The I.M. Skaugen Group (IMSK) today announced a negative result for the year
2009 - a year of much contradiction, challenges and transition

· The pre-tax result before tax was negative USD9.5 million 2009 compared to USD
8.2 million  in 2008. The  result of  the FY09  on an  EBITDA basis  was USD24.7
million compared to USD50 million for the FY08.
·  The 4Q09 pre-tax  result was  negative USD8.3  million compared to a negative
USD12.9  million for the 4Q08. The EBITDA  result of the 4Q09 was USD5.9 million
compared to USD3.1 million for the 4Q08.
·  The deviation in net profits and  EBITDA earnings reflects a weaker operating
performance  for all  business units.  For the  gas carriers  it reflects higher
share  of spot voyages in the utilization of  the Norgas fleet and a much weaker
spot  market than the year before. For SPT it reflects a more challenging tanker
market  and for the China based activities  it reflects gain from sale of assets
in  2008 that was not repeated  in 2009 and a loss  on sale of 3 "WG" vessels in
2009/2010.
Our  Net  result  in  4Q09 has  been  charged  with impairment cost and R&D cost
related  to discontinued operations  in the amount  of about USD10,2 million. We
have  also  charged  cost  as  awarded  by  an arbitration panel for RMB7.8 mill
(USD1.1  mill); these  are cost  related to  a contract cancellation in 2007 for
newbuildings of two gas carriers that we elected to discontinue.
If  we adjust for these charges our EBITDA  and Net result would have been USD27
million  and USD1.7 million respectively. These  numbers reflects in our opinion
more appropriately the ongoing business and our core activities
·  The  book  equity,  excluding  minority  interests,  totaled USD94 million or
USD3.46/NOK20.00 per share. The book equity represents about 27.1 percent of the
total  assets. The net debt  at the end of  4Q09 was USD62.1 million and the net
interest-bearing debt totaled USD116.3 million. The ratio between current assets
and current liabilities is 435 percent.
·  Total liquidity as of the end of 4Q09 was USD96 million, which is regarded as
sufficient  for the company's  ongoing business activities.  The working capital
requirements  continue  to  be  high  in  historical  terms  due  to the current
newbuilding  commitments. Interest  coverage ratio  was 1.6 for 2009, as against
3.2 for 2008.
· Given the net loss for the year the Board will not recommend any dividends for
the year of 2009.
· Issues related to CAPEX and debt financing
At  the end of 4Q09 total capex  commitments on I.M. Skaugen's newbuilding stood
at  USD 47 million for vessels financed  trough sale and leaseback solutions and
USD  31 million  (adjusted  for  ownership  in  JV's)  for  vessels financed via
traditional debt facilities.
The  IMS Company  successfully tapped  the Chinese  debt markets for its overall
corporate  purposes in  2009 and this  shows the  value of  its presence in this
market.
· Bond portfolio of outstanding loans
The  company has  benefited from  the bond  markets in  Norway mainly to provide
construction  finance or  working capital  for the  newbuilding programs at SMC.
Maturity  in the outstanding bond portfolio will mostly be offset by funds to be
received  from sale and  lease-back arrangements on  ships under construction by
SMC.  The  counter-party  in  these  sale  lease-back  structures are Teekay LNG
Partners  for two more "Wintergas" vessels  and two "Multigas" 12, 000 cbm sized
vessels.
Average  interest cost (including. of margin) for all outstanding bonds financed
now  stand at  5.7 percent, given  current USD  interest rates.  The company has
USD10.6  million of bonds  falling due for  repayment within next 12 months. The
bond with the longest duration matures in June 2012.
Our views on the performance of the company in 2009

The company is not satisfied with the overall financial performance for the year
which  showed a negative result. The USD11.3  mill charges to the "pandl" of the
company in 4Q reflects charges related to discontinued operations and impairment
charges  on activities that  are considered non-core.  As such we  would like to
highlight  the  positives  as  the  results  from  ongoing  core  operations are
considered  more acceptable. Given the  challenging macro economic conditions we
are in general pleased with our core activities performance at this point of the
economic  cycle.  A  cyclical  business  like  our  will  normally suffer in the
downcycle  and the year 2009 is a year  of the downcycle. We are benefiting from
our  strategic decisions made several  years ago - a  focus on emerging markets,
reducing costs and building longer and better contract coverage.

In  a year where global  trade reported the largest  contraction since World War
II,  and where chemical production (a proxy  for ethylene) was set back to 2006
volume  levels; ethylene production itself ended the year positively compared to
2008 and only marginally lower than the peak year of 2007. This is mainly due to
a  sharp rebound in demand from "non - Japan Asia" and especially Chinese demand
offsetting the weaker markets in North America and Europe.

The added volumes for Asia were covered for the most by imports from the Middle
East, which is the growth area "no. 1" for petrochemical industry. The low cost
Ethane-based ethylene crackers in the Middle East has made the region well
placed to cover production shortfalls in other regions as higher costs have
pushed many European and some Asian producers towards the uncompetitive end of
the global cost curve, thus making the Middle East the major net export area.
Over the year a good percentage of the ethylene fleet of the long haul carriers
(i.e larger ships) was being employed lifting tons from this region and a large
share of this going to Asia.




The implication of this trend is that we experience an increase in tonmiles per
product transported for these types of ships. And although 13 new ethylene
vessels where delivered in 2009, the resilient overall production volumes
absorbed to a great extent this additional capacity and prevented spot rates of
falling as much as most other markets.
We  have suffered a USD7.3 million loss at the  end of the year in 2009 on a non
core  IT  related  investment  within  health  care  sector  due  to  impairment
valuations  made. This company has written off  most of its R&D investment made,
over  several years in a portal technology for the "e-health" sector. This as it
was  proven  that  the  commercial  applications  were not acceptable to the key
Norwegian  client  for  their  future  needs.  The  loss  is regrettable and the
investment  was considered promising despite being  outside of our core business
focus. The innovative solutions provided by this company were intriguing and did
fit  our desire to work  with such innovations. We  will in the future, based on
this  experience, not embark on a venture that  is this much outside of our core
focus.  The CSAM Health AS  (www.csam.no <http://www.csam.no/>) company has been
refinanced  and will now be without external debts. Our investment has a current
book  value of  USD1.4 mill.  We own  25% of the  shares in  the company and the
management team owns 50%.

1Q2010 Outlook

In  the early  part of  1Q10 we experience  high utilization  of gas carriers on
contractual  terms and  not so  much tonnage  in the  sport market. Crude tanker
market  has  improved  and  SPT  benefits  from  this.  All China activities are
progressing better than last year.



[HUG#1374053]





    IMSK - Preliminary result 2009: http://hugin.info/179/R/1374053/336775.pdf