Prospects for the building and construction market have deteriorated during the autumn. The international financial crisis escalated throughout the third quarter, and contributed to a shortage of credit, higher interest rates and a general pessimism in the Scandinavian economy. It is difficult to make an estimate of how long the effect will last and how deep the impact will be on the building and construction market. However, we do expect a period of considerably more challenging market conditions for housing and private non-residential buildings. The authorities of the Scandinavian countries, Norway and Sweden in particular, are now stimulating public building and construction activities by increasing funds and moving forward large projects. This may lessen the negative effect of the fall in the rest of the building market.

From the Kjøsnesfjorden hydro power station, Jølster, Norway

Veidekke will continue to closely follow developments within all market segments. The company will continuously evaluate measures to reduce negative effects on its activities.

Risk factors

Regarding Veidekke’s construction operations, the tighter market results in more stringent demands to be selective in choice of projects, and to continue to maintain a strong focus on profitability and risk management rather than on higher turnover.

Regarding property development, focus will continue to be directed at upholding requirements for advance sales of dwellings prior to the start-up of new projects, developing the existing portfolio of development sites and being selective in the purchase of new sites.

Veidekke’s aim is to maintain the company’s strong financial position. Repurchase of own shares will be considered continuously.

No material changes in the risk situation have occurred further to the description of risk and uncertainty provided in the Annual Report for 2007 (pdf)