- Portfolio restructured and operating expenses reduced - Financial position remains strong with equity of ISK 115 billion Reykjavik, Iceland 8 May 2008 - FL Group (OMX: FL), the international investment company, today announces its results for the first quarter ending 31 March 2008. Financial Highlights » Net loss after tax of ISK 47.8 billion in 1Q 2008. » Major factors contributing to the loss are negative mark to market adjustments of listed assets of the Group, including a ISK 20.6 billion loss due to a 21.4% drop in Glitnir shares, ISK 13.8 billion loss on other listed assets and a total ISK 11.3 billion loss on the sale of remaining shares in Commerzbank, Finnair and Aktiv Kapital. » Total assets at the end of 1Q 2008 were ISK 401 billion. » Total shareholder equity at end of 1Q was ISK 115.2 billion, including a translation difference of ISK 7.0 billion. Equity ratio at the end of 1Q is 29% and equity ratio in investment operations is 33%. » Liquid cash at ISK 18.9 billion. Remaining debt maturing in 2008 of ISK 7.0 billion. » Operating expenses for investment operations totalled ISK 588 million, compared to ISK 884 million in 1Q 2007, which represents a 33.5% decrease and a 73.1% decrease from 4Q 2007. » TM, FL Group's operating subsidiary, reported a loss of ISK 3.3 billion, mainly due to investments. Operational Highlights » Market risk reduced significantly through divestment of shares in listed companies which did not fit within FL Group's revised investment strategy. This includes the divestment of all of the Group´s shares in Commerzbank, Finnair and Aktiv Kapital for a total transaction value of ISK 60 billion. » Private Equity portfolio activity included the sale of a 43.1% stake in Geysir Green Energy for ISK 10.5 billion and a subsequent ISK 4.5 billion investment in Glacier Renewable Energy Fund, the sale of holdings in FL Group's property funds to Landic Property for ISK 20.6 billion, and a successful refinancing of Refresco and continued implementation of “Buy & Build” strategy » Comprehensive internal restructuring and streamlining of operations. Plans for reducing 2008 operating expenses by 50%, year-on-year, are on track. » In line with FL Group's revised investment strategy, portfolio now more balanced across different sectors with a core focus on banking, insurance and property. Key holdings include Glitnir bank (32%), TM (99%) and Landic Property (39.8%). In addition to core investment areas, FL Group will continue to support its Private Equity portfolio. FL Group intends to apply for de-listing of shares from OMX Nordic Exchange in Iceland » On 1 May 2008, the Board of Directors of FL Group announced that it had approved a motion to call an Extraordinary General Meeting on 9 May 2008 in order to put to vote the Board's recommendation to proceed with an application for the de-listing of the Company's shares from the OMX Nordic Exchange in Iceland. » If the motion for de-listing is approved at the Extraordinary General Meeting, shareholders will be offered to keep their shares in an unlisted FL Group or sell their shares in FL Group in exchange for shares in Glitnir Bank. FL Group's key shareholders with a collective holding of 83% of FL Group have already waived the right to sell their shares and will remain shareholders in FL Group after the delisting. FL Group's Chief Executive Officer, Jon Sigurdsson, commented: “I am pleased to report that the objectives FL Group set out at the end of last year are well on their way to being fully achieved despite the ongoing adverse global market conditions. We have restructured the Company's investment portfolio by divesting non-core assets that did not fit our long term strategy. We have also been focused on maintaining a healthy financial position and reduced operating expenses; and have streamlined the Company's operations extensively. Despite the extremely challenging economic climate which has affected our results for 1Q 2008, our fundamentals remain strong and we maintain a very clear strategic focus following a revision of our investment strategy. I'm confident that we are moving in the right direction and the outlook for the remainder of the year looks stable. Furthermore, the Board´s recently announced plan to delist the company will present us with increased flexibility and more opportunities for taking the business forward and creating long-term shareholder value.“