2nd quarter and 1st half year report 2012

8/24/2012 2:00 AM EST

Highlights Q2 2012
· EBITDA of NOK - 1.6 million in the quarter compared 
to NOK - 4 million in Q2 - 2011
· No investment has been made
· Continued process to reduce cost base to an 
operational minimum
· Outgoing cash balance at 30th of June of 
NOK 59.3 million

Highlights 1st half year of 2012
(In addition to the above mentioned items)
· Scanarc transformed into an investment company 
(EGF 10.2.2012)
· EBITDA is NOK - 5.1 million in the H1 compared to 
NOK - 8.5 million in H1 2011
· Scanarc's claim towards SPT and Scanarc's remaining 
stake of 19.9 % in SPT was sold and settled by 
transfer of 1,300,000 Scanarc shares (treasury shares 
transaction).

Financial results
Scanarc (inclusive ERAS France)
The Extraordinary General Meeting on 10 February 2012 
resolved to approve the transformation of Scanarc 
into an investment company. Hence, the activities in 
Scanarc in H1 have mainly been related to closing of 
the previous business, the transformation into an 
investment company and the screening and evaluation 
of potential investments. No investment has been made 
up to now. The subsidiary Eras Metal France, which 
has no operational activity, is under dissolution.

Scanarc's second quarter operating revenues were zero 
(zero in Q2 - 2011) and the second quarter EBITDA 
loss was NOK - 1.6 million (NOK - 4 million). 

Scanarc's revenue in first half year of 2012 was zero 
(zero in first half 2011) and the first half year 
EBITDA loss of NOK - 5.1 million (NOK - 8.5 million).

Several cost components that are non-recurring are 
included in the H1 2012 EBITDA. Such costs include 
legal costs of NOK 0.9 million, financial reporting - 
and auditing costs of approximately NOK 2.2 million 
due to financial reporting complexity following the 
2011 transactions and a fee related to continued 
listing on Oslo Axess of NOK 0.3 million.
The company's option program have affected the H1 
salary and personnel costs by NOK 0.2 million (no 
cash effect).

The net annual cost base (including finance income) 
going forward is estimated to NOK 3 - 4 million, 
before any potential transaction related costs. Which 
this is in line with the cost level indicated when 
transforming the company into an investment company.

Balance sheet and cash flow
Scanarc has a strong cash and equity position. Cash 
amounted to NOK 59.3 million as of 30 June 2012 (NOK 
97.8 million as of 30 June 2011). 

The equity ratio was 95.3 % at period-end (82.2 %). 
The net change in cash for the first half year 2012 
was NOK -9.6 million (NOK -65.2 million in H1 2011)

Organisational changes
Ralf Schmidt continued in his position as CEO after 
the transformation of Scanarc into an Investment 
company. Gunhild L. Melle was employed as new CFO, 
part time for hire, from the 10 May 2012, replacing 
Oddleif Hatlem

Risks
The principal risks and uncertainties Scanarc are 
exposed to include:
Financial risk:
·	Changes in interest rates
Credit risk:
·	Potential default in the deferred Proval 
payment

Transactions with related parties
All related party transactions are carried out as 
part of the ordinary course of business at market 
prices.  

As previously disclosed, on 13 March, the Board 
entered into an agreement where the managing director 
of the former subsidiary SPT, Bror Magnus Heegaard, 
acquired the claim Scanarc had against SPT AB and 
Scanarc's remaining stake of 19.9% in SPT AB. The 
transaction was settled by Heegaard transferring a 
total of 1,300,000 Scanarc shares to Scanarc 
(treasury shares transaction). 

Since Heegaard was a shareholder in Scanarc, and the 
agreement involved a sale to a shareholder of a value 
exceeding 5 % of the company's share capital, the 
Agreement was (ref § 3-8 of the Norwegian Public 
Limited Liability Companies Act) finally approved by 
the Annual General Meeting on 27 April 2012,  before 
it came into force. Settlement took place on 2 May 
2012.

The agreement with Heegaard led to a write down of 
the claim by NOK 5.6 million to NOK 2.2 million in 
the accounts as of 31 December 2011. The SPT shares 
being transferred, was in connection with the sale of 
the majority (80.1 %) of SPT in 2011, written down to 
NOK 1. Hence, this agreement has not affected the H1-
result.

Pro & contra settlement - Eras transaction 
With reference to the annual report for 2011, there 
is still a disagreement between Scanarc and Proval 
Partners SA (Proval) regarding the final adjustment 
of the purchase price for the shares in Eras Metal AS 
(Eras). 

Scanarc has recently been informed by Proval that 
Proval and its subsidiary Eras will raise a formal 
notice of litigation regarding claims related to the 
settlement of the Share Purchase Agreement (SPA) 
between Scanarc and Proval. Such formal notice has 
not yet been received, and the exact amount and legal 
basis on which the claim will be made is therefore 
unclear. Consequently, Scanarc has not made any 
provisions for the claim in the accounts as of 30th 
of June 2012. However, it is the Board`s intention to 
continue a dialogue with Proval to resolve the matter 
in an expeditious manner for all interests involved.

Based on the information available, Scanarc does not 
believe that the total amount of any claims to be 
made by Proval and/or Eras will exceed the deferred 
Proval payment of MNOK 5.

See note 3 for further information.

Significant events after the balance sheet date
There have been no significant events after the 
balance sheet date.

Outlook
Scanarc's current strategy is to aim for investments 
in Nordic based companies with an attractive business 
case where profitability can be reached within 
reasonable time. Furthermore, the companies should 
operate in industries where Scanarc's CEO and 
Chairman have operational or strategic experience. No 
investment has been made as of today.

The resolution of the extraordinary general meeting 
to convert Scanarc into an investment company (10 
February 2012) stated that the Board should evaluate 
the strategy of the company in the autumn of 2012. 
The Board is currently carrying out such evaluation 
and will inform shareholders of its conclusion in the 
near future.  

The winding up of Eras Metal France continues, and 
the time line for this process is determined by the 
time needed by the French authorities to conduct this 
process.

For further information, please contact:

Ralf Schmidt
CEO, ScanArc ASA
Mob.: +47 959 49 978

Gunhild Louise Melle
CFO, ScanArc ASA
Mob.: +47