Nordex SE — Earnings Release 2003

Dec 18, 2003

News Details

Ad-hoc | 18 December 2003 08:30

Nordex into the offensive with extensive impairment charges

Ad-hoc-announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Nordex into the offensive with extensive impairment charges Effects of conservative accounting concealing rising new business / Preliminary figures for fiscal year 2002/03 Hamburg, December 18, 2003. In spite of declining demand in Germany, the Nordex Group’s new business has stabilized again. According to stricter criteria the order intake in the 2nd half-year of 2002/2003 rose to EUR 130 million (1st half-year: EUR 107 million). In total the adjusted new orders in fiscal 2002/2003 were valued at EUR 237 million, compared with EUR 355 million in the previous fiscal year. In the first quarter of the current fiscal year, new business is continuing to match fore-casts. Since January 2003, Nordex has only recognized order receipts for which fi-nance has been irrevocably confirmed or for which a bank guarantee has been fur-nished. Nordex is also applying stricter criteria with respect to the recognition of IAS revenues. Since the fourth quarter of 2002/03, in line with the constructing progress the company is using restrictive criteria of the percentage-of- completion method. In spite of rising business volumes, Nordex reported a reduction in revenues of around EUR 45 million. Adjusted for this effect, business volumes would have reached the forecast level. The conservative application of the PoC method also resulted in a lower result. A more cautious accounting resulted in additional strains on earning. The value of fixed and current assets has been devaluated comprehensively. This particularly concerns prototypes, capitalized development expenses and inventories for turbines which will no longer be sold in the future. In connection with this reorientation, the Group is now focusing on volume products in the upper output segments. Given the mounting payment difficulties on the part of some German customers, Nordex has tightened the criteria for the revaluation of receivables. As well the company accounted for provisions due to settlement payments in connection with its resolute personnel adjustments. In total this leads for the fourth quarter to additional one-off expenses of EUR 60 – 65 million. These exceptional charges primarily only impact the balance sheet and have little effect on the Company’s liquidity. All told, Nordex was able to put a stop to the heavy drain on liquidity at the end of the fiscal year. In the fourth quarter, the com-pany reports a free cash flow of EUR 0.5 million. For the current quarter Nordex expects a further stabilization. Working capital shrank by around EUR 51 million to EUR 76.3 million primarily due to a reduction in receivables and higher advance payments. The 75 percent reduction in long- term purchase commitments to around EUR 33 million will take further pressure off the working capital this year. As expected, operating profit in the fourth quarter came under pressure from still low revenues. Loss was on a par with the level in earlier quarters. Accordingly, loss before tax, interest and one-off expenses is expected to come to around EUR 67 million in fiscal 2002/03 (previous year: profit of EUR 17.8 million). end of ad-hoc-announcement (c)DGAP 18.12.2003 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: The Company anticipates a substantial improvement in its bottom line in the current fiscal year thanks to the restructuring measures implemented in summer 2003. Moreover, it is convinced that because of the comprehensive adjustment of risks and a more cautious accounting policy the strains of the past have been cleaned up. In total Nordex plans to improve earnings by around EUR 70 million by the end of next fiscal year, by which time it intends to post operating profit on the basis of its own resources again. Information for analysts and press: CFO Thomas Richterich will be presenting and explaining the preliminary fiscal 2002/2003 figures at the international conference call scheduled for 10:00 CET this morning. The full financial statements for the fiscal year will be published in the first quarter of 2004 in accordance with the applicable stock market rules. For more information, please contact: Nordex AG, Ralf Peters Telephone: +49 40 500 98 – 100 Telefax: – 333 ——————————————————————————– WKN: 587357; ISIN: DE0005873574; Index: NEMAX 50 Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 180830 Dez 03