Pieno Zvaigzdes

Earnings Release • Nov 30, 2009

Pieno Žvaigždės, AB Confirmation of the Management

2009 11 30 Vilnius

Interim Financial Statements for the nine months 2009

We hereby confirm that to the best of our knowledge, the attached not audited Pieno žvaigždes, AB Interim Financial Statements for the nine months 2009 prepared in accordance with International Financial Reporting Standards give a true and fair view of the assets, liabilities, financial position and profit of Pieno žvaigždės, AB.

CEO

Pieno Žvaigždės, AB Aleksandr Smagin

Pieno Žvaigždės, AB Audrius Statulevičius CFO

PIENO ŽVAIGŽDĖS, AB

INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS OF 2009

VILNIUS, NOVEMBER 2009

1. Balance sheet 3
2. Income statement 4
3. Cash flow statement 5
4. Statement on changes in equity 6
5. Notes to financial statements 7

Financial statements prepared according IFRS, not audited

1. Balance sheet

Thousand Litas	2009.09.30	2008.12.31
Assets
Property, plant and equipment	225 532	235 152
Intangible assets	1 673	1 071
Investments available for sale	275	275
Long-term receivables	4 519	4 453
Deferred tax		-
Total non-current assets	231 999	240 951
Inventories	58 187	81 841
Receivables	72 706	76 709
Cash and cash equivalents	2 138	1 907
Total current assets	133 031	160 457
Total assets	365 030	401 408
Equity
Share capital	54 205	54 205
Share premium	27 246	27 246
Own shares	(6 108)	(4 108)
Reserves	27 373	28 759
Retained earnings	41 445	36 063
Total equity	144 161	142 165
Liabilities
Government grants	3 565	2 775
Interest-bearing loans and borrowings	86 908	77 568
Deferred tax	1 930	1 930
Total non-current liabilities	92 403	82 273
Provisions	-	-
Interest-bearing loans and borrowings	66 979	112 525
Income tax payable	3 200	1 930
Trade and other amounts payable	58 287	62 515
Total current liabilities	128 466	176 970
Total liabilities	220 869	259 243
Total equity and liabilities	365 030	401 408

2. Income statement

Thousand Litas	2009.01.01 - 2009.09.30	2008.01.01 - 2008.09.30
Revenue	460 984	505 744
Cost of sales	(366 241)	(426 024)
Gross profit	94 743	79 720
Other operating income, net	378	6 673
Sales and administrative expenses	(76 132)	(78 345)
Operating profit before finance costs	18 989	8 048
Finance income	795	399
Finance expenses	(6 671)	(8 307)
Finance income/expenses, net	(5 876)	(7 908)
Profit before tax	13 113	140
Corporate income tax	(3 200)	( 21)
Profit for the year	9 913	119
Earnings per share (Litas)	0,18	0,00

Thousand Litas	2009.07.01 - 2009.09.30	2008.07.01 - 2008.09.30
Revenue	161 093	172 445
Cost of sales	(129 606)	(141 886)
Gross profit	31 487	30 559
Other operating income, net	114	6 231
Sales and administrative expenses	(25 739)	(23 698)
Operating profit before finance costs	5 862	13 092
Finance income	179	176
Finance expenses	(1 713)	(2 839)
Finance income/expenses, net	(1 534)	(2 663)
Profit before tax	4 328	10 429
Corporate income tax	(1 036)	( 21)
Profit for the year	3 292	10 408
Earnings per share (Litas)	0,06	0,19

3. Cash flow statement

	2009.09.30	2008.09.30
Cash flows from operating activities
Net profit	9.913	119
Adjustments:
Depreciation and amortisation	31.865	32.806
Amortisation of government grants	(338)	(1.493)
Result of disposal of property, plant and equipment	152
Change in impairment loss of inventories	2.034
Interest income/expenses, net	5.614	7.908
Cash flows from ordinary activities before changes	49.240	39.340
in the working capital
Change in inventories	21.621	6.327
Change in receivables	6.212	(16.270)
Change in trade and other payable amounts	(3.580)	(1.002)
Cash flows from operating activities	73.493	28.395
Interest paid	(6.211)	(7.703)
Income tax paid	(150)
Net cash flow from operating activities	67.132	20.692
Cash flows from investing activities
Acquisition of property, plant and equipment	(24.651)	(33.465)
Acquisition of intangible assets	(808)	(46)
Proceeds on sale of property, plant and equipment	956	5.578
Interest received	597
Net cash flow used in investing activities	(23.906)	(27.933)
Cash flows from financing activities
Loans received	10.255	24.845
Repayment of borrowings	(34.192)	(12.263)
Issue (redemption) of shares	(2.000)	-
Dividends paid	(5.917)	(12.014)
Payment of finance lease liabilities	(12.269)	4.062
Government grants received	1.128	2.511
Net cash from/(used in) financing activities	(42.995)	7.141
Change in cash and cash equivalents	231	(100)
Beginning cash	1.907	2.702
Ending cash	2.138	2.602

4. Statement on changes in equity

Thousand Litas	Share capital	Share premiu m	Own shares	Compulso ry reserve	Revalu ation reserve	Other reserv es	Retained earnings	Total equity
As at 1 January 2008	54 205	27 246	(4 108)	5 420	19 174	3 700	52 875	158 512
Profit allocation						3 100	(3 100)	0
Dividends							(12 016)	(12 016)
Acquisition of own shares Revaluation of fixed								0
assets								0
Depreciation of					(2
revaluated part					358)		2 358	0
Net profit for 2008							119	119
As at 30 September 2008	54 205	27 246	(4 108)	5 420	16 816	6 800	40 236	146 615
As at 1 October 2008	54 205	27 246	(4 108)	5 420	16 816	6 800	40 236	146 615
Profit allocation								0
Dividends								0
Acquisition of own shares								0
Revaluation of fixed
assets								0
Depreciation of
revaluated part					( 278)		278	0
Net profit for 2008							(4 451)	(4 451)
As at 31 December 2008	54 205	27 246	(4 108)	5 420	16 538	6 800	36 063	142 164
As at 1 January 2009	54 205	27 246	(4 108)	5 420	16 538	6 800	36 063	142 164
Profit allocation						( 550)	550	0
Dividends							(5 917)	(5 917)
Acquisition of own
shares			(2 000)					(2 000)
Revaluation of fixed
assets					( 836)		836	0
Depreciation of revaluated part								0
Net profit for 2009							9 913	9 913
As at 30 September 2009	54 205	27 246	(6 108)	5 420	15 702	6 250	41 445	144 160

5. Notes to 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 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	2009.01.01 - 2009.09.30	2008.01.01 - 2008.09.30
Sales, Thousand Litas	460 984	505 744
Gross profit, Thousand Litas	94 743	79 720
EBITDA, Thousand Litas	50 515	39 362
Current ratio (at the end of period)	1,02	2,02
Book value per share (at the end of period)	2,66	2,70
Net profit per share	0,18	0,00

Ratios	2009.07.01 - 2009.09.30	2008.07.01 - 2008.09.30
Sales, Thousand Litas	161 093	172 445
Gross profit, Thousand Litas	31 487	30 559
EBITDA, Thousand Litas	16 222	23 509
Current ratio (at the end of period)	1,02	2,02
Book value per share (at the end of period)	2,66	2,70
Net profit per share	0,06	0,19

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	2009.09.30	2008.12.31
Raw materials	11 926	18 458
Stored production	46 131	63 266
Goods for resale	130	117
Total:	58 187	81 841

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. All company's assets located in Lithuania.

Sales, Thousand Litas	2009.01.01 - 2009.09.30	2008.01.01 - 2008.09.30
Lithuania	233 281	268 933
Russia	158 580	170 316
EU, other countries	69 123	66 495
Total:	460 984	505 744
Sales, Thousand Litas	2009.07.01 - 2009.09.30	2008.07.01 - 2008.09.30
Lithuania	83 643	91 190
Russia	45 182	62 113
EU, other countries	32 368	19 142
Total:	161 093	172 445

Post balance sheet events

There were no significant events after the balance sheet date.