Börsiteade

Pealkiri

Results of operations for the 1st half-year 2008 (EUR)

Teade

MANAGEMENT REPORT                                                               
RESULTS OF OPERATIONS - FOR THE 1st HALF-YEAR 2008                              


Overview                                                                        

In the 1st six months of 2008 the Company's total sales increased, year on year,
by 16.6% to 28.4 mln EUR. Total water and sewerage services sale volumes        
increased in the 1st six months of 2008 by 0.2% compared to the same six months 
of 2007, respective sales increased by 10.5%. Within the service area sales to  
residential customers increased by 9.4% year on year, sales to commercial       
customers increased by 8.3% year on year, and sales to customers outside of the 
service area increased by 47.3% year on year, reaching 1.7 mln m3 or 0.78 mln   
EUR. The Company's profit before taxes was 11.5 mln EUR, which is a 3.2%        
increase compared to the same six months of 2007. Eliminating the one-off       
nitrogen provision release in the 1st quarter of 2007, profit before tax in the 
1st six months of 2008 increased by 11.8%. The Company invested 6.3 mln EUR, of 
which 4.9 mln EUR was invested in network extension and rehabilitation.         

--------------------------------------------------------------------------------
| mln EUR              |    6    |    6    |  Change  |  6 months   |  Change  |
|                      | months  | months  |          |    2007     |          |
|                      |  2008   |  2007   |          | underlying  |          |
--------------------------------------------------------------------------------
| Sales                |    28,4 |    24,4 |    16,6% |        24,4 |    16,6% |
--------------------------------------------------------------------------------
| Main operating       |    23,2 |    20,8 |    11,6% |        20,8 |    11,6% |
| activities           |         |         |          |             |          |
--------------------------------------------------------------------------------
| Other operating      |     5,2 |     3,6 |    45,6% |         3,6 |    45,6% |
| activities           |         |         |          |             |          |
--------------------------------------------------------------------------------
| Gross profit         |    15,1 |    14,7 |     3,2% |        13,8 |     9,6% |
--------------------------------------------------------------------------------
| Gross profit margin  |    53,3 |    60,1 |   -11,5% |        56,7 |    -6,0% |
| %                    |         |         |          |             |          |
--------------------------------------------------------------------------------
| Operating profit     |    12,9 |    12,5 |     3,3% |        11,6 |    10,8% |
--------------------------------------------------------------------------------
| Operating profit     |    45,4 |    51,2 |   -11,4% |        47,7 |    -5,0% |
| margin %             |         |         |          |             |          |
--------------------------------------------------------------------------------
| Profit before taxes  |    11,5 |    11,1 |     3,2% |        10,3 |    11,8% |
--------------------------------------------------------------------------------
| Profit before taxes  |    40,5 |    45,7 |   -11,5% |        42,2 |    -4,2% |
| margin               |         |         |          |             |          |
--------------------------------------------------------------------------------
| Net profit           |     7,3 |     7,6 |    -4,4% |         6,8 |     7,6% |
--------------------------------------------------------------------------------
| ROA %                |     4,6 |     4,9 |    -6,4% |         4,4 |     5,4% |
--------------------------------------------------------------------------------
| Debt to total        |   55,7% |   55,8% |    -0,1% |       55,8% |    -0,1% |
| capital employed     |         |         |          |             |          |
--------------------------------------------------------------------------------

Gross profit margin - Gross profit / Net sales                                  
Operating profit margin - Operating profit / Net sales                          
Profit before taxes margin - Profit before taxes / Net sales                    
ROA - Net profit /Total Assets                                                  
Debt to Total capital employed - Total Liabilities / Total capital employed     


Profit and Loss Statement                                                       

2nd quarter 2008                                                                

Sales                                                                           

In the 2nd quarter of 2008 the Company's total sales increased, year on year, by
32.6% to 14.9 mln EUR.  Sales from the Company's main operating activities were 
11.7 mln EUR. Sales in the main operating activity principally comprise of sales
of water and treatment of wastewater to domestic and commercial customers within
and outside of the service area, and fees received from the City of Tallinn for 
operating and maintaining the storm water system.                               

Sales of water and wastewater services were 10.6 mln EUR, an 8.9% increase      
compared to the 2nd quarter of 2007, excluding the over pollution the increase  
was 9.2%, resulting from the 11.7% increase in tariffs from 1 January 2008 for  
the Company's residential and commercial customers combined with the factors    
described below.                                                                

Included within this amount were the following increases by sector: within the  
service area sales to residential customers increased by 9.2% to 5.6 mln EUR.   
Sales to commercial customers increased by 6.6% to 4.5 mln EUR. Sales to        
customers outside of the service area - primarily bulk volumes of wastewater    
treatment services provided to the surrounding municipalities - increased by    
52.0% reaching 821 thousand m3 or 0.38 mln EUR. Over pollution fees received    
were 0.23 mln EUR, same level as in the 2nd quarter of 2007.                    

In the 2nd quarter of 2008, the volumes sold to residential customers dropped   
2.3% or 171 thousand m3. We believe that this is mainly related to the fact that
people are moving to the surrounding areas of Tallinn.                          

The volumes sold to commercial customers inside the service area decreased      
compared to the relevant period in 2007 due to several factors combined. Part of
the reduction in sales volumes in Tallinn is due to companies moving to the     
surrounding municipalities, supplemented by companies implementing different    
efficiency measures or reducing their production. Particularly the sales in 2nd 
quarter of 2008 compared to the 2nd quarter of 2007 were impacted by the fact   
that one of the Company's biggest industrial customers moved its facilities out 
of our area in the second half of 2007, this resulted in a water and sewage     
volumes loss of 56 thousand m3 in the 2nd quarter of 2008 compared to 2007.     

The real estate market stays relatively unchanged from last year. Although      
slightly lower than in 2007, the number of new apartments and business buildings
being constructed this year in Tallinn remains high. A large share of new       
buildings still remain vacant as commercial customers as well as people in need 
of space are moving to surrounding areas due to more affordable real estate     
prices.                                                                         

This trend is also reflected in the Company's sales to surrounding areas, which 
has increased by 52.0% in the 2nd quarter of 2008 compared to the same period   
last year. This reflects the success of the Company's strategy to re-capture    
customers leaving Tallinn. The Company is actively looking for the further      
expansion opportunities into the neighboring municipalities.                    

The sales from the operation and maintenance of the storm water and fire-hydrant
system increased by 37.5% to 0.80 mln EUR in the 2nd quarter of 2008 compared to
the same period in 2007. This is in accordance with the terms and conditions of 
the contract whereby the storm water and fire hydrant costs are invoiced based  
on actual costs and volumes treated. This is contractually agreed up to 2020.   

Sales revenues from other operating activities, mainly connections and storm    
water construction, totaled 3.3 mln EUR which is 2.5 mln EUR more than in the   
2nd quarter of 2007. Before 2008 a considerable amount of works and revenues    
were confirmed and recorded in the first quarter. According to the new contract 
concluded with the City of Tallinn on 30th November 2007, the revenue flow is   
more even throughout the year. Starting from March 2008 the revenue in this line
is mainly calculated using the Tallinn domestic water sales volumes and fixed   
development rate per cubic meter. This revenue line goes in pairs with the Cost 
of goods sold from other operating activities, where the respective costs of the
constructions are recorded.                                                     


Cost of Goods Sold and Gross Margin                                             

The cost of goods sold for the main operating activity was 4.4 mln EUR in the   
2nd quarter of 2008, an increase of 0.71 mln EUR or 19.4% from the equivalent   
period in 2007.                                                                 

In the 2nd quarter of 2008 the Company did not achieve the beneficial 0.5       
coefficient for pollution tax, and as a result the amount of pollution tax      
payable was 0.33 mln EUR compared to 0.06 mln EUR in 2nd quarter of 2007. The   
2nd quarter of 2007 included also the reduction of the rates in 1st quarter of  
2007 as the environmental body confirmed it only in 2nd quarter of 2007. Without
the reduction 2007 2nd quarter cost would have been 0.09 mln EUR. Increase in   
pollution tax is due to the combination of the coefficient and increase in tax  
rates year on year by 20%, supplemented by volume and pollution impact. Despite 
the fact that the pollution level of the incoming sewerage does vary and the    
company does not have full control over storm water outlets regarding the       
pollution, we are working hard to use the optimum level of chemicals to achieve 
the 0.5 coefficient in the following quarters of 2008.                          

The chemical costs were 0.42 mln EUR, this represents an 24.5% increase compared
to the corresponding period in 2007. This result is the combination of volumes  
treated, chemicals dosed and the price inflation.                               

Electricity costs increased by 0.01 mln EUR or 3.5% in the 2nd quarter of 2008  
compared to the 2nd quarter of 2007 due to higher electricity prices combined   
with volumes treated.                                                           

Salary expenses increased in the 2nd quarter of 2008, year on year, by 0.20 mln 
EUR or 25.0% due to a number of factors. Firstly, increased headcount from the  
new services launched. Secondly, a highly competitive labour market has led to  
significant salary inflation. Finally in the 1st quarter of 2008 the Company    
restructured and combined departments which resulted in transferring cost from  
one line to an other. Eliminating these structural changes would give us 17.0%  
increase in salaries. This is in line with the increase in average salaries in  
the Estonian market.                                                            

Depreciation charges increased in the 2nd quarter of 2008 by 0.12 mln EUR or    
10.4% year on year due to new sludge treatment building commissioned in the end 
of 2007. Also in the beginning of 2008 the depreciation rates were revised to   
correspond with the useful life of assets.                                      

Other cost of goods sold in the main operating activity increased by 0.02 mln   
EUR, or 2.4% year on year. This was due to higher costs on a number of support  
service contracts, such as transport, security services, maintenance cost,      
reflecting the significant increase in labour and services costs in Tallinn. But
on the other hand it reflects Company's achievements to reduce costs by         
optimizing operations.                                                          

The cost pressure sets the challenge to the management to identify the further  
efficiency opportunities through review of processes, procedures and            
procurements.                                                                   

As a result of all of the above the Company's gross profit for the 2nd quarter  
of 2008 was 7.6 mln EUR, which is an increase of 0.64 mln EUR, or 9.3%, compared
to the gross profit of 7.0 mln EUR for the 2nd quarter of 2007.                 

Operating Costs and Operating Margin                                            

Marketing expenses decreased by 0.02 mln EUR to 0.20 mln EUR during the 2nd     
quarter of 2008 compared to the corresponding period in 2007. This is partly the
result of the structural changes, balanced by the increase in depreciation      
charges.                                                                        

General administration expenses decreased by 0.07 mln EUR to 0.91 mln EUR in the
2nd quarter of 2008 year on year, mainly as a consequence of structural changes.

Included within all the above cost categories are staff costs. These totaled 1.4
mln EUR in the 2nd quarter of 2008, which is a 0.18 mln EUR or 14.9% increase   
compared to the same period in 2007. As mentioned earlier this was mainly due to
the wide revision of salaries at the beginning of 2008.                         

Other net income/expenses totaled an income of 0.01 mln EUR in the 2nd quarter  
of 2008 compared to an expense of 0.03 mln EUR in the 2nd quarter of 2007.      

As a result of all of the above the Company's operating profit for the 2nd      
quarter of 2008 was 6.5 mln EUR, an increase of 0.77 mln EUR compared to an     
operating profit of 5.7 mln EUR achieved in the 2nd quarter of 2007. Compared to
the operating profit in the 2nd quarter of 2007, the operating profit has       
increased 13.3%.                                                                

Financial expenses                                                              

Net Financial expenses were 0.71 mln EUR in the 2nd quarter of 2008, which is an
increase of 0.03 mln EUR or 4.6% compared to the 2nd quarter of 2007. The       
Company's interest costs have increased by 19.5% compared to the 2nd quarter of 
2007. This is due to the increase in the 6 month Euribor rate. The increase in  
interest expenses is partially offset by an increase in financial income earned 
during the 2nd quarter of 2008, as a result of a more favourable cash position  
and increasing interest rates.                                                  

Profit Before Tax                                                               

The Company's profit before taxes for the 2nd quarter of 2008 was 5.8 mln EUR,  
which is 0.73 mln EUR higher than the profit before taxes of 5.1 mln EUR for the
2nd quarter of 2007.                                                            

The Company recorded 4.2 mln EUR income tax as the result of 15.9 mln EUR       
dividends distributed in the 2nd quarter of 2008.                               

Results for the 1st six months of 2008                                          

During the 1st six months of 2008 the Company's total sales increased, year on  
year, by 16.6% to 28.4 mln EUR.  Sales from the Company's main operating        
activities were 23.2 mln EUR. Sales of water and wastewater treatment were 21.4 
mln EUR, a 10.5% increase compared to the 1st half of 2007.                     

The Company's profit before taxes for the 1st six months of 2008 was 11.5 mln   
EUR, which is 0.36 mln EUR higher than the profit before taxes of 11.1 mln EUR  
in the relevant period in 2007. The results for the 1st half of 2007 were       
impacted by the fact that the Ministry of Environment gave final approval to the
success of the nitrogen project, which resulted in the release of a provision   
worth 0.85 mln EUR for environmental taxes. Looking at the underlying profit    
before taxes for the 1st six months of 2007, it shows a 1.2 mln EUR or 11.8%    
increase in 2008 for the same period.                                           


Balance sheet                                                                   

During the 1st six months of 2008 the Company invested 6.3 mln EUR into fixed   
assets. Non-current assets were 138.3 mln EUR at 30 June 2008. Current assets   
decreased by 3.5 mln EUR to 20.4 mln EUR in the six months of the year, customer
receivables decreased by 5.1 mln EUR. During the 1st six months of 2008 cash at 
bank increased by 0.86 mln EUR.                                                 

Current liabilities increased by 6.4 mln EUR to 19.1 mln EUR in the six months  
of the year. This was mainly due to increases in Current portion of long-term   
borrowings by 2.7 mln EUR, as result of the reclassification of the loan based  
on repayment schedule and Taxes payable by 4.5 mln EUR. Increase in taxes       
payable reflects the income tax on dividends.                                   

The company continues to maintain its leverage level within its target range    
above 50% with total liabilities to total capital employed of 55.7% as of 30    
June 2008. Long-term liabilities stood at 69.3 mln EUR at the end of June 2008, 
consisting almost entirely of the outstanding balance on the two long-term bank 
loans.                                                                          


Cash flow                                                                       

During the 1st six months of 2008, the Company generated 14.2 mln EUR of cash   
flows from operating activities, an increase of 3.1 mln EUR compared to the     
corresponding period in 2007. Underlying operating profit continues to be the   
main driver for growth, supplemented by debt collection in six months of 2008.  

In the six months of 2008 net cash inflows from investing activities were 2.6   
mln EUR, which is 4.2 mln EUR more than in 2007. This was mainly due to some    
large construction revenue invoices that were due and paid in the 1st quarter   
2008, offset by increased investment payments. In the 1st six months the company
invested 6.3 mln EUR - 4.9 mln EUR on networks (including 3.4 mln EUR on        
extension and developments), 0.65 mln EUR at Paljassaare wastewater treatment   
plant and sludge treatment, 0.23 mln EUR on water quality (Ülemiste water       
treatment plant and raw water) and 0.48 mln EUR for other investments (IT,      
capital maintenance, meters, etc).                                              

The cash outflows from financing activities were 15.9 mln EUR during the 1st six
months of 2008 compared to cash outflow of 12.6 mln EUR during the same six     
months of 2007, representing the dividend payouts of respective years.          

As a result of all of the above factors, the total cash inflow in the six months
of 2008 was 0.86 mln EUR compared to a cash outflow of 3.1 mln EUR in the six   
months of 2007. Cash and cash equivalents stood at 12.3 mln EUR as at 30 June   
2008.                                                                           


Employees                                                                       

At the end of the 2nd quarter of 2008, the number of employees was 316, compared
to 319 at the end of the 2nd quarter of 2007.                                   


Dividends and share performance                                                 

Based on the results of the 2007 financial year, the company paid 15,914,640 EUR
of dividends. Of this 639 EUR was paid to the owner of the B-share              
and 15,914,000 EUR, i.e. 0.80 EUR per share to the owners of the A-shares.  The 
dividends were paid out on 13 June 2008, based on the list of shareholders,     
which was fixed on 30 May 2008.                                                 

As of 30 June 2008 AS Tallinna Vesi shareholders, with a direct holding over 5%,
were:                                                                           

--------------------------------------------------------------------------------
| United Utilities (Tallinn) BV                     | 35.3%                    |
--------------------------------------------------------------------------------
| City of Tallinn	                            | 34.7%                    |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc clients account trading   | 8.72%                    |
--------------------------------------------------------------------------------
| Morgan Stanley + Co International Equity client   | 6.81%                    |
| account                                           |                          |
--------------------------------------------------------------------------------

At the end of the quarter, 30 June 2008, the closing price of the AS Tallinna   
Vesi share was 11.81 EUR, which is a 5.5% decrease compared to the closing price
of 12.50 EUR at the beginning of quarter,  this is still outperforming the      
market as the OMX Tallinn index dropped by 8.5% during the quarter.             


Operational highlights in the six months of 2008                                

The company implemented the development component in the 1st quarter of 2008    
according to the Services Agreement Amendment, which was signed with the City of
Tallinn on 30 November 2007. The Services Agreement is extended until 2020 and  
the k-coefficient is also fixed until 2020 - 2% in years 2009 to 2010 and 0% in 
years 2011 to 2020. No extra capital expenditures (in addition to maintenance   
capex and extensions program agreed in the contract) can be imposed on the      
company until 2020. According to the agreement the network extension            
constructions must be completed by March 2011. To compensate the Company for the
construction and financing costs, a specific development component is included  
into the Tallinn domestic water tariff starting from 1 March 2008 to the end of 
2017, and the City of Tallinn will compensate 0.28 mln EUR every month for the  
storm water constructions until the end of 2011. The development component shall
be compensated to the customers with direct payment to the company by the City  
of Tallinn. The component is bigger during the construction period (0.58 euros  
per m3 until 31 December 2011 and 0.39 euros per m3 in years 2012 to 2017).     

From the beginning of the year water and wastewater tariffs increased as        
approved by the City Council in 2007. The tariff increase was 11.7% in the main 
service area and was similar outside the main service area, depending on        
individual contracts with the municipalities.                                   

The usage of the web based self service has increased by 3 times compared to    
2007, around 12% of invoices were issued via web.                               

We are pleased to report the compliance with all requirements of the Levels of  
Services established by the contract with City of Tallinn.                      


Additional information:                                                         
Siiri Lahe                                                                      
Chief Financial Officer                                                         
+372 6262 262                                                                   
siiri.lahe@tvesi.ee                                                             




--------------------------------------------------------------------------------
| INCOME STATEMENT                          | 6 months | 6 months  | 12 months |
--------------------------------------------------------------------------------
| (thousand EUR)                            |   2008   |   2007    |   2007    |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Sales from main operating activities      |   23 215 |    20 803 |    41 436 |
--------------------------------------------------------------------------------
| Revenues from other operating activities  |    5 234 |     3 595 |    11 021 |
--------------------------------------------------------------------------------
| Net sales                                 |   28 449 |    24 398 |    52 457 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Costs of goods sold (main operating       |   -8 588 |    -6 519 |   -13 848 |
| activities)                               |          |           |           |
--------------------------------------------------------------------------------
| Costs of goods sold (other operating      |   -4 711 |    -3 206 |   -10 110 |
| activities)                               |          |           |           |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| GROSS PROFIT                              |   15 150 |    14 674 |    28 499 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Marketing expenses                        |     -411 |      -415 |      -866 |
--------------------------------------------------------------------------------
| General administration expenses           |   -1 836 |    -1 888 |    -3 633 |
--------------------------------------------------------------------------------
| Other income/ expenses (-)                |        2 |       126 |       118 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| OPERATING PROFIT                          |   12 905 |    12 496 |    24 118 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Financial income / expenses (-)           |   -1 394 |    -1 347 |    -2 827 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES                       |   11 511 |    11 150 |    21 291 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Income tax on dividends                   |   -4 231 |    -3 533 |    -3 533 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| NET PROFIT FOR THE PERIOD                 |    7 280 |     7 616 |    17 757 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Attributable to:                          |          |           |           |
--------------------------------------------------------------------------------
| Equity holders of A-shares                |    7 280 |     7 616 |    17 757 |
--------------------------------------------------------------------------------
| B-share holder                            |     0,64 |      0,64 |      0,64 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Earnings per share in euros               |     0,36 |      0,38 |      0,89 |
--------------------------------------------------------------------------------




--------------------------------------------------------------------------------
| BALANCE SHEET                             |          |           |           |
--------------------------------------------------------------------------------
| (thousand EUR)                            |30.06.2008|30.06.2007 |31.12.2007 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| ASSETS                                    |          |           |           |
--------------------------------------------------------------------------------
| CURRENT ASSETS                            |          |           |           |
--------------------------------------------------------------------------------
| Cash at bank and in hand                  |   12 264 |    12 813 |    11 403 |
--------------------------------------------------------------------------------
| Commercial paper                          |        0 |         0 |         0 |
--------------------------------------------------------------------------------
| Customer receivables                      |    6 775 |     5 468 |    11 838 |
--------------------------------------------------------------------------------
| Accrued income and prepaid expenses       |    1 023 |       210 |       331 |
--------------------------------------------------------------------------------
| Inventories                               |      262 |       259 |       233 |
--------------------------------------------------------------------------------
| Assets for sale                           |       71 |        50 |        72 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS                      |   20 396 |    18 801 |    23 877 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS                        |          |           |           |
--------------------------------------------------------------------------------
| Tangible assets                           |  128 271 |   122 882 |   127 375 |
--------------------------------------------------------------------------------
| Intangible assets                         |    2 864 |     3 207 |     3 140 |
--------------------------------------------------------------------------------
| Unfinished assets - non connections       |    2 712 |     4 090 |     3 070 |
--------------------------------------------------------------------------------
| Unfinished pipelines - new connections    |    4 314 |     6 220 |     5 756 |
--------------------------------------------------------------------------------
| Prepayments for fixed assets              |      127 |       199 |       345 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS                  |  138 289 |   136 597 |   139 686 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                              |  158 685 |   155 398 |   163 562 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| LIABILITIES                               |          |           |           |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES                       |          |           |           |
--------------------------------------------------------------------------------
| Current portion of long-term borrowings   |    5 301 |         0 |     2 651 |
--------------------------------------------------------------------------------
| Trade and other payables, incl. dividends |    4 428 |     4 356 |     5 558 |
--------------------------------------------------------------------------------
| Taxes payable                             |    6 167 |     4 939 |     1 693 |
--------------------------------------------------------------------------------
| Short-term provisions                     |      159 |       143 |       143 |
--------------------------------------------------------------------------------
| Deferred income                           |    3 058 |     2 652 |     2 691 |
--------------------------------------------------------------------------------
| TOTAL CURRENT LIABILITIES                 |   19 113 |    12 090 |    12 736 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES                   |          |           |           |
--------------------------------------------------------------------------------
| Bank loans                                |   69 311 |    74 555 |    71 932 |
--------------------------------------------------------------------------------
| Other payables                            |        8 |         6 |         7 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT LIABILITIES             |   69 318 |    74 562 |    71 939 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                         |   88 432 |    86 652 |    84 675 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| EQUITY CAPITAL                            |          |           |           |
--------------------------------------------------------------------------------
| Share capital                             |   12 782 |    12 782 |    12 782 |
--------------------------------------------------------------------------------
| Share premium                             |   24 734 |    24 734 |    24 734 |
--------------------------------------------------------------------------------
| Statutory legal reserve                   |    1 278 |     1 278 |     1 278 |
--------------------------------------------------------------------------------
| Accumulated profit                        |   24 178 |    22 336 |    22 336 |
--------------------------------------------------------------------------------
| Net profit for the period                 |    7 280 |     7 616 |    17 757 |
--------------------------------------------------------------------------------
| TOTAL EQUITY CAPITAL                      |   70 253 |    68 746 |    78 887 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY CAPITAL      |  158 685 |   155 398 |   163 562 |
--------------------------------------------------------------------------------




--------------------------------------------------------------------------------
| CASH FLOW STATEMENT                       | 6 months |  6 months | 12 months |
--------------------------------------------------------------------------------
| (thousand EUR)                            |     2008 |      2007 |      2007 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CASH FLOWS FROM OPERATING ACTIVITIES      |          |           |           |
--------------------------------------------------------------------------------
| Operating profit                          |   12 905 |    12 496 |    24 118 |
--------------------------------------------------------------------------------
| Adjustment for depreciation               |    2 837 |     2 540 |     5 064 |
--------------------------------------------------------------------------------
| Adjustment for income and expenses from   |     -523 |      -390 |      -911 |
| constructions                             |          |           |           |
--------------------------------------------------------------------------------
| Other financial income and expenses       |      -51 |       -23 |      -101 |
--------------------------------------------------------------------------------
| Profit from sale of fixed assets          |        0 |         1 |      -155 |
--------------------------------------------------------------------------------
| Expensed fixed assets                     |        0 |         0 |        30 |
--------------------------------------------------------------------------------
| Capitalization of operating expenses      |     -753 |      -580 |    -1 263 |
--------------------------------------------------------------------------------
| Movement in current assets involved in    |    1 186 |      -632 |    -2 049 |
| operating activities                      |          |           |           |
--------------------------------------------------------------------------------
| Movement in liabilities involved in       |      419 |      -689 |       -21 |
| operating activities                      |          |           |           |
--------------------------------------------------------------------------------
| Interest paid                             |   -1 807 |    -1 652 |    -3 386 |
--------------------------------------------------------------------------------
| Total cash flow from operating activities |   14 212 |    11 069 |    21 326 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CASH FLOWS FROM INVESTING ACTIVITIES      |          |           |           |
--------------------------------------------------------------------------------
| Acquisition of fixed assets (incl         |   -6 823 |    -5 887 |   -16 997 |
| pipelines construction)                   |          |           |           |
--------------------------------------------------------------------------------
| Proceeds from pipelines financed by       |    8 758 |     3 885 |     6 509 |
| construction income                       |          |           |           |
--------------------------------------------------------------------------------
| Proceeds from sale of and prepayments     |        1 |         1 |        25 |
| received for fixed assets                 |          |           |           |
--------------------------------------------------------------------------------
| Proceeds from sale of assets and real     |        0 |        15 |        15 |
| estate investments                        |          |           |           |
--------------------------------------------------------------------------------
| Interest received                         |      628 |       346 |       676 |
--------------------------------------------------------------------------------
| Total cash flow from investing activities |    2 564 |    -1 640 |    -9 773 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CASH FLOWS FROM FINANCING ACTIVITIES      |          |           |           |
--------------------------------------------------------------------------------
| Finance lease payments                    |        0 |       -30 |       -30 |
--------------------------------------------------------------------------------
| Dividends paid                            |  -15 915 |   -12 527 |   -12 527 |
--------------------------------------------------------------------------------
| Income tax on dividends                   |        0 |         0 |    -3 533 |
--------------------------------------------------------------------------------
| Total cash flow from financing activities |  -15 915 |   -12 558 |   -16 091 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| Change in cash and bank accounts          |      861 |    -3 128 |    -4 537 |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CASH AND EQUIVALENTS AT THE BEGINNING OF  |   11 403 |    15 940 |    15 940 |
| THE PERIOD                                |          |           |           |
--------------------------------------------------------------------------------
|                                           |          |           |           |
--------------------------------------------------------------------------------
| CASH AND EQUIVALENTS AT THE END OF THE    |   12 264 |    12 813 |    11 403 |
| PERIOD                                    |          |           |           |
--------------------------------------------------------------------------------