The result after the 4th quarter is an after tax profit of NOK 45.4 mill (NOK 89.4 mill).

The shipping activity gave a profit of NOK 26.8 mill (NOK 38.1 mill) including sales gain of NOK 21.2 mill (NOK 0 mill).

The investment portfolio gave a profit of NOK 19,2 mill (NOK 58,7 mill).

The board propose to keep the dividend at NOK 0,75 per share.Smaller ownership shares in ships managed by other ship owners are booked using the fair value method. Change in market value for these shares influences the profit and loss account directly, and amount to NOK -8,7 mill compared to NOK 5.1 mill last year.

 

The negative result from the shipping activity in the 4th quarter is mainly due to start up costs, both finance and technical, for a new building that was delivered in December 2007. Further finance and part of supervision cost for our series of 7 new buildings being delivered in 2008 are being booked as expenses rather than activated.

These expenses amounted to NOK 17,2 mill in 2007 and NOK 12,1 mill in 2006. The company had 5 ships going through surveys including dry-docking, compared to one ship in 2006.

 

The Norwegian krone has strengthened 8,7% towards USD compared to last year.

 

The market has in total been firm in all segments of the company's shipping activity during the year. For semiref/ethylene ships the last six months were stronger than the first due to high activity for shipment of ethylene out of AG. For the 50-60,000 cbm ships, the first 6 months was slightly better than the last six, mainly due to increased competition from the VLGCs in the Atlantic basin. The company had 5 ships going through periodical surveys compared to 1 ship last year.

 

For the semi-ref. ships in the 12,000 to 17,000 cbm segment earnings were 21,9 % better than for 2006 measured in USD. There has been good activity in petrochemical gases, especially ethylene. A firm market is expected for 2008 at level with the first 6 months of 2007.

 

For the ships in the 50,000-60,000 cbm segment earnings were 11.1 % lower than in the same period last year measured in USD. The market was good until September, when idle time increased, and freight rates softened somewhat. The market picked up, however, during the autumn. There is some uncertainty for the market development for 2008.

 

Financial expenses related to the company's new building program amounted to NOK 13,4 mill for the period, compared to NOK 10,3 mill for 2006.

 

Solvang has received notice from BW Gas that the BW Gas LGC pool will be terminated as from end May. The pool is marketing fully ref LPG vessels in the 50,000 - 60,000 cbm segment. Solvang ASA has 4 vessels in the pool and 1 vessel trading outside the pool. Solvang is evaluating various alternatives for the marketing of its vessels in this segment including co-operation with other owners. Solvang has 3 new buildings of 60,000 cbm being delivered in 2008 bringing the company's total fleet in the segment to 8 vessels. In addition we have 2 new buildings of 75,000 cbm in the VLGC segment also being delivered in 2008.

 

Camillo Eitzen & Co ASA has given notice of resignation to ENGC. Solvang ASA is partner with Eitzen in ENGC and will leave ENGC together with Eitzen. After the withdrawal period, Solvang ASA will continue the co-operation with Eitzen for 17 ethylene vessels (12 owned by Eitzen and five by Solvang). In addition to the vessels operated in co-operation with Eitzen, Solvang owns and operates 1 ethylene and 2 semi-ref ships.

 

The company's two new buildings "Clipper Hebe" and "Clipper Helen", both LPG/ethylene ships of 17,128 cbm, were delivered the 31st of July and 3rd December from Meyer Werft, Germany. The company will take delivery of two sister ships from the same yard in May and October 2008.

 

In our report for the 3rd quarter we informed that the new transfer rules from the old to the new tax regime for shipping companies would impose a tax liability for the daughter company Solvang Shipping AS of NOK 48 mill, which can be reduced by a third by allowing for environment friendly investments. The tax shall after the proposal, be paid in equal annual instalments over ten years. In the accounts for 2007 is booked tax cost at an NPV amount of NOK 38.6 mill. Intergroup sale of ownership shares in companies has lead deferred tax liabilities of NOK 54.9 mill being dissolved. After adjustments made for tax effects of currency variations of NOK 14.5 mill, the final tax cost for the year is positive by NOK 2.1 mill.

 

The rules for a new tonnage tax regime however seem to be fairly attractive and the board evaluate to put all ships into the new regime. Vessels owned under the old regime are transferred to the new regime as per 1. January 2007.

 

The report for the 4th quarter 2007 is presented according to IAS 34 Interim Financial Reporting, and is consistent with current IFRS standards and the interpretation of these as they exist today.

 

Present accounting principles do not, in the board's opinion, give full and extensive information about the company's main activity. Therefore the profit and loss account and the balance sheet, where the company's interest in shipping partnerships are included in the accounts after the joint venture accounting method, are included.

 

 

Stavanger 14th of February 2008

Board of Directors

Solvang ASA