Preliminary report on the operations of AB Custos during 1998

PRELIMINARY REPORT ON THE OPERATIONS OF AB CUSTOS DURING 1998 *The total return on Custos' shares during 1998 was -1.5 percent for Series A shares and 0.4 percent for Series B shares *Custos' Board of Directors proposed giving shareholders the right to redeem every fifth Custos share for a payment of SEK 210 per share plus the dividend *A dividend of SEK 11.50 (7.25) per share, up 59 percent, is proposed *Custos divested its holdings in Skanska, Drott and Hufvudstaden CEO's comments "1998 was largely dominated by a number of sizable divestments of inherited holdings. The sale of our holdings in Skanska/Drott and the phase-out of ownership in Hufvudstaden represented the final steps in a deliberate process aimed at changing the composition of Custos' portfolio in one essential respect. Having accounted for nearly 60 percent of the portfolio in 1996, Custos' exposure to the construction and real estate sector has been eliminated. Custos now has a purely industrial portfolio. With respect to return, 1998 was a weak year. One measure of market confidence in an investment company and in its strategy and management is the discount to net asset value in its share price. Custos' discount moved in the right direction, improving during the year relative to other comparable investment companies. The discount is still too high, however. The proposed share redemption in the amount of SEK 1.7 billion is an important signal that the task of reducing the discount has priority. It will ensure that shareholders receive the full net asset value for a substantial proportion of their holdings. Even after implementing the redemption, Custos will have good financial capacity. Its own investment capacity is sizable - SEK 1.5 billion - and this promises an exciting investment year in 1999". ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/01/26/19990126BIT00410/bit0001.doc http://www.bit.se/bitonline/1999/01/26/19990126BIT00410/bit0002.pdf