Ernst Russ AG

Earnings Release • Nov 12, 2008

News Details

Corporate | 12 November 2008 07:06

HCI Capital AG: HCI Capital AG posts strong operating results for the third quarter of 2008

HCI Capital AG / Quarter Results

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HCI Capital AG posts strong operating results for the third quarter of 2008

• Record placements of fund products
• Revenues up 34.4 per cent year-on-year in the third quarter
• Financial markets crisis influences 9-month result and outlook
• EUR 6.3 million profit after taxes for the third quarter

Hamburg, 12 November 2008 – HCI Capital AG, one of the leading issuing
houses for closed-end funds, demonstrated the strength of its operating
business in the third quarter of 2008, placing an aggregate EUR 167.3
million of fund products during the quarter – up 20.9 per cent
year-on-year. At a record level of EUR 508 million, equity capital placed
during the first nine months of the current year showed an increase of
close to 17 per cent. Third-quarter revenues of EUR 34.9 million were up by
34.4 per cent compared to the same period of the previous year; at EUR 96.5
million, they grew by 8 per cent during the first nine months (9m 2007: EUR
89.3 million). Consolidated net income for the third quarter of 2008
amounted to EUR 6.3 million.

About HCI:
Established in 1985, the HCI Group creates closed-end funds and structured
investments in shipping, real estate, aircraft, private equity funds of
funds, and in the secondary life insurance market, as well as asset
creation plans. Since 1985, more than 117,600 clients have invested EUR
5.69 billion in 485 issues, with an investment volume totalling more than
EUR 14.25 billion (figures as at 30 Sep 2008), making HCI one of the
leading 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.

Record placements of fund products
Placements of fund products in the third quarter of 2008 reached EUR 167.3
million and were thus 20.9% up on the previous year’s result of EUR 138.4
million. With placed equity capital of EUR 507.8 million for the period
ended 30 September 2008 and an increase of 16.8% over the previous year's
level of EUR 434.6 million, HCI Group successfully continued along its
growth path. In spite of the challenging market environment, HCI Capital
achieved the highest placement figure ever seen in any nine-month period
during the Group's 20-year history, once again demonstrating the strength
of its operating business, product range and sales network in the third
quarter.

'The fact that we succeeded in increasing placements so clearly in a
challenging market environment demonstrates the strength of our sales
network, and that our fund products satisfy investor demand and
preferences', said Dr Ralf Friedrichs, Chairman of the Management Board of
HCI Capital AG.

Revenues up 34.4 per cent year-on-year in the third quarter
Strong sales of fund products during the third quarter were also reflected
in results. Revenues were up by a marked 34.4 per cent, to EUR 34.9
million. Gross profit was also up strongly over the previous year, rising
by 33.4 per cent to EUR 16 million. At EUR 5.9 million, third-quarter
earnings before inter-est and taxes (EBIT) were in line with the previous
year's figure. At EUR 6.3 million, consolidated net income for the period
was particularly gratifying.

Financial market crisis influences 9-month result and outlook
Nine-month results were negative, at EUR -12.2 million. The figure was
influenced in particular by the extraordinary one-off effects which
occurred during the first half of the financial year, and in particular, by
the considerable impairment of an investment in a portfolio of commercial
real estate loans in the USA, originally planned as a fund product.
Excluding this write-down, HCI Group would have reported a profit in excess
of EUR 12.0 million.

Moreover, the serious further deterioration of the crisis affecting
financial markets since the beginning of October led to uncertainty amongst
investors, who have adopted a very reluctant stance vis-à-vis all types of
investment. The closed-end funds sector has also been hit by this
development, and what has been very dynamic placement activity by the HCI
Group to date has slowed markedly in the face of investor uncertainty over
recent weeks. Against this backdrop, HCI Group was forced to revise its
sales planning downwards - from an initial figure of EUR 880 million of
placed equity capital, to a target range of between EUR 650 and 750 million
for the current year. Accordingly, the forecast full-year 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 current situation facing financial markets and banks, and the impact on
the real economy, poses a huge challenge for the entire sector of
closed-end fund product providers. But every crisis also offers an
opportunity. 'I firmly believe that investors' attention will once again
focus on our products, in recognition of their solid and transparent
material investments following the experiences of the financial market
crisis', said Dr Friedrichs. 'We have the right products, a strong sales
network and thus also the opportunities to gain renewed momentum as soon as
market events calm down again.'

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 Corporate Communications
Phone: +49 40 88881-125
olaf.streuer@hci-capital.de

12.11.2008 Financial News transmitted by DGAP

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

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