VIPsight - February 2015

COMPANIES

Deutsche Bank is to repay 400 million Euros to customers

Citing a modification to German legal procedure, Deutsche Bank has announced that a one-off charge has obliged the private client division, presently undergoing computerization, to post a drop in 2014 fourth quarter profits of 75% to 55 million Euros gross (compared to 218 million Euros in 2013). The citation refers to two judgments handed down last year by the Federal Court (Bundesgerichtshof - BGH). The judges decided that clients may demand repayment of management commission charges linked to consumer loans that the banks had no right to charge. The ruling is retroactive and is not only valid only for the last three years but from the end of 2004, a ruling that came as a surprise to many experts. At this juncture, Deutsche Bank is obliged to pay 400 million Euros back to its customers for credit management commission wrongly charged, of which 330 million in the fourth quarter of 2014 alone. Pending this ruling, the group had created a reserve fund of 70 million Euros. However, there are an additional 6000 claims lodged plus a great many unresolved disputes that are weighing on the bank. In the fourth quarter of 2014, the reserve fund was raised by 200 million Euros and now stands at 3.2 thousand million Euros. There is still no sign of the bank’s hope of establishing this year a cost quota adjusted by 65%. In 2014 it still stood at 74%.

Misgivings about DEA sale nearing solution

In tandem with Michail Fridmann and his Letter One group, it looks like RWE has reached an agreement that includes moving forward at last with the decision, in abeyance for ten months, to sell DEA by the beginning of March. The gas and oil production concern should fetch 5 thousand million Euros, namely 100 million Euros less than initially agreed with the Russian oligarch. According to an RWE spokesperson, the lowering in price is linked to the drop in oil prices and to shifts in market conditions. The energy provider is, however, committed to buying the business back from DEA during the first year if the Letter-One group were to face sanctions, an eventuality that RWE’s CEO Peter Terium deems highly improbable. LetterOne’s primary goal is to direct DEA’s British business separately from RWE’s other activities in DEA. If, in the end, LetterOne were to lose its licence for producing on British oilfields , the deal would still be valid. Great Britain in whose territorial waters DEA is extracting its oil, was not in agreement with the transaction. Official authorization from the British government, that has reserves against Fridmann is still forthcoming .

RWE intends making use of the revenue deriving from the transaction to reduce indebtedness.

Hawesko: end of hostilities

The power struggle for the future of wine merchant Hawesko Holding AG is over. Alexander Margaritoff, present chair of the management board, is resigning halfway through his annual contract thus leaving majority shareholder Detlev Meyer a free hand. Margaritoff and Meyer who is also on the Supervisory Board of the SDax-listed group never did see eye to eye on the company’s management. The major shareholder presented a purchase offer in November 2014 that the management board rejected.

Now Margaritoff is standing down of his own free will and selling his 30% interest in Hawesko to Meyer. Meyer, acknowledged to be a good executive, made his first million in textiles and would like to cut future dividends in favour of international expansion according to Manager Magazine.

KTG Agrar: with verve

The KTG Agrar SE agricultural group is optimistic about its future prospects. The Entry Standard-listed company is forecasting a 2014 turnover in excess of 200 million Euros whereas the figure talked about last year was in the region of 165 million. KTG Agrar is now envisaging a substantial increase in profits and a markedly positive cash flow. Ebit for 2013 was some 24 million Euros which the company exceeded in the course of the first semester of 2014.

According to the company, the subsidiary KTG Energie is faring particularly well. Today (31 October), the figures for financial year 2013-14 point to an Ebitda of approximately 21 million Euros, an increase of 59% over the previous year. Total performance is up 43 percent to 73 million Euros. Over the last two years the company has doubled both turnover and also Ebit and Ebitda. KTG’s forecast for Ebitda in 2014-15 is now some 25 million Euros.

Datagroup: broadening of the services

As of September 30, IT service provider Datagroup AG exceeded its target in turnover and profits. These results, however, are lower than last year’s figures. Turnover is down from 157 million Euros to 152 million, Ebitda is 12 million Euros instead of 12.5 million. According to the Entry Standard-listed company, the reduction is due to the costs incurred in restructuring the company. Datagroup’s speciality is high-margin IT services and long-term technical assistance, and this strategy has paid off. For the first time, the IT service division turnover has been more than 75% of total turnover.

In addition, the company has succeeded in cutting its indebtedness by 24 million Euros to 20 million. At the next shareholders meeting in March, Datagroup is expecting to propose a dividend of 20 cents per share. The management board expressed optimism for financial year 2014-15, Just recently, the company announced that its technical assistance portfolio now stood at 36 million Euros.