Parent company after-tax loss of ISK 13.4 Bn
Consolidated after-tax loss of ISK 34.9 Bn
Milestone's equity decreased by ISK 14.9 Bn and amounted to ISK 69 Bn on parent
company level on 30 June 2008 but equity amounted to ISK 55 Bn on a
consolidated basis.
Total assets of the parent company were ISK 134 Bn and total consolidated
assets amounted to ISK 513 billion at the end of second quarter.
Parent company borrowings amounted to ISK 41.3 Bn and this year repayments
amount ISK 6.2 Bn for the parent company. Total consolidated liabilities,
consisting of insurance contracts, deposits from customers and other
liabilities, amounted to ISK 458 Bn at the end of second quarter.
The equity ratio of the parent company was 51% and equity ratio of the group
was 11%
Milestone's holding in the Swedish financial group Moderna accounted for 92% of
Milestone's total assets at the end of the period. Moderna has total assets of
ISK 444 BN, total equity of ISK 59 Bn, an equity ratio of 13.2% and meets its
regulatory capital adequacy requirements by a positive margin of 76%
IMPORTANT EVENTS IN THE FIRST HALF OF 2008
On 1 January 2008 Milestone transferred Sjóvá and Askar Capital to its wholly
owned subsidiary Moderna in Sweden.
The asset allocation effectively positions Moderna as a robust Nordic financial
group with Milestone as the only shareholder. Moderna is the parent company of
all companies within the group, including several majority owned financial
institutions operating within the fields of insurance, banking and asset
management in the Nordic region and the Benelux countries.
Following the asset transfer, Milestone has positioned itself as a holding
company with a strategic role as the single shareholder of the Nordic financial
group Moderna.
FINANCIAL HIGHLIGHTS OF FIRST HALF 2008
Milestone's single largest asset Moderna reported a loss of ISK 6.2 Bn for the
first six months of the year. The second quarter was challenging for the global
financial sector, but Moderna reported growth and positive development in its
largest business segments. For the remainder of the year Moderna will focus on
activities that will drive its future growth and implement cost cutting
measures to improve Moderna's profitability.
A loss of ISK 8.2 Bn in Milestone's accounts stems from impairment of goodwill
and write-down's that are prudent measures given the challenging market
conditions.
Precautionary write-downs have been applied to unlisted assets of Milestone to
better reflect the underlying trend of similar listed assets. This is done as
preparation for the prospective listing of Moderna on the Swedish stock
exchange in 2009.
Net foreign exchange loss amounts to ISK 6.6 Bn in the first six months of 2008.
All Icelandic listed assets are accounted for by the fair value method and are
marked to market in the accounts of subsidiaries and associated companies.
Total loss from listed Icelandic assets amounted to ISK 5.9 Bn in the first
half of 2008.
A 17.6% holding in the Nordic investment bank Carnegie is documented with the
equity method by the subsidiary Moderna. However, a precautionary write down of
ISK 5.2 Bn was made in the quarter to better reflect the difference between
market value and book value of the holding.
GuDmundur Olason, CEO
“The operations of Moderna remain robust and Milestone's undivided focus is set
on preparing Moderna for listing on the Stockholm stock exchange in 2009. Going
forward Milestone's strength will be measured through the performance of
Moderna. Its strength lies in diversified business supported by a strong niche
product range and we are seeing positive developments in its core business
areas, despite challenging market conditions. Milestone has become a holding
company with a strategic role as the single shareholder of Moderna and our
emphasis will be on developing its business in the Nordic region. We believe
that Moderna is well positioned to take advantage of opportunities arising in
the Nordic financial services market and we remain committed to our business
plan with focus on insurance, banking and asset management.”
Outlook for 2008
Milestone has taken precautionary measures in the first half of 2008 and the
value of its unlisted assets has been adjusted to better reflect the underlying
trend of listed equities. Pro-active measures of cost cutting and streamlining
of operations will better support operations going forward. Overall, Milestone
is in a good position to shoulder possible continuing downward market trends
and will remain focused on its strategic role as the single shareholder of
Moderna.
ABOUT MILESTONE
Milestone is an Icelandic holding company focusing on strategic investments in
financial services. The company is monitored by the Icelandic FSA and has bonds
listed on NASDAQ OMX Nordic Exchange in Iceland. Milestone is the single
shareholder in the Swedish financial services group MODERNA Finance A.B.
Milestone has placed holdings in companies focused on insurance, banking and
asset management at the forefront of its business strategy.
For additional information, visit www.milestone.is
Or contact Gudmundur Olason, CEO, Tel: (+354) 414 1800
