- Second quarter will see a write-down of EUR 74 million - - Innovate's previous owners depart from Eimskip's Board of Directors - - Eimskip updates financial guidance for 2008 - - Board evaluates strategic alternatives for Versacold Atlas - Reykjavik, Iceland, 11 June, 2008 - Eimskip (OMX: HFEIM), the international transportation company, today announced that it will write-off its interest in UK subsidiary Innovate Holding. Eimskip's current book value for Innovate is EUR 74.1 million, which will be fully written off in the second quarter. Eimskip has begun a strategic review of Innovate to divest all of Innovate's assets. Innovate is a UK reefer logistics company, operating 25 warehouses in 11 locations in the UK market. Eimskip invested in Innovate in 2006-2007 and is now the sole owner of the company. As part of Innovate's strategy, the company entered into long-term lease agreements for warehouses and transportation systems. However, recent market conditions have proved challenging, leading to lower than expected capacity utilization of warehouse and transportation network assets. Furthermore, the company´s lease and financial costs have significantly increased and the losses in recent months have weakened the company's financial position to such extent as to impact ongoing operations. Given the challenging economic outlook in the UK and following a detailed review by Eimskip's Board of Directors in recent weeks, the Board chose not to increase Eimskip's investment in Innovate and subsequently decided to write off Innovate's assets and look for potential buyers. In recent weeks, Eimskip has worked closely with its UK consultants to conduct an orderly sale process of Innovate. Priority has been placed on ensuring minimal impact for customers, suppliers and financial partners. In addition, operations at Eimskip's other businesses will not be affected by Innovate's asset sale. Thorough view on the investment process In conjunction with the write-off and expected divestiture of Innovate´s assets, three of Eimskip's Board Directors, Stephen Savage, Stephen Dargavel and Peter Osborne, who were also the prior owners of Innovate, will step down from the Group´s Executive Board. The Board believes that the assumptions made when Innovate was purchased have significantly changed and has decided to perform a detailed analysis on these assumptions and the investment process. Financial Impact It was previously anticipated that Innovate would deliver revenues of approximately EUR 300 million to Eimskip in 2008. As a result of the write-off and the shortfall from Innovate's revenues, along with changes in market conditions for the rest of the Group, Eimskip has changed its revenue guidance. 2008 revenue guidance is revised to EUR 1.4 billion, compared to the company's previous guidance of EUR 1.9 billion. EUR 300 million of the lower guidance is due to Innovate's write-off, the remaining EUR 200 million is due to lower than expected transportation revenue from around the Group and adverse currency fluctuations against the Group's reporting currency, the Euro. Eimskip now expects an EBITDA margin of 11.5%, compared to previous guidance of 9.5%. The higher EBITDA margin is due to Eimskip's cancellation of asset sales in the US and Canada, and sale leaseback transactions, which has resulted in increased financial expenses and lower rental payments than expected. In light of Innovate's weakened financial position, Innovate's book value of EUR 74.1 million will be fully written off. Eimskip does not expect any additional asset sales of Innovate to change the total amount of the write-down. Eimskip's equity ratio will decrease; however, the Board is evaluating various alternatives to strengthen the company's balance sheet. Board evaluates strategic alternatives for Versacold Atlas As a part of its overall refinancing strategy, Versacold and Atlas successfully completed a number of sale leaseback transactions in 2006 and 2007, with a total value of approximately EUR 462 million. The company has elected not to pursue further sale leaseback financings at this time. The Company and its Board of Directors have now decided to review strategic alternatives for Versacold and Atlas to enhance shareholder value. Eimskip's current intention is to remain a significant shareholder in the business. Together, Versacold and Atlas, is the largest global cold store services company, with over 120 cold stores around the world. The Company's' results have been in-line with expectations and positive synergies have been realized from the combined operations of the Versacold and Atlas businesses. For further information contact: Halldor Kristmannsson Executive Vice President of Corporate Communications & IR Tel: (+354) 525 7000 / (+354) 825 7221 E-mail: halldor@eimskip.is