HALF YEAR 2007 - Sør-Norge Aluminium AS

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HALF YEAR 2007 - Sør-Norge Aluminium AS

TO THE SHAREHOLDERS

MARKET

LME 3 months price at the London Metal Exchange was in average USD 2.772 per ton (2.562) 1 .

Obtained LME price was in average USD 2.735 (2.256). The difference between obtained and

official price is due to the time lag in pricing. The market for extrusion billets has been stable in

the period and the product margins somewhat higher than the same period last year.

The exchange rate of USD was in average 6.12 (6.46).

1)

Figures in parenthesis show the corresponding figures for the same period in 2006.

ACCOUNTS

The operating revenues ended at NOK 1.675 mill. (1.432). The operating income was

NOK 302 mill. (329). Ordinary income before taxes was 313 (343).

PRODUCTION AND OPERATION

The production of liquid metal in 1 st half year 2007 was 76.373 tons (81.312).

The reduced production in the Potrooms was caused by poor quality of anodes, affecting

stability of the production process. Only extrusion billets were produced. The Casthouse

production has been good and stable.

HEALTH AND SAFETY

Sickness absenteeism was 5.44% (4.82).

There has been 1 lost time accident (contractor) 1 st half year 2007.

As from January 1 st 2007 the contractors are included in the safety figures for the company.

INVESTMENTS / PROJECTS

Relocation and upgrading of the anode workshop is proceeding and planned finalized in 2008.

FUTURE PROSPECTS

The market prospects for primary products seem to be positive for the next half year.

The profit development will also depend on the development in NOK compared to USD. The

production in the Potrooms is expected to stabilize at a normal level in 2 nd half year 2007.

Husnes, 12. July 2007

Board of Directors

Sør-Norge Aluminium AS


SØR-NORGE ALUMINIUM AS - 1 st HALF YEAR 2007

(all figures in NOK mill., unless otherwise stated)

30.06.2007 30.06.2006 2006

INCOME STATEMENT

Total operating revenues 1 675 1 432 3 045

Inventory change -3 5 -11

Material costs 1 034 801 1 768

Personnel costs 127 105 270

Depreciation 54 60 122

Other operating costs 161 132 280

Operating income 302 329 616

Net financial items 11 14 50

Ordinary income before taxes 313 343 666

Taxes 88 96 186

Net income 225 247 480

BALANCE SHEET

Fixed assets 790 860 808

Current assets 928 1 321 1 119

Total assets 1 718 2 181 1 927

Equity 1 184 1 276 959

Long term debt 58 111 81

Short term debt 476 794 887

Total equity and liabilities 1 718 2 181 1 927

KEY FIGURES

Operating margin (%) 18.0 23.0 20.2

Profit margin (%) 18.7 24.0 21.9

Asset turnover 1.8 1.4 1.6

Cash flow 279 307 448

Current ratio 2.0 1.7 1.3

Man-labour years end of period 396 385 380

Net production electrolysis (mt) 76 373 81 312 163 620

Definitions:

Operating margin %: (Operating income / Total operating revenues) x 100

Profit margin %: (Ordinary income before taxes / Total operating revenues) x 100

Asset turnover: Total operating revenues / Average total assets

Cash flow:

Cash flow from operation during the period

Current ratio: Current assets / Short term debt

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