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Juniar Spraybooths

LM Glassfiber Revenue for First Half of 2005 Up 20 Percent

02 September 2005

In the first six months of 2005, the LM Glasfiber Group posted revenue of DKK 1,099 million, up 20 percent on the same period of 2004.

LM Glasfiber, the Danish manufacturer of blades for wind turbines, said that the revenue increase was attributable to a higher level of activity in North America and Asia and a change in sales seasonality in Northern Europe. The sales increase is expected to be partially balanced out later in the year.

Operating profit (EBIT) fell 6% from DKK 95 million to DKK 89 million. The lower profit is due in part to the fact that we have invoiced a greater proportion of our sales in USD in H1 2005. This adversely impacts our earnings, as we are still not able to procure all raw materials and components locally in USD. The other reason for the lower profit is rising prices of composite materials such as resin, carbon fibres and core materials.

LM Glasfiber recorded a DKK 29 million improvement in pre-tax financial performance during the first six months of 2005, from a loss of DKK 2 million last year to a profit of DKK 27 million this year. In addition to the above-mentioned revenue increase, the improvement is attributable to a DKK 21 million decline in net interest expenses due to lower interest rates and due to repayment of our Equity Bridge loan in April 2004.

Net investments totalled DKK 117 million in H1 2005 compared with DKK 116 million in the same period of 2004. Investments in the period involved new blade moulds and production equipment, an expansion of the manufacturing facilities in China and the USA and development costs for new blade types.

During the first six months of 2005, LM Glasfiber delivered 3,615 blades, corresponding to 1,308 MW. This constitutes an increase of 23% in supplied MW relative to the year-earlier period. The revenue increase was attributable to the aforementioned higher level of activity in North America and Asia and a change in sales seasonality in Europe. The sales increase is expected to be partially balanced out later in the year.

At 30 June 2005, LM Glasfiber had an order backlog corresponding to about six months of average production, which was on a level with the order backlog at the same time last year.