Interim report for the period January - June 2011 of Ferronordic Machines AB

Second Quarter 2011

• Sales revenues amounted to EUR 74.7m (3.8m).
• Operating profit amounted to EUR 4.6m (-1.8m)*.
• The Operating margin was 6.1% (-48.0%)*.
• EBITDA for the second quarter was EUR 6.2m (-1.4m)*.
• The after-tax result amounted to EUR 2.0m (17.4m).
• Cash flow from operating activities amounted to EUR 12.1m (-1.7m).
• The Company issued bonds of SEK 400m.
• The Company repaid the Investor Loan Facility in the amount of EUR 24.9m.

January - June 2011

• Sales revenues amounted to EUR 116.8m (3.8m).
• Operating profit amounted to EUR 4.2m (-1.8m)*.
• The Operating margin was 3.6% (-48.0%)*.
• EBITDA for the six months amounted to EUR 7.2m (-1.4m)*.
• The after-tax result amounted to EUR 1.3m (17.4m).
• Cash flow used in operating activities amounted to EUR 5.5m (-1.7m).

*2010 numbers exclude the effect of negative goodwill of 18.8m related to the takeover from Volvo in June 2010.

Ferronordic Machines’ CEO Erik Eberhardson commented:

A good first year
On 1 June 2010, we became Volvo's exclusive dealer in Russia for Volvo Construction Equipment. In the last 13 months, we have sold over 900 new machines, had revenues of EUR 187 million and hired an experienced management team and workforce of 400. The business In the first six months of 2011, we have generated EBITDA of EUR 7.2 million. We have participated in exhibitions and spent time with our customers to promote a total cost of ownership concept. We also have expanded our points of presence to 47 locations. Our aftermarket, parts and service, business continues to grow and we continue to expand our training programs. We work closely with Volvo Construction Equipment and our cooperation helps to insure high quality equipment and service for the Russian market. We have also issued bond financing of SEK 400 million and repaid our Investor Loan of EUR 24.9 million. We look forward to the remainder of 2011, but remain vigilant to changes in business conditions in Russia and abroad.

For further information, please contact:
Erik Eberhardson, CEO, Telephone: +7 985 220 8888
Anders Blomqvist, CFO, Telephone: +46 70 7766 485
Ferronordic Machines AB, Hovslagargatan 5B, 111 48 Stockholm, Sweden