Investor relations

Report concerns:
Cancellation of the 2008 forecast

Report’s text:
Acting pursuant to section 5.1.(25) of the Ordinance of the Minister of Finance on current and periodical reporting by issuers of securities of 19 October 2005 (Journal of Laws No. 209, item 1744) (henceforth the Ordinance), J.W. Construction Holding S.A., with its seat in Ząbki, Poland (henceforth the Company) hereby reports that the forecast of the Company’s financial results for 2008 has been cancelled.

The Management Board decided to cancel the forecast of the Company’s financial results for 2008 which was publicly disclosed in Current Report No. 56 of 7 August 2008 and adjusted the forecast presented in Current Report No. 3 of 8 January 2008, taking into consideration the change in the macroeconomic situation in the Company’s business environment that occurred independently of the Company and substantially affected its performance. Due to the global banking crisis affecting the Polish economy, the following circumstances occurred independently of the Company:

- A change in the policy of banks granting home mortgage loans to individual clients, resulting in a significant decline in the Poles’ creditworthiness, which translates into a reduced demand for real property.

- A change in the policy of banks as regards investment loans, driven by a difficulty in acquiring funds on the interbank market. While executing its investment projects, the Company finances current investment-related expenses with funds from bank loans, which are subsequently repaid from payments made by apartment buyers during the term of their contracts. In the event of hindered access to bank loans, the Company will be forced to finance some of the expenses with its own funds.

- A reduced demand for apartments involves the necessity to reschedule the Company’s new investments and will probably lead to delays in the completion of investments, the revenues from which constituted the basis for the calculation of the previous financial forecasts.

- Sales are at a level lower than planned as regards investment projects executed currently in line with the schedule.