· Net profit 9M-2010: EUR 24 million profit vs. EUR 45 million loss in 9M-2009
· Profitable sale of Insurance and Pension activities and 16% stake in Russian Sovcom bank materializes value for shareholders;
· Improved results from operating companies in all segments in 9M-2010.

Real Estate
· GTC SA: rental and service income up 40% y-o-y; slower pace of residential sales;
· China: approximately 100% (9M y-o-y) increase of sales contracts for apartments; fewer deliveries y-o-y;
· China: first shopping mall Chengdu opened on November 24, 2010 (over 80% pre-let).

Financial Services
· Russian bank Sovcom: strong y-o-y improvement of net result (EUR 25 million profit, 9M-2010 vs. EUR 14 million loss, 9M-2009);
· Ukraine bank VAB: 10% y-o-y increase of net loss (9M-2010).

(Water)Infrastructure
· 9M-2010: Higher revenues (up 21% y-o-y) and substantially higher operating result (up 133%
y-o-y) reflect continuing demand for water infrastructure services.

The Management Board of Kardan N.V. ("Kardan") commented on the results of 9M-2010:

"In general, our results for 9 months of 2010 were better than for the same period of last year. We recorded positive net results in all our divisions. This is due to improved efficiencies, better markets, and our strategy to create local platforms, combining our expertise with local knowledge. The co-operation with our local partners provides us with an early insight into both risks and opportunities that may arise in those markets/countries, of which some, as we know, are still fairly volatile. From an investment company point of view, we materialized value by successfully selling our Insurance and Pension activities, and a part of our stake in Sovcom bank in Russia, both at a significant profit.
We expect further improvement in the macroeconomic conditions in most countries in which we are active. The economy in China continues to grow significantly. Within CEE, some countries are in a better position than others, but overall, GDP growth estimates indicate that the emerging markets will outpace the growth of developed markets. Kardan is well positioned to benefit from the increasing wealth of the middle classes in emerging markets and thus to create long term value for shareholders. Looking at the portfolio of Kardan and the macroeconomic expectations for the countries in which we are active, and taking into account our involvement in the operating companies, we expect 2010 to show a positive development in our results".

Summary Results of 9M-2010

The net result of Kardan N.V. attributable to equity holders amounted to a profit of EUR 24 million in 9M-2010 versus a loss of EUR 45 million in the same period of 2009. The increase is mainly attributable to the Financial Services division (EUR 35 million) and to the Real Estate division (EUR 23 million). The strengthening of the currencies against the Euro, in most countries of operation, significantly increased the value of the investments in these countries. According to the accounting principles, the increase in value is recognized directly in equity, not affecting the income statement. This appreciation of local currencies resulted in an increase of equity attributable to shareholders of EUR 49 million, besides the net contribution of EUR 24 million, to EUR 358 million from EUR 293 million as at December 31, 2009.

The net contribution of the Real Estate division in the reporting period is EUR 3 million (9M-2009: loss of EUR 20 million), out of which EUR 15 million is attributable to (net of tax) revaluation gains (compared to revaluation losses of EUR 27 million in 9M-2009). Most of the positive revaluation result (EUR 13 million) is attributable to GTC China. GTC SA recorded a positive revaluation result (EUR 4 million); a turning point after 5 consecutive quarters of valuation losses until Q2-2010. Delivery of apartments in China in 9M-2010, approximately 14-18 months after having been bought and to a large extent paid for, were substantially lower as a result of less sales contracts in China in 2008. The contribution net of tax of the operating companies in the Real Estate division before recognition of revaluations was EUR 6 million negative (9M-2009: profit of EUR 7 million).
The positive contribution of the operating companies was reduced by finance expenses of the holding company amounting to EUR 7 million.

Within KFS, the Banking and Lending segment (TBIF), generated a negative net contribution to equity holders of EUR 6 million in 9M-2010, compared to a loss of EUR 32 million in 9M-2009.

The total net result of all TBIF operating companies improved by EUR 16 million from a loss of EUR 24 million in 9M-2009 to a loss of EUR 8 million in 9M-2010. The improved result is mainly due to lower provisions for bad debts in Russia driven by the improving macroeconomic environment.
The change from joint to full control by Kardan in the Ukrainian bank VAB Bank negatively impacted the results in the reporting period. Due to the increase, foreign exchange losses in prior years that were recorded directly in equity, are now reclassified to the income statement; the impact is a loss of EUR 16 million. In addition, given the continuing losses of VAB Bank (Ukraine) the goodwill and intangible assets resulting from the increase of the stake were impaired with EUR 10 million. Furthermore, an amount of EUR 11 million was impaired relating to our holdings in KFS. The sale of 16% of the shares of Sovcom (Russia) reduced the stake of Kardan in the bank to 50%; due to the sales price of more than twice the equity value, the transaction led to a gain of EUR 48 million.

The Insurance and Pension segment (TBIH) contributed a net profit of EUR 31 million (9M-2009: net profit EUR 22 million). Due to the change of control in June 2010, whereby Vienna Insurance Group obtained full control over TBIH, Kardan recorded a net profit of EUR 24 million in 9M-2010. The agreement, concluded in Q3-2010, to sell 40% of TBIH will not lead to additional material results for Kardan. In 9M-2009, Kardan recognized a capital gain of EUR 20 million on the sale of part of the activities of TBIH to VIG.

The net contribution of the (Water) Infrastructure division amounted to a profit of EUR 4 million in 9M-2010 (9M-2009: loss of EUR 1 million). Higher revenues (up 21% y-o-y to EUR 127 million) and gross margins (up 27% y-o-y) resulted in a substantially higher (up 133% y-o-y) operating profit (before fair value adjustments, disposal of assets and financial expenses) of EUR 10 million. The operating profit was reduced by finance expenses and tax, to arrive at EUR 4 million profit.

The Israeli Sale of vehicles and Rental and Leasing of vehicles segments contributed EUR 8 million (9M-2009: break-even) on the back of higher revenues and improvement in gross profit margins.

Finally, Other Results, mainly comprising of finance and general expenses not allocated to specific activities and the results of activities not attributable to a segment, amounted to a loss of EUR 16 million in 9M-2010 (9M-2009: loss of EUR 17 million).

Developments within the divisions and segments in 9M-2010

GTC, Kardan's Real Estate division, realized strong growth of 40% y-o-y in rental and service income throughout GTC SA's operations in the CEE region. Approximately 75% of this growth derives from new completions or acquisitions of minority stakes in properties; the remainder can be allocated to existing projects. Residential sales declined as the number of apartments and houses available for sale decreased. The quality of the portfolio of GTC SA is reflected, amongst others, by the sale of the Topaz and Nefryt office buildings in Warsaw, at attractive yields of 7.2% resulting in EUR 22 million free cash. GTC SA has a reputable name with leading European banks, which enables the company to ensure financing at favorable terms. In September 2010, a EUR 80 million refinancing loan agreement for City Gate, a renowned office building in Bucharest, was finalized. As of mid November 2010, GTC SA has 1.8 million sqm net under construction and in pipeline for commercial and residential projects (GTC's equity part only).

In the Chinese real estate operations, 2,656 apartment sales contracts were signed in 9M-2010, significantly outpacing the 9M-2009 level of 1,316. These sales will only be recognized as revenue upon delivery of the relevant apartments, which is expected in 2011-2012. The Chinese government took additional measures in April 2010 to reduce speculative purchases of apartments. This was to some extent noticeable in the slightly decreasing trend of sales contracts during the year 2010 (Q3-2010: 745 vs. Q2-2010: 921). The sales trend is also partly influenced by GTC China's strategy to be cautious and to follow market developments. GTC China constructs apartments in Tier 2 and Tier 3 cities, the majority of which are for buyers' own use and not for speculative purposes. Larger projects are constructed in phases, enabling easy adaptation to changing market conditions. The opening of GTC's first shopping mall in China (Chengdu) took place on November 24 of this year, with over 80% pre-let.

Within the Banking and Lending segment (TBIF) of the Financial Services division (KFS), the developments in Russia are promising: in 9M-2010, the loan portfolio of Sovcom bank increased significantly (31%) as did the deposit taking (16%), compared to December 31, 2009. In the Ukraine, growing confidence in the banking system is reflected in the 9M-2010 increase in deposit taking (40%). Lending, however, is still at low levels due to the weak economy. Romania and Bulgaria, the two other countries in which TBIF operates, are still facing macroeconomic challenges. These markets remain difficult, as governments are taking measures to reduce the fiscal deficit and to comply with IMF demands.

Tahal, Kardan's (Water) Infrastructure division, continued to see strong demand for its services, particularly in China and Africa which are facing a severe lack of (clean) water. In 9M-2010, revenues grew 21% y-o-y to EUR 127 million. To accommodate the many opportunities for (water) infrastructure projects, Tahal concluded an agreement in July with a private equity investor (FIMI) to provide funds of up to USD 50 million (approx. EUR 36 million), of which USD 25 million (approx. EUR 18 million) was received in cash. The backlog of Tahal Projects (EUR 194 million at September 30, 2010) remains substantial.

The Israeli automotive activities presented higher revenues and gross margins in 9M-2010 y-o-y on the back of improved market conditions and changes in the mix of vehicles sold.

Outlook 2010

Based on the results in 9M-2010 and assuming no deterioration of the Real Estate markets in which Kardan is active, result from operations before tax and financing expenses should be positive.

In Financial Services (mainly Banking and Lending) in CEE and CIS, the economic environment in Russia has shown signs of improvement. In the other countries where we operate, such as in Bulgaria, Romania and Ukraine, circumstances are more challenging. We expect that, on balance, lending activities should increase and provisions for bad debt will decrease throughout the full year 2010. Overall, profit from continuing operations before tax in financial services will not be positive in 2010.

In the (Water) Infrastructure division, due to completion of waste water treatment plants in China in 2009 and 2010 (Tahal ssets) and the steady backlog for the design, engineering and construction activities (Tahal Projects), management expects an increase in revenues and gross margins in 2010. Results from operations before tax and finance expenses are expected to be positive.