--------------------------------------------------------------------------------
| Retirement benefit | | 4,731 | 865 | 865 |
| obligations | | | | |
--------------------------------------------------------------------------------
| Provisions | 10 | 2,151 | 5,303 | 4,112 |
--------------------------------------------------------------------------------
| Total current liabilities | 2.2 | 623,081 | 660,275 | 577,227 |
--------------------------------------------------------------------------------
| Total liabilities | | 648,751 | 698,587 | 592,563 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 2.2 | 4,508,309 | 4,811,966 | 4,314,006 |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
In thousand of Estonian kroons (EEK)
--------------------------------------------------------------------------------
| | Notes | 9 months to | 9 months to |
| | | 30 September | 30 September |
| | | 2007 | 2006 |
--------------------------------------------------------------------------------
| Operating activities | | | |
--------------------------------------------------------------------------------
| Net profit for the period | | 1,056,747 | 922,071 |
--------------------------------------------------------------------------------
| Adjustments for: | | | |
--------------------------------------------------------------------------------
| Depreciation, amortisation and | 3 | 364,128 | 424,776 |
| impairment of fixed and intangible | | | |
| assets | | | |
--------------------------------------------------------------------------------
| (Profit) / loss from sales and | | (15,081) | (44,472) |
| discards of fixed assets | | | |
--------------------------------------------------------------------------------
| Net (income) / expenses from | | 2,427 | (1,617) |
| associated companies | | | |
--------------------------------------------------------------------------------
| Provisions | | (5,132) | (3,709) |
--------------------------------------------------------------------------------
| Financial items | | 9,152 | 15,452 |
--------------------------------------------------------------------------------
| Income tax on dividends | | - | 4 |
--------------------------------------------------------------------------------
| Miscellaneous non-cash items | | 9,096 | 124 |
--------------------------------------------------------------------------------
| Cash flow before change in working | | 1,421,337 | 1,312,629 |
| capital | | | |
--------------------------------------------------------------------------------
| Change in current receivables | | (110,989) | (13,118) |
--------------------------------------------------------------------------------
| Change in inventories | | (32,806) | (35,322) |
--------------------------------------------------------------------------------
| Change in current liabilities | | (45,129) | (26,947) |
--------------------------------------------------------------------------------
| Change in working capital | | (188,924) | (75,387) |
--------------------------------------------------------------------------------
| Cash flow from operating activities | 2.2 | 1,232,413 | 1,237,242 |
--------------------------------------------------------------------------------
| Investing activities | | | |
--------------------------------------------------------------------------------
| Intangible and tangible fixed assets | 3 | (511,379) | (550,755) |
| acquired | | | |
--------------------------------------------------------------------------------
| Intangible and tangible fixed assets | | 6,245 | 48,930 |
| divested | | | |
--------------------------------------------------------------------------------
| Shares, participations and | | - | (91,699) |
| operations acquired | | | |
--------------------------------------------------------------------------------
| Net change in interest-receivables | | 680,220 | 469,474 |
| short maturities | | | |
--------------------------------------------------------------------------------
| Net cash changes of other long-term | | (23,382) | (56,098) |
| receivables | | | |
--------------------------------------------------------------------------------
| Cash flow from investing activities | 2.2 | 151,704 | (180,148) |
--------------------------------------------------------------------------------
| Cash flow before financing | | 1,384,117 | 1,057,094 |
| activities | | | |
--------------------------------------------------------------------------------
| Financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from non-convertible debts | 8 | 191 | 100 |
--------------------------------------------------------------------------------
| Repayment of finance lease | 8 | (1,353) | (1,552) |
| liabilities | | | |
--------------------------------------------------------------------------------
| Dividends paid | 7 (d) | (1,310,568) | (1,241,591) |
--------------------------------------------------------------------------------
| Cash flow used in financing | 2.2 | (1,311,730) | (1,243,043) |
| activities | | | |
--------------------------------------------------------------------------------
| Cash flow for the year | 2.2 | 72,387 | (185,949) |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 2.2 | 324,405 | 430,393 |
| beginning of year | | | |
--------------------------------------------------------------------------------
| Cash flow for the year | 2.2 | 72,387 | (185,949) |
--------------------------------------------------------------------------------
| Effect of foreign exchange rate | 2.2 | (200) | (592) |
| changes | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of | 2.2 | 396,592 | 243,852 |
| period | | | |
--------------------------------------------------------------------------------
AS Eesti Telekom consolidated III quarter and 9 months 2007 interim report EEK
| Source: Eesti Telekom
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