VA Technologie AG

euro adhoc: VA Technologie AG
Quarterly or Semiannual Financial Statements
Half-year result 2004 characterised by reorientation (E)

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• Additional restructuring-measures bring losses in 2004 • Managing Board change at VA TECH Transmission & Distribution • Order intake and sales clearly up • Dynamic development in growth markets outside Europe • WABAG redimensioning proceeds as planned • A sustainable, positive result situation anticipated for 2005 • Extraordinary General Shareholders-Meeting to be held on September 21, in order to approve capital increase

The first half-year 2004 was characterised by generally positive developments in our markets, which resulted in an 11% increase in order intake and record order backlog of EUR 4.8 billion. To guarantee a lasting turnaround in the Group is the completion of restructuring within the Group, like that at the transformer production locations, and the redimensioning of Water Systems the priority for 2004. To achieve the rapid implementation of these measures together with the Supervisory Board, the Managing Board will draw up an additional restructuring programme during the second half of 2004. This will contain a drastic reduction in transformer capacity involving costs of EUR 65-70 m, of which around 50% will be cash effective. Consequently, we exspect a negative net result for 2004 to the same amount. The planned measures constitute an investment in the development of prosperity in the coming years. From 2005 onwards, a positive result situation on a durable basis can be anticipated, with a profit for the period in 2005 of more than EUR 50 m. Due to differences of opinion concerning the extent of restructuring in T&D, Klaus Brenner, who up to now headed T&D will leave the group by mutual agreement. When this takes place member of the VA TECH-Board Christian Habegger will take charge of T&D in addition to his current poste as head of the Power Generation Division. The Group’s order intake was raised by 11% in the first half-year to EUR 2,463 m, which resulted in an 11% rise in order backlog to a new record high of EUR 4,821 m. In the first half of 2004, VA TECH sales were raised by 13% to EUR 1,940 m. The group’s half year result for 2004 is characterised by three highly profitable divisions (VAI, VA TECH HYDRO, VA TECH ELIN EBG) and problems in WABAG and T&D. Earnings before interest, taxes and goodwill amortisation (EBITA) in the first six months improved to EUR 64.3 m (HY 1 2003: EUR 42.8 m). The VA TECH Group’s financial result for the first six months of the year altered from minus EUR 48.5 m to minus EUR 63.2 m due to increased interest on advance payments. Earnings before taxes (EBT) were up from minus EUR 25.4 m to minus EUR 19.8 m in the first half of 2004. Following the deduction of taxes and minority interests, the result for the period improved from minus EUR 23.4 m in 2003 to minus EUR 18.6 m in 2004. Net liquidity was maintained at the high level of EUR 163 m. Group free cash flow amounted to minus EUR 83 m in the first half of 2004 (HY 1 2003: minus EUR 27 m). A major step towards Water Systems restructuring and turn-around was taken with the sale of the domestic business of WABAG Germany and WABAG France. This divestment affected five WABAG locations (Leipzig, Ratingen, Butzbach, Bayreuth and Paris) with a work force of 157 and sales revenues in 2003 of EUR 70 m. Details concerning the transaction will be given following the granting of approval by the German anti-trust authority. In the second half of 2004, the general improvement in the climate of investment within the capital goods industry should continue to benefit the VA TECH Group. Positive impulses are tangible in both the metallurgical technology and energy branches. Therefore, even after the sale of some operative units, it is anticipated that order intake and sales in 2004 will remain steady at a high level. A rise in the VA TECH equity ratio and the turnaround in 2005 offer an ideal basis for a profitable and success-oriented future for the Group. At an extraordinary General Shareholder’s Meeting of VA Technologie AG, to be held on September 21, an authorised capital of up to 3.75 million shares will be sought (up to 25% of share capital). Realisation is planned for the current year in line with market conditions.  

end of announcement            euro adhoc 26.08.2004
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Further inquiry note: Bettina Pepek Press Officer

phone:  43 1 89100-3400 fax:    43 1 89100-4103 bettina.pepek@vatech.at

Branche: Technology
ISIN:      AT0000937453
WKN:        093745
Index:    ATX, ATX Prime, WBI
Börsen:  Wiener Börse AG / official dealing
              Berliner Wertpapierbörse / free trade
              Bayerische Börse / free trade



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