The result for 2008 is an after tax loss of NOK 87.9 mill against a profit of NOK 47,3 mill in 2007. Out of this, loss on the investment portfolio was NOK 123.4 mill against a positive result of NOK 19.2 mill last year. Tax was at an income of NOK 23 mill.

The shipping activity gave a loss of NOK 21.6 mill against a positive result of NOK 38.1 mill in 2007. Given the uncertainty in the market conditions, and substantial ship investments in 2007 and 2008, the board proposes not to pay dividends for 2008.

As informed in the 3rd quarter report, the company has always held a substantial part of its liquidity in a diversified portfolio of stocks and shares. The negative development at the Oslo Stock Exchange has therefore had a negative effect on the company's result, mainly due to unrealised loss on the portfolio. The board is evaluating the portfolio strategy on a continuous basis.

 

The result from the shipping activity includes loss on asset sales and write down on one ship of NOK 12,9 mill, while 2007 showed gain on asset sales of NOK 21.2 mill. Adjusted for profit on asset sales and write downs, the result from the shipping activity is NOK 14.3 mill down in 2008 compared to 2007.

 

A negative effect on the cost side is the delivery of 7 new buildings in 2008 as well as one in January 2009. Start up cost for these vessels amounts to NOK 20 mill for 2008 compared to NOK 4.5 mill in 2007.

 

In addition to start up cost, the weak result is caused by a lower market for both ethylene vessels as well as fully ref LGC/VLGC vessels in the 4th quarter. This compared both to same period 2007 as well as the 3 first quarters 2008.

 

For the semi-ref. ships in the 12,000 to 17,000 cbm segment earnings were on line with 2007 measured in USD. There was a good level of activity in petrochemical gases and ethylene up to and including July. In August and September the market dropped somewhat. As from October the impact of the negative development in the world economy resulted in lower activity in transportation of petrochemical gases. 4th quarter is the lowest since 2004. In January the market has improved somewhat compared to November and December, but the drop in the world economy creates uncertainty for the market for 2009.

 

For the ships in the 60,000-75,000 cbm segment earnings were 26 % lower than last year measured in USD. The market for modern ships trading in LPG has been reasonably good in the Atlantic and through the Panama Canal to the west coats of South- and Central America. However, as from August the market for NH3 has been weak and close to non-existent on the route Black Sea to USA. This is caused by falling demand as well as falling product prices which again lead to lower volumes than normal being available for transportation. The weak NH3 market reduces the average earnings for this segment. As for the semi ref market, rates have improved somewhat in January compared to November and December. But uncertainty regarding development of the word economy as well as falling energy prices, combined with a weak VLGC market, creates uncertainty for the market for 2009.

 

The company had 4 ships going through periodical surveys, the same as last year.

 

The company took delivery of 7 new buildings in 2008 and the last new building in our program was delivered 5th January 2009. All new buildings are fully financed with long terms facilities. The company has not entered into any derivative contracts or other financial instruments where counterparty risk is an issue.

 

The full report for the 4th 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 4th quarter accounts are not audited.

 

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.

 

Stavanger 11th of February 2009

Solvang ASA

Board of Directors

 

Complete report including figures is enclosed