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Befesa’s earnings after tax increased 46.4 percent to 23.6 million euro

Bilbao, February 28, 2007. - Today, Befesa has released its results for the 2006 financial year in which its consolidated sales figure is 555.3 million euro, which represents a 38.0 percent increase on the previous year. All of Befesa’s business areas increased their sales during said year.

As regards the operating result, there has been a 17.6 million euro (43.7%) increase on the 2005 figure, due mainly to the positive evolution of all the business areas. The Ebitda/Sales ratio has improved slightly, reaching 10.5%, and this is due mainly to the modification in the Group’s sales mix.

Earnings before tax were 34.7 million euro, representing a 55.6% increase on the 22.3 million euro figure for the 2005 financial year.

Earnings after tax attributable to the parent company were 23.6 million euro, which is a 46.4 percent increase on the 16.1 million euro the previous financial year.

Evolution of the 2006 financial year results

Evolution of the 2006 financial year results
 Thoushands €Variation %% on sales
 2006200506 / 0520062005
Sales555,285402,40338.0 %100.0 %100.0 %
EBITDA58,03240,39243.7 %10.5 %10.0 %
Amortizations and provisions-12,697-12,2423.7 %-2.3 %-3.0 %
Net financial costs-12,137-6,91475.5 %-2.2 %-1.7 %
External Partners-2,943-1,382113.0 %-0.5 %-0.3 %
Results Attributed to the Parent23,55516,08546.4 %4.2 %4.0 %

The distribution of sales by Business Unit is shown in the following table:

Net Sales Figure
 Net Sales Figure
Business Unit20062005% Var (06/05)
Aluminum Waste229,383.00164,524.0039.4 %
Steel and Galvanization Waste76,252.0054,502.0039.9 %
Industrial Waste Management110,211.0079,921.0037.9 %
Environmental Engineering139,439.00103,456.0034.8 %
Total555,285.00402,403.0038.0 %

As regards the earnings achieved in 2006, one must take into consideration the fact that upon applying international accounting standards, following the acquisition of the BUS Group towards year-end, Befesa’s profit and loss account only includes the result for the month of December (the time at which Befesa took over control of the new sub-group) and, therefore, its effect in 2006 has not been of any great significance. Nonetheless, Befesa’s consolidated balance sheet includes the totality of the assets and liabilities of the Bus sub-group and, as a consequence thereof, the net debt has increased significantly as a result of the financing undertaken in the sum of 355.5 million euro for said acquisition transaction.

Furthermore, the effort the company is making in R&D&I must be taken into account. Some 2.18 million euro was allocated thereto in 2006 as against 1.2 million euro the previous year. This represents an 82 percent increase.

The end result is an earning of € 0.87 per share, which is higher than the € 0.59 per share achieved in 2005.

Geographic Diversification

Geographic Diversification
Geographic Area2006%2005%
Home Market394,20471 %310,20077 %
Foreign Market161,08129 %92,20323 %
Total555,285100 %402,403100 %

In the 2006 financial year, Befesa continued to increase its activity abroad, both in volume and diversification. The increase reached 68.8 million euro, which is a 74.7 percent increase on the previous year. Following the acquisition of BUS, as of from the 2007 financial year, Befesa’s sales abroad will increase significantly.

During the course of 2006, Befesa managed more than 2,525,000 tons of wastes, from which more than 1,297,000 tons were dedicated to the production of new materials by recycling. In addition, it increased its desalination capacity to more than one million cubic meters per day, which will enable supply for a population of more than 4.8 million.

Befesa, Abengoa’s environmental services subsidiary, focuses its activity on providing environmental services for the industry sector and the construction of environmental infrastructures. It is a listed company and closed the 2006 financial year with treasury stock in excess of 693 million euro. (