Interim report first quarter 2013

Scana Industrier ASA is a Nordic industrial group whose key business is supplying products and system solutions to energy-related businesses. This encompasses oil and gas, other forms of energy and marine activities for the offshore area. Scana also provides servicing, maintenance and repairs for customers in the same markets. Scanas technology, unique expertise in engineering materials and extensive production experienc e form the basis of the Groups competitiveness. Scanas aim is to be the preferred supplier for leading companies within our market segments. The majority of Scanas customers are located in Europe, America and South East Asia. Scana Industrier ASA has subsidiaries in Norway, Sweden, China, the USA, Poland, Singapore, Brazil and South Korea. The Groups head office is in Stavanger.

First quarter 2013 Revenue was NOK 504 million in the first quarter of 2013 with EBITDA of NOK -12 million. EBITDA improved NOK 30 million from the fourth quarter of 2012. Non-recurring costs (restructuring/reductions in staffing levels) of NOK 5 million were charged to the accounts in the first quarter. During the first quarter of 2013, order inflow was NOK 476 million. The order reserve increased to NOK 1,196 million from fourth quarter of 2012.

Financial performance The Groups total revenue was NOK 504 million in the first quarter of 2013, compared with NOK 559 million for the same period in 2012. This is a fall of 10 per cent. EBITDA was NOK -12 million in the first quarter of 2013, which is equivalent to an EBITDA margin of -2 per cent compared with -1 per cent for the corresponding period in 2012. In the first quarter the income statement was charged with NOK 5 million in nonrecurring costs associated with restructuring/reductions in staffing costs in the businesses. The Groups competitiveness continues to be affected considerably by strong Norwegian and Swedish currency (NOK/SEK) and margins. Net order inflow in the first quarter amounted to NOK 476 million, a reduction of 8 per cent compared with the same period in 2012. The order reserve at the end of the first quarter of 2013 was NOK 1,196 million, an increase of 7.5 per cent on the previous quarter. Net financial items amounted to NOK -19 million in the first quarter of 2013, compared with NOK -12 million in the first quarter of 2012. Interest expenses amounted to NOK -7 million, net agio items amounted to NOK -5 million and other financial expenses amounted to NOK -7 million for the quarter. Scana hedges all major contracts in foreign currency. The change in value is recognised in accordance with IFRS. The tax cost for the first quarter is NOK -5 million.

Changes in values of effective hedging instruments that satisfy IFRS criteria for hedge accounting appear under the item Other revenues and costs. In the first quarter, such instruments fell in value by NOK 6 million. Earnings per share were NOK -0.16 for the first quarter of 2013.

Performance of key figures:

Kvartal NOK millioner Driftsinntekter EBITDA Driftsresultat EBIT Driftsmargin % Resultat fr skatt Ordreinngang Ordrereserve K1 13 504 -12 -33 -6 % -51 476 1 196 K1 12 559 -4 -23 -4 % -35 520 1 272 K4 12 524 -42 -99 -19 % -109 492 1 113 K3 12 399 -10 -32 -8 % -48 390 1 234 K2 12 557 22 3 0% -3 563 1 262 Hittil i r 2013 504 -12 -33 -6 % -51 476 1 196 2012 559 -4 -23 -4 % -35 520 1 272 Helr 2012 2 039 -34 -152 -7 % -196 1 965 1 113

Cash flow Net cash flow from operating activities amounted to NOK -65 million in the first quarter. Net cash flow from investing activities was NOK -12 million, of which investment in noncurrent assets represents the main part when considering the quarter as a whole. Net cash flow from financing activities was NOK 82 million. The net cash flow in the first quarter was accordingly NOK 5 million. Balance sheet and capital position The balance sheet total at the end of the first quarter of 2013 was NOK 1,837 million, which is an increase of NOK 87 million compared with the end of 2012. The Groups net interest-bearing debt was NOK 547 million. Syndicate loan is classified as being shortterm as a result of the conditions associated with the execution of issuing not being complete before the second quarter. Financial covenants were met at the end of the first quarter. The carrying amount for equity of NOK 536 million corresponds to NOK 1.86 per share and an equity ratio of 29 per cent. Share price trend The closing price for shares in Scana was NOK 0.40 at the end of the first quarter. The closing price at the end of 2012 was NOK 0.82. The price trend was affected by the issuing measures in the first quarter, when the share went according to subscription rights on 29 January this year. Scanas holding of own shares is 113,010. Scana has a Market Maker agreement to increase the liquidity of its shares and ensure listing on the Oslo Brs Match list. Restructuring Further downsizing in Scanas steel companies in Norway and Sweden took place in the first quarter of 2013. Strategic initiatives Scana Industrier ASA has consultants to assess various strategies for the Scana Energy business areas further growth and international development.

Scana Energy is the Groups biggest business area with a revenue of between SEK 800 million and SEK 1,500 million in recent years. The companies constitute a complete value chain from production of high-quality steel for finished products and energy and oil solutions and gas production in addition to the marine and tool industry. The customers are leading global companies within each market area. The work currently ongoing follows the strategy that was communicated through the reorganisation of Scanas business areas in 2012 and which will allow different development routes for the Groups business areas. The aim of the process is to assess different terms that can force and strengthen Scana Energys market positions and thereby create a suitable basis for the growth of value for the Groups shareholders. The process follows a set schedule and dialogue with possible collaboration partners which will commence during the course of the second quarter of 2013. Scana will work for development and strengthening of the strategic position for the Propulsion Business area Scana Industrier ASA owns some considerable property, most of which is in Norway and Sweden. The properties are expected to represent considerable future value for the Group. It has been decided that Scana will develop plans for properties that are both independent and dependent on operations in order to show the value and remove the value potential. The work associated with increasing value creation will in the first instance be based on the Groups large areas in Strand municipality in Rogaland. The work is underway a nd preliminary reports indicate a considerable value development potential.

BUSINESS AREAS Scana Energy

This business area includes Scana Steel Bjrneborg, Scana Steel Sderfors, Scana Subsea, Scana Steel Booforge and Scana Machining, all of which are based in Sweden. During the first quarter of 2013, operating revenue was NOK 202 million. This is a fall of 16 per cent on the corresponding period in 2012. EBITDA for the first quarter was NOK 0 million, which is equivalent to a 0 per cent EBITDA margin, compared with 5 per cent for the corresponding period in 2012.

High order reserve for forged riser components to the Oil & Gas industry Technical challenges in relation to risers is clarified Considerable cost reducing action implemented in the steel companies Still a weak market for the commodity steel products sales effort increased The strategic project for Scana Energy moves forward according to time line major interest

Orders The business areas net order inflow was NOK 171 million in the first quarter. During the first quarter there was a continued market demand for simpler products. The order reserve totals NOK 415 million compared with NOK 433 million at the same point in 2012. Operations During the first quarter operations have progressed well but activities have been lower than the companys capacity. Market Continued low prices in the energy sector, a weak European market and a strong Swedish krona are putting pressure on margins and profitability within this business area. Low global activity in relation to the contracting of vessels is having a significant impact on the profitability of the business area. A normalisation of the marine market will have a great impact on the profit performance of this business area. Global activity levels within oil and gas are high. Scana Energy delivers products such as riser components for field expansions in very deep water. The companies have record high order reserves within this area for production in 2013 and 2014.

Scana Propulsion
Reporting for this area includes the production units of Scana Volda, Scana Mar-El, as well as the service and sales offices in Poland, Singapore, China, Brazil and the USA. Operating revenue totalled NOK 98 million in the first quarter of 2013. This is an increase of 36 per cent on the corresponding period in 2012. EBITDA for the first quarter was NOK 3 million, which is equivalent to a 3 per cent EBITDA margin, compared with -2 per cent for the corresponding period in 2012.

Existing order backlog secures higher activity in 2013 according to 2012. New orders is needed for fourth quarter large prospect list Ownership in Inpower (24,9%) gives access to permanent magnetic motors technology witch opens new markets for Propulsion. Restructuring of the business in Poland has been completed

Orders Order inflow totalled NOK 49 million in the first quarter. The order reserve was NOK 164 million, compared with NOK 226 million at the same point in 2012, which is a fall of 27 per cent. Operations The restructuring of the business in Poland has been completed. Scana Zamech has been converted to a purely sales and service company, while new production has been transferred to Scana Volda. The transfer has gone according to plan. In the first quarter, commissioning in Volda has resulted in a somewhat lower margin than expected. Market In light of the continued weak international marine market, Scana Propulsion has a satisfactory order inflow in terms of new sales up until October 2013. The positive trend within servicing and after-sales services is expected to continue.

In the first quarter, Scana has invested in a 24.9 per cent ownership in the company Inpower AS. This provides Scana with exciting access to technology that is expected to have great usage in the years to come.

Scana Offshore
Reporting for this area includes the companies Scana Offshore Vestby, Scana Steel Stavanger, Scana Offshore Technology, Scana Offshore Services in Houston and Singapore, as well as Scana Skarpenord and Scana Korea Hydraulic (Scana has a 49 per cent share of ownership). During the first quarter of 2013, operating revenue was NOK 174 million. This is a fall of 19 per cent on the corresponding period in 2012. EBITDA for the first quarter was NOK 9 million, which is equivalent to a -5 per cent EBITDA margin, compared with -1 per cent for the corresponding period in 2012.

Scana Steel Stavanger signed additional contracts in Korea. New contracts are more complex and do have higher margins Scana Offshore Vestby signed in first quarter a NOK 58 million contract with Dana Petroleum Scana Korea (49%) won contracts with a value of NOK 60 million related to FPSO projects in Korea Scanas service company in USA moves into new facilities which gives a possibility to future growth

Orders Order inflow was NOK 217 million in the first quarter. The order reserve totals NOK 531 million compared with NOK 514 million at the same point in 2012. Operations Scana Steel Stavanger is undergoing development towards an increasing number of oil and gas-related project deliveries. The company has succeeded in obtaining some very interesting contracts on the international oil and gas market thanks to its castings. Profitability in these projects is improving but the activity is somewhat uneven. The company continues to have a shortfall in activity associated with forgings. Scana Offshore Vestby has charged the Group in terms of operating profit but has increased the number of prospects in terms of loading and unloading systems as well as anchoring systems for the FPSO market and deliveries to the North Sea maintenance market. A new contract with Dana Petroleum provides higher activity, something that is important for the Groups profit trend. Scanas sales and production of valve control systems are based at companies in Norway and Korea. These companies are seeing a weak increase in activity thanks to increased deliveries to FPSO projects in Korea. In the first quarter of 2013, more FPSO contracts in South Korea have been entered into by Scana Korea Hydraulic. Market The global oil and gas market is expected to remain positive. It is particularly interesting for Scana that the FPSO market looks set to experience positive development in the future. This is important for profitability at Scana Offshore Vestby and the business area. For Scana Steel Stavanger the market for castings is interesting and in the space of a short period, the company has taken a strong position in the market.

A high Norwegian cost level and strong Norwegian kroner, combined with a demanding project schedule, continue to apply great pressure on the margin of the projects. Continual improvement is crucial for developing profitability. For forgings with high-grade alloy, the market is expected to continue to be difficult in the next few months. The activity associated with service and repairs is good but was characterised by seasonal variations in the first quarter.

Other companies
This report mainly covers the activities of Leshan Scana Machinery in China Operating revenue totalled NOK 38 million in the first quarter. This is an increase of 15 per cent on the corresponding period in 2012. EBITDA for the first quarter was NOK 3 million, which is equivalent to a 7 per cent EBITDA margin, compared with -14 per cent for the corresponding period in 2012. Orders Order inflow totalled NOK 38 million in the first quarter. The order reserve totals NOK 86 million compared with NOK 99 million at the same point in 2012. Operations Scana has focused on stabilising the companys operations and p lans to reduce staffing levels in order to adapt cost levels to activity levels. This has been successful and resulted in stable production and improved financial performance. Market The fall in activity at Leshan Scana Machinery reflects a significant downturn on the Chinese steel market, with a reduction in volume of around 40 per cent in the markets in which Scana operates. The company has managed to finance its business without financial contributions from the parent company. This is being done with local financing by increased working capital needs as a result of an expectation of increased activity level in the future.

Outlook
The main focus for Scana in 2013 is to generate profitability within its business areas. In addition, Scana will continue the projects for further growth and international development by Scana Energy and will continue working to achieve property values. Scanas extraordinary general meeting on 20 February 2013 decided to make an issue of shares to strengthen the Groups capital situation. A targeted issue of NOK 100 million among the companys major shareholders was made and a repair issue for the other shareholder is subsequently planned. The issue, combined with a payment holiday from the banks, continued restrictions associated with investments and expected improved cash flow from regular operations, stabilises the liquidity situation and allows a stronger focus on value creating activities. Scana expects increased revenue in the offshore market throughout 2013 and into 2014. The same applies to the production of propulsion systems for special vessels. The energy market for forgings is expected to continue with pressure on prices. In terms of simpler products, a flat development is expected throughout 2013 as well as an upturn when the European market once again shows signs of growth.

Switching production to more advanced and complete products and components for the energy market (including oil and gas) is a good development and will increase Scanas market position and earning potential.

Stavanger, 24 April 2013 The Board of Directors and the Group CEO Scana Industrier ASA

Profit and Loss Account - Group

NOK million Total operating revenues Raw materials and consumables Change in stocks and FG and WIP Wages and NI contributions Other operating costs Depreciation/amortization/writedowns Total operating costs Operating profit / (loss) - EBIT Interest income Interest expense Net currency gain / loss (-) Other financial income / expense (-) Net financial income / expense (-) Profit / (loss) before taxes Taxation Net profit / (loss) Attributable to: Equity holders of the parent Minority interests Earnings per share Diluted earnings per share Other comprehensive income Net movement in value of cash flow hegdes Net gain /loss on hegde of net investment Exchange difference on translations of foreign operations Other comprehensive income Total comprehensive income Key Figures: EBITDA EBITDA margin - % EBIT margin - % Net profit margin - % Order intake Order reserve Q1 13 504 175 -9 197 154 20 537 -33 0 -7 -5 -7 -19 -51 -5 -46 -47 1 -0,16 -0,16 3 -9 17 12 -34 -12 -2 % -6 % -9 % 476 1 196 Q1 12 559 205 11 196 150 20 583 -23 1 -8 -3 -1 -12 -35 -9 -26 -23 -3 -0,10 -0,10 2 2 -10 -6 -32 -4 -1 % -4 % -5 % 520 1 272 Quarters Q4 12 524 184 15 195 172 56 623 -99 0 -7 -1 -2 -10 -109 20 -129 -126 -3 -0,44 -0,44 2 3 -7 -2 -131 -42 -8 % -19 % -25 % 492 1 113 Q3 12 399 144 -10 150 124 22 431 -32 0 -7 -8 -2 -16 -48 -12 -37 -35 -2 -0,12 -0,12 -4 -3 -2 -10 -47 -10 -3 % -8 % -9 % 390 1 234 Q2 12 557 196 9 189 141 20 554 3 1 -7 3 -2 -6 -3 -1 -3 -3 0 -0,01 -0,01 -1 0 7 6 4 22 4% 0% 0% 563 1 262 Year to date 2013 2012 504 559 175 205 -9 11 197 196 154 150 20 20 537 583 -33 -23 0 1 -7 -8 -5 -3 -7 -1 -19 -12 -51 -5 -46 -47 1 -0,16 -0,16 3 -9 17 12 -34 -12 -2 % -6 % -9 % 476 1 196 -35 -9 -26 -23 -3 -0,10 -0,10 2 2 -10 -6 -32 -4 -1 % -4 % -5 % 520 1 272 Full Year 2012 2 039 730 25 730 587 117 2 190 -152 2 -30 -9 -7 -45 -196 -1 -195 -187 -8 -0,68 -0,68 -1 2 -12 -11 -206 -34 -2 % -7 % -10 % 1 965 1 113

Balance Sheet - Group

NOK million Intangible fixed assets Deferred tax assets Property, pland and equipment Shares in associated companies Total fixed assets Inventory Trade debtors Derivates Cash and cash equivalents Assets hold for sale Total current assets Total assets Paid-in capital Other equity Minority interests Total shareholders equity Interest bearing loans and borrowings Derivates Other non-current liabilities Total non-current liabilities Interest bearing loans and borrowings Derivates Other current liabilities Total current liabilities Total liabilities and shareholders equity Key Figures: Equity ratio Gross debt Net debt Gearing (gross debt divided by shareholders' equity) Equity ratio ex. Derivate 31.03.13 104 23 769 19 915 376 527 1 18 0 922 1 837 479 36 21 536 13 11 50 74 553 11 664 1 227 1 837 31.03.12 133 44 752 12 940 363 574 5 85 0 1 027 1 967 481 234 25 740 334 8 68 410 145 17 655 816 1 967 31.12.12 101 23 758 14 896 352 489 1 13 0 854 1 750 478 71 20 570 15 14 52 81 437 15 647 1 099 1 750 30.09.12 136 54 773 12 974 367 448 3 26 0 844 1 818 482 193 23 698 257 14 66 337 183 16 584 783 1 818 30.06.12 141 47 753 12 953 353 535 5 133 0 1 026 1 979 482 237 25 744 330 9 72 410 140 16 668 824 1 979 31.03.13 104 23 769 19 915 376 527 1 18 0 922 1 837 479 36 21 536 13 11 50 74 553 11 664 1 227 1 837 31.03.12 133 44 752 12 940 363 574 5 85 0 1 027 1 967 481 234 25 740 334 8 68 410 145 17 655 816 1 967 31.12.12 101 23 758 14 896 352 489 1 13 0 854 1 750 478 71 20 570 15 14 52 81 437 15 647 1 099 1 750

29 % 566 547 1,1 30 %

38 % 479 393 0,6 39 %

33 % 452 439 0,8 34 %

38 % 441 415 0,6 40 %

38 % 470 336 0,6 39 %

29 % 566 547 1,1 30 %

38 % 479 393 0,6 39 %

33 % 452 439 0,8 34 %

Cash Flow Statement - Group

NOK million Profit / (loss) before taxes Tax paid Currency exchange differences and gain/loss on sale of fixed assets and non cash element Depreciation/amortization/writedowns Net interest expense Change in net working capital Net cash flow from operating activities Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Proceeds from sale of shares Investments in business Net cash flow from investing activities Proceeds from long-term borrowings Repayment of long-term borrowings Net increase/(decrease) in short-term borrowings Paid-in capital Paid dividend Paid other finance cost Net paid interest Net cash flow from financing activities Net cash flow Cash and cash equivalents at beginning of period Net foreign exchange difference Cash and cash equivalents at end of period Quarters Q1 13 Q1 12 -51 -35 -1 -1 -3 7 20 20 7 8 -37 -53 -65 -56 0 4 -8 -8 0 0 -5 0 -12 -5 0 0 -0 -4 91 -20 0 141 0 0 -6 -2 -3 -7 82 109 5 48 13 1 18 38 -0 85 Year to date 2013 2012 -51 -35 -1 -1 -3 7 20 20 7 8 -37 -53 -65 -56 0 4 -8 -8 0 0 -5 0 -12 -5 0 0 -0 -4 91 -20 0 141 0 0 -6 -2 -3 -7 82 109 5 48 13 1 18 38 -0 85 Full Year 2012 -196 2 15 117 28 31 -2 6 -87 0 0 -80 349 -396 -3 141 0 -4 -28 58 -24 38 -1 13

Statement of change in shareholders equity - Group

Issued capital Equity at 1 January 2012 Total comprehensive income current period Share option programme Paid in capital Equity at 31 December 2012 210 Own Other paidshares in capital 0 124 1 -6 0 119 71 18 -18 Total Currency Reserves equity ex. Retained translation for change minority earnings reserves in value interests 258 -187 28 -10 -17 -1 602 -198 1 144 549 20 Minority interest 28 -8 Total equity 630 -206 1 144 570

150 360

Equity at 1 January 2013 Total comprehensive income current period Share option programme Paid in capital Equity at 31 March 2013

Issued capital 360

Own Other paidshares in capital 0 119 0 0 0 119

Retained earnings 71 -47

Total Currency Reserves equity ex. translation for change minority reserves in value interests 18 -18 549 9 3 -35 0 0

Minority interest 20 1

Total equity 570 -34 0 0

0 360

24

26

-15

515

21

536

Notes - Group
Note 1 - Overall information

The condensed consolidated f inancial statements f or Scana Industrier ASA f or the f irst quarter 2013 was approved at the board meeting April 24 2013. The f inancial statement is unaudited.This interim report has been prepared in accordance with the International Financial Reporting Standar ds ( IFRS ), IAS 34 Interim Financial Reporting. The same accounting principles are applied in the quarterly report as in the last annual report.
Note 2 - Segment information NOK million Energy: Turnover EBITDA EBITDA margin Order intake Order reserve Propulsion: Turnover EBITDA EBITDA margin Order intake Order reserve Offshore: Turnover EBITDA EBITDA margin Order intake Order reserve Other Business: Turnover EBITDA EBITDA margin Order intake Order reserve Other / Elimination: Turnover EBITDA Q1 13 202 -0 0% 171 415 98 3 3% 49 164 174 -9 -5 % 217 531 38 3 7% 38 86 -8 -9 Q1 12 241 13 5% 219 433 72 -1 -2 % 61 226 214 -3 -1 % 199 514 33 -5 -14 % 41 99 -1 -7 Quarters Q4 12 216 -2 -1 % 203 339 111 -4 -4 % 81 211 179 -21 -12 % 184 483 32 -8 -24 % 24 80 -15 -8 Q3 12 158 -2 -1 % 163 431 78 4 6% 68 240 131 -1 -1 % 140 474 33 -5 -14 % 19 88 -2 -7 Q2 12 236 25 11 % 237 433 95 7 8% 140 246 193 1 1% 149 479 36 -3 -8 % 36 105 -3 -8 Year to date 2013 2012 202 -0 0% 171 415 98 3 3% 49 164 174 -9 -5 % 217 531 38 3 7% 38 86 -8 -9 241 13 5% 219 433 72 -1 -2 % 61 226 214 -3 -1 % 199 514 33 -5 -14 % 41 99 -1 -7 Full Year 2012 851 34 4% 822 339 358 6 2% 351 211 715 -24 -3 % 672 483 135 -20 -15 % 121 80 -20 -30

Note 3 - Interest-bearing debt Per 31.03.13 Total interest-bearing debt Per 31.03.12 Total interest-bearing debt Current 552 562 Current 144 732 Long-term 13 235 Long-term 334 020

Syndicate loan established in 2007 was refinanced in 2012 with a new 3-year multi-currency fixed-term loan of MSEK 348and an ongoing operating credit facility of MNOK 280, divided in rolling credit facility of MNOK 130 and a bank gaurantee facility of MNOK 150. Syndicate loan of MSEK 348 has ha half-yearly instalments profile from January 2013. The loan is secured with a first priority in the group`s assets. Parts of the covenant in the loan agreements is waivers to the banks as of 31.03.2013.

Bulllet loan of $8.666.667 was established as a replacement for previous loans from DNB and Handelsbanken in China. The loan has maturity date 30.6.2013.
Scana Group has entered into an additional credit with the bank sydicate of MNOK 60 which is available before the private placement. The additional credit is due 15 May 2013. Note 4 - Impairment test

Tangible and intangible assets are written down to recoverable amount, when recoverable amount is lower than booked assets of the cash generating unit. Recoverable amount is the present value of future cash flow from asset or cash generating unit. The group also utilizes sensitivity analysis to test the impairment test for reasonable changes in key assumptions. For Scana applies operating margin, discount rate and growth rate for the period 2013-2017. This means there is uncertainties in the outcome of the calculations. It is through the use of impairment test not identified impairment related to property, plant and equipment or intangible asset of the group.

Note 5 - Other comprehensive income

The figures shows the changes in value related to cash flow hedges conserning hedging of the electricity price linked to the operations in Sweden and Scana Steel Stavanger and cash flow hedging conserning hedging of the interest rate for some parts of the Groups interest - bearing debt. In addition the figures includes hedging av net investments in operations in Sweden an currency translation differences.
Note 6 - Tax Tax is calculated based on profit before tax with associated tax rate in countries where businesses are located. The group has deferred tax in several countries. The deferred tax is booked, if it is expected that sufficient revenues will be generated within the time limits that apply in each country. Deferred tax assets are partially impaired for the Norwegian and Chinese part of the group. This is an assessment based om previous results and uncertainty about future earnings.