Sonae Industria 2006 EBITDA up 21.9% to Euro 223 million

Posted March 2, 2007

Mar 02, 2007. /Lesprom Network/. Sonae Industria reports on March 1 unaudited consolidated results for the full year 2006 which have been prepared in accordance with IFRS. Turnover in financial year 2006 increased 16% in to Euro 1.7 billion. Recurrent EBITDA reached Euro 223 million, compared with Euro 183 million in 2005. The EBITDA margin on turnover increased to 13.1%. Net profit after minority interests reduced to Euro 32 million, from Euro 36 million in 2005, as a result of the increase in net financial charges.

Carlos Bianchi de Aguiar, Sonae Industria CEO commented: “I am pleased to be able to report positive Consolidated Results for 2006. Turnover in 2006 reached Euro 1.7 billion, an increase of 16% compared with 2005 and Consolidated EBITDA reached Euro 234 million, compared with 208 million euros in 2005. We began 2006 facing a tough market environment due to the relentless increase in raw material prices, namely of oil related costs such as transport and energy. However, this negative pressure was gradually offset during the year through delivery of increased productivity, good underlying volume growth and price recovery in our main geographies and as a result of the gradual improvement in the economic climate, as well as sector consolidation in Central Europe.

During 2006 we made significant progress towards our strategic objectives. We established a joint-venture agreement with Tarkett for production and commercialization of laminate flooring based at our Eiweiler MDF plant. Also in Germany, we acquired the 3 production sites of the Hornitex Group, thereby increasing our capacity by 1.4 million cubic meters and contributing to market consolidation in the Central European panels sector. In September, we acquired a particleboard plant in South West France which we integrated into our Iberian management structure and in July we announced the intention to acquire the minority shareholdings in our subsidiary Tafisa, although final registration of our offer is still to be concluded. Pursuant to our goal of growth in our more profitable markets, we initiated construction of a new particleboard line at our White River plant in South Africa, which will be operational by 2Q07, and increased our melamine facing capacity in Canada in order to raise our exposure to higher value-added segments of the market.

Unfortunately, we suffered a setback at our Canadian operation when a fire broke out at one of our two particleboard lines in April. Thankfully, none of our employees were seriously injured however the production line was badly damaged and is currently under reconstruction.

The coming quarters will be very busy for us and our main priority will be to maximize the benefits of the acquisitions completed in 2006 and to launch production at our new lines in South Africa and Canada. Our strong performance in 2006 and our ability to deliver further value to our stakeholders is only possible due to the dedication and hard work of our team around the world and I would like to thank them sincerely for their daily commitment to the continued growth and success of the Sonae Indústria Group.”

Looking forward

Our expectations for underlying business performance in terms of sales volumes and for market prices in our main geographic regions are positive for 2007, although pressure is likely to remain on wood and resin prices. We will continue to concentrate on increasing the profitability of our existing asset base aiming to deliver further production and process based operating efficiencies, supported by continuous innovation at all levels of our organization.

During 2007, our team will give top priority to the integration of the assets we acquired during 2006, the launch of our new production line in South Africa in second quarter 2007 and to the return to production of our Canadian particleboard line 2 scheduled for third quarter 2007.

Sonae Indústria is the most important Portuguese group of companies manufacturing wood based products. On 31 December 2005, Sonae Indústria's workforce numbered 5 438, in 10 countries: Portugal, Spain, France, Germany, UK, Canada, Brazil, Holland, Switzerland and South Africa.

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Topics: Finance

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