Q1 results of the 2008/2009 financial year

The first quarter operations of the 2008/2009 financial year for AS Tallink Grupp and its subsidiaries (hereinafter also referred to as the Group) were influenced by the global macroeconomic development.

The Group revenues increased by EUR 7.1 million (EEK 111.2 million) showing pleasing 3.8% year-on-year growth in spite of the current weak economic environment. The increase in total passenger related revenues was 12.6% or EUR 16.8 million (EEK 262 million) as the result of increase in the number of passengers which compensated well the EUR 9 million (EEK 142 million) decrease in the cargo revenues. As expected, the delivery of MS Baltic Princess and the related re-routings of M/S Galaxy and M/S Silja Festival had major impact to the growth in the passenger operations.

The management is pleased with EUR 30.2 million (EEK 473 million) EBITDA result being in line with the management expectations for the first quarter. Despite the high operating costs, the Group was able to increase EBITDA by 4.4% as a result of nearly 27% decreasing administrative costs.

It is important to stress that the high cost inflation from the recent past was still influential on the purchase of goods and services during the first quarter of the financial year 2008/2009. Although the fuel prices have decreased significantly by today the prices were still relatively high during the first quarter of the financial year compared to the prices a year ago. The fuel cost for the vessel operations decreased by EUR 0.9 million (EEK 15.3 million), effected from the reduction of the capacity on the Germany route. Similarly, the rapid decrease in EUR interest rates had not yet an impact on the financial costs of the first quarter. As the majority of the interest rates for the Group loans are reset every 3-6 months period, the first quarter interests on most of the Group loans were set at the highest EURIBOR levels at around 5%. As a result of the higher debt liabilities and increased interest rates the Group's interest cost during the first quarter increased by EUR 3.3 million (EEK 51.6 million) or 23% to EUR 17.5 million (EEK 273.5 million) comparing the first quarter a year before.

The global macroeconomic slowdown is impacting negatively the freight volumes carried by the Group vessels. Together with the decrease of the capacity on the Group's Germany route, noticeable decrease in the cargo revenues in the coming periods are expected. On the other hand, the passenger operations are currently remaining strong. The costs for goods, services, fuel and also interest rates are decreasing faster than previously planned which are expected to compensate the potential slowdown in passengers' spendings. Overall, the Group operations are healthy and expected to deliver targeted result.

1st QUARTER KEY FIGURES
	01.09.2008-30.11.2008		01.09.2007-30.11.2007		change
	EEK	EUR	EEK	EUR	%
Net sales (million)	3,031	193.7	2,920	186.6	3.8%
Gross profit (million)	604	38.6	649	41.5	-7%
Gross margin (%)	19.9%		22.2%
EBITDA (million)	473	30.2	453	29.0	4.4%
EBITDA margin (%)	15.6%		15.5%
Net profit for the period (million)	-31	-1.9	3	0.2	-1267%
Net profit margin (%)	-1.0%		0.1%
Depreciation (million)	257	16.5	234	14.9	10.2%
Investments (million)	168	10.7	446	28.5	-62.3%
Weighted average number of ordinary shares outstanding during 1st quarter*	669,882,040		673,817,040		-0.6%
Earnings per share	-0.05	0.00	0.00	0.00
Number of passengers	1,786,205		1,510,079		18.3%
Cargo units	76,313		91,897		-17%
Average number of employees	6,826		6,408		6.5%
	30.11.2008		31.08.2008		change
	EEK	EUR	EEK	EUR	%
Total assets (million)	28,887	1,846	29,702	1,898	-2.7%
Total liabilities (million)	18,614	1,190	19,308	1,234	-3.6%
Interest-bearing liabilities (million)	17,040	1,089	17,525	1,120	-2.8%
Total equity (million)	10,272	657	10,394	664	-1.2%
Equity ratio (%)	35.6%		35.0%
Number of ordinary shares outstanding	669,882,040		669,882,040
Shareholders' equity per share	15.3	0.98	15.5	0.99	-1.3%

Net profit margin - net profit / net sales;
EBITDA - Earnings before net financial items, share of profit of associates, taxes, depreciation and amortization, income from negative goodwill;
EBITDA margin - EBITDA / net sales;
Gross margin - gross profit / net sales
Equity ratio - total equity / total assets;
Earnings per share - net profit / weighted average number of shares outstanding;
Shareholder's equity per share - shareholder's equity / number of shares outstanding.
* Share numbers exclude own shares.

The largest increase of EUR 6.6 million (EEK 104.1 million) in the Group sales was contributed from the Estonia-Finland route, whereas the biggest growth rate of 45.7% in the sales was on the Latvia Sweden route. From the operational segments, the largest increase by EUR 12.5 million (EEK 195 million) was on the restaurant and shop sales as the result of the increased passenger volumes. The Group's cargo sales decreased by EUR 9 million (EEK 142 million), mostly as a consequence of the weak macroeconomics globally.

CONSOLIDATED CONDENSED INCOME STATEMENT
	01.09.2008-30.11.2008	01.09.2007-30.11.2007	01.09.2008-30.11.2008	01.09.2007-30.11.2007
(unaudited, in thousands)	EEK		EUR
Net sales (Note 3)	3,031,349	2,920,102	193,739	186,629
Cost of sales	-2,427,351	-2,270,624	-155,136	-145,119
Gross profit	603,998	649,478	38,603	41,510
Marketing expenses	-215,656	-193,482	-13,783	-12,366
Administrative and general expenses	-175,594	-239,300	-11,223	-15,294
Other income	3,156	3,099	201	198
Other expenses	-271	-282	-17	-18
Financial income (Note 4)	87,511	6,888	5,593	440
Financial expenses (Note 4)	-333,807	-223,774	-21,334	-14,302
Profit /-loss from normal operation before income tax	-30,663	2,627	-1,960	168
Income tax	0	-3	0	0
Net profit /-loss for the period	-30,663	2,624	-1,960	168
Attributable to:
Equity holders of the parent (Note 5)	-30,663	2,624	-1,960	168
Earnings per share	(in EEK per share)		in EUR per share
-basic (Note 5)	-0.05	0.00	0.00	0.00
-diluted (Note 5)	-0.05	0.00	0.00	0.00

CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands)	EEK		EUR
ASSETS	30.11.2008	31.08.2008	30.11.2008	31.08.2008
Current assets
Cash and cash equivalents	451,839	1,043,785	28,878	66,710
Receivables	995,592	1,177,342	63,630	75,246
Prepayments	154,993	111,522	9,906	7,127
Derivatives (Note 6)	103,659	51,884	6,625	3,316
Inventories	319,425	358,480	20,415	22,911
Total current assets	2,025,508	2,743,013	129,454	175,310
Non-current assets
Investments in associates	2,222	2,222	142	142
Other financial assets and prepayments	7,618	7,700	486	492
Deferred income tax assets	199,849	199,851	12,773	12,773
Investment property	4,694	4,694	300	300
Property, plant and equipment (Note 7)	25,441,508	25,518,298	1,626,009	1,630,917
Intangible assets (Note 8)	1,205,697	1,226,023	77,058	78,357
Total non-current assets	26,861,588	26,958,788	1,716,768	1,722,981
TOTAL ASSETS	28,887,096	29,701,801	1,846,222	1,898,291
LIABILITIES AND EQUITY
Current liabilities
Current portion of interest-bearing liabilities (Note 9)	2,185,822	2,200,220	139,699	140,620
Payables	1,247,758	1,621,711	79,746	103,646
Deferred income	171,447	138,752	10,958	8,868
Derivatives (Note 6)	137,675	5,351	8,799	342
Total current liabilities	3,742,702	3,966,034	239,202	253,476
Non-current liabilities
Interest bearing loans and borrowings (Note 9)	14,854,501	15,324,355	949,376	979,405
Deferred income tax liability	16,147	16,147	1,032	1,032
Other liabilities	1,424	1,643	91	105
Total non-current liabilities	14,872,072	15,342,145	950,499	980,542
TOTAL LIABILITIES	18,614,774	19,308,179	1,189,701	1,234,018
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	1,060,434	1,151,071	67,774	73,566
Retained earnings	2,463,719	2,494,382	157,460	159,420
Total equity attributable to equity holders of the parent	10,272,322	10,393,622	656,521	664,273
TOTAL EQUITY	10,272,322	10,393,622	656,521	664,273
TOTAL LIABILITIES AND EQUITY	28,887,096	29,701,801	1,846,222	1,898,291

CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands)	EEK		EUR
	01.09.2008-30.11.2008	01.09.2007-30.11.2007	01.09.2008-30.11.2008	01.09.2007-30.11.2007
Cash flows from operating activities
Net profit /-loss for the period	-30,663	2,624	-1,960	168
Adjustments	507,786	458,235	32,453	29,287
Changes in assets related to operating activities	135,353	15,150	8,651	968
Changes in inventories	39,055	-10,161	2,496	-649
Changes in liabilities related to operating activities	-337,265	-76,655	-21,555	-4,899
Income tax repaid	-52	640	-3	41
	314,214	389,833	20,082	24,916
Cash flow used for investing activities
Purchase of property, plant, equipment and intangible assets (Notes 7, 8)	-168,304	-445,547	-10,756	-28,476
Proceeds from disposals of property, plant, equipment	8,318	312	532	20
Proceeds from settlement of derivatives	12,999	-8,552	831	-546
Interest received	2,718	2,552	173	163
	-144,269	-451,235	-9,220	-28,839
Cash flow from (+)/used for (-) financing activities
Redemption of loans (Note 9)	-467,526	-424,012	-29,880	-27,099
Change in overdraft (Note 9)	-19,440	53,888	-1,242	3,444
Repayment of finance lease liabilities (Note 9)	-2,091	-4,991	-134	-319
Interest paid	-272,834	-208,736	-17,438	-13,341
	-761,891	-583,851	-48,694	-37,315
TOTAL NET CASH FLOW	-591,946	-645,253	-37,832	-41,238
Cash and cash equivalents:
- at the beginning of period	1,043,785	1,303,609	66,710	83,315
- increase (+)/decrease (-)	-591,946	-645,253	-37,832	-41,238
Cash and cash equivalents at end of period	451,839	658,356	28,878	42,077

Janek Stalmeister
Financial Director
AS Tallink Grupp
Tel: +372 6409 800
Fax: +372 6409 810
E-mail: janek.stalmeister@tallink.ee