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Earnings Release • Mar 10, 2008

News Details

Corporate | 10 March 2008 09:16

HCI Capital AG: Net Income of EUR 30.6 million

HCI Capital AG / Final Results/Final Results

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Press Release

HCI Capital AG: Net Income of EUR 30.6 million

• Net income target reached if last-minute special effects are eliminated

• Continuing diversification with innovative product concepts

• Strategic orientation lays solid foundation for further growth

• Proposed dividend of EUR 0.70

(Hamburg, March 10, 2008) –HCI Capital AG, one of the leading
non-bank-affiliated issuing houses for closed-end funds and structured
products, placed EUR 810.6 million in equity during the past fiscal year.
In so doing, the Company surpassed the EUR 800 million mark for the first
time in its history and increased its operating result by 26%. Consolidated
net income was influenced by unexpected special effects, including tax
expenses, and stood at EUR 30.6 million, thus falling short of the forecast
amount of EUR 35.0 million. The Management Board and the Supervisory Board
will propose that shareholders approve a dividend of EUR 0.70 per share.

With placed equity of EUR 810.6 million, the HCI Group finished 2007 with a
record level of placements. This reflects a 25.9% increase in placements
over the previous year. During the year, the company increased its number
of customers by 16.2%, from 87,700 to 101,900, while the number of sales
partners rose by 52% to 1,583.

'As it continues to diversify its offering to include innovative products,
the HCI Group has provided for future growth by tapping new levels of
investors for itself and its sales partners,' said Wolfgang Essing,
Chairman of the Management Board of HCI Capital AG. 'We have refocused our
internal sales structure and have significantly enhanced the services we
offer to our sales partners. This will provide a solid foundation for
continuing our growth in dynamic markets in the medium and long term,' said
Essing.

On the earnings side, the strategic change in the HCI Group’s product
offering led to a significant shift in commission structures during the
past year. Upfront sales commissions were partly replaced by regularly
recurring (and thus ongoing) trustee, service and management fees, part of
which will not have an effect until the coming years. This resulted in a
decrease in revenues during the reporting period from EUR 145.6 million to
EUR 137.3 million, or a 5.7% decrease from the prior year. The percentage
of recurring revenues was up from 20.6% to 22.4%.

EBIT (earnings before interest and taxes) fell by 21.1% in 2007, from EUR
51.1 million to EUR 40.3 million. The other operating income in the amount
of EUR 13.2 million was below last year’s figure of EUR 21.3 million, which
was influenced by exceptionally high income from the brokerage of ships.

The consolidated net income of EUR 30.6 million was affected by unexpected
effects. These included tax expenses in connection with an audit in the
amount of around EUR 2.6 million, which did not become apparent until the
consolidated financial statements at December 31, 2007 were prepared. They
also included expenses of EUR 1.8 million from including HCI Real Estate
Finance I GmbH & Co. KG in the balance sheet. This had to be included in
the IFRS consolidated financial statements at December 31, 2007 because of
the lack of marketability resulting from the downturn in the real estate
markets in the United States. If these effects are eliminated, the targeted
earnings of EUR 35 million were achieved.

HCI’s Management Board and Supervisory Board will propose that shareholders
approve a dividend of EUR 0.70 per share (prior year: EUR 1.40 per share).
This proposed dividend reflects the Management Board’s goal of taking
advantage of growth opportunities in the industry even in the midst of the
change of conditions on the financial markets.

The turmoil on the international financial markets, triggered by the
subprime mortgage crisis in the United States, have made it more difficult
to design closed-end investment models and structured products.

As a result, banks have stepped up their requirements to finance fund
projects for the entire industry.

Outlook

HCI will continue to grow its sales structures and expand them to include
new sales channels, to lay an even more solid foundation for success and
take its existing potential to the next level.

HCI Capital AG has set the goal for 2008 of increasing its placement
results by approximately 10%, to around EUR 880 million.

After expanding its structured product offerings, the Company will tap
additional new asset classes for itself and its partners. Thus, for
example, in 2008 HCI will offer a closed-end aircraft fund for the first
time, and will penetrate a brand new market segment with the HCI Deepsea
Oil Explorer.

Another of HCI’s goals is to increase its business with institutional and
international investors. Here the Company will initially concentrate on
Ships and Real Estate. Following the successful placement of HCI Hammonia
Shipping AG, there is additional potential for capital market investments
in ships.

This will be accompanied by a further decoupling of revenues from placement
volumes. Although the income streams will initially decrease in the short
term, they will increase in favor of recurring income over the long term.

On the basis of these strategic goals and given the current situation on
the financial markets, the Management Board expects consolidated net income
for 2008 on the level of approximately EUR 33 million.

Result 2007 2006 Change
Revenues in million EUR 137.3 145.6 -5.7%
Total operating performance in million EUR 149.8 166.9 -10.2%
EBIT in million EUR 40.3 51.1 -21.1%
EBT in million EUR 40.8 55.2 -26.1%
Consolidated net income in million EUR 30.6 39.5 -22.5%
EBIT margin as a % 29.4 35.1 -5.7% points
Earnings per share in EUR* 1.27 1.64 -22.6%

* on the basis of 24 million shares following IPO

Balance Sheet 2007 2006 Change
Total assets in million EUR 239.9 227,1 5.6%
Equity in million EUR 118.0 123,3 -4.3%
Equity ratio as a percentage 49.2 54,3 -5.1% points

Employees 2007 2006 Change
Average number of employees 286 238 20.2%
Personnel expense in million EUR 28.0 23.2 17.2%
Personnel expense ratio as a percentage 20.4 16.4 4.0% points

About HCI:

The HCI Group was founded in 1985 and creates closed-end funds and
structured products in shipping, real estate, private equity funds of funds
and the secondary life insurance market, as well as asset creation plans.
As of December 31, 2007, over 100,000 clients have invested close to EUR
5.2 billion in 468 issues, with an investment volume totaling more than EUR
13.27 billion, making HCI one of the leading non-bank-affiliated issuing
houses in Germany. HCI Capital AG has been listed on the stock exchange
since October 2005. It has been listed on the SDAX since December 19, 2005
and on the Hamburg Regional Index HASPAX since September 1, 2006.

Contact Public Relations:
Ingo Pfeil
HCI Capital AG
Head of Public Relations
Tel.: +49 40 88 88 1 236
ingo.pfeil@hci-capital.de

Contact Investor Relations:
Dr. Olaf Streuer
HCI Capital AG
Head of Investor Relations
Tel.: +49 40 88 88 1 125
olaf.streuer@hci-capital.de

10.03.2008 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 88881-109
E-mail: ir@hci-capital.de
Internet: www.hci-capital.de
ISIN: DE000A0D9Y97
WKN: A0D9Y9
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg;
Freiverkehr in Berlin, Düsseldorf, München, Stuttgart

End of News DGAP News-Service

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