Consolidated net sales of third quarter 2011 was 4.2 mil. euros representing a 19% increase on the third quarter compared to third quarter 2010. The comparable business units of the company (Pärnu softboard factory, Pärnu furniture factory and retail chain Skano) exhibited the total increase of business revenue of 122%, increasing from 172 thousand euros in 2010 to 381 thousand euros in the third quarter of 2011. Nevertheless, the single start-up costs of recently acquired Püssi softboard factory brought a business loss to the unit in the amount of 364 thousand euros.

According to IFRS interim report must comply the same accounting principles as described in last published annual report. On 25. May 2011 AS Viisnurk acquired bankruptcy assets as Püssi softboard factory, main activity production of softboards, and paid for the business entity 4 mil. euros. The group applied the acquisition method to account for business combinations and compiled acquisition analysis. According to that, identifiable assets acquired (no liabilities were transferred) in a business combination were measured initially at their fair values at the amount 6.64 mil. euros. The fair value of land and buildings is 0.72 mil. euros and fair value of machinery and equipment is 5.92 mil. euros. During the process of valuation, the help of external experts were used – at bigger subjects the production line was valued by Põyry Management Consulting Oy and real estate by Uus Maa real estate office. Due to the sales of bankruptcy assets at the situation, where the potential buyers had difficulties to find financing, Viisnurk had opportunity to aquire the assets cheaper than the fair value. The consideration transferred, 4.19 mil. euros, was less than the fair value of the net assets of the unit – 6.64 mil. euros,  and the difference was recognized directly in the income statement in the amount of 2.46 mil. euros. The total land plot area is 16.23 ha and buildings area 7684 m2.

Due to the given circumstances the Concern’s consolidated net profit of the third quarter was 2.4 mil. euros. The management wishes to emphasize once again that the given result has been considerably influenced by single revenues and expenditures and therefore has no significant meaning as a reference base.

By business units, Pärnu furniture factory exhibited 23% increase of revenue in the third quarter and extended up to 1.6 mil. euros. Compared to the third quarter of the previous year, the profit increased twice and reached 129 thousand euros.

Turnover in Skano retail chain in the third quarter increased 14% compared to the previous year and made 448 thousand euros. As a result, the net loss of Skano in the third quarter was 1 thousand euros compared to the loss of 92 thousand euros in 2010. The results of Skano are also considerably influenced by currency movements which brought exchange gains in the amount of 45 thousand euros in the third quarter of this year compared to the exchange losses of the previous year in the amount of 80 thousand euros. Although as an independent unit Skano is still far from the objectives established by the management then from the standpoint of the enterprise it has yet brought positive receipts to the group throughout the crisis as the furniture factory sells its production to Skano upon market conditions and profitably. With the past 9 months of 2011 the sales of the furniture factory to Skano have made up the total of 663 thousand euros by bringing gross profit to the furniture factory and sales margin for covering the general expenses of the division to a considerably larger extent compared to the net loss of Skano division in the same period. The results of Skano retail chain have remained below the expectations in connection with the extremely low demand for durable goods caused by the economic environment in Ukraine and the Baltic countries.

The turnover of Pärnu softboard factory and interior finishing panels’ line decreased 2% compared to the third quarter of the previous year and made up 1.9 million euros. Decrease in turnover was caused by the selling out of the stock and by a demand which was bigger than the production, which last year was covered from the stock. Notwithstanding the small decrease in turnover, the profit of Pärnu factory increased 25% and was 253 thousand euros. In connection with the start-up of Püssi factory, the management expects approximately 15% increase in the maximum production capacity of Pärnu factory starting from the next year. This can be achieved on the account of a shorter standstill which so far was spent on the adjustment of machinery for different products and the more favourable product portfolio for the factory (transfer of floor panels’ production to Püssi factory).

Püssi softboard factory has started the first test production in the beginning of August. Generally the launching has proceeded according to the planned schedule but during the period of launching several standstills have occurred related to adjusting and repair of equipment, which could be considered natural. The company has considerably adjusted the parameters of the Püssi production line as compared to the production before the purchase in order to allow more efficient production process and lower risks. By October the cost price of the product had decreased as compared to August by 48% and in the last week of October the factory achieved the capacity that enables us to produce ca 4,500 m3 a month and the total sales of which would be ca 500 thousand Euros. At the same time the launching of the factory on full capacity is continuing step by step and based on the purchase orders received. Currently ca 70% of the full capacity of the factory is used and the factory works in three shifts. Taking into consideration the general cooling down of the economic environment the management prefers to keep the stock low and maintain the liquidity reserve in current situation. At the same time the company concentrates more than ever on dispersing sales volumes outside Europe (primarily in Asia), which in longer perspective would offer better protection against regional economic crises and guarantee higher margins. Presuming that the economic environment in target markets will not sharply deteriorate, the management shall expect the Püssi softboard factory to achieve its full capacity during the second quarter in 2012. With the support of additional investments it is also possible to increase the production capacity in future.

th. EUR	9 m 2011	9 m 2010	9 m 2009
Income statement
Revenue	12,513	9,875	9,693
EBITDA	3,334	1,017	364
EBITDA margin	26.6%	10.3%	3.8%
Operating profit	2,893	644	16
Operating margin	23.1%	6.5%	0.2%
Net profit	2,775	562	(134)
Net margin	22.2%	5.7%	(1.4%)
Balance sheet (30.09)
Total assets	16,538	9,104	9,122
Return on assets	16.8%	6.2%	(1.5%)
Equity	7,921	5,129	4,447
Return on equity	35.0%	11.0%	(3.0%)
Debt-to-equity ratio	52.1%	43.7%	51.2%
Share (30.09)
Closing price	1.50	1.15	0.93
Earnings per share	0.62	0.12	(0.03)
Price-earnings ratio	2.42	9.21	-
Book value of a share	1.76	1.14	0.99
Marke t t o book ratio	0.85	1.01	0.94
Market capitalization	6,749	5,174	4,184

EBITDA = Earnings before interest, taxes, deprecation and amortisation

EBITDA margin = EBITDA / Revenue

Operating margin = Operating profit / Revenue

Net margin = Net profit / Revenue

Return on assets = Net profit / Total assets

Return on equity = Net profit / Equity

Debt-to-equity ratio = Liabilities / Total assets

Earnings per share = Net profit / Total shares

Price-earnings ratio = Closing price / Earnings per share

Book value of a share = Equity / Total shares

Marke t t o book ratio = Closing price / Book value of a share

Market capitalization = Closing price * Total shares

	th EUR		sales growth	% of net sales
	Q3 2011	Q3 2010	%	Q3 2011	Q3 2010
Building Materials Division	2.309	2.017	14.5%	55.3%	57.3%
Furniture Factory	1.626	1.317	23.5%	38.9%	37.5%
Retail sales	448	392	14.3%	10.7%	11.2%
Elimination	-206	-211		(4.9)%	(6.0)%
TOTAL	4.177	3.515	18.8%	100.0%	100.0%

After the aquisition of Püssi softboard factory the main activity will change to manufacturing of building materials.

	th EUR		% of net sales
	Q3 2011	Q3 2010	Q3 2011	Q3 2010
Finland	1,518	1,371	36.3%	39.0%
Russia	1,158	637	27.7%	18.1%
Estonia	734	759	17.6%	21.6%
Great Britain	173	22	4.1%	0.6%
Ukraine	149	155	3.6%	4.4%
Sweden	103	100	2.5%	2.8%
Lithuania	101	72	2.4%	2.0%
Latvia	97	122	2.3%	3.5%
Germany	31	8	0.7%	0.2%
Israel	24	21	0.6%	0.6%
Denmark	23	12	0.6%	0.3%
Kazakhstan	9	69	0.2%	2.0%
Other countries	57	167	1.4%	4.9%
Total	4,177	3,515	100.0%	100.0%

Regarding the markets, turnover has increased into Russia, Finland and Great Britain. The percentage of turnover has decreased most in Estonia, Sweden, Ukraine and Latvia.

th. EUR	Q3 2011	Q3 2010
Building Materials Division	2,357	196
Furniture Factory	129	67
Skano	(1)	(92)
Elimination	(19)	30
TOTAL	2,466	201
Net financial costs	(64)	(29)
NET PROFIT	2,402	172

The net sales of the Building Materials Division in third quarter amounted to 2.3 mil. euros and profi t t o 2,4 mil. euros. In the same period of the last year, the turnover of the division totaled to 2.0 mil. euros and the profit 196 thousand euros. As compared to the previous year the turnover of the division has increased by 236 thousand euros and the profit has increased by 2,2 mil. euros.         

Net sales by geographical segments

	th EUR		% of net sales
	Q3 2011	Q3 2010	Q3 2011	Q3 2010
Finland	848	788	36.7%	39.1%
Estonia	537	619	23.3%	30.7%
Russia	426	213	18.4%	10.6%
Great Britain	173	54	7.5%	2.7%
Sweden	103	100	4.5%	5.0%
Latvia	43	64	1.9%	3.2%
Germany	31	8	1.3%	0.4%
Ukraine	26	10	1.1%	0.5%
Denamrk	23	12	1.0%	0.6%
India	0	24	0.0%	1.2%
Other countries	99	124	4.3%	6.2%
Total	2,309	2,016	100.0%	100.0%

Regarding the markets, turnover has increased into Finland, Russia and Great Britain and decreased into Estonia and Latvia.

	Net sales		Profit
th EUR	Q3 2011	Q3 2010	Q3 2011	Q3 2010
Pärnu softboard factory	1,359	1,464	198	140
Pärnu interior boards factory	551	484	55	61
Püssi softboard factory	323	-	2,091	-
Not allocated	76	68	13	(5)
Total	2,309	2,016	2,357	196

Püssi softboard factory started the firs t t est production in the beginning of August. Generally the launching has proceeded according to the planned schedule but during the period of launching several standstills have occurred related to adjusting and repair of equipment. By now the problems have mostly been solved. The production capacity of the Püssi softboard factory was 1,200 m3 in August, 2,600 m3 in September and 3,150 m3 in October. In the last week of October the factory achieved a level where it is possible to produce around 4,500 m3 and the potential total sales of which would be about 500 thousand euros per month. The production cost of the product has decreased by 48% as compared to August.

In future it is planned to improve the production line and increase the speed of the line and achieve a monthly production capacity of 5,500-6,000 m3. The project related to the increase of production capacity can be processed, if the existing capacity is in use and we see increasing demand. Currently our construction material customers have given signals tha t t heir orders could decrease. Therefore we have decided that during the fourth quarter of 2011 the Püssi factory is going to work in three shifts and use around 70% of its capacity. The above production capacity is currently covered with orders and there is no intention to create large stocks.

AS Viisnurk retail business is operated by a private limited company OÜ Skano and its subsidiaries in Latvia, Lithuania and Ukraine. Skano has totally 11 stores – two in Tallinn, Pärnu, Riga, Vilnius, two in Kiev, Donetsk, Kharkiv and two in Dnipropetrovs’k at the end of the third quarter. The stores in Kaunas and Kiev were closed on third quarter. The reason for closing in Kaunas was continuously negative result and in Kiev significant rise of rent price, which could cause negative result.

	th EUR		% of net sales		Number of stores
	Q3 2011	Q3 2010	Q3 2011	Q3 2010	30.9.2011	30.9.2010
Estonia	179	120	40.0%	30.6%	3	2
Latvia	54	58	12.1%	14.8%	1	1
Lithuania	92	69	20.5%	17.6%	1	2
Ukraine	123	145	27.5%	37.0%	6	7
TOTAL	448	392	100.0%	100.0%	11	12

The Furniture Factory’s sales in the third quarter in the company’s basic target markets in Russia and Finland have increased. Our clients do not estimate increase of demand in near future. Rather, a decrease in the consumers’ certainty can be expected in the conditions of the European debt crisis and therefore also a decrease in the sales turnover as a result.

The net sales of the Furniture Factory in third quarter amounted to 1.6 mil. euros and profit to 129 thousand euros. In the same period of the last year, the turnover of the division totalled 1.3 mil. euros and the profit 67 thousand euros. As compared to the previous year the turnover of the division has increased by 309 thousand euros and the profit has increased by 62 thousand euros.

Furniture factory sales by countries

	th EUR		% of net sales
	Q3 2011	Q3 2010	Q3 2011	Q3 2010
Russia	732	424	45.0%	32.2%
Finland	670	583	41.2%	44.3%
Estonia	18	20	1.1%	1.5%
Kazakhstan	0	69	0.0%	5.2%
Other countries	0	10	0.0%	0.8%
Skano	206	211	12.7%	16.0%
TOTAL	1,626	1,317	100.0%	100.0%

As the outlook of Europe’s economy is unpredictable, our view of the future is cautious. We believe that in connection with cooling of economics, demand may decrease in the nearest future; we contribute to maintaining liquidity and not creating an excess stock reserve. We will continue production only proceeding from orders and according to the forecasts of our reliable partners. If the production volume should decrease there is a danger that the enterprise’s profitability will decrease as well.

Building Materials Division. On the main production line the production is performed in four shifts round the clock in Pärnu softboard factory. If the orders should decrease it is possible that that three shifts instead of four shall be applied on the production line in the fourth quarter. In Isotex line are used one or two shifts accordingly the demand of clients. Püssi softboard factory shall operate in three shifts in the fourth quarter and according to the preliminary evaluation this production is covered by orders. At the same time management’s priority is raising the effectiveness and profitability primarily in Püssi softboard factory.

In connection with the risk of decreasing sales volumes in Scandinavia we have continued the search of customers from other areas, especially the Asian countries as well as Russia. Despite the fact that Pärnu softboard factory worked with full capacity we were not able to satisfy the demand for softboards in the nearest countries in the second quarter of 2011 and therefore could not offer goods to Asia. Presently we are continuing active sales work towards Asia.

Skano. We do not expect significant growth of retail sale in the fourth quarter of 2011. Therefore we shall continue to save the costs and do not plan any extension of the retail chain.

Furniture Factory. In the third quarter of 2011 we expect similar turnover as in the preceding quarters in the furniture factory, but the volume will still remain lower than the production capabilities would allow. Therefore the workload is continuously low in the furniture factory. Agreements have been concluded with the employees for application of undertime until 31.03.2012. From April 1, 2011 the business hours were extended, however for most of the employees the weekly number of business hours will remain below 40.

Consolidated statement of financial position

th EUR	30.9.2011	31.12.2010	30.9.2010
Cash and bank	160	1,011	322
Receivables and prepayments	2,261	1,198	1,592
Inventories	3,100	2,484	2,783
Total current assets	5,521	4,693	4,697
Investment property	185	185	185
Tangible fixed assets	10,815	4,217	4,201
Intangible fixed assets	17	20	21
Total fixed assets	11,017	4,422	4,407
TOTAL ASSETS	16,538	9,115	9,104
Debt obligations	659	1,383	177
Payables and prepayments	2,692	1,462	1,550
Short-term provisions	1	8	2
Total current liabilities	3,352	2,853	1,729
Non-current debt obligations	5,067	733	2,040
Non-current provisions	198	198	206
Total non-current liabilities	5,265	931	2,246
Total liabilities	8,617	3,784	3,975
Share capital at nominal value	2,699	2,875	2,875
Issue premium	5,698	364	364
Statutory capital reserve	288	288	288
Currency translation	7	16	23
Retained profits	1,788	1,017	1,017
Net profit(loss) for the year	2,775	771	562
Total equity	7,921	5,331	5,129
TOTAL LIABILITIES AND EQUITY	16,538	9,115	9,104

Consolidated statement of comprehensive income

th EUR	3rd q 2011	3rd q 2010	9 m 2011	9 m 2010
RETURN ON SALES	4,176	3,515	12,513	9,875
Cost of production sold	(3,573)	(2,714)	(10,022)	(7,507)
Gross profit	603	801	2,491	2,368
Marketing expenses	(516)	(520)	(1,700)	(1,461)
General administrative expenses	(102)	(37)	(349)	(260)
Other income*	2,500	42	2,562	120
Other expenses	(19)	(85)	(111)	(123)
Operating profit	2,466	201	2,893	644
Financial income and financial expenses	(64)	(29)	(114)	(82)
Profit(loss) before taxes	2,402	172	2,779	562
Prepaid income tax	0	0	(4)	0
NET PROFIT(LOSS) FOR THE PERIOD	2,402	172	2,775	562
Currency translation differences	(21)	23	(9)	(3)
TOTAL COMPREHENSIVE INCOME	2,381	195	2,766	559
Basic earnings per share	0.53	0.04	0.62	0.12
Diluted earnings per share	0.53	0.04	0.62	0.12

*The other income includes the gain from a bargain purchase 2,455 th. EUR