Interim report 1-9/2003

Kyro Corporation    STOCK EXCHANGE RELEASE    5 November 2003, 8:30am

Interim report 1-9/2003

- Net sales grew by 55% to EUR 156.1 (100.7) million
- Operating profit before amortisation of goodwill grew by 38% to
  EUR 14.7 (10.6) million
- Profit before taxes grew by 36% to EUR 13.0 (9.5) million
- Equity ratio was 59.3% (76.7%)
- Order book grew to EUR 82.9 (65.1) million
- A good order book indicates a strong final quarter


"Kyro’s strategy is to grow organically and through acquisitions.
During 2002 and 2003 growth has been sought through acquisitions,
which within the Glaston Technologies business area have made its
machinery group number one in the world of glass processing machinery
and its glass processing group the leading comprehensive supplier of
architectural glass in Finland," says President Pentti Yliheljo.

"The net sales and profit of the Kyro Group have improved strongly in
2003 following acquisitions, new product introductions and improved
logistical efficiency. The business model of Tamglass and Z.
Bavelloni, acquired in January, which aims at comprehensive
deliveries, has gained an excellent reception from glass processors."

"The expanded machinery and glass processing groups within Glaston
Technologies have both been capable of growing their volumes and
strengthening their market shares in a difficult market situation. The
order intake and the order book for the business area grew clearly
during the third quarter. This together with a favourable energy
market provides a solid foundation for a good result by Kyro for the
final quarter and the whole year," Yliheljo estimates.


Kyro’s Safety Glass Technology business area has expanded through
acquisitions to become the Glass and Stone Technology business area,
which operates under the name of Glaston Technologies. It consists of
a global glass processing machinery business and a local glass
processing business, which focuses on the markets in Finland and
neighbouring areas. Kyro’s second business area is Energy, which
consists of the energy supplier Kyro Power Oy.

With regard to companies acquired in 2002 and 2003, Uniglass
Engineering Oy has been consolidated in the financial statements of
Kyro Group as of 1 May 2002, Finton Parvekejärjestelmät Oy as of 1
November 2002, and Z. Bavelloni, Glasto, and Suomen Lämpölasi Oy as of
1 January 2003.


Kyro Group net sales in January-September grew by 55% over the
previous year to EUR 156.1 (100.7) million. The weakening of the U.S.
dollar and other billing currencies against the euro has had a slowing
effect on volume growth.

Group operating profit before amortisation of goodwill grew by 38% to
EUR 14.7 (10.6) million. Its share of net sales was 9.4% (10.5%).
Operating profit after amortisation of goodwill grew by 17% to EUR
12.3 (10.5) million, at 7.9% (10.4%) of net sales. Amortisation of
goodwill amounted to EUR 2.3 (0.2) million, and unamortized goodwill
stood at EUR 55.2 million.

Net financial items amounted to EUR 0.6 (-0.9) million. This includes
interest, dividend and other financial income of EUR 1.5 (2.4)
million, as well as interest and other financial expenses of EUR 0.9
(3.3) million. Of these, EUR 0.3 (0.2) million came from interest
expenses, EUR 0.6 (0.4) million from exchange rate losses and EUR 0.0
(2.7) million from securities valuation losses and other financial

Profit before taxes grew by 37% to EUR 13.0 (9.5) million. Profit for
the period after taxes and minority interest was EUR 6.9 (6.2)
million. Earnings per share were EUR 0.18 (0.16). The Group’s order
books on amounted to EUR 82.9 (65.1) million. The order book grew
thanks to a good order intake by Glaston Technologies in the third

Figure 1. Net sales, operating profit before amortisation of goodwill,
and order book by business area, EUR million

                                Net Sales      EBITA**    Order Book
                                1-9/  1-9/   1-9/  1-9/   30.9. 30.9.
                                2003  2002*  2003  2002*  2003  2002*

Glaston Technologies           134.8  82.4   12.1   8.8   60.3  42.1
Energy                          21.3  18.1    4.3   3.5   22.6  23.0
Parent Company and eliminations  0.0   0.2   -1.7  -1.7
Group total                    156.1 100.7   14.7  10.6   82.9  65.1

* 1-9/2002 figures for Glaston Technologies do not include companies
acquired after 30 September 2002.

** Operating profit before amortisation of goodwill.


The Group’s financial position is good. Equity ratio stood at 59.3%
(76.7%). Liquid cash assets and securities amounted to EUR 28.8 (46.3)
million. Interest-bearing liabilities totalled EUR 35.2 (4.9) million.
Net interest-bearing liabilities amounted to EUR 6.7 (-41.9) million.
Gearing stood at 4.9% (–33.9%). Equity per share totalled EUR 3.44


Kyro Group’s investments totalled EUR 60.2 (2.0) million in January-
September. The bulk of the investments consists of the purchase cost
of Z. Bavelloni, Glasto and Suomen Lämpölasi Oy shares.


Kyro Group had a total of 1,143 (491) employees at the end of the
period under review. Most of the staff increase is due to the
personnel of the acquired companies, as well as recruitments at
Tamglass plants in China and Brazil. The acquired companies employed
624 persons.

Employees                 30 September 2003    30 September 2002*

Glaston Technologies             1,109               458
Energy                              24                23
Parent Company                      10                10
Kyro Group                       1,143               491

*2002 figures for Glaston Technologies do not include companies
acquired after 30 September 2002.


A total of 1,576,206 Kyro Corporation shares were traded at the
Helsinki Exchanges during January-September, which equals 4.0% of the
total number of shares issued. The lowest price paid for a Kyro
Corporation share on the Helsinki Exchanges was EUR 5.40 and the
highest EUR 7.50. The average price of the share for the period under
review was EUR 6.56.


On 4 September 2003 Kyro Corporation assigned 83,340 of its own shares
based on the authorisation of the Annual General Meeting on 19 March
2003. The assigned shares were used to pay the last instalment for
Uniglass Engineering Oy purchased on 19 April 2002. The share value at
assignment was 7.20 EUR/share as agreed by both parties. The assigned
shares accounted for 0.2% of the total share capital.

On 30 September 2003 Kyro Corporation held a total of 164,952
(1,483,830) own shares, representing 0.4% (3.7%) of its share capital.


Glaston Technologies net sales in January-September grew with
acquisitions by 64% over the previous year to EUR 134.8 (82.4)
million. Vacation periods at Tamglass and Z. Bavelloni reduced third
quarter delivery volumes in comparison to other quarters. The effect
from the U.S. dollar and other main currencies is seen in that net
sales for the business area would have been 10% higher with exchange
rates from 2002.

Despite currency exchange rate effects, operating profit before
amortisation of goodwill grew by 37% to EUR 12.1 (8.8) million. Its
share of the net sales of the Glaston Technologies was 9.0% (10.7%).

The net sales of the Tamglass Group and Uniglass Engineering increased
slightly over the corresponding period last year. Their profitability
clearly improved during the period under review thanks to new products
and improved logistical efficiency among other things.

Bavelloni Group net sales and profitability fell from last year as a
result of the US dollar and other important invoicing currencies
falling against the euro, as well as demand focusing on smaller basic
machinery. The order quantities for Bavelloni have turned to growth
since July.

Glaston Technologies’ order book was good at EUR 60.3 (42.1) million.
The order book grew from EUR 54.0 million in June due to success at
the Vitrum exhibition.


Glaston Technologies’ machinery group includes Tamglass, the market
and technology leader in safety glass machines; Z. Bavelloni, the
leading supplier of pre-processing machines and tools; Glasto, a group
of distributors; and Uniglass Engineering, a supplier of flat glass
tempering machines.

Tamglass and Z. Bavelloni synergies

The synergies between Z.Bavelloni and Tamglass have resulted in
business and market share growth as well as cost savings.  The One-
Stop-Shop business model of Tamglass and Z. Bavelloni, which aims at
comprehensive full-service deliveries, has gained a good reception
among the glass processing industry.

Markets and sales

The popularity of glass architecture, development of safety glass
regulations and increasing size of glass surfaces used in vehicles
contribute to growth in the glass industry and create the base for
long-term growth in the glass processing machinery business.

The overall global demand for safety glass machines was good despite a
weak investment climate in the United States and Central Europe. The
demand for glass pre-processing machines has been increasing since the
third quarter.

The sales organisations of Tamglass and Z. Bavelloni have worked in
close co-operation. This has brought both companies new customers from
the among the other’s clientele.

Production and products

The capacity utilisation rate of Glaston Technologies’ machine plants
was at a good level during the period under review. Tamglass and Z.
Bavelloni have achieved cost savings from logistical co-operation
already in the third quarter.

The machine plants are well prepared to quickly increase their
production capacity as market demand starts to grow.

Maintenance services, spare parts and tools

The number of maintenance agreements at Glaston Technologies continues
to grow. The cautious investment climate is still reflected in the
sales of accessories and upgrades, contributing to slow growth in the
maintenance business.

Owing to the small number of available of used machines, the second-
hand machine business will be weighted on the fourth quarter.

Tamglass has been developing new update and control system packages to
enhance the operation of existing machines. The Tamglass maintenance
business strengthened its geographical network in the third quarter by
adding a Polish service point.


Tamglass Glass Processing includes Tamglass Safety Glass, a safety
glass processor; Tamglass Finton, a balcony systems manufacturer; and
Tamglass Insulating Glass, an insulating glass element manufacturer.

The combined full product range of these three glass processing
companies makes them as a whole a significant supplier to the Finnish
construction industry. Furthermore, glass processing plays an
important role in product development and customer presentations for
Glaston Technologies’ machines.

Tamglass Glass Processing has achieved synergy benefits by
centralising its purchasing. Most significant benefits however have
come from sales growth. The most significant deliveries of tempered
insulating glass in the third quarter went to construction projects
for the Helsinki Business Polytechnic and Ikea in Helsingborg as well
as glazing projects for bus stops and trains. Tamglass Finton
increased its volumes in balcony renovation projects.


Net sales, operating profit and order book

Net sales of Kyro Power in January-September grew by 18% to EUR 21.3
(18.1) million. Growth was due to increased spot market prices for
electricity, which also improved the operating profit by 21% to EUR
4.3 (3.5) million. Operating profit represented 20.0% (19.4%) of net
sales. The order book for the business area amounted to EUR 22.6
(23.0) million.

Development of energy markets and energy production

The price for electricity in Finland in January-September was on
average approximately 80% higher than in the previous year. The market
price of electricity remained good in the third quarter due to the
weak water situation in the Nordic countries. Owing to the elevated
electricity prices, Kyro Power has been able to use all of its
production capacity, including condensing power, which increased the
volume of energy production and improved profitability.

Electricity prices rose in other parts of Europe as well due to a hot
and dry summer. Strong price fluctuations emphasise the stabilising
effect of long-term energy delivery agreements to Kyro Power’s
contract customers.

The generation of hydro power has been severely restricted this year
due to a weak water situation also in the lake Kyrösjärvi water
system. The turbine of Kyro Power’s gas-fired power plant underwent
corrective maintenance in September.

Acquisition of the Hämeenkyrö district heating network

Kyro Power acquired the district heating network of the Hämeenkyrö
municipality and operations were transferred to Kyro Power’s
subsidiary, Hämeenkyrön Lämpö Oy, on 1 October 2003. Kyro Power has
supplied heat to the Hämeenkyrö district heating network even prior to
the acquisition. The purchase enhances the company’s district heating


Kyro Group´s profit outlook for the rest of the year is good.

The business of Glaston Technologies, which grows strongly due to
acquisitions, will again this year be weighted on the last part of the

Kyro Power’s net sales and operating profit will increase over last

Kyro´s net sales will thus grow strongly, and the Groups profitability
is estimated to be good in 2003.

Helsinki, 5 November 2003

Board of Directors

Additional information on Kyro’s interim report is available from
Kyro’s President, Pentti Yliheljo, and Chief Financial Officer, Veli
Kronqvist. Phone:  03-372 3111.

Investor          Kyro Corporation, Mr. Mika Nevalainen,VP,
relations:        Corporate Communications, p. 0400-882 024
Distribution:     Helsinki Exchanges
                  Key media

Consolidated Income Statement, EUR million

                                     1-9/03     1-09/02*    1-12/02*

Net sales                             156.1       100.7       144.3
Other operating income                  0.8         0.1         0.9
Expenses                              137.4        86.3       121.1
Depreciation and amortisation
  without amortisation of goodwill      4.9         3.9         5.2
Operating profit before
  amortisation of goodwill             14.7        10.6        18.9
  % of net sales                        9.4        10.5        13.1
Amortisation of goodwill                2.3         0.2         0.2
Operating profit                       12.3        10.5        18.7
  % of net sales                        7.9        10.4        13.0
Financial income and expenses           0.6        -0.9        -0.6
Profit before taxes                    13.0         9.5        18.1
Income taxes                           -5.2        -3.0        -5.7
Minority interest                      -0.8        -0.4        -0.6
Profit for the period                   6.9         6.2        11.7

*Comparison figures for 2002 do not include acquisitions subsequent to
the period under review.

Consolidated Balance Sheet, EUR million

                                    30.9.03     30.9.02    31.12.02

Fixed assets                          118.8        74.8        73.6
Current assets
  Inventories                          39.3        17.0        15.7
  Deferred tax receivable               7.1         6.6         6.1
  Financial assets                     79.1        82.7        91.7
Assets                                244.4       181.0       187.1

Equity                                137.4       132.2       137.1
Minority interest                       1.8         0.5         0.7
Non-discretionary reserves              5.7
  Interest-bearing liabilities         35.2         4.9         3.7
  Non-interest bearing liabilities     55.5        36.5        38.7
  Deferred tax liability                8.9         7.0         6.9
Equity and liabilities                244.4       181.0       187.1
Key figures                          1-9/03      1-9/02*    1-12/02*

Earnings per share, EUR                0.18        0.16        0.31
Equity per share, EUR                  3.44        3.23        3.36
Number of shares, x1000              39,675      39,675      39,675
Own shares held, x1000                  165       1,484       1,484
Return on invested capital, %          11.7         9.7        13.6
Return on equity, %                     7.7         6.8         9.4
Equity ratio, %                        59.3        76.7        77.1
Gearing, %                              4.9       -33.9       -40.5
Investments, EUR million               60.2         2.0         6.8
Personnel, end of period              1,143         491         531
Personnel on average                  1,021         508         536
Order book, EUR million                82.9        65.1        67.4

Contingent liabilities, EUR million

Liens                                   0.4         0.9         0.5
Other liabilities pending              16.4         6.3         7.8
Derivatives contracts
Value of underlying assets
  Forward currency contracts           31.6        28.7        18.4
Market value
  Forward currency contracts           30.9        27.4        17.5

Cash flow, EUR million

Cash flow from operations
  before taxes and financing           12.3         5.3        20.5
Net financing expenses                 -0.6         1.0        -0.5
Taxes paid                             -3.4        -3.7        -5.3
Cash flow from operations               8.3         2.7        14.7

Cash flow from investments             -1.3        -0.7        -1.1
Acquisition of subsidiaries           -70.7        -0.8        -2.3
Cash flow from investments            -72.0        -1.5        -3.4

Dividends paid                         -5.9       -13.3       -13.3
Assignment of own shares                8.0         0.7         0.7
Change in net debt                     34.0        -3.6        -2.2
Cash flow from financing               36.1       -16.2       -14.7

Change in cash and equivalents        -27.5       -15.0        -3.4

The above figures are unaudited

                                    Net sales, EUR million

                             1-3/  4-6/  7-9/ 10-12/ 1-3/  4-6/  7-9/
                             2000  2002  2002  2002  2003  2003  2003

Glaston Technologies         25.0  34.3  23.0  35.4  46.4  48.2  40.2
Energy                        6.5   5.7   6.0   8.2   8.0   6.8   6.5
Parent Company, other
  operations & eliminations   0.1   0.0   0.0   0.0   0.0   0.0  -0.1
Group total                  31.6  40.0  29.0  43.6  54.4  55.1  46.6

                              Operating profit before amortisation of
                                   goodwill, EUR million / EBITA%

                             1-3/  4-6/  7-9/ 10-12/ 1-3/  4-6/  7-9/
                             2000  2002  2002  2002  2003  2003  2003

Glaston Technologies          2.5   3.9   2.4   6.7   4.3   4.5   3.3
  EBITA%                     10.0  11.5  10.3  18.9   9.3   9.3   8.3
Energy                        1.3   1.1   1.1   2.0   1.7   1.5   1.1
  EBITA%                     20.6  18.5  19.1  24.3  20.8  22.1  16.9
Parent Company, other
  Operations & eliminations  -0.5  -0.7  -0.6  -0.4  -0.8  -0.6  -0.4
Group total                   3.4   4.3   2.9   8.3   5.2   5.4   4.0
  EBITA%                     10.6  10.8  10.1  19.1   9.6   9.9   8.6

                                      Order book, EUR million

                               3/    6/    9/   12/    3/    6/    9/
                             2000  2002  2002  2002  2003  2003  2003

Glaston Technologies         49.5  49.7  42.1  45.2  63.6  54.0  60.3
Energy                       23.6  23.0  23.0  22.2  22.0  22.2  22.6
Group total                  73.1  72.7  65.1  67.4  85.6  76.2  82.9