Based upon the preliminary group-accounts, the result for the fourth quarter 2007 for Hexagon Composites ASA will be lower than expectations due to a weaker than expected fourth quarter result from the company's daughter company Ragasco AS. Ragasco will return a small negative result for the 4th Quarter 2007.

 

A small downturn in profits was expected for Ragasco AS for the final quarter of 2007 due to some offset sales and a traditionally weaker fourth quarter associated with seasonal activity. However this small downturn has been exaggerated by a production anomaly resulting in two week's production of unsaleable products. This issue arose through the final stages of the streamlining and efficiency drive which has been an ongoing process for the Ragasco plant during 2007.

 

Improved production procedures are now being implemented and Ragasco AS is fully expected to continue its strong growth and profitability into 2008 and beyond. The Ragasco plant can now operate comfortably at a production level to provide one million units annually.

 

Improving sales coverage on a world wide basis is contributing to the reduction of seasonal influences and consequently helping to smooth out yearly production.

 

Expanding sales coverage is dependent upon: achieving type approval in the respective countries we hope to sell our products in, consumer confidence in the product type, the structure and competitiveness of the cylinder distribution network and price differentials between cylinder types.

 

For further information please contact:

 

Erik Espeset

Group President, Hexagon Composites ASA

+47 70 11 64 45