Kempinski Announces First Half Year Results

August 23, 2002; At its AGM in Munich, the majority shareholder (98.2%) of Kempinski AG, in accordance with new German company law governing squeeze-outs, passed a resolution to purchase the remaining 1.8% of the Company’s shares. The offer price was €363.70 per share, valuing the Company at approximately €140m.

Announcing its first half-year results for 2002, the Group said that turnover in its managed hotels was €176.3m in the first half of 2002, a 1% drop from the €178.2m recorded in the same period in 2001. Amid difficult trading conditions, it had nevertheless managed to strengthen its overall market share.

While trading in Germany was subdued compared to the previous year, the Group benefited from strong performances in Russia, China, Hungary and Spain. Group income from its operations was €36.3m in the first half of 2002, down from €40.3m for the same period in 2001. After tax and exceptional items, which included income from the sale of the real estate of the Hotel Gravenbruch in Frankfurt, the Group posted a profit of €6.2m.

President and CEO of Kempinski Hotels & Resorts, Reto Wittwer, said that the outlook for the luxury sector in Kempinski’s markets remains challenging for the rest of the year.

Kempinski Hotels & Resorts is Europe’s oldest luxury hotel group with a portfolio comprising over 30 luxurious properties in Europe, the Middle East, Africa, South America, Asia and Australia. Each offers superior standards of service combined with a distinctive style that reflects the individuality of the property and it`s location.