Interim Reports:

Financial statements for the year 2006

Report content:

Elisa's financial statements for 2006

Year 2006

October-December 2006

Key indicators were as follows:

Income statement

 

 

EUR million

10-12/2006

10-12/2005

1-12/2006

1-12/2005

Revenue

401 343 1 518 1 337

EBITDA

118 1) 95 2)   4343)

4464)

EBIT

70 38 225 233

Profit before taxes

69 33 212 212

Earnings per share, EUR

0,31 0,18 0,97 1,22

Capital expenditures

70 71 207 204

EBITDA excluding non-recurring items: 1)  EUR 119m, 2) EUR 89m, 3) EUR 445m, 4) EUR 346m

Figures describing the financial position and cash flow:

Financial position

31.12.2006

31.12.2005

Net debt

377 293

Equity ratio, %

63,1 61,7

Cash flow statement

1-12/2006

1-12/2005

Cash flow after investments

118

308

The Board of Directors will propose to the General Meeting that a dividend of EUR 0.50 per share plus an extra dividend of EUR 1.00 per share, which totals EUR 1.50 per share, be distributed for 2006. This corresponds to 152 per cent of the profit for the financial period. The Board of Directors also decided to apply to the General Meeting for authorisation to buy back 8 million treasury shares, which accounts for 5 per cent of total shares. The Group has specified the following medium-term capital structure objectives: net debt to EBITDA of 1.5-2 and gearing of 50-100 percent. The purpose of these proposals is to improve the efficiency of capital structure significantly. The parent company’s distributable proceeds at year-end amounted to EUR 574 million.

 

CEO Veli-Matti Mattila:

?The year 2006 was outstanding.

Elisa’s success last year within both the broadband market and mobile communications was excellent. In Finland, we strengthened our leading position in the broadband market as the number of subscriptions increased by approximately one fifth. Success in mobile communications also furthered Elisa’s success in the 3G service bundles market.

During the last quarter, the number of broadband subscriptions grew by approximately 17,000. We expanded our broadband offering by introducing, among other things, the Viihdekaista entertainment service that offers Canal Digital TV and movie services as well as video rentals.

The popularity of the 3G service bundles contributed significantly to the development of the wireless information society. Once service bundles were permitted in the beginning of April, the handset base started to renew rapidly. According to our estimate, Finns had approximately 350,000 3G service bundles by the end of the year. New handsets also brought about an increase in the use of new services.

Elisa’s revenues grew 14% during the year and the result improved clearly. Thanks to all Elisa employees for their contribution to this successful result, for which a total bonus of EUR 6 million will be transferred to the personnel fund.

The significant difference between interconnection fees applied by different operators distorts competition on the mobile communication markets. The Finnish Communications Regulatory Authority’s (FICORA) view of harmonising unequal interconnection fees is correct, and it is good that the authority has taken measures to this effect. There is a trend towards equal fees also within the EU.

By order of the Finnish Communications Regulatory Authority, the frequencies assigned to operators have been equally distributed as of the beginning of the year. This decision also supports harmonised interconnection fees. It would be just in terms of competition and fair to customers to migrate directly to equal fees and record this as a principle in legislation. ?

ELISA CORPORATION

Vesa Sahivirta
Director, IR and Financial Communication

Further information:
Mr Veli-Matti Mattila, President and CEO, tel. +358 10 262 2635
Mr Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr Vesa Sahivirta, Director, IR and Financial Communication, tel. +358 10 262 3036

Distribution:
Helsinki Stock Exchange
Principal Media