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Befesa's profit after tax rises 0.4% in third quarter

November 5, 2009

• Sales from the water generation and management activity grew 43%

The economic situation has affected the markets in which Befesa operates, which is reflected in the company's results for the third quarter of 2009. Nevertheless, there is a modest slowdown in the decline of the main economic indicators, which is translating into a slower decline in sales for the company compared to previous months.

To analyse the evolution of the business during the third quarter of 2009 and to make like-for-like comparisons possible with the data from the same period last year, we have excluded the effect of the sale of Befesa Desulfuración's land in Baracaldo in February 2008, from the income statement. We can therefore compare the year on year figures on a like-for-like basis, representing the reality of Befesa's situation in both periods.

Befesa's consolidated sales at the end of the first nine months of 2009 fell by 23.7% to €481.1 million compared to €630.3 million the year before. The impact of the different economic factors has affected Befesa's businesses in different ways. The industrial waste treatment and recycling activities have been significantly affected as a result of the declining industrial production across the whole of Europe, with sales down by 39% compared to the same period in 2008. However, the water business has experienced significant growth with sales rising by 43% compared to the same quarter last year, as a result of desalination contracts abroad and in Spain.

EBITDA totalled €71.9 million, which in like-for-like terms, removing the effect of the sale of land in Baracaldo, represents a 15.2% decline compared to the third quarter of last year. It is important to note that the EBITDA/Sales ratio was 14.9%, an increase of 1.4% compared to last year.

Income after taxes attributable to the parent company was €25.0 million, an increase of 0.4% compared to €24.9 million for the third quarter 2008.

Significant events during the first nine months of the year include nine water infrastructure and treatment projects awarded to Befesa, such as the construction of a regulating tank in Kurkudi (Vizcaya), awarded by Consorcio de Aguas de Bilbao Bizkaia; as well as a project to construct the tertiary treatment system of the Blanca waste water treatment plant in Murcia. The Regional Ministry of the Environment of Castilla y León has awarded Befesa, in a joint venture with Zarzuela, S.A, the contract to construct the waste water treatment station in Sanchonuño, in northern Segovia. In addition to the station, the project also includes the creation of the pipelines required to carry waste water from the existing discharge points to the new facilities. The above actions will benefit more than 200,000 inhabitants.

Javier Molina, chairman of Befesa, said, "Thanks to the diversification and internationalisation of Befesa's activities, as well as the management policies adopted by the company, the impact of the crisis on the company's results has been notably lower than in the sectors in which we operate".