Press release BoxID: 402478 (Funkwerk AG)
  • Funkwerk AG
  • Im Funkwerk 5
  • 99625 Kölleda/Thüringen
  • Contact person
  • Jörg Reichenbach
  • +49 (3635) 600-346

Funkwerk prospects and Algeria business

(PresseBox) (Kölleda, ) Funkwerk AG (ISIN DE0005753149) continued its restructuring and focusing efforts to achieve savings of over EUR 15m, contributed by all its business segments. Measures included the optimisation of its workflow management and a more productive use of resources. Based on the preliminary figures now available for 2010, sales approximated last year's level with company earnings before impairments and restructuring near break-even, improving the operating result on the previous year by around EUR13m.

In light of the increasing political instability in North Africa, however, a revaluation of Funkwerk's business in Algeria was deemed sensible for the 2010 financial statements. Funkwerk has been involved in a contract with an Algerian industrial corporation since 2006, setting up major safety systems for key oil and gas plants including pertinent residential bases in Algeria. Sparked by radical domestic upheaval, which also led to a change in leadership at the state-owned Algerian corporation, business in the country, and particularly the 'Base 24' project, which was still at the time implemented, needed to be discontinued in the first half of 2010.

The risks involved in this business are detailed in the quarterly report as at 30 September. Over the past few months, efforts were made at every level to ensure a continuation and completion of the project. On grounds of the aggravating political situation in Algeria, it remains to be seen if and when these efforts will lead to success. As a result, the Executive Board of Funkwerk feels it wise to account for appropriate impairments in the 2010 financial statements.

Along with other reduced items, impairments of tied-up inventories and assets made for reasons of due diligence will total up to EUR 13m and be included in the 2010 financial statements with significant impact on revenues at Funkwerk AG. If the project is resumed in 2011 or the following years, the appropriate impairments would be reversed to result in operating revenue.

The preliminary figures for fiscal 2010 are due to be disclosed in early March. The full annual financial statements of Funkwerk AG will be published on 31 March 2011.