Published: 2006-02-09 07:30:00 CET
Elisa Oyj - Quarterly report
ELISA'S OCTOBER-DECEMBER PRE-TAX PROFIT AMOUNTED TO EUR 33 MILLION
ELISA CORPORATION STOCK EXCHANGE RELEASE 9 FEBRUARY 2006 AT 8.30am

ELISA'S OCTOBER-DECEMBER PRE-TAX PROFIT AMOUNTED TO EUR 33 MILLION

October-December pre-tax profit amounted to EUR 33 million (65).
Revenue was EUR 343 million (351). Excluding non-recurring items,
the pre-tax profit amounted to EUR 27 million (50).

Excluding non-recurring items, the EBITDA for the period under
review amounted to EUR 89 million, which is slightly better than
anticipated

Compared with the previous quarter, Elisa's number of mobile phone
subscriptions, exclusive of MVNOs, increased by approximately
2,300 subscriptions, and the churn decreased further from 27.2 per
cent to 22.6 per cent. The total number of subscriptions in
Elisa's network was approximately two million.

During the final quarter the number of broadband subscriptions
increased by 39,000 to 385,000 subscriptions at year-end. Together
with Saunalahti, the total number of subscriptions reached
420,500.

Elisa's key indicators were as follows:

Income statement       
EUR million              10-12/05   10-12/04    1-12/05    1-12/04 
Revenue                       343        351      1,337      1,356
EBITDA                      95 1)     122 2)     446 3)     455 4)
EBIT                           38         69        233        242
Profit before taxes            33         65        212        213
                                                                   
Earnings per share, EUR      0.18       0.35       1.22       1.10
Capital expenditures           71         59        204        182 
                               
1) Comparable EBITDA EUR 89 million 
   (capital gain on the divestment of Estera, EUR 6 million)
2) Comparable EBITDA EUR 108 million
3) Comparable EBITDA EUR 346 million
4) Comparable EBITDA EUR 441 million

Figures describing the financial position and cash flow:

Financial position         31 Dec 2005 31 Dec 2004
Net debt                           293         462
Equity ratio, %                   61.7        49.3
                                                 
Cash flow statement            1-12/05     1-12/04
Cash flow after investments        308         225

The Board of Directors will propose to the AGM that a dividend
of EUR 0.70 per share be distributed for 2005, which corresponds 
to approximately 66 per cent of the profit for the financial 
period. The Group's distributable equity at year-end amounted 
to EUR 276 million. The Board of Directors further proposes 
that authorisation be sought to purchase the company's own 
shares, a maximum of 10 per cent of the share capital.


CEO Veli-Matti Mattila:

”A year of strong market grow for Elisa

The year 2005 was a period of strong market growth for Elisa. 
We were highly successful in the fierce competition in both the
mobile communications and the broadband markets.

In the summer we became the market leader in broadband
subscriptions. At year-end, the number of our broadband
subscriptions was approximately 385,000, showing a growth of more
than 70 per cent on the previous year. Our acquisition of
Saunalahti brought us a further 35,000 subscriptions. We improved
services in the broadband market by offering higher speeds at the
same price.

Elisa's mobile phone subscriptions increased by approximately
100,000 during the year, totalling almost 1.5 million
subscriptions at year-end. When Saunalahti became part of Elisa
in autumn 2005, the number of mobile phone subscriptions in
Elisa's network reached almost two million. Together, Elisa and
Saunalahti form a strong Finnish player in the ICT market.

Competition with prices reached its peak in early autumn 2005.
After that the price competition slowed down and the focus has
shifted to competition with new services. The entry into force
of a new Act in April, which will allow service packages including
both handsets and services, gives us good opportunities for 
offering new services. Finland will have the opportunity of 
regaining its place as top mobile communications services.

Elisa will continue to streamline and boost the efficiency of its
operations in order to be able to offer an even better service. We
also expect to see a marked improvement in revenue and operative
profitability on the previous year.”

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
Major media


Financial report 1 January to 31 December 2005

As of 1 January 2005, the Finnish Accounting Standards (FAS) were
replaced by the International Financial Reporting Standards (IFRS)
in Elisa Corporation's consolidated reporting.

This financial statement has been prepared in accordance with the
IFRS booking and valuation principles.

Market situation

The market situation was tight throughout 2005. Prices continued
to fall for the average call/minute rate in the mobile phone
business, and subscriber usage increased. The year saw several
marketing campaigns offering low-rate voice and SMS services. The
number of Elisa's own mobile phone subscriptions continued to
develop favourably.

The number of broadband subscriptions in the fixed network
business continued to grow strongly, but the decrease in the
number of traditional subscriptions and their usage was even
stronger than before.

Revenue
                         Financial statements
EUR million                1-12/05    1-12/04

Mobile communications          740        713
Fixed network                  671        654
Other businesses                38        111
Sales between segments        -112       -121
Total                        1,337      1,356

The decrease in Elisa's turnover was due to the sale of Comptel,
Yomi Software and Estera shares, which were not included in
Elisa's core business. The comparable revenue for 2005 improved
slightly on the previous year.

The revenue from the mobile phone business was affected by an
increase in the number of subscriptions in Elisa’s network, growth
in usage of subscriptions and the increase in traffic generated by 
Saunalahti’s subscribers. Revenue growth was curtailed by reduced 
interconnection fees and consumer prices. Revenue growth in the 
fixed network business was attributable to the acquisition of a 
new subsidiary, Tikka Communications, and growth in the 
broadband business.

Performance 
                          Financial        Exclusive of non-
                          statements       recurring items

EUR million               1-12/05 1-12/04  1-12/05* 1-12/2004**
Mobile communications                                              
 EBITDA                       220     227       190         227
 EBITDA, %                     30      32        26          32
 EBIT                         130     138       100         138
Fixed network                                                      
 EBITDA                       160     201       156         201
 EBITDA, %                     24      31        23          31
 EBIT                           4      91        41          91
Other business and                                                 
corporate functions                                                
 EBITDA                        66      27         0          13
 EBIT                          58      12        -8          -2
Total                                                             
 EBITDA                       446     455       345         441
 EBITDA, %                     33      34        26          33
 EBIT                         233     242       132         227

* Capital gain on the divestment of Yomi Software, EUR 4 million;
compensations for damage in interconnection traffic, EUR 28
million; capital gain on real estate, EUR 15 million; capital gain
on the disposal of Comptel shares and the related impact on
earnings, EUR 40 million; IFRS adjustment relating to the transfer
of pension liabilities, EUR 13 million; provision for reorganizing
operations, EUR -6 million; and capital gain on the sale of
Estera, EUR 6 million.

** EUR 9 million capital gain on real estate and EUR 5 million 
revenue recognition due to a change in the calculating
principles of the pension provision

Elisa's EBITDA decreased by 2 per cent from the previous year, and
relative profitability decreased by one percentage point to 33 per
cent of the revenue. EBITDA for 2005 included a capital gain on
the divestment of Yomi Software Ltd and Estera, a tax-free capital
gain on the disposal of Comptel shares, compensation for damages
received from TeliaSonera and capital gain on real estate. Thus
the relative profitability, excluding non-recurring items,
decreased from 33 to 26 per cent. This was affected by the price
erosion in mobile communications consumer and interconnection
traffic fees and diminished traffic volumes in the fixed network,
frontloading of costs in the broadband business and market
investments.

The Group’s other financial income and expenses totalled EUR -22
million (-30). The financing income also included the share of the
associated companies' results, EUR 1.2 million (1.3). The reduced
financing expenses were mainly due to a significant decrease in
interest-bearing liabilities.

Income taxes in the income statement amounted to EUR -34 million 
(-53). The Finnish tax base was altered from 29 per cent to 26 per
cent at the beginning of 2005.

The group's January-December results after taxes and minority
interests stood at EUR 176 million (152). The group’s earnings per
share (EPS) amounted to EUR 1.22 (1.10). At the end of 2005, the
group shareholders' equity per share stood at EUR 8.06 (6.23 at
the end of 2004).

Changes in corporate structure

Elisa sold the entire share capital of Yomi Software Ltd, a 100
per cent subsidiary of Elisa, to Sysopen Digia Plc. The selling
price was EUR 12.1 million, and Elisa was also released from a EUR
1.5 million debt liability.

Elisa and IBM signed an agreement on the allocation of Elisa’s
application management services to IBM as of 1 April 2005. On the
same date, 150 Elisa employees transferred to IBM.

The merger of Liedon Puhelin Oy with Lounet Oy was entered in the
trade register on 31 March 2005. Elisa previously owned 16.8 per
cent of Liedon puhelin. Following the merger, Elisa's holding in
Lounet decreased from 50.2 per cent to 46.7 per cent. Lounet is
consolidated in Elisa as a group company based on a rule of vote.

The merger of Kestel Oy and Kesnet Oy with Elisa was entered in
the trade register on 31 March 2005, the merger of Finnet
International Ltd on 31 May 2005 and the merger of Elisa
Matkapuhelinpalvelut Oy on 31 December 2005.

On 29 April 2005, Elisa submitted a public tender offer for the
shares of Tikka Communications Oy. In May, Elisa's holding in the
company exceeded 50 per cent, after which Tikka Communications Oy
was consolidated as a subsidiary as of 1 June 2005. Elisa acquired
a 100 per cent holding in the company by mid-December.

Elisa's ownership of Comptel Corporation decreased from 58.1 per
cent to 19.9 per cent after Elisa sold 40,946,000 Comptel
Corporation shares to investors for EUR 65.1 million at the end of
May. Comptel Corporation was consolidated as a subsidiary until 31
May 2005.

On 1 June 2005, Elisa sold its 35 per cent holding of Racap
Solutions Oy to Capgemini Finland Oy.

On 27 June 2005, Elisa sold a 55.1 per cent stake in Lippupiste
Oy's share capital to Interavanti Oyj and a 25 per cent stake to
Cardplus Oy. Elisa still has a 19.9 per cent holding in Lippupiste
Oy, which the buyers have agreed to purchase from Elisa after a
period of two years.

As of 1 July 2005, Elisa transferred its personnel’s statutory
pension coverage to Varma Mutual Pension Insurance Company and
supplementary pensions to Sampo Life Insurance Company Limited.

On 7 July 2005, Elisa made a public tender offer for all shares
issued by Saunalahti Group Oyj and a bid to Saunalahti option
holders. Elisa's ownership of Saunalahti Group Oyj stood at
approximately 97 per cent at the end of the year. In order to
acquire all Saunalahti shares, Elisa made a redemption offer on
all remaining shares and share options. Simultaneous with the
redemption offer, Elisa initiated compulsory acquisition
proceedings for minority shareholders in accordance with the
Finnish Companies Act. The proceedings ended on 13 January 2006 at
4.30 pm. Elisa has initiated arbitration proceedings in accordance
with the Finnish Companies Act in relation to the redemption of
the Saunalahti Group Oyj shares.

On 4 November 2005, Elisa sold the entire share capital of Estera
Oy, a security business company, to ISS Security Oy. In connection
with the sale, Estera Oy sold part of its business to its operative
management.

On 30 November 2005, Elisa sold the entire share capital of
Kiinteistö Oy Espoon Keilasatama 5, which was formerly used by
Radiolinja, to Local Government Pensions Institution. 
The sold property is not included in the holdings that are in 
line with Elisa' strategy.

Mobile communication business

                               9-12/05   9-12/04   1-12/05    1-12/04
Total number of subscriptions                                      
(Finland and Estonia)        2,228,101 1,609,015 2,228,101  1,609,015
Number of subscriptions in    
in Finland *                 1,962,101 1,383,515 1,962,101  1,383,515 
  - Network operator in       
Finland **                   1,483,129 1,383,515 1,483,129  1,383,515       
  - Saunalahti subscriptions   478,973         -   478,973         -
Subscriptions in Estonia       266,000   225,500   266,000    225,500
                                      
* Elisa's network operator in Finland
** Elisa's network operator in Finland, exclusive of Saunalahti

Operative figures in Finland,                                      
exclusive of Saunalahti
Revenue/subscription***(ARPU), €  30.4      37.0      32.5      37.8
Churn***, %                       22.6      38.9      28.4      33.7
Usage, million minutes*          1,070       659     3,509     2,498
Usage,                             
min/subscription/month***          180       161       172       156
SMS, million msg*                  275       154       827       537
SMS,                                
msg/subscription/month***           40        38        38        34
Value-added services/revenue, %     17        14        16        14

* Elisa's network operator in Finland
*** Elisa's service operator in Finland, exclusive of Saunalahti

Elisa’s network operator significantly increased the number of
its subscriptions during the year as Saunalahti shifted its
subscriptions to Elisa’s network. At the end of 2005 Elisa’s
network stood at approximately two million subscriptions.
Exclusive of Saunalahti subscriptions, the number of Elisa
subscriptions stood at 1,483,129, showing an increase of 2,335
subscriptions from the previous quarter.

In 2005 the call minutes per subscription of Elisa's own service
operator rose by approximately 10 per cent and the number of SMS
messages increased by approximately 12 per cent on the previous
year. The call minutes of the network operator rose by 40 per cent
and SMS messages by 54 per cent. The increased volume of the
network operator was substantially affected by additional traffic
generated by Saunalahti after 1 September 2005.

Revenue per subscription (ARPU) decreased by approximately 14 per
cent on the previous year. This was mainly due to a fall in
interconnection fees and consumer prices.

The business operations of Elisa's subsidiary in Estonia were
favourable. Revenue was EUR 88.1 million (75.3), EBITDA EUR 27.9
million (22.5) and EBIT 18.5 million (13.2). The number of
subscriptions stood at 266,000 (225,500) at the end of 2005.

Elisa agreed on new mobile interconnection fees with TeliaSonera
Finland and Finnet Networks. As of 1 June 2005, Elisa's mobile
interconnection fee was reduced to 8.4 cents per minute, compared
to 10 cents per minute prior to this date.

Elisa announced the launch of the Vodafone Push Email service,
which will make sending and receiving email with a mobile phone
easier.

Elisa and Nokia introduced a new mobile communications concept,
which integrates the handset and services into one package.
Elisa's Mobi menu gives users easy access to value-added and
entertainment services as well as the main features of the mobile
phone.

Elisa introduced the citizen certificate on a GSM SIM card for its
customers. The service is provided in collaboration with the
Population Register Centre and offers consumers easy, safe and
user-friendly access to electronic services.

Fixed network business

Number of subscriptions               
                               31 Dec 2005  31 Dec 2004  Change, %

Broadband subscriptions, total     420,465      250,390         68
  - Elisa subscriptions            384,909      222,307         73
  - Saunalahti subscriptions        35,556       28,083         27
ISDN channels                      128,665      159,591        -19
Cable TV subscriptions             214,054      198,447          8
Analogue and other subscriptions   578,002      639,202        -10
Subscriptions, total             1,305,630    1,219,547          7
                                       
The demand for Elisa's broadband subscriptions continued briskly
throughout 2005. The number of subscriptions showed an increase of
73 per cent on the previous year. Elisa achieved market leadership
in the Finnish broadband market.

The target set in the national broadband strategy – one million
subscriptions – was exceeded in June. The number of traditional
subscriptions continued to decrease steadily as voice calls
shifted to the mobile communication networks and data transfers to
broadband subscriptions.

Changes in the pricing principles applied to calls made from the
fixed network to mobile phones took effect at the beginning of
March. This made it possible to reduce the price of these calls
for end customers.

Personnel

The average number of personnel at Elisa was 4,989 (5,590) during
2005. At the end of 2005, the number of personnel stood at 4,681
(5,376).

                         31 Dec 2005   31 Dec 2004   Change, %

Mobile communications          1,629         1,477         +10
Fixed network                  3,001         3,015          -0
Other business operations          -           814            
Corporate functions               51            70         -27
Total                          4,681         5,376         -13

During the year, the disposal of Comptel reduced the number of
personnel by approximately 420, the disposal of Estera by
approximately 160 and the disposal of Yomi Software by
approximately 260. The consolidation of Tikka Communications and
Saunalahti increased the number of personnel by approximately 260
people for each company.

Elisa executed a major business reorganisation in spring and summer 
2005. It was further specified at the year-end. As part of these
extensive streamlining measures, Elisa initiated a reorganisation 
of operations, aiming at simplifying and rationalising operations.
This led to outsourcing and a need for fewer personnel. Reductions 
in the number of personnel were achieved through pension 
arrangements and support packages.

Investments

EUR million                                    1-12/05    1-12/04
                                                    
Capital expenditures, of which                     204        182
- mobile communications business                    86         68
- GSM leasing liability buy-backs                    4         20
- fixed network business                           112         88
- others                                             2          6
Shares                                             415         61
 - of which achieved through an exchange of shares 361         47
Total                                              619        243

Financial position

Elisa's financial position and liquidity remained good throughout
the year. At the end of the year cash flow after investments
amounted to EUR 308 million (225). This was particularly affected
by divestment of non-core businesses, loan receivables and fixed
assets, and compensations for damages received.

On 17 June 2005, Elisa entered into a seven-year EUR 170 million
revolving credit facility. The facility replaced a comparable
arrangement that Elisa had entered into in June 2003.

Before shifting Elisa's TEL pension liabilities to Varma Mutual
Pension Insurance Company, Elisa repaid EUR 64 million in pension
loans to the Elisa Group's Pension Fund ahead of schedule.

On 7 November 2005, Elisa updated the EMTN programme in compliance
with the new directive requirements.

Financial key indicators

EUR million                          31 Dec 2005       31 Dec 2004
Net debt                                     293               462
Gearing, %                                  21.7              50.6
Equity ratio, %                             61.7              49.3
                                             
                                         1-12/05           1-12/04
Cash flow after investments                  308               225

Valid finance arrangements
EUR million                              Maximum      In use on 31
                                          amount     December 2005

Committed credit limit                       170                 0
Commercial paper programme1)                 150                 0
EMTN programme2)                           1,000               452

1) The programme is not committed
2) European Medium Term Note programme, 
   not committed.

Long-term credit ratings

Credit rating agency                      Rating           Outlook
Moody’s Investor Services                   Baa2            Stable
Standard & Poor’s                            BBB          Negative

Share

At the end of 2005 the company's total number of shares was
166,066,016 (141,989,109). The market capitalisation on 31
December stood at EUR 2,596 million (1,682).

In 2005 a total of 248.3 million shares were traded on the
Helsinki Stock Exchange for an aggregate of EUR 3,464 million. 
The exchange was 171.5 per cent of the number of 
outstanding shares.

Elisa did not have any valid warrants on 31 December 2005.

Treasury shares

At the end of 2005 the total number of Elisa's shares owned by the
subsidiaries was 180,000 (210,672 at the end of 2004). The
nominal value of the shares totalled EUR 90,000, and their
proportion of the share capital and voting rights was 0.11 per
cent.

Research and development

The group invested EUR 8 million (17) in research and development
in 2005. Important research trends included IP technologies,
development of terminals and service-oriented architecture.
Customer-centred R&D is of key importance in developing new
services. As a measure of enhancing customer-centeredness, 
the R&D unit was relocated into the business units.

Elisa’s Extraordinary General Meeting

On 5 December 2005, Elisa Corporation’s Extraordinary General
Meeting resolved to pay an extra dividend of EUR 0.40 per share in
accordance with the Board of Director’s proposal. The number of
members at the company’s Board of Directors was also increased by
two to eight members. President and CEO Lasse Kurkilahti and
attorney Matti Manner were elected new members. Voting limitation
was removed from the Articles of Association.

The Board of Directors' authorisations

On 14 March 2005 the Annual General Meeting approved the Board of
Directors' proposal authorising the Board of Directors to decide
on increasing the company's share capital. The authorisation is
valid for one year. A maximum aggregate of 28.3 million of the
company's shares can be issued, and the company's share capital
can be increased by a maximum of EUR 14,150,000 in total.

The Annual General Meeting approved the Board of Directors'
proposal concerning the authorisation to acquire and assign own
shares. The authorisation applies to a maximum of 6,888,000 own
shares.

The Annual General Meeting adopted the Board of Directors proposal
concerning the sale of shares in the joint book-entry account in
accordance with Chapter 3a, section 3a of the Finnish Companies
Act.

Directed issue

On 7 July 2005, Elisa made a public tender offer for all shares
issued by Saunalahti Group Oyj. The consideration offered by Elisa
in the tender offer was 1 Elisa share for 5.6 Saunalahti shares.
The calculated total value of the consideration offered by Elisa
was approximately 27 per cent higher than the average volume-
weighted price of the Saunalahti shares traded in the pervious 12
months. Elisa also made an offer to Saunalahti option holders,
offering EUR 1.53 in cash for each share option of the 2002 option
programme, and EUR 1.82 in cash for each share option of the 2003
option programme. The calculated total amount of the consideration
offered by Elisa was approximately EUR 320 million at the time 
of the offering.

Following Elisa's tender offer for Saunalahti shares and share
options, which ended on 4 November 2005, Elisa's proportion of
Saunalahti shares and voting rights exceeded two thirds (2/3) of
the voting rights of Saunalahti shares. On 11 November 2005 Elisa
decided to complete the public tender offer, and the right of
ownership to Saunalahti shares was transferred to Elisa on 14
November 2005. By the end of 2005 Elisa held approximately 97 per
cent of Saunalahti shares and voting rights.

On 12 December 2005, Elisa made a redemption offer for Saunalahti
shares and share options. The offer expired on 13 January 2006 at
4.30 pm. Simultaneous with the redemption offer, Elisa initiated
compulsory acquisition proceedings for minority shareholders in
accordance with the Finnish Companies Act to acquire all
Saunalahti shares.

Major legal issues

Elisa and TeliaSonera agreed on abandoning the legal proceedings
regarding the claim for restitution and compensation of mobile
interconnection fees and the patent action brought on by
TeliaSonera. As part of the overall solution, TeliaSonera Finland
paid Elisa EUR 30 million in compensation. Elisa also reached an
agreement over mobile interconnection fees regarding Finnet
Networks, and paid Finnet Networks EUR 2 million in compensation.
In the beginning of 2006, Finnet Verkot initiated arbitration
proceedings concerning Saunalahti interconnection fees.

In the redemption proceeding regarding the merger of Yomi Plc, the
arbitration court set the redemption price at EUR 7.30 per share.
The redemption concerned 636,294 former shares of Yomi Plc. The
handling of the matter with regard to 428,600 shares is continuing
in the district court.

The Helsinki District Court issued a ruling in favour of Elisa and
dismissed the action for annulment of the decision taken at Elisa
Matkapuhelinpalvelut Oy's (previously known as Oy Radiolinja Ab)
Annual General Meeting in the spring of 2000. The plaintiffs have
appealed against the decision. The merger of Elisa
Matkapuhelinpalvelut Oy with Elisa was entered in the trade
register on 31 December 2005.

With regard to the redemption procedure of Oy Radiolinja Ab's
shares pursuant to the Finnish Companies Act, the arbitration
court set the redemption price at EUR 7,904.83 in 2001. Processes
related to the redemption price concerning 325 shares are still
pending.

Elisa has initiated arbitration proceedings pursuant to the
Finnish Companies Act aimed at the redemption of Tikka
Communications Oy shares. The right of ownership to the shares to
be redeemed was transferred to Elisa in December 2005.

Elisa has initiated arbitration proceedings pursuant to the
Finnish Companies Act aimed at the redemption of Saunalahti Group
Oyj shares. Elisa demands the redemption price be set at EUR 2.29
per share. The redemption price concerning approximately 3.8
million shares is pending a decision by the arbitration court.

The public authorities are currently conducting investigations
into Elisa concerning the pricing of broadband and fixed network
traffic and interconnection fees.

Substantial risks associated with Elisa

The competition in telecommunication business is extremely tight
in Elisa’s main markets: The competitive situation may affect
Elisa’s business.

The rapid developments in telecommunications technology may have a
significant impact on Elisa's business.

Elisa's main market is Finland, where the number of mobile phones
per inhabitant is among the highest in the world. Thus the overall
market of mobile subscriptions in Finland cannot grow
significantly. Furthermore, the share of fixed network, which 
utilises Elisa's fixed network, has decreased in the past
few years. These factors may restrict growth potential.

The telecommunications industry is subject to heavy regulation.
Elisa and its business are monitored and regulated by several
public authorities. This regulation also affects the price level
of some products and services offered by Elisa.

Events after the financial period

On 2 January 2006, Elisa and Manpower signed an agreement
concerning the outsourcing of the outbound telemarketing services
of Elisa's Contact Centers to Manpower Business Solutions Oy from
the beginning of February. In connection with the business
transfer, 134 employees transferred from Elisa's Contact Centers
to Manpower as established employees.

Elisa revised its business model, aiming at enhanced customer-
orientation and efficiency in line with Elisa's strategic choices.
As part of this effort, Elisa invited some Saunalahti executives
to its Executive Board, also rotating other members and
redistributing responsibilities.

Outlook for 2006

Competition in the Finnish telecommunications market remains
challenging, while the focus is increasingly shifting to services. 
The use of mobile communications and broadband products continues 
to increase. Elisa's aim is to further reinforce its position as 
the leading service supplier.

Elisa's revenue is expected to increase clearly on the previous 
year. Changes in the operating environment are creating uncertainty
concerning the predictability of the company's performance.
However, Elisa expects to see an improvement in EBITDA and
EBIT excluding non-recurring items in 2006. This will be due to
e.g. the synergy benefits created by the Saunalahti deal and
Elisa’s rationalisation procedures.

Capital expenditures during the year are estimated to total 13 to
15 per cent of the revenue, and cash flow will be clearly positive.
Certain non-recurring items related to IT and production
system reforms, which will support the "One Elisa" operational 
model, are scheduled for 2006.


BOARD OF DIRECTORS


Tables

Information in this release is based on the company’s audited 
financial statements. The auditor’s report has been given 
on 8 February 2006.


CONSOLIDATED INCOME STATEMENT
EUR million
                                        10-12   10-12    1-12    1-12
                                         2005    2004    2005    2004

Revenue                                 343,0   350,8  1337,3  1356,0
Other operating income                   12,4    16,1   113,9    27,0
Operating expenses                     -260,9  -244,9 -1005,1  -928,2
EBITDA                                   94,5   122,0   446,1   454,8
Depreciation and amortisation           -56,8   -52,7  -213,2  -213,2
EBIT                                     37,7    69,3   232,9   241,6
Share of associated companies' profit     0,0     1,4     1,2     1,3
Financial income and expenses            -5,1    -5,9   -22,2   -30,4
Profit before tax                        32,6    64,8   211,9   212,5
Income taxes                             -4,6   -13,3   -34,1   -53,2
Profit for the period                    28,0    51,5   177,8   159,3

Attributable to:
  Equity holders of the parent           27,2    48,5   176,2   151,7
  Minority interest                       0,8     3,0     1,6     7,6
Profit for the period                    28,0    51,5   177,8   159,3

Earnings per share (EUR)
Basic                                    0,18    0,35    1,22    1,10
Diluted                                  0,18    0,35    1,22    1,10

Average number of outstanding 
shares (1000 shares)
Basic                                  153822  137570  144807  137321
Diluted                                153822  137570  144807  137321


REVENUE BY BUSINESS SEGMENTS
EUR million
                                        10-12   10-12    1-12    1-12
                                         2005    2004    2005    2004

Mobile                                  197,3   179,9   739,9   712,8
Fixed Network                           173,0   162,0   670,9   653,6
Other Companies                           1,5    33,5    38,2   108,4
Unallocated                                      2,4             2,4
Intra-segment sales elimination         -28,8   -27,0  -111,7  -121,2
Corporation total                       343,0   350,8  1337,3  1356,0

EBITDA BY BUSINESS SEGMENTS
EUR million 
                                        10-12   10-12    1-12    1-12
                                         2005    2004    2005    2004

Mobile                                   51,8    56,7   220,1   227,0
Fixed Network                            36,8    48,2   159,6   200,7
Other Companies                           5,2     7,5    55,8    20,3
Unallocated                               0,7     9,6    10,5     6,8
Corporation total                        94,5   122,0   446,1   454,8

EBIT BY BUSINESS SEGMENTS
EUR million
                                        10-12   10-12    1-12    1-12
                                         2005    2004    2005    2004
Mobile                                   27,1    34,6   129,9   138,1
Fixed Network                             3,4    20,8    44,8    91,1
Other Companies                           5,2     3,6    47,3    10,2
Unallocated                               2,0    10,3    10,9     2,2
Corporation total                        37,7    69,3   232,9   241,6


CONSOLIDATED BALANCE SHEET
EUR million
                                                       31.12.  31.12.
                                                         2005    2004
Non-current assets
Intangible assets                                       178,7    68,7
Consolidated goodwill                                   770,6   473,3
Tangible assets                                         660,6   724,2
Investments in associated companies                       0,4    11,7
Available-for-sale investments                           44,2     9,3
Deferred tax receivable                                  42,5    42,5
Other receivables                                        10,6    47,6
                                                       1707,6  1377,3
Current assets
Inventories                                              20,3    15,1
Trade and other receivables                             261,8   308,5
Cash and cash equivalents                               212,7   162,8
                                                        494,8   486,4

Total assets                                           2202,4  1863,7

Equity attributable to equity holders of the parent    1337,3   883,5
Minority interest                                        12,4    31,0
Total equity                                           1349,7   914,5

Non-current liabilities
Deferred tax liabilities                                 40,6    29,8
Provisions                                                9,4    21,4
Interest-bearing debt                                   393,7   593,4
Other non-current liabilities                            12,7    10,3
                                                        456,4   654,9
Current liabilities
Provisions                                                3,4     3,3
Interest-bearing debt                                   112,4    31,8
Current liabilities                                     280,4   259,2
                                                        396,3   294,3

Total equity and liabilities                           2202,4  1863,7


Statement of changes in equity
EUR million
                     
              Share   Share Treasury  Other Retained Minority   Total
            capital   issue   shares reser- earnings interest  equity
                    premium             ves
Total equity 
at 31.12.2003  69,0   516,7      0,0    3,4    110,0     77,4   776,5
Effects of 
adopting IFRS                  -24,7                     -4,1   -28,8
Restated 
balance 
at 1.1.200      69,0   516,7   -24,7    3,4    110,0     73,3   747,7
Investments 
in subsidiaries                                  1,1    -37,1   -36,0
Available for 
sale investments                       -0,4                      -0,4
Other changes                                  -12,0      0,3   -11,7
Items recognised 
directlyin equity                      -0,4    -10,9    -36,8   -48,1
Profit for 
the period                                     151,7      7,6   159,3
Total recognised 
income and 
expence for                             
the period                             -0,4    140,7    -29,2   111,1
 
Dividends                                               -13,1   -13,1
Issue of share 
capital          2,0    13,7           31,5                      47,2
Sales of 
treasury shares                 21,6                             21,6
Total equity 
at 31.12.2004   71,0   530,4    -3,1   34,5    250,8     31,0   914,5


Total equity 
at 1.1.2005     71,0   530,4    -3,1   34,5    250,8     31,0   914,5
Sales of 
subsidiaries                                            -15,8   -15,8
Investments in 
subsidiaries                    -0,2                     -0,2    -0,4
Available for 
sale investments                       34,7                      34,7
Other changes                                    3,7              3,7
Items recognised 
directly in
equity                          -0,2   34,7      3,7    -16,0    22,2
Profit for 
the period                                     176,2      1,6   177,8
Total recognised 
income and expense    
for the period                  -0,2   34,7    179,9    -14,4   200,0
Dividends                                     -123,2     -4,2  -127,4
Issue of share 
capital         12,0                  349,7                     361,7
Sales of 
treasury share                   0,8                              0,8
Total equity 
at 31.12.2005   83,0   530,4    -2,5  418,9    307,5     12,4  1349,7


RECONCILIATION OF NET PROFIT FOR COMPARISON PERIODS 2004
EUR million
                                                        10-12    1-12
                                                         2004    2004
Profit for the period before minority interest 
according to FAS                                         38,3   113,9
Effects of adopting IFRS:
Reversal of goodwill amortisation                        10,9    44,6
Employee benefits                                         7,1    10,7
Finance leases                                           -4,3    -9,6
Financial instruments                                     0,0     0,5
Income tax                                               -0,5    -0,8
IFRS adjustments, total                                  13,2    45,4

Profit for the period according to IFRS                  51,5   159,3

Attributable to:
Equity holders of the parent                             48,5   151,7
Minority interest                                         3,0     7,6
                                                         51,5   159,3

RECONCILIATION OF EQUITY FOR COMPARISON PERIODS 2004
EUR million 
                                                         1.1.  31.12.
                                                         2004    2004

Total equity according to FAS                           699,1   851,0
Effects of adopting IFRS:
Reversal of goodwill amortisation                                44,6
Employee benefits                                       -24,0   -13,5
Finance leases                                            4,7    -4,9
Reversal of revaluations                                -11,1
Financial instruments                                     0,9     1,1
Other adjustments                                         1,7     1,6
Income tax                                                3,2     3,6
IFRS adjustments, total                                 -24,6    32,5
Equity holders of the parent                            674,5   883,5

Minority interest according to FAS                       77,4    33,6
IFRS adjustments                                         -4,1    -2,6
Minority interest                                        73,3    31,0

Total equity according to IFRS                          747,8   914,5


CONSOLIDATED CASH FLOW STATEMENT
EUR million 
                                                         1-12    1-12
                                                         2005    2004
Cash flow from operating activities
Profit before tax                                       211,9   212,5
Adjustments to profit before tax                        146,9   199,7
Change in working capital                               -23,7     4,9
Cash flow from operating activities                     335,1   417,1

Received dividends and interests and interest paid      -20,4   -45,8
Taxes paid                                               -5,1   -16,0
Net cash flow from operating activities                 309,6   355,3

Cash flow in investments
Capital expenditure                                    -194,9  -171,4
Investments in shares and other investments              -4,1   -10,4
Proceeds from asset disposal                            197,4    51,4
Net cash used in investment                              -1,6  -130,4

Cash flow after investments                             308,0   224,9

Cash flow in financing
Sales of treasury shares                                  0,8     6,4
Change in interest-bearing receivables                    0,8    24,3
Repayment of long-term debt                            -102,4  -110,7
Change in short-term debt                               -18,6   -15,3
Repayment of financing leases                           -16,7   -21,0
Dividends paid                                         -122,0   -13,0
Cash flow in financing                                 -258,1  -129,3

Change in cash and cash equivalents                      49,9    95,6
Cash and cash equivalents at beginning of period        162,8    67,2
Cash and cash equivalents at end of period              212,7   162,8


LIABILITIES
EUR million 
                                                      31.12.   31.12.
                                                        2005     2004
Mortgages, pledges and guarantees
Mortgages
  For own and group companies                           18,7     27,6
Pledges given
  Pledges given as surety                                0,9      0,2
Guarantees given
  For others                                             3,1
Mortgages, pledges and guarantees total                 22,6     27,8

Derivative contracts
Forward contracts and swap agreements
  Nominal value of underlying instrument                         13,5

Leasing contracts and
other commitments
Leasing commitments                                     14,3     18,3
Repurchase commitments                                   0,7      1,2
Real estate leases                                      63,3     77,2
Lease liabilities total                                 78,3     96,7


Other commitments
Lease-leaseback agreement (QTE facility)
Termination risk                                        23,5     22,8
Total value of the arrangement                         171,5    149,8
Other commitments                                        0,6      9,1


KEY FIGURES
EUR million
                                        10-12   10-12    1-12    1-12
                                         2005    2004    2005    2004

Shareholders' equity/share, EUR                          8,06    6,23
Net debt                                                293,5   462,2
Gearing                                                21,7 %  50,6 %
Equity ratio                                           61,7 %  49,3 %
Gross investments in fixed asse          71,3    59,2   204,4   181,8
of which finance lease investme           0,3     4,9     9,5    10,4
Gross investments as % of revenue      20,8 %  16,9 %  15,3 %  13,4 %
Investments in shares                   374,7    52,6   414,8    61,1
of which paid in equity issue           361,2    47,2   361,2    47,2
Average number of personnel                              4989    5590


Formulae for financial indicators

Gearing  % 

               Interest-bearing debt - cash and cash equivalents
               -------------------------------------------------x 100
                               Total equity


Equity ratio % 

                               Total equity
               -------------------------------------------------x 100
                   Balance sheet total - advances received



Net debt            

                   Interest-bearing debt - cash and cash equivalents



Shareholders' equity/share 


                  Equity attributable to equity holders of the parent
                 ----------------------------------------------------
                      Number of shares outstanding at end of period


Earnings/share 


       Profit for the period attributable to equity holders of parent
       --------------------------------------------------------------
                     Average number of outstanding shares