The net sales of Viisnurk AS for nine months of 2003 were 279.7 mil. kroons (17.9 mil. euros) and the net loss 5.2 mil. kroons (0.3 mil. euros). In the same period of the last year, the net sales totalled 258.2 mil. kroons (16.5 mil. euros) and the net profit 0.6 mil. kroons (0.04 mil. euros).

In the 3rd quarter, the company made a loss of 8.4 mil. kroons (0.5 mil. euros) at the net sales of 91.1 mil. kroons (5.3 mil. euros). The net sales of Viisnurk for the 3rd quarter of 2002 totalled 82.4 mil. kroons (5.3 mil. euros) and the net loss 3.2 mil. kroons (0.2 mil. euros).

The earnings of Viisnurk before interest, taxes, depreciation and amortisation (EBITDA) amounted to 0.2 mil. kroons (0.02 mil. euros; the EBITDA margin 8%) in the 3rd quarter, and 21.5 mil. kroons (1.4 mil. euros) in nine months of the year.

Divisional Review

The Furniture Division of Viisnurk AS, which incorporates the sawmill, the Wood Panel and Furniture Factories, made a loss of 4.3 mil. kroons (0.27 mil. euros) at the net sales of 167.1 mil. kroons (10.7 mil. euros). As compared to the same period of the previous year, the net sales of the Furniture Division increased by 9%. In the 3rd quarter, the Furniture Division made a loss of 7.1 mil. kroons (0.45 mil. euros) at the net sales of 48.8 mil. kroons (3.1 mil. euros). The results of nine months were divided between various subdivisions of the Furniture Division as follows:
in the period, the sawmill made a loss of 0.54 mil. kroons (0.03 mil. euros) at the net sales of 14.2 mil. kroons (0.91 mil. euros), whereas the net sales for 2002 were 17.9 mil. kroons (1.1 mil. euros) and the loss 1.4 mil. kroons (0.09 mil euros); the Wood Panel Factory incurred a loss of 12.6 mil. kroons (0.81 mil. euros) at the net sales of 34.8 mil. kroons (2.2 mil. euros) (cf. a loss of 10.8 mil. kroons (0.69 mil. euros) at the net sales of 15.1 mil. kroons (0.97 mil. euros) in 2002); and the Furniture Factory made a loss of 5.4 mil. kroons (0.34 mil. euros) at the net sales of 118.0 mil. kroons (7.6 mil. euros) (the net sales amounted to 118.6 mil. kroons (7.6 mil. euros) and the profit 11.0 mil. kroons (0.7 mil. euros) in the same period of the last year). The outcomes of the sawmill for the 3rd quarter were affected by the long collective vacation in summer and the shortage of raw material as unfavourable weather conditions resulted in postponed beginning of the felling period. The Wood Panel Factory also exposed more modest economic results for the 3rd quarter than planned. The setbacks in the European furniture market in summer adversely affected the prospects of getting orders and the output of the Wood Panel Factory in the 3rd quarter.  However, the Wood Panel Factory has found some new big customers and continues to work in three shifts on the brink of maximum capacity. There were also significant changes in the customer base of the Furniture Factory in the 3rd quarter. Several product lines were prepared for launching for new customers. For example, the co-operation with a large German retail chain, Porta, was commenced. But the decline in margins induced by the changes in customer base and introduction of new products resulted in significant additional costs in the 3rd quarter. Compensating the declining trend of operating margins by aggressive increase in sales volumes is the main goal of the furniture business of Viisnurk.

The economic results of the Sports Goods Division for the 3rd quarter expose a loss of 4.3 mil. kroons (0.27 mil. euros) at the net sales of 43.6 mil. kroons (2.8 mil. euros). Compared to the last year, the sales of the division grew by 2.5%, but the loss increased by 2.3 mil. kroons (0.15 mil. euros). In the 3rd quarter, the division made a loss of 0.49 mil. kroons (0.03 mil. euros) at the net sales of 21.4 mil. kroons (1.4 mil. euros). In the same period of the last year, the net sales totalled 21.9 mil. kroons (1.4 mil. euros) and the loss 0.6 mil. kroons (0.04 mil. euros). The Sports Goods Division is raising both sales and production volumes owing to the increased market demand. On the other hand, the ongoing technological instability has kept the quality expenses high and given rise to the stressful situation in fulfilling customer orders. The Sports Goods Division has resumed its co-operation with one of its major customers, Atomic; Rossignol and Exel continue to be the customers of utmost importance for production service. Owing to successful customer relations, it is now possible to plan significant production volumes for the 1st and 2nd quarter of 2004, which will even out the division’s production cycle of the year and the seasonal nature of its results. Furthermore, the company has launched a new, order-based production planning system and various product and technology development projects to ensure realisation of significantly rising production volumes for 2004 and rapidly cut back quality-related expenses.

The Building Materials Division earned a profit of 15.9 mil. kroons (1.0 mil. euros) at the net sales of 68.3 mil. kroons (4.4 mil. euros) in nine months. The net sales escalated by 9% and the profit by 12% compared to the previous financial year. In the 3rd quarter, the division gained a profit of 3.8 mil. kroons (0.24 mil. euros) at the net sales of 20.7 mil. kroons (1.3 mil. euros). The increase in the net sales and profitability of the Building Materials Division for 2003 has been achieved due to the changes in its customer base and modification of the proportion of products. The growth in construction activities that began in Estonia last year has continued, thus the role of the Estonian market of higher cost- benefit ratio has advanced even further. A certain rise in demand can also be noticed in foreign markets. There have been some favourable changes with regard to more advanced boards (ISOTEX) as the division has managed to win a bigger market share from competing products both in Estonia and Finland mainly owing to its efficient marketing activities and product development. The sales of ISOTEX wall panels with a renewed range of colours have grown both in the domestic and foreign markets.


INCOME STATEMENT                                                           
thousand kroons                                                            
                                   3nd quarter  3nd quarter    9 months     9 months
                                         2003         2002             2003           2002
                                                                           
RETURN ON SALES                91,108       82,434     279,679    258,222
                                                                           
Cost of production sold        (90,189)     (77,784)   (255,052)  (229,658)
                                                                           
Gross profit                              919        4,650      24,627        28,564
                                                                           
Marketing expenses               (4,052)      (3,763)    (15,762)     (13,397)
                                                                           
General administrative            (2,768)      (2,004)     (9,012)      (6,997)
expenses
                                                                           
Other income                         2,763          938         5,921        1,451
                                                                             
Other expenses                     (3,240)        (621)     (4,619)      (1,609)
                                                                           
Operating profit                     (6,378)        (800)       1,155        8,012
                                                                           
Financial income and               (2,065)      (2,359)     (6,387)     (7,427)
financial expenses
                                                                           
NET PROFIT FOR THE PERIOD (8,443)      (3,159)     (5,232)          585
                                                                           
Basic earnings per share            (1.88)       (0.70)      (1.16)         0.13
Diluted earnings per share         (1.88)       (0.70)      (1.16)         0.13


INCOME STATEMENT                                                           
thousand euros                                                             
                                    3nd quarter  3nd quarter  9 months  9 months
                                           2003         2002        2003         2002
                                                                           
RETURN ON SALES                5,823        5,269      17,875      16,503
                                                                           
Cost of production sold        (5,764)      (4,972)    (16,301)   (14,677)
                                                                           
Gross profit                               59          297      1,574        1,826
                                                                           
Marketing expenses                (259)        (240)    (1,007)        (857)
                                                                           
General administrative             (177)        (128)      (576)        (447)
expenses
                                                                           
Other income                          177           60          378            93
                                                                           
Other expenses                     (208)         (40)       (295)        (103)
                                                                           
Operating profit                     (408)         (51)           74          512
                                                                           
Financial income and               (132)        (151)       (408)        (475)
financial expenses
                                                                           
NET PROFIT FOR THE PERIOD  (540)        (202)       (334)           37
                                                                           
Basic earnings per share          (0.12)       (0.04)      (0.07)         0.01
Diluted earnings per share       (0.12)       (0.04)      (0.07)         0.01


BALANCE SHEET                                                   
                                     Thou. Kr.   Thou. Kr.    Thou. eur   Thou. eur
                                    30.9.2003  31.12.2002    30.9.2003  31.12.2002
                                                                
Cash and bank                        674       1,764            43          113
Customer receivables           50,270      54,143       3,213      3,460
Other receivables                  1,928       1,916          123         122
Prepayments                        7,787       4,447          498         284
Inventories                        71,855       58,602       4,592       3,746
Total current assets           132,514    120,872       8,469       7,725
                                                                
Long-term financial                1,476       1,436           94           92
investments
Real estate investments         2,558       2,792          163         178
Tangible fixed assets          200,134   219,008       12,791    13,998
Intangible fixed assets              587         785             38           50
Total fixed assets              204,755    224,021      13,086     14,318
                                                                
TOTAL ASSETS                337,269    344,893      21,555     22,043
                                                                
                                                                
Debt obligations                 21,545      38,773        1,377       2,478
Customer prepayments              76         620               5           40
Supplier payables                 31,487     30,978        2,012      1,980
Taxes payable                      6,557       5,944          419          380
Accrued expenses              16,784      12,267        1,072         784
Short-term provisions                           1,493                           95
Total current liabilities          76,449     90,075        4,885       5,757
                                                                
Non-current debt oblig.     123,008    111,773        7,862       7,144
Total non-current liab.       123,008    111,773        7,862       7,144
                                                                
Total liabilities                   199,457    201,848      12,747      12,901

Share capital (nom. value)   44,991      44,991        2,875       2,875
Issue premium                   11,332      11,332           724         724
Mandatory capital reserve     4,499         4,499          288          288
Retained profits                 82,223     101,855        5,255       6,510
Net profit for the year        (5,232)    (19,632)        (334)     (1,255)
Total equity                     137,812     143,045        8,808       9,142
                                                                            
TOTAL LIABILIT. AND       337,269     344,893       21,555      22,043
EQUITY



Andrus Aljas
Business controller
+372 447 8355