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Mid-year profit of MNOK 139

At mid-year 2003, Kongsberg Gruppen reports operating revenues of MNOK 3 138 (MNOK 3 723) and an EBITA of MNOK 139 (MNOK 238).

"The operating revenues and profit are in line with our plans, with the exception of an expense of MNOK 50 related to the loss of an arbitration case, which we booked in Q1", states Chief Executive Officer Jan Erik Korssjøen.

"We've managed relatively well throughout the cyclical downturn experienced over the past year by large segments of Norwegian and international industry. KONGSBERG instituted a number of organisational measures during the early half of the year, at the same time as new orders have picked up again in several of our markets. Consequently, we still expect a satisfactory result for 2003 as a whole", continues Korssjøen.

"One of the organisational changes we made was to merge companies in Kongsberg Maritime. This will entail considerably more co-ordination in terms of products and technology, as well as in sales and marketing activities. The merger will also lower future cost levels. This will undoubtedly make Kongsberg Maritime a more effective unit", adds Korssjøen.

At mid-year, KONGSBERG posted an operating profit of MNOK 94, compared with MNOK 200 a year ago. The EBT (earnings before tax) came to MNOK 56, compared with MNOK156 in 2002. The profit per share was NOK 1.27, compared with NOK 3.55 last year. The consolidated backlog of orders at mid-year was NOK 5.6 billion, up from NOK 5.1 billion at year-end 2002.

Otherwise, Q2 was characterised by a good influx of new orders for Offshore & Subsea and Merchant Marine. Yachting & Fishery managed to win market shares despite a softer yacht market, while the fisheries market saw somewhat lower investment levels. Defence experienced several important strategic events in Q2. The Norwegian government's proposal to build five new missile torpedo boats (MTBs) will be of great importance to KONGSBERG, and it will have decisive significance for the serial production of the new Naval Strike Missile (NSM). KONGSBERG also signed a contract with Lockheed Martin for deliveries for an anti-submarine system for a new type of destroyer in South Korea.

"This is the first export contract based on a co-operation agreement with Lockheed Martin. Signed when Norway bought new frigates in 2000, the agreement clearly demonstrates the effect of having a repurchasing regime for defence products", comments the CEO.

"KONGSBERG still expects a good year in 2003. Although we have observed certain positive signs in the international economy, the prevailing uncertainty could still affect the Group's markets. Consequently, we will continue to monitor market trends closely throughout the rest of the year", concludes Korssjøen. ------ The Q2 2003 report is posted on the Internet at www.kongsberg.com

For further information, please contact: Chief Executive Officer Jan Erik Korssjøen, telephone: ( 47) 920-60000 Chief Financial Officer Arne Solberg, telephone: ( 47) 920-60011

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