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2008-02-13 17:40:56 CET 2008-02-13 17:41:58 CET REGULATED INFORMATION FL GROUP hf. - Financial Statement ReleaseFL Group reports net loss of ISK 67 billion in 2007-FL Group reports net loss of ISK 67 billion in 2007 -Global market conditions significantly affect Q4 earnings- -Financial position and fundamentals remain strong - -Market risk reduced significantly in Q4 and YTD 2008- Reykjavik, Iceland 13 February 2008 - FL Group (OMX: FL), the international investment company, today announces its results for the year 2007. Financial highlights Net loss after tax of ISK 63.2 billion (EUR 694.5 million) in Q4 and ISK 67.3 billion (EUR 738.5 million) in 2007, reflecting a significant decrease in market value of FL Group's listed assets. All of FL Group's listed holdings are marked to market. Total assets increased to ISK 422.3 billion at the end of Q4 from ISK 262.9 billion at the end of 2006, representing a 60.7% increase. Tryggingamidstodin was fully consolidated by the end of the year. Total shareholders equity was ISK 155.8 billion at the end of the quarter, an increase of ISK 13.2 billion from the end of 2006. The increase was due to a share issue in the second half, related to the acquisitions of property companies and Tryggingamidstodin. Financial position and liquidity are strong, equity ratio is 36.9% and direct liquidity of ISK 28.6 billion in the form of cash position and unpaid share capital which became payable on 4 January. At the time of publishing the annual results, FL Group has refinanced ISK 47.1 billion of borrowings maturing in 2008, with only ISK 8.5 billion of borrowings currently remaining. Negative re-valuation of ISK 3.7 billion of FL Group´s unlisted portfolio reflected global market conditions in Q4. Increase in operating expenses is largely driven by increased investment activity, non-recurring charges and expenses related to stock options. Operational highlights in fourth quarter ISK 53.7 billion acquisition of several major property companies funded with new share capital. Icelandic insurance company Tryggingamidstodin acquired (99.1%), largely funded with an equity increase. Jon Sigurdsson appointed Chief Executive Officer. Comprehensive internal restructuring, market risk decreased and Copenhagen office closed. Reduced exposure to the aviation sector by divesting shares in AMR and Finnair for ISK 35.2 billion. Reduced exposure to non-core financial assets. Reduced stake in Commerzbank for ISK 20.7 billion in Q4 and an additional ISK 34 billion have been sold the first quarter 2008. Additional divestments in the trading portfolio in the quarter amounted to ISK 29.0 billion. Portfolio now is strongly balanced across different sectors, including: banking, insurance and property - each of which has good value potential. So does our Private Equity portfolio. FL Group remains committed to its key holdings, Glitnir, TM and Landic Property, and will continue working with the management of these companies to drive growth and profitability. As of today, FL Group has sold its 43,1% share in Geysir Green Energy. The transaction amounts to ISK 10.5 billion. Estimated profit of ISK 3 billion, which represents an increase of 40% from the original investment, has already been accounted for in the company´s books. All foreign property funds, acquired from Baugur Group in December, have been sold to Landic Property, in line with previous announcements, for a total amount of ISK 20.6 billion. FL Group's Chief Executive Officer, Jon Sigurdsson, commented: “The fourth quarter of 2007 was an exceptionally challenging period for the global economy and markets worldwide. FL Group has not remained unaffected, as the value of most of our investments came under significant pressure, directly affecting the Group's profitability. However, our confidence in the future remains unwavering: our fundamentals are strong, we have re-aligned our portfolio, which has good value potential, and we have a clear strategic focus. We are well capitalised and have taken actions to limit our market exposure. We have the financial capacity to face market turbulence and to support our core holdings in Glitnir, Landic Property and TM.” Financial developments - Q4 and full financial year 2007 FL Group's operations are split into three business divisions: Financial Institutions Group (“FIG”), Private Equity and Capital Markets. FIG is a special investment function responsible for strategic investments in banking, insurance and other financials. Private Equity oversees FL Group‘s private equity holdings in addition to some listed positions that fit specific investment criteria. The Company's Capital Markets function oversees investments in listed securities as well as derivatives and other alternative trading for hedging or investment purposes. The division also handles stake building and stake disposals on behalf of FL Group's FIG and Private Equity divisions. |
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