Market announcement

Title

2009 I QUARTER AND 3 MONTHS CONDENSED INTERIM REPORT (UNAUDITED)

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DIRECTORS' REPORT                                                               

OUR MISSION                                                                     
Our mission is to offer our customers complete premier value adding construction
and engineering solutions.                                                      
We add value to the company by motivating our employees and providing them with 
clear development opportunities and a contemporary work environment.            

VISION                                                                          
Our goal is to become the fastest growing construction group on the Nordic and  
Baltic stock exchanges by 2013 in terms of revenue growth.                      

SHARED VALUES                                                                   

Reliability                                                                     
We keep our promises and honour our agreements. We act openly and transparently.
We consistently support and promote the best construction practices. We do not  
take risks at the expense of our customers.                                     

Quality                                                                         
We are professional builders - we apply appropriate and effective construction  
techniques and technologies and observe generally accepted quality standards. We
provide our customers with integrated cost efficient solutions. We are          
environmentally aware and operate sustainably. We value our employees by        
providing them with a modern work environment that encourages creativity and a  
motivation system that fosters initiative.                                      

Innovation                                                                      
We are innovative and creative engineers. We take maximum advantage of the      
benefits offered by information technology. We inspire our employees to grow    
through continuous training and balanced career opportunities.                  


FINANCIAL REVIEW                                                                
Margins                                                                         
Nordecon International Group ended the first quarter of 2009 with a gross profit
of 36.9 million kroons (2.4 million euros), a 64 per cent decrease from the     
101.4 million kroons (6.5 million euros) earned in the first quarter of 2008.
   
In the first quarter of 2009, the Group operated with practically zero profit,  
incurring a net loss of 0.6 million kroons (0.04 million euros). Compared with  
the net profit of 44.9 million kroons (2.9 million euros) earned in the first   
quarter of 2008, the net result has shrunk considerably. The decrease results   
largely from a decline in the profitability of construction contracts. In       
ordinary circumstances, the lower than average profitability in the first       
quarter has resulted from seasonal factors that impact mainly the road          
construction business. In the current situation, however, this has been         
accompanied by exceptionally weak demand in the buildings construction sector,  
which has triggered fierce competition and, accordingly, a steep decrease in    
relevant associated margins. In addition, consolidated net profit has been      
influenced by distribution and administrative expenses (particularly            
non-recurring restructuring expenditures) that have not decreased at the same   
pace as the margins of construction contracts.
                                  
The key profitability ratios monitored by the Group's management are following  
the same trends that emerged in the last quarter of 2008 owing to adverse       
changes in the operating environment. The Group's margins have dropped (in all  
markets) year-over-year primarily on account of a steep decline in demand. The  
main sector-specific trend has been the increasing excess of construction       
capacities over the number of projects on offer. Low demand that is insufficient
for meeting the business needs of all market players has heightened pressure for
lowering the prices. To remain competitive, the Group was forced to lower the   
first quarter gross margin to 6.2 per cent, a two-fold decrease from the 13.1   
per cent posted for the first quarter of 2008. In the light of the trends       
prevailing in the construction market, the Group will focus on redesigning its  
internal processes (improving the efficiency of purchase of services,           
cost-cutting, etc) so as to maintain its gross margin at a level that would     
ensure that the year will end in an operating profit.
                           
The operating loss of 3.5 million kroons (0.2 million euros) was anticipated.   
The restructuring of the Group and downsizing triggered exceptional expenses    
that will not recur in the next period. As a result, the ratio of administrative
expenses to revenue rose to 6.3 per cent (Q1 2008: 5.6 per cent), surpassing the
5 per cent limit set by management. The Group remains committed to the decision 
that during the period 2009-2010 the cost base should be reduced by up to 30 per
cent compared with 2007-2008 and will act resolutely to achieve this.           

Cash flows                                                                      
The Group's net operating cash flow was negative at 79.7 million kroons (5.1    
million euros), reflecting developments in the markets where the Group operates.
Contractual settlement terms have lengthened (particularly as regards the public
sector projects) and the overall economic situation is causing difficulties that
delay settlement past the agreed due dates. Receipts from customers exceed      
disbursements to suppliers but not enough to render the net operating cash flow 
positive.
                                                                       
Investing activities of the first quarter of 2009 resulted in a net outflow of  
75.2 million kroons (4.8 million euros) compared with a net outflow of 164.6    
million kroons (10.5 million euros) for the first quarter of 2008. The largest  
outflow resulted from lending activities (net outflow 47.7 million kroons or 3.0
million euros) that are becoming common especially in the Estonian construction 
market where potential customers view not only the banks but also the builders  
as potential co-financiers during the construction period.  Compared with a year
ago, investments in other companies have decreased significantly. If in the     
first quarter of 2008 investments in other companies (mainly for the interest in
AS Eston Ehitus) totalled 195.4 million kroons (12.5 million euros), then in the
first quarter of 2009 investments in subsidiaries, associates and joint ventures
totalled 32.8 million kroons (2.1 million euros).
                               
Financing activities generated net inflow of 38.2 million kroons (2.4 million   
euros). The corresponding figure for the first quarter of 2008 was inflow of    
265.1 million kroons (16.9 million euros). The net amount of loans received and 
repaid through financing activities was positive at 59.3 million kroons (3.8    
million kroons) against the also positive net result of 284.3 million kroons    
(18.2 million euros) for the first quarter of 2008.
                             
In the first quarter of 2009, the Group's cash and cash equivalents decreased by
116.6 million kroons (7.5 million euros) whereas in the first quarter of 2008   
cash and cash equivalents grew by 136.4 million kroons (8.7 million euros).     
At 31 March 2009, the Group's cash and cash equivalents stood at 179.6 million  
kroons (11.5 million euros) against 372.5 million kroons (23.8 million euros) at
31 March 2008. Considering that as a rule the first and fourth quarters are     
periods in which operating cash flow is more influenced by disbursements than   
receipts, management believes that the Group's cash and cash equivalents are    
sufficient to ensure the Group's liquidity throughout the remainder of the year.
On the other hand, the size of the Group's available cash funds depends directly
on whether the banks' agree to extend the Group's short-term credit limits.     


Key financial figures and ratios                                                
--------------------------------------------------------------------------------
| Figure / ratio                 |  Q1 2009 |  Q1 2008 |   Q1 2007 |      2008 |
--------------------------------------------------------------------------------
| Weighted average number of     | 30,756,7 | 30,756,7 | 30,756,72 | 30,756,72 |
| shares                         |       28 |       28 |         8 |         8 |
--------------------------------------------------------------------------------
| Earnings per share (in kroons) |     0.23 |     1.50 |      0.96 |      4.73 |
--------------------------------------------------------------------------------
| Earnings per share (in euros)  |     0.01 |     0.10 |      0.06 |      0.30 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue growth                 |   -23.6% |    38.2% |     63.8% |      3.1% |
--------------------------------------------------------------------------------
| Average number of employees    |    1,223 |    1,102 |     1,009 |     1,232 |
--------------------------------------------------------------------------------
| Revenue per employee (in       |      483 |      702 |       555 |     3,140 |
| thousands of kroons)           |          |          |           |           |
--------------------------------------------------------------------------------
| Revenue per employee (in       |       31 |       45 |        35 |       201 |
| thousands of euros)            |          |          |           |           |
--------------------------------------------------------------------------------
| Personnel expenses to revenue, |    16.7% |    13.6% |     13.3% |     12.7% |
| %                              |          |          |           |           |
--------------------------------------------------------------------------------
| Administrative expenses to     |     6.3% |     5.6% |      5.3% |      4.7% |
| revenue, %                     |          |          |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA (in thousands of        |   14,813 |   77,166 |    51,619 |   281,161 |
| kroons)                        |          |          |           |           |
--------------------------------------------------------------------------------
| EBITDA (in thousands of euros) |      947 |    4,932 |     3,299 |    17,969 |
--------------------------------------------------------------------------------
| EBITDA margin, %               |     2.5% |    10.0% |      9.2% |      7.3% |
--------------------------------------------------------------------------------
| Gross margin, %                |     6.2% |    13.1% |     11.8% |      9.3% |
--------------------------------------------------------------------------------
| Operating margin, %            |    -0.6% |     7.9% |      6.7% |      5.4% |
--------------------------------------------------------------------------------
| Operating margin excluding     |    -0.7% |     7.6% |      6.2% |      5.3% |
| gains on asset sales, %        |          |          |           |           |
--------------------------------------------------------------------------------
| Net margin, %                  |    -0.1% |     5.8% |      5.6% |      4.4% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on invested capital, %  |     0.5% |     3.9% |      5.6% |     19.1% |
--------------------------------------------------------------------------------
| Return on assets, %            |    -0.2% |     2.8% |      2.6% |      9.1% |
--------------------------------------------------------------------------------
| Return on equity, %            |    -0.1% |     5.4% |      6.1% |     20.5% |
--------------------------------------------------------------------------------
| Equity ratio, %                |    37.5% |    38.0% |     37.8% |     36.5% |
--------------------------------------------------------------------------------
| Gearing, %                     |    31.8% |    18.9% |     18.9% |     18.2% |
--------------------------------------------------------------------------------
| Current ratio                  |     1.28 |     1.65 |      1.41 |      1.33 |
--------------------------------------------------------------------------------
|                                | 31 March | 31 March |  31 March |        31 |
|                                |     2009 |     2008 |      2007 |  December |
|                                |          |          |           |      2008 |
--------------------------------------------------------------------------------
| Order backlog (in thousands of | 1,714,175| 3,368,680| 3,197,000 | 2,220,748 |
| kroons)                        |          |          |           |           |
--------------------------------------------------------------------------------
| Order backlog (in thousands of |  109,556 |  215,298 |   204,326 |   141,932 |
| euros)                         |          |          |           |           |
--------------------------------------------------------------------------------
* For comparability, the weighted average number of shares is the number of     
shares after the bonus issues.                                                  

--------------------------------------------------------------------------------
| Earnings per share (EPS) = net     | Operating margin excluding gains on     |
| profit attributable to equity      | asset sales = (operating profit - gains |
| holders of the parent / weighted   | on sale of property, plant and          |
| average number of shares           | equipment - gains on sale of real       |
| outstanding                        | estate) / revenue                       |
| Revenue per employee = revenue /   | Net margin = net profit for the period  |
| average number of employees        | / revenue                               |
| Personnel expenses to revenue =    | Return on invested capital = (profit    |
| personnel expenses / revenue       | before tax + interest expense) / the    |
| Administrative expenses to revenue | period's average (interest-bearing      |
| = administrative expenses /        | liabilities + equity)                   |
| revenue                            | Return on assets = operating profit /   |
| EBITDA = earnings before interest, | the period's average total assets       |
| taxes, depreciation and            | Return on equity = net profit for the   |
| amortisation                       | period /the period's average total      |
| EBITDA margin = EBITDA / revenue   | equity                                  |
| Gross margin = gross profit /      | Equity ratio = total equity / total     |
| revenue                            | equity and liabilities                  |
| Operating margin = operating       | Gearing = (interest-bearing liabilities |
| profit / revenue                   | - cash and cash equivalents) /          |
|                                    | (interest bearing liabilities + equity) |
|                                    | Current ratio = total current assets /  |
|                                    | total current liabilities               |
--------------------------------------------------------------------------------


PERFORMANCE BY GEOGRAPHICAL MARKETS                                           
In the first quarter of 2009, revenue earned outside Estonia accounted for 17   
per cent of consolidated revenue against approximately 18 per cent a year ago.  
The Group has expanded operations in Latvia. In the first quarter of 2009,      
Latvian revenue accounted for more than 10 per cent of the total while in 2008  
(full year) the proportion was 6 per cent.
                                      
At the same time, the contribution of Ukrainian revenues has dropped to 3 per   
cent. The downturn is attributable to the completion of major projects started  
in the preceding period and the complexity of entering into new contracts in the
current steep recession. Lithuanian revenues have remained stable at 2 per cent 
of the total.
                                                                   
--------------------------------------------------------------------------------
| Geographical market   |    Q1 2009 |     Q1 2008 |     Q1 2007 |        2008 |
--------------------------------------------------------------------------------
| Estonia               |      82.7% |       81.9% |       83.3% |       80.3% |
--------------------------------------------------------------------------------
| Ukraine               |       3.2% |       16.2% |       16.7% |       11.4% |
--------------------------------------------------------------------------------
| Latvia                |      12.2% |          0% |          0% |        5.9% |
--------------------------------------------------------------------------------
| Lithuania             |       1.8% |        1.9% |          0% |        2.4% |
--------------------------------------------------------------------------------
Revenue distribution across different geographical areas is a consistently      
deployed strategy aimed at mitigating the risks arising from undue reliance on a
single market. In addition, increasing the proportion of revenue earned outside 
Estonia is one of the Group's strategic objectives - in 2013 the Group expects  
to earn half of its revenue outside Estonia.                                    


PERFORMANCE BY BUSINESS LINE                                                  
The core business of Nordecon International Group is general contracting and    
project management in buildings and infrastructure construction. In addition,   
the Group is involved in road construction and maintenance, environmental       
engineering, concrete works and real estate development.
                        
Consolidated revenue for the first quarter of 2009 was 590.7 million kroons     
(37.8 million euros), a 24 per cent decrease from the 773.5 million kroons (49.4
million euros) generated in the first quarter of 2008. Revenue has decreased    
mainly on account of shrinkage in demand in all the Group's markets. In         
addition, the absolute revenue figure has been impacted by stiff competition    
that has lowered the construction prices (see further explanations and          
expectations for the future in Outlooks of the geographical markets where the   
Group operates). 
                                                               
The Group tries to maintain the revenues generated by its main segments         
(Buildings and Infrastructure) in balance as this helps disperse risks and      
provides a more solid foundation under stressed circumstances when one segment  
experiences shrinkage in operating volumes. In view of estimates of demand for  
apartments, the proportion of housing construction revenue from apartment       
buildings is will remain within the strategically defined 20 per cent.          

Segment revenue                                                                 
It is quite common for the construction business that in the first quarter the  
revenue generated by the Buildings segment is larger than that of               
Infrastructure. However, compared with the first quarter of 2008, revenue       
distribution between the primary segments has become more even. This results    
from the situation in the construction market (particularly in Estonia) that has
been causing the order backlog of the Infrastructure segment to grow at a faster
pace than that of the Buildings segment already since the second quarter of     
2008.
                                                                           
In the first quarter of 2009, the Buildings segment generated 339.5 million     
kroons (21.7 million euros) and the Infrastructure segment 246.5 million kroons 
(15.8 million euros) of the Group's construction contract revenue. The          
corresponding figures for the first quarter of 2008 were 630.1 million kroons   
and 140.6 million kroons (40.3 million euros and 9.0 million euros)             
respectively. In response to market developments, the revenue of the Buildings  
segment has declined and that of the Infrastructure segment has grown. However, 
the approximately 100-million kroon (6.4-million euro) growth in the            
Infrastructure segment is not wholly organic but includes also the Latvian      
revenue which in the first quarter of 2008 was not yet consolidated.            
--------------------------------------------------------------------------------
| Revenue distribution between  |          |           |           |           |
| segments*                     |          |           |           |           |
--------------------------------------------------------------------------------
| Business segment              |  Q1 2009 |   Q1 2008 |   Q1 2007 |      2008 |
--------------------------------------------------------------------------------
| Buildings                     |      58% |       80% |       55% |       63% |
--------------------------------------------------------------------------------
| Infrastructure                |      42% |       20% |       45% |       37% |
--------------------------------------------------------------------------------
* In connection with the entry into force of IFRS 8 Operating Segments during   
the reporting period, the Group has changed segment reporting in its financial  
statements. In the Directors' report the Ukrainian and EU Buildings segments    
which are disclosed separately in the financial statements are presented as a   
single segment. In addition, the segment information presented in the Directors'
report does not include the disclosures on “other segments” that are presented  
in the financial statements.

                                                  
Management believes that because of the market situation the proportion of      
revenue generated by the Infrastructure segment will increase in 2009. The      
assessment is supported by the Group's order backlog as at 31 March 2009 where  
the contracts of the Infrastructure segment surpass those of the Buildings      
segment (see Order backlog). 
                                                   
Revenue distribution within segments                                            
Within the Buildings segment, revenue distribution has remained similar to prior
periods, with commercial buildings accounting for over 50 per cent of the       
segment's revenue. As anticipated, revenue from the construction of industrial  
and warehouse facilities and apartment buildings has decreased. Due to          
favourable construction prices, the proportion of revenue from the construction 
of public buildings might increase through potential local government investment
in schools, nursery schools and other public buildings although such investment 
plans may be undermined by financing difficulties.			                           
--------------------------------------------------------------------------------
| Revenue distribution in the  |   Q1 2009 |   Q1 2008 |   Q1 2007 |      2008 |
| Buildings segment            |           |           |           |           |
--------------------------------------------------------------------------------
| Commercial buildings         |    75%    |    63%    |    50%    |    59%    |
--------------------------------------------------------------------------------
| Industrial and warehouse     |    8%     |    14%    |    14%    |    16%    |
| facilities                   |           |           |           |           |
--------------------------------------------------------------------------------
| Public buildings             |    12%    |    15%    |    18%    |    14%    |
--------------------------------------------------------------------------------
| Apartment buildings          |    4%     |    8%     |    18%    |    11%    |
--------------------------------------------------------------------------------

In absolute terms, the revenue of the Infrastructure segment has grown almost   
two-fold year-over-year and this has changed revenue distribution within the    
segment. The strong growth in port construction and environmental engineering   
revenues has increased the proportions of relevant sub-segments.                
--------------------------------------------------------------------------------
| Revenue distribution in the  |   Q1 2009 |   Q1 2008 |   Q1 2007 |      2008 |
| Infrastructure segment       |           |           |           |           |
--------------------------------------------------------------------------------
| Road construction and        |    20%    |    41%    |    24%    |    45%    |
| maintenance                  |           |           |           |           |
--------------------------------------------------------------------------------
| Port construction            |    22%    |    11%    |    58%    |    24%    |
--------------------------------------------------------------------------------
| Environmental engineering    |    17%    |    5%     |    18%    |    6%     |
--------------------------------------------------------------------------------
| Other engineering            |    41%    |    43%    |     -     |    25%    |
--------------------------------------------------------------------------------

ORDER BACKLOG                                                                  
At 31 March 2009, the Group's order backlog was 1,714 million kroons (110       
million euros), an almost 50 per cent decrease compared with the 3,369 million  
kroons (215 million euros) posted a year ago.                                   
--------------------------------------------------------------------------------
|                                | 31 March | 31 March |  31 March |        31 |
|                                |     2009 |     2008 |      2007 |  December |
|                                |          |          |           |      2008 |
--------------------------------------------------------------------------------
| Order backlog, in thousands of | 1,714,17 | 3,368,68 | 3,197,000 | 2,220,748 |
| kroons                         |        5 |        0 |           |           |
--------------------------------------------------------------------------------
| Order backlog, in thousands of |  109,556 |  215,298 |   204,326 |   141,932 |
| euros                          |          |          |           |           |
--------------------------------------------------------------------------------

In the Infrastructure segment, the order backlog has been growing               
year-over-year. At 31 March 2009, the backlog of the Infrastructure segment     
accounted for 65 per cent of the Group's total backlog portfolio (31 March 2008:
35 per cent), reflecting the situation in the construction market where the     
shrinkage in the Buildings segment has been considerably faster than the growth 
in the Infrastructure segment. In absolute terms, the backlog has been severely 
influenced by a major fall in construction prices.                              


PEOPLE                                                                         
Nordecon believes that its most important assets are its people and that the    
value of the company depends on the professionalism, motivation and loyalty of  
its employees. Accordingly, the Group's management is committed to creating a   
contemporary work environment that fosters professional growth and development  
both in terms of career opportunities and the nature of the work.               
People and personnel expenses 
                                                  
In the first quarter of 2009 the Group (including the parent and the            
subsidiaries) employed, on average, 1,223 people including around 500 engineers 
and other technical personnel. The proportion of engineers and technical        
personnel (ETP) has increased over the past couple of years due to business     
growth. Compared with a year ago, the number of staff has increased by          
approximately 100 mainly on account of the acquisition of the Latvian company   
SIA LCB at the beginning of 2009. However, since the end of 2008 the growth     
curve has been declining in connection with downsizing instigated by a          
significant decrease in business.
                                               
Average number of the Group's employees (including the parent and its           
subsidiaries):                                                                  
--------------------------------------------------------------------------------
|     Period      |        ETP         |     Workers      |   Total average    |
--------------------------------------------------------------------------------
|     Q1 2009     |        499         |       724        |       1,223        |
--------------------------------------------------------------------------------
|     Q1 2008     |        456         |       646        |       1,102        |
--------------------------------------------------------------------------------
|     Q1 2007     |        396         |       613        |       1,009        |
--------------------------------------------------------------------------------
|      2008       |        511         |       721        |       1,232        |
--------------------------------------------------------------------------------
The Group's personnel expenses for the first quarter of 2009, including         
associated taxes, totalled 98.5 million kroons (6.3 million euros), a 7 per cent
decrease on the 105.4 million kroons (6.7 million euros) incurred in the first  
quarter of 2008. At the same time, the number of staff has increased by 11 per  
cent.  
                                                                         
The decrease in personnel expenses despite growth in the number of staff results
from the reduction of basic salaries. Employee salaries have been reduced at all
Group entities; the salaries of engineers and other technical staff have been   
cut by 15 per cent on average. The performance pay of project staff that is     
directly related to the projects' profit margins has also declined.             
Owing to the overall economic situation and the slump in the construction       
market, in the first quarter of 2009 Group entities terminated employment       
relations with approximately 240 people.
                                        
In the first quarter of 2009, the remuneration of the members of the council of 
Nordecon International AS amounted to 270 thousand kroons (17 thousand euros).  
The corresponding figure for the first quarter of 2008 was also 270 thousand    
kroons (17 thousand euros). The remuneration and benefits of the members of the 
board of Nordecon International AS totalled 611 thousand kroons (39 thousand    
euros) compared with 2,575 thousand kroons (165 thousand euros) a year ago. The 
differences in the remuneration of the board stem from the fact that since 5    
January 2009 the board has had three members while in 2008 the number was five. 
In addition, the figure has been impacted by a 15 per cent reduction in board   
member remuneration across the Group.                                           


OUTLOOKS OF THE GEOGRAPHICAL MARKETS WHERE THE GROUP OPERATES                  

Estonia                                                                         
According to management's assessment, in 2009-2010 the Estonian construction    
market will be characterised by the following features:                         
- Total demand in the construction market will depend heavily on public 
procurement tenders and the number and pricing of infrastructure, environmental 
and other projects launched with the support of the European Union funds (the   
latter will be critically influenced by the administrative capabilities of the  
central and local governments). However, the more moderate decline in the       
infrastructure sector will not be able to compensate for the steep contraction  
of the buildings construction market that has currently been abandoned by most  
private sector corporate and individual customers. The Group's management       
estimates that by 2010 the total volumes of the construction market will have   
decreased 50 per cent compared with 2008                                        

- The number of development and buildings construction companies will decrease 
(market consolidation). Buildings construction companies which in 2008 began    
seeking opportunities to penetrate other market segments such as infrastructure 
will continue to do so, heightening competition in the segments involved. The   
continuing slump will lead to mergers, takeovers and bankruptcies.              

- Owing to the global financial crisis, the amount of money circulating in the 
economy has decreased considerably. As a result, more and more private sector   
companies will have difficulty in raising debt to finance new construction      
projects. The steep decrease in demand may be somewhat alleviated by a          
competition-induced decrease in prices, which will render investment in         
construction projects more attractive than it was during the boom of 2006 and   
2007.
                                                                           
- Building materials manufacturers that significantly increased their output 
during the growth phase of the market will be faced by shrinking demand and,    
consequently, greater strain in meeting the obligations taken for increasing    
capacities.                                                                     

- Real estate development companies' ability to service and repay existing
loans 
will weaken and their creditworthiness will decrease. For companies involved in 
general contracting and project management, this may mean an increase in        
doubtful and irrecoverable receivables.                                         

- The importance of infrastructure projects will increase and, accordingly, 
critical success factors will include specialised engineering expertise and     
experience as well as the availability of relevant resources.                   

- The deteriorating economic climate and fierce competition in the construction 
market along with falling demand will cause continuing unemployment for the     
construction workers. The ensuing increase in the availability of labour will   
lower construction companies' personnel expenses although in the short term the 
decrease will be lessened by the disbursement of redundancy benefits.           

- Construction projects' financing schemes will change (customers' settlement 
terms will extend significantly) and additional requirements to the financing   
provided by general contractors during the construction period will impose      
pressure on contractors' liquidity.                                             

Nordecon International Group operates in accordance with its long-term          
objectives that are adjusted for changes in the external environment. Relevant  
strategic management is the responsibility of the Group's board.                
The Group has prepared for changes in the economic environment by:              
- Setting the objective of reducing the cost base by 30 per cent (by cutting 
personnel expenses by downsizing and lowering salaries, reducing the costs of   
goods and services purchased, etc)                                              
- Restructuring the Group for better management of the business lines
(buildings 
and infrastructure construction) and maintaining the competitive advantages     
- Performing a more thorough preliminary analysis of the customers' solvency
and 
creditworthiness and dealing proactively with the collection of overdue         
receivables                                                                     
- Dispersing risks through portfolio design 
- Dispersing activities across geographical areas 


Latvia and Lithuania                                                            
Despite the difficulties in the Latvian political and monetary systems, the     
volumes of various infrastructure projects financed by the state and local      
government with the support of EU funding will remain stable or, hopefully, will
even increase (such as projects for the rehabilitation of the water supply and  
central heating systems). Construction activities will be mainly affected by the
situation of the financing institutions, a significant decrease in private      
sector demand, still high inflation and heightening competition. 
               
Recent economic developments in Lithuania have been similar to the ones in the  
other Baltic countries. Pressure on the state budget and national currency,     
slowdown in investment both in the public and private sectors and similar       
factors directly influence the construction market. The commercial and          
residential construction (the Group as a general contractor not a developer)    
market has contracted visibly and the situation remains strained. Other relevant
risks include the stability of banks, increasing competition and the impact of  
inflation on the construction prices.
                                           
The Group's management has suspended major decisions and remains alert to       
developments in Latvia and Lithuania because similarly to Estonia, their whole  
economy is in difficulty and this can also be felt in the construction sector.  
Management is analysing the Group's operation in the Latvian and Lithuanian     
markets in the light of developments in the external environment and is prepared
to revise the current plans swiftly and decisively.
                             
In view of the situation in the Lithuanian construction market and the prospects
of the Lithuanian economy, the Group is also considering the alternative of     
revising its current action plan in 2009 and does not rule out the possibility  
of downscaling the Lithuanian operations temporarily should this prove          
reasonable and justified.  
                                                     
The Group designs its activities in the Latvian and Lithuanian construction     
markets in accordance with its international expansion strategy and believes    
that in the longer term the two markets will have a logical place in the Group's
internationalisation.                                                           


Ukraine                                                                         
In Ukraine, the Group will continue acting as a general contractor and project  
manager in the construction of commercial buildings and production facilities.  
Activities on development projects that require major investment have been      
suspended to minimise the risks until the situation in the Ukrainian and global 
financial markets has eased up.
                                                 
The main risks in the Ukrainian market are connected with the low administrative
efficiency of the central and local government and the judicial system,         
inflation, and the availability of quality construction inputs. Since October   
2008 the Ukrainian monetary and banking systems have been under severe pressure.
The Ukrainian national currency hryvna (UAH) has weakened significantly against 
both the US dollar and the euro, which is causing substantial foreign exchange  
losses for foreign companies operating in Ukraine that have not hedged their    
currency risk exposures.
                                                        
Nevertheless, the Group is confident that the construction market of a country  
with a population of 46 million will offer business opportunities also in the   
future. The Group's main success factor is negligible competition in the project
management sector (the Group offers flexible construction management along with 
European practices and competencies). The Group's management is confident that  
the current crisis in the Ukrainian construction market and economy as a whole  
will transform the local understanding and expectations regarding general       
contracting and project management in the construction business, which will     
improve the Group's position in the long term considerably.                     


DESCRIPTION OF THE MAIN RISKS                                                  
Business risks                                                                  
To mitigate the risks arising from the seasonal nature of the construction      
business (primarily the weather conditions during the winter months), the Group 
has acquired road maintenance contracts that generate year-round business. In   
addition, Group companies are constantly seeking new technical solutions that   
would allow working more efficiently under changeable weather conditions.       
To manage their daily construction risks, Group companies purchase Contractors' 
All Risks insurance. Depending on the nature of the project, both general frame 
agreements and specially tailored project-specific contracts are used. In       
addition, as a rule, subcontractors are required to secure the performance of   
their obligations with a bank guarantee issued for the benefit of a Group       
company. To remedy builder-caused deficiencies which may be detected during the 
warranty period, all Group companies create warranties provisions. At 31 March  
2009 the provisions (including current and non-current ones) totalled 13.9      
million kroons (0.9 million euros). The corresponding figure at 31 March 2008   
was 11.2 million kroons (0.7 million euros).                                    

Credit risks                                                                    
For credit risk management, a potential customer's settlement behaviour and     
creditworthiness are analysed already in the tendering stage. Subsequent to the 
signature of a contract, the customer's settlement behaviour is monitored on an 
ongoing basis from the making of an advance payment to adherence to the         
contractual settlement schedule, which usually depends on the documentation of  
the delivery of work performed. We believe that the system in place allows us to
respond to customers' settlement difficulties with sufficient speed. As at the  
end of the reporting period, our customers' settlement practice was good.       
However, the customers' settlement behaviour has changed. The proportion of     
overdue receivables has increased somewhat, increasing the probability of credit
losses in subsequent periods. In accordance with the Group's accounting         
policies, all receivables that are more than 180 days overdue are recognised as 
an expense.                                                                     
In the first quarter of 2009, the net loss on doubtful receivables amounted to  
0.9 million kroons (0.1 million euros). In the first quarter of 2008, income    
from the recovery of previously expensed receivables surpassed losses from the  
write-down of receivables, yielding net gain of 0.2 million kroons (0.01 million
euros).                                                                         

Liquidity risks                                                                 
Free funds are placed in overnight or fixed-interest term deposits with the     
largest banks in Estonia. To ensure timely settlement of liabilities,           
approximately two weeks' working capital is kept in current accounts or         
overnight deposits. Where necessary, overdraft facilities are used. At the      
reporting date, the Group's current assets exceeded its current liabilities     
1.28-fold (31 March 2008: 1.65) and available cash totalled 179.6 million kroons
(11.5 million euros) (31 March 2008: 372.5 million kroons or 23.8 million       
euros). Together with unused overdraft facilities, the cash balances provide a  
sufficient liquidity buffer for conducting operations in an economic environment
which is more uncertain than in the previous year.                              

Interest rate risks                                                             
The loans taken by Group companies from banks operating in Estonia, Latvia and  
Ukraine have mainly fixed interest rates. Finance lease contracts have floating 
interest rates and are linked to EURIBOR. By the end of the reporting period,   
the Group's interest-bearing loans and borrowings have increased by 8.3 million 
kroons (0.5 million euros) year-over-year to 665.8 million kroons (42.6 million 
euros). Interest expense for the first quarter of 2009 amounted to 8.4 million  
kroons (0.5 million euros). Compared with the first quarter of 2008, the size of
interest expense has remained stable despite growth in loans and borrowings.    
This has been possible thanks to a decline in the EURIBOR base rate.            

Currency risks                                                                  
As a rule, construction contracts and subcontractors' service contracts are made
in the currency of the host country: in Estonia contracts are made in Estonian  
kroons (EEK), in Latvia in Latvian lats (LVL), in Lithuania in Lithuanian litas 
(LTL) and in Ukraine in Ukrainian hryvnas (UAH). A significant proportion of    
services purchased from other countries are priced in the euro, which does not  
constitute a currency risk for the Group's Estonian, Latvian and Lithuanian     
entities. 
                                                                      
In the last quarter of 2008, the Ukrainian economy and its national currency    
(the Ukrainian hryvna / UAH) were seriously hit by the global financial crisis. 
The exchange rate of the local currency that was not officially pegged to any   
international currency was deeply impacted by a decrease in exports and foreign 
investment and concerns about the general reliability of the Ukrainian banking  
system. Despite counter-measures, the local central bank was unable to maintain 
a stable exchange rate for the Ukrainian hryvna and in 2008 the latter weakened 
against the US dollar and the euro by more than 30 per cent year-over-year.     

In 2009 the weakening of the Ukrainian hryvna against the euro has stopped and  
in the first quarter of 2009 the Group's exchange losses (including the ones    
recognised in finance expenses and other operating expenses) totalled 0.2       
million kroons (0.01 million euros). The net result of exchange differences     
(including exchange gains) on the Group's result of operations was gain of 2.1  
million kroons (0.1 million euros).                                             

FINANCIAL STATEMENTS

Condensed consolidated interim statement of financial position                  

--------------------------------------------------------------------------------
| EEK '000                      |     31 March | 31 March 2008 |   31 December |
|                               |         2009 |               |          2008 |
--------------------------------------------------------------------------------
| ASSETS                        |              |               |               |
--------------------------------------------------------------------------------
| Current assets                |              |               |               |
--------------------------------------------------------------------------------
| Cash and cash equivalents     |      179,643 |       372,537 |       296,184 |
--------------------------------------------------------------------------------
| Trade receivables             |      443,126 |       359,718 |       473,935 |
--------------------------------------------------------------------------------
| Other receivables and         |      414,134 |       245,195 |       408,541 |
| prepayments                   |              |               |               |
--------------------------------------------------------------------------------
| Deferred tax assets           |          776 |         1,905 |           776 |
--------------------------------------------------------------------------------
| Income tax assets             |            0 |             0 |         3,207 |
--------------------------------------------------------------------------------
| Inventories                   |      443,553 |       431,055 |       386,733 |
--------------------------------------------------------------------------------
| Non-current assets held for   |            0 |        43,362 |             0 |
| sale                          |              |               |               |
--------------------------------------------------------------------------------
| Total current assets          |    1,481,232 |     1,453,772 |     1,569,376 |
--------------------------------------------------------------------------------
| Non-current assets            |              |               |               |
--------------------------------------------------------------------------------
| Long-term investments         |      121,960 |        91,828 |       112,605 |
--------------------------------------------------------------------------------
| Investment property           |      116,783 |       133,753 |       116,783 |
--------------------------------------------------------------------------------
| Property, plant and equipment |      253,140 |       276,167 |       263,295 |
--------------------------------------------------------------------------------
| Intangible assets             |      332,869 |       290,356 |       305,188 |
--------------------------------------------------------------------------------
| Total non-current assets      |      824,752 |       792,104 |       797,871 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                  |    2,305,984 |     2,245,876 |     2,367,247 |
--------------------------------------------------------------------------------
| LIABILITIES                   |              |               |               |
--------------------------------------------------------------------------------
| Current liabilities           |              |               |               |
--------------------------------------------------------------------------------
| Interest-bearing loans and    |      332,295 |       151,184 |       235,948 |
| borrowings                    |              |               |               |
--------------------------------------------------------------------------------
| Trade payables                |      319,687 |       291,656 |       439,615 |
--------------------------------------------------------------------------------
| Taxes payable                 |       52,658 |        48,411 |        65,760 |
--------------------------------------------------------------------------------
| Other payables                |      384,488 |       382,168 |       423,270 |
--------------------------------------------------------------------------------
| Provisions                    |        9,903 |         8,078 |        11,600 |
--------------------------------------------------------------------------------
| Total current liabilities     |    1,099,031 |       881,497 |     1,176,193 |
--------------------------------------------------------------------------------
| Non-current liabilities       |              |               |               |
--------------------------------------------------------------------------------
| Interest-bearing loans and    |      333,474 |       506,308 |       318,578 |
| borrowings                    |              |               |               |
--------------------------------------------------------------------------------
| Other liabilities             |        4,258 |           761 |         2,534 |
--------------------------------------------------------------------------------
| Provisions                    |        4,022 |         3,739 |         6,630 |
--------------------------------------------------------------------------------
| Total non-current liabilities |      341,754 |       510,808 |       327,742 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES             |    1,440,785 |     1,392,305 |     1,503,935 |
--------------------------------------------------------------------------------
| EQUITY                        |              |               |               |
--------------------------------------------------------------------------------
| Share capital                 |      307,567 |       307,567 |       307,567 |
--------------------------------------------------------------------------------
| Statutory capital reserve     |       34,800 |        21,426 |        34,800 |
--------------------------------------------------------------------------------
| Translation reserve           |       -2,714 |         4,574 |        -4,106 |
--------------------------------------------------------------------------------
| Retained earnings             |      434,033 |       432,937 |       426,995 |
--------------------------------------------------------------------------------
| Equity attributable to owners |      773,686 |       766,504 |       765,256 |
| of the parent                 |              |               |               |
--------------------------------------------------------------------------------
| Non-controlling interests     |       91,513 |        87,067 |        98,056 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                  |      865,199 |       853,571 |       863,312 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY  |    2,305,984 |     2,245,876 |     2,367,247 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


Condensed consolidated interim statement of financial position                  

--------------------------------------------------------------------------------
| EUR '000                     | 31 March 2009 | 31 March 2008 |   31 December |
|                              |               |               |          2008 |
--------------------------------------------------------------------------------
| ASSETS                       |               |               |               |
--------------------------------------------------------------------------------
| Current assets               |               |               |               |
--------------------------------------------------------------------------------
| Cash and cash equivalents    |        11,481 |        23,810 |        18,930 |
--------------------------------------------------------------------------------
| Trade receivables            |        28,321 |        22,990 |        30,290 |
--------------------------------------------------------------------------------
| Other receivables and        |        26,468 |        15,670 |        26,110 |
| prepayments                  |               |               |               |
--------------------------------------------------------------------------------
| Deferred tax assets          |            50 |           123 |            50 |
--------------------------------------------------------------------------------
| Income tax assets            |             0 |             0 |           205 |
--------------------------------------------------------------------------------
| Inventories                  |        28,348 |        27,549 |        24,717 |
--------------------------------------------------------------------------------
| Non-current assets held for  |             0 |         2,771 |             0 |
| sale                         |               |               |               |
--------------------------------------------------------------------------------
| Total current assets         |        94,668 |        92,913 |       100,301 |
--------------------------------------------------------------------------------
| Non-current assets           |               |               |               |
--------------------------------------------------------------------------------
| Long-term investments        |         7,795 |         5,869 |         7,197 |
--------------------------------------------------------------------------------
| Investment property          |         7,464 |         8,548 |         7,464 |
--------------------------------------------------------------------------------
| Property, plant and          |        16,178 |        17,650 |        16,828 |
| equipment                    |               |               |               |
--------------------------------------------------------------------------------
| Intangible assets            |        21,274 |        18,557 |        19,505 |
--------------------------------------------------------------------------------
| Total non-current assets     |        52,711 |        50,625 |        50,993 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                 |       147,379 |       143,538 |       151,295 |
--------------------------------------------------------------------------------
| LIABILITIES                  |               |               |               |
--------------------------------------------------------------------------------
| Current liabilities          |               |               |               |
--------------------------------------------------------------------------------
| Interest-bearing loans and   |        21,238 |         9,662 |        15,080 |
| borrowings                   |               |               |               |
--------------------------------------------------------------------------------
| Trade payables               |        20,432 |        18,640 |        28,096 |
--------------------------------------------------------------------------------
| Taxes payable                |         3,364 |         3,094 |         4,203 |
--------------------------------------------------------------------------------
| Other payables               |        24,574 |        24,425 |        27,052 |
--------------------------------------------------------------------------------
| Provisions                   |           633 |           516 |           741 |
--------------------------------------------------------------------------------
| Total current liabilities    |        70,241 |        56,338 |        75,172 |
--------------------------------------------------------------------------------
| Non-current liabilities      |               |               |               |
--------------------------------------------------------------------------------
| Interest-bearing loans and   |        21,313 |        32,359 |        20,361 |
| borrowings                   |               |               |               |
--------------------------------------------------------------------------------
| Other liabilities            |           272 |            49 |           162 |
--------------------------------------------------------------------------------
| Provisions                   |           257 |           239 |           424 |
--------------------------------------------------------------------------------
| Total non-current            |        21,842 |        32,647 |        20,947 |
| liabilities                  |               |               |               |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES            |        92,083 |        88,985 |        96,119 |
--------------------------------------------------------------------------------
| EQUITY                       |               |               |               |
--------------------------------------------------------------------------------
| Share capital                |        19,657 |        19,657 |        19,657 |
--------------------------------------------------------------------------------
| Statutory capital reserve    |         2,224 |         1,369 |         2,224 |
--------------------------------------------------------------------------------
| Translation reserve          |          -173 |           292 |          -262 |
--------------------------------------------------------------------------------
| Retained earnings            |        27,740 |        27,670 |        27,290 |
--------------------------------------------------------------------------------
| Equity attributable to       |        49,448 |        48,989 |        48,909 |
| owners of the parent         |               |               |               |
--------------------------------------------------------------------------------
| Non-controlling interests    |         5,849 |         5,565 |         6,267 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                 |        55,296 |        54,553 |        55,176 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY |       147,379 |       143,538 |       151,295 |
--------------------------------------------------------------------------------


Condensed consolidated interim statement of comprehensive income                

--------------------------------------------------------------------------------
|                                       |    Q1 2009 |    Q1 2008 |       2008 |
| EEK '000                              |            |            |            |
--------------------------------------------------------------------------------
| Revenue                               |    590,664 |    773,510 |  3,867,917 |
--------------------------------------------------------------------------------
| Cost of sales                         |    553,809 |    672,156 |  3,510,006 |
--------------------------------------------------------------------------------
| Gross profit                          |     36,855 |    101,354 |    357,911 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution expenses                 |      2,223 |        827 |      8,007 |
--------------------------------------------------------------------------------
| Administrative expenses               |     37,404 |     43,493 |    182,526 |
--------------------------------------------------------------------------------
| Other operating income                |      1,689 |      7,122 |     63,947 |
--------------------------------------------------------------------------------
| Other operating expenses              |      2,423 |      3,113 |     22,845 |
--------------------------------------------------------------------------------
| Operating profit / loss               |     -3,506 |     61,043 |    208,480 |
--------------------------------------------------------------------------------
| Finance income                        |     18,775 |      4,559 |     96,877 |
--------------------------------------------------------------------------------
| Finance expenses                      |     13,782 |     19,851 |     68,019 |
--------------------------------------------------------------------------------
| Net finance income / expense          |      4,993 |    -15,292 |     28,858 |
--------------------------------------------------------------------------------
| Share of profit of equity accounted   |          0 |         16 |         17 |
| investees                             |            |            |            |
--------------------------------------------------------------------------------
| Share of loss of equity accounted     |      2,644 |        728 |     24,770 |
| investees                             |            |            |            |
--------------------------------------------------------------------------------
| Net share of profit and loss of       |     -2,644 |       -712 |    -24,753 |
| equity accounted investees            |            |            |            |
--------------------------------------------------------------------------------
| Profit / loss before income tax       |     -1,157 |     45,039 |    212,585 |
--------------------------------------------------------------------------------
| Income tax expense                    |       -618 |        145 |     41,269 |
--------------------------------------------------------------------------------
| Profit / loss for the period          |       -539 |     44,894 |    171,316 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income:           |     -1,480 |      2,331 |     -6,371 |
| Exchange differences on translating   |            |            |            |
| foreign operations                    |            |            |            |
--------------------------------------------------------------------------------
| Other comprehensive income for the    |     -1,480 |      2,331 |     -6,371 |
| period                                |            |            |            |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the    |     -2,019 |     47,225 |    164,945 |
| period                                |            |            |            |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit / loss attributable to:        |            |            |            |
--------------------------------------------------------------------------------
| - Owners of the parent                |      7,046 |     46,138 |    145,580 |
--------------------------------------------------------------------------------
| - Non-controlling interests           |     -7,585 |     -1,244 |     25,736 |
--------------------------------------------------------------------------------
|                                       |       -539 |     44,894 |    171,316 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income            |            |            |            |
| attributable to:                      |            |            |            |
--------------------------------------------------------------------------------
| - Owners of the parent                |      8,438 |     48,358 |    139,120 |
--------------------------------------------------------------------------------
| - Non-controlling interests           |    -10,457 |     -1,133 |     25,825 |
--------------------------------------------------------------------------------
|                                       |     -2,019 |     47,225 |    164,945 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to    |            |            |            |
| owners of the parent:                 |            |            |            |
--------------------------------------------------------------------------------
| Basic earning s per share             |       0.23 |       1.50 |       4.73 |
--------------------------------------------------------------------------------
| Diluted earnings per share            |       0.23 |       1.50 |       4.73 |
--------------------------------------------------------------------------------


Condensed consolidated interim statement of comprehensive income                

--------------------------------------------------------------------------------
| EUR '000                              |    Q1 2009 |    Q1 2008 |       2008 |
--------------------------------------------------------------------------------
| Revenue                               |     37,750 |     49,436 |    247,205 |
--------------------------------------------------------------------------------
| Cost of sales                         |     35,395 |     42,959 |    224,330 |
--------------------------------------------------------------------------------
| Gross profit                          |      2,355 |      6,478 |     22,875 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution expenses                 |        142 |         53 |        512 |
--------------------------------------------------------------------------------
| Administrative expenses               |      2,391 |      2,780 |     11,666 |
--------------------------------------------------------------------------------
| Other operating income                |        108 |        455 |      4,087 |
--------------------------------------------------------------------------------
| Other operating expenses              |        155 |        199 |      1,460 |
--------------------------------------------------------------------------------
| Operating profit / loss               |       -224 |      3,901 |     13,324 |
--------------------------------------------------------------------------------
| Finance income                        |      1,200 |        291 |      6,192 |
--------------------------------------------------------------------------------
| Finance expenses                      |        881 |      1,269 |      4,347 |
--------------------------------------------------------------------------------
| Net finance income / expense          |        319 |       -977 |      1,844 |
--------------------------------------------------------------------------------
| Share of profit of equity accounted   |          0 |          1 |          1 |
| investees                             |            |            |            |
--------------------------------------------------------------------------------
| Share of loss of equity accounted     |        169 |         47 |      1,583 |
| investees                             |            |            |            |
--------------------------------------------------------------------------------
| Net share of profit and loss of       |       -169 |        -46 |     -1,582 |
| equity accounted investees            |            |            |            |
--------------------------------------------------------------------------------
| Profit / loss before income tax       |        -74 |      2,879 |     13,587 |
--------------------------------------------------------------------------------
| Income tax expense                    |        -39 |          9 |      2,638 |
--------------------------------------------------------------------------------
| Profit / loss for the period          |        -34 |      2,869 |     10,949 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income:           |        -95 |        149 |       -407 |
| Exchange differences on translating   |            |            |            |
| foreign operations                    |            |            |            |
--------------------------------------------------------------------------------
| Other comprehensive income for the    |        -95 |        149 |       -407 |
| period                                |            |            |            |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the    |       -129 |      3,018 |     10,542 |
| period                                |            |            |            |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit / loss attributable to:        |            |            |            |
--------------------------------------------------------------------------------
| - Owners of the parent                |        451 |      2,949 |      9,304 |
--------------------------------------------------------------------------------
| - Non-controlling interests           |       -485 |        -80 |      1,645 |
--------------------------------------------------------------------------------
|                                       |        -34 |      2,869 |     10,949 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income            |            |            |            |
| attributable to:                      |            |            |            |
--------------------------------------------------------------------------------
| - Owners of the parent                |        539 |      3,090 |      8,891 |
--------------------------------------------------------------------------------
| - Non-controlling interests           |       -668 |        -72 |      1,651 |
--------------------------------------------------------------------------------
|                                       |       -129 |      3,018 |     10,542 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share attributable to    |            |            |            |
| owners of the parent:                 |            |            |            |
--------------------------------------------------------------------------------
| Basic earning s per share             |       0.01 |       0.10 |       0.30 |
--------------------------------------------------------------------------------
| Diluted earnings per share            |       0.01 |       0.10 |       0.30 |
--------------------------------------------------------------------------------
                                                                              

Condensed consolidated interim statement of cash flows 
                         
--------------------------------------------------------------------------------
|                              |       EEK '000        |       EUR '000        |
--------------------------------------------------------------------------------
|                              |   Q1 2009 |   Q1 2008 |   Q1 2009 |   Q1 2008 |
--------------------------------------------------------------------------------
| Cash flows from operating    |           |           |           |           |
| activities                   |           |           |           |           |
--------------------------------------------------------------------------------
| Cash receipts from customers |   661,510 | 1,041,501 |    42,278 |    66,564 |
--------------------------------------------------------------------------------
| Cash paid to suppliers       |  -608,644 |  -869,455 |   -38,899 |   -55,568 |
--------------------------------------------------------------------------------
| Cash paid to and for         |  -126,515 |  -136,073 |    -8,086 |    -8,697 |
| employees                    |           |           |           |           |
--------------------------------------------------------------------------------
| Income taxes paid            |    -6,002 |       -20 |      -384 |        -1 |
--------------------------------------------------------------------------------
| Net cash used in / from      |   -79,651 |    35,953 |    -5,091 |     2,298 |
| operating activities         |           |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing    |           |           |           |           |
| activities                   |           |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of property,     |      -530 |    -2,473 |       -34 |      -158 |
| plant and equipment          |           |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of intangible    |    -7,500 |      -464 |      -479 |       -30 |
| assets                       |           |           |           |           |
--------------------------------------------------------------------------------
| Proceeds from sale of        |     1,130 |     3,342 |        72 |       214 |
| property, plant and          |           |           |           |           |
| equipment and intangible     |           |           |           |           |
| assets                       |           |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, |    -6,776 |  -194,719 |       433 |    12,444 |
| net of cash acquired         |           |           |           |           |
--------------------------------------------------------------------------------
| Proceeds from disposal of    |         0 |     1,482 |         0 |        95 |
| subsidiaries                 |           |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of associates    |    -6,000 |         0 |      -383 |         0 |
--------------------------------------------------------------------------------
| Proceeds from disposal of    |     6,724 |         0 |       430 |         0 |
| associates                   |           |           |           |           |
--------------------------------------------------------------------------------
| Acquisition of interests in  |   -20,000 |         0 |    -1,279 |         0 |
| joint ventures               |           |           |           |           |
--------------------------------------------------------------------------------
| Loans granted                |   -53,747 |    -7,973 |    -3,435 |      -510 |
--------------------------------------------------------------------------------
| Repayment of loans granted   |     6,092 |    31,111 |       389 |     1,988 |
--------------------------------------------------------------------------------
| Interest received            |     5,457 |     5,099 |       349 |       326 |
--------------------------------------------------------------------------------
| Net cash used in investing   |   -75,150 |  -164,595 |    -4,803 |   -10,520 |
| activities                   |           |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing    |           |           |           |           |
| activities                   |           |           |           |           |
--------------------------------------------------------------------------------
| Proceeds from loans received |   122,911 |   333,701 |     7,855 |    21,327 |
--------------------------------------------------------------------------------
| Repayment of loans received  |   -63,576 |   -49,421 |    -4,063 |    -3,159 |
--------------------------------------------------------------------------------
| Payment of finance lease     |   -12,462 |   -13,499 |      -796 |      -863 |
| liabilities                  |           |           |           |           |
--------------------------------------------------------------------------------
| Interest paid                |    -8,374 |    -5,693 |      -535 |      -364 |
--------------------------------------------------------------------------------
| Other payments made          |      -315 |         0 |       -20 |         0 |
--------------------------------------------------------------------------------
| Net cash from financing      |    38,184 |   265,088 |     2,440 |    16,942 |
| activities                   |           |           |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow                |  -116,617 |   136,446 |    -7,454 |     8,720 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at |   296,184 |   236,112 |    18,930 |    15,089 |
| beginning of period          |           |           |           |           |
--------------------------------------------------------------------------------
| Effect of exchange rate      |        76 |       -20 |         5 |        -1 |
| fluctuations                 |           |           |           |           |
--------------------------------------------------------------------------------
| Decrease / increase in cash  |  -116,617 |   136,446 |    -7,454 |     8,720 |
| and cash equivalents         |           |           |           |           |
--------------------------------------------------------------------------------
| Cash and cash equivalents at |   179,643 |   372,538 |    11,481 |    23,810 |
| end of period                |           |           |           |           |
--------------------------------------------------------------------------------


Nordecon International is a group of construction companies whose core business
is general contracting and construction management in the construction of
buildings and infrastructures in Estonia, Latvia, Lithuania and Ukraine. In
addition, in Estonia our companies act as independent contractors in road
construction and maintenance, environmental engineering, the assembly of
reinforced concrete elements, and the performance of cast-on-site concrete
works. The parent of the Group is Nordecon International AS, a company
registered and located in Tallinn, Estonia. In addition to the parent company,
there are more than 20 subsidiaries in the Group. The consolidated revenue of
the Group in 2008 was 3.9 billion kroons (247 million euros) and the
consolidated net profit was 171 million kroons (11 million euros). Nordecon
International Group employs more than 1,100 people. Since 18 May 2006, the
company's shares have been quoted in the main list of the NASDAQ OMX Tallinn
Stock Exchange. 

1 euro = 15.6466 kroons


Raimo Talviste
Nordecon International AS
Head of Investor Relations
Tel: +372 615 4445
Email: [email protected] 
www.nordecon.com