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08.28.2008

Befesa’s earnings after tax increased 133.3 percent in the first half of the year

Asua-Erandio, August 28, 2008. Befesa’s results at the close of the first half year have increased notably on those for the same period the previous year. The sales figure has increased 15 percent and earnings after tax 133.3 percent. During this period, Befesa has been awarded with a seawater desalination plant with capacity to produce 200.000 cubic meters of water a day in Tenés (Algeria); and has formalized the sale, for 44.4 million euro, of the site on which its desulphurization plant is located. This is part of the Sefranito Special Interior Reform Plan (PERI in Spanish) for the municipality of Baracaldo (Biscay). This last operation affected the results of the period.

Befesa’s consolidated sales at the close of the first half of 2008 were 425.9 million euro, a 15 percent increase on the previous year.

The operating result (EBITDA) was 96.3 million euro, a 103.9 percent increase on the 47.2 million euro for the same period the previous year. If the sale of the site of Befesa Desulfuración were not taken into consideration, the increase in the result compared to the first half of 2007 would be 19.3 percent.

The result after tax attributable to the parent company was 32.9 million euro, which was a 133.3 percent increase on the 14.1 million euro in the first half of 2007. If the sale of the desulphurization plant site is not taken into account, the increase would be 14.2 percent.

The evolution by Business Unit at the close of the first half of 2008 is as follows:

  • Aluminum Waste Recycling. The accumulated sales in the first six months were 144 million euro, an 16.4 percent increase on the previous year’s 123.7 million euro. During the period, some 182,000 tons of aluminum-content wastes have been treated, which is equivalent to an 19 percent increase on the previous year.
  • Steel and Galvanization Waste Recycling. Sales in the first half were 134.4 million euro, compared to 131.1 million euro for the same period the previous year. This is a 2.5 percent increase. The 327,000 tons of steel and galvanization wastes managed represent a 2.2 percent increase on those treated last year.
  • Industrial Waste Management. This business unit has achieved sales of 71 million euro as against 61.3 million euro the previous year. The 617,000 tons managed at the close of the first six months represent a 10 percent increase compared to the same period in 2007.
  • Water. This business unit’s sales at the close of the first half of the year were 76.5 million euro as against 54.2 million euro last year. This is a 41.1 percent increase as a consequence of the execution of the desalination contracts awarded abroad.

As significant events in the first half of the year, the Algeria state-owned company, Algerian Energy Company (AEC), has awarded Befesa the design, construction, financing and 25-year operation of the Tenes-Chlef seawater desalination plant project, the contract value more than 232 million dollars. Its production capacity, utilizing reverse osmosis technology, will be 200,000 cubic meters per day, sufficient to enable supply to a population of 800,000. Both the design and turnkey construction of the plant, as well as 25-year operation of the same will be 100% responsibility of Befesa. Earnings from water sales over this period will be more than 50 million dollars a year, representing total earnings in excess of 1,400 million dollars.

Furthermore, during this period Befesa has been awarded significant projects such as the river Sar general interceptor collector works project corresponding to the section between Pontepedriña and Silvouta treatment plant in Santiago de Compostela (A Coruña), awarded by the Ministry of the Environment and Rural and Maritime Development, through its Directorate General of Water, for more than 20 million euro.

Finally, Befesa opened new facilities and offices, such as the productive facilities of Befesa Zinc Aser and the building of its new headquarters in Erandio (Biscay), and a new office in Chennai (India) to develop this market and its current projects. Soluciones Ambientales del Norte too, a subsidiary of Befesa Chile, also started the operation of its hazardous and non-hazardous waste treatment plant located 120 kilometers from Antofagasta, in Chile.

According to Befesa’s chairman, Javier Molina, "the results of the first half of the year have been excellent. The new awarding in Algeria, the start of the activities of our waste treatment center in Chile and the opening of new facilities are a reflection of Befesa’s solid growth and internationalization".

Befesa, the environmental services subsidiary of Abengoa, international company specializing in integrated management of industrial waste, and the management of water and generation, focuses on providing environmental services to industry and construction of environmental infrastructure. The Company quoted on the stock exchange closed the year 2007 with a capitalization in excess of 550 million euros. (www.befesa.com)