The core business of alcohol production is expanding with double digit growth. This is further fuelled by an aggressive strategy of acquisitions - based on complementary alcohol business and a further expansion into existing geographic markets.

The main assets of the group - our globally renowned brands, state-of-the-art production and distribution companies as well as our portfolio of investments and projects - have tripled in value since 2003.

Our performance in 2006 has been strong. At the start of the year we made a commitment to deliver solid profitability from all our brands - local as well as international - whilst increasing market share. We have met our targets, and reinforced SPI's leading position in the industry. Our success was driven by the performance of Stolichnaya, our leading brand. "Stoli" continued to gain share in the US, the core market for SPI which contributes more than 50% of group profits. The international sales of our high-margin extra-premium product, Stolichnaya Elit, tripled during the year.

Our development is the result of extended relationships with our trade and financial partners.  Throughout 2006 we achieved excellent results thanks to the global partnership with our key logistics and distribution partner, Pernod Ricard of France, which started in 2005.

Due to the Group’s continuously improving financial ratios and excellent track record in loan portfolio management SPI  has been able to significantly reduce the cost of borrowing over the last three years.

In the Baltic region, SPI continued to strengthen its position and increase profitability because of the synergies between our strategic international brands and more than 50 local brands. Our position in the region significantly improved following last year's acquisition of Bennet, one of the leading spirits and drink distributors in Lithuania.  During its first year as a part of the SPI Group, Bennet's sales and operating profit grew by more than 40%. Our retail chains in Latvia and Lithuania also achieved considerable growth and gained market share in a growing segment of the local economy.

The other parts of our business - property development and agriculture - developed according to plan.

We believe our continued success highlights the strength of our business model and remain committed to grow the business by following through on our global strategy.