Income ISK 7,777 million during the year, an increase of 44% from Q3 2006 • Nýherji negotiates purchase of 77% share of TM Software hf • Total income ISK 2,750 million during Q3, ISK 7,777 million during the year • Organic growth of income 32% in Q3, plus 12% from new subsidiaries • EBITDA in Q3amounted to ISK 184 million or 6.7% Operation in the third quarter The third quarter of 2007 proved to be the highest quarter in terms of income of Nýherji from the beginning, as the company's income amounted to ISK 2,750 million compared with ISK 1,910 million during the same period in 2006. The income has therefore increased by 44% from Q3 in 2006, 32% of which may be traced to organic growth. Operating profit before financial expenses and depreciation, EBITDA, amounted to ISK 184 million, or 6.7% compared with ISK 197 million, or 10.5% during the same period in the previous year. Profit after taxes in Q3 was ISK 93 million, whereas it was ISK 154 million during the same period in 2006. The number of full-time equivalent positions at Nýherji and its subsidiaries totals 464, an increase of about 120 since New Year's. The conglomerate's employees abroad totaled 134 at the end of the quarter. Financial expenses and equity-capital development Financial revenues and financial expenses at the end of Q3 were negative by ISK 58 million, however, positive by ISK 47 million during the same period in 2006. Nýherji's equity on 30 September 2007 amounted to ISK 1,642 million compared with ISK 1,397 million at the beginning of the year. Performance during the first nine months of 2007 The revenues over the first nine months of 2007 amounted to ISK 7,777 compared with ISK 5,942 during the same period in 2006, constituting an increase of about 31% between the years. Operating profit before financial expenses and depreciation, EBITDA, amounted to ISK 485 million, or 6.2% compared with ISK 509 million, or 8.6% during the same period last year. Profit after taxes after the three quarters of the year amounted to ISK 302 million compared with ISK 238 million in 2006. During the first nine months of the year, revenue from the sale of products and related services totaled ISK 5,522 million compared with ISK 3,936 in 2006. The operating profit from sales of products and related services totaled ISK 310 million compared with ISK 197 million in the previous year. The revenues from software, related services and consultation totaled ISK 2,363 over the first nine months of this year compared with ISK 2,101 million in 2006. The operating profit of these operations was ISK 100 million during the first nine months, whereas it amounted to ISK 237 million after the first nine months of 2006. Nýherji's operations This year has seen extensive and steady sales of servers; storage solutions and other core IT infrastructure systems, as well as extensive growth in IP solutions and in hosting services. The service revenues have also increased by 30% compared with the same quarter last year. The main projects include major installations of IBM equipment and multimedia systems for financial undertakings. Sales of laptops and audio/visual equipment have been good, illustrating solid growth between the periods. A new store offering digital solutions, Sense, was opened in early summer this year. The new store has been welcomed by customers and the new solutions offered there have attracted much attention. The operation of Tölvusmidjan in East Iceland, which Nýherji purchased in October 2006, has gone well during the year. A decision has been made to merge the operation of Nýherji and Tölvusmidjan before the end of this year. Nýherji purchases TM Software hf shares Nýherji hf has negotiated to purchase 77% of the share capital of the IT undertaking TM Software hf from Straumur hf, FL Group hf and Tryggingamidstödin hf. The purchase is subject to a satisfactory outcome of due diligence and the consent of the Competition Authority. The due diligence is expected to be completed by early December. The goal of the purchase is to strengthen the position of Nýherji group in the fields of outsourcing service and the development of specialized software solutions for enterprises. TM Software hf will be operated as a subsidiary of Nýherji. Included in the purchase of TM Software hf are the subsidiaries Skyggnir, Origo, Vigor, eMR and ITP. TM Software hf is a leading provider in Iceland of hosting services and specialized software solutions which counts amoungst its customers several of the largest enterprises and institutions in Iceland. TM Software hf's revenues are forecasted as being ISK 2,500 million in 2007 and its number of employees is about 275. Nýherji's purchase of TM Software is an important phase in the development of Nýherji as a solution and service enterprise, but over 50% of the revenues of the consolidated company will be generated by service, software and consultation activities. The annual turnover after the purchase of TM Software hf is assessed as being about ISK 13 billion and the number of employees to total about 750. Subsidiaries An increasing part of the activities of Nýherji group is entailed in its subsidiaries. Today, about 54% of Nýherji's employees work at its subsidiaries, which also generate 35% of the turnover. There have been extensive investments in development of solutions and the structuring of new undertakings in foreign markets, and about ISK 89 million have been debited this year, particularly regarding the development of certain software solutions under the umbrella of AppliCon. AppliCon The operation of AppliCon ehf and AppliCon A/S in Denmark was in conformity with the companies' plans. This year marks the 10th anniversary of the company starting offering SAP business software to enterprises in Iceland. Today, AppliCon is one of the leading consulting enterprises in the Nordic countries and in October, AppliCon received the SAP gold certification, one of three enterprises in the Nordic countries to have received this honor. A gold certification is the highest certification level of SAP and AppliCon received the acknowledgement for its outstanding achievements in the sale, service and development of SAP solutions. The project status of AppliCon ehf and AppliCon A/S in Denmark is good. An example of a new project in Iceland is that Kópavogur town has purchased a SAP human resource and salary application. AppliCon A/S is currently working on an extensive SAP installation with the civil engineering company, Birch & Krogboe, as well as continuing the installation of SAP ERP solutions at Dong Energy A/S. The structuring of new AppliCon operations in London and Stockholm, for servicing the markets in Britain and Sweden, is progressing as planned. ParX ehf The operations of ParX this year have developed in a satisfactory manner and the company's project situation is good. The revenues and performance of ParX during the first three quarters of the year exceed targets. The company's projects are varied and its group of customers includes many of the larger enterprises in Iceland, as well as governmental institutions and municipalities. Additionally, the company has increasingly carried out projects abroad. Dansupport A/S The operation of Dansupport A/S, which Nýherji purchased in May of this year, has been in accordance with plans. The company has opened a new office in Copenhagen and the number of employees has increased by 11 since last spring, now totaling about 40. The plan is to invest in further growth of Dansupport over the next few quarters and it is anticipated that by the second half of next year the company will be yielding normal returns on investment. Linkur ehf The operation of Linkur ehf has been as scheduled this year. Last September Linkur finalized its purchase of the operation of the Sony Center at Kringlan Mall in Reykjavík. The goal of this purchase is to strengthen the company's supply in audio/visual solutions. Prospects Nýherji's revenues this year exceed plans and the net income conforms to expectations. The prospects during the forth quarter are good and new opportunities will materialize next year through Nýherji's purchase of TM Software hf. Acceptance by the Board of Directors At its meeting on 18 October 2007, Nýherji's board of directors accepted the interim accounts for the third quarter. Nýherji hf The role of Nýherji hf is to generate value added service for its customers through employees' expertise and knowledge of IT, business operations and customer needs. Nýherji provides first class consulting and professional service in IT and sophisticated computer, office and software solutions, together with reliable managed services. The number of enterprises under the umbrella of the Nýherji conglomerate is 14, both in Iceland and abroad. The number of employees total 464. Nýherji hf stock is registered at OMX Iceland. Nýherji's board of directors consists of the following: Chairman, Benedikt Jóhannesson, Árni Vilhjálmsson and Gudmundur Jóh. Jónsson. The CEO of Nýherji is Thórdur Sverrisson, who provides further information on tel: +354-569-7711 or mobile: +354-893-3630. Nýherji's homepage is: www.nyherji.is