2007-08-30 14:49:06 CEST

2007-08-30 14:49:06 CEST


REGULATED INFORMATION

English Finnish
Neomarkka - Quarterly report

INTERIM REPORT 1.1 - 30.6.2007


Neomarkka Plc	Stock exchange release 30.8.2007		1(17)                  


INTERIM REPORT 1.1 - 30.6.2007                                                  

Neomarkka renewed its strategy shifting the emphasis towards industrial         
investment and divested direct hedge fund investments                           

--------------------------------------------------------------------------------
| KEY FIGURES                              |       1-6 /2007 |        1-6/2006 |
--------------------------------------------------------------------------------
| Turnover, EUR million, of which          |            14.2 |             1.7 |
--------------------------------------------------------------------------------
| - gains and losses from trade of         |             5.6 |             1.7 |
| financial assets	                        |             8.5 |                 |
| - cable business turnover                |                 |                 |
--------------------------------------------------------------------------------
| Operating profit, EUR million, of which  |             4.8 |             0.9 |
--------------------------------------------------------------------------------
| - trade of financial assets              |             4.8 |             0.9 |
| - cable business                         |             0.0 |                 |
--------------------------------------------------------------------------------
| Result for the period EUR million        |             2.9 |             0.3 |
--------------------------------------------------------------------------------
| Earnings per share EUR                   |            0.48 |            0.05 |
--------------------------------------------------------------------------------

All the figures for 2007 and 2006 are not comparable as a result of the change  
in strategy carried out in 2007 and the consequent acquisition of Reka Cables   
Ltd. The 2007 figures take into account the acquisition and the subsequent      
business for June 2007 (1.6 - 30.6.2007).                                       

Major events during the period under review                                     
Neomarkka renewed its strategy with the aim of targeting the investment         
portfolio at synergic industrial investments. The aim of the investments is to  
raise the return on the invested capital by developing the companies involved.  
Returns are sought both through dividend flow and an increase in value.         

With the renewed strategy Neomarkka now has two business areas: investment in   
securities and industrial private equity investments. Following the change      
Neomarkka will adopt segment reporting.                                         

Industrial private equity investments; Cables                                   
The first step in the implementation of the new strategy was the acquisition    
from Reka Ltd of the entire share capital of Reka Cables Ltd at the price of EUR
25.8 million. The parties to the deal have also agreed on adjusting the price on
the basis of the trend in Reka Cable's average operating margin in 2007 and     
2008. The maximum price adjustment either upwards or downwards is EUR 3.5       
million. The allocation of the purchase price is described in the notes and has 
been carried out in accordance with IFRS 3. The release of the inventory margin 
resulting from this will be allocated to June and July, and the proportion      
allocated to June, EUR 0.5 million, puts a strain on the financial result for   
the period under review.                                                        

In June, a 4,000 m2 expansion of Reka Cables Ltd's Riihimäki factory was        
completed, which allows increasing production capacity to meet the increased    
demand.                                                                         

Production of Reka Cables in Russia is beginning, and inputs in net working     
capital during the period under review (June) totalled EUR 1.5 million.         

Investments in securities                                                       
Neomarkka continues to manage its current financial assets in line with its     
existing principles. The assets waiting for investments in accordance with the  
new strategy are invested mainly in hedge funds for the moment. Neomarkka has   
been arranging its hedge fund investments and the financing of its investment   
portfolio so that it does not have direct hedge fund investments any more.      
Instead, Neomarkka owns bonds issued by Nordea Bank Plc, including a holding in 
the eQ Active Hedge Fund. These bonds are constructed so that their share of the
eQ Active Hedge Fund was, on subscription, double the value of the bond, and the
difference was financed with loan funding. Thus the return on the bonds takes   
into account the return from the eQ Active Hedge Fund reduced by the costs      
arising from the loan.                                                          

On June 30, 2007 Neomarkka owned EUR 33.8 million's worth of the bonds issued by
Nordea Bank Plc (the acquisition price was EUR 32.5 million in May). These bonds
have been recognised as investments in the balance sheet.                       

As far as listed equities and equity funds are concerned, the level of          
investment remained more or less unchanged. As for private equity, the shares in
Kymen Puhelin Oy were sold, which reduced investments in private equity by EUR  
0.1 million.                                                                    

As a result of the strategy change, Neomarkka's portfolio management relating to
hedge fund investments ended. At the same time the advisory services to the eQ  
Bank in relation to the portfolio management of the eQ Active Hedge Fund and    
related provisions ended on June 1, 2007. Neomarkka's previous Managing         
Director, Samuel von Martens, transferred to the company that acts as advisor to
the eQ Bank in relation to the portfolio management of the eQ Active Hedge Fund.

During the second quarter of the year, the leverage of the company's investment 
in securities fell significantly with the hedge fund investment arrangements. On
the last day of the review period, the Group's investments in securities were as
follows (at market value):                                                      

--------------------------------------------------------------------------------
| EUR Million                 |     30.6.2007 |     30.6.2006 |     31.12.2006 |
--------------------------------------------------------------------------------
| Hedge funds*                |          33.9 |          66.6 |           75.7 |
--------------------------------------------------------------------------------
| Listed equities and equity  |  	         |    	       |            7.5 |
| funds                       |           6.3 |          10.3 |                |
--------------------------------------------------------------------------------
| Private equity              |           4.0 |          14.8 |            4.1 |
--------------------------------------------------------------------------------
| Total                       |          44.2 |          90.7 |           87.3 |
--------------------------------------------------------------------------------
* Nordea Bank Plc's securities are taken into account under hedge funds.        

Shareholders' meeting and governance                                            
The Annual General Meeting was held on March 22, 2007.                          

An extraordinary shareholders' meeting called to decide on the Reka Cables Ltd  
deal, on the new board of directors and on certain amendments to the Articles of
Association was held on June 1, 2007.                                           

The extraordinary shareholders' meeting approved the agreement concerning the   
acquisition of the share capital of Reka Cables Ltd signed on May 10, 2007 by   
Neomarkka Plc and the implementation of the deal.                               

The extraordinary shareholders' meeting also approved proposed amendments to the
Articles of Association. The amendments related to the reorientation of         
Neomarkka's business and to some rearrangements caused by the new Companies Act 
624/2006 taking effect on July 21.                                              

The extraordinary shareholders' meeting confirmed the number of the members of  
the Board of Directors as six, electing the following persons as new members of 
the Board from June 1, 2007: Jorma Wiitakorpi from Porvoo as chairman of the    
Board, Matti Lainema from Helsinki as vice chairman and Ilpo Helander from Espoo
and Pekka Soini from Helsinki. Hannu Anttila from Espoo and Taisto Riski from   
Oulu were re-elected.                                                           

The Board of Directors elected its members Hannu Anttila and Taisto Riski as    
members of the Audit Committee.                                                 

The Managing Director of Neomarkka changed in May. Markku E. Rentto was         
appointed Managing Director as of May 10, 2007. Sari Tulander was appointed     
Financial Director as of May 11, 2007.                                          

Net asset value and share price                                                 
Neomarkka's net asset value per share on June 30, 2007 was EUR 10.22 (EUR 9.45) 
and at the end of 2006 EUR 10.04.                                               

Neomarkka Plc's B shares are listed on OMX Nordic Exchange Helsinki Oy. The     
closing price at the end of the review period was EUR 9.05 (EUR 8.20) per share.
On December 31, 2006 the price was EUR 7.76 per share. The share turnover in the
review period was 1,976,058 (1,423,748) shares. The lowest B share quotation was
EUR 7.78 (EUR 7.31) and the highest EUR 9.35 (EUR 9.20).                        

According to the renewed strategy, the investment portfolio will be targeted at 
synergic industrial investments, which will reduce the importance of the net    
asset value reporting.                                                          

Result, balance sheet and financing                                             
This interim report has been drawn up in accordance with the IAS 34 requirements
for interim reports. The acquisition cost calculation for the acquisition of    
Reka Cables Ltd has been made in accordance with IFRS 3. In the case of         
financial assets, Neomarkka has applied the same accounting principles in       
drawing up the interim report as in its financial statements for 2006. After the
acquisition of Reka Cables Ltd, i.e. as of June 1, 2007, the figures also       
include items not included in the 2006 financial statements. These items have   
been dealt with in accordance with IFRS standards. The interim report is        
unaudited.                                                                      

Financial result                                                                
The consolidated turnover totalled EUR 14.2 million in the review period,       
consisting of the gains and losses from the trade of financial assets and the   
turnover of the cable business. The gains and losses from the trade of financial
assets totalled EUR 5.6 million (EUR 1.7 million) in the review period. The     
turnover in the cable business totalled EUR 8.5 million. The impact of the cable
business on the financial result has been taken into account as of June 1, 2007.

Operating profit for the review period was EUR 4.8 million (EUR 0.9 million), of
which the trade of financial assets accounted for EUR 4.8 million (EUR 0.9      
million) and the cable business for EUR 0.0 million. The net result for the     
review period was EUR 2.9 million (EUR 0.3 million). Earnings per share came to 
EUR 0.48 (EUR 0.05).                                                            

Balance sheet and financing                                                     
At the end of the review period the balance sheet totalled EUR 120.3 million    
(EUR 98.6 million). Renewal of the strategy and the subsequent acquisition of   
Reka Cables Ltd changed the content of the balance sheet substantially in the   
period under review. For instance, the cable business caused the following      
changes: non-current assets increased, inventories now include tangible assets  
and receivables comprise customer receivables.                                  

The eQ Active Hedge Fund and outside capital underlie the securities issued by  
Nordea Bank Plc. At the end of the review period, Neomarkka owned EUR 33.8      
million's worth of these securities. The securities are entered as investments  
on the balance sheet.                                                           

At the end of the review period, the equity per share was EUR 10.22 (9.45) and  
the equity ratio was 51.2% (57.7%).                                             

Neomarkka repaid a short-term loan of EUR 40 million to the Kaupthing Bank      
during the review period.                                                       

The acquisition in June of Reka Cables Ltd in accordance with the renewed       
strategy was partly financed with long-term credit of EUR 13.6 million.         

Total financing worth EUR 4.2 million was acquired in relation to industrial    
investments operating business, of which EUR 3.0 million was used to repay loan.
A credit facility of EUR 3.0 million and a factoring limit of EUR 2.0 million   
were acquired. At the end of June the factoring limit totalled EUR 5.5 million. 

Investments                                                                     
Neomarkka acquired the entire share capital of Reka Cables Ltd in the review    
period in accordance with its new strategy. The acquisition price was EUR 27.0  
million, of which the price for the shares accounted for EUR 25.8 million       
(enterprise value EUR 30.0 million less the company's liabilities). The rest of 
the acquisition price consists of the asset transfer tax and expert fees.       

Other investments made in the review period relate to the cable business,       
totalling EUR 0.5 million. Long-term leases signed in connection with the       
acquisition of Reka Cables Ltd have been recognised as fixed assets under IFRS. 

Personnel                                                                       
The Group employed an average of 52 people (4). The average number of personnel 
takes into account the personnel relating to the cable business for one month.  
Group personnel numbered 314 on June 30, 2007, of which 310 were in the cable   
business.                                                                       

Group structure and shareholders                                                
Neomarkka Plc is the parent company in a Group that includes the fully owned    
subsidiaries Novalis Plc and Alnus Ltd with their subsidiaries. The domicile of 
the Group companies is Hyvinkää.                                                

At the end of the review period, Neomarkka Plc had 13,516 (14,238) shareholders.
The biggest shareholder Reka Ltd bought 1.1 million Neomarkka B shares from     
Metsäliitto Cooperative on May 23, 2007, representing some 18.3% of all         
Neomarkka's B shares and some 12.7% of all votes. The purchase price was EUR    
10.45 million, equivalent to EUR 9.50 per share. Metsäliitto still holds 105,305
Neomarkka B shares, equivalent to some 1.75% (20.02%) of all shares and 1.21%   
(13.90%) of all votes. After the deal, Reka Ltd's ownership share was 50.76%    
(32.49%) of all shares and 65.77% (53.09%) of all votes. Neomarkka Plc is thus  
part of the Reka Group. Reka Ltd's domicile is Hyvinkää.                        

The aggregate ownership of the ten biggest shareholders at the end of the review
period was 59.42% (57.81%) of all shares and 71.79% (70.67%) of all votes.      

Major events after the review period                                            
Reka Cables Ltd's Managing Director changes. Vesa Siitari acted as Managing     
Director up to August 15, 2007. Reka Cables Ltd's Board of Directors has invited
Board Member Jorma Leskinen to act as Managing Director for the time being. The 
Board has started preparations for the hiring of a new Managing Director for    
Reka Cables Ltd.                                                                

A decision was made by the Board in August to continue expansion of Reka Cables 
Ltd's medium and high voltage cable factory in Riihimäki. The expansion will    
provide response to the substantially increased demand by removing production   
capacity constraints. The entire expansion investment is EUR 9.6 million,       
including expansion of production facilities and acquisitions of machinery and  
equipment with installations.                                                   

The operating sector of Neomarkka's subsidiary Alnus Ltd has been reviewed, and 
part of the machinery and equipment acquisitions made under industrial          
investments will be directed to it. Alnus Ltd will continue to rent out         
machinery and equipment within the Group. The machinery and equipment           
acquisitions for Reka Cables Ltd's expansion in Riihimäki will be carried out   
primarily through Alnus Ltd.                                                    

Business risks in the near future and hedging                                   
With the renewed strategy, future risk factors will be more closely related to  
the trends in the business operations of a small number of portfolio companies  
and to normal business risks in comparison with the previous strategy, where    
Neomarkka's risk was based on a widely distributed market risk. As far as the   
distributed market risk is concerned, changes in the value of investments       
underlying the eQ Active Hedge Fund will have a substantial impact on           
Neomarkka's financial result.                                                   

Investment securities other than those denominated in euros were hedged         
primarily through foreign exchange forward contracts.                           

Risks are involved in the business operations of the first of the industrial    
private equity investments, Reka Cables Ltd, the most significant of which are  
the fluctuation in raw material costs and more rapid changes than previously in 
the order book situation. Partial price hedging is used in purchases of metals. 
Major currencies will be used in hedging against foreign exchange fluctuation.  
In order to be aware of the risks and prepare for them, Reka Cables Ltd has     
carried out an extensive risk-charting process.                                 

Cap options are being used for hedging against interest rate risks.             

Comments made in this report that do not refer to actual facts that have already
taken place are future estimates. Such estimates include expectations concerning
market trends, growth and profitability, and statements that include the terms  
‘will be', ‘will improve', ‘expect', or a similar expression. Since these       
estimates are based on current plans and estimates, they involve risks and      
uncertainty factors which may lead to results differing substantially from      
current statements. Such factors include 1) operating conditions, e.g. continued
success in production and consequent efficiency benefits, availability and cost 
of production inputs, demand for new products, changing circumstances in respect
of the acquisition of capital under acceptable conditions; 2) circumstances in  
the sector such as the intensity of demand for products, the competition,       
current and future market prices for the Group's products and related pricing   
pressures, the financial situation of the Group's customers and competitors,    
competitors' possible new competing products and 3) the general economic        
situation such as economic growth in the Group's main geographical market areas 
or changes in exchange rates and interest rates.                                

Prospects for the near future                                                   
Prospects in the cable industry are positive, growth is expected to continue and
the market situation is expected to remain good on condition that no significant
negative changes take place in the overall economic situation. The prices of the
principal raw materials (copper, aluminium and plastics) will be very volatile. 
The cable business operative result will improve compared to the previous year. 

Neomarkka´s investments in hedge- and equity funds will be reduced.             

--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT(IFRS)   |             |            |           |
--------------------------------------------------------------------------------
|                            |     1.4. | 1.4. -30.6. |       1.1. |       1.1 |
|                            |   -30.6. |             |     -30.6. |   .-30.6. |
--------------------------------------------------------------------------------
| EUR 1,000 euroa            |     2007 |        2006 |       2007 |      2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Industrial business        |    8,543 |           0 |     8,543  |         0 |
| turnover                   |          |             |            |           |
--------------------------------------------------------------------------------
| Gains and losses from the  |    3,836 |      -1,158 |      5,364 |     1,660 |
| trade of financial assets  |          |             |            |           |
--------------------------------------------------------------------------------
| TURNOVER                   |   12,379 |      -1,158 |     14,177 |     1,660 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in inventories of   |     -854 |           0 |       -854 |         0 |
| finished products and      |          |             |            |           |
| production in progress     |          |             |            |           |
--------------------------------------------------------------------------------
| Production for own use     |       10 |           0 |         10 |         0 |
--------------------------------------------------------------------------------
| Materials and services     |   -5,714 |           0 |     -5,714 |         0 |
--------------------------------------------------------------------------------
| Personnel expenses         |   -1,084 |        -137 |     -1,217 |      -276 |
--------------------------------------------------------------------------------
| Depreciation and           |     -278 |          -8 |       -281 |       -21 |
| impairment                 |          |             |            |           |
--------------------------------------------------------------------------------
| Other operating expenses   |     -982 |        -231 |     -1,311 |      -472 |
| and income                 |          |             |            |           |
--------------------------------------------------------------------------------
|                            |   -8,902 |        -376 |     -9,367 |      -769 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit/loss      |    3,477 |      -1,534 |      4,810 |       891 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income and       |     -499 |        -411 |       -983 |      -753 |
| expenses                   |          |             |            |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before taxes        |    2,978 |      -1,945 |      3,827 |       138 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxes                      |     -719 |         641 |       -940 |       151 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| result for the period      |    2,259 |      -1,304 |      2,887 |       289 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution:              |          |             |            |           |
--------------------------------------------------------------------------------
| to parent company owners   |    2,259 |      -1,304 |      2,887 |       289 |
--------------------------------------------------------------------------------
| to minority                |        0 |           0 |          0 |         0 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Earnings per share after   |     0,38 |       -0,22 |       0,48 |      0,05 |
| and before dilution, EUR   |          |             |            |           |
--------------------------------------------------------------------------------
| Number of shares       |    6,020,360 |   6,020,360 |  6,020,360 | 6,020,360 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET (IFRS)       |                  |                 |
--------------------------------------------------------------------------------
| EUR 1,000                               |        30.6.2007 |      31.12.2006 |
--------------------------------------------------------------------------------
| ASSETS                                  |                  |                 |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS                      |                  |                 |
--------------------------------------------------------------------------------
| Intangible assets                       |            3,494 |               0 |
--------------------------------------------------------------------------------
| Tangible assets                         |           22,398 |              51 |
--------------------------------------------------------------------------------
| Other non-current assets                |               12 |               0 |
--------------------------------------------------------------------------------
| Goodwill                                |            4,515 |               0 |
--------------------------------------------------------------------------------
| Deferred tax assets                     |              183 |               0 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS                |           30,602 |              51 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS                          |                  |                 |
--------------------------------------------------------------------------------
| Inventories                             |           19,318 |              0  |
--------------------------------------------------------------------------------
| Financial assets held for trading       |                0 |             226 |
--------------------------------------------------------------------------------
| Other financial assets at fair value    |           44,053 |          86,806 |
| through profit and loss                 |                  |                 |
--------------------------------------------------------------------------------
| Other financial assets available for    |            4,001 |           4,112 |
| sale                                    |                  |                 |
--------------------------------------------------------------------------------
| Other current receivables               |           18,593 |           8,429 |
--------------------------------------------------------------------------------
| Cash in hand and at bank                |            3,728 |           3,324 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS                    |           89,693 |         102,897 |
--------------------------------------------------------------------------------
| ASSETS                                  |          120,295 |         102,948 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS´EQUITY                     |                  |                 |
--------------------------------------------------------------------------------
| Share capital                           |           24,082 |          24,082 |
--------------------------------------------------------------------------------
| Share premium                           |               66 |              66 |
--------------------------------------------------------------------------------
| Reserved fund                           |            1,221 |           1,221 |
--------------------------------------------------------------------------------
| Retained earnings                       |           11,971 |           9,897 |
--------------------------------------------------------------------------------
| Other unrestricted equity               |           21,327 |          21,327 |
--------------------------------------------------------------------------------
| Result for the period                   |            2,887 |           3,880 |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY              |           61,554 |          60,473 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES                             |                  |                 |
--------------------------------------------------------------------------------
| Deferred tax liabilities                |            5,358 |           1,632 |
--------------------------------------------------------------------------------
| Provisions                              |              514 |              0  |
--------------------------------------------------------------------------------
| Non-current liabilities                 |           28,624 |               0 |
--------------------------------------------------------------------------------
| Current liabilities                     |           24,245 |          40,843 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                       |           58,741 |          42,475 |
--------------------------------------------------------------------------------
| SHAREHOLDERS´EQUITY AND LIABILITIES     |          120,295 |         102,948 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| BALANCING ACCOUNT OF SHAREHOLDERS´EQUITY (IFRS)                  |           |
--------------------------------------------------------------------------------
| EUR 1,000  |   Share |  Share |  Reserve |    Retained |   Other |     Total |
|            | capital | premiu |     fund |      profit | unrestr |           |
|            |         |      m |          |             |   icted |           |
|            |         |        |          |             |  equity |           |
--------------------------------------------------------------------------------
| Opening    |  24,082 |     66 |    1,221 |      11,703 |  21,327 |    58,399 |
| balance    |         |        |          |             |         |           |
| 1.1.2006   |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| Changes    |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| Dividends  |         |        |          |      -1,806 |         |    -1,806 |
| paid       |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| Result for |         |        |          |         289 |         |       289 |
| the period |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| BALANCE    |  24,082 |     66 |    1,221 |      10,186 |  21,327 |    56,882 |
| 30.6.2006  |         |        |          |             |         |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR 1,000  |   Share |  Share |  Reserve |    Retained |   Other |     Total |
|            | capital | premiu |     fund |      profit | unrestr |           |
|            |         |      m |          |             |   icted |           |
|            |         |        |          |             |  equity |           |
--------------------------------------------------------------------------------
| Opening    |  24,082 |     66 |    1,221 |      13,777 |  21,327 |    60,473 |
| balance    |         |        |          |             |         |           |
| 1.1.2007   |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| Changes    |         |        |          |             |         |         0 |
--------------------------------------------------------------------------------
| Dividends  |         |        |          |      -1,806 |         |    -1,806 |
| paid       |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| Result for |         |        |          |       2,887 |         |     2,887 |
| the period |         |        |          |             |         |           |
--------------------------------------------------------------------------------
| BALANCE    |  24,082 |     66 |    1,221 |      14,858 |  21,327 |    61,554 |
| 30.6.2007  |         |        |          |             |         |           |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT (IFRS)                                      |
--------------------------------------------------------------------------------
|                                             |    1.1 -30.6. |     1.1 -30.6. |
--------------------------------------------------------------------------------
| EUR 1,000                                   |          2007 |           2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING ACTIVITIES                        |               |                |
--------------------------------------------------------------------------------
| Payments received from operating activities |       110,284 |         14,467 |
--------------------------------------------------------------------------------
| Payments paid on operating activities       |       -57,329 |        -12,152 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| INVESTING ACTIVITIES                        |               |                |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and new         |       -26,969 |              0 |
| business                                    |               |                |
--------------------------------------------------------------------------------
| Change in tangible assets                   |           -18 |            -65 |
--------------------------------------------------------------------------------
| Change in other intangible assets           |          -499 |              0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FINANCING ACTIVITIES                        |               |                |
--------------------------------------------------------------------------------
| Increase in liabilities                     |        19,253 |              0 |
--------------------------------------------------------------------------------
| Decrease in liabilities                     |       -43,235 |              0 |
--------------------------------------------------------------------------------
| Dividends paid                              |        -1,806 |         -1,806 |
--------------------------------------------------------------------------------
| Other changes in equity                     |            60 |              0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CASH FLOW FOR THE PERIOD                    |          -259 |            444 |
--------------------------------------------------------------------------------
| Liquid funds at beginning of the period     |         3,987 |          1,144 |
--------------------------------------------------------------------------------
| LUQUID FUNDS AT END OF PERIOD               |         3,728 |          1,588 |
--------------------------------------------------------------------------------

NOTES TO THE ACCOUNTS                                                           

This interim report has been drawn up in accordance with IAS 34 requirements    
concerning interim reporting. The acquisition cost calculation for Reka Cables  
Ltd has been made in accordance with IFRS 3. The interim report is unaudited.   

Principles for drawing up the report                                            
In drawing up this interim report, Neomarkka has applied the same principles for
securities as in its 2006 financial statements with the exception of the changes
listed below. After the acquisition of Reka Cables Ltd on June 1, 2007 the      
figures also include items not included in the 2006 financial statements. These 
items have been dealt with in accordance with the IFRS. The acquisition of Reka 
Cables Ltd has been dealt with in accordance with IFRS 3.                       

The figures for Reka Cables Ltd have been taken into account from the time of   
acquisition on June 1, 2007.                                                    

The following new standards, changes in standards and application of            
interpretations which have been found important for the Group have been adopted 
in 2007:                                                                        

- IFRS 7  Financial instruments; information and complementary changes to be    
presented in the financial statements IAS 1, Presentation of financial          
statements - information on equity to be disclosed in the financial statements. 
IFRS 7 requires that new notes are to be presented on financial instruments. The
standard has no impact on the classification or measurement of the Group's      
financial instruments.                                                          

- IFRIC 9  Reassessment of embedded derivatives. The interpretation requires an 
assessment of whether contracts contain embedded derivatives that must be       
separated from the host contract and dealt with as stand-alone derivatives.     

- IFRIC 10  Interim financial reporting and impairment. IFRIC 10 forbids the    
reversal of an impairment loss possibly made on goodwill in an interim report on
a later closing date during the reporting period.                               

These new standards and interpretations that have been adopted do not have a    
material impact on the reported income statement, balance sheet and notes.      

The following interpretations are compulsory in 2007 but do not have major      
significance in terms of the Group:                                             

- IFRIC 7  on applying the restatement approach under IAS 29 Financial reporting
in hyperinflationary economies.                                                 

- IFRIC 8 IFRS 2: scope.                                                        

Goodwill is the part of acquisition cost exceeding the Group's share of the     
identifiable net asset value of a subsidiary, associate company of joint venture
purchased at the time of acquisition. The Reka Cables Ltd deal brought goodwill 
to the Group. This goodwill will be tested for impairment annually or more often
if there is reason to believe that the value has decreased.                     

Drawing up principles for the cable business (as far as they differ from those  
applied in the securities or are missing)                                       
- Measurement of fixed assets: Fixed assets are recognised in the balance sheet 
at direct acquisition cost reduced by planned depreciation on a straight line   
basis over the useful life of the fixed asset items concerned. The depreciation 
period and depreciation on fixed assets included in the balance sheet through   
financial leases are recognised according to the length of the leases and IFRS  
regulations.                                                                    

--------------------------------------------------------------------------------
| Deprciation periods                         |                 |              |
--------------------------------------------------------------------------------
|  Other non-current liabilities              |       10        |        years |
--------------------------------------------------------------------------------
|  Machinery and equipment                    |      5 - 15     |        years |
--------------------------------------------------------------------------------
|  Intangible rights	                   |      5          |        years |
--------------------------------------------------------------------------------
|  Buildings and structures                   |        10 - 15  |        years |
--------------------------------------------------------------------------------

- Measurement of inventories: Inventories are presented in accordance with the  
FiFo principle at acquisition cost, at replacement cost if lower or at probable 
sales price. The value of inventories includes variable costs and the fixed     
costs of purchase and production.                                               

- Derivatives: The price hedges applied in purchasing metals and foreign        
exchange hedges are recognised in the balance sheet at the time of entering the 
contract at acquisition cost, after which they are measured at fair value. The  
Group does not apply hedge accounting under IAS 39. Changes in the fair value of
metal and foreign exchange hedges are recorded under other expenses and income  
in the income statement and are recognised in the balance sheet through profit  
and loss. In interest rate hedges, swaps are recognised on the balance sheet at 
acquisition cost, after which they are recognised at fair value. Changes in the 
fair value of interest rate hedges are recognised under financial income and    
expenses and taken into account in the balance sheet through profit and loss.   
Any acquisition cost for interest rate caps or other options is recognised as an
expense item at the time of acquisition. Benefits from options are recognised   
when the option is being used (e.g. the interest rate cap is actualised).       
Recognition in the income statement and the balance sheet is recorded as        
described above in accordance with the item concerned.                          

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SEGMENT REPORTING                                                            |
--------------------------------------------------------------------------------
| EUR 1,000                                                                    |
--------------------------------------------------------------------------------
|                             |   INVESTMENT |        INDUSTRIAL |       TOTAL |
|                             |           IN |      INVESTMENTS; |             |
|                             |   SECURITIES |            CABLES |             |
--------------------------------------------------------------------------------
| Industrial business         |            0 |             8,543 |       8,543 |
| turnover                    |              |                   |             |
--------------------------------------------------------------------------------
| Gains and losses from the   |        5,634 |                 0 |       5,634 |
| trade of financial assets   |              |                   |             |
--------------------------------------------------------------------------------
| TURNOVER                    |        5,634 |             8,543 |      14,177 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment operating profit    |        4,790 |                20 |       4,810 |
--------------------------------------------------------------------------------
| Unallocated items           |              |                   |           0 |
--------------------------------------------------------------------------------
| OPERATING PROFIT            |              |                   |       4,810 |
--------------------------------------------------------------------------------
|                             |              |                   |             |
--------------------------------------------------------------------------------
| Segment assets              |       50,649 |            68,474 |     119,123 |
--------------------------------------------------------------------------------
| Unallocated assets          |              |                   |       1,172 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                |       50,649 |            68,474 |     120,295 |
--------------------------------------------------------------------------------
|                             |              |                   |             |
--------------------------------------------------------------------------------
| Segment liabilities         |        2,940 |            19,980 |      22,919 |
--------------------------------------------------------------------------------
| Unallocated liabilities     |              |                   |      35,822 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES           |        2,940 |            19,980 |      58,741 |
--------------------------------------------------------------------------------
|                             |              |                   |             |
--------------------------------------------------------------------------------
| ASSETS - LIABILITIES        |       47,709 |            48,495 |      61,554 |
--------------------------------------------------------------------------------

IFRS 3 has been observed in the recognition of margin under inventories in the  
process of allocating the cost of acquisition of Reka Cables Ltd. The release of
the margin weakened the result by EUR 0.5 million in June.                      

Turnover and result taking Reka Cables into account as of the beginning of the  
financial period                                                                
If Reka Cables Ltd had been acquired at the turn of the year and the figures    
taken into account for the full period under review, Neomarkka's turnover for   
the period 1.1.-30.6.2007 would have been EUR 54.5 million and the result for   
the period EUR 3.6 million. The release of the inventory margin resulting from  
purchase price allocation would be fully allocated by the end of the reporting  
period. The release of the inventory margin had adverse effect of EUR 0.9       
million and is included in the result for the period.                           

--------------------------------------------------------------------------------
| Change in tangible assets                 |                |                 |
--------------------------------------------------------------------------------
| EUR 1,000                                 |      1-6 /2007 |      1-12 /2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Book value at beginning of period         |             51 |              15 |
--------------------------------------------------------------------------------
| Investment                                |             71 |              65 |
--------------------------------------------------------------------------------
| Decrease                                  |             -3 |             -11 |
--------------------------------------------------------------------------------
| Depreciation                              |           -124 |             -18 |
--------------------------------------------------------------------------------
| Impairment                                |              0 |               0 |
--------------------------------------------------------------------------------
| Translation difference and other changes  |          8,526 |               0 |
--------------------------------------------------------------------------------
| BOOK VALUE AT END OF PERIOD               |          8,521 |              51 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Contingent liabilities                        |              |               |
--------------------------------------------------------------------------------
| EUR 1,000                                     |    30.6.2007 |    31.12.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| On own behalf                                 |              |               |
--------------------------------------------------------------------------------
|   Corporate mortgages                         |       15,000 |             0 |
--------------------------------------------------------------------------------
|   Guarantees                                  |       13,600 |             0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| On behalf of others                           |              |               |
--------------------------------------------------------------------------------
|   Loan guarantees                             |        4,000 |             0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other commitments, own                        |              |               |
--------------------------------------------------------------------------------
|   Leasing liabilities tangible assets         |          930 |             0 |
--------------------------------------------------------------------------------
|   Other liabilities                           |          830 |             0 |
--------------------------------------------------------------------------------

Investment commitments                                                          
Investment commitments on tangible assets were EUR 1.5 million on June 30, 2007 
(EUR 0.0 million on December 31, 2006).                                         

--------------------------------------------------------------------------------
| Derivative contracts                       |               |                 |
--------------------------------------------------------------------------------
| EUR 1,000                                  |     30.6.2007 |      31.12.2006 |
--------------------------------------------------------------------------------
|                                            |               |                 |
--------------------------------------------------------------------------------
| Nominal values                             |               |                 |
--------------------------------------------------------------------------------
| Foreign exchange derivatives               |               |                 |
--------------------------------------------------------------------------------
|     Currency forward contracts             |             0 |          21,120 |
--------------------------------------------------------------------------------
| Raw material derivatives                   |               |                 |
--------------------------------------------------------------------------------
|     Price hedging for metals               |         2,937 |               0 |
--------------------------------------------------------------------------------
|                                            |               |                 |
--------------------------------------------------------------------------------
| Fair values                                |               |                 |
--------------------------------------------------------------------------------
| Foreign exchange derivatives               |               |                 |
--------------------------------------------------------------------------------
|     Currency forward contracts             |             0 |             -90 |
--------------------------------------------------------------------------------
| Raw material derivatives                   |               |                 |
--------------------------------------------------------------------------------
|     Price hedging for metals               |            76 |               0 |
--------------------------------------------------------------------------------

Consolidated loans have been partly hedged with interest rate caps. A cap of    
4.5% has been acquired for the EUR 3 million loan for three years and a cap of  
4.7% for the EUR 6.8 million loan for three years. The original interest rate   
base for the hedged EUR 3 million loan is the 6-month Euribor and that for the  
EUR 6.8 million loan the 12-month Euribor.                                      

--------------------------------------------------------------------------------
| BUSINESS WITH THE RELATED PARTIES (Reka Group)             |                 |
--------------------------------------------------------------------------------
| EUR 1,000                                 |      1-6 /2007 |      1-12 /2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales to Reka Group                       |              5 |               0 |
--------------------------------------------------------------------------------
| Dividends to Reka Group                   |           -587 |            -587 |
--------------------------------------------------------------------------------
| Acquisition of Reka Cables Ltd            |        -25,803 |               0 |
--------------------------------------------------------------------------------
| Other purchases from Reka Group           |           -143 |               0 |
--------------------------------------------------------------------------------
| Sales receivables and other receivables   |            852 |               0 |
| at end of period                          |                |                 |
--------------------------------------------------------------------------------
| Non-current debts (financial leases) at   |         -7,902 |               0 |
| end of period                             |                |                 |
--------------------------------------------------------------------------------
| of which financial leases for machinery   |         -2,518 |               0 |
| and equipment                             |                |                 |
--------------------------------------------------------------------------------
| of which financial leases for fixed-term  |         -5,384 |               0 |
| rents for facilities                      |                |                 |
--------------------------------------------------------------------------------
| Other debts at end of period              |           -324 |               0 |
--------------------------------------------------------------------------------
| Guarantees given                          |          4,000 |               0 |
--------------------------------------------------------------------------------
| Guarantees received                       |          1,902 |               0 |
--------------------------------------------------------------------------------


Some of the receivables, debts and guarantees received, including a guarantee   
given in connection with the acquisition of Reka Cables Ltd in June 2007 have   
not yet been completed. These items will be adjusted and eliminated in          
accordance with the terms of the deal. Occasional payments by customers may     
still be going to previous bank accounts, but these will be minor sums.         

The guarantee given by Reka Ltd for a Reka Cables Ltd loan from the Nordic      
Investment Bank will continue. No costs will be incurred by Reka Cables Ltd     
through the guarantee.                                                          

Acquisition of Reka Cables Ltd                                                  
Neomarkka bought the entire share capital of Reka Cables Ltd from Reka Ltd      
through a deal carried out on June 1, 2007. The price was paid in cash. Apart   
from the purchase price, the acquisition cost includes EUR 1.2 million in       
experts' fees relating to the deal and asset transfer tax. The following assets 
and liabilities were recorded under IFRS 3. EUR 1.7 million of the margin has   
been recognised under inventories. The release of the margin puts a strain of   
EUR 0.5 million on the result for the review period.                            


--------------------------------------------------------------------------------
| EUR 1,000                |       Acquiree´s |   Fair value |      Fair value |
|                          |  acrrying amount |  adjustments |                 |
|                          |           before |              |                 |
|                          |      combination |              |                 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets acquired      |                  |              |                 |
--------------------------------------------------------------------------------
| Intangible assets        |               24 |        3,490 |           3,514 |
--------------------------------------------------------------------------------
| Tangible assets          |           13,603 |        3,511 |          17,114 |
--------------------------------------------------------------------------------
| Investments              |               74 |            0 |              74 |
--------------------------------------------------------------------------------
| Inventories              |           17,726 |        1,661 |          19,387 |
--------------------------------------------------------------------------------
| Deffered tax assets      |              157 |            0 |             157 |
--------------------------------------------------------------------------------
| Current receivables      |           18,962 |            0 |          18,962 |
--------------------------------------------------------------------------------
| Cash in hand and at bank |              660 |            0 |             660 |
--------------------------------------------------------------------------------
| Other current            |          -28,609 |            0 |         -28,609 |
| liabilities              |                  |              |                 |
--------------------------------------------------------------------------------
| Deferred tax liability   |           -1,012 |       -2,252 |          -3,264 |
--------------------------------------------------------------------------------
| Provisions               |             -509 |            0 |            -509 |
--------------------------------------------------------------------------------
| Other non-current        |           -5,025 |            0 |          -5,025 |
| liabilities              |                  |              |                 |
--------------------------------------------------------------------------------
| Net assets acquired      |                  |              |          22,460 |
--------------------------------------------------------------------------------
| GOODWILL ARISING ON ACQUISITION             |              |           4,515 |
--------------------------------------------------------------------------------
| TOTAL CONSIDERATION, SATISFIED BY CASH      |              |          26,975 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Net cash outflow arising on acquisition:    |             |                  |
--------------------------------------------------------------------------------
| Cash consideration paid                                   |          -26,975 |
--------------------------------------------------------------------------------
| Cash and cash equivalents acquired                        |              660 |
--------------------------------------------------------------------------------
| Net cash outflow arising on acquisition:    |             |          -26,315 |
--------------------------------------------------------------------------------

The allocation of the acquisition cost is preliminary. The changes in the fair  
values of intangible assets consist of customer relations (EUR 2.8 million) and 
product brands and trademarks (EUR 0.7 million). The goodwill consists of       
personnel, experts' fees in the acquisition process, asset transfer tax and     
other goodwill.                                                                 

Net asset value calculation                                                     
The company's net asset value is calculated by deducting liabilities from       
assets. The net asset value (assets less liabilities) totalled EUR 61.6 million 
(EUR 56.9 million) on June 30, 2007. The net asset value per share is obtained  
by dividing the company's net asset value by the number of shares. On June 30,  
2007 the number of shares was 6,020,360, and the net asset value per share was  
EUR 10.22 (EUR 9.45).                                                           

According to the renewed strategy, the investment portfolio is targeted at      
synergic industrial investments, which will reduce the importance of net asset  
value reporting.                                                                

Investments in securities                                                       
Investments in securities were distributed as follows. On June 30, 2007 direct  
investments in hedge funds were given up (the remaining few marginal investments
will be discontinued by September 30, 2007). For reasons of comparability,      
investments in the securities issued by Nordea Bank Plc are presented in the    
table below as if they were a direct investment in eQ Active Hedge Fund.        

--------------------------------------------------------------------------------
| EUR 1,000                    |         Number | Market value |   Acquisition |
|                              |                |              |         value |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY FUNDS                 |                |              |               |
--------------------------------------------------------------------------------
| Fourton Odysseus             |         20,023 |        4,141 |         2,363 |
--------------------------------------------------------------------------------
| Arvo Finland Value           |      1,550,427 |        2,174 |         2,002 |
--------------------------------------------------------------------------------
| Total equity funds           |                |        6,315 |         4,365 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| HEDGE FUNDS                  |                |              |               |
--------------------------------------------------------------------------------
| eQ Active Hedge Kasvu Fund   |          7,763 |           84 |            83 |
--------------------------------------------------------------------------------
| Ind eQ Active / Nordea       |                |       18,232 |        17,500 |
--------------------------------------------------------------------------------
| Ind eQ Active / Nordea       |                |       15,609 |        15,000 |
--------------------------------------------------------------------------------
| Total hedge funds            |                |       33,925 |        32,583 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Money market funds           |                |        3,813 |         3,791 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL FINANCIAL ASSETS AT FAIR VALUE THROUGH  |       44,053 |        40,739 |
| PROFIT AND LOSS, Neomarkka Oyj                |              |               |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PRIVATE EQUITY                                |              |               |
--------------------------------------------------------------------------------
| Oulun Puhelin Oyj            |        746,250 |        3,081 |         3,081 |
--------------------------------------------------------------------------------
| Satakunnan Puhelin Oy        |         81,700 |          920 |           920 |
--------------------------------------------------------------------------------
| OTHER FINANCIAL ASSETS AVAILABLE FOR SALE,    |        4,001 |         4,001 |
| Novalis Oyj                                   |              |               |
--------------------------------------------------------------------------------
| (subsidiary fully owned by Neomarkka Plc)                    |               |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL INVESTMENT IN SECURITIES            |           48,054 |        44,740 |
--------------------------------------------------------------------------------

CALCULATION FORMULAS FOR INDICATORS                                             

--------------------------------------------------------------------------------
| Gains and losses    | =  | Turnover + other operating income - purchase of   |
| from the trade of   |    | securities +/- change in inventories              |
| financial assets    |    |                                                   |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share  | =  | Profit for the review period belonging to parent  |
| (EPS) EUR           |    | company owners /                                  |
--------------------------------------------------------------------------------
|                     |    | Number of shares, adjusted for share issues       |
|                     |    | (average)                                         |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio %      | =  | Shareholders' equity + minority         | X 100   |
|                     |    | interest less deferred tax assets /     |         |
--------------------------------------------------------------------------------
|                     |    | Balance sheet total - advances received |         |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity %  | =  | Financial result for the period / | X 100         |
| (ROE)               |    |                                   |               |
--------------------------------------------------------------------------------
|                     |    | Shareholders' equity average      |               |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share,   | =  | Shareholders´equity - minority interest less      |
| EUR                 |    | deffered taxes /                                  |
--------------------------------------------------------------------------------
|                     |    | Adjusted number of shares at the end of period    |
--------------------------------------------------------------------------------


Helsinki 30.8.2007                                                              
Neomarkka Plc                                                                   
Board of Directors                                                              




pp. Sari Tulander                                                               
Financial Director                                                              


FURTHER INFORMATION:                                                            
Managing Director Markku E. Rentto, tel. +358 40 500 1858                       

DISTRIBUTION                                                                    
Helsinki Stock Exchange                                                         
Main media                                                                      
www.neomarkka.fi