2nd quarter 2008
Group The Group s operating revenues in Q2 2008 from continued operations was MNOK 111,2 compared to MNOK 93,6 proforma last year. EBITDA was MNOK 1,8 compared to MNOK -2,6 proforma last year. EBIT was MNOK -4,9 compared to MNOK -9,4 proforma last year, and result after tax was MNOK - 20,3 compared to MNOK -42,1 proforma last year. The proforma figures for 2007 are excluding the discontinued operations, and are directly comparable to the 2008 figures. Operating revenues per 30 th June from continued operations was MNOK 240,4 compared to MNOK 255,6 proforma last year. EBITDA was MNOK 8,2 compared to MNOK 4,2 proforma last year and EBIT was MNOK -5,2 compared to MNOK -9,5 proforma last year. Result after tax was MNOK -18,9 compared to MNOK -42,3 proforma last year. The group s balance sheet at June 30th was MNOK 862,6 compared to MNOK 1 245,7 last year. The board of directors has decided to reduce the deferred tax asset in the balance sheet from MNOK 45 to MNOK 23. The group has a forwardable tax related loss of MNOK 288. Book equity is MNOK 250,5, corresponding to an equity ratio of 29,0% compared to 26,5 % last year. Net interest bearing debt is MNOK 473,1 compared to MNOK 724,5 last year. The Norwegian part of Domstein Enghav has been merged with Naustvik. The group accounts have been charged with a loss on discontinued operations of MNOK 49,8 for the second quarter and MNOK 56,9 for the total half-year. As from third quarter the share of the result after tax will be included as income from investments in associated companies. Domstein Fish Domstein Fish is a business area for whitefish consisting of fillet production, trading and supplies of bait with departments in Måløy, Raudeberg and Trondheim. The activities include production and sales of fresh, chilled and frozen products of whitefish with high quality and environmental profile, based on long lined fish and breeded cod. The main market is Europe. Net operating revenues 57,9 66,5 142,9 166,5 EBITDA -3,6-2,0-4,9 3,5 EBIT -5,3-4,2-8,4-1,0 Operating margin -9,2 % -6,3 % -5,9 % -0,6 % The main acitivity in Domstein Fish is fillet production of cod and saithe. Negative currency development in a number of important markets, especially England, has weakened the profitability. Second quarter is normally main season for production of saithe fillet. This year the supply of raw material has been very small and the activity and capacity utilization have been low. The price development for whitefish in second half-year will still be strongly influenced by the currency rates. There seems to be less supply of fresh cod to the European market. We therefore expect to achieve higher market prices for cod fillet. At the end of August we will start producing eco-labelled products for the Scandinavian market. This will enable us to somewhat rise the prices in the market. Domstein Enghav Sverige Domstein Enghav Sverige is a producer and marketer of seafood in Sweden. The main products are breaded fish, fish gratin, ready meals and roe products. Net operating revenues 48,0 47,5 99,0 99,1 EBITDA 2,0 1,4 6,2 5,0 EBIT 0,2-0,2 2,8 1,6 Operating margin 0,4 % -0,5 % 2,8 % 1,7 %
Second quarter is low season for the Swedish operations, but sales and profit development have been stable. Sales growth in second half-year is expected, mainly as a consequence of the launching of new eco-labelled and ecological products. Domstein Eiendom Domstein Eiendom controls the properties in Norway which are hired out to Norway Pelagic and Domstein. Yearly lease is MNOK 24,7. Net operating revenues 6,3 0,0 12,3 0,0 EBITDA 5,8 0,0 11,3 0,0 EBIT 2,9 0,0 5,6 0,0 Operating margin 46,7 % 45,5 % An agreement has been made to sell 51% of the shares in Domstein Eiendom to NRP Realkapital. It is the intention that the transaction will be taken into the accounts as from third quarter. Preliminary estimates show that the transaction will give an accounting profit of MNOK 10 and a positive cash flow of MNOK 75. By deconsolidation the group s net interest bearing debt will be reduced by about MNOK 170. Ervik Havfiske (50 %) Ervik Havfiske AS is a fishing vessel company with 12 sea-going longliners and controls 13 cod and 14 haddock quotas in Norway. In addition, several of the company s vessels are fishing on foreign quotas. The share of the profit in Ervik Havfiske is included in the financial profit as income from investments in associated companies and amounted in second quarter to MNOK 0,9 and MNOK 2,8 accumulated. Net operating revenues 53,1 52,9 128,4 112,1 EBITDA 13,3 13,0 35,5 30,4 EBIT 9,5 9,1 26,6 22,6 Operating margin 17,9 % 17,2 % 20,7 % 20,2 % Operations in second quarter have been good. The catch quantity is higher than last year, but lower prices for some fish species and higher fuel- and interest costs give a stable result. Positive development in second half-year is expected. Norway Pelagic (35 %) As of July 1st 2007 Domstein s pelagic activities were merged with Global Fish, Bergen Fiskeindustri, Koralfisk and Bernt Hansen. The share of the profit in Norway Pelagic is included in the financial profit as income from investments in associated companies and amounted in second quarter to MNOK -2,5 and accumulated MNOK 7,9. Net operating revenues 269,5 813,3 EBITDA -8,1 37,4 EBIT -9,0 31,2 Operating margin -3,3 % 3,8 %
Discontinued operations The Norwegian activities of Domstein Enghav are merged with Naustvik and is treated as discontinued operations in the half-year accounts. The group accounts have been charged with a loss on discontinued operations of MNOK 49,8 for the second quarter and MNOK 56,9 for the total half-year. Financing June 24th 2008 a private placement of 6 995 000 shares at a share price of NOK 3,75 was completed. At the same time a three years 12% convertible bond loan of MNOK 50 was obtained. The proveny has among other things been used to repay a convertible bond loan of MNOK 50, due 30 th June 2008. The group s interest bearing debt per 30 th June 2008 was MNOK 473,1. By deconsolidation of Domstein Eiendom, interest bearing debt will be reduced by about MNOK 170. Important risk factors and elements of uncertainty in the next accounting period The group s revenues are strongly influenced by price developments, especially for cod and other whitefish, where the activities are fully integrated through the owner share in Ervik Havfiske. Two thirds of the turnover are in foreign currency, mainly SEK, EUR and GBP. Current sales are secured with currency hedging, but the exchange rate development is important for the selling price. Approximately 80% of the group s loan debt is in NOK and the result is strongly influenced by the development of the Norwegian interest rate level. The board of directors emphasizes handling risks in all parts of the operations consciously and systematically. Directions and reporting routines for important risk areas have been made. The board of directors regards risk managements as an important condition for value creation in the group. Structural conditions The board of directors approved June 30 th the final agreement to merge the Norwegian activities of Domstein Enghav and Naustvik. With a turnover of more than NOK 1 billion the merged company will become the largest supplier of fish and seafood in the Norwegian market. The company will have production-, distribution- and sales units in Oslo, Biri, Kristiansand, Stavanger, Haugesund, Karmøy, Bergen, Trondheim, Bodø, Tromsø and Vardø. The head office will be in Oslo. Rolf Domstein has been elected chairman of the board and Jan Dahl has been appointed CEO. The merger process has shown that it is possible to achieve large synergies by merging the activities, and the realization of the synergies has already started. Shareholder information Domstein ASA is listed on Oslo Stock Exchange with ticker DOM. The market value of the company per 30th June 2008 was MNOK 292, based on a share price of NOK 3,80. Number of outstanding shares is 76 907 402.
Statement from the board of directors and CEO The board of directors and the CEO of Domstein ASA have today discussed and settled the interim report and the consolidated half-year accounts for Domstein ASA per 30 th June 2008 with comparable figures for the same period 2007. The group accounts for the first half-year have been prepared in accordance with IAS 34 standards, Interim Financial Reporting, EU approved and in addition the Norwegian regulations according to the Norwegian Securities Trading Act It is the board of directors and the CEO s opinion that the accounts for the first half-year have been prepared in accordance with applicable Norwegian accounting standards, and the information in the accounts gives a true picture of the group s assets, debts and financial standing and result as per 30 th June 2008. The half-year accounts give a true view of important events in the period and their influence on the half-year accounts. It is the board of directors and the CEO s opinion that the description of the risks and elements of uncertainty the company will be faced with in the next accounting period is true. Måløy, 28 August 2008 The board of directors and CEO of Domstein ASA Hanne Refsholt Morten Frogner Inger Myklebust Gunnar Domstein Chairman Board member Board member Board member Knut Magne Domstein Tove Svensen Ottar Refvik Rolf Domstein Board member Board member Board member CEO - Denne rapporten er utarbeidet I henhold til International Financial Reporting Standards IFRS herunder standard for delårsrapportering ( IAS 34 ). - This report is produced according to International Financial Reporting Standards IFRS Including the interim report standard ( IAS 34 ). - ved utarbeidelse av delårsrapporten er det benyttet de samme prinsipper som i årsregnskapet - When preparing interim reports we utilise the same principles as for the annual report
Resultatregnskap konsern 2008 Q2 2008 Q2 2007 Q2 2007 YTD 2008 YTD 2007 YTD 2007 Consolidated operating results Group Nok.mill. Proforma Proforma Netto driftsinntekt Operating revenues 111,2 93,6 93,6 240,4 255,6 255,6 Varekostnad Raw materials and consumables used -73,1-61,7-61,7-161,4-180,6-180,6 Øvrige betalbare driftskostnader Other operating expenses -36,3-34,5-34,5-70,7-70,8-70,8 Sum driftskostnader Total operating expenses -109,4-96,2-96,2-232,2-251,4-251,4 EBITDA 1,8-2,6-2,6 8,2 4,2 4,2 Ordinære avskrivinger Ordinary depreciation -6,7-6,9-6,9-13,4-13,7-13,7 EBIT -4,9-9,4-9,4-5,2-9,5-9,5 Inntekt på investering i tilknyttet selskap -1,7-22,7 1,2 10,6-13,4 2,4 Income from investments in associated companies Netto finanskostnader Net financial expenses -13,7-9,9-9,9-24,3-19,3-19,3 Ordinært resultat før skatt Result before tax -20,3-42,1-18,1-18,9-42,3-26,5 Skattekostnad Taxes 0,0 0,0 0,0 0,0 0,0 0,0 Resultat etter skatt Result after tax -20,3-42,1-18,1-18,9-42,3-26,5 Resultat frå videreført virksomhet result from continuing operations -20,3-42,1-18,1-18,9-42,3-26,5 Resultat frå avviklet virksomhet result from discontinued operations -49,8-4,7 76,0-56,9-11,7 82,9 Resultat result -70,1-46,8 57,9-75,8-54,0 56,5 Resultat margin videreført virksomhet Profit margin continued operations -18,2 % -44,9 % -19,3 % -7,9 % -16,5 % -10,4 % Driftsmargin videreført virksomhet Operating margin continued operations -4,4 % -10,1 % -10,1 % -2,2 % -3,7 % -3,7 % Resultat pr. aksje (nok) Profit per share -1,03 0,80 Utv.resultat pr. aksje (nok) Diluted profit per share -0,91 0,77 ROCE videreført virksomhet Continued operations 1,5 % -4,4 % -1,4 % Egenkapitalandel (inkl min int) Book equity ratio 29,04 % 26,48 % 26,48 % Utestående aksjer Outstanding shares 76 907 402 69 912 402 69 912 402
Balanse konsern 30.06.08 30.06.07 YTD 2007 Consolidated balance sheet Group Nok.mill. Immaterielle eiendeler Intangible fixed assets 37,0 144,8 131,1 Varige driftsmidler Tangible fixed assets 260,9 327,5 306,1 Finansielle anleggsmidler Financial fixed assets 309,8 231,7 257,4 Anleggsmidler Total fixed assets 607,7 704,0 694,5 Varer Inventories 155,3 300,2 216,0 Fordringer Receivables 95,4 230,0 185,9 Omløpsmidler holdt for salg Current assets held for sale 0,0 0,0 27,4 Betalingsmidler Cash and equivalents 4,2 11,6 9,5 Omløpsmidler Current assets 254,9 541,7 438,8 Sum eiendeler Total assets 862,6 1245,7 1133,3 Innskutt egenkapital Equity contributions 59,9 34,9 35,0 Opptjent egenkapital Earned equity 190,6 292,0 280,5 Minoritetsinteresser Minority interests 0,0 3,0 3,5 Egenkapital og minoritetsinteresser Total equity 250,5 329,9 318,9 Avsetning for forpliktelser Provisions 5,4 5,0 5,3 Rentebærende langsiktig gjeld Interest bearing long term debt 319,0 385,7 304,7 Øvrig langsiktig gjeld Other long term liabilities 2,3 3,0 2,6 Sum annen langsiktig gjeld Total other long term liabilities 321,3 388,7 307,3 Rentebærende kortsiktig gjeld Interest bearing current liabilities 158,3 350,3 288,5 Ikke-rentebærende kortsiktig gjeld Non interest bearing current liabilities 127,2 171,8 188,8 Kortsiktig gjeld holdt for salg Current liabilities held for sale 0,0 0,0 24,5 Kortsiktig gjeld Current liabilities 285,5 522,1 501,8 Sum egenkapital og gjeld Total equity and liabilities 862,6 1245,7 1133,3 Netto rentebærende gjeld Net interest bearing debt 473,1 724,5 583,6 Egenkapitalandel Equity ratio 29,0 % 26,5 % 28,1 % Kontantstrømoppstilling konsern Consolidated cash flow statement Group 30.06.08 30.06.07 YTD 2007 Kontantstrøm operasjonelle aktiviteter Net cash flow from operating acitvities -21,4-25,2 5,1 Kontantstrøm investeringsaktiviteter Net cash flow investment activities -14,1-61,1-9,3 Kontantstrøm finansieringsaktiviteter Net cash flow from financial activities 30,2 73,8-10,3 Effekt av valutakursendringer Effect of change in exchange rates 0,0-0,2-0,3 Endring av kontanter og innskudd Net change in cash and bank deposits -5,4-12,7-14,7 Kontanter og innskudd ved periodens begynnelse Cash and bank deposits at start of period 9,5 24,2 24,2 Kontanter og innskudd ved periodens slutt Cash and bank deposits at end of period 4,2 11,6 9,5 Avstemming av egenkapital Change in equity 30.06.08 30.06.07 31.12.07 Egenkapital ved begynnelsen av perioden Equity at the start of the period 318 934 273 014 273 014 Resultat i perioden Result for the period -75 845 56 517 51 164 Omregningsdifferanser Conversion differences 772-115 -1 984 Emisjon Capital increase 26 231 0 Utbytte dividend -19 688-273 -273 Andre egenkapital justeringer Other changes in equity 63 740-2 987 Egenkapital ved slutten av perioden Equity at the end of the period 250 467 329 883 318 934
Note 1 Regnskapsprinsipper Accounting principles Det konsoliderte halvårsregnskapet i Domstein ASA konsern er utarbeidet i samsvar med IAS 34 Delårsrapportering. Halvårsregnskapet omfatter ikke all informasjon som kreves i et fullstendig årsregnskap og bør leses i sammenheng med konsernregnskapet for 2007. Regnskapsprinsippene for 2007 er beskrevet i årsrapporten for 2007. Konsernregnskapet for 2007 ble utarbeidet i samsvar med EU-godkjente IFRS'er og tilhørende fortolkninger, samt de ytterligere norske opplysningskrav som følger av regnskapsloven, børsforskrift og børsregler, som skulle anvendes per 31.12.2007. The group accounts for the first half year have been prepared in accordance with international accounting standards IFRS, IAS 34 Interim Financial Reporting. The half year accounts do not include all information required in the annual accounts and should be seen in accordance with the annual accounts for 2007. The accounting principles are described in the annual report for 2007, which is prepared in accordance with the EU approved IFRS and in addition the Norwegian regulations according to the Norwegian Accounting Act and stock exchange usages applicable on 31.12.2007. Note 2 Virksomhetssegment Segment reporting Domstein Eiendom Domstein Enghav Domstein Fish Domstein ASA / Videreført virksomhet Service + elim. Continued operations Beløp i tusen kroner figures in NOK Q2-08 Q2-07 Q2-08 Q2-07 Q2-08 Q2-07 Q2-08 Q2-07 Q2-08 Q2-07 Netto salg segment Net revenues per segment 6 319 0 47 992 47 536 57 864 66 475-9 964-51 379 102 211 62 632 Segment resultat EBITDA per segment 5 808 0 1 961 1 450-3 575-1 954-2 352-2 065 1 842-2 569 Segment resultat EBIT per segment 2 948 0 197-223 -5 325-4 181-2 696-5 030-4 876-9 434 Domstein Eiendom Domstein Enghav Domstein Fish Domstein ASA / Videreført virksomhet Service + elim. Continued operations Beløp i tusen kroner figures in Nok YTD 2007 YTD 2007 YTD 2007 YTD 2007 YTD 2007 Netto salg segment Net revenues per segment 12 348 0 99 040 99 144 142 930 166 524-31 915-88 085 222 403 177 583 Segment resultat EBITDA per segment 11 344 0 6 235 4 989-4 905 3 480-4 440-4 278 8 234 4 191 Segment resultat EBIT per segment 5 624 0 2 787 1 646-8 405-976 -5 192-10 194-5 186-9 524 Note 3 Investeringer i tilknyttet selskap Investment in associated companies Beløp i tusen kroner figures in Nok Norway Pelagic AS Ervik Havfiske AS Vadsø Fryselager AS Enghav Naustvik Sum Norbait DA Bokført verdi 01.01 214 124 20 322 1 036 235 482-3 509 Andel av balanseført egenkapital ved anskaffelse 59 500 59 500 Share of booked equity Utdelt utbytteaksjer Stock dividends -18 678-18 678 Resultatandel Share of results 7 921 2 821-43 10 699-132 Bokført verdi per 30.06. 203 367 23 143 993 59 500 287 003-3 641 Forpliktelse knyttet til Norbait DA er presentert som avsetning for forpliktelse i balansen. The Norbait DA liability is presented as a provision in the balance sheet Note 4 Aksjonæroversikt Shareholders Aksjer Shares Eierandel Ownership R. Domstein & Co. AS 37 914 040 49,27 % Fondsfinans ASA 6 995 000 9,09 % MP Pensjon 4 850 000 6,30 % Skagen Vekst AS 1 916 000 2,49 % Caiano AS 1 601 870 2,08 % Spectiatio AS 1 599 000 2,08 % Sum > 1% eierandel / share 54 875 910 71,32 % Øvrige aksjonærer other shareholders 22 071 490 28,68 % Sum 76 947 400 100,00 % Note 5 Ekstraordinart utbytte Extraordinary dividend Det er utdelt som utbytte aksjer i Norway Pelagic ASA. Antall 460 793 til kurs 38. An extraordinary dividend is distributed in the form of shares in Norway Pelagic. Total 460 793 shares at shareprice nok 38. Note 6 Kapitalutvidelse capital increase Kapitalutvidelsen i den rettede emisjonen var 6.995.000 aksjer til kurs 3.75 brutto 26.231.250 NOK 6.995.000 new shares were issued at a share price of kr 3,75- Gross proveny NOK 26.231.250 Note 7 Finansiering Financial information Obligasjonslån stort MNOK 50.mill ble innløst. Videre er det blitt foretatt opptak av nytt konvertibelt obligasjonslån på MNOK 50. Det nye obligasjonslånet har en rente på 12% og forfaller juni 2011. Convertible bond loan MNOK 50 with maturity date 30/6-2008 repaid. New convertible bond loan of MNOK 50 with an interest rate of 12% and maturity date 30/6-2011. Note 8 Fusjon Naustvik Merger Naustvik Gevinstberegning Profit calculation Tusen NOK Egenkapital som overførtes Equity transfered 95 185 Omkostninger ved. transaksjonen Transaction costs 2 720 Domstein sin andel egenkapitalverdi Domstein's share of equity 59 500 Tap ved transaksjonen Accounting loss 38 405 Finansiell eiendel i balansen Financial fixed asset 59 500