MNOK
GROUP	Q2 2010	Q2 2009	2009	2008
Operating revenues	4 327.4	4 186.2	15 558.0	19 395.3
Earnings before tax	163.3	204.5	523.1	815.6
Profit margin(%)	3.8	4.9	3.4	4.2

Turnover in the second quarter was slightly higher than for the corresponding quarter in 2009. The increase came mainly from construction activities in Norway and Sweden as well as, to some degree, from property activities. The results, seen as a whole, are good but are affected by a highly competitive market with overcapacity.

Orders-on-hand for construction operations rose slightly during the quarter and at the end of the quarter totalled BNOK 12.3, the same as at year’s end. Orders-on-hand for the same period last year were
BNOK 10.8.

Within Property, Veidekke’s sales of new homes were satisfactory and there is a planned increase in the number of ongoing projects.

Veidekke has a solid financial position. Cash flow for the quarter is seasonally negative. The sale of two industrial projects in Norway in the quarter, freed-up MNOK 358 in capital.

Veidekke in the first half

So far in 2010, Veidekke’s results reflect a market situation which is still difficult. Overall, as a result of how Veidekke handled the recession, the Group stands strong today, both organisationally and financially. The level of activity as well as developments on the property side are showing signs of improvement compared with previous years.

Construction activities experienced growth in volumes in Norway and Sweden. Margins were, as expected, somewhat weaker in Norway due to market overcapacity, while margins improved somewhat on the whole in Sweden. The construction segment, in both Norway and Sweden, is the strongest, although smaller construction projects are also showing progress. The introduction of new housing projects will boost this segment’s activity.

In the Scandinavian property operations, housing sales will continue to show improvement, with family dwellings as the foremost segment. Its performance is still marked by the low level of new project starts from previous years. Activity increased in the first half year and is expected to increase further during the second half of this year.

This year’s harsh winter resulted in a later start to the asphalt season than usual. This affected Industry’s operations and, combined with a continued weak private market, resulted in a weaker than expected first half.

Construction operations

Building and heavy construction activities in Norway and Denmark are nation-wide, while activity in Sweden is concentrated in the regions around Stockholm, Gothenburg and Skåne.

Property development

This division includes the development of housing for its own account, as well as non-residential buildings for private and public sector customers. Activities are concentrated around the largest cities in Norway and Sweden.

Industry operations

The Norwegian Industry Division’s operations are nation-wide and its business segments are asphalt, crushed stone and gravel, road maintenance and recycling of industrial waste. In Sweden, Veidekke has operations within the segments of asphalt, crushed stone and gravel, but at present, these activities are limited.

Special items

See note 9 for further comment on the effect of the modified contractual pension (AFP) scheme. The change occurred in the first quarter of 2010 and amounted to MNOK 95.

Effective from 1 January 2010, Veidekke implemented new reporting principles in its financial accounting of residential developments for its own account. Refer to page 18 of the quarterly report for further comment.