Higher first-quarter profits for Moelven

Operating revenues the first quarter improved marginally compared to last year and amounted to NOK 1 476.8 million (1456.2), while net result totalled NOK 22.2 million (minus 90.1). The profit figure includes a one-off gain of NOK 22 million due to a reduction in pension commitments, so the actual improved result from ordinary operations in Q1 is NOK 90 million compared to last year. The higher profit figure is primarily the result of cost-cutting measures and a favourable price trend for the Timber and Wood divisions.

President Hans Rindal explains: - Capacity adjustments and cost-reducing measures implemented last year are now firmly in place. The Group's cost structure is therefore well adapted to the current activity level. The measures have worked as planned, says a pleased Mr. Rindal.

- An important part of the overall story is that we've just been through a tough winter, says Mr. Rindal. In certain geographical areas in Norway and Sweden, the winter has been significantly colder and with more snowfall than normal. These challenging weather conditions have created difficult operating conditions for several of the Group's units, because the cold weather leads to distruptions in operations, increased wear on production equipment and increased cost for snow clearing.

The president is optimistic about the future: - The bottom point on the net result curve for the Group was reached at this time last year. Even though the market is starting from a very low level, it is moving in the right direction. It is time to start thinking more aggresively again. We have now returned to a normal investment level after a period of having focussed on cost-cutting, concludes a confident Mr. Rindal.

Future prospects
The first quarter developed in line with the Board's projections. Construction activity and demand for wood-based building materials remains at a low level, but some positive signs can be seen on the horizon. The Building Systems division is reporting a higher rate of new-orders, even though the intense competition they are experiencing is putting pressure on prices. For the rest of 2010, the Board expects a stable market for rehabilitation and additions, a slight increase in new-build activity and an overall moderate improvement of the net result compared to last year.

For additional information, please contact:
President and CEO Hans Rindal, cell phone: +47 90 69 69 10
Director of Finance: Morten Sveiverud, cell phone: +47 90 98 06 67
Director of Communication and Human Resources Kristin Vitsø Bjørnstad, cell phone: + 47 90713701