MNOK
GROUP	Q1 2010	Q1 2009	2009	2008
Operating revenues	3 147.8	3 325.3	15 558.0	19 395.3
Earnings before tax	-14.3	-133.5	523.1	815.6
Profit margin (%)	-0.5	-4.0	3.4	4.2

Veidekke’s turnover in the first quarter of 2010 decreased by 5% compared to sales in the first quarter of 2009. The results for the quarter are strongly characterised by a recorded gain totalling MNOK 95 related to the effects of changes in the early retirement pension scheme (AFP) in the Norwegian operations. The decline in results is due in part to a very demanding market in certain sectors and to a hard winter across all of Scandinavia. Considerable snow and many cold days resulted in a lower productive efficiency.

At the end of the quarter, the Orders-on-hand in the construction segment was BNOK 12.0, compared with BNOK 12.3 at year’s end and BNOK 9.9 in the same period last year.

The Group’s financial position remains strong, although the Group showed a negative cash flow for the quarter, seen seasonally.

Construction operations

Adjusted for the effects of changes in contractual early retirement pensions in Norway, the first quarter shows a profit margin reduction in the Norwegian operations. Margin pressure was due partly to more demanding market conditions with overcapacity, strong price competition in some segments, and partly to the hard winter which led to higher costs and lower productive efficiency.

For the coming quarters in 2010, there is good reason, seasonally, to expect some margin improvement although the levels of recent years will probably not be attained. At the same time however, there are signs of improvement in the housing segment.

Property development

The housing market’s positive development in the second half of 2009 has continued. There has been particular progress in housing sales in large urban areas in Sweden and Norway, and more new projects are scheduled to start. If this trend continues, by year’s end Veidekke could have up to 1,000 apartments under production.

Industry operations

The first quarter is a quarter of low seasonal activity for Industry operations and is therefore an “expense quarter”. Adjusted for one-off effects, the result is somewhat better than in 2009, although Industry’s crushed stone and gravel and recycling activities were also somewhat lower due to the hard winter. This also led to higher costs for road maintenance operations.

Kolo Veidekke came out well in the awarding of government contracts, which should result in a good start to the asphalt season.

Other operations

See note 9 for further comment to the effects of changes in the early retirement pension scheme (AFP).

Effective from 1 January 2010, Veidekke has implemented new policies for the reporting of residential development projects for its own account in the financial accounts. See note 12 for further comment.