How To Make Money From Fishing

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1 A natural choice in fish and seafood QUARTERLY REPORT 4th quarter 2005 Preliminary annual results 2005

2 The group s operating revenue by the end of Q4 amounted to MNOK 1.731,9 compared with MNOK 1.494,6 last year. EBITDA was MNOK 56,0 compared with MNOK 15,6 and EBIT was MNOK 14,8 compared with MNOK -25,9 last year. The result before tax was MNOK 182,6 compared with MNOK -67,0 last year and the result after tax was MNOK 187,2 compared with MNOK 63,6 last year. Included in the financial results is MNOK 194 in profit from the sale of the shares in Fjord Seafood. The group s operating revenue in Q4 amounted to MNOK 626,0, compared with MNOK 517,7 last year. EBITDA was MNOK 22,8 compared with MNOK -12,0 last year and EBIT MNOK 10,2 compared with MNOK - 22,5 last year. The result before tax was MNOK 4,1 compared with MNOK -39,6 last year and the result after tax MNOK 2,1 compared with MNOK -44,9 last year. The group s balance sheet by the end of Q4 was MNOK 1.247,5 compared with MNOK 1252,3 last year. Book equity was MNOK 361,8 corresponding to an equity ratio of 29,0%. Including convertible bonds the solidity was 32,6%. Net interest bearing debt was MNOK 571,2. In Q4 the group had MNOK 79,6 in negative cash flow from operations due to normal seasonal fluctuations in compulsory savings and current assets. Working capital at the end of Q4 was MNOK 95.7, which is MNOK 6,0 higher than at the end of the previous quarter. Domstein Pelagic Domstein Pelagic includes the pelagic fish sales organisation and production units in Kalvåg, Måløy, Selje and Bodø. Mnok Q Q YTD 2005 YTD 2004 Net operating revenues 402,1 376,0 1054,4 942,2 EBITDA 27,3 14,8 57,6 28,1 EBIT 19,8 8,7 33,3 4,2 Operating margin 4,9 % 2,3 % 3,2 % 0,4 % The autumn herring season was strongly delayed compared to normal due to a combination of bad weather and availability. The volume of pelagic fish in Q4 was all time high with tons compared to tons in the same period last year, and on a yearly basis tons compared to tons last year. The demand for both mackerel and herring has been good in all markets. Gross margins per kilo raw material in the quarter were NOK 1,56 compared to NOK 1,46 last year. On a yearly basis the gross margin was NOK 1,60 compared to NOK 1,58 last year. The total Norwegian quotas for pelagic fish are slightly lower in 2006 than This is expected to be compensated by increased landings from foreign vessels. The board of directors has decided to invest MNOK 45 in new filleting lines at the Måløy factory. The investment is expected to increase production volumes by tons on a yearly basis. There have been good landings of NVG herrings during the 1 st quarter 2006, whereas mackerel landings from foreign vessels has been lower than expected. The total quantity for the 1 st quarter is expected to be higher than last year. Domstein Enghav Domstein Enghav consists of sales organisations for VAP products in Norway, Sweden, Denmark and Finland, and production units in Måløy, Vardø, Haugesund, Lysekil and Kungshamn (Sweden) and Hammel (Denmark). The product range has so far consisted mainly of frozen fish and caviar. Domstein Enghav is expanding the product range with fresh and chilled products. Domstein Enghav s goal is to become the main supplier of fish and seafood in the Scandinavian market. This includes establishing a nationwide distribution net for fresh fish in

3 Norway. Pursuant to this strategy Domstein Enghav has acquired several new companies; Inger Sørensen in Oslo, Breivik & Co. in Bergen, the production lines of Iglo Haugesund, Vest Engros in Stavanger, Karmøy Delikatesse, Reinhartsen in Kristiansand, Kvalisea in Denmark and Atmospack in Sweden. The acquisitions make a total investment of MNOK 88. Further acquisitions are pending. Mnok Q Q YTD 2005 YTD 2004 Net operating revenues 232,5 146,0 701,5 566,4 EBITDA -2,2-24,0 4,1-4,8 EBIT -7,2-28,1-11,7-20,7 Operating margin -3,1 % -19,2 % -1,7 % -3,7 % Domstein Enghav had a 59% increase in revenues in the 4th quarter and 24% on a yearly basis. The whole increase is from the new fresh fish activities, whereas the traditional frozen segment has had a decrease in revenues. In spite of substantial costs tied to the integration of the new companies the fresh activities are contributing with a positive operating result. The traditional frozen fish activities are still showing a negative profit development, but the losses are substantially lower than last year. Continued strong growth in revenues and improved profitability are expected in Ervik Havfiske AS (50%) Ervik Havfiske is a fishing vessel company with a total of 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. MNOK 0,7 in the 4th.quarter and MNOK 4,3 by the end of the 4 th quarter. Mnok Q Q YTD 2005 YTD 2004 Net operating revenues 71,9 50,5 235,5 199,9 EBITDA 11,7-4,4 58,6 30,0 EBIT 6,3-10,7 35,7 4,4 Operating margin 8,8 % -21,2 % 15,2 % 2,2 % Efficient operations and high prices have contributed to the positive results. The prospects for 2006 are also promising. Shareholder information Domstein ASA is listed on Oslo Stock Exchange with ticker DOM. The market value of the company per 31 st December 2005 was MNOK 381, based on a share price of NOK 5,45. Number of outstanding shares is Måløy, 27th February 2005 The board of Directors of Domstein ASA

4 Resultatregnskap konsern 2005 Q Q YTD 2005 YTD 2004 Consolidated profit and loss account Group Nok.mill. Netto driftsinntekt Operating revenues 626,0 517, , ,6 Varekostnad Raw materials and consumables used -489,7-428, , ,4 Øvrige betalbare driftskostnader Other operating expenses -113,5-100,8-324,9-329,6 Sum driftskostnader Total operating expenses -603,2-529, , ,0 EBITDA 22,8-12,0 56,0 15,6 Ordinære avskrivinger Ordinary depreciation -11,0-10,6-39,6-41,4 EBIT 10,2-22,5 14,8-25,9 Inntekt på investering i tilknyttet selskap 1,0-5,8 203,0-2,3 Income from investments in associated companies Netto finanskostnader Net financial expenses -7,1-11,3-35,2-38,8 Ordinært resultat før skatt Result before tax 4,1-39,6 182,6-67,0 Skattekostnad Taxes -1,9-5,3 4,6 3,4 Resultat etter skatt Result after tax 2,1-44,9 187,2-63,6 Minoritetsandel Minority share 0,03-0,07 0,72 0,15 Resultat margin Profit margin 0,3 % -8,7 % 10,8 % -4,3 % Driftsmargin Operating margin 1,6 % -4,4 % 0,9 % -1,7 % Resultat pr. aksje (nok) Profit per share -0,03-0,75 2,88-1,05 Utv.resultat pr. aksje (nok) Diluted profit per share -0,02-0,65 2,71-0,88 Avkastning sysselsatt kapital Return on capital employed -1,2 % -5,6 % 22,3 % -5,60 % Egenkapitalandel (inkl min int) Book equity ratio -2,8 % -3,1 % 29,0 % 15,2 % Utestående aksjer Outstanding shares Balanse konsern Consolidated balance sheet Group Nok.mill. Immaterielle eiendeler Intangible fixed assets 155,4 109,2 Varige driftsmidler Tangible fixed assets 382,3 357,7 Finansielle anleggsmidler Financial fixed assets 41,7 275,5 Anleggsmidler Total fixed assets 579,4 742,4 Varer Inventories 337,2 309,8 Fordringer Receivables 304,6 182,5 Betalingsmidler Cash and equivalents 26,4 17,6 Omløpsmidler Current assets 668,1 509,9 Sum eiendeler Total assets 1247,5 1252,3 Innskutt egenkapital Equity contributions 133,8 75,5 Opptjent egenkapital Earned equity 227,0 113,3 Minoritetsinteresser Minority interests 1,0 1,5 Egenkapital og minoritetsinteresser Total equity 361,8 190,3 Avsetning for forpliktelser Provisions 13,3 10,7 Rentebærende langsiktig gjeld Interest bearing long term debt 297,7 402,3 Øvrig langsiktig gjeld Other long term liabilities 2,3 2,9 Sum annen langsiktig gjeld Total other long term liabilities 300,0 405,2 Rentebærende kortsiktig gjeld Interest bearing current liabilities 299,8 406,1 Ikke-rentebærende kortsiktig gjeld Non interest bearing current liabilities 272,6 240,1 Kortsiktig gjeld Current liabilities 572,4 646,2 Sum egenkapital og gjeld Total equity and liabilities 1247,5 1252,3 Netto rentebærende gjeld Net interest bearing debt 571,2 790,8 Egenkapitalandel Equity ratio 29,0 % 15,2 % Arbeidskapital Working capital 95,7-136,3

5 Kontantstrømoppstilling konsern Consolidated cash flow statement Group Kontantstrøm operasjonelle aktiviteter Net cash flow from operating acitvities -98,7 0,9 Kontantstrøm investeringsaktiviteter Net cash flow investment activities 354,8-17,2 Kontantstrøm finansieringsaktiviteter Net cash flow from financial activities -246,8 20,8 Effekt av valutakursendringer Effect of change in exchange rates -0,4-0,1 Endring av kontanter og innskudd Net change in cash and bank deposits 8,8 4,4 Kontanter og innskudd ved periodens begynnelse Cash and bank deposits at start of period 17,6 13,1 Kontanter og innskudd ved periodens slutt Cash and bank deposits at end of period 26,4 17,6 Avstemming av egenkapital Change in equity Egenkapital ved begynnelsen av perioden Equity at the start of the period Resultat i perioden Result for the period Omregningsdifferanser Conversion differences Emisjon Capital increase Utbytte dividend Andre egenkapital justeringer Other changes in equity Egenkapital ved slutten av perioden Equity at the end of the period This report is produced according to International Financial Reporting Standards IFRS Including the interim report standard ( IAS 34 ). - When preparing interim reports we utilise the same principles as for the annual report

6 Domstein ASA N-6706 Måløy, Norway Tel.: Fax: