- The Tulikivi Group’s third-quarter sales were EUR 16.6
(16.5) million and profit before taxes was EUR 1.0 (0.1)
million.
- The Group’s cumulative sales during the review period
were EUR 48.2 million (EUR 53.1 million, 1-9/2007) and
profit before taxes was EUR 1.2 (1.4) million. Earnings
per share amounted to EUR 0.02 (0.03). Cash flow from
operating activities was EUR 3.3 (-1.1) million.
- The order backlog at the end of the period amounted to
EUR 7.2 (7.9) million.
- General economic uncertainty has increased
substantially, and full-year sales are thus expected to
fall slightly short of the previous year’s level.
Measures to improve effciency are anticipated to yield an
improvement in earnings.

Managing Director Heikki Vauhkonen:
"The market polarised further in the third quarter.
Private house-building slowed down rapidly and consumer
confidence deteriorated further in September. This has
had an impact on the demand for fireplaces, especially in
Finland. On the other hand, the surge in consumer energy
prices and the general interest in saving energy have
strongly increased demand for fireplaces in Central
Europe. Demand for fireplaces has also grown in Russia.

In addition to fireplace exports, demand for lining stone
has exceeded the level of the earlier part of the year
and will continue to be clearly brisker for the remainder
of the year.

Demand for natural stone has remained solid. In addition,
the company has increased its market share particularly
for interior decoration stones.

The Corporation has implemented measures to improve
efficiency which will make it possible to increase
profitability also in the remainder of the year."

Sales and result
The Group’s sales amounted to EUR 48.2 million (EUR 53.1
million in January-September 2007). The Fireplaces
Business posted sales of EUR 40.6 (45.3) million, the
Natural Stone Products Business sales of EUR 6.1 (5.7)
million and Other Operations sales of EUR 1.5 (2.1)
million. The decline in sales of lining stones in the
early part of the year accounted for the most significant
share of the reduction in the sales of the Fireplaces
Business.

Sales in Finland accounted for EUR 26.7 (28.8) million,
or 55.0 (54.3) per cent, of total sales. Exports
accounted for EUR 21.5 (24.3) million. The largest
countries for exports were France, Germany and Belgium.

The Group’s operating profit was EUR 1.9 (2.0) million.
The Fireplaces Business posted an operating profit of EUR
4.2 (4.0) million and the Natural Stone Products Business
had an operating profit of EUR 0.4 (0.4) million and
Other Operations an operating loss of EUR 2.7 (2.4)
million. The Utility Ceramics product group, which is
part of Other Operations, posted a loss of EUR 0.05
million.

The Group’s profit before taxes was EUR 1.2 (1.4)
million. Earnings per share were EUR 0.02 (0.03). The
Group has downscaled costs and personnel to match the
scope of operations.

The Group’s third-quarter sales were EUR 16.6 million
(EUR 16.5 million in July-September 2007) and profit
before taxes was EUR 1.0 (0.1) million.

Financing and investments
Cash flow from operating activities before investments
amounted to EUR 3.3 (-1.1) million. The Group’s net
financial expenses were EUR 0.7 (0.5) million. The equity
ratio was 43.5 per cent (42.3 per cent at September 30,
2007). The ratio of interest-bearing net debt to equity,
or gearing, was 66.9 (76.2) per cent. The current ratio
was 1.7 (1.6). Equity per share amounted to EUR 0.72
(0.76).

The Group’s investments were EUR 1.8 (4.2) million during
the review period. The major investments made during the
review period comprised the opening of new quarries as
well as conversion and replacement investments made in
fireplace production.

R&D expenditure totalled EUR 1.1 (1.1) million,
representing about 2.3 (2.0) per cent of sales. Of this
amount, EUR 0.1 (0.1) million was capitalised on the
balance sheet. The main focus of product development was
on the development of fireplace combustion technology.

Personnel
The Group employed an average of 569 (713) people during
the reporting period. Salaries and bonuses during the
review period totalled EUR 12.7 (15.7) million.

The Tulikivi Group has an incentive plan that includes a
share-based incentive plan for key personnel and an
incentive pay scheme for all personnel. The share-based
incentive plan includes three earning periods: the
calendar years 2008, 2009 and 2010. The potential reward
from this plan for earning period 2008 will be based on
the Group’s profit after financial items and cash flow
from operating activities. The potential reward for the
2008 earning period will be paid partly in the form of
the company’s Series A shares and partly in cash in 2009.
A maximum total of 120,000 Tulikivi Corporation Series A
shares and a cash payment corresponding to the value of
the shares will be paid as rewards on the basis of the
2008 earning period. The managing director may receive no
more than 22,500 of these shares. A maximum total of
about 360,000 Series A shares and a cash payment
corresponding to the value of the shares will be paid as
rewards on the basis of the entire share-based incentive
plan.
The incentive pay scheme is based on the achievement of
the Group’s earnings, productivity and personal targets.
The cost-impact of the incentive pay scheme was EUR 0.2
million in the review period.

Resolutions of the Annual General Meeting

Dividends
Tulikivi Corporation’s Annual General Meeting, held on
April 17, 2008, resolved to pay a dividend of EUR 0.0450
on the Series A share and EUR 0.0433 on the Series K
share.

Administrative bodies
Bishop Ambrosius, Juhani Erma, Eero Makkonen, Maarit
Toivanen-Koivisto, Heikki Vauhkonen, Reijo Vauhkonen and
Matti Virtaala were elected to the Board of Directors of
the parent company and business subsidiaries. The Board
elected Matti Virtaala as its chairman from amongst its
number. The firm of independent public accountants KPMG
Oy Ab, based in Helsinki, was elected as the auditor.

Share buyback authorisation
The Annual General Meeting authorised the Board to
repurchase the company’s own shares as proposed by the
Board.

Authorisation to decide on share issues and conveying the
company’s own shares in possession of the company and the
right to issue special rights which give entitlement to
shares as defined in Chapter 10, section 1 of the Limited
Liability Companies Act
The Annual General Meeting authorised the Board of
Directors to decide on issuing new shares and conveying
the company’s own shares in its possession as proposed by
the Board of Directors. The authorisation also includes
the right to issue special rights, as defined in Chapter
10, section 1, of the Limited Liability Companies Act, in
which shares can be subscribed for against payment or by
setting off the receivable.

Share repurchase
The Tulikivi Corporation Board of Directors has decided
to commence repurchasing the company's A shares, as
authorised. The repurchasing commenced on 1 August 2008
and will end on 30 November 2008 at the latest. During
the review period, 32,604 A shares were purchased, and
their repurchase value was EUR 37,334. The repurchased
shares account for 0.09 per cent of all shares and 0.03
per cent of votes. The shares were held by the company at
the end of the review period. A maximum of 60,000 shares
may be repurchased under the authorisation.

The shares are repurchased for use as consideration in
corporate acquisitions or other structural arrangements
or to implement the share-based incentive system, to pay
a share-based incentive or otherwise to be transferred or
cancelled.

Risks and uncertainties
The Group’s risks are divided into strategic and
operational risks, damage, casualty and loss risks and
financial risks. Strategic risks include risks related to
the Group’s raw material reserves, amendments to laws and
decrees, and market position. Operational risks are
related to, but not limited to, products, distribution
channels and processes. For more information on risks,
see the 2007 Annual Report. The Group’s near-term risks
are related to the decline in the volume of housing
construction and the trend in the consumer prices of
energy. Tulikivi Corporation’s objective is to secure a
positive trend in sales and results by improving existing
distribution channels, opening new market areas and
designing products for new user groups. These risks have
been taken into consideration in action plans and
measures are taken to reduce them in accordance with the
risk management system.

A substantial decrease in private home construction and
energy prices could have a significant impact on the
result and cash flows in the coming winter.

Outlook for the future
Small-house construction is on the decrease in many
market areas, which will affect the demand for
fireplaces. The outlook for the demand for lining stones
has improved somewhat since the spring. Thus general
economic uncertainty has increased substantially, and
full-year sales are thus expected to fall slightly short
of the previous year’s level. The measures taken to
improve efficiency are anticipated to yield an
improvement in earnings.

The strategic objectives
The strategic objectives set for the Tulikivi Group are:
annual organic growth of 5 per cent in the long term,
return on investment of over 20 per cent and the
improvement of relative profitability by two percentage
points per year. Sales growth and return on investment
will fall short of these objectives during the present
year, mainly due to the decline in the demand for
fireplaces.

Segment reporting
The Group’s business segments are the Fireplaces
Business, Natural Stone Products Business and Other
Operations. The Fireplaces Business includes soapstone
and ceramic fireplaces sold under the Tulikivi and
Kermansavi brands and also soapstone lining for heater
manufacturers. The Natural Stone Products Business
includes interior decoration stone products for
households and stone deliveries to construction sites.
Other Operations includes expenses that are not allocated
to the Group’s other segments, tax and financial
expenses, as well as sales of ceramic utensils and the
expenses of this business.

Tables
CONSOLIDATED INCOME STATEMENT
MEUR
                     1-9/   1-9/Change,  1-12/  7-9/   7-9/Change
                     2008   2007      %   2007 2008    2007      %

Sales                48.2   53.1   -9.2   69.9  16.6   16.5    0.6
Other operating
income                0.6    0.4           0.6   0.2    0.2
Increase/decrease in
inventories in
finished goods and
in work in progress  -0.9    2.2           2.1  -0.9    0.0
Production for
own use               0.4    0.9           1.1   0.1    0.4
Raw materials and
consumables           9.0   10.8          14.2   2.7    3.4
External services     7.4    8.2          11.1   2.7    3.1
Personnel expenses   16.6   20.0          27.1   4.9    5.6
Depreciation and
amortisation          4.1    4.2           5.7   1.3    1.4
Other operating
expenses              9.3   11.4          14.7   3.0    3.2

Operating profit      1.9    2.0   -0.9    1.0   1.4    0.4  234.3
Percentage of sales   4.0    3.7           1.4   8.3    2.5
Finance income        0.1    0.1           0.2  -0.1    0.0
Finance expense      -0.8   -0.7          -1.0  -0.3   -0.3
Share of the profit of
associated company    0.0    0.0           0.0   0.0    0.0

Profit before income
tax                   1.2    1.4  -13.4    0.2   1.0    0.1 1052.8
Percentage of sales   2.5    2.6           0.2   6.3    0.6
Income tax expenses  -0.3   -0.4           0.2  -0.3    0.0

Profit for the period 0.9    1.0           0.4   0.8    0.1

Earnings per share
attributable to the
equity holders of the
parent company, EUR
basic and diluted    0.02   0.03          0.01  0.02   0.00

CONSOLIDATED BALANCE SHEET
MEUR                                09/08       09/07        12/07
ASSETS
Non-current assets
Property, plant and equipment
Land                                  1.1         1.1          1.1
Buildings                             8.2         8.9          8.6
Machinery and equipment              10.8        12.9         12.7
Other tangible assets                 1.2         1.4          1.4
Intangible assets
Goodwill                              4.3         4.3          4.3
Other intangible assets              11.1        11.1         11.1
Investment properties                 0.2         0.2          0.2
Available-for-sale investments        0.1         0.1          0.1
Receivables
Deferred tax assets                   0.9         0.6          1.0
Total non-current assets             37.9        40.6         40.5

Current assets
Inventories                          11.7        12.9         12.7
Trade receivables                     6.9         7.9          5.3
Current income tax receivables        0.3         0.5          0.1
Other receivables                     0.8         1.9          0.5
Cash and cash equivalents             4.0         3.2          3.8
Total current assets                 23.7        26.4         22.4
Total assets                         61.6        67.0         62.8

EQUITY AND LIABILITIES
Equity
Share capital                         6.3         6.3          6.3
Share premium fund                    7.4         7.4          7.4
Translation difference               -0.1        -0.1         -0.1
Retained earnings                    13.2        14.7         14.0
Total equity                         26.8        28.3         27.6
Non-current liabilities
Deferred income tax liabilities       2.1         3.0          2.3
Provisions                            0.9         0.8          0.9
Interest-bearing debt                17.7        18.4         17.7
Other debt                            0.4         0.4          0.3
Total non-current liabilities        21.1        22.6         21.2
Current liabilities
Trade and other payables              9.5         9.8          9.4
Current income tax liabilities                    0.0          0.1
Current provisions                    0.0                      0.7
Short-term interest-bearing debt      4.2         6.3          3.8
Total current liabilities            13.7        16.1         14.0
Total liabilities                    34.8        38.7         35.2
Total equity and liabilities         61.6        67.0         62.8

CONSOLIDATED CASH FLOW STATEMENT
MEUR                               01-09/      01-09/       01-12/
                                     2008        2007         2007
Cash flows from operating activities
Profit for the period                 0.9         1.0          0.4
Adjustments:
Non-cash transactions                 4.1         4.1          5.5
Interest expenses
and income and taxes                  1.0         0.9          0.6
Change in working capital            -1.4        -5.4         -1.8
Interest paid and received
and taxes paid                       -1.3        -1.7         -2.2
Net cash flow from operating
activities                            3.3        -1.1          2.5

Cash flows from investing activities
Investment in property, plant and
equipment and intangible assets      -1.8        -4.7         -5.7
Grants received for investments
and sales of property, plant and
equipment                             0.1         0.2          1.4
Loans granted                         0.0
Net cash flow from investing
activities                           -1.7        -4.5         -4.3

Cash flows from financing activities
Proceed from borrowings               3.0         8.9          8.5
Repayment of borrowings              -2.7        -1.6         -4.4
Dividends paid                       -1.7        -3.4         -3.4
Net cash flow from financing
activities                           -1.4         3.9          0.7

Change in cash and cash
equivalents                           0.2        -1.7         -1.1

Cash and cash equivalents at
beginning of period                   3.8         4.9          4.9
Cash and cash equivalents at
end of period                         4.0         3.2          3.8

STATEMENT OF CHANGES IN EQUITY
MEUR
                     Share   Share Trans- Retained   Total
                   capital premium lation earnings
                              fund  diff.

Equity 1 January 2008  6.3     7.4   -0.1     14.0     27.6
Translation
differences                           0.0               0.0
Profit for the period                          0.9      0.9
Dividends paid                                -1.7     -1.7
Share buyback                                  0.0      0.0
Equity 30 Sept. 2008   6.3     7.4   -0.1     13.2     26.8

Equity 1 January 2007  6.3     7.4    0.0     17.1     30.8
Translation
differences                          -0.1              -0.1
Items recognised directly
in equity                                     -0.1     -0.1
Profit for the period                          1.0      1.0
Dividends paid                                -3.3     -3.3
Equity 30 Sept. 2007   6.3     7.4   -0.1     14.7     28.3

BUSINESS SEGMENTS            01-09/      01-09/       1-12/
MEUR                          2008        2007         2007
Sales                          48.2        53.1        69.9
Fireplaces business            40.6        45.3        59.7
Natural stone products
business                        6.1         5.7         7.4
Other operations                1.5         2.1         2.8

Operating profit                1.9         2.0         1.0
Fireplaces business             4.2         4.0         4.4
Natural stone products
business                        0.4         0.4         0.4
Other operations               -2.7        -2.4        -3.8

BUSINESS SEGMENTS QUARTERLY
MEUR                      Q1/   Q2/   Q1/   Q4/   Q3/   Q2/    Q1/
                         2008  2008  2008  2007  2007  2007   2007

Sales                    16.6 17.0   14.6  16.8  16.5  17.4   19.2
Fireplaces business      14.4  14.2  12.0  14.4  13.9  14.7   16.7
Natural stone products
business                  1.7   2.4   2.0   1.7   1.7   2.1    1.9
Other operations          0.5   0.4   0.6   0.7   0.9   0.6    0.6

Operating profit          1.3   0.9  -0.3  -1.0   0.5   0.7    0.8
Fireplaces business       2.0   1.8   0.4   0.4   1.0   1.5    1.5
Natural stone products
business                  0.1   0.1   0.2   0.0   0.1   0.2    0.1
Other operations         -0.8  -1.0  -0.9  -1.4  -0.6  -1.0   -0.8

KEY FINANCIAL RATIOS AND
SHARE RATIOS               1-9/08    1-9/07  7-9/08  7-9/07  1-12/
                                                                07

Earnings per share, EUR      0.02      0.03    0.02   0.00    0.01
Equity per share, EUR        0.72      0.76    0.72   0.76    0.74
Return on equity, %           4.3       4.6    11.3    1.1     1.2
Return on investments, %      5.4       5.4    10.5    2.4     2.5

Equity ratio, %              43.5      42.3                   43.9
Net indebtness ratio, %      66.9      76.2                   64.7
Current ratio                 1.7       1.6                    1.6
Gross investments, MEUR       1.8       4.2                    5.7
Gross investments, % of sales 3.6       8.0                    8.1
Research and development
costs,  MEUR                  1.1       1.1                    1.6
%/sales                       2.3       2.0                    2.3
Outstanding orders (30 Sept.),
MEUR                          7.2       7.9                    6.9
Average number of staff       569       713                    682

Rate development of shares, EUR
Lowest share price, EUR      1.20      2.33                   1.53
Highest share price, EUR     1.88      3.75                   3.75
Average share price, EUR     1.45      3.01                   2.69
Closing price, EUR           1.22      2.34                   1.56

Market capitalization at the
end of period, 1000 EUR    45 276    86 917                 57 945
(Supposing that the market price of the K-share
is the same as that of the A-share)
Number of shares traded,
(1000 pcs)                  1 735     3 691                  5 369
% of total amount of A-shares 6.3      13.4                   19.4
Number of shares
average                  37140677  37143970               37143970
Number of shares
30 Sept.                 37111366  37143970               37143970

NOTES TO THE INTERIM REPORT

This interim report has been prepared in accordance with
International Financial Reporting Standard IAS 34 Interim
Financial Reporting. In preparing of this
interim report, Tulikivi has applied same accounting
policies as in the 2007 financial statements, with the
exception of the following new/amended standards that the
group has adopted as from January 1, 2008:
- IFRIC 12 Service Concession Arrangements
- IFRIC 14, IAS 19 The Limit and Defined Benefit Assets,
Minimum Funding Requirements and their Interaction
The changes have no material effect on Tulikivi’s interim
report.

The key figures presented in the Interim Report have been
calculated using the same formulas as the latest
financial statement 2007. The formulas can be found on
page 63 of the 2007 Annual Report.

Income taxes
MEUR                               01-09/  01-09/       01-12/07
                                       08      07
Taxes for the current and previous
reporting periods                    -0.3    -0.5         -1.1
Deferred taxes                                0.1          1.3
Total                                -0.3    -0.4          0.2

Collateral and securities given and other commitments
MEUR                               9/2008  9/2007          12/
                                                          2007

Mortgages and pledges given          26.3    28.9         26.3
Derivatives
Interest rate swaps;
nominal value                        11.0     8.3          7.4
fair value                            0.1     0.2          0.1

The fair value of interest rate swaps is the gain or loss
for closing the contract based on market rates at the
balance sheet date. Unused credit commitments stood at
EUR 5.8 million at the end of the review period.

Provisions and contingent liabilities
The Group’s non-current provisions are an environmental
provision of EUR 0.4 million and a warranty provision of
EUR 0.5 million.
A restructuring provision that was recognised in current
provisions in 2007 was used during the review period.
On the basis of the Mining Act and environmental
legislation, the Tulikivi Group has landscaping
obligations that must met when operating the quarries and
after quarries and plants are eventually shut down.
Provisions and contingent liabilities are itemized in
greater detail in notes 24. Provisions and 33. Other
contingent liabilities in the 2007 consolidated financial
statements.

Share capital
Share capital by share series
                            Number      % of      % of      Share,
                           of shares   shares    voting    EUR of
                                                 rights      share
                                                           capital
                 
K-shares(10 votes)        9 540 000      25.7      77.6  1 621 800
A-shares (1 vote)        27 603 970      74.3      22.4  4 692 675
Total 30 Sept, 2008      37 143 970     100.0     100.0  6 314 475

There have been no changes in Tulikivi Corporation´s
share capital during the period. According to the
articles of association the dividend paid for Series A
shares shall be 0.0017 EUR higher than the dividend paid
on Series K shares.  The Series A share is listed on the
NASDAQ OMX Helsinki Ltd. On September 30, 2008, the
company had 4467 shareholders. 7.3 per cent of all shares
were nominee registered or in foreign ownership. No
flagging notifications were made to the company during
the review period.

Board authorizations
The Annual General Meeting of April 17, 2008 authorized
the Board of Directors to acquire the company’s own
shares. A maximum of 2,760,397 Series A shares in the
company and 954,000 Series K shares in the company can be
bought back. The authorization is valid until the 2009
Annual General Meeting. In addition, the Board of
Directors has an authorization to decide on issuing new
shares and the conveyance of own shares in the company’s
possession. New shares can be issued or own shares held
by the company conveyed amounting to a maximum of
5,520,794 Series A shares and 1,908,000 Series K shares.
The authorization is valid until the 2009 Annual General
Meeting.

At the end of the review period, the company hold 32 604
of its own shares.

Related party transactions
1000 EUR                           9/2008        9/2007
Sales of goods and services
-sales of goods and services to
associated companies                   12              2

Purchases of goods and services
-purchases of goods and services
from associated companies              98             36

Transactions with key management
- leases from related parties          88             79

Transactions with other related parties
Tulikivi Corporation is a founder member of the Finnish
Stone Research Foundation. The company has leased offices
and storages from the property owned by the Foundation
and North Karelia Educational Federation of
Municipalities. The rent paid for these facilities was
EUR 93 thousand (93 thousand)in the period. The rent
corresponds with the market rents.  The sales of services
to foundation were EUR 16 thousand (EUR 28 thousand) in
the period. Tulikivi Corporation gave the Foundation a
grant of sixty thousand euros and a long-term loan of
forty thousand euros during the review period.

Largest shareholders on 30 September 2008
Name of shareholder                        Shares       Proportion
                                                          of total
                                                              vote
Vauhkonen Reijo                         4 164 327           24.3 %
Vauhkonen Heikki                        3 003 887           24.1 %
Elo Eliisa                              2 957 020            5.9 %
Virtaala Matti                          2 421 300           12.6 %
Mutual Pension Insurance
Company Ilmarinen                       1 902 380            1.5 %
Mutanen Susanna                         1 643 800            7.2 %
Vauhkonen Mikko                           797 700            3.6 %
Paatero Ilkka                             718 430            0.6 %
Nuutinen Tarja                            674 540            3.5 %
Fondita Nordic Micro Cap
Placeringsfond                            616 900            0.5 %
Other shareholders                     18 243 686           16.2 %

The interim report has not been audited.

The companies included in the Group are the parent
company Tulikivi Corporation, Kivia Oy, AWL-Marmori Oy,
Tulikivi U.S. Inc. and OOO Tulikivi. Group companies
include also Uuni Vertriebs GmbH and The New Alberene
Stone Company, Inc., which are dormant. The parent
company has a fixed place of business in Germany,
Tulikivi Oyj Niederlassung Deutschland. The Group has
interests in associated companies Stone Pole Oy and
Leppävirran Matkailukeskus Oy.

TULIKIVI CORPORATION

Board of Directors
Matti Virtaala Chairman of the Board

Distribution: NASDAQ OMX Helsinki Ltd
Central Media
www.tulikivi.com

Additional information: Tulikivi Corporation, 83900
Juuka, tel.
+358-207-636 000, www.tulikivi.com
- Chairman of the Board of Directors Matti Virtaala
- Managing Director Heikki Vauhkonen