Operating revenue and profit for the Group in the second quarter totalled NOK 2 202.3 million (2 119.4) and NOK 81.3 million (329.2), respectively. For the first six months of the year, operating revenues totalled NOK 4 153.6 million (4 107.9), and operating profit totalled NOK 191.5 million (554.8).

 

- There is major variation in profitability among the various divisions and markets, says Mr. Hans Rindal, President and CEO of Moelven Industrier. - Building Systems has been only slightly influenced by the change in economic conditions and still operates based on favourable market conditions. The activity in the commercial building market is high, and we have a solid backlog of orders. The division's financial figures are better than for the same period last year.

 

- When it comes to the sawmill business, competitive pressures are intense, however. Prices are significantly lower than for the same period last year, so that profitability for this part of the Group is now unsatisfactory. - Within the processing business, we still have satisfactory profitability. Although the rate of housing starts in Scandinavia is slowing, this is from the extremely high level experienced last year. The maintenance market is still good, however. Increased focus on Scandinavia from companies who earlier had exported their products results in increasing competition and pressures on prices in this area as well, says Mr. Rindal.

 

Mr. Rindal summarizes as follows: - The fact that Moelven has three divisions is a good thing for us. We still take the challenging conditions in some markets seriously and are constantly looking for areas to improve. Our comprehensive, three-year investment programme of one billion Norwegian kroner should make our business even more efficient. This investment programme is on track, and we have already invested NOK 127 million this year, which is a bit above the investment level we had last year.

 

The Board of Moelven Tom Heurlin AB decided in the second quarter that the company's sawmill business will be closed and 32 employees will have to be let go. - Unfortunately there was no basis on which to run the company profitability. This is an older facility without any possibility for upgrading. The company will now focus efforts on further development of the planing business, says Mr. Rindal.

 

Based on the continued high market activity for the businesses in the Building Systems division, the board expects solid activity also in the second half of the year. The planing division is expected to maintain a good level of activity, but with harder competition in the Scandinavian market. For the sawmill division, the international market for sawn wood will continue to be characterized by a high level of supply, combined with weaker demand compared to one year ago. The consequence will be unsatisfactory margins for this division in the second half of the year. The supply of raw materials and other components are good for all of the Group's businesses and prices are expected to be stable or somewhat falling.

 

Operating revenues and profit in 2008 are expected to be significantly lower than in 2007, but the Board anticipates profits to be satisfactory in light of the change in economic conditions.

 

 

President and CEO Hans Rindal, + 47 90 69 69 10

VP-Finance & Treasury Rune F Andersen, + 47 91 34 32 60

Communications and Human Resource Director Kristin V. Bjørnstad, + 47 90 71 37 01