Hartmann's CEO Peter Arndrup Poulsen has the following comments on 1H 2008:

 

 

 

On the outlook for 2008:

 

 

 

Consolidated Revenue for 1H 2008 reflected an increase of 8% to DKK 769 million driven by an improved product and price mix in the core business and increased revenue in other business areas.

 

The period in review was affected by general increases in prices of energy and raw materials. Nonetheless, the Group posted a significantly improved result, and the amount in normalised EBIT (adjusted for asset impairment and non-recurring items) for the Group came to DKK 50 million against the year-earlier level of DKK 12 million, making it the third consecutive quarter in which the ongoing turnaround activities have a positive effect on the bottom line.

 

Hartmann generated a positive cash flow from operating activities before financial income and expenses of DKK 69.2 million against DKK 19.1 million in the same period last year.

 

Financial income and expense reflects the reclassification made in Q2 2008 of accumulated exchange rate losses of DKK 16 million from equity to financials. The reclassification was made in connection with the closing down of the operations in Asia.

 

Consolidated earnings (EAT) in 1H 2008 came to DKK -14 million against DKK -486 million last year, the difference being due primarily to DKK -245 million from the sale of the operations in South America and DKK -212 million in impairment writedowns of assets in North America and Asia made in 1H 2007.

 

In the period in review Hartmann carried out a fully subscribed rights issue resulting in DKK 252 million in net proceeds. The issue was given massive support by the Group's shareholders.

 

The emission resulted in an increase in Hartmann's equity interest in 1H from 18% to 42% and a reduction of the Group's gearing from 269% to 61%. The Group's equity rose by DKK 295 million from the opening level, standing at DKK 515 million at 30 June 2008. This represents a marked improvement in the Group's financial situation.

 

The combination of the capital injection and strong earnings growth has created a sound basis for the implementation of the strategy plan outlined by Management in the prospectus.

 

In connection with the rights issue the Group effected a merger of its previous three share classes so that, moving forward, the Hartmann Group has only one class of shares.

 

The turnaround activities continue in 2008 for the purpose of stabilising and consolidating the business. The plan is scheduled for full implementation by the end of 2008.

 

The two agreements for the sale of a building and a production line in Malaysia have now become final and are reflected in the profit/loss for Q2 2008 in a total amount of approx. DKK 14 million (DKK 6 million in Industrial Packaging and DKK 8 million in other business areas).

 

Egg Packaging Europe posted growth in both revenue and operating profit/loss (EBIT) in 1H 2008.

 

Egg Packaging North America remained affected by the unfavourable hedging of exchange rates. The amount in operating result (EBIT) in 1H 2008 less impairment came to DKK -7 million against DKK-16 million in the same period last year, the improvement being due mainly to intra-group sales of production technology, lower fixed costs and a lower amount in depreciation as a result of the write-down in 2007.

 

Industrial Packaging posted a marked decline in revenue, however with a sizeable increase in normalised operating result (EBIT). Q2 2008 included DKK 32 million in asset impairment caused by the previously announced change in the market situation.

 

Hartmann maintains the outlook for 2008 which involves a revenue in the level of DKK 1,480 million, an operating result (EBIT) of approx. DKK 55 million and earnings for the year (EAT) of approx. DKK 0-5 million.