Funkwerk AG

Earnings Release • Feb 2, 2011

News Details

Ad-hoc | 2 February 2011 17:00

Funkwerk prospects and Algeria business

Funkwerk AG / Key word(s): Profit Warning

02.02.2011 17:00

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The issuer is solely responsible for the content of this announcement.

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Funkwerk prospects and Algeria business

Kölleda, February 2, 2011. In 2010, Funkwerk AG (ISIN DE0005753149)
continued its restructuring and focusing efforts to achieve savings of over
EUR 15m, contributed by all its business segments. Measures included the
optimisation of its workflow management and a more productive use of
resources. Based on the preliminary figures now available for 2010, sales
approximated last year's level with company earnings before impairments and
restructuring near break-even, improving the operating result on the
previous year by around EUR13m.

In light of the increasing political instability in North Africa, however,
a revaluation of Funkwerk's business in Algeria was deemed sensible for the
2010 financial statements. Funkwerk has been involved in a contract with an
Algerian industrial corporation since 2006, setting up major safety systems
for key oil and gas plants including pertinent residential bases in
Algeria. Sparked by radical domestic upheaval, which also led to a change
in leadership at the state-owned Algerian corporation, business in the
country, and particularly the 'Base 24' project, which was still at the
time implemented, needed to be discontinued in the first half of 2010.
The risks involved in this business are detailed in the quarterly report as
at 30 September. Over the past few months, efforts were made at every level
to ensure a continuation and completion of the project. On grounds of the
aggravating political situation in Algeria, it remains to be seen if and
when these efforts will lead to success. As a result, the Executive Board
of Funkwerk feels it wise to account for appropriate impairments in the
2010 financial statements.

Along with other reduced items, impairments of tied-up inventories and
assets made for reasons of due diligence will total up to EUR 13m and be
included in the 2010 financial statements with significant impact on
revenues at Funkwerk AG. If the project is resumed in 2011 or the following
years, the appropriate impairments would be reversed to result in operating
revenue.

The preliminary figures for fiscal 2010 are due to be disclosed in early
March. The full annual financial statements of Funkwerk AG will be
published on 31 March 2011.

For further information contact

Funkwerk AG
Im Funkwerk 5
99625 Kölleda/Thuringia
Germany
Jörg Reichenbach
Investor Relations
Phone: 0 36 35/6 00 -3 46
Fax: 0 36 35/6 00 -5 07
reichenbach@funkwerk.com

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Language: English
Company: Funkwerk AG
Im Funkwerk 5
99625 Kölleda
Deutschland
Phone: +49 (0)3635 600 0
Fax: +49 (0)3635 600 507
E-mail: info@funkwerk.com
Internet: www.funkwerk.com
ISIN: DE0005753149
WKN: 575314
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of Announcement DGAP News-Service

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