Tecnomen Corporation                STOCK EXCHANGE RELEASE
                                    29 October 2003 at 8.30 a.m.

TECNOMEN INTERIM REPORT 1 January - 30 September 2003


- Net sales EUR 9.1 million (12.7)
- Operating result EUR -1.9 million (-0.3)
- Non-recurring items reducing operating result EUR 0.9 million
- Order book EUR 7.2 million (6.3)
- Cash flow EUR -1.2 million (-1.0)
- Cash funds EUR 33.1 million (33.6)
- Personnel at the end of period 437 (473)
- Tecnomen renewed its organisation structure and appointed a new
  management board and a new President and CEO


                            7-9/03  7-9/02  1-9/03  1-9/02    2002

Net sales, MEUR                9.1    12.7    28.3    29.2    39.9
Net sales, change %          -28.0    -2.3    -3.3   -23.3   -30.2
Operating result, MEUR        -1.9    -0.3    -6.6   -11.2   -14.1
   % of net sales            -21.3    -2.2   -23.3   -38.3   -35.5
Result before                 -1.7    -1.3    -6.0   -12.0   -14.6
extraordinary items,
appropriations and taxes,
   % of net sales            -18.6   -10.3   -21.3   -41.2   -36.7
Personnel at end of            437     473     438     473     457
Earnings per share, EUR      -0.03   -0.02   -0.11   -0.21   -0.25
Equity per share, EUR         1.15    1.30    1.15    1.30    1.26
Net interest-bearing         -31.9   -32.7   -31.9   -32.7   -33.8
liabilities, MEUR

Unless otherwise stated, all figures presented below are for the
review period 1-9/2003 and the figures for comparison are from the
corresponding period 1-9/2002.


Messaging systems

During the period no major changes took place in the market from the
previous period. Competition intensified and increased the pressure on
system prices. Operators showed increasing interest in next generation
messaging systems during the review period.

Looking at the different regions, the situation in Europe remained
challenging. During the review period net sales consisted largely of
updates for the messaging systems of existing customers and adding new
features to them. In Latin America, deliveries of messaging system
showed signs of starting to grow, and this growth is expected to
continue. No significant changes took place in the markets in Eastern
and South-East Asia. The market in the Middle East and Africa has also
remained very stable.

Multimedia Messaging Systems

Most operators particularly in Western Europe and the more developed
markets in Asia have launched their first MMS (multimedia) services.
In other market areas launches are expected to take place at an even
faster rate towards the end of 2003 and next year. During the review
period, Celcom in Malaysia and Satelindo in Indonesia introduced
Tecnomen multimedia messaging centres. The markets with most potential
for Tecnomen’s multimedia messaging systems are the Middle East,
Africa and Latin America.

Prepaid systems

Tecnomen’s main Prepaid market, Latin America, is showing clear signs
of picking up. Operators have started to invest at an every faster
pace in GSM overlay networks, built alongside TDMA networks. Since the
Latin American market is one of the few growth areas in infrastructure
investment, almost all suppliers are active in the region. As a
result, competition is intensifying and pressure on prices is growing.


The process of changing the organisational structure that started in
the third quarter was part of a programme of action affecting the
entire group that aims to improve the company’s profitability and
develop selected core business areas.

The new organisation consists of five business units: Messaging,
Mobile Multimedia, Intelligent Network & Paging, Operations, and Sales
and Marketing. The new organisation came into effect on 15 September

The composition of the Management Board as of September 15, 2003 is
the following:

- Mr Ilpo Uotila, CEO
- Mrs Riitta Järnstedt, Chief Financial Officer and Investor
- Mr Timo Nykänen, Director, Messaging Solutions
- Mr Miika Reinikka, Director, Mobile Multimedia
- Mr Timo Kangas, Director, Intelligent Network Systems & Paging
- Mr Vesa Kemppainen, Director, Corporate Development

Mr Jarmo Niemi was appointed President and CEO of Tecnomen Corporation
as from 31 October 2003.


Tecnomen’s net sales in the review period fell 3.3 per cent to EUR
28.3 (29.2) million. The company’s net sales in the third quarter
totalled EUR 9.1 (12.7) million, or 28.0 per cent lower than the year

Net sales by product segment

                              1-9/2003          1-9/2002        
                                  MEUR       %      MEUR       %
Messaging Solutions               16.5      58      17.9      61
Intelligent Networks Systems       8.7      31       7.8      27
Paging Systems                     3.1      11       3.5      12
TOTAL                             28.3  100.00      29.2  100.00

Total net sales and their distribution among the different product
segments vary greatly from one quarter of the year to another, as a
result of the timing of project deliveries.

Maintenance and service sales together accounted for some 21.4 per
cent (20.9%) of net sales. In 2002, maintenance and service in total
accounted for 20.4 per cent of net sales.

Sales through global partners totalled EUR 4.9 million or 17.2 per
cent (21.1%) of net sales.

Sales to new customers accounted for 13.1 per cent (17.0%) of net

At the end of September the company’s order book stood at EUR 7.2
(6.3) million.


As a result of the personnel reductions and other cuts in costs
carried out, the company’s losses declined. The operating result for
the review period was EUR -6.6 (-11.2) million. The operating result
in the third quarter was EUR -1.9 (-0.3) million.

During the past two years Tecnomen has adapted its operations to the
weaker state of the market. Fixed costs fell 20 per cent compared to
the corresponding period in the previous year.

A total of EUR 0.9 million of the one time costs arising from the
personnel reductions were recorded in the review period.

The weakening of the US dollar during 2003 reduced January-September
net sales, since more than a third of the company’s invoicing was in
dollars. If the impact of the change in exchange rates were
eliminated, Tecnomen’s net sales would have risen 4 per cent in
January-September on the same period in the previous year.

Tax at source of EUR -0.4 million deducted by clients from their
project payments has been recorded under taxes and added to Tecnomen
Corporation’s tax deductible loss.

The result for the period before extraordinary items, appropriations
and taxes was EUR -6.0 (-12.0) million.

Earnings per share were EUR -0.11 (-0.21). Equity per share at the end
of the period was EUR 1.15 (1.30).


Tecnomen’s financial position is strong. Liquid assets were EUR 33.1
(33.6) million. The balance sheet total on 30 September 2003 stood at
EUR 75.1 (84.4) million. The cash flow in the period under review was
EUR -1.6 (-7.4) million. The cash flow in the third quarter was EUR
-1.2 (-1.0) million. Interest-bearing liabilities amounted to EUR 1.2
(0.9) million. The debt to equity ratio (gearing) was -48.8 per cent 
(-43.3%). The balance sheet structure remained strong and the equity
ratio on 30 September 2003 was 88.8 per cent (90.9%).

Financial income and expenses during the review period totalled EUR
0.6 (-0.8) million. Interest and investment income totalled EUR 0.6
(1.1) million.

Tecnomen’s gross capital expenditure during the review period was EUR
1.6 (1.8) million. The most significant investment was the acquisition
of the entire share stock of Helsinki-based Krocus Communications Oy,
which develops messaging system technology. Progress is being made in
merging Krocus Communications Oy with Tecnomen Corporation and the
planned date for registering the completion of the merger is 30
November 2003. Krocus Communications Oy has been consolidated into the
group from the date of acquisition, 24 June 2003. Consolidation has
not had a significant impact on the consolidated result.


R&D costs during the review period were EUR 7.0 (8.6) million,
corresponding to 24.9 per cent (29.4%) of net sales. R&D related costs
have been recorded directly as costs.

Tecnomen is maintaining its efforts on its next generation messaging
system platform and seeking to reinforce its position as a supplier of
next generation IP (Internet Protocol)-based value-added service

Development work continued on prepaid systems. New standards supported
by the Tecnomen system included CAMEL phase 2. The functions of CAMEL
2 make it possible to create value-added services for individual
operators and to use them when outside the home network.

In Latin America Tecnomen is the first supplier of prepaid systems
with systems in commercial use that support both CAMEL phase 2 and IS-
41P signalling at the same time. This centralised solution linking two
separate networks simplifies business for operators and enables them
to offer prepaid services to all customers, whether they use the TDMA
or the GSM network.

Product launches

Tecnomen launched its new FIVE from Tecnomen concept, which includes
the Tecnomen eZONER Next Generation Messaging platform. This messaging
platform provides a modern, all-IP environment for developing
innovative messaging services. With the FIVE from Tecnomen concept,
operators can profitably serve precisely segmented customer groups and
through this increase customer loyalty and win new customers.

Tecnomen launched the Real-Time Prepaid SMS Charging product that
enables operators to charge in real time for SMS text messages sent by
prepaid customers. In addition they can offer their customer groups
different methods of payment, attract new customers and reduce phone
line congestion. Effective billing of SMS messages and promotional
schemes to increase SMS messaging increase net sales from customers
using prepaid services. Tecnomen Real-Time Prepaid SMS Charging
reduces operational costs and provides a service platform that can be
integrated with the existing prepaid systems of operators.


At the end of the third quarter of 2003, Tecnomen employed 437 (473)
people worldwide. The average number of personnel during the period
under review was 440 (538).

Personnel by region:

                           30.9.2003         30.9.2002        
                                           %                 %
Finland                          234      53       252      53
Ireland                          115      26       125      27
Latin America                     36       8        34       7
East and Southeast Asia           25       6        32       7
Continental Europe                16       4        19       4
Middle East                       11       3        11       2
TOTAL                            437  100.00       473  100.00

On 25 August 2003 Tecnomen announced that it was continuing to raise
efficiency in its operations and was starting negotiations about
personnel reductions. The negotiations were completed on 23 September
2003 and as a result the number of personnel will be reduced by a
total of 61 persons, of whom 49 work in Finland.


At the end of September 2003 the shareholders' equity of Tecnomen
Corporation stood at EUR 66.1 million and the share capital was EUR
4,647,406.24, divided into 58,092,578 shares. The company held 400,000
of these shares. The equity per share was EUR 1.15.

A total of 17,944,823 Tecnomen shares (EUR 10,535,620) were traded on
the Helsinki Exchanges during the period 2 January - 30 September
2003, or 30.9 per cent of the total number of shares. The highest
share price quoted in the period was EUR 0.92 and the lowest was EUR
0.39. The average quoted price was EUR 0.59 and the closing price on
30 September 2003 was EUR 0.83. The share stock had a market value of
EUR 48,216,840 at the closing price.


At the end of the review period Tecnomen’s Board of Directors held the
following current authorisations granted by the Annual General Meeting
on 25 March 2003:

1. Authorisation to decide to purchase the company’s own shares such
   that, including the shares already in the possession of the company,
   the shares purchased shall have a total nominal value that represents
   at most 5 per cent of all the company’s current share capital and
   associated rights, using funds available for the distribution of
2. Authorisation to decide to dispose of the company’s own shares
   already in the possession of the company and any acquired under the
   authorisation given to the Board.

3. Authorisation to decide to increase the share capital by issuing
   new shares, convertible bonds and/or stock options in one or more
   issues. The number of new shares through share issuance or
   subscription of shares in exchange for convertible bonds or pursuant
   to the stock options may be at most 7,518,515 shares, and the
   company's share capital may rise by at most a total of 
   EUR 601,481.20.

The authorisations given to the Board of Directors are effective for
one year from the decision of the Annual General Meeting of


The company has a current 2002 stock option programme approved by the
Annual General Meeting of Shareholders on 11 April 2002, which is
divided into four stock option series, the 2002A, 2002B, 2002C and
2002D stock options. A maximum of 4,100,000 stock options may be
issued that entitle holders to subscribe to a total of 4,100,000
Tecnomen Corporation shares. As a result of subscriptions with the
2002 stock options, the company's share capital can rise by a maximum
of EUR 328,000. The share subscription price for stock option 2002C
was set at 0.46 euros, the Tecnomen trade volume weighted average
share price on the Helsinki Exchanges between 1 March and 31 March
2003. The subscription period for the 2002A stock options started on 
1 April 2003. During the review period no share subscriptions have 
been made with the 2002A stock options.


Tecnomen signed an agreement with CCT Boatphone, a provider of
wireless services in the Virgin Islands in the Caribbean. The
agreement includes prepaid, voice mail and unified messaging systems
as well as a multimedia messaging centre (MMSC) and a WAP gateway. The
systems will be supplied and installed during the final quarter of
2003 and taken into commercial use in March 2004.


Tecnomen’s whole year net sales are estimated to be about the same as
the previous year. The tough competition on price has continued in the
markets and reduced sales margins. The company’s fixed costs have been
reduced significantly from the previous year. Tecnomen’s operating
loss for the whole year is expected to be half that of the previous

Sales of Messaging and IN products are expected to grow mainly in
Latin America and South East Asia. Sales in these regions are boosted
by system capacity expansions and purchases by new customers.

Tecnomen’s current programme to increase efficiency that started at
the beginning of September will only have a full impact on the
company’s figures during 2004.


Board of Directors

Lauri Ratia, Chairman of the Board, tel. +358 20 447 7375
Ilpo Uotila, CEO, tel. +358 400 301 327
Riitta Järnstedt, CFO, tel. +358 (0)9 804 781

Helsinki Exchanges
Main media


MEUR                            1-9/03      1-9/02         2002
Net sales                         28.3        29.2         39.9
Operating expenses                32.5        37.8         50.6
Depreciation                       2.3         2.6          3.4
Operating result                  -6.6       -11.2        -14.1
   % of net sales                -23.3       -38.3        -35.5
Financial income and               0.6        -0.8         -0.5
Result before                     -6.0       -12.0        -14.6
extraordinary items
Result before taxes and           -6.0       -12.0        -14.6
minority interest
Taxes                             -0.3         0.1          0.3
Result for the period             -6.3       -11.9        -14.3


MEUR                           30.9.03     30.9.02  31.12.2002
Fixed assets                      10.6        11.8        11.4
Current assets                                                
   Inventories                     3.4         4.8         3.6
   Financial assets               61.1        67.8        66.3
Assets                            75.1        84.4        81.3
Shareholders’ equity              66.1        75.6        72.5
   Interest-bearing                0.8         0.9         0.9
   Non-interest bearing            8.2         7.8         7.9
   Deferred tax                    0.0         0.1         0.0
Equity and liabilities            75.1        84.4        81.3


MEUR                                 1-9/03   1-9/02      2002
Cash flow, business operations         -0.5     -5.3      -3.8
Cash flow from investments             -1.0     -1.6      -2.2
Cash flow from financing               -0.1     -0.5      -0.4
Increase (+) and decrease (-) in       -1.6     -7.4      -6.4
liquid funds
Liquid funds on 1 Jan.                 34.7     41.1      41.1
Liquid funds on 30 September           33.1     33.7      34.7
Change                                 -1.6     -7.4      -6.4


MEUR                           1-9/03      1-9/02         2002
Return on investment, %         -11.3       -19.4        -18.0
Return on equity, %             -12.2       -19.5        -17.9
Equity ratio, %                  88.8        90.9         90.1
Debt/equity ratio               -48.8       -43.3        -46.6
(gearing), %
Investments                       1.6         1.8          2.2
   % of net sales                 5.6         6.2          5.5
Research and development          7.0         8.6         11.2
   % of net sales                24.9        29.4         28.0
Order book                        7.2         6.3         10.4
Personnel, average                440         538          520
Personnel, at end of              437         473          457


MEUR                           1-9/03      1-9/02        2002
Earnings per share, EUR         -0.11       -0.21       -0.25
Equity per share, EUR            1.15        1.30        1.26
Number of shares at end        58,093      58,093      58,093
of period, x 1,000
Number of shares on            58,093      58,093      58,093
average, x 1,000
Share price, EUR                                             
   Average price                 0.59        1.10        0.97
   Lowest price                  0.39        0.56        0.49
   Highest price                 0.92        2.10        2.10
Share price at end of            0.83        0.60        0.51
Market value of issued           48.2        34.9        29.6
stock at end of period,
Share turnover, million          17.9        18.2        24.3
Share turnover, % of             30.9        31.4        41.8
Share turnover, MEUR             10.5        20.0        23.6


MEUR                           1-9/03      1-9/02        2002
For own debts                                                
  Mortgages                       0.7         0.7         0.7
Pledges given to cover                                       
other own commitments
  Mortgages                       1.3         0.6         1.3
  Chattel mortgages               0.2         0.2         0.2
Other own liabilities             2.3         2.8         2.6
Derivative contracts                                         
  Current forward                                            
    Market value                 12.7        11.5        11.0
    Value of underlying          13.3        12.1        11.9
  Currency options                                           
    Market value                  2.6         0.0         0.0


                            3Q/02  4Q/02  1Q/03  2Q/03  3Q/03
Net sales, MEUR              12.7   10.6    7.6   11.6    9.1
Net sales, change %          -2.3  -44.2   -9.2   41.5  -28.0
Operating result, MEUR       -0.3   -2.9   -3.8   -0.8   -1.9
   % of net sales            -2.2  -27.7  -49.5   -7.6  -21.3
Result before                -1.3   -2.6   -3.7   -0.6   -1.7
extraordinary items,
appropriations and taxes,
Personnel at end of period    473    457    436    444    437
Earnings per share, EUR     -0.02  -0.04  -0.06  -0.01  -0.03
Equity per share, EUR        1.30   1.26   1.19   1.18   1.15
Net interest-bearing        -32.7  -33.8  -32.8  -32.8  -32.3
liabilities, MEUR
Order book, MEUR              6.3   10.4    8.3    6.9    7.2

The financial figures in the balance sheet, income statement and key
indicators have been rounded up or down to the nearest million euro.
Calculations based on these rounded figures may not give exactly the
same results as those presented in this release, since the figures
shown here have been calculated using exact values.

The figures are not audited.


The company’s ten largest shareholders, excluding nominee
registrations, on 30 September 2003:

                                     No. of             %
Henki-Sampo Insurance Fund        3,083,400          5.31
Hammaren Lars-Olof                2,164,300          3.73
Sumelius Henning                  2,022,300          3.48
Oy Finvestock AB                  2,003,600          3.45
Geveles AB                        1,952,092          3.36
Fennogens Investments SA          1,535,000          2.64
Sumelius Johanna Marina           1,122,400          1.93
Oy Investsum AB                     954,100          1.64
Estate of Suutarinen Helena         901,200          1.55
Gyllenberg Small Firm Fund          833,575          1.43
TOTAL                            16,571,967         28.52

Ownership of Tecnomen shares, 30 September 2003

Shares              Holders       %   Shares and        %
1-500                 3,451   52.84      762,218     1.31
501-1,000             1,063   16.28      817,533     1.41
1,001-5,000           1,349   20.66    3,161,050     5.44
5,001-10,000            285    4.36    2,160,432     3.72
10,001-50,000           228    3.49    5,087,110     8.76
50,001-100,000           53    0.81    3,737,500     6.43
100,001-500,000          84    1.29   18,613,704    32.04
500,001<                 18    0.28   23,715,431    40.82
Joint account                             37,600     0.06
Total                 6,531  100.00   58,092,578   100.00

Ownership structure by sector, 30 September 2003

                                          No. of        %
Companies                             10,394,107    17.89
Finance houses and insurance          13,715,812    23.61
Public sector                            869,265     1.50
Non-profit making associations           867,559     1.49
Households and private persons        28,999,212    49.92
Foreign holders                        3,209,023     5.52
TOTAL                                 58,054,978    99.94
Joint account                             37,600     0.06
Share capital                         58,092,578   100.00
Nominee registrations                  3,327,649     5.73

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