Q1 results of the 2007/2008 financial year

One of the important developments of the previous financial year, the new booking and check-in system was finally executed in October. The implementation of the new booking system and related activities best describe the focus of AS Tallink Grupp and its subsidiaries (hereinafter also referred to as “the Group”) in the first quarter of 2007/2008 financial year.

Our newest investment, the new generation fast ferry M/S Star, was in operation for her first autumn period to offer the new Shuttle service product. The speed, stable operating schedule and her improved onboard services are of great advantages over the old type fast crafts in the service between Tallinn and Helsinki. The positive effect of the Star is seen in the increased passenger numbers and segment result.

The Group's performance during the first quarter of 2007/2008 financial year was impacted by the launch of the new Group-wide booking and check-in system.
During the transition period of the systems the bookings and sales activities were not running at their highest capacities as the use of resources was disturbed by technical issues. At the same time the booking system is a new tool not only to our internal sales agents but also to our external partners and individual customers who need to adapt to the new system's capabilities that are much more expansive then the previous different booking systems that the Group had in place. However, even though the influence to the passenger numbers is not over yet, we are seeing a return towards expected booking levels at the moment as all users begin to take full advantage of the new potential and features that the new booking system is able to offer.

In the given circumstances of high fuel prices and interest rates and also the new booking system start up factors during the first quarter the Group's result can be considered rather positive as our main routes have improved the margins and several key ratios including revenues per passenger have increased. Based on the current development in our operations, expected new vessels and changes in the routes, also the sign from the world's markets in fuel price and interest rates easing the management expects the positive development in the Group's business during the next nine months reporting period to meet the targets.

Q1 KEY FIGURES

	01.09.2007-30.11.2007		01.09.2006-30.11.2006		change
	EEK	EUR	EEK	EUR	%
Net sales (million)	2,920.1	186.6	2,976.9	190.3	-1.9
Gross profit (million)	649.5	41.5	724.0	46.3	-10.3
Gross margin (%)	22.2		24.3
EBITDA (million)	453.1	29.0	519.2	33.2	-12.7
EBITDA margin (%)	15.5%		17.4
Net profit for the period (million)	2.6	0.2	114.6	7.3	-97.7
Net profit margin (%)	0.1		4.6
Depreciation (million)	233.6	14.9	253.2	16.2	-7.8
Investments (million)	445.5	28.5	247.6	15.8	80.0
Weighted average number of ordinary shares outstanding during 1st quarter	673,817,040		673,817,040		0.0
Earnings per share	0.00	0.00	0.17	0.01	-97.7
Number of passengers	1,510,079		1,616,869		-6.6
Cargo units	91,897		92,914		-1.1
Average number of employees	6,408		6,020		6.4
	30.11.2007		31.08.2007		change
	EEK	EUR	EEK	EUR	%
Total assets (million)	26,131.8	1,670.1	26,570.9	1,698.2	-1.7
Total liabilities (million)	15,991.0	1,022.0	16,436.0	1,050.4	-2.7
Interest-bearing liabilities (million)	14,463.4	924.4	14,831.7	947.9	-2.5
Total equity (million)	10,140.8	648.1	10,134.9	647.7	0.1
Liquidity ratio	0.498		0.665
Equity ratio (%)	38.8		38.1
Number of ordinary shares outstanding	673,817,040		673,817,040		0.0
Shareholders' equity per share	15.05	0.96	15.04	0.96	0.1

Net sales of the Group amounted to 2,920.1 million EEK (186.6 million EUR) in the first quarter of 2007/2008 financial year (September 01, 2007 – November 30, 2007) compared to 2,976.9 million EEK (190.3 million EUR) in the first quarter of last financial year. The decrease in sales in the first quarter resulted largely from the lower number of passengers which was an impact of the lower sales and marketing activity during the transition period to the new Group-wide booking and check-in system.

The Group's gross profit decreased 74.6 million EEK (4.8 million EUR) to 649.5 million EEK (41.5 million EUR), EBITDA decreased by 12.7% to 453.1 million EEK (29.0 million EUR). The net profit was 2.6 million EEK (0.2 million EUR). Basic earnings per share and diluted earnings per share were 0.00 EEK (0.00 EUR) in the first quarter of 2007/2008 financial year compared to 0.17 EEK (0.01 EUR) in Q1 last financial year.

In addition to the decreased sales, the Group's earnings were also negatively affected by the high fuel price and interest rates. Compared to the first quarter of previous financial year the Group's fuel costs increased by around 110 million EEK (7 million EUR) as a result of fuel price increase. In order to minimise the impact from the increased fuel price the fuel surcharges were introduced to the passenger tickets in January 2008.

CONSOLIDATED CONDENSED INCOME STATEMENT

	01.09.2007--30.11.2007	01.09.2006-30.11.2006	01.09.2007--30.11.2007	01.09.2006-30.11.2006
(unaudited, in thousands)	EEK		EUR
Net sales	2,920,102	2,976,863	186,629	190,256
Cost of sales	-2,270,624	-2,252,864	-145,119	-143,984
Gross profit	649,478	723,999	41,510	46,272
Marketing expenses	-193,482	-235,941	-12,366	-15,079
Administrative and general expenses	-239,300	-229,556	-15,294	-14,671
Other operating items	2,817	7,427	180	474
Income from negative goodwill	0	689	0	44
Financial income	6,888	24,636	440	1,575
Financial expenses	-223,774	-176,708	-14,302	-11,294
Profit from normal operation before income tax	2,627	114,546	168	7,321
Income tax	-3	55	0	3
Net profit for the period	2,624	114,601	168	7,324
Attributable to:
Equity holders of the parent	2,624	114,601	168	7,324
Earnings per share (in EEK per share)
- basic	0.00	0.17	0.00	0.01
- diluted	0.00	0.17	0.00	0.01

CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands)

	EEK		EUR
ASSETS	30.11.2007	31.08.2007	30.11.2007	31.08.2007
Current assets
Cash and cash equivalents	658,356	1,303,609	42,077	83,315
Receivables	851,556	815,093	54,424	52,094
Prepayments	71,370	124,134	4,561	7,934
Derivatives	1,994	1,799	127	115
Inventories	282,513	272,352	18,056	17,407
Total current assets	1,865,789	2,516,987	119,245	160,865
Non-current assets
Investments in associates	3,242	3,242	207	207
Other financial assets and prepayments	9,279	9,279	594	594
Deferred income tax assets	153,278	153,102	9,796	9,785
Investment property	4,694	4,694	300	300
Property, plant and equipment	22,813,870	22,600,001	1,458,072	1,444,403
Intangible assets	1,281,662	1,283,592	81,913	82,036
Total non-current assets	24,266,025	24,053,910	1,550,882	1,537,325
TOTAL ASSETS	26,131,814	26,570,897	1,670,127	1,698,190
LIABILITIES AND EQUITY
Current liabilities
Current portion of interest-bearing liabilities	2,288,893	2,247,390	146,287	143,634
Payables	1,323,310	1,408,369	84,575	90,011
Deferred income	136,131	121,008	8,700	7,734
Derivatives	1,421	7,980	91	510
Total current liabilities	3,749,755	3,784,747	239,653	241,889
Non-current liabilities
Interest bearing loans and borrowings	12,174,480	12,584,261	778,091	804,281
Deferred income tax liability	63,463	63,463	4,056	4,056
Pension liability	3,348	3,489	214	223
Total non-current liabilities	12,241,291	12,651,213	782,361	808,560
TOTAL LIABILITIES	15,991,046	16,435,960	1,022,014	1,050,449
EQUITY
Equity attributable to equity holders of the parent
Share capital	6,738,170	6,738,170	430,648	430,648
Share premium	9,999	9,999	639	639
Reserves	1,206,198	1,202,991	77,089	76,885
Retained earnings	2,186,401	2,183,777	139,737	139,569
Total equity attributable to equity holders of the parent	10,140,768	10,134,937	648,113	647,741
TOTAL EQUITY	10,140,768	10,134,937	648,113	647,741
TOTAL LIABILITIES AND EQUITY	26,131,814	26,570,897	1,670,127	1,698,190

CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands)

	EEK		EUR
(unaudited, in thousands)	01.09.2007-30.11.2007	01.09.2006-30.11.2006	01.09.2007-30.11.2007	01.09.2006-30.11.2006
Cash flows from operating activities
Net profit for the period	2,624	114,601	168	7,324
Adjustments	458,235	404,612	29,287	25,859
Changes in assets related to operating activities	15,150	347,793	968	22,228
Changes in inventories	-10,161	-2,134	-649	-136
Changes in liabilities related to operating activities	-76,655	-360,048	-4,899	-23,011
Income tax repaid	640	-226	41	-14
	389,833	504,598	24,916	32,250
Cash flow used for investing activities
Purchase of property, plant, equipment and intangible assets	-445,547	-247,589	-28,476	-15,824
Proceeds from disposals of property, plant, equipment	312	979	20	62
Proceeds from settlement of derivatives	-8,552	12,645	-546	808
Acquisition of minority interests and subsidiary	0	-500	0	-32
Interest received	2,552	6,173	163	395
	-451,235	-228,292	-28,839	-14,591
Cash flow from (+)/ used for (-) financing activities
Transaction costs of issue of shares	0	-6,520	0	-417
Redemption of loans and bonds)	-424,012	-471,367	-27,099	-30,126
Change in overdraft	53,888	0	3,444	0
Repayment of finance lease liabilities	-4,991	-10,098	-319	-645
Interest paid	-208,736	-130,700	-13,341	-8,353
	-583,851	-618,685	-37,315	-39,541
TOTAL NET CASH FLOW	-645,253	-342,379	-41,238	-21,882
Cash and cash equivalents:
- at the beginning of period	1,303,609	1,407,608	83,315	89,963
- increase (+) / decrease (-)	-645,253	-342,379	-41,238	-21,882
Cash and cash equivalents at end of period	658,356	1,065,229	42,077	68,081