Pieno Zvaigzdes

Earnings Release • Nov 30, 2012

Pieno Žvaigždės, AB Confirmation of the Management

Vilnius, November 2012

Financial statements for the 9 months 2012

We, Aleksandr Smagin, Chief Executive Officer and Audrius Statulevičius, Chief Financial Officer, hereby confirm that, to the best of our knowledge, Interim Financial Statements of the nine months of 2012 prepared in accordance with IFRS, give true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of AB "Pieno žvaigždės".

CEO

Pieno Žvaigždės, AB Aleksandr Smagin

CFO

Pieno Žvaigždės, AB Audrius Statulevičius

PIENO ŽVAIGŽDĖS, AB

INTERIM FINANCIAL STATEMENTS

For the 9 months 2012

VILNIUS, NOVEMBER 2012

1. Balance sheet 3
2. Income statement4
3. Cash flows statement5
4. Statement on changes in equity6
5. Notes to the financial statements7

Prepared according to IFRS, not audited

1. Balance sheet
Thousand Litas	2012.09.30	2011.12.31
Assets
Property, plant and equipment	190 226	181 166
Intangible assets	745	899
Investments available for sale	275	276
Long-term receivables	730	126
Deferred tax
Total non-current assets	191 976	182 467
Inventories	66 016	75 725
Receivables	79 598	73 238
Cash and cash equivalents Total current assets	8 113 153 727	1 973 150 936
Total assets	345 703	333 403
Equity
Share capital	49 634	54 205
Share premium	27 246	27 246
Own shares	-	(14 435)
Reserves	31 603	36 819
Retained earnings	28 496	43 997
Total equity	136 979	147 832
Liabilities
Government grants	3 471	4 422
Interest-bearing loans and borrowings	119 908	92 078
Deferred tax Total non-current liabilities	1 478 124 857	1 478 97 978
Provisions	-	-
Interest-bearing loans and borrowings	18 263	28 578
Income tax payable	4 884	1 402
Trade and other amounts payable	60 720	57 613
Total current liabilities	83 867	87 593
Total liabilities	208 724	185 571
Total equity and liabilities	345 703	333 403

2. Income statement

Thousand Litas	2012.01.01 - 2012.09.30	2011.01.01 - 2011.09.30
Revenue	566 979	524 359
Cost of sales	(461 976)	(425 518)
Gross profit	105 003	98 841
Other operating income, net	464	242
Sales and administrative expenses	(77 980)	(72 318)
Operating profit before finance costs	27 487	26 765
Finance income	147	158
Finance expenses	(4 421)	(3 198)
Finance income/expenses, net	(4 274)	(3 040)
Profit before tax	23 213	23 725
Corporate income tax	(3 482)	(3 559)
Profit for the year	19 731	20 166
Earnings per share (Litas)	0,40	0,37
Thousand Litas	2012.07.01 -	2011.07.01 -
	2012.09.30	2011.09.30
Revenue	206 066	187 139
Cost of sales	(162 623)	(151 779)
Gross profit	43 443	35 360
Other operating income, net	73	70
Sales and administrative expenses	(25 677)	(23 591)
Operating profit before finance costs	17 839	11 839

Finance income 36 79 Finance expenses (2 458) (1 197) Finance income/expenses, net (2 422) (1 118)

Profit before tax	15 417	10 721
Corporate income tax Profit for the year	(2 312) 13 105	(1 608) 9 113
Earnings per share (Litas)	0,26	0,17

3. Cash flows statement

Thousand Litas	2012.09.30	2011.09.30
Cash flows from operating activities
Net profit	19.731	20.166
Adjustments:
Depreciation and amortisation	24.153	25.000
Amortisation of government grants	(951)	(776)
Result of disposal of property, plant and equipment	62	91
Change in vacation reserve	(115)	31
Interest income/expenses, net	2.822	3.090
Income tax	3.482	3.560
Cash flows from ordinary activities before changes in the working capital	49.184	51.162
Change in inventories	9.709	(10.822)
Change in receivables	(6.964)	(9.115)
Change in trade and other payable amounts	5.251	3.036
Cash flows from operating activities	57.180	34.261
Interest paid	(2.822)	(3.090)
Income tax paid	(1.934)	(2.474)
Net cash flow from operating activities	52.424	28.697
Cash flows from investing activities
Acquisition of property, plant and equipment	(33.167)	(16.179)
Acquisition of intangible assets	(50)	(48)
Proceeds on sale of property, plant and equipment	-	145
Interest received	(33.217)	(16.082)
Net cash flow used in investing activities	(33.167)	(16.179)
Cash flows from financing activities
Loans received	35.594	108.068
Repayment of borrowings	(18.078)	(75.353)
Issue (redemption) of shares	(5.766)	(86)
Dividends paid	(24.817)	(24.812)
Payment of finance lease liabilities	-	(20.077)
Government grants received	-	632
Net cash from/(used in) financing activities	(13.067)	(11.628)
Change in cash and cash equivalents	6.140	987
Beginning cash	1.973	3.582
Ending cash	8.113	4.569

4. Statement on changes in equity

000 LTL	Share capital	Share premiu m	Own shares	Compul sory reserve	Revalua tion reserve	Other reserve s	Retained earnings	Total equity
As at 1 January 2011	54 205	27 246	(14 349)	5 420	15 093	16 370	43 058	147 043
Profit allocation						1 050	(1 050)	0
Dividends							(24 810)	(24 810)
Acquisition of own
shares			( 86)					( 86)
Revaluation of fixed
assets								0
Depreciation of
revaluated part					( 836)		836	0
Net profit for 2011							20 166	20 166
As at 30 September 2011	54 205	27 246	(14 435)	5 420	14 257	17 420	38 200	142 313
As at 1 October 2011	54 205	27 246	(14 435)	5 420	14 257	17 420	38 200	142 313
Profit allocation								0
Dividends								0
Acquisition of own
shares								0
Revaluation of fixed
assets								0
Depreciation of
revaluated part					( 279)		279	0
Net profit for 2011							5 519	5 519
As at 31 December 2011	54 205	27 246	(14 435)	5 420	13 978	17 420	43 998	147 832
As at 1 January 2012	54 205	27 246	(14 435)	5 420	13 978	17 420	43 998	147 832
Profit allocation						11 250	(11 250)	0
Dividends							(24 817)	(24 817)
Acquisition of own
shares			(5 766)					(5 766)
Revaluation of fixed
assets								0
Depreciation of
revaluated part					( 837)		837	0
Net profit for 2012							19 730	19 730
As at 30 September 2012	54 205	27 246	(20 201)	5 420	13 141	28 670	28 498	136 979

5. Notes to the financial statements

AB Pieno Žvaigždės was established by way of merger of stock companies Mažeikių Pieninė, Pasvalio Sūrinė, Kauno Pienas and Panevėžio pienas.

The main office of the Company is located in Vilnius and the branches – in Mažeikiai, Pasvalys, Kaunas and Panevėžys.

Ordinary shares of the Company are quoted in the NASDAQ OMX Vilnius Stock Exchange.

The Company is engaged in production and sales of milk products to retail stores directly and through distributors.

Statement of compliance

These are the financial statements of a separate company AB Pieno Žvaigždės, which have been prepared in accordance with International Financial Reporting Standards (IFRS).

Main indicators of the Company's' performance

Ratios	2012.01.01 - 2012.09.30	2011.01.01 - 2011.09.30
Sales, Thousand Litas	566 979	524 359
Gross profit, Thousand Litas	105 003	98 941
EBITDA, Thousand Litas	50 689	50 988
Current ratio (at the end of period)	1,83	1,74
Book value per share (at the end of period), LTL	2,76	2,63
Net profit per share	0,40	0,37

Ratios	2012.07.01 - 2012.09.30	2011.07.01 - 2011.09.30
Sales, Thousand Litas	206 066	187 139
Gross profit, Thousand Litas	43 443	35 360
EBITDA, Thousand Litas	25 582	19 904
Current ratio (at the end of period)	1,83	1,74
Book value per share (at the end of period), LTL	2,76	2,63
Net profit per share	0,26	0,17

Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Inventories, Thousand Litas	2012.09.30	2011.12.31
Raw materials	18 583	18 114
Stored production	46 324	57 356
Goods for resale	1 109	255
Total:	66 016	75 725

Segment reporting

A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Company sales production mainly in domestic market, Russia, EU.

Sales, Thousand Litas	2012.01.01 - 2012.09.30	2011.01.01 - 2011.09.30
Lithuania	253 477	242 860
Other EU countries	78 493	64 260
Other non EU countries	235 009	217 419
Total:	566 979	524 539

Sales, Thousand Litas	2012.07.01 -	2011.07.01 -
	2012.09.30	2011.09.30
Lithuania	86 560	82 381
Other EU countries	34 250	25 555
Other non EU countries	85 256	79 383
Total:	206 066	187 139

Post balance sheet events

There were no significant events after the balance sheet date.