Managing Director's Review 2007

Nordic Aluminium's profit development continued its positive trend, and the Company made a record turnover and operative result.

The turnover increased by 10.6 per cent compared to the previous year totalling at EUR 106.84 million. High demand in aluminium products and good growth in lighting track products, one of the Company's key business areas contributed to the sales growth.

Net profit was EUR 14.81 million (EUR 8.06 million). The net profit included EUR 3.6 of non-recurring gain due to the fire in the anodizing plant. In combination with the start of a new ERP system non-recurring costs of EUR 1.2 million were booked in inventories during the last quarter.

The fire in the anodizing plant early June placed big demands on the operative processes. The subcontracting of compensating production started rapidly with the help of co-operation partners and succeeded reasonably well although the Company's service level decreased, due to the logistical challenges and prolonged delivery cycles. The replacement investment was conducted within a tight time frame and the new plant is operative as of March 2008.

Investments in 2007 were on a high level EUR 12.80 million. Insurance coverage based on the fire in the anodizing plant amounted to EUR 6.4 million of above mentioned investments. Investments were focused on automation solutions, processing capacity improvement and capacity increase in the lighting track production.

The Company has started a considerable investment program of approximately EUR 10 million during 2008. The program includes increase of automation levels in packaging and logistics as well as investments in renewal of an extrusion line. The extrusion line is expected to increase efficiency and capacity from beginning of 2009.

Key targets for the current year are improving the service level and increasing the operative efficiency.

The market demand is expected to continue at a good level during the first half of the year, in spite of risks related to the possible uncertainty in the development of the world economy and its influence on market demand.

The Company aims at a good profit development for the whole year.

Kirkkonummi, March 2008,
Robert Paajanen, Managing Director and CEO