The shareholders of the Baltika Brewery have today at the Annual General Meeting approved of the results of the company and its financial statements for the year 2004. Gross margin from the core business in 2004 under Russian accounting standards increased by 11% and reached 6,625 Mln RUR. This gave a foundation for the company to increase the amount of dividends to shareholders according to the tradition of Baltika. Common stock dividend will now be 13.94 rubles per share, and privileged stock dividend - 18.12 rubles per share.  

The Shareholders of the Company also approved the procedure of a two-step dividend payment - the first payment will be made after April 11th, the second one - after August 1st, 2005. The efficiency and practicality of such a system is proven by years of experience.  

The company has annually increased the amount of dividends it pays, holding the amount of dividend paid for the privileged share higher than the amount paid for the common stock. Over the recent 5 years the amount of dividend payments has been increased by a factor of 4.5. The amount of dividends compared to the year 2003 increased by 20%.  

This trend is beneficial for the Shareholders of the Company and is the result of the financial stability and the successful work of the Company in 2004. The financial status of the Company manifested itself in high profitability and liquidity that were the best on the Russian brewing industry and among the best on the world market. Simultaneously with the growth of the operating revenue the Company succeeded in an efficient control of the production, distribution and administrative costs. Positive cash flow has covered the needs for investments and working capital, and confirmed financial stability of the Company.  

Over 40% of the growth of the Russian brewing market was driven by the increased sales of Baltika last year. A favorable forecast for the future development of the brewing sector, as well as an increased corporate transparency, stimulated the investors' interest in the Baltika stock. Common stock value increased from $13.5 to $19.0 in the year, and the Company's capitalization exceeded $ 2 billion.  

In addition, the Shareholders approved a new Board of Directors for the company. It will include:  

1. Anton Artemiev (OAO Baltika Brewery)  

2. Paul Bergqvist (Carlsberg A/S)  

3. Alexander Izosimov (OAO VympelKom)  

4. Alexander Ikonnikov (Independent Directors Association)  

5. Tomas Kucinskas (BBH Baltics)  

6. John Nicolson (Scottish & Newcastle plc.)  

7. Christian Ramm-Schmidt (BBH)  

The Chairman of the Board of Directors, Mr. Christian Ramm-Schmidt said: "I am satisfied with the results of the General Shareholders' Meeting. We have built a professional Board of Directors and as is a tradition introduced therein two independent directors. They are professionals with a profound expertise which will benefit the Company going forward."  

Furthermore, a commission for the company revision was elected and auditors - ZAO A&P Audit and KPMG - were approved.  

Reference:  

Baltika Brewery has been the leader of the Russian brewing industry since 1996. The company comprises 5 factories (St. Petersburg, Rostov-on-Don, Tula, Samara and Khabarovsk), a malt-producing factory in Tula, and 32 sales enterprises. The Company's products are exported to 37 countries both within and outside the CIS. Since 1993 Baltic Beverages Holding AB (BBH) has been the largest shareholder of Baltika. BBH is a company owned in equal shares by Carlsberg A/S and Scottish & Newcastle plc. BBH's share in the authorized capital is 75.4 %. Overall there are 2000 shareholders of Baltika. In 2004 the Company's market capitalization exceeded $ 2 billion.
In 2004 the company issued its first bonded loan having successfully placed a 1 bln rubles three-year bonded loan on the secondary market. The Company's financial stability is confirmed with its high credit ratings according to Moody's Interfax Rating Agency (long-term credit rating AA3 (RUS) and short-term (RUS-1) and Dun&Bradstreet (highest credit rating 5A2).