Not unexpectedly, the Group’s sales are down, a result of the retailers stocking up during the last quarter of last year in anticipation of the higher excise duties which were introduced in January. The sales reduction was 47% YoY to BGN 40.5m, with cigarette sales alone (excl. tobacco) dropping by mighty 60% to BGN 27m. The lower domestic sales however were partially offset by a 42% rise in cigarette exports, which now constitute 30% of cigarette sales, compared to 20% a year ago. Apart from the excise hike, the other main factors that impacted on the Holding’s weak sales are the ‘price war’ between BTH’s highest selling brands and BAT’s offerings mostly in the face of Viceroy, and secondly, the growing share of illegal import. Profitability suffered on operational level still, as all cost lines went up; of them materials and energy went as high as 58% of sales (49% for Q1 2007), a result of changing market conditions internationally. Operational loss for the company is BGN 7.9m, where last year it was a profit of BGN 8.6m. Below the operational line, the divestment of Kardzhali Tabac also brought the Group a loss of BGN 2m (for Q1 the sale of Sandanski BT resulted in a loss of almost BGN 3m). Further, the resetting of the prices of materials in EUR, while at the same time keeping a big part of exports in USD, resulted in an FX loss of BGN close to BGN 3m. The bottom line is a loss of BGN 14.4m (a loss of BGN 0.5m for Q1 ’07). If we exclude for one-offs the loss would be just below BGN 13m against a profit of BGN 2.4m a year earlier. The above discussion gives a clue for the operational cash flow, which is a negative BGN 42m. During the three months the Group has taken up new loans for BGN 140m, mainly to repay old debt for BGN 135m. On the balance sheet, the good news is that Receivables have now come down to just BGN 40m, where they were BGN 142m at the end of 2007 (due to the stockpiling discussed above). This comes to say that the next quarter will see a rise in sales as retailers are running out of stock.