However, there are several elements in Veidekke's quarterly report that bode well for further development. The Group has increased its orders-on-hand in the first quarter to a total of NOK 9.5 billion, and the prospects are good in all three of its Scandinavian markets.

In addition to the progress in property development, construction operations in Norway continue to show a positive trend, increasing orders-on-hand by NOK 1 billion compared with the same quarter last year. The growth in turnover is not mirrored to the same extent in profits and this is due to the fact that, after a very strong fourth quarter in 2004 with the completion of many large projects, numerous new projects are now starting up. This can be seen both in volume and in a more cautious profit reporting.

In Denmark, the upswing in construction operations in the second half of last year, with an increase in activity in house-building and heavy construction, has continued into the first quarter of this year. The reorganisation in Jylland has produced results, although the market there is still difficult.

Construction operations in Sweden have developed in line with expectations. The situation for

operations in Gothenburg and for building operations in Stockholm is stable. Activities in Skåne continue to show improvement, while the results for heavy construction in East Sweden are affected by the lack of contribution margin in a major project.

"With a satisfactory share of the new asphalt contracts awarded this year by the Public Roads Administration, we also have reason to be optimistic about the possibilities for our Industry Division," says Mr. Venold. "Activity is naturally slow in asphalt operations in the first quarter of the year."

"With the first quarter behind us, the favourable prospects are a source of motivation and encouragement for the whole organisation," says Mr. Venold. "Our joint task will now be to ensure that we maintain our focus on quality, capability and cost development. Nothing is easier than incurring a few extra costs when times are good," he concludes.

Reference is also made to the Board of Directors' report for the first quarter, which is enclosed with this press release.

If you have any questions, please contact:

Terje R. Venold, President and CEO,

tel. +47 21 05 77 01, mobile +47 905 82 323

Arne Giske, Senior Vice President & CFO,

tel. +47 21 05 77 80, mobile +47 905 89 526

Jørgen G. Michelet, Director, Finance and Investor Relations,

tel. + 47 21 05 77 22, mobile+47 917 43 856

Kai Krüger Henriksen, Senior Vice President, Communication,

tel. +47 21 05 77 04, mobile +47 905 19 360