Scana — Earnings Release 2009

Feb 17, 2010

Solid performance for Scana in 2009

The board of Directors of Scana Industrier ASA has today approved the accounts

for 4Q 2009 and preliminary annual accounts (attached).

A presentation of the business and accounts was done February 17'th in Stavanger

and will be given February 18'th at 08:00 hrs at Hotel Continental in Oslo. A

web-cast can be accessed at www.scana.no on Friday.

For further information, please contact:

CEO Rolf Roverud, tel. +47 911 67 581, or

CFO Christian Rugland, tel. +47 952 952 55.

____________________________________________________________

Solid performance for Scana in 2009

* Turnover of NOK 2,267 million and an operating profit of NOK 201 million for

2009

* Turnover of NOK 491 million and an operating profit of NOK 22 million for

the fourth quarter

* Strong profitability within the Marine business area

* High level of bid tendering and good positioning in the Oil & Gas business

area

* The effect of implemented cost measures amounts to NOK 200 million

* The board proposes a dividend of NOK 0.30 per share

The operating profit was NOK 22 million for the fourth quarter, which

corresponds to an operating margin of 4%. Operating revenue totalled NOK 491

million in the fourth quarter, compared with NOK 797 million for the same period

last year. The results are marked by an awaiting international market. Good

operations and cost reductions contributed to positive results.

Operating revenue totalled NOK 2.3 billion in 2009, compared with NOK 2.9

billion in 2008. The operating profit was NOK 201 million, which corresponds to

an operating margin of 9%, and is better than the group anticipated in light of

weak international economic trends. Good collaboration with trade unions and low

absence due to illness (3.5%) have facilitated restructuring and contributed to

the solid performance.

Lower demand and strong pressure on prices are the most important reasons for

reduced sales revenues in the Steel business area. Turnover in Oil & Gas

reflects the fact that Scana has not had any major projects in 2009. The decline

in operating revenues in the Steel and Oil & Gas business sectors has been

compensated for to some extent by a high level of activity and good margins in

the Marine business area.

Net financial items were negative NOK 2 million in the fourth quarter and

positive NOK 117 million year to date. Temporary changes in the value of

currency contracts represented a gain of NOK 147 million year to date due to the

strengthening of the Norwegian krone (NOK) in 2009. Scana hedges all major

contracts denominated in a foreign currency. The change in the value of hedging

contracts must be recognised directly in the profit and loss account in

accordance with IFRS, but it cannot be realised and has no effect on liquidity.

The net order inflow was NOK 284 million in the fourth quarter and NOK 1,121

million year to date. The order reserve was NOK 856 million at the end of 2009.

There is a high level of bid tendering in several of Scana's market segments,

and the group anticipates an increased order inflow in 2010, especially in the

Oil & Gas business sector.

The closing price for shares in Scana was NOK 7.83 at the end of the fourth

quarter, up from NOK 7.50 at the end of the third quarter. This gives a market

capitalisation of NOK 1.31 billion for the group. In the fourth quarter, 4.3

million shares out of a total of 167 million outstanding shares were traded.

Scana holds 113,010 treasury shares. In 2009 Scana entered into a Market Maker

agreement with Oslo Børs to increase the liquidity of its shares and ensure

listing on the Oslo Børs Match list.

Steel

Operating revenue was NOK 279 million in the fourth quarter and NOK 1,354

million for 2009. This is a reduction of 47% and 32%, respectively, compared

with the corresponding periods in 2008. Operating profit for the fourth quarter

was NOK 5 million, which corresponds to an operating margin of 2%. The operating

profit was NOK 140 million for 2009, which corresponds to an operating margin of

10%. The decline in profit is due to continued low demand and strong pressure on

prices. Efficient operation and cost-saving measures implemented in the steel

companies curbs the decline in the operating profit.

The business area's net order inflow was NOK 155 million for the fourth quarter,

while the order reserve was NOK 440 million at the end of 2009. The combined

demand from steel companies was also weak in the fourth quarter. However, key

customers renewed their framework agreements with Scana towards the end of

2009, which ensures a continued good positioning in the market.

The investment programme that was implemented in 2009 and the cost-reducing

measures reduce the level of risk and streamline production. This will

strengthen Scana's competitive position when the market turns.

The scrap steel prices increased somewhat throughout the fourth quarter. Alloy

prices are also increasing. The steel companies have used extensive contractual

hedging on contracts to neutralise the effect of raw material price fluctuations

in order to safeguard their operating margins.

Marine

Operating revenue totalled NOK 172 million in the fourth quarter. Operating

revenue for 2009 totalled NOK 784 million, which is an increase of 23% compared

with 2008. The operating profit for the fourth quarter was NOK 34 million,

compared with NOK 31 million for the same period last year, which corresponds to

an operating margin of 20%. Scana has a high level of activity linked to ongoing

new projects and an increased level of activity in the service area.

The order inflow was NOK 95 million in the fourth quarter, and the order reserve

at the end of the year was NOK 388 million. Scana's marine companies have been

affected by cancellations only to a limited extent.

Oil & Gas

Operating revenue was NOK 48 million in the fourth quarter and NOK 156 million

for all of 2009. The operating loss of NOK 14 million reflects the fact that

Scana has not had any major projects in 2009, in addition to the fact that funds

have been used in connection with increased bid tendering and market

positioning. In addition, the level of maintenance and repair activity has been

affected by the postponement of the customers' maintenance programmes.

The order inflow was NOK 34 million for the business area in the fourth quarter,

while the order reserve is at NOK 28 million.

Scana has strengthened its organisation through increased competence, creation

of new companies, and establishment of foreign offices. This has given Scana a

strong position, and the level of bid tendering for oil & gas projects has

increased significantly. The group expects that this initiative will increase

the order inflow from the first half of 2010 and gradually increase the level of

activity throughout the year.

Accounts

This interim report has been prepared in accordance with the standard for

interim financial reporting, IAS 34, and IFRS. The group classifies agio items

as financial items. The same accounting principles as in the annual accounts are

applied in the interim report.

Financial performance

The group's total turnover was NOK 491 million in the fourth quarter. The

reduction of 38% in relation to the same period in 2008 is attributed to the

generally lower demand in several of the group's market segments. The operating

profit of NOK 22 million corresponds to an operating margin of 4%. The net

financial items were negative NOK 2 million, compared with negative NOK 154

million for the fourth quarter in 2008. Temporary changes in value linked to

currency contracts represent a gain of NOK 150 million in 2009 due to the

strengthening of the Norwegian krone (NOK). Scana hedges all major contracts

denominated in a foreign currency. The change in value must be recognised

directly in the profit and loss account in accordance with IFRS, but it cannot

be realised and has no effect on liquidity.

The estimated taxes for 2009 amount to NOK 81 million, NOK 13 million of which

is tax payable. The change in deferred taxes was NOK 75 million. In addition,

tax and translation differences related to foreign tax have been charged against

equity. Scana has tax loss carryforwards in Norwegian companies that are used to

reduce the tax payable. The subsidiaries in Sweden, the US and China are in a

taxpaying position.

The earnings per share was NOK 0.10 for the fourth quarter and NOK 1.45 for

Cash flow

The operating profit before depreciation (EBITDA) was NOK 40 million, while the

tax paid totalled NOK 5 million. In addition, the working capital was reduced by

NOK 15 million. The cash flow from operations was thus positive NOK 54 million

in the fourth quarter.

Investment activities totalled NOK 35 million in the fourth quarter. The

financing activities include a downpayment of the part of the syndicated loan

facilities drawn in EUR of NOK equivalent 43 million while the group made new

drawings on the same syndicated loan facilities in SEK of NOK equivalent 26

million. Combined the net cash flow from financing activities was negative NOK

2 million.

The net cash flow for the group was accordingly NOK 16 million. The group's cash

and cash equivalents totalled NOK 140 million at the end of the fourth quarter.

The group also has satisfactory credit facilities that have not been used.

Balance sheet and capital position

The total balance sheet at the end of 2009 was NOK 1,982 million, which is a

reduction of NOK 266 million since the beginning of the year. The group's net

interest-bearing debt was NOK 355 million. Book equity of NOK 864 million

corresponds to NOK 5.20 per share and an equity ratio of 44%.

Financial instruments are valued at fair value. Changes in value that satisfy

the requirements for hedge accounting are recorded directly against equity. In

2009, such instruments had a negative change in value of NOK -0,4 million, which

entailed a corresponding change in the equity. Translation differences from

foreign subsidiaries and the elimination of agio related to the hedging of net

investments have reduced the net equity by NOK 74 million.

Outlook

Scana's main products are niche oriented, and they are leading products within

their market segments. After several years of turnover growth and higher

margins, this trend came to an end in 2009 due to a significantly weaker

international economy. Scana anticipates a continued weak market in the Marine

business area and a volatile, but gradually stronger, international market for

traditional industry. Scana's measures in the Oil & Gas business area are

expected to result in an increased order inflow from the first half of 2010 and

gradually increase the level of activity throughout the year.

In a longer term perspective a strong and modernised production capacity will

result in significantly higher turnover and earnings.

In the Steel business area, sales and marketing will be given the most

attention. In addition, the group is working continuously on improving the

ongoing operations. The investment projects in the Swedish steel companies

streamline the production, reduce risk and increase our capacity with respect to

strategically important customers. Within traditional industry the market is

still weak and volatile. Improvement is however registered in parts of the

segment. Within the Energy market segment demand is expected to increase. The

demand within the Marine market segment is expected to be low until 2011.

The economic downturn and few new contracts will reduce the level of activity

for Scana's marine companies in 2010. To consolidate its position as a good

collaboration partner for leading shipping companies and shipyards, Scana

attaches importance to quality and delivery reliability, as well as offering

total deliveries and more complete equipment groups. Scana has strengthened its

sales and marketing work and strengthened it positioning in emerging markets.

The initiative within service and after sales provide increased profitability.

In the Oil & Gas business area it is expected that the order inflow will

increase significantly in 2010. This will be as a result of the group's

structural measures and increased focus on the world's most active oil and gas

markets. This will have a positive effect for a number of Scana's companies in

2010 and the coming years.

Scana has implemented a number of measures to adapt its capacity and consumption

of resources to a weaker market. This includes stepping up the marketing and

sales efforts, restructuring the businesses, and substantial manpower and cost

reductions. The group has reduced manpower by around 300 full-time equivalents

through temporary and permanent measures. Scana has also strengthened its

measures to free up working capital and introduced a strict prioritisation of

its investment resources. These measures ensure a satisfactory liquidity

position and a strong balance sheet.

Board of Directors of Scana Industrier ASA

17 February 2010

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

[HUG#1385582]