Höft & Wessel AG

Hoeft & Wessel AG anticipates substantial loss for 2011

- Revaluations lead to non-recurring write-down
- New CEO will now lay the foundations for positive business development
- Return to positive earnings territory expected as early as 2012

In the fourth quarter of 2011, the Hoeft & Wessel Group did not match the previous year's good development. For this reason, according to preliminary estimates, sales revenues in fiscal 2011 are expected to decline to approx. EUR 88 million. Projects postponed until 2012 and lower revenues than planned led to a negative operating result of approx. EUR -3,2 million before non-scheduled depreciation. No dividend can therefore be paid out for the financial year 2011. In contrast, the operating cash flow will turn out positive according to preliminary figures.

After business development for 2011 did not turn out satisfactory, with its new CEO Michael Hoeft at the helm Hoeft & Wessel will now lay the foundations for a sustainable, positive business trend for the following years.

In this context, revaluations essentially relating to balance sheet line items such as capitalised company-produced additions to plant and equipment and inventories in the Skeye segment led to a non-recurring write-down of approx. EUR 4,5 million and will create the preconditions in accounting terms for improved business results.

The founder and principal shareholder, Michael Hoeft, had recently returned to the Board of Management, of which he is now the Chairman. Under his management, thanks to new organisational structures for example the prerequisites are to be created for a sustainable, profitable business development. These measures are to already become effective during the current financial year; accordingly, Hoeft & Wessel AG assumes it will generate in fiscal 2012 slightly higher sales revenues than in the previous year and a moderately positive operating result.