(Oslo 6 November 2007) The operating revenues in the 3rd quarter 2007 amounted to NOK 701 million, up NOK 7 million (1.0 percent). The operating profit (EBIT) was NOK 82 million, up NOK 9 million (12.1 percent). The EBIT margin was 11.7 percent corresponding to 10.6 percent in the 3rd quarter 2006. The order backlog at the end of the quarter was NOK 2 113 million, an increase of 7.6 percent.

 

- The operating revenues and the order intake are in line with the 3rd quarter 2006. Increased operating profit and strong margins confirm a stable and profitable growth in the quarter, comments Lars Nilsen, CEO in BWG Homes.

 

Operating revenues are reflective of increased production capacity and increased average prices for the Group's Norwegian products. Swedish operations continued to experience a lower rate of production.

 

The operating profit (EBIT) has increased with 12.1 percent compared to the 3rd quarter 2006, and reflects efficient operations.

 

BWG Homes completed the acquisition of Prevesta AB on 31 May 2007. Corresponding figures 2006 are pro forma.

 

Following the purchase of Prevesta AB, BWG Homes presents figures for two geographical segments - Norway and Sweden.

 

Operating revenues in the 3rd quarter 2007 amounted to NOK 382 million, an increase of 7.5 percent compared to the 3rd quarter 2006. Operating profit (EBIT) was NOK 63 million, an increase of 22.4 percent compared to the 3rd quarter 2006. The EBIT margin at 16.5 percent is two percentage points up from the 3rd quarter 2006.

 

Marketing activities and strong demand for the companies' products generated a satisfactory Q3 order intake with an increase of 3.6 percent. The number of unsold units at the end of the 3rd quarter was six, compared with nine for the same period in 2006.

 

Operating revenues in the 3rd quarter 2007 amounted to NOK 318 million, a reduction of 5.8 percent compared to the 3rd quarter 2006. Operating profit (EBIT) was NOK 19 million, a reduction of 12.4 percent compared to the 3rd quarter 2006. The EBIT margin was 6.0 percent, in line with the 3rd quarter 2006.

 

There has been pressure on margins throughout the year due to limited operations at the new factory in Sundsvall, and conversion to a new technical platform for all factories. The Myresjö factory (Myresjöhus) is back on track.

 

The Vrigstad and Sundsvall factories (SmålandsVillan) are still "off track". Vrigstad has moved to two shifts for much of its production and will operate in over-staffed conditions until optimal staffing is in place. Sundsvall is operating with new personnel and will slow the pace until efficiency is achieved. The SmålandsVillan products are in the process of being reviewed. New house types will be introduced primo 2008, with production in mid-2008. These new house types will essentially allow more efficient production.

 

The order intake for the 3rd quarter is on a par with the previous year. The order backlog increased by 20.7 percent compared with the same period in 2006.

Sales prices were raised by approx. 8 percent in 2007. The effects will be seen at the end of 2007 and into 2008.

 

There continues to be a satisfactory activity in the BWG Homes' market areas in both the Norwegian and Swedish housing markets. The order intake for the 3rd quarter is on a par with the same quarter in 2006.

 

There is currently a glut of newly built and resale homes in the Norwegian and Swedish housing markets. Home buyers are tending to sell existing homes before buying new ones, with completion taking longer. This applies particularly in the large city centres and in the apartment market. This creates market fluctuations, with potential price declines for resale homes in the period before the supply of homes returns to normal.

 

Macro-economic factors, such as employment, interest rate and the economy, are positive for Norway and Sweden alike. A flattening of the interest rate curve will also help to ease the troubled market.

 

- Even if the market turbulence continues for a while, we expect the market situation eventually normalising and the customer base increasing again. BWG Homes ended the 3rd quarter with a solid order backlog, which will ensure a satisfactory turnover for the rest of the year. The order backlog also guarantees a good start to 2008. The stage is set for continued reasonable development in our market segments, comments Lars Nilsen.

 

 

For more details, see the attached interim report.

 

Lars Nilsen, president and CEO, BWG Homes ASA, Tel: +47 23 24 60 00

Ketil Kvalvik, CFO, BWG Homes ASA, Tel: +47 23 24 60 42, +47 907 71 315

 

BWG Homes develops, sells and constructs residential homes in the Nordic region. The present brands owned by the group are Block Watne in Norway, Myresjöhus and SmålandsVillan in Sweden. BWG Homes sells and constructs homes through own residential projects and for individual customers. Ranked as a leading residential house builder in its markets, the group annually completes more than 2 500 new homes. BWG Homes has 1 340 employees. In 2006 the pro forma turnover was NOK 3 billion.