FL GROUP hf. - Financial Statement Release

FL Group reports net loss of ISK 47.8 billion in the first quarter

- Portfolio restructured and operating expenses reduced
- Financial position remains strong with equity of ISK 115 billion

Reykjavik, Iceland 8 May 2008 - FL Group (OMX: FL), the international
investment company, today announces its results for the first quarter ending 31
March 2008. 

Financial Highlights 
» Net loss after tax of ISK 47.8 billion in 1Q 2008.
» Major factors contributing to the loss are negative mark to market
adjustments of listed assets of the Group, including a ISK 20.6 billion loss
due to a 21.4% drop in Glitnir shares, ISK 13.8 billion loss on other listed
assets and a total ISK 11.3 billion loss on the sale of remaining shares in
Commerzbank, Finnair and Aktiv Kapital. 
» Total assets at the end of 1Q 2008 were ISK 401 billion.
» Total shareholder equity at end of 1Q was ISK 115.2 billion, including a
translation difference of ISK 7.0 billion. Equity ratio at the end of 1Q is 29%
and equity ratio in investment operations is 33%. 
» Liquid cash at ISK 18.9 billion. Remaining debt maturing in 2008 of ISK 7.0
billion. 
» Operating expenses for investment operations totalled ISK 588 million,
compared to ISK 884 million in 1Q 2007, which represents a 33.5% decrease and a
73.1% decrease from 4Q 2007. 
» TM, FL Group's operating subsidiary, reported a loss of ISK 3.3 billion,
mainly due to investments. 

Operational Highlights 
» Market risk reduced significantly through divestment of shares in listed
companies which did not fit within FL Group's revised investment strategy. This
includes the divestment of all of the Group´s shares in Commerzbank, Finnair
and Aktiv Kapital for a total transaction value of ISK 60 billion. 
» Private Equity portfolio activity included the sale of a 43.1% stake in
Geysir Green Energy for ISK 10.5 billion and a subsequent ISK 4.5 billion
investment in Glacier Renewable Energy Fund, the sale of holdings in FL Group's
property funds to Landic Property for ISK 20.6 billion, and a successful
refinancing of Refresco and continued implementation of “Buy & Build” strategy 
» Comprehensive internal restructuring and streamlining of operations. Plans
for reducing 2008 operating expenses by 50%, year-on-year, are on track. 
» In line with FL Group's revised investment strategy, portfolio now more
balanced across different sectors with a core focus on banking, insurance and
property. Key holdings include Glitnir bank (32%), TM (99%) and Landic Property
(39.8%). In addition to core investment areas, FL Group will continue to
support its Private Equity portfolio. 

FL Group intends to apply for de-listing of shares from OMX Nordic Exchange in
Iceland 
» On 1 May 2008, the Board of Directors of FL Group announced that it had
approved a motion to call an Extraordinary General Meeting on 9 May 2008 in
order to put to vote the Board's recommendation to proceed with an application
for the de-listing of the Company's shares from the OMX Nordic Exchange in
Iceland. 
» If the motion for de-listing is approved at the Extraordinary General
Meeting, shareholders will be offered to keep their shares in an unlisted FL
Group or sell their shares in FL Group in exchange for shares in Glitnir Bank.
FL Group's key shareholders with a collective holding of 83% of FL Group have
already waived the right to sell their shares and will remain shareholders in
FL Group after the delisting. 


FL Group's Chief Executive Officer, Jon Sigurdsson, commented: 

“I am pleased to report that the objectives FL Group set out at the end of last
year are well on their way to being fully achieved despite the ongoing adverse
global market conditions. We have restructured the Company's investment
portfolio by divesting non-core assets that did not fit our long term strategy.
We have also been focused on maintaining a healthy financial position and
reduced operating expenses; and have streamlined the Company's operations
extensively. 

Despite the extremely challenging economic climate which has affected our
results for 1Q 2008, our fundamentals remain strong and we maintain a very
clear strategic focus following a revision of our investment strategy. 

I'm confident that we are moving in the right direction and the outlook for the
remainder of the year looks stable. Furthermore, the Board´s recently announced
plan to delist the company will present us with increased flexibility and more
opportunities for taking the business forward and creating long-term
shareholder value.“

Attachments:

condensed consolidated interim financial statements 1q 2008.pdf

1q 2008 press release.pdf

1q 2008 investor presentation.pdf