(Oslo 30 August 2006) Block Watne Gruppen achieved operating revenues of NOK 727 million for the first half, on a par with the same period of 2005. In the second quarter operating revenues were NOK 370 million, a reduction of 3.5 per cent compared to second quarter 2005. Operating profit (EBIT) for first half totalled NOK 105 million, representing an increase of 10.5 per cent. In the second quarter operating profit of NOK 56 million is an increase of 0.7 per cent compared to second quarter 2005.

 

A strong order intake has given the group a good backlog. Orders in hand totalled NOK 1 005 million at 30 June, compared with NOK 830 million a year earlier. Representing a 21 per cent increase, this provides a good basis for future production.

 

The group achieved operating revenues of NOK 370 million in the second quarter of 2006, a reduction of roughly NOK 13 million from the same period of 2005. Operating revenues for the quarter reflect some displacement in certain projects. A few district offices have faced capacity challenges in relation to sub-contractors and in-house staffing. In line with group policy, safety is given priority in project execution and economics over short term top line growth. Operating revenues totalled NOK 727 million for the first half, on a par with the same period of 2005.

 

Operating profit (EBIT) for the second quarter came to NOK 56 million, marginally higher than in the same period of last year. The EBIT margin rose from 14.5 per cent in the second quarter of 2005 to 15.1 per cent. Operating profit for the first half was NOK 105 million (14.5 per cent), compared with NOK 95 million (13 per cent) for the same period of 2005. This represents an increase of 10.5 per cent. The improvement reflects relatively higher turnover for "Residential project developments" and "Property sales with a commitment to construction".

 

Profit before tax (EBT) came to NOK 48 million for the second quarter, compared with NOK 45 million for the same period of last year. The corresponding first-half figures were NOK 91 million and NOK 77 million, representing a growth of 18.2 per cent.

 

Cash flow from operations during the second quarter was affected by a tax payment of NOK 62 million, and was accordingly negative at NOK 30 million. It was positive for the first half at NOK 34 million. No investment worth mentioning was made during the first six months. Group liquidity is good.

 

Order intake in the second quarter was NOK 478.6 million, compared with NOK 430.4 million for the same period of 2005. This represents an increase of 11.2 per cent. The corresponding figures for the first half were NOK 932.3 million, NOK 833.4 million and 11.9 per cent.

 

The market for new houses was very good in the first half. We expect the market to remain stable during the second half. The group maintains its focus on high quality and profitability in the projects in preference to short term revenue growth. We expect operating revenues in the third quarter to be rather lower than in the same period of last year. For 2006 as a whole we expect operating revenues as for 2005.

 

For more details, see the attached interim report.

Lars Nilsen, president and CEO, Block Watne Gruppen ASA, tel: +47 23 24 60 00

Ketil Kvalvik, chief financial officer, Block Watne Gruppen ASA, tel: +47 23 24 60 42, +47 90 77 13 15