Annual report 2007

The 2007 operating year was the best year in Isola's 67-year history, both in terms of turnover and profit. This is, of course, partly because 2007 was also the best year ever in the building industry in Norway. We would like to thank all our employees for their unflagging efforts, which helped secure this excellent result.

2007 was an extremely busy year for all of us at Isola, as it also saw the start-up of the biggest investment programme in Isola's history, for a total of NOK 360 million over a period of 2-3 years. The investment comprises a completely new combined shingle and roofing machine, plus a new polymer facility which has considerably increased the Eidanger factory's capacity. We are also in the process of establishing a new state-of-the-art window and door factory in Røros, which will be manufacturing the products for our two factories there, Røros Bruk AS and Sjøvold AS. In addition, we will continue our endeavour to modernise and automate our steel gutter production facility in Fredrikstad.

Last year was also a very busy one because, in addition to our highest turnover ever, we manufactured an uncommonly large stockpile of roof products in order to meet deliveries during the months when the shingle machine was being demolished and rebuilt in the winter and spring of 2008. The roll-out of a completely new computer-controlled, fully automatic shingle machine, combined with the manufacture of rolled roofing membrane, also presented us with great challenges, an experience we could have well done without. A highly motivated staff, and an heroic effort on their part, has been a valued contribution to meeting these challenges.

Although the forecasters are saying that activity in the building industry has peaked for this cycle, we at Isola have seen little evidence of this. Activity levels in the winter and spring were marginally higher than in the first few months of last year. Interest rate increases by the central bank are, however, likely to take effect, and we must be prepared for lower activity for the rest of this year and into next year. But even with a moderate reduction in building activity, ours will nonetheless be at an historically high level.

As steel and asphalt are our most important raw materials, we have experienced big price increases throughout 2007. For competitive reasons, it has not been possible to fully compensate for these increases in our selling prices. We also anticipate considerable price increases in raw materials in the years ahead.

Our new market strategy is to grow in the Nordic region, whereas we expect our activity in Eastern Europe to diminish. As a consequence, we have sold our roofing factory in Budapest. We have gone into the Swedish market with our entire product range and plan to do the same in Denmark.

Although the building industry appears to have peaked this time around, we are fortunate in continuing to have plenty of challenging work ahead of us.

Erik Withbro
CEO

Related documents

Annual repport for the 2007 Download (PDF)