The result after 2nd quarter is an after tax loss of NOK -90.9 mill against a profit of NOK 40.7 mill. Out of this unrealised loss on the investment portfolio was NOK -44.9 mill (NOK 13 mill).

The shipping activity gave a profit of NOK 12.9 mill (NOK 22.2 mill) including profit on sale of vessels of NOK 0.9 mill (NOK 16.6 mill).

Start up cost for three vessels delivered 2nd quarter plus one ship delivered in July, have been booked as cost in the accounts for 2nd quarter and has a negative impact on the accounts with approximately NOK 7 mill.

 

For the semi-ref. ships in the 12,000 to 17,000 cbm segment earnings were 27 % better than for the same period in 2007 measured in USD. There is continued good activity in petrochemical gases, especially ethylene. The company's 2 new buildings of 17.000 cbm are yielding good results in this market. A firm market is expected for the rest of 2008.

 

For the ships in the 50,000-60,000 cbm segment earnings were 16 % lower than in the same period last year measured in USD. There has been some increased competition from VLGC vessels. The VLGC segment sees increased capacity due to deliveries of new buildings. During the summer the market has picked up, but the VLGC order book gives some uncertainty for the market development for the rest of 2008.

 

The company had 2 ships going through periodical surveys compared to 4 last year.

 

The Norwegian krone has strengthened 15% towards USD compared to same period last year. This has a negative effect on the company's earnings.

 

Solvang has established International Gas Carriers ("IGC") as a joint venture with Neu Gas Carriers. The start up has been according to plan. IGC is marketing Solvang's and Neu's fully ref vessels of 60.000 cbm, 75.000 cbm and 82.000 cbm. When all Solvang's and Neu's new buildings are delivered in 2009, IGC will market a fleet of approximately 20 vessels and be a major operator in the marketplace for fully ref LPG vessels.

 

Solvang has 3 new buildings of 60.000 cbm that will be delivered in 2008. 2 vessels are delivered and one will be delivered in November. This brings the total fleet for Solvang in this segment to 8 ships. We also have 2 new buildings of 75.000 cbm, one was delivered in June 2008 and one will be delivered in January 2009. In addition to this the company took delivery the 30th April of an 82.000 cbm new building. The vessel has been given the name "Clipper Sun". The ship was not part of our own new building program, but a resale of an existing contract made by the seller.

 

Solvang is building a series of 4 LPG/Ethylene ships of 17.000 cbm at Meyer Werft, Germany. The 2 first were delivered in 2007 and the third in July 2008. The fourth ship will be delivered in October 2008.

 

The company has in total 10 new buildings out of Germany and South Korea that have been or are being delivered in 2007, 2008 and 2009. The new buildings are expected to increase the turnover and profit from the shipping activity, but the size of this increase will depend upon the market development.

 

It is a main challenge for the company to conclude the new building program as outlined above. We are, however, comfortable that the quality of the yards as well as our in-house capacity will ensure that all vessels will be delivered on time and on cost.

 

Due to constant change in and backdating of the rules for entering the new tonnage tax regime, the board has reversed its decision made in the 1st quarter regarding putting all ships into the new tonnage tax regime. A decision regarding the new regime will be made at a later stage. Tax for 1st half 2008 is therefore calculated based on ordinary corporate tax regime including reversing the booking of deferred tax as was done in the accounts for 31.12.2007.

 

Solvang owns between 19,5 % and 30% in the vessels we manage. Our role as manager is regulated in an agreement between Solvang ASA and each ship owning company. The company is receiving an annual fee according to these agreements. The agreements are on arms length and market terms. These agreements can be defines as between related parties. Further, the company has a short term financing at market terms with a related party.

 

The full report for the 2nd quarter 2008 is presented according to IAS 34 Interim Financial Reporting. The accounts do not include all information that is needed for full annual accounts and should be read together with the full accounts for 2007. The 2nd quarter accounts are not audited.

 

The accounting principles for 2007 are described in the accounts for 2007. The accounts for 2007 were produced according to EU approved IFRSs and further Norwegian information requirements according to accounting law and stock exchange regulation as required per 21.12.2007. The following new or changed standards or interpretations, which have not come into force yet, are released after the 2007 accounts were released; IAS 2,3 and 32. It is not expected that these rules will influence the reported accounts materially. The group has as per 01.01.2008 changed accounting principles for interest cost on construction loans according to IAS 23.

 

The preparation of consolidated financial statements in conformity with IFRS requires use of estimates and assumptions that affects the reported figures. The use of estimates and uncertainty connected to the use of estimates is explained in Note 1 to the groups annual accounts 2007.

 

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 enclosed to the report.

 

Complete report including figures is enclosed.