Financial Results

for the First Quarter of 2004

Highlights – First Quarter of 2004

On 2 January 2004 Arunas Siksta took the office of General Manager of Lietuvos

Telekomas.

In February, a new management structure of Lietuvos Telekomas was approved

and implemented as of 1 April 2004.

UAB Comliet, a subsidiary of Lietuvos Telekomas, transferred its

telecommunication service implementation and maintenance activities to Lietuvos

Telekomas as of 1 April 2004. UAB Comliet considers sell off of its construction

business.

UAB Verslo Portalas, joint venture of Lietuvos Telekomas and Verslo Zinios, will

terminate its activities and will be liquidated.

UAB Lintel and UAB Lintkom, both being members of Lietuvos Telekomas’ Group,

have started reorganisation process. UAB Lintkom will be merged into UAB Lintel.

AB Lietuvos Telekomas’ Shareholders

60.00%

7.93%4.67%

27.40%Amber Teleholding A/S

State of Lithuania

Treasury stocks

Other shareholders

Amber Teleholding A/S is a fully owned subsidiary of TeliaSonera AB.

During January – March 2004 State of Lithuania reduced its shareholding from 8.12% to 7.93% by giving shares of the Company to the citizens of Lithuania as a compensation for realty redeemable by the State of Lithuania.

As of 31 March 2004 112,203,890 shares of the Company (13.77% of the total share capital) were represented by 11,220,389 GDRs of AB Lietuvos Telekomas.

UAB Lintkom, a member of Lietuvos Telekomas’ Group, holds treasury stocks.

(as of 31 March 2004)

Structure of Lietuvos Telekomas’ Group

AB Lietuvos Telekomas(fixed-line telephony, data communication, fixed-line network, wholesales and Internet-related services)

UAB Voicecom (VoIP services)

UAB Lintkom* (treasury stocks)

UAB Lintel* (directory inquiry, telemarketing and contact center services)

UAB Lietuvos Telekomo Verslo Sprendimai (‘business solutions’ to largest customers)

UAB Comliet (telecommunications and low voltage network’s construction services)

UAB TietoEnator Consulting (IT-related consultancy services)

UAB Verslo Portalas** (B2B portal)

UAB Baltijos Informaciniu Duomenu Valdymo Centras (IT infrastructure services)

100 % Baltic Data Center SIA

55% Telegrupp AS

75 % Datu Tikli SIA

95 % Comliet-Kaliningrad

100 % UAB Sonex KomunikacijosVsI Lietuvos Telekomo Sporto

Klubas (sports club)

100%

100%

100%

100%

60%

60%

30%

26%

100%

* company under reorganisation; ** company under liquidation

Fixed-line Telephony Services

Number of main lines in service

826

893

859

836828

780

800

820

840

860

880

900

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

Th

ou

san

ds

During January – March 2004 number of main lines decreased by just 2.5 thousand.

Tariffs for long-distance calls during peak time reduced by 35% to 0.26 litas and for subscribers to the new payment plan Miestai (Cities) even down to 0.12 litas.

The Company improved its Local and Country payment plans by providing subscribers with additional 30 hours of free-of-charge calls during off-peak time.

Compared with Q1 2003, local calls’ traffic in Q1 2004 was up by 11%, long-distance up by 19%, fixed to mobile up by 42%.

Internet-related Services

Number of ADSL access points

23,699

16,50914,289

12,371

28,984

1,386

1,795

1,007

592

255

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

WholesalesRetail

In the first quarter of 2004 the Company launched a new dial-up Internet access payment plan, Internet, that offers 30 hours per month for just 10 litas.

At the end of March the number of Internet payment plan users was 12.5 thousand and total number of dial-up Internet access service users was 40.6 thousand.

DSL service users were offered a new voice communication over the Internet service.

Key Financial Figures – First Quarter of 2004

Group, according to IFRS, unaudited

Revenue amounted to LTL 185 million, a decrease by 9.4%, year–on-year.

Operating expenses, including additional employee redundancy costs of LTL 7

million, were cut down by 2.5% to LTL 99 million, y-o-y.

EBITDA amounted to LTL 86 million and EBITDA margin was 46.2%. Underlying

EBITDA (excluding employee redundancy costs) was 50%.

Profit before profit tax was LTL 6 million and net profit was LTL 4 million.

During the quarter net cash flow from operating activities was LTL 60 million.

Due to repayment of loans cash and cash equivalents decreased by LTL 50 million.

Investments amounted to LTL 11 million.

Profit (Loss) Statement (in million of litas)

Group, according to IFRS, unaudited

Revenue 184.9 204.0 -9.4%

Operating expenses -99.4 -102.2 -2.8%

EBITDA 85.5 101.7 -15.9%

EBITDA margin 46.2% 49.9%

Depreciation and amortisation -76.6 -90.0 -14.9%

Operating profit (EBIT) 8.9 11.7 -23.6%

EBIT margin 4.8% 5.7%

Financial activities, net -3.4 -8.0 -57.4%

Profit before profit tax 5.7 3.8 47.9%

Net profit 4.0 2.0 95.4%

Net profit margin 2.1% 1.0%

Earnings per share (LTL) 0.005 0.003 95.4%

Q1 2004 Q1 2003 Change

Reclassified Breakdown of Revenue (in million of litas)

Group, according to IFRS, unaudited

Fixed-line Telephony Services 141.8 164.4 -13.7%

Internet and Data Communication Services 31.3 29.1 7.3%

Other Services 11.8 10.4 13.1%

Total 184.9 204.0 -9.4%

Q1 2004 Q1 2003 Change

In the fourth quarter of 2003, Lietuvos Telekomas has adjusted its revenue grouping following the latest standard used by TeliaSonera AB. Revenue from ISDN services were moved from the Internet and Data Communication Services group and Contact Centre services (Inquiry service 118, Operator-assisted services) from the Other Services group to the Fixed-line Telephony Services group.

Revenue, EBITDA and EBITDA margin (in million of litas)

Group, according to IFRS, unaudited

Revenue by quarters

EBITDA & EBITDA margin

207197204204

185

0

50

100

150

200

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

8910096102 86

43.0%

46.2%

50.6%

47.0%

49.9%

0

50

100

150

200

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

30%

35%

40%

45%

50%

55%

60%

In first quarter of 2004, the Company had additional employee redundancy costs of LTL 7 million.

Cash Flow and Net Debt (in million of litas)

Group, according to IFRS, unaudited

Cash Flow

Net Debt/EquityNet Debt

60

78

100

51

6862

0

20

40

60

80

100

120

Q1 2002 Q1 2003 Q1 2004

Net cash fromoperating activities

Net cash beforefinancing activities

26

70

115

178

2242%

6%

10%

15%18%

0

50

100

150

200

250

300

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

- 10%

0%

10%

20%

Net debt

Net debt toequity ratio(Gearing)

In March, the Company redeemed its LTL 150 million Eurobond issue.

During the quarter cash and cash equivalents decreased by LTL 50 million.

Investments and Network Digitalisation

Network Digitalisation, in total

Group’s Investments in million of litas

1110

16

14

11

0

2

4

6

8

10

12

14

16

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 88.5%

63.0%

47.4%

38.0%

91.3%

0%

20%

40%

60%

80%

100%

Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004

On 31 March 2004, total number of ISDN channels was 39.1 thousand, total number of ADSL access points was 30.8 thousand and number of MPLS VPN access points was 809.

Employees

Number of Lietuvos Telekomas’ Group employees at the end of the period

Main lines per employee in the core business at the end of the period

3,5863,6934,0644,1403,353

281300

275261271

0

2,000

4,000

6,000

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004

50

100

150

200

250

300

More information about Lietuvos Telekomas’ Group is available on the web page:

www.telecom.lt