Shipping activities yielded NOK 5.6 mill during Q3 2011 compared to a loss of NOK 5.2 mill during the same period in 2010. The result from the ship-owning companies (equity method) was NOK 6.4 mill and includes a negative adjustment of interest rate swaps of NOK 4.5 mill. The result before tax was negative at NOK 15.4 mill compared to a gain of NOK 12.4 mill during the same period in 2010. The securities portfolio contributed negatively with a non-realised loss of NOK 21.9 mill compared with a non-realised gain of NOK 16.1 mill last year.

Introduction
The underlying developments in the LPG market continue to be positive, but on a general basis the results from shipping activities are still not satisfactory.

As previously reported, the LPG market in 2011 has been seen a significant improvement compared to 2010. On timecharter basis freight earnings YTD are NOK 124.1 mill compared to NOK 90.5 mill during the same period last year, an increase of 37%. A continued low USD/NOK exchange rate has negative impact on the results.

The ethylene market remained robust which resulted in high fleet utilisation.  The increase in rates for the fully-ref segment has been driven by export growth from the Arabian Gulf since July. As a result The Baltic Index has increased from an average of $42/ton in June to $69/ton in September. 

VLGC 82k cbm
The company has one VLGC ship, which is on time-charter until August 2016 with market based hire.

LPG export volumes out of the Arabian Gulf is a central driver for this market and export volumes have remained high since the summer, which has caused spot rates to more than double from USD 600k pcm to over USD 1.4 mill pcm.

Panamax VLGC 75k cbm
The company has Panamax VLGC on long term timecharter and one in the spot market. As a result of the stronger VLGC market, freight rates for Panamax VLGC's have strengthened accordingly. 

LGC 60k cbm
As previously reported the market for ships in the LGC segment has improved compared to recent years and is 22.5% higher on timecharter basis during Q3 2011 compared to Q3 2010. However, the level remains at unsatisfactory levels, but the trend continues to be positive. 

Ethylene 12-17k cbm
For the ethylene ships, freight rates have remained strong driven by high volumes under export contracts from the Arabian Gulf and a busy spot market in general. Activity levels in the market have subdued somewhat in recent weeks but freight rates remain healthy.

General
The company has made a change in comparable figures regarding conversion of shares in shipping partnerships. The change relates to 2010 and is non-cash item. Details in separate note to the accounts.

There have been no incidents with a particular impact on the financial accounts during the period.

The company carried out no ordinary classification docking.

Stavanger, 22nd November 2011
The board of Solvang ASA