Ekornes generated operating revenues of NOK 1,269.9 million in the first half of 2007, which is an increase of NOK 10.7 million, or 0.8 per cent, compared with 2006.

 

As at 30.06.2007, the Group's consolidated operating profit totalled NOK 225.2 million (17.7 per cent) compared with NOK 244.2 million (19.4 per cent) in 2006. This corresponds to a decrease of 7.8 per cent.

 

Profit on ordinary activities before tax totalled NOK 224.9 million (17.7 per cent) compared with NOK 239.9 million (19.1 per cent) in 2006. This corresponds to a decrease of 6.3 per cent.

 

Net profit after tax totalled NOK 154.1 million compared with NOK 164.4 million in 2006. This results in earnings per share of NOK 4.18, compared with NOK 4.46 in 2006.

 

Operating revenues in the second quarter of 2007 totalled NOK 600.3 million against NOK 607.9 million (-1.3 per cent) in the corresponding period in 2006. The operating profit in the second quarter totalled NOK 101.9 million (17.0 per cent) against NOK 122.3 million (20.1 per cent) in the same period last year. Profit on ordinary activities before tax totalled NOK 100.9 million (16.8 per cent) against NOK 116.9 million (19.2 per cent) in the second quarter of 2006. This corresponds to a decrease of 13.7 per cent.

 

A low order intake, especially from the markets in Central Europe and the USA, is the reason for the poor development in turnover and operating revenues.

 

 

The profit margin achieved as at the second quarter indicates that employees will qualify for bonus payments corresponding to 70 per cent of their monthly salary, in accordance with the previously established bonus scheme. As a result hereof, provisions for this bonus scheme amount to NOK 17.0 million for the first half of the year, compared with NOK 23.0 million for the first half of 2006.

 

Provisions for the long-term incentive scheme for employees and management, which comes into effect if the company's average share price exceeds NOK 170.00 for a period of 20 successive trading days on the stock exchange, amount to NOK 8.0 million against NOK 11.0 million in 2006. Total provisions for 2005, 2006 and 2007 amount to NOK 45.4 million as at 30.06.07. The conditions for payment of the bonus have not been met. If the conditions for payment have still not been met at the end of 2008, all the provisions related to this scheme will be taken to income as at 31.12.2008.

 

Details of the schemes are available at www.ekornes.no and in the company's annual report for 2006. The scheme is also described in a separate announcement to the Oslo Stock Exchange.

 

Provisions totalling NOK 25.0 million have been made for the two bonus schemes in the first half of 2007, compared with NOK 34 million in the first half of 2006. The amount includes employers' national insurance contributions.

 

 

In the first half of 2007, the company received orders worth NOK 1231 million, which is an increase of 1.2 per cent compared with the same period in 2006. As at 30.06.07, the company had orders on hand worth NOK 198 million against NOK 215 million as at the same time in 2006. 

 

The order intake in July was NOK 233 million, which is an increase of 30 per cent compared with July 2006.

 

The order intake for Stressless® increased by 27 per cent in July. The order intake for Ekornes® Collection (sofa) continues to decrease and was approximately 6 per cent lower in July 2007 than in July 2006, whereas the order intake for Svane® mattresses has doubled compared with 2006. As at the end of July, the company had orders on hand worth NOK 275 million against NOK 263 million as at the same time in 2006.

 

 

The consolidated financial statements for the first half of 2007 cover Ekornes ASA and its subsidiaries. The annual report for 2006, which contains the consolidated financial statements for the Group as a whole and the financial statements for the parent company Ekornes ASA, may be obtained on request by contacting the company's head office, or from the company's website: www.ekornes.no.

 

The consolidated financial statements for the first half of 2007 have been prepared in accordance with the statutory regulations for the Stock Exchange, the Oslo Stock Exchange's own rules and IAS 34 "Interim Financial Reporting". The interim financial statements do not include all the information and disclosures that are required of a complete set of annual financial statements, and they should therefore be read in conjunction with the consolidated annual financial statements for 2006. 

 

The accounting principles applied in these interim financial statements are the same as those applied to the consolidated financial statements for 2006 and are described therein. The consolidated financial statements for  2006 were prepared in accordance with the provisions of the Norwegian Accounting Act and international financial reporting standards as laid down by the EU.

 

Revenues, costs and balance sheet items for foreign enterprises are consolidated in accordance with IFRS. Revenues and costs are translated into NOK quarter for quarter, using the average exchange rate for the individual currency in the quarter in question. Balance sheet items are consolidated using exchange rates as at the closing balance sheet date.

 

Please also see the company's interim reports for 2006.

 

 

The furniture markets in general.

 

The furniture market in Germany has seen a heavy decline in the first half of 2007, just like the German markets for other capital goods. The development has been more normal on the other European furniture markets without any significant changes in the pattern of demand. The weak development on the American furniture market continued in the second quarter as well, whereas the development has been more positive for the Canadian furniture market. The development on the Norwegian furniture market has been stable with a high demand for furniture, and the other Nordic markets have also seen a stable development even though the increase in demand for furniture in Denmark seems to be declining somewhat. The development on the furniture market in Japan is good.

 

Ekornes

 

Ekornes' operating revenues for the first half of 2007 have been affected by the weaker German and US markets, and the company has not experienced the same strong growth as in the same period in 2006. However, the production capacity in the Stressless® product area was increased towards the end of the first half of 2007.

 

N-6222 Ikornnes, 15. august  2007/ 15 August 2007