Published: 2005-02-10 07:30:01 CET
Elisa Oyj - Quarterly report
ELISA?S OCTOBER-DECEMBER PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES INCREASED TO EUR 51 MILLION
ELISA CORPORATION STOCK EXCHANGE RELEASE 10 FEBRUARY 2005 AT
8.30am

ELISA’S OCTOBER-DECEMBER PROFIT BEFORE EXTRAORDINARY ITEMS AND
TAXES INCREASED TO EUR 51 MILLION

October-December
·    Profit before extraordinary items and taxes increased to EUR
51 million (-93). Revenue amounted to EUR 351 million (391). The
comparable profit before taxes was EUR 33 million (32).
·    During the last quarter of 2004, the number of Elisa’s
subscriptions in mobile communications rose by 15 000 
subscriptions excluding MVNO subscriptions. At the
end of the year, the number of subscriptions amounted to
1 383 515. The number of subscriptions, both for Elisa’s own and
for service operators in Elisa’s network, developed favourably.
·    During the fourth quarter, the number of broadband
subscriptions rose by over 37 000, amounting to 222 307
subscriptions at the end of the year.
·    The financial position strengthened: equity ratio was 51 per
cent (40) and net debt was reduced to EUR 410 million (654).

In October-December 2004, Elisa’s key figures were:

Income statement       Financial statements        Comparable
EUR million               Q4/2004    Q4/2003   Q4/2004*   Q4/2003**
Revenue                       351        391        351         351
EBITDA                        114         96         96         116
EBIT                           55        -83         37          41
Profit before                  51        -93         33          32
extraordinary items                                                
and taxes
Earnings per share,          0.26      -0.34       0.17        0.16
EUR
CAPEX                          54         63         54          60

Figures describing the financial position and cash flow:

Financial position          31.12.2004 31.12.2003
Net debt                           410        654
Equity ratio, %                   51.1       40.4
                                                 
Cash flow statement          1-12/2004  1-12/2003
Cash flow after                    204        105
investments

In January-December 2004, Elisa’s key figures were:

Income statement       Financial statements        Comparable
EUR million             1-12/2004  1-12/2003 1-12/2004* 1-
                                                        12/2003**
Revenue                      1356       1538       1356        1382
EBITDA                        432        385        414         403
EBIT                          193        -34        175         122
Profit before                                                      
extraordinary items           166        -74        148          86
and taxes
Earnings per share,          0.78      -0.12       0.68        0.33
EUR
CAPEX                         170        194        170         176

*Exclusive of EUR 13 million capital gain on real estate and EUR 5
million revenue recognition due to a change in calculating
principles of the pension provision.
** Exclusive of the Germany-based business, and adjusted to
correspond to the revenue booking procedure change in mobile
communications, effective as of early 2004, as well as exclusive
of substantial non-recurring items.

The Board of Directors will recommend that a dividend of EUR 0.40
per share be distributed for 2004, and that authorisation to
purchase own shares be acquired.

CEO Veli-Matti Mattila:

“Elisa did well in the fierce market. The 2004 performance clearly
improved.

More than a year ago we set our target to improve profitability.
Now our comparable results before taxes have improved
substantially, by approximately 70 per cent.

Last year Elisa did very well in the fierce market.  Weighed
against the other large mobile communications operators, we were
the first to turn the amount of subscriptions back onto a growth
track. Our broadband subscriptions almost doubled. Elisa Broadband
is now available in every municipality in Finland.

Elisa underwent a radical restructuring last year. All our
products and services are now available to our customers in ‘one
desk’. Our operational model was adapted to correspond to the
objectives of an integrated Elisa. Elisa became an umbrella brand,
offering all mobile communication services.

Last November, we introduced our third-generation mobile
communication services. At the early stage, business customers
will be the main users of these services. In 2005, we expect to
gain thousands of new 3G customers.

We believe the market situation will remain fierce and prices may
still fall. However, our target is to consolidate our market
position further and improve our results.”


ELISA CORPORATION

Velipekka Nummikoski
Vice President, Corporate Communications

Further information:

Mr Veli-Matti Mattila, President and CEO, tel. +358 10 262 2635
Ms Tuija Soanjärvi, CFO, tel. +358 10 262 2606
Mr Vesa Sahivirta, IR-director, tel. +358 10 262 3036

Distribution:

Helsinki Stock Exchange
Major media


Financial statement 2004

Market situation

The market situation was tight throughout 2004. Prices continued
to fall for the average call minute rate in the mobile phone
business, and subscriber usage increased.  The robust demand for
broadband subscriptions in the fixed network market prevailed,
whereas the number of traditional subscriptions decreased.

Elisa invested heavily in sales and continued extensive marketing.
Consumer awareness of the umbrella brand increased substantially.
The number of Elisa’s own mobile phone subscriptions and those of
service operators in Elisa’s network continued to develop
favourably. The decrease in subscriptions in early 2004 was
reversed already in the second quarter, and the number of
subscriptions at the year-end was larger than a year earlier. New
operators increased their market share in the low-end segment.
Elisa’s Kolumbus subscription that was launched in this segment
succeeded well, and increased its number of subscriptions.  The
number of broadband subscriptions in the fixed network business
continued to grow strongly. The number of traditional
subscriptions decreased as voice shifts to mobile subscriptions.

In April, Elisa revamped its brand as part of the corporate
strategy process. Elisa became the principal umbrella brand of the
whole group. In addition, Elisa will use selected retail and
product brands.

Changes in corporate structure

The group’s judicial structure was radically changed. The mergers
of the following companies into Elisa were entered in the Trade
Register: Elisa Networks Ltd and Soon Net Ltd on 30 April 2004;
Soon Com Ltd, Oy Heltel Ab, ElisaCom Ltd, RPOCom Oy and Riihimäen
Puhelin Oy on 1 July 2004. In accordance with an announced plan,
the following companies merged into their parent company Oy
Radiolinja Ab: Radiolinja Aava Oy, Radiolinja Suomi Oy, Radiolinja
Origo Oy and Witem Oy. The change of Oy Radiolinja Ab’s name to
Elisa Matkapuhelinpalvelut Oy was entered in the Trade Register on
1 July 2004. The merger of Oy Radiolinja Ab into Elisa was delayed
due to a district court process on the annulment of the decision
made at Oy Radiolinja Ab’s shareholders’ meeting in spring 2000 to
increase the share capital.

Soon Net Ltd of Elisa and Eltel Networks signed an agreement on
transferring the installation business. Along with the
transaction, 67 Soon Net employees joined Eltel Networks on 1
April 2004. The business transfer applied to the construction,
maintenance and repairing of the telecommunication network.

Elisa abandoned the Germany-based business and divested the entire
share capital of its subsidiary Elisa Kommunikation GmbH to a
consortium led by Apax Partners. Due to the transaction, which
took place in early 2004, the Germany-based business has not been
consolidated into Elisa for 2004. The financial impact of the
transaction was recorded for the year 2003.

On 27 May 2004, extraordinary meetings of Yomi and Elisa approved
a merger plan, according to which Yomi merged into Elisa on 31
December 2004. For each Yomi share, Yomi’s shareholders received a
merger consideration of 0.5654 of a new Elisa share. The
acquisition cost of the shares within the group amounted to EUR 52
million.

Elisa increased its holdings in its subsidiary Finnet
International Ltd, a provider of international telecommunication
services, from 51.2 per cent to 100 per cent. The purchase price
was EUR 7.7 million. The selling parties were minority
shareholders which comprise local telcos.

On 30 June 2004, Elisa and Fujitsu Services Oy signed an agreement
on outsourcing Elisa's desktop and data centre services to
Fujitsu. The agreement came into force on 1 July 2004. At the same
time, approximately 100 employees from Elisa joined Fujitsu.

Performance

                        Financial statements       Comparable
EUR million              1-12/2004  1-12/2003 1-12/2004 1-12/2003*
Mobile communications          713        757       713         735
Fixed network                  654        686       654         686
Germany-based business           -        134         -           -
Other businesses               111         98       111          98
Sales between segments        -121       -137      -121        -137
Total                         1356       1538      1356        1382

*Exclusive of the Germany-based business, and adjusted to
correspond to the change in the revenue booking procedure in
mobile communications, effective as of early 2004.

Elisa's revenue for January-December decreased by 12 per cent over
the last year. The reduced revenue was affected by the divested
German operations, the volume of the traditional fixed network
products, as well as by the reduced interconnection fees in the
mobile communications business, the fall in prices, and the change
in the revenue booking procedure. The comparable revenue decreased
by 2 per cent.

Comparable revenue for the mobile communication business decreased
by 3 per cent over the previous year. The fall in prices slightly
exceeded the increased usage. Revenue was boosted by the enhanced
operations of the Estonian subsidiary.

Revenue for the fixed network business decreased by 5 per cent
over last year. The change in revenue was mainly due to the
declining volume in traditional subscription products and
equipment sales. The increased number of broadband subscriptions
improved the revenue.


Performance

                        Financial statements       Comparable
EUR million              1-12/2004  1-12/2003 1-12/2004*         1-
                                                          12/2003**
Mobile communications                                              
 EBITDA                        219        210        219        212
 EBITDA, %                    31 %       28 %       31 %       29 %
 EBIT                          101         73        101         75
Fixed network                                                      
 EBITDA                        185        167        185        180
 EBITDA, %                    28 %       24 %       28 %       26 %
 EBIT                           79         45         79         58
Germany-based business                                             
 EBITDA                          -          4          -          -
 EBIT                            -       -134          -          -
Other businesses and                                               
corporate functions                                                
 EBITDA                         28          4         10         12
 EBIT                           14        -17         -4        -10
Total                                                              
 EBITDA                        432        385        414        403
 EBITDA, %                    32 %       25 %       31 %       29 %
 EBIT                          193        -34        175        122
*Exclusive of EUR 13 million capital gain on real estate, and EUR
5 million revenue recognition due to a change in calculating
principles of pension provision.
** Exclusive of the Germany-based business, and adjusted to
correspond to the change in the revenue booking procedure in
mobile communications, effective as of early 2004, as well as
exclusive of substantial non-recurring items.

Elisa’s EBITDA increased by 12 per cent over the previous year,
and relative profitability rose to 32 per cent (25) of the
revenue. Improved profitability was substantially affected by
streamlining measures executed in the business, reduction in
pension fund payments and disposal of the Germany-based business.
Elisa sold its former main office and booked a EUR 13 million
capital gain on the transaction. Owing to the change in
calculating principles of the pension provision, the company also
recognised EUR 5 million in revenue. All these have been handled
as non-recurring items.

The group's other financing income and expenses totalled EUR -27
million (-40). The financing income also included the share of the
associated companies’ results, EUR 0.7 million (-0.3). Reduced
financing expenses were mainly due to the decreased net debt.

Income taxes in the income statement amounted to EUR -52 million
(+60, including a EUR 89 million tax asset booked from the losses
of the Germany-based business). Altering the tax base from 29 per
cent to 26 per cent at the beginning of 2005 increased tax
expenses by EUR 2 million due to a change in the deferred tax
asset.

The group's January-December results after taxes and minority
interests were EUR 107 million (-17). The group's earnings per
share (EPS) amounted to EUR 0.78 (-0.12). At the end of 2004, the
group shareholders' equity per share stood at EUR 6.00 (5.09 at
the end of 2003).


Mobile communications

                                1-12/2004 1-12/2003     Change
Number of subscriptions*        1 383 515 1 374 146        1 %
Revenue/subscription**(ARPU),€       37.8      41.6       -9 %
Churn**, %                           33.7      18.6           
Usage, million minutes*             2 498     2 310        8 %
Usage, min./subscription/mth**        156       146        7 %
SMS, million minutes*                 537       453       19 %
SMS, msg/subscription/mth**            34        29       18 %
Value-added services/revenue         14 %      12 %           

* Elisa’s network operator in Finland
** Elisa’s service operator

In 2004, the number of Elisa’s network operator subscriptions in
Finland rose by approximately 9 400 excluding MVNO subscriptions.
The share of Elisa’s own service operator accounted for 
approximately 2 300 subscriptions of the increase.

The usage by subscribers continued to grow throughout the year.
The number of call minutes increased by approximately 8 per cent,
and the number of SMS messages sent grew by approximately 19 per
cent.

Revenue per subscription (ARPU) decreased by approximately 9 per
cent over last year. This was partly due to a change in the
revenue booking procedure. Comparable ARPU decreased by
approximately 4 per cent because of reduced interconnection fees
and consumer prices. The revenue booking procedure was changed in
early 2004, so that remunerations payable to providers of value-
added services and interconnection costs to be invoiced are
directly booked as a deduction of revenue.

Elisa’s subsidiary in Estonia succeeded well. Revenue was EUR 75.3
million (60.9), EBITDA EUR 22.5 million (17.5) and EBIT EUR 13.2
million (8.2). At the end of 2004, there were 225 500
subscriptions (167 750).

On 15 April 2004, the Finnish Government amended 3G mobile
communication licences. The amended licenses allow partial joint
constructing and use of networks.

On 23 November 2004, Elisa launched its 3G network for commercial
use and simultaneously began offering the Vodafone Mobile Connect
3G/GPRS data card, which is connected to laptops.

Elisa and Saunalahti agreed on initiating mobile network
cooperation. A part of Saunalahti’s new customers use Elisa’s
network, and the 3G services to be launched will function on
Elisa’s network.

Fixed network business

Number of subscriptions        31.12.2004 31.12.2003      Change
Broadband subscriptions           222 307    127 388        75 %
ISDN channels                     159 591    200 455       -20 %
Cable TV subscriptions            198 447    183 469         8 %
Analogue and other                639 202    675 272        -5 %
subscriptions
Subscriptions, total            1 219 547  1 186 584         3 %

Brisk demand for broadband subscriptions continued during the
whole 2004. In autumn, the speeds in slower categories were
doubled, and the prices of the greater speed categories were
reduced. The number of broadband subscriptions increased by 75 per
cent over the previous year. The number of traditional
subscriptions continued to decrease as voice is shifting to the
mobile network and data to broadband subscriptions.

Elisa continued to substantially expand the coverage area of
broadband during 2004. By the end of the year, the availability of
broadband was extended to every municipality in Finland. Sales in
the new areas had a very positive start.

Nordea and Elisa signed an agreement, which states that Elisa acts
as Nordea’s principal provider of telecommunication services in
Finland. The agreement entails fixed network voice communications,
mobile communications and data transfer services throughout the
country.

The Ministry of Justice renewed its voice services by outsourcing
the phone systems of 9 500 employees and over 350 offices to
Elisa’s service production. The new Salmisaari Courthouse in
Ruoholahti, Helsinki, was one of the principal targets of the
agreement.

Elisa is the first commercial enterprise in Finland, which has
been registered as a CERT organisation (Computer Emergency
Response Team) with 24-hour CERT operations. A CERT team is a
group of experts specialised in information security emergencies
and situations requiring immediate action.

Personnel

During 2004, the average number of personnel at Elisa was 5 590
(7 172). By the end of 2004, the number of personnel was 5 376
(6 683).

                          31.12.2004   31.12.2003       Change
Mobile communications          1 477        1 678        -12 %
Fixed network                  3 015        3 572        -16 %
Germany-based business             -          426            -
Other businesses                 814          905        -10 %
Corporate functions               70          102        -31 %
Total                          5 376        6 683        -20 %

Labour negotiations, initiated in October 2003, were completed on
12 January 2004. As a result, the number of personnel was reduced
by approximately 900 people.

On 22 April 2004, Elisa’s employees established a personnel fund.
The fund includes approximately 4 000 members with membership
based on employment. The fund is owned by the employees, and they
administer the funds paid as rewards by the company and the
proceeds received from the invested capital.

Investments

EUR million                  1-12/2004  1-12/2003   Comparable
                                                    1-12/2003*
Investments                                                   
- in fixed assets                  170        194          176
- in shares                         61         28            8
Total                              231        222          184
Aforementioned investments                       
include GSM leasing                              
liability                           20         28
buy-backs

*Exclusive of the Germany-based business

Capital expenditures in the mobile business were EUR 83 million
(98) and EUR 83 million (74) in the fixed network business. The
investments included GSM leasing liability buy-backs from telcos
for EUR 20 million (28).

Investments in shares were mainly the increase in Elisa’s holdings
to 100 per cent of Yomi and Finnet International.

Financial position

The group's financial position and liquidity strengthened clearly
in 2004. This was particularly affected by positive performance,
the divestment of the Germany-based business and the disposal of
real estate. The January-December cash flow after investments
amounted to EUR 204 million (105).

The disposal of the Germany-based business reduced the group's
interest-bearing liabilities by EUR 65 million, and the leasing
liabilities outside the balance sheet decreased by EUR 133
million. During 2004, the group’s net debt decreased by one-third
from the level in 2003, amounting to EUR 410 million (654) on 31
December 2004.

Elisa sold its former main office real estate to Sponda.  The
selling price was EUR 25.5 million and a capital gain of
approximately EUR 13 million was booked from the transaction.

On 20 September 2004, Elisa completed a note exchange offer. As a
consequence of this, the average maturity of loans was extended
from 3 years to 5.5 years. A new long-term benchmark bond was also
issued. Of the old loans, 66.4 per cent were exchanged for notes
maturing on 22 September 2011. All in all, the notes issued
amounted to EUR 260 010 000.

Financial key indicators

EUR million                            31.12.2004   31.12.2003
Net debt                                      410          654
Gearing, %                                   46.4         87.5
Equity ratio, %                              51.1         40.4
                                                              
                                        1-12/2004         2003
Cash flow after investments                   204          105

Ratings per long-term loans
Credit rating agency                Rating             Outlook
Moody’s Investor Services             Baa2              Stable
Standard & Poor’s                      BBB              Stable

Share

At the end of 2004, the company's total number of shares was
141 989 109. The market capitalisation on 31 December 2004 stood
at EUR 1 682 million. In 2004, a total of 121.4 million company
shares were traded on the Helsinki Stock Exchange for an aggregate
of EUR 1 380 million. The exchange was 88.3 per cent of the number
of shares in the market.

The number of Elisa’s A warrants for the year 2000 was 3 600 000
and B warrants for the year 2000 was 3 600 000. At the end of the
year, the market capitalisation of the warrants amounted to EUR
0.3 million.

Treasury shares

At the end of 2004, the total number of Elisa's shares owned by
the subsidiaries was 210 672 (781 563 at the end of 2003). The
nominal value of the shares totalled EUR 105 336, and their
proportion of the share capital and voting rights was 0.15 per
cent.

During the period of 2-3 November 2004, Yomi sold its 556 870
Elisa shares with a nominal value of EUR 278 435 in total on the
Helsinki Stock Exchange. The sale price totalled EUR 6 388 573.55,
on average EUR 11.47 per share. The transaction related to the
restructuring of Yomi's balance sheet.

Moreover, the Elisa Group Pension Fund owned 202 263 Elisa shares
(722 363 at the end of 2003) at year-end.

Research and Development

In 2004, the group invested EUR 17 million (24) in research and
development. Important research trends were IP technologies, the
end-user’s perspective, and the evolution of wireless equipment.
Customer-centred R&D is of key importance in developing new
services.

Shifting to IFRS reporting

Elisa will adopt International Financial Reporting Standards
(IFRS) at the beginning of 2005. The first interim report
conforming to IFRS will be for the period of January-March 2005.
On 14 February 2005, Elisa will publish a release on the effects
of shifting to IFRS.

The Board of Directors’ authorisations

On 31 March 2004, the Annual General Meeting authorised the Board
of Directors to decide on increasing the company's share capital
through one or more new issues, taking a convertible bond and/or
granting warrants, so that in a new issue the subscription of new
shares in exchange for the convertible bonds and pursuant to
warrants, a maximum aggregate of 27.6 million of the company’s
shares can be issued and the company’s share capital can be
increased by a maximum of EUR 13.8 million in total. The
authorisation is valid for one year from the Annual General
Meeting. The pre-emption rights of shareholders may be waived by
means of this authorisation if there is an important financial
reason for doing so.

The company’s Board of Directors has no valid authorisation to
acquire or assign treasury shares.

Private offering

On 28 March 2004, the Boards of Directors of Elisa and Yomi signed
a merger plan, which was approved by an extraordinary meeting of
Yomi on 27 May 2004. According to the plan, Yomi merged with Elisa
on 31 December 2004.

As a merger consideration, Yomi’s shareholders received 0.5654 of
an Elisa share for each Yomi share. All in all 3 977 352 new Elisa
shares were given as merger consideration. The shares were entered
in the Trade Register on 31 December 2004, whereupon they received
full shareholder rights. These shares entitle their holders to a
dividend for the financial year ending on 31 December 2004. Due to
this share issue, the company’s share capital increased by EUR
1 988 676. After the share issue, the company’s shares amounted to
141 989 109 and the share capital entered in the Trade Register
increased to EUR 70 994 554.50.

Major legal issues

Processes pending in regard to Elisa Matkapuhelinpalvelut Oy
(formerly known as Oy Radiolinja Ab) are the action for annulment
of the decision made at the spring 2000 shareholders’ meeting to
increase the share capital, an appeal against the resolution by
Helsinki District Court to dismiss the action (with which Oy
Multiclearing Ltd demands increasing the redemption price of 255
shares from EUR 7 904.83 to approximately EUR 50 000), plus an
action for annulment demanding the cancellation of the merger
decision made at the shareholders’ meeting in December 2003.

Processes relating to the merger of Yomi and Elisa are the request
of shareholders who oppose the merger decision on the redemption
price of approx. 636 000 shares, and an appeal against a decision
by Turku Administrative Court, in which the Administrative Court
dismissed the request for a special audit.

TeliaSonera Finland Oyj is demanding EUR 13.2 million in
compensation from Elisa Matkapuhelinpalvelut Oy for patent
infringement and damages. It also requests that using the system
pursuant to the alleged patent must be prohibited. The patent
dispute relates to the implementation of Elisa Heimopalvelu.
Elisa denies the patent infringement allegations.

On 2 November 2004, the Finnish Communications Regulatory
Authority (Ficora) initiated an investigation on the pricing of
Elisa Matkapuhelinpalvelut Oy’s terminating traffic. Elisa
Matkapuhelinpalvelut Oy has forwarded clarifications to Ficora.
The matter is still pending.

Events after the financial period

On 18 January 2005, Elisa and IBM signed a letter of intent to
concentrate Elisa's application management services in IBM. The
seven-year agreement will come into force on 1 March 2005. On that
date, 150 employees from Elisa will join IBM as established
employees.

Outlook

The competition in the telecommunications market in Finland is
envisaged to remain tight. It is estimated that usage of both the
mobile and fixed network products will increase. Elisa aims to
strengthen its market position.

Elisa’s revenue for 2005 is estimated to increase slightly. Due to
the implemented and ongoing revamping of operations, the company’s
competitive edge will continue to improve and profitability will
remain good. The comparable EBITDA and EBIT for the first half
of the year is estimated to remain at the same level as in the
fourth quarter of 2004. Capital expenditure will amount to 15 per
cent of the revenue at most, and the cash flow will continue to be
clearly positive.


THE BOARD OF DIRECTORS



ELISA CORPORATION

FINANCIAL STATEMENTS 1 JANUARY-31 DECEMBER 2004
(eur million)
(Figures are not audited)

CONSOLIDATED INCOME STATEMENT                        
                                   Oct-     Oct-     Jan-     Jan-
                                    Dec      Dec      Dec      Dec
                                   2004     2003     2004     2003

Revenue                           350,8    391,0  1 356,0  1 538,2
Other operating income             19,9     12,8     30,9     33,9
Operating expenses               -257,2   -308,0   -954,7 -1 187,4
Depreciation and value 
adjustments:
  On fixed assets                 -48,2    -75,6   -195,5   -273,2
  On Corporation's goodwill       -10,8   -103,2    -43,3   -145,1
EBIT                               54,5    -83,0    193,4    -33,6
Financial income and expenses:
  Share of associated companies' 
  profit                            1,5      0,3      0,7     -0,3
  Other financial income and 
  expenses                         -5,0    -10,6    -27,9    -39,7
Profit before extraordinary items  51,0    -93,3    166,2    -73,6
Extraordinary items
Profit after extraordinary items   51,0    -93,3    166,2    -73,6
Income taxes                      -12,6     47,0    -52,2     59,7
Minority interest                  -2,7     -0,5     -7,4     -2,6
Net profit                         35,7    -46,8    106,6    -16,5

CONSOLIDATED BALANCE SHEET                         31 Dec   31 Dec
                                                     2004     2003
Fixed assets
Intangible assets                                    62,5     64,2
Consolidated goodwill                               440,6    459,5
Tangible assets                                     649,9    856,4
Share in associated companies                        16,2     20,1
Other investments                                    12,5     12,0
                                                  1 181,7  1 412,2
Current assets
Inventories                                          15,1     15,9
Deferred tax receivable                              13,5     81,9
Receivables                                         368,0    352,4
Marketable securities                                96,1      6,5
Cash in hand and in banks                            66,8     60,8
                                                    559,5    517,5
Total assets                                      1 741,2  1 929,7

Shareholders' equity
Share capital                                        71,0     69,0
Share premium account                               561,8    516,7
Contingency fund                                      3,4      3,4
Retained earnings                                   108,2    126,5
Net profit                                          106,6    -16,5
                                                    851,0    699,1
Minority interests                                   33,6     77,3
Provisions for liabilities and charges               17,1     51,6
Liabilities
Long-term creditors                                 565,5    616,5
Short-term creditors                                274,0    485,2
                                                    839,5  1 101,7
Total shareholders' equity and liabilities        1 741,2  1 929,7

Items presented in the tables for each row have 
been rounded.


CONSOLIDATED CASH FLOW STATEMENT 1)
(eur million)
                                                   Jan-       Jan-
                                                    Dec        Dec
                                                   2004       2003
cash inflow from operating activities
Profit before extraordinary items                 166,2      -73,6

Adjustments:
Depreciation and value adjustments                238,8      418,3
Other financial income and expenses                27,2       39,6
Provisions for liabilities and charges            -23,3       -4,3
Sales profits from the disposal of fixed assets   -16,6       -2,0
Sales profits from business operations and shares  -5,6       -1,3
Other adjustments                                   0,3       -0,6
Cash inflow before working capital                387,0      376,1

Change in working capital                           4,9      -16,0
Cash inflow before taxes and financials           391,9      360,1

Received dividens and intrests and intrest paid   -42,9      -40,7
Taxes paid                                        -16,0      -14,6
Free funds from operations                        333,0      304,8

Cash flow in investements
Investments in fixed assets                      -170,1     -193,7
Disposal of fixed assets                           36,6        5,0
Investments in shares and other investments       -10,4      -26,9
Disposal of shares and other investments           12,0       15,2
Disposal of business operations                     2,8        1,0
Cash flow in investments                         -129,1     -199,4

Cash flow after investments                       203,9      105,4

Cash flow in financing
Sales of treasury shares                            6,4
Change in interest-bearing receivables             24,3      -17,6
Change in long-term loans                          -9,1      -96,5
Change in short-term loans                       -116,9       12,0
Dividends paid                                    -13,0       -1,8
Cash flow in financing                           -108,3     -104,0

Change in financial assets                         95,6        1,4
Financial assets at the beginning of 
the financial period                               67,3       65,9
Financial assets at the end of 
the financial period                              162,9       67,3 
1) Consolidated cash flow statement has been 
regrouped from the beginning of 2004.


LIABILITIES                                       
                                                 31 Dec     31 Dec
(eur million)                                      2004       2003

Mortgages, pledges and guarantees
Mortgages
  For own and group companies                      27,6       77,0
Pledges given
  Pledges given as surety                           0,2       23,7
Guarantees given
  For others                                                  11,0
Mortgages, pledges and guarantees total            27,8      111,6

Derivative contracts
Forward contracts and swap agreements
  Market value of underlying security              13,5       14,2
  Market value                                      1,3        1,7

Leasing contracts and
other commitments
Leasing commitments                                23,6       35,3
Repurchase commitments                              4,6        2,7
Real estate leases                                156,6      136,1
Lease liabilities total                           184,8      174,1

Leasing commitments consists mainly from leases 
of IT and office equipment and cars.
Real estate leases consists both office and 
technical space.


Leasing and rental agreements of telecom networks
  Fixed network                                     9,0       16,0
  German business                                            132,8
  Mobile network *)                                29,8       55,4
Rental agreement liabilities, total                38,8      204,2

*) Added to this, a provision for the future 
   redemptions of GSM network financial agreements

Other commitments                                   9,1        6,0
Lease-leaseback agreement (QTE facility)
Termination risk                                   22,8       26,8
Total value of the arrangement                    149,8      160,7


KEY FIGURES  
(eur million)                                    
                             Oct-       Oct-       Jan-       Jan-
                              Dec        Dec        Dec        Dec
                             2004       2003       2004       2003

Earnings/share (EPS), EUR    0,26      -0,34       0,78      -0,12
Shareholders' equity/share,
EUR                                                6,00       5,09
Gross investments in 
fixed assets                 54,0       63,1      170,2      193,8
Gross investments as
% of revenue                 15,4       16,1       12,5       12,6
Purchase of shares           52,7        3,4       61,1       27,7
Non-interest-bearing debt                         283,2      406,7
Average number of personnel                       5 590      7 172

ADJUSTED GROUP KEY FIGURES         
(exclusive of non-recurring 
items)
                             Oct-       Oct-       Jan-       Jan-
                              Dec        Dec        Dec        Dec
                             2004       2003       2004       2003

Revenue                     350,8      391,0    1 356,0    1 538,2
EBITDA                       95,6      118,0      414,3      406,9
EBITDA, %                    27,3       30,2       30,6       26,5
EBIT                         36,6       33,3      175,5       82,7
EBIT, %                      10,4        8,4       12,9        5,4
Profit before 
extraordinary items          33,1       23,0      148,3       42,7

Adjusted key figures have 
been calculated without 
the following non-recurring 
items:
Restructuring costs and
pension provision             5,1      -22,2        5,1      -22,2
Capital gain of real estate 
sales                        12,8                  12,8
Write-downs in Germany                 -94,1                 -94,1

Non-recurring items, total   17,9     -116,3       17,9     -116,3
Impact on EBITDA             17,9      -22,2       17,9      -22,2
Impact on EBIT               17,9     -116,3       17,9     -116,3
Impact on profit before 
extraordinary items          17,9     -116,3       17,9     -116,3


KEY FIGURES BY SEGMENTS OCTOBER-DECEMBER/2004 1)
(eur million)

                 Revenue              EBITDA               EBIT
                 Oct-Dec             Oct-Dec             Oct-Dec
              2004     2003       2004     2003       2004     2003

Mobile       179,9    201,3       52,1     62,7       32,2     38,8
Amortisation 
on goodwill                                           -9,6     -9,6
Total        179,9    201,3       52,1     62,7       22,6     29,2

Fixed 
Network      162,0    171,4       41,8     29,2       16,1     -5,6
Amortisation 
on goodwill                                           -0,9      0,8
Total        162,0    171,4       41,8     29,2       15,2     -4,8

Germany
Carrier-
business               32,6                 2,2               -10,7
Amortisation 
on goodwill                                                   -91,6
Total                  32,6                 2,2              -102,3

Other 
Companies
Comptel       17,9     13,3        5,1      2,6        4,6      1,9
Other 
Companies 2)  15,5     10,6        1,0      1,0       -0,9      0,4
Amortisation 
on goodwill                                           -0,4     -2,9
Total         33,4     23,9        6,1      3,6        3,3     -0,6

Unallocated 
expenses 3)    2,6      0,9       13,5     -1,9       13,4     -4,5

Intra-segment 
sales        -27,1    -39,1

Corporation 
total        350,8    391,0      113,5     95,8       54,5    -83,0



KEY FIGURES BY SEGMENTS (exclusive of non-recurring items)

Segments                          
                  Revenue             EBITDA               EBIT
                  Oct-Dec             Oct-Dec             Oct-Dec
              2004     2003       2004     2003       2004     2003

Mobile       179,9    201,3       52,1     64,3       22,6     30,8
Fixed 
Network      162,0    171,4       41,8     42,3       15,2      8,3
Germany                32,6                 2,2                -8,2
Other 
Companies     33,4     23,9        6,1      3,6        3,3     -0,6
Unallocated 
expenses       2,6      0,9       -4,4      5,6       -4,5      3,0
Intra-segment 
sales        -27,1    -39,1                                     
Corporation 
total        350,8    391,0       95,6    118,0       36,6     33,3


1) Business has been re-grouped to match new organisation.
   Segment figures are not comparable with the previously reported 
   figures for the business areas in earlier years.
2) Includes Yomi IT companies.
3) Includes unallocated expenses of corporate headquarters and 
   administration.


KEY FIGURES BY SEGMENTS JANUARY-DECEMBER/2004 1)
(eur million)

                 Revenue              EBITDA               EBIT
                 Jan-Dec             Jan-Dec             Jan-Dec
              2004     2003       2004     2003       2004     2003

Mobile       712,8    757,3      218,7    210,0      139,1    110,9
Amortisation 
on goodwill                                          -38,2    -38,2
Total        712,8    757,3      218,7    210,0      100,9     72,7

Fixed 
Network      653,6    686,0      185,3    166,6       82,3     46,3
Amortisation 
on goodwill                                           -3,5     -1,8
Total        653,6    686,0      185,3    166,6       78,8     44,5

Germany
Carrier-
business              134,1                 3,8               -33,7
Amortisation 
on goodwill                                                  -100,0
Total                 134,1                 3,8              -133,7

Other 
Companies
Comptel       59,7     54,0       16,7      9,5       14,5      6,6
Other 
Companies 2)  48,7     41,7        1,2     -1,8       -4,8     -5,6
Amortisation 
on goodwill                                           -1,7     -5,1
Total        108,4     95,7       17,9      7,7        8,0     -4,1

Unallocated 
expenses 3)    2,4      2,2       10,3     -3,4        5,7    -13,0

Intra-segment 
sales       -121,2   -137,1

Corporation 
total      1 356,0  1 538,2      432,2    384,7      193,4    -33,6



KEY FIGURES BY SEGMENTS (exclusive on non-recurring items)

Segments                           
                 Revenue             EBITDA               EBIT
                 Jan-Dec             Jan-Dec             Jan-Dec
              2004     2003       2004     2003       2004     2003

Mobile       712,8    757,3      218,7    211,6      100,9     74,3
Fixed 
Network      653,6    686,0      185,3    179,7       78,8     57,6
Germany               134,1                 3,8               -39,6
Other 
Companies    108,4     95,7       17,9      7,7        8,0     -4,1
Unallocated 
expenses       2,4      2,2       -7,6      4,1      -12,2     -5,5
Intra-segment 
sales       -121,2   -137,1
Corporation 
total      1 356,0  1 538,2      414,3    406,9      175,5     82,7


1) Business has been re-grouped to match new organisation.
   Segment figures are not comparable with the previously reported 
   figures for the business areas in earlier years.
2) Includes Yomi IT companies.
3) Includes unallocated expenses of corporate headquarters and 
   administration.


FINANCIAL SITUATION
(eur million)
                                31 Dec  30 Sep 30 Jun 31 Mar 31 Dec
                                    04      04     04     03     03
Long-term debt
  Bonds and notes                481,4   484,9  471,5  471,5  471,5
  Loans from the Pension funds    75,4    79,6   79,5   79,6   79,5
  Loans from financial 
  institutions                     1,9     3,3    3,5    3,4   57,8
Total                            558,8   567,8  554,5  554,5  608,8
Short-term debt
  Bonds and notes                  0,0   100,0  100,0  100,0  100,0
  Loans from financial 
  institutions                     0,2     0,7    0,7    1,7   12,2
  Committed credit line 1)         0,0     0,0    0,0    0,0    0,0
  Commercial papers 2)             0,0     0,0    0,0    0,0    0,0
  Others                          14,4 3) 10,2   10,2   23,9   25,5
Total                             14,6   111,0  110,9  125,6  137,7
Interest-bearing debt, total     573,4   678,8  665,5  680,1  746,6

  Security deposits                0,0     0,0    0,0   25,2   24,5
  Securities                      96,1   128,7  114,0   24,3    6,5
  Cash and bank                   66,8    89,1   39,0   43,3   60,8
Interest-bearing receivables     162,9   217,8  153,0   92,8   91,8

Net debt 4)                      410,5   461,0  512,5  587,3  654,8

1) The committed credit line is a joint EUR 170 million revolving 
   credit facility with eight banks, which Elisa Corporation may 
   flexibly use on agreed pricing. The loan arrangement is valid 
   until 16 June 2008.
2) Elisa Corporation has agreed on a joint programme with seven 
   banks on issuing commercial papers. The arrangement is not 
   committed. The maximum amount of the arrangement is EUR 150 
   million.
3) Redemption liability for minority shareholders in Elisa 
   Matkapuhelinpalvelut (EUR 2,6m) and in Yomi Oyj (EUR 4,3m)
   and deposits in the Financial Services Office (EUR 7,6m).
4) Net debt is interest-bearing debt less cash and liquid 
   interest-bearing receivables.

Key Financial Indicators      31 Dec  30 Sep 30 Jun  31 Mar 31 Dec
                                  04      04     04      04     03

Gearing                       46,4%    56,0%  64,0%   75,9%  87,5%
Equity ratio                  51,1%    45,5%  46,2%   44,4%  40,4%


Formulae for financial indicators


Gearing  %  

                Interest-bearing debt-cash and bank-securities
                ---------------------------------------------x 100
                     Shareholders' equity + minority interests


Equity ratio %



                     Shareholders' equity + minority interests
                    -----------------------------------------x 100
                       Balance sheet total - advances received