BEFESA

Befesa’s profit after tax up 66.5 percent in third quarter

Asua-Erandio, 12 November 2008. Befesa’s results at the end of the third quarter increased significantly compared to the same quarter last year. Sales increased by 15.9 percent, while profit after tax rose by 66.5 percent. During the third quarter, Befesa took an important step to enter the North American desalination market through the 51 percent acquisition of NRS Consulting Engineers. It was also awarded the contract for the works on the pipeline that will connect the Sant Celoni and Hostalric branch pipelines in the province of Barcelona, worth more than 26 million euro.

Consolidated sales for Befesa at the end of the third quarter totalled 630.3 million euro, an increase of 15.9 percent compared to the 543.9 million euro the previous year.

EBITDA increased by 63.4 percent to 124.8 million euro compared to 76.4 million euro for the same period the previous year. If the sale of the site of Befesa Desulfuración in Baracaldo were not taken into consideration, compared to the third quarter in 2007, EBITDA grew by 11 percent.

Income after taxes attributable to the parent company was 41.8 million euro, an increase of 66.5 percent versus the 25.1 million euro from 3Q 2007. The impact of the sale of Befesa Desulfuración’s land and the changes in the consolidation scope must be excluded in order to make a like-for-like comparison of the 9M 2008 result with the previous year. Excluding these affects, income after taxes attributable to the parent company increased by 4.8 percent to 26.3 million euro compared to the same period in 2007.

Performance by business unit at the end of September 2008 was as follows:

• Aluminium Waste Recycling. Accumulated sales during the first nine months increased by 25.8 percent to 210.9 million euro compared to 167.7 million euro the previous year. Some 251,000 tonnes of aluminium-containing waste was treated during the period, equivalent to an 18 percent increase compared to the previous year.
• Steel and Galvanisation Waste Recycling. Sales in the third quarter totalled 195.9 million euro against 181.4 million euro for the same period 2007, equivalent to an 8 percent increase. Some 505,000 tonnes of steel and galvanisation waste were managed, an increase of 12.5 percent on the previous year.
• Industrial Waste Management. This business unit recorded sales of 104.2 million euro compared to 93.1 million euro the previous year, equivalent to an 11.9 percent increase. The volume of managed waste increased by 12.4 percent to 904,000 tonnes compared to 3Q 2007.
• Water. Sales by this unit at the end of September 2008 totalled 119.3 million euro versus 101.7 million euro the year before. This 17.3 percent increase was a result of desalination contracts abroad and the increase in the order book in Spain.

Significant events during the first nine months of the year include an agreement by Befesa to acquire 51 percent of the US firm NRS Consulting Engineers through Befesa’s subsidiary Befesa Agua. NRS is one of the leading engineering companies in Texas in the sector for desalinating underground and brackish water, where it has designed around 30 percent of the facilities that exist in the state for treating these types of water. This acquisition marks Befesa’s entry into the United States, one of the most promising water markets, through a company that is highly specialised in desalination.

Finally, Aguas del Ter de Llobregat, the public company owned by the regional government of Catalonia, has awarded Befesa, in a joint venture with ACSA, the contract for the works of the mains pipeline that will connect the Sant Celoni and Hostalric branch pipelines in the province of Barcelona, worth more than 26 million euro. This project, which includes the 16.7 kilometre pipeline section, forms part of a series of actions that aim to connect the desalination plant in Tordera with the drinking water plant in Ter de Llobregat, in order to provide a short term solution to the supply problems of more than 20,000 inhabitants in this area, who will be supplied via this pipeline with water from the drinking water plant in Ter.

Javier Molina, chairman of Befesa, said "the results at the end of the third quarter show Befesa’s solidity and ability to continue growing, despite the difficult international economic situation".

Befesa, the environmental services subsidiary of Abengoa, is an international company that specialises in the integral management of industrial waste and in the management and generation of water, focussing its activities on the provision of environmental services for industry and the construction of environmental infrastructures. It is a public listed company with a market capitalisation in excess of 550 million euro (close 2007). (www.befesa.com).