DGAP-Adhoc: SKW Stahl-Metallurgie Holding AG: New Executive Board of the SKW Metallurgie Group sees significant need for impairment, and implements program for strategic realignment; revenues and EBITDA expected below previous year for H1-2014

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| Source: EQS Group AG
SKW Stahl-Metallurgie Holding AG  / Key word(s): Restructure of Company/Profit
Warning 

14.08.2014 19:59

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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New Executive Board of the SKW Metallurgie Group sees significant need for
impairment, and implements program for strategic realignment; revenues and
EBITDA expected below previous year for H1-2014

The new Executive Board of SKW Stahl-Metallurgie Holding AG is currently
reviewing, in the context of a fundamental analysis, all business
activities of the Group. Preliminary assessment and findings indicate
significantly more conservative business developments for certain Group
companies than so far expected.
In this context, the Executive Board has decided to no longer foster the
strategy of backward integration. The Executive Board is currently
reviewing all available options for the Group companies concerned in Bhutan
and Sweden.
In the context of compiling the Group interim financial report as per June
30, 2014, the SKW Metallurgie Group tests for impairment pursuant to
international accounting standards. In this context, extraordinary value
adjustments will be required to an expected tune of EUR 84 million; the
majority of those adjustments concern tangible assets in Bhutan and Sweden
as well as non-tangible assets and impairments of deferred tax assets.
Extraordinary adjustments are non-cash and hence do not have any immediate
impact on the operative business or cash in hand of the SKW Metallurgie
Group. Further extraordinary impairments are currently not expected.

The new Executive Board of the SKW Metallurgie Group has implemented a
comprehensive program for strategic realignment ("ReMaKe"). In the medium
term, this program should on Group level increase revenues and earnings as
well as ensure a sustainably positive free cash flow.

The one-off expenses associated with the realignment are mainly expected in
the EBITDA of H2-2014 (in the single-digit million Euro range). Positive
net earnings contributions are expected as of 2015. A more detailed
quantification of the effects from the program of strategic realignment is
not possible at this stage and will be published after concluding
corresponding analyses, at the latest with the publication of the Group
interim financial report as per September 30, 2014.

Based on preliminary figures now available, the SKW Metallurgie Group
assumes that revenues and EBITDA in Q2-2014 and hence also in H1-2014 will
not reach the levels of the previous year.
Due to the aforementioned extraordinary adjustments, earnings before
interest and taxes (EBIT), earnings before taxes (EBT) as well as the net
result of the period and earnings per share (EPS), each for H1-2014, will
be significantly negative and also lie below the figures of the previous
year.

For the second half of 2014 and for full year 2014, the SKW Metallurgie
Group has updated its expectations, based on the current corporate
structure, as follows:
* Revenues of the Group in H2-2014 are expected slightly above those of
H2-2013. However, the Executive Board does not assume the weak revenues of
Q1-2014 to be compensated in full; hence, revenues slightly below the
figures of the previous year are expected for FY-2014.
* Group EBITDA (before restructuring expenses) in H2-2014 are expected
above the reported figures of the comparable period of 2013.
* Group EBITDA (reported, after restructuring expenses) in H2-2014 and also
in FY-2014 are expected below the reported figures of the comparable period
of 2013.

The net result of the year and earnings per share (EPS) will be
significantly negative and hence significantly below the figures of the
previous year, for the aforementioned reasons.
The SKW Metallurgie Group furthermore expects that in FY-2014 on the level
of the parent company SKW Stahl-Metallurgie Holding AG, due to high value
adjustments, equity will depreciate significantly, and the accumulated
result for FY-2014 will be negative.

The currently expected results of the Group profit and loss statement as
per June 30, 2014 and their implications for the Group balance sheet as per
June, 30, 2014 would result in SKW Stahl-Metallurgie Holding AG's not
meeting certain financial covenants from current financing contracts, which
would, in turn, result in rights to terminate for the lenders. Currently,
constructive discussions are taking place with the financing banks.
The loan-providing banks have signed a waiver agreement for the framework
credit contract regarding the covenant breach as of June 30, 2014; this
waiver is, for the time being, going to last until September 30, 2014.

The half-year financial report of the Group, which is subject to an
auditor's review, will be published on August 28, 2014. The adjournment is
required in order to present the aforementioned matters comprehensively.


14.08.2014 The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:     English
Company:      SKW Stahl-Metallurgie Holding AG
              Rathausplatz 11
              84579 Unterneukirchen
              Germany
Phone:        +49 (0)8634 62720-15
Fax:          +49 (0)8634 62720-16
E-mail:       info@skw-steel.com
Internet:     www.skw-steel.com
ISIN:         DE000SKWM021
WKN:          SKWM02
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, München, Stuttgart
 
End of Announcement                             DGAP News-Service
 
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