Interim report july 1 - september 30, 2000

INTERIM REPORT JULY 1 - SEPTEMBER 30, 2000 for AB Novestra (publ), company reg. No. 556539-7709 Result and Financial Position, KSEK (unless otherwise indicated) Purchase method. The Group Novestra reports a result for the three first months ending September 30, 2000 of -17,189 (16,979) of which -15,315 (17,820) relates to the result from sales of securities and 1,953 (331) relates to other operations. The result has mainly been affected by the complete write-down of the book value of Novestra's holding in Boxman.com plc, 20,637. This book value was generated as a result of the acquisition of Boxman AB by iMVS.com plc in 1999. Novestra's total capital investment in Boxman.com plc is, however, limited to 13,910. The result per share, prior to full conversion of outstanding options, amounted to SEK -0.74 (1.24). Book value on financial assets amounted to 616,192 (56,901) of which interest-bearing investments constituted 199,999 (0). Shareholders' equity, prior to full conversion of outstanding options, amounted to 648,769 (75,302) which corresponds to a value of SEK 27.7 per share (4.9). Net asset value, prior to full conversion of outstanding options, amounted to 1,118,762 (108,524), which corresponds to a value of SEK 47.8 per share (7.1). The Group's cash and cash equivalents, including interest-bearing investments shown under financial assets, amounted to 266,401(21,986) which corresponds to a value of SEK 11.4 per share (1.4). Solidity was 91.4% (91.9%). Investments during the period amounted to 127,014 (7,150) of which the greater part, 126,404 (7,150), consisted of investments in fixed financial assets. Investments in tangible fixed assets amounted to 610 (-). The total number of shareholders as of September 30, 2000 was approx. 4,000 (approx.. 3,500 as of June 30, 2000). Significant events during the period Novestra has invested a total of 9,078 in three new companies: Comintell Holding AB, Delphi Finansanalys AB and X2 Media Group AB. Novestra also subscribed for its share of a convertible loan issued by B2 Bredband AB in August 2000 which represents the major part of the total investments of 80,748 which was made in portfolio companies during the period. Novestra's holding in Jupiter Communications Inc. was divested against payment in shares in Jupiter Media Metrix Inc. as a result of Media Metrix Inc.'s purchase of Jupiter Communications Inc. in September 2000. The transaction resulted in an initial book profit of 16,647. A write-down has been made as a result of a subsequent decrease in Jupiter Media Metrix's market value and the net positive effect for Novestra of the transaction as of September 30, 2000 has been reduced to 4,619. Novestra's holding in Boxman.com plc with a book value of MSEK 20.6 was written down to zero following the company's application for voluntary liquidation. Significant events after the end of the period As a result of the negative market conditions, B2 Bredband AB decided to postpone its planned IPO in October. Novestra has made an additional investment in PowerNet of MSEK 5, by the utilisation of an option. As of October 1, 2000, Novestra has reorganised Evestra as a separate company, primarily providing consultancy services for projects and companies within the broadband sector. Evestra will also have the task to identify investment opportunities for Novestra. Novestra initially owns 19.8 per cent of the new company with an option to increase its holding to 33 per cent. The remaining part is held by the Evestra management whose employment has been transferred to the new company. Future development There has been a generally positive development in Novestra's portfolio companies over the period. This development has, however, been overshadowed by the highly negative sentiment towards technology companies in the market and the general re-evaluation of this sector. This process of re-evaluation has also affected some of our portfolio companies as well as Novestra. While this is unfortunate, it is also part of any correction in the market where investors make their judgements on the prospects of entire sectors rather than on individual companies. The last twelve months have offered venture capital investors extreme changes in the market where the sentiment has changed from unlimited potential to no potential. Novestra's current portfolio of 20 holdings has been successively built up over a period of three and a half years. In this process, Novestra's strategy has been to balance the holdings in the portfolio as regards Novestra's exposure to further capital requirements and to maintain a conservative level of liquidity. Out of our major strategic holdings, only B2 Bredband AB has significant negative cash flow. B2 Bredband AB is backed by several strong major shareholders (Investor, NTL, Carlyle Group and Intel). Most holdings, such as Comintell Holding AB, Netsurvey AB and PowerNet AB, have only limited capital requirements. Several companies, such as DCM AB and Qbranch AB, are cash positive and are generating profits. Iquity Systems Inc. is the only company which needs additional major funding within the near future. Despite current market conditions and sentiment, we believe that there is a significant potential in our balanced portfolio which, together with our solid capital base, makes Novestra able to withstand market turmoils such as the one that we are currently experiencing. In the current market situation, Novestra will continue to focus on maintaining a high liquidity level and to develop our existing portfolio. In parallel, the market situation will generate interesting investment opportunities at valuations that are viable long-term. Other information The interim report for the period July - December 2000 will be published on January 31, 2001. The number of outstanding shares as of September 30, 2000 amounted to 23,390,980 (15,390,975). Profit per share has been calculated on the basis of an average number of 23,283,371(13,669,236) shares. This report has not been subject to any audit by the company's auditors. Stockholm in October 2000 Thomas Åkerman President For further information, please contact Mr Thomas Åkerman, President, phone No. + 46 8 545 01 750. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/10/31/20001031BIT01060/bit0001.doc http://www.bit.se/bitonline/2000/10/31/20001031BIT01060/bit0002.pdf