AS EESTI TELEKOM

ANNOUNCEMENT

01.04.99 

 

COMMENTARY ON ESTONIAN TELEPHONE COMPANY FINANCIAL RESULTS OF 

1998

 

Net sales and net profit of Estonian Telephone Company Group in 

1998 were 1 968 million Estonian kroons and 263 million kroons 

correspondingly. Net sales of 1997 was 1 516 million kroons and 

net profit 179 million kroons.

 

By the end of 1998, total assets of Estonian Telephone Company 

Ltd were 2 661 million kroons which makes annual growth 242 

million kroons.

 

Estonian Telephone Company Group consists of Estonian Telephone 

Company Ltd and a 60% owned affiliated company Teabeliin Ltd (a 

telephone information mediator company). In addition to the 

subsidiary companies, the Group also has a 30% owned associated 

company EsData Ltd (a data communication company).

 

Net sales of Teabeliin Ltd in 1998 totalled 30 million kroons 

(19 million kroons in 1997), operating revenue was 30 million 

kroons (19 million kroons in 1997) and net profit was 3 million 

kroons (1 million kroons in 1997).

 

Net sales of EsData Ltd in 1998 totalled 13 million kroons (11 

million kroons in 1997), operating revenue was 14 million 

kroons (11 million kroons in 1997) and net profit was 2 million 

kroons (1 million kroons in 1997).

 

Consolidated income statement and balance sheet of 1997 and 

1998 were prepared in accordance with principles of the 

International Accounting Standards (IAS) and in accordance with 

effective legal acts regulating accounting in the Republic of 

Estonia. Financial statements prepared in accordance with IAS 

differ from the statements prepared in accordance with Estonian 

Accounting Standards (EAS). Differences are caused by following 

reasons: first, EAS-statements are fully consolidated under the 

equity method, in case of IAS-statements full consolidation 

principle was followed when consolidating affiliated companies; 

second, in EAS-statements, transactions with other 

telecommunication operators are presented using netting 

principle, in IAS-statements the transactions are presented 

using gross-principle.

 

All previous statements of Estonian Telephone Company have been 

prepared in accordance with EAS. By EAS, net sales of 1998 and 

1997 were 1 564 million kroons and 1 219 million kroons, and 

net sales 254 million kroons and 217 million kroons 

correspondingly.

 

Profit before taxes of Estonian Telephone Company Group in 1998 

was 260 million kroons, which exceeds 1997  number (228 million 

kroons) by 14%. Increase in profit before taxes has been 

affected by growth of operating revenue from 1 557 million 

kroons to 1 994 million kroons or by 28%, and by growth of 

operating expenses from  1260 million kroons to 1 664 million 

kroons or by 31%.

 

Increase in operating revenue was caused by growing net sales. 

Net sales of 1998 consisted of the following main types of 

income: call revenue 1 362 million kroons (1 030 million kroons 

in 1997), connection fees and monthly fees 358 million kroons 

(293 million kroons in 1997), line rental revenue 105 million 

kroons (102 million kroons in 1997) and other telecommunication 

revenues 143 million kroons (91 million kroons in 1997).

 

Extraordinary high increase in operating expenses was caused by 

high growth of depreciation and value adjustment of assets. 

Expanding economic activities and inflation had also direct 

influence on operating expenses. Depreciation and value 

adjustment of assets grew by 193 million kroons or by 53%, 

major part of it, 99 million kroons, was revaluation of 

Estonian Telephone Company’s real estate (in accordance with § 

29 of the Estonian Accounting Law). Depreciation formed 

remaining 94 million kroons.

 

 

Raul Kalev

PR Manager

Eesti Telekom

Tel. +372 646 0220, +372 507 7797