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
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