Icelandic Salmon AS

Quarterly Report • May 15, 2008

Icelandic Group hf.

1 January - 31 March 2008 Condensed Consolidated in Euro Interim Financial Statements

105 Reykjavík Icelandic Group hf. Borgartún 27

Reg. no. 461296-2119

Contents

Endorsement and statement

by the Board of Directors and the CEO	3	Statement of Changes in Equity	6
Income Statement	4	Statement of Cash Flows	7
Balance Sheet	5	Notes	8

Interim Financial Statements of Icelandic Group hf. 31 March 2008 _______________________________________________ 2 _______________________________________________

Endorsement and statement by the Board of Directors and the CEO

The condensed consolidated interim financial statements of Icelandic Group hf. for the period from 1 January to 31 March 2008 have been prepared in accordance with International Financial Reporting Standards (IFRSs) for Interim Financial Statements (IAS 34). The interim financial statements comprise the consolidated interim financial statements of Icelandic Group hf. and its subsidiaries.

According to the income statement loss for the period from 1 January to 31 March 2008 amounted to € 7.3 million. The Group's income amounted to € 321.1 million for the period. According to the balance sheet total assets at the end of March amounted to € 723.0 million and equity amounted to € 16.3 million. The equity ratio of the Group was 16.1 %.

The Annual General Meeting of the Company held on 18 April 2008 approved to authorize the Board of Directors to request delisting of the Company´s shares in Nasdaq OMX in Iceland.

The Company´s auditors have not audited nor reviewed these condensed concolidated interim financial statments.

Statement by the Board of Directors and the CEO

The condensed consolidated inerim financial statements for the three-month period ended 31 March 2008 have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and additional Icelandic disclosure requirements for consolidated financial statements of listed companies.

According to our best knowledge it is our opinion that the condensed consolidated interim financial statements give a true and fair view of the consolidated financial performance of the Company for the three-month period ended 31 March 2008, its assets, liabilities and consolidated financial position as at 31 March 2008 and its consolidated cash flows for the three-month period ended 31 March 2008.

Further, in our opinion the consolidated financial statements and the endorsement of the Board of Directors and the CEO give a fair view of the development and performance of the Group's operations and its position and describes the principal risks and uncertainties faced by the Group.

The Board of Directors and the CEO have today discussed the consensed consolidated interim financial statements of Icelandic Group hf. for the three-month period ended 31 March 2008 and confirm them by means of their signatures.

Reykjavík, 15 May 2008

Board of Directors:

Friðrik Jóhannsson Ágúst Helgi Leósson Henrik Leth Guðmundur Kristjánsson Gunnar Jónsson

CEO:

Finnbogi A. Baldvinsson

Interim Financial Statements of Icelandic Group hf. 31 March 2008 ____________________________________________ 3 _______________________________________________

Consolidated Interim Income Statement

for the three months ended 31 March 2008

				Q 1
			1 January - 31 March
	Notes		2008		2007
Sales			321.082		385.161
Cost of goods sold			287.009)		342.927)
Gross profit			34.073		42.234
Other operating income			1.417		1.656
Operating expenses			28.060)		34.334)
Share of loss of equity accounted investees, net of income tax			105)		43)
Operating profit			7.325		9.513
Finance income			674		3.648
Finance expenses			15.835)		9.520)
Net finance costs	3		15.161)		5.872)
(Loss) Profit before income tax			7.836)		3.641
Income tax			583		1.354)
(Loss) Profit for the period			7.253)		2.287
Attributable to:
Equity holders of the Company		€	7.350)		2.280
Minority interest			97		7
(Loss) Profit for the period			7.253)		2.287
Earnings per Share:
Basic and diluted (loss) earnings per share (each share is 1 Icelandic króna)			0,0025		0,0008

Interim Financial Statements of Icelandic Group hf. 31 March 2008

All amounts are in thousands of euro

Consolidated Balance Sheet as at 31 March 2008

	Notes	31.3.2008	31.12.2007
Assets:
Property, plant and equipment		113.197	118.421
Intangible assets		216.969	227.188
Investment in equity accounted investees		1.057	1.551
Other investments		6.104	7.409
Deferred tax assets		10.819	11.577
Total non-current assets		348.146	366.146
Inventories		198.818	242.532
Trade and other receivables		149.315	159.232
Cash and cash equivalents		26.675	28.153
Total current assets		374.808	429.917
Total assets		722.954	796.063

Equity:

Share capital			36.661		36.661
Share premium			120.863		120.863
Reserves (deficit)	4	(	36.358)	(	27.563)
Accumulated deficit		(	7.350)		0
Total equity attributable to equity holders of the company			113.816		129.961
Minority interest			2.466		2.369
Total equity			116.282		132.330
Liabilities:
Loans and borrowings	5		175.298		187.996
Deferred income tax liability			7.237		7.446
Total non-current liabilities			182.535		195.442
Loans and borrowings	5		302.257		326.542
Trade and other payables			121.880		141.749
Total current liabilities			424.137		468.291
Total liabilities			606.672		663.733
Total equity and liabilities			722.954		796.063

Consolidated Interim Statement of Changes in Equity for the three months ended 31 March 2007

Changes in equity in Q1 2007:	Notes	Share capital	Share premium	Reserves (deficit)	Retained earnings (accumulated deficit)	Minority interest	Total equity
Equity as at 1.1.2007		36.912	151.892	(12.564)	0	1	176.241
Currency fluctuations on subsidiaries not reporting in euros Profit for the period				(1.406)	2.280	7	( 1.406) 2.287
Total recognised income and expense for the period Minority Interest , change				(1.406)	2.280	7 16	881 16
Own shares purchased	(	53)	( 341)				( 394)
Equity as at 31.3.2007		36.859	151.551	( 13.970)	2.280	24	176.744
Changes in equity in Q1 2008:
Equity as at 1.1.2008		36.661	120.863	(27.563)	0	2.369	132.330
Currency fluctuations on subsidiaries not reporting in euros				(8.795)			( 8.795)
Profit for the period					( 7.350)	97	( 7.253)
Total recognised income and expense for the period				(8.795)	(7.350)	97	( 16.048)
Equity as at 31.3.2008		36.661	120.863	( 36.358)	( 7.350)	2.466	116.282

Interim Financial Statements of Icelandic Group hf. 31 March 2008

All amounts are in thousands of euro

Consolidated Interim Statement of Cash Flows

for the three months ended 31 March 2007

	Q1
		1 January - 31 March
	Notes	2008		2007
Cash flows from operating activities:
Operating profit		7.325		9.513
Difference between operating profit and cash from operations:
Loss (gain) on sale of assets		33	(	46)
Depreciation and amortisation		4.557		4.657
Share of loss of equity accounted investees		105		43
Change in operating assets and liabilities		20.906	(	3.445)
Cash generated from operations		32.926		10.722
Interest income received		2.176		779
Interest expenses paid	(	9.025)	(	8.340)
Income tax paid		891		213
Net cash from operating activities		26.968		3.374
Cash flows from investing activities:
Investment in property, plant and equipment	(	3.356)	(	3.000)
Proceeds from sale of property, plant and equipment		339		224
Investment in intangible assets	(	39)	(	464)
Acquisition of subsidiaries, net of cash acquired		0	(	268)
(Decrease) increase in bonds and other receivables	(	4.588)		1.127
Net cash used in investing activities	(	7.644)	(	2.381)
Cash flows from financing activities:
Purchase of own shares		0	(	394)
Minority share in capital stock		0		16
Long-term debt proceeds		5.790		1.481
Long-term debt repaid	(	2.162)	(	21.127)
Short-term debt (repaid) proceeds	(	23.106)		28.651
Net cash (used in) from financing activities	(	19.478)		8.627
(Decrease) increase in cash and cash equivalents	(	154)		9.620
Effect of exchange rate fluctuations of cash held	(	1.324)	(	246)
Cash and cash equivalents at 1 January		28.153		21.222
Cash and cash equivalents at 31 March		26.675		30.596

Significant accounting policies

a. Reporting entity

Icelandic Group hf. is a company domiciled in Borgartún 27, Reykjavík, Iceland. The condensed consolidated interim financial statements of the Company as at and for the three-month period ended 31 March 2008 comprise the Company and its subsidiaries, together referred to as the "Group" and the Group´s interest in associates. The Group is involved in manufacturing and marketing of seafood in international markets.

b. Statement of compliance

The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34, Interim Financial Reporting. They do not include all of the information required for a complete set of consolidated annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2007.

The consolidated interim financial statements were approved by the Board of Directors on 15 May 2008.

c. Basis of preparation

The accounting policies and methods of computation applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its financial statements as at and for the year ended 31 December 2007. The consolidated financial statements for the year ended 31 December 2007 are available at the Company´s website, www.icelandic.is and at the OMX Nordic Stock Exchange website, www.omxnordicexchange.com.

The condensed consolidated interim financial statements are prepared in euro, which is the Company´s functional currency. All financial information presented in euro has been rounded to the nearest thousand, unless otherwise stated.

d. Use of estimates and judgements

The prearation of interim financial statements in conformity with IFRSs requires managment to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Segment Reporting

1. Summary of the Goups segments results.

Business segments

1 January to 31 March 2008

Income Statement:	Production		Sales and marketing		Holding and servicing		Eliminations		Consolidated
Sales to external customers	230.875		90.190		17		0		321.082
Inter-segment sales	31.142		41.403		623	(	73.168)		0
Total segment sales	262.017		131.593		640	(	73.168)		321.082
Segment result	5.605		1.798	(	78)		0		7.325
Net finance costs (	5.840)	(	2.466)	(	6.855)		0	(	15.161)
Loss before income tax (	235)	(	668)	(	6.933)		0	(	7.836)
Income tax (	924)		84		1.423		0		583
Loss for the period (	1.159)	(	584)	(	5.510)		0	(	7.253)

1 January to 31 March 2007

Income Statement:

Sales to external customers	278.256	103.215		3.690		0		385.161
Inter-segment sales	41.794	46.850		858	(	89.502)		0
Total segment sales	320.050	150.065		4.548	(	89.502)		385.161
Segment result	8.327		1.158	28		0		9.513
Net finance costs (	5.730)	(	1.450)	1.308		0	(	5.872)
Profit (loss) before income tax	2.597	(	292)	1.336		0		3.641
Income tax (	1.154)	(	117) (	83)		0	(	1.354)
Profit (loss) for the period	1.443	(	409)	1.253		0		2.287

Geographical segments

1 January to 31 March 2008

	USA	UK	Continental Europe	Asia	Eliminations	Consolidated
Sales	81.452	87.084	133.132	92.582	( 73.168)	321.082
1 January to 31 March 2007
Sales	116.032	114.508	148.814	95.309	( 89.502)	385.161

Quarterly Summary

1. Summary of the Group's operating results by quarters:

	2008		2007		2007		2007		2007
	Q1		Q4		Q3		Q2		Q1
Sales	321.082		327.784		327.428		344.001		385.161
Cost of goods sold	( 287.009)	(	299.355)	(	293.661)	(	312.604)	(	342.927)
Gross profit	34.073		28.429		33.767		31.397		42.234
Other operating income	1.417		4.318		1.934		1.230		1.656
Operating expenses	( 28.060)	(	47.439)	(	31.712)	(	33.136)	(	34.334)
Share of profit
of equity accounted investees	( 105)	(	70)	(	274)	(	11)	(	43)
Operating profit (loss) - EBIT	7.325	(	14.762)		3.715	(	520)		9.513
Net finance costs	( 15.161)	(	12.620)	(	8.781)	(	1.214)	(	5.872)
(Loss) profit before income tax	( 7.836)	(	27.382)	(	5.066)	(	1.734)		3.641
Income tax	583	(	1.609)		2.517		1.650	(	1.354)
(Loss) profit for the period	( 7.253)	(	28.991)	(	2.549)	(	84)		2.287
Attributable to:
Equity holders of the company	( 7.350)	(	29.158)	(	2.601)	(	319)		2.280
Minority interest	97		167		52		235		7
(Loss) profit for the period	( 7.253)	(	28.991)	(	2.549)	(	84)		2.287
EBITDA	11.883		1.367		8.506		4.295		14.170
EBITDA ratio	3,7%		0,4%		2,6%		1,2%		3,7%

Net finance costs

1. Net finance costs are specified as follows:

		Q1 2008		Q1 2007
Interest income		674		354
Fair value changes on shares in other companies		0		3.294
Finance income, total		674		3.648
Interest expenses	(	8.228)	(	9.465)
Net currency loss	(	7.516)	(	55)
Fair value changes on shares in other companies	(	91)		0
Finance expenses, total	(	15.835)	(	9.520)
Net finance costs	(	15.161)	(	5.872)

Interim Financial Statements of Icelandic Group hf. 31 March 2008 ____________________________________________ 10

Equity

Reserves

1. Reserves are specified as follows:

		31.3.2008 31.12.2007
Translation reserve
Statutory reserve		394 373
Reserves total

Loans and borrowings

31.3.2008	Non-current	Current
Currency	borrowings	borrowings	Total
EUR	112.274	132.108	244.382
USD	7.619	75.118	82.737
GBP	54.411	22.074	76.485
$JPY$	3.905	21.595	25.500
DKK	13.380	8.477	21.857
CHF	803	11.571	12.374
CAD	$\Omega$	8.213	8.213
$CNY$	$\theta$	1.836	1.836
NOK	$\Omega$	2.707	2.707
SEK	$\Omega$	1.464	1.464
Loans and borrowings, total	192.392	285.163	477.555
Current maturities of non-current liabilities	17.094)	17.094	$\theta$
Loans and borrowings according to the balance sheet	175.298	302.257	477.555
31.12.2007	Non-current	Current
	borrowings	borrowings	Total
EUR	111.921	136.466	248.387
USD ………………………………………………………………………………………………	8.164	96.174	104.338
GBP	61.698	25.950	87.648
$JPY$	3.729	20.615	24.344
DKK	14.195	6.815	21.010
CHF	775	10.983	11.758
CAD	$\overline{0}$	9.182	9.182
$\text{CNY}$	$\Omega$	3.634	3.634
NOK	$\Omega$	2.782	2.782
SEK	$\Omega$	1.455	1.455
Loans and borrowings, total	200.482	314.056	514.538
Current maturities of non-current liabilities	12.486)	12.486	$\overline{0}$

1. Loans and borrowings are specified as follows:

Interim Financial Statements of Icelandic Group hf. 31 March 2008

All amounts are in thousands of euro

514.538

326.542

187.996

Loans and borrowings according to the balance sheet .............................

Notes, contd.:

Group companies

1. Subsidiaries numbered 34 at period-end and are all included in the consolidated finanical statements. They are:

	Share		Share
Beihai Beilian Foods Industry Inc. , China	51%	Icelandic Services ehf., Iceland	100%
Coldwater Seafood (UK) Ltd., UK	100%	Icelandic UK Ltd., UK	100%
Dalian Three Star Seafood Co. Ltd, China	98%	Icelandic USA Inc., USA	100%
Danberg ehf., Iceland	100%	IFP Trading Ltd., UK	100%
Ecomsa S.A., Spain	100%	Jeka Fish AS, Denmark	100%
Fiskval ehf., Iceland	100%	Marinus ehf., Iceland	100%
Gadus B.V., The Netherlands	100%	OTO L.L.C., USA	100%
Icelandic Asia Inc., S-Korea	100%	Pickenpack Assets GmbH, Ger	100%
Icelandic China Trading Co. Ltd., China	100%	Pickenpack Gelmer SAS, France	100%
Icelandic France S.A.S., France	100%	Pickenpack H&H GmbH, Ger	100%
Icelandic Group UK Ltd., UK	100%	Pickenpack H&H S.a.r.l., France	100%
Icelandic Holding Germany GmbH, Germany	100%	Seachill Ltd., UK	100%
Icelandic Iberica S.A., Spain	100%	Sirius ehf., Iceland	100%
Icelandic Japan K.K., Japan	100%	Sjóvík ehf. (Blue-Ice), Iceland	100%
Icelandic Norway AS, Norway	100%	Unifish ehf. a.v., Iceland	100%
Icelandic Northwest Inc., USA	85%	Verwaltungg. HFP GmbH, Ger	100%
Icelandic Scandinavia ApS, Denmark	100%	Westfalia-Strenz F. GmbH, Ger	100%

Financial Ratios

	31.3.2008	31.12.2007
Current ratio	0,88	0,92
Equity ratio	16,1%	16,6%
Return on equity (	23,8% )	( 16,7% )
Internal value	3,17	3,61
Change in price per share from the beginning of the period (	64,2% )	( 32,0% )
Price per share (ISK)	1,85	5,17
Market value of the company (EUR)	44,258	164,465
	Q1 2008	Q1 2007
EBITDA EBITDA ratio	11.883 3,7%	14.170 3,7%

1. Financial ratios for the consolidated interim financial statements:

Interim Financial Statements of Icelandic Group hf. 31 March 2008 ____________________________________________ 12