H&R WASAG AG / Miscellaneous
06.11.2008
Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Hamburg, 5 November 2008
H&R WASAG AG (ISIN: DE0007757007) today decided to recognise a cautionary
provision of 22 million in the third quarter 2008 financial statements.
This step comes on the back of the EU commission issuing a cartel fine
against the company as the joint and severally liable entity with Hansen &
Rosenthal Group. A preliminary analysis of the rationale behind the notice
has found that there are grounds to challenge the reason for and the amount
of the fine. According to the Board it however remains to be seen if a
challenge would be a success. In recognising a provision, claims against
other jointly and severally liable partners were not included as there is
no reliable basis on which to put a value on the claim.
The Board today also discussed the initial indications for earnings in
October and made an estimate for the full year. According to that,
previously forecasted earnings before tax (EBT) of 50 to 60 million
adjusted for the provision for the cartel fine would be exceeded
considerably. The reasons for such a good result are on the one hand to be
found in the current positive operational results; on the other hand, it
must be considered that with the extreme decline of raw material prices the
valuation of the semi-finished and finished products applying the moving
average (with an annual average related valuation of the expenditure) will
tend to result in a stock valuation above the current price level and that
accordingly a system-induced devaluation requirement will be shifted to the
future. With the length of the reference period increasing over the course
of the year, the changes of raw material costs and thus of manufacturing
costs are leading to ever diminishing adjustments of the average. In a bid
to pay tribute to the special price situation and to avoid an overvaluation
of inventories, the Board decided to improve the way higher commodity price
volatility is reflected in earnings reporting and to replace the current
system of valuing outflows at average annual prices with a valuation at
monthly average prices. From todays point of view, this could result in
changes in consolidated financial statements for the financial year 2008 of
up to 15 million in additional inventory devaluation.
The earnings before tax (EBT) figure mentioned above and adjusted for the
cartel fine will be in the forecasted region of between 50 million and
60 million assuming sustained stable business development, despite the
devaluation effects. Changing valuation will ensure a more transparent and
timely reflection of the development of commodity prices in reporting.
Contact:
H&R WASAG AG
Investor Relations / Public Relations
Christian Pokropp
Neuenkirchenerstraße 8, 48499 Salzbergen
Tel.: 040-43218-321, Fax: 040-43218-390
Mail: Christian.Pokropp@hur-wasag.de
www.hur-wasag.de
DGAP 06.11.2008
---------------------------------------------------------------------------
Language: English
Issuer: H&R WASAG AG
Neuenkirchener Str. 8
48499 Salzbergen
Deutschland
Phone: +49 (0)40 43 218 321
Fax: +49 (0)40 43 218 390
E-mail: investor.relations@hur-wasag.de
Internet: www.hur-wasag.de
ISIN: DE0007757007
WKN: 775700
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg,
Düsseldorf; Freiverkehr in Berlin, Hannover, München,
Stuttgart
End of News DGAP News-Service
---------------------------------------------------------------------------
DGAP-Adhoc: H&R WASAG AG is recognising a provision for cartel fine / Operating earnings remain on target despite devaluation of inventories
| Source: EQS Group AG