Muehlhan AG

Earnings Release • May 30, 2007

News Details

Corporate | 30 May 2007 07:50

Muehlhan publishes figures for the first quarter of 2007

Muehlhan AG / Quarter Results

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Muehlhan publishes figures for the first quarter of 2007:

• Revenue up 8% on the year to EUR 42.9 million
• Strong growth in Ship Repair and Industry Services
• Asia and Europe show high double-digit revenue growth
• Under-utilization, preliminary project losses in US
• Quarterly figures on IFRS basis for the first time

Hamburg, 30 May 2007 – Muehlhan AG (Entry Standard; ISIN DE000A0KD0F7)
reports revenue of EUR 42.9 million in the first three months of the
current financial year. That was 8% more than in the first quarter of 2006
(EUR 39.7 million). Business was particularly pleasing for the Muehlhan
Group, which is active in the area of maritime surface protection, in the
Ship Repair and Industry Services segments. The ship repair business was at
around EUR 9 million about 15% up on the previous year’s EUR 7.8 million.
Revenue growth in the Industry Services division was nearly 25%, totaling
EUR 15.6 million (Q1 2006: EUR 12.5 million). Muehlhan is on balance also
satisfied with revenue development in its other two segments Ship
Newbuilding and Oil & Gas Offshore. Newbuilding continued to be the largest
division, with EUR 15.8 million in turnover, but revenue was, as expected,
below the previous year’s EUR 16.9 million due to the termination of a
loss-making newbuilding project at a Norwegian shipyard. In the Oil & Gas
Offshore segment Muehlhan’s revenue was unchanged on the year at EUR 2.5
million. 'We are firmly persuaded,' said Muehlhan CEO Dr Andreas Krüger,
'that the pace of revenue growth will pick up significantly from the second
quarter now that work has commenced on the North Sea platforms.'

Development in the different regions is also, with the exception of the
United States, pleasing on the whole. In Europe growth compared with the
first quarter of 2006 was nearly 20% to EUR 33.3 million. In the Middle
East Industry Services, which is under development, progressed very well,
in the complete region Asia first-quarter revenue improved by over 68% to
EUR 3.5 million even without consolidation of Muehlhan China.

EBITDA in the reporting period was a mere EUR 1.0 million (Q1 2006: EUR 2.7
million), while EBIT was EUR -0.5 million (Q1 2006: EUR 1.3 million). This
year-on-year decline was due mainly to uncertainties in project business
and to under-utilization in the United States as noted in the Annual Report
for 2006. American shipyards and with them the Muehlhan Group have been hit
by under-utilization due to ongoing weakness in both the Ship Newbuilding
and Ship Repair segments – mainly as a result of the US Navy’s military
commitments. The Group’s promptly response was to adjust capacities and
reduce personnel at the US subsidiary SIPCO by over 20%. Further measures
will be taken in the second quarter of 2007.

Muehlhan subsidiary CCC was only able to execute complex and demanding
repairs to the Golden Gate Bridge after a substantial delay due to
construction-related faults that were not initially apparent and to the bad
weather. The extent to which the extra cost will be passed on to the client
is going to be decided in the weeks ahead. In the first quarter the project
imposed an initial EUR 1.2 million burden on pre-tax earnings. Completion
of this first fixed-price project on the bridge is scheduled for the
beginning of June 2007. CCC expects to reach an agreement on cost transfer
with the client as a result of which the company will be able to rely on
being granted the contract for further extensive pending project stages.
The Golden Gate Bridge is undergoing a general overhaul as part of a
comprehensive US$ 19.7 billion program of repairs to make all bridges in
the San Francisco area earthquake-safe over the next 15 to 20 years. 'We
have been able to perform all contractually agreed services and further
services required by our client to the entire satisfaction of the latter.
We therefore feel we are well placed for follow-on orders for which,
however, we will no longer accept any lack of clarity with regard to the
exact scope of performance,' said CEO Dr. Andreas Krüger.

Outlook
After a traditionally poor first quarter due to weather conditions Muehlhan
anticipates a significant improvement in its earnings position for the full
year 2007. In view of the problems in the United States described above,
however, the current financial year will not, as far as can be seen at
present, reach the level of the result for 2006 adjusted to IFRS. Depending
on the further course of project work, on measures in the United States and
on the extent to which extra costs incurred in work on the Golden Gate
Bridge can be passed on to the client the Executive Board anticipates an
EBITDA of between EUR 10 million and EUR 13 million (2006: EUR 14.3 million
according to IFRS). EBIT on the basis of the new IFRS reporting standards
should as expected amount to between EUR 4 million and EUR 7 million (2006:
EUR 8.5 million according to IFRS). In view of the pleasing trend in the
Ship Repair, Oil & Gas Offshore and Industry Services segments and the
prospects for the Middle East/Asia region the Executive Board reaffirms its
revenue forecast in the Annual Report for 2006 of between EUR 185 million
and EUR 205 million (2006: EUR 184.4 million according to IFRS).

Key Figures:
In kEUR Q1/2007 (IFRS) Q1/2006 (IFRS)
Revenue 42,865 39,733
EBITDA * 1,004 2,656
EBIT ** -526 1,290
EBT -897 919
Earnings per share*** -0.09 -0.02
Consolidated result after minority interests -1,785 -260
Fixed assets **** 48,319 45,966
Equity capital 57,366 37,559

* EBITDA: Consolidated net profit for the year before interest, taxes,
depreciation and amortization
** EBIT: Consolidated net profit for the year before interest and taxes
*** No dilution from the existing Phantom-Shares-Programme
**** Fixed assets (IFRS): Non-current assets less deferred taxes

About Muehlhan:
The Muehlhan Group is a leading world provider of marine surface
protection. Its core business consists of applying and renewing corrosion
protection coatings to steel structures. They include steel surfaces of
ships and of oil and gas rigs and platforms. The Muehlhan Group is also
active in the Industry Services segment, which includes surface protection
for wind turbines, chemical production plants and fuel storage depots,
steel bridges, cranes and machinery. The company’s patented technology
brand-named μ-jet guarantees especially high quality and efficiency in
the removal of old coatings and rust, particularly in the open sea.
Muehlhan was established in Hamburg in 1881 and today employs some 2,300
people in 31 subsidiaries around the world. In 2006 the company generated
revenues of EUR 184 million (IFRS). For further information visit
www.muehlhan.com

Press Contact:
Ties Kaiser
Muehlhan AG
Tel: +49-40-75271-156
E-mail: kaiser@muehlhan.com

DGAP 30.05.2007

Language: English
Issuer: Muehlhan AG
Schlinckstrasse 3
21107 Hamburg Deutschland
Phone: +49 40 75271 0
Fax: +49 40 75271 130
E-mail: investorrelations@muehlhan.com
www: www.muehlhan.com
ISIN: DE000A0KD0F7
WKN: A0KD0F
Indices:
Listed: Freiverkehr in Berlin-Bremen, Hamburg, München, Stuttgart;
Entry Standard in Frankfurt

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