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08.26.2009

Befesa’s profits after taxes went up 5.6 per cent during the first half of the year

Asua-Erandio, 26 August 2009. The financial situation has affected the markets on which Befesa operates, which is reflected in its results for the first half of 2009. However, the company has continued to grow by acquiring new production assets, companies and the awarding of new projects. One of its most significant achievements has been the financial closing for the design, construction and exploitation during a period of 25 years of the seawater desalination plant at Qingdao, in China, which will have a capacity for desalinating 100,000 cubic meters of water a day.

In order to analyze the evolution of the business during the first half of 2009 and that it be comparable to the data for the same period in the previous year, it is necessary to eliminate the effect on the Profit and Loss Account of the sale of the terrains of Befesa Desulfuración in Baracaldo in February of 2008. In this way, it is possible to compare the year-on-year figures in a homogeneous manner, obtaining an image closely adapted to the reality of Befesa’s figures in both periods.

Befesa’s consolidated sales upon the closing of the first half of 2009 have reached a total amount of 317.2 million euros, which represents a reduction of 25.5 per cent in regard to the 425.9 million of the previous year. The impact of the different financial factors has affected Befesa’s businesses in different ways: the recycling and industrial waste processing activities have been affected in an important manner, as a result of the major drop in industrial production throughout Europe, with a reduction in the level of sales of 44 per cent as compared with the same period in 2008. In the water business, on the other hand, the sales have experienced an important growth with an increase of 58 per cent in regard to the same semester of the past year, as a result of the execution of desalinating contracts abroad and in Spain.

The operating results (EBITDA) have reached the 47.8 million euro mark, which represents, in homogeneous terms, eliminating the effect of the sale of the terrains corresponding to the Baracaldo plant, a reduction in the EBITDA in regard to the first half of the prior accounting period of 15.1 per cent. It is important to highlight the fact that the EBITDA/Sales ratio has been situated at 15.1 per cent and has attained a 1.9 per cent increase over the previous year.

The results after taxes attributable to the dominant company have been 17.0 million euros, which represents an increase of 5.6 per cent in relation with the 16.1 million euros in comparative figures, in relation with the first half of 2008.

Among the most significant events taking place during the first half of the year, Befesa has acquired for a sum of 24 million euros, the set of productive assets from the German companies Aluminium-Salzschlacke Aufbereitungs GmbH and Alsa Süd GmbH, made up of three production plants located in the German cities of Hannover, Lünen and Töging, all furnished with the top technology existing on the market, and with a joint capacity for processing and recycling 380,000 tons of salt slag’s annually. With this purchase, Befesa emerges as the leading company in recycling of this waste in Europe, with five production plants distributed strategically throughout the European continent.

And finally, Befesa has closed the financing for the design, construction and exploitation during a 25 year period of the seawater desalination plant at Qingdao, in China, which will have a desalination capacity of 100,000 cubic meters of water a day, equivalent to the supply required for a population of 500,000 people. The project, which will rely on the reverse osmosis technology with innovating designs, will represent a total investment of 135 million euros, which will be financed by a bank syndicate, made up of the Agricultural Bank of China (the leader of the consortium), Export-Import Bank, China Construction Bank and China Merchants Banks, which will finance 70 per cent of the investment (94.5 million euros) for the stockholders without resources. It is estimated that in its 25 years of operation, the desalination plant will provide from the sale of water an income of more than 654 million euros, and from the technical assistance provided for its operation, an additional 25 million euros.

Javier Molina, Chairman of Befesa states: "Thanks to the managerial policies adopted by Befesa, as well as the diversification and internationalization of its activities, the impact of the crisis on the Company’s results, has been reasonably better than in the sectors in which we carry out our other operations. The recent acquisitions and the new projects reflect Befesa’s solidity and strength to continue with its strategy for the growth and development of its sustainable businesses."

Befesa, an affiliate of Abengoa’s environmental services, centers its activity on the providing of environmental services to industry and on the construction of environmental infrastructures. It is quoted on the Stock Exchange and closed the year 2008 with a capitalization that exceeded 325 million euros. (www.befesa.com).