Consolidated net profit improved – balanced result for financial year 2005 expected

Sales significantly above previous year’s figure; Earnings improved in all segements

Frankfurt, 12 August 2005 - During the first six months of 2005, at 181.4 million Euro, revenues were 6.7 million Euro or 3.8 percent up on the previous year’s value. In the post acute segment it rose by just under three percent to 105 million Euro, in the acute segment 1.9 percent. The nursing care segment developed according expectations.

The income situation also improved. After achieving "break even" in the second quarter of 2005 in the post acute segment, MediClin was able to show a positive consolidated operating result amounting to 2.6 million Euro for the first six months of 2005. In comparison with the previous year, this represents a 6.8 million Euro income improvement. Even when the approximately 3 million Euro relief in rental expenses for the six months of the year is taken into account an improvement was achieved mainly through higher occupancy coupled with increased efficiency

The consolidated net loss for the first six months came to 1.0 million Euro: compared to minus 7.2 Euro million in the previous year’s period. The second quarter of the year had a positive impact, with an operating result of 3.7 million Euro and consolidated net income for the period of 2.0 million Euro.

The course of business during the first six months of the year continues to be in line with the Board of Management’s expectations for the Company’s development in 2005. MediClin will profit from already initiated and newly implemented measures in the coming months; in effect, given that the general economic conditions in Germany do not deteriorate, it can be assumed that a balanced result will be generated in 2005.

Increase in number of nursing days and number of cases treated
The number of nursing days and the number of cases treated increased in comparison with the first six months of the previous year. Excluding the nursing care segment, the number of nursing days increased by 4,710 in comparison with the previous year and the number of nursing days in the post acute segment rose by 15,589, the number of cases by 1,457. The trend towards an increase in out-patient treatment continues in the acute segment; the number of cases declined slightly by 553.

Expenses optimized – Cash flow improved
Cost of materials increased in comparison with the same period of the previous year primarily due to higher revenue. In addition, cost of materials was also impacted by the increase in energy prices. Personnel expenses were at approximately the same level as in the previous year. Taken together, depreciation and other operating expenses saw a decline of 2.6 million Euro.

The cash flow of the current period of minus 0.4 million Euro improved perceptibly when measured against the comparable previous year’s period (minus 14.6 million Euro). The contributing factors here are the earnings improvement, the rental relief and the recognition of a partial amount of the interim financing for the new construction of the Müritz-Klinikum in Waren.

Investments during the first six months of the year amounted to 6.2 million Euro (previous year’s six-month period: 5.9 million Euro).

In June 2005, MediClin employed 5,231 full time staff nationwide; on average, 5,228 people accounted for as full time employees in the first half of 2005.

MediClin becomes more effective
In the first half of the year Mediclin commenced to structure its organization more decentrally and, consequently, more powerfully. In the future the management of our clinics are more independent.

MediClin’s intranet has been online since 1 July 2005. A project has been started which, in the future, will substantially streamline the Group’s sales and marketing activities and thereby also improve its efficiency.