As we approach the end of the year, can you comment on your view of the progress during 2003?


Shareholder, name withheld

Although we will wait for the Book Closing Report on 18 February 2004, and the 2003 Annual Report, to formally report on the result, we can take this opportunity to review our progress and re-iterate the comments that were made during the 7 November Audio Q&A event.

During the pre-production years, the revenues are strongly linked to the number of installations of our System 2000 process control systems, and whether the installation Agreements are based on sales or leases. Ultimately, the timing of the installations depends on the production planning of the OEMs and investment strategies of their foundry suppliers. As our management focus is on the long-term best interest of SinterCast, rather than individual year-on-year interim results, it is to encourage early installation. As discussed during the 7 November Audio Q&A event, the production of the General Electric locomotive cylinder head at the Motor Castings foundry in the USA is a good example of this. The timing of the installation will coincide with the ramp-up of the production of the engine, which is targeted toward 2005 emissions legislation in the USA. In the meantime, we will continue to support the production requirements with our engineering resources in the USA. All of our planned installation discussions remain active.

As we mentioned during the 7 November Audio Q&A event, our business activities have evolved well during 2003. The first high volume cylinder block production has successfully started. A new long-term business for General Electric locomotive cylinder heads has begun. The year-on-year income from field activities is up 36% relative to 2002. Prototype volumes, test pieces, Sampling Cup deliveries and invoiced engineering service days are all up significantly compared to 2002. And finally, the long-term financing of the Company has been secured by the early exercise of warrants at SEK 58. While these measurable items demonstrate the progress of 2003, the less tangible ’CGI atmosphere’ in the industry and the motivation among the SinterCast employees provides that strongest signal that we remain on the right path.