Peter Arndrup Poulsen, CEO of Brødrene Hartmann, makes the following statement about the result of the first quarter:
"First quarter 2007 was influenced by a number of non-recurring items caused by structural measures. These measures consist primarily of dismissals in the division for Industrial Packaging as well as a restructuring of the research & development activities in the Group, including a write-down of an ongoing project. Adjusted for these items the profit would have been better than same quarter last year. The measures are in line with our wish to consolidate and make our business more efficient as announced already in the Annual Report 2006."
Peter Arndrup Poulsen says about the sale of the activities in South America:
"In April we announced the ongoing sale of our activities in South America and the financial consequences related to this. I am not satisfied with the costs that the sale inflicts on us, but I am pleased that we had the courage to carry out the decision. Now we can concentrate our efforts on future activities."
Peter Arndrup Poulsen makes the following statement about the revised expectations:
"When we announced the annual report Hartmann expected an operating profit in the range of DKK 40-50 million. This did not include costs associated with further strategic initiatives. As a consequence of the costs for structural measures in first quarter as well as the ongoing sale of the activities in South America, the forecast for 2007 has been revised accordingly. The forecast does not include any costs resulting from further strategic and structural measures in the remaining part of 2007."
Highlights from the report for the first quarter 2007:
The Group posted DKK 381 million in first-quarter revenue in 2007. This was on a par with the year-earlier level.
The Group posted DKK 5 million in first-quarter operating profit in 2007, down from DKK 12 million last year and reflecting the adverse effect of approx. DKK 10 million in non-recurring items caused by structural measures initiated by the Group.
Hartmann still expects consolidated revenue in 2007 in the range of DKK 1,500 million, up approx. 2% from the revenue achieved in 2006.
The Group initiated a number of structural measures in Q1 2007 to strengthen its long-term earnings capacity. The measures are in keeping with the Group's wish to enhance efficiency and consolidate its business, as announced already in the Annual Report 2006. Non-recurring items resulting from these measures aggregated approx. DKK 10 million in Q1. Against this background the Group has revised the operating profit forecast for the full year by DKK -10 million to DKK 30-40 million.
As announced in stock exchange release no. 8/2007, in April a conditional contract was signed for the sale of the Group's operations in South America. The sale is expected to have a negative earnings effect of approx. DKK 50 million on discontinued operations. Accordingly, the Group's equity is reduced by a similar amount, approx. DKK 50 million.
It has previously been announced that the divestment of the operations in South America involves the reclassification of foreign exchange gains/losses from prior years appearing by the translation of the equity in South America at the opening exchange rate and the exchange rate at balance sheet date.
The procedure is an accounting technicality only and has no effect on equity or liquidity. At 31 March 2007 the amount involved totalled approx. DKK 187 million.
Accordingly, the Group expects a negative impact of approx. DKK 237 million on the amount in net profit/(loss) after tax in 2007, including the above reclassification, as a result of costs related to the contract signed in relation to South America.
The net profit for the year is now forecast at between DKK -227 million and DKK -237 million.
The forecast does not include any costs that may arise out of further strategic and structural measures in the remaining part of 2007.
For further information please contact:
Peter Arndrup Poulsen
CEO
Brødrene Hartmann A/S
Tel.: +45 45 87 50 30
