Ernst Russ AG

Earnings Release • Oct 10, 2008

News Details

Corporate | 10 October 2008 20:32

HCI Capital AG: HCI Capital AG adjusts forecast for 2008 placements and earnings

HCI Capital AG / Profit Warning

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HCI Capital AG adjusts forecast for 2008 placements and earnings

• Placements up strongly, by 16.8% as at 30 Sep 2008
• Record EUR 508 million placement volumes achieved during the first nine
months of the financial year
• Current deterioration of the financial markets slows down dynamic
placement momentum
• Investors reluctant to enter into new investments

Hamburg, 10 October 2008 – HCI Capital AG, one of the leading issuing
houses for closed-end funds, boosted sales of closed-end fund products by
16.8 per cent year-on-year during the first nine months of 2008. With
placed equity capital of approx. EUR 508 million (9m 2007: EUR 434.6
million), product sales developed very positively indeed until 30 Sep 2008.
However, the serious deterioration of the crisis affecting financial
markets over the last weeks generally increased uncertainty, leading
investors to adopt a very reluctant stance. Accordingly, the strong
momentum of placements has slowed down significantly after posting a strong
performance for the first three quarters. Against this background, HCI
Group has revised its forecasts for placements and earnings for the 2008
financial year downwards.

Record placements of EUR 508 million during the first nine months: up 16.8%
year-on-year
HCI Group's operating performance during the third quarter of the 2008
financial year clearly demonstrated the strength of its product range and
distribution network: With approx. EUR 508 million in aggregate equity
capital placed during the first nine months – up 16.8% from the previous
year's figure of EUR 434.6 million – HCI successfully maintained its growth
momentum. At EUR 167 million, placements during the third quarter of 2008
were up by as much as 20% year-on-year (Q3 2008: EUR 138.4 million). In
spite of the challenging market environment, HCI Group achieved the highest
placement figure ever seen in any nine-month period throughout the Group's
20+-year history. This success was attributable to strong growth in the
real estate product sector (which includes the HCI Real Estate BRIC+ real
estate fund of funds); strong placements of guarantee products in the
shipping segment (Shipping Protect); a significant increase in placements
of secondary life insurance market funds involving UK life assurance
policies; and not least the extension of the product range into new asset
classes (HCI Deepsea Oil Explorer and HCI Aircraft One). Accordingly, the
number of customers rose to around 117,000 as at 30 September 2008 – up by
approx. 20% year-on-year. Dr Ralf Friedrichs, Chairman of the Management
Board of HCI Capital AG, said that this development 'demonstrates HCI
Group's ability to increasingly tap new target customer groups, with
innovative products and a strong distribution network.'

Strong placement momentum slowed down by deteriorating financial markets
crisis, as investors adopt reluctant stance
Given the dramatic worsening of the crisis affecting the banking sector
since early October, with further intensified financial market volatility,
investors currently facing significant uncertainty have been generally
reluctant vis-à-vis any form of investment products. The market for
closed-end funds could not escape this trend: as a result, HCI Group
recorded a significant slowdown in placements over recent weeks. Against
this background, HCI Group revised its previous sales forecast of EUR 880
million in placed equity capital, and now envisages placements to range
between EUR 650 million to EUR 750 million. Accordingly, the forecast
result after taxes, which had been projected to break even due to
significant non-recurring charges, is now expected to show a loss between
EUR 9 million and EUR 13 million. 'The fallout of the crisis affecting
financial markets has turned into a significant burden on HCI Group's
results for the 2008 financial year', said Dr Friedrichs. 'Looking ahead,
however, we see good potential for our business, once the strain on
financial markets eases and investors gain renewed confidence.'

Investments in tangible assets may benefit from the crisis
HCI Group expects investors to increasingly focus on investments in
tangible assets once the turbulence in the financial markets and the
banking sector starts to subside – this would benefit closed-end funds in
particular. 'With the experience gained during the financial markets
crisis, we are convinced that investors will focus on tangible assets,
emphasising a high degree of transparency', said Dr Friedrichs. 'Thanks to
our product range, we are in an excellent position to respond to this
investor preference.'

Established in 1985, the HCI Group creates closed-end funds and structured
investments in shipping, real estate, private equity funds of funds, and in
the secondary life insurance market, as well as asset creation plans. More
than 112,000 clients have invested EUR 5.5 billion in 478 issues, with an
investment volume totalling more than EUR 13.97 billion (figures as at 30
Jun 2008), making HCI one of the leading independent issuing houses in
Germany. HCI Capital AG has been listed on the stock exchange since October
2005, and has been included in the SDAX index since 19 December 2005.

Press contact:
Ingo Pfeil
HCI Capital AG
Head of Public Relations
Phone: +49 40 88881-236
ingo.pfeil@hci-capital.de

Investor Relations contact:
Dr Olaf Streuer
HCI Capital AG
Head of Investor Relations
Phone: +49 40 88881-125
olaf.streuer@hci-capital.de
10.10.2008 Financial News transmitted by DGAP

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Language: English
Issuer: HCI Capital AG
Bleichenbrücke 10
20354 Hamburg
Deutschland
Phone: +49 (0)40 88881-0
Fax: +49 (0)40 88881-199
E-mail: hci@hci.de
Internet: www.hci.de
ISIN: DE000A0D9Y97
WKN: A0D9Y9
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg;
Freiverkehr in Berlin, Hannover, Stuttgart, München,
Düsseldorf

End of News DGAP News-Service

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