Satisfaction with business last year

We ended the year with a 97% increase in the market value of our shares which also represented the highest returns on the Slovenian Stock Exchange in the past two years, with a 13% increase in the number of passengers compared to 2003 and with a net operating result in the amount of SIT 2.040 billion, which is 12% more than in 2003.

Turnover at Ljubljana Airport grew in 2004. Increases in charter traffic (37%) and the introduction of new scheduled routes by the foreign carriers Austrian Airlines, easyJet, Malév and Air France had a positive influence on this growth. For the first time in our history, the airport recorded over one million passengers in a single year. We finished 2004 with 1,048,238 passengers, which is a 13% increase over the previous year (104% of the annual plan). The number of aircraft takeoffs and landings increased from 31,737 in 2003 to 35,502 in 2004 (109% of the annual plan).

The company's operating revenues also followed the growth in traffic. At SIT 5.532 billion, operating revenues were 14% higher than the previous year (exceeding the annual plan by 6%). Operating expenses were higher by 7% (SIT 3.966 billion, exceeding the annual plan by 1%). Our operating result was 35% higher than in the same period last year, exceeding the plan by 22% (SIT 1.566 billion). At SIT 2.304 billion, which also includes financial and extraordinary income and expenses, our operating result grew by 6% in comparison to 2003 and exceeded the annual plan by 6%. After tax liabilities, our net operating result for the budgetary period amounts to SIT 2.040 billion, which is 12% more than the year before.

In addition to growth in traffic and good operating results, last year was marked at Ljubljana Airport by increased connections with tourism through the companies in the SPOT consortium, the construction of a new parking garage, renovation of our web pages and traffic and business information system, the purchase of 13.5 ha of land for the continued growth of the airport, the completion of construction of a general aviation hangar and a capital increase at Portorož Airport.

We expect this favourable trend in business at the airport to continue in 2005, when we plan a 15% increase in traffic and a 9% increase in operating revenues. We will continue the marketing strategy we have adopted. This means that the activities of the SPOT consortium will lead to the consolidation of major tourism service operators and even more intensive operation in the European market. We will also dedicate more attention to the development of freight traffic. Because of continually increasing demands in the area of ground supply, our priority projects will include the modernization of the information system for passenger inspections. The most important investments will also include the completion of the parking garage with its business wing and the preparation of documentation for the new passenger terminal.

Brnik, 1 March 2005