18.08.2005 – 15:31

JoWooD Productions Software AG

euro adhoc: JoWooD Productions Software AG
Quarterly or Semiannual Financial Statements
JoWooD Productions Software AG reports financial results for the six-month-period ended 30th June 2005.

  Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.

18.08.2005

•       Total results considerably dampened by liabilities carried forward
        from 2004.
•       Performance-oriented restructuring measures largely completed.
•       Q2 operative cash flow slightly negative.

Financial situation

The company managed to preserve a stable cash flow situation despite
the high financial burdens related to the performance-oriented
restructuring measures (studio closures, severance pays, burdens from
storage value adjustments).

Even though the Q2 operative cash flow compared with Q1 2005 (TEUR
544) turned slightly negative  (TEUR -523) the development must be
considered positive compared against the previous year.  The
operative cash flow during the comparative period of the previous
year was TEUR - 9.571. During the six-month-period ended 30th June
the company thus managed to almost completely finance its activities
without third party funds.

Profit situation

Sales proceeds total TEUR 4.555. All these proceeds were generated
from the sale of titles already published during the previous year
(back catalogue) as the titles will be published during Q4 2005 or
the first quarters of 2006 from the planned new line-up for which new
distribution contracts were signed during recent months. The results
of the first six months 2005 therefore do not yet reflect any effects
from the newly signed distribution contracts on sales.

For reasons of the better transparency of the profit situation the
depreciation of the games titles will  be shown separately as from
the shareholder letter of the first six months 2005. The gross sales
results before depreciation of the games titles is TEUR 2.135.

The EBIT for the first six months ended 30th June  totals TEUR -2.515
including depreciations for games titles  published in 2004 of a
total of TEUR -1.913.

Q2 2005 saw the introduction of the matching principle depreciation
method for games titles. The values of the titles published in 2004
were entered on a loss-free basis and then depreciated on a quarterly
basis. The depreciation total (sales-related and depreciation from
loss-free evaluation) was established according to the depreciation
method applied in 2004.

The sales and management costs of the first six months do not yet
reflect the lower cost structure realised since Q3. Attached to the
semi-annual results are pro forma semi-annual results depicting a
profit situation under the assumption that the operative cost
efficiency measures carried out had already applied for the total
period of the first six months of 2005.

Asset situation

The reduction of the semi-finished and finished goods compared to the
year end 2004 by TEUR 7.292 reflects the depreciation of the sales
titles and the effects of the discontinuation of the unprofitable
product developments of the past.

The considerable reduction in the receivables from supplies and
services totalling approx. TEUR 8.300 compared to the year end 2004
is due both to an above-average deadline-related receivables
situation at the year end 2004 as well as to the set-off against
reserves and liabilities. Considerable price credits for games
deliveries in 2004 also had to be taken into account.

The high losses during the first six months ended 30th June 2005 also
translated into a sharp drop in the equity ratio by 4% compared to
the end of 2004.

The increase in the liabilities from supplies and services compared
to the year end 2004 is the result of an average extension of the due
dates.

The decline in other liabilities as well as prepaid expenses and
deferred revenues compared to the balance sheet date of the previous
year is mainly the result of the repayment of a supplier loan.

For the sake of caution latent taxes were adjusted. This is not cash
effective.

Restructuring result

The total result of the second six months is marked by significant
restructuring expenses and repayments outside the operative business
with a focus on the restructuring and redemption of liabilities from
transactions and projects made and initiated long before the current
management.

The major items are price credits from supplies during Q3 and Q4 of
the previous year with results  both on the expenditure side and
financial liabilities of the company. The total amount of the price
credits booked during the second six months is TEUR 2.308. To date
price credits of a total of approximately TEUR 4.000 have already had
to be accepted by contract during the current year;  of which TEUR
1.698 were already considered when establishing the annual accounts
2004 in April of the present year.

More than TEUR 2.200 had to be entered as effective on the result
from the title of studio closures. The discontinuation of an
unprofitable development project from the past is entered at TEUR
970. Depreciations from the title of loss-free evaluation concerning
games published during 2004 total TEUR 4.489.

Apart from the sales these restructuring expenditures still pose a
liability to the company’s liquidity situation.

Despite the termination of the Stargate SG-1™: The Alliance
development contract necessary for major quality deficiencies the
Management of JoWooD sees a positive development in the company’s
operative results. This is underlined by the fact that the monthly
EBIT for the month of June was the first since the beginning of the
year to turn positive. Independently thereof, however, due to the
significant rise in short-term financial liabilities last year as
well as the continuing burden of liabilities for price credits
immediate action is required with regard to the company’s balance
sheet structure.

Key Figures
in EUR 000                                                     Jan - Jun 2005
Sales                                                                   4,555
Costs of goods sold                                                    -1,370
Development costs                                                      -1,049
Gross profit before depriciation of games                               2,135
Depriciation of games                                                  -1,913
Gross profit after depriciation of games                                  222
EBIT before restrukturing activities                                   -2,515
Restrukturing Result                                                  -10,989
EBIT after restrukturing activities                                   -13,505
Ordinary result                                                       -13,726
Income before minorities                                              -16,389
Group result                                                          -16,389
Cash flow from operating activities                                      -523
                                                                   30.06.2005
Non- current assets                                                     4,631
Cash                                                                      456
Other current assets                                                   15,528
Total assets                                                           20,615
Shareholders' equity                                                      752
Minority interests                                                          0
Longterm payables                                                       3,909
Shortterm debts to banks                                                5,776
Other short term payable                                               10,178
thereof advanced payment                                                1,069
equity ratio                                                               4%

end of announcement                               euro adhoc 18.08.2005 15:18:32

Further inquiry note:

JoWooD Productions Software AG
Dr. Albert Seidl, Vorstand
Matthias Rathammer, Investor Relations
Tel.: +43 (0)3614 2966 1015
mailo:investor@jowood.com
http://www.jowood.com

Branche: Software
ISIN: AT0000747357
WKN: 074735
Index: WBI, ATX Prime, ViDX
Börsen: Berliner Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Frankfurter Wertpapierbörse / free trade
Bayerische Börse / free trade
Wiener Börse AG / official dealing