The performance results of AS Balti Investeeringud for the year 2004 were as anticipated. Changes in the company's key economic indicators were comparable with the developments of other companies operating in the financial sector.

Both the portfolio of loans issued and the earnings and profit from ordinary activities grew remarkably. The increase in interest expenses and wages and salaries has been relatively lower than the increase in income, and the overall efficiency of the company has improved. The focus on the core activities and active marketing activities have significantly contributed to the accomplishment of the company's objectives.

The interest income of the consolidation group of AS Balti Investeeringute Grupp was up 54% from the previous year and amounted to 64.5 million kroons. At the same time, interest expenses grew by just 14%, amounting to 11.4 million kroons. Both the decline in the general interest level and the increase in the owners\' equity contributed to the relatively small growth in interest expenses. When compared to the second half-year 2003, interest income grew by 64% and interest expenses grew by 30% in the second half-year 2004.

The Group earned a total of 4.2 million kroons on net fees and commissions, which is up 54% from the previous year. When compared to the second half-year 2003, growth amounted to 32% in the second half-year 2004.

Administrative expenses grew in the Group by 44% in 2004 when compared to the year 2003, amounting to 29.7 million kroons. An increase in expenses incurred in marketing activities accounted for a significant part in the growth. In the second half-year 2004, the growth in administrative expenses amounted to 53% when compared to the same period of the previous year.

The aggregate net profit of the Group grew in 2004 by 52% when compared to the previous year, and amounted to 31.6 million kroons. In the second half-year 2004, the growth in the net profit amounted to 31% when compared to the same period of the
previous year.

The consolidated balance sheet total grew during the year 2004 from 185 million kroons at the beginning of the year to 267 million kroons at the end of the year (an increase of 44%). Trade receivables increased in 2004 from 167 million kroons to
236 million kroons, i.e. by 41%, while the earnings ratio of the loan portfolio did not decline. The sum of doubtful claims (for which provisions have been formed) rose to 8.2 million kroons, i.e. by 17% and doubtful claims accounted for 3.5% of the portfolio as of 31 December 2004. The actual loss ratio of loans continued to be lower than the provision ratio and no material increase of the loss ratio is expected to occur.

The liabilities of the Group grew in the year 2004 to 192 million kroons, i.e. by 41% when compared to the beginning of the financial year. Among other liabilities, the amount of issued bonds has increased notably, amounting to 123 million kroons as of the end of the year 2004 (a growth of 77%). The owners\' equity of the Group increased to 78 million kroons during the year 2004, i.e. up 61% when compared to the beginning of the year.

The Group's balance sheet and income statement are available here.

Eero Varkki
Finance Manager