OHL increases its net profit in 2010 by 25.3%

The OHL Group ended 2010 with very satisfactory results, most notably the strong growth of 31.7% and 36.7% in operating margins EBITDA and EBIT, respectively, as well as an increase of 25.3% net attributable profit, which increased to 195.6 million euros. Sales grew by 2.7% reaching 4,909.8 million euros.

OHL Concessions has been the driving force behind these results, with growth of 32.1%, 71.3% and 78.0% in sales, EBITDA and EBIT, respectively. These results have led it to become the main division of the Group, contributing 74.3% of its EBITDA and 80.2% of its EBIT in 2010.

The increasing internationalization of OHL was another significant factor of the year, as activity abroad represented 69.5% of sales and 93.0% of EBITDA. Mexico, with 40.2%, and Brazil, with 37.2%, were the two countries with the largest contribution to Group EBITDA in 2010.

In the international arena, OHL International Construction’s impressive close to the year stands out. In the last quarter, this division entered new markets winning major contracts in Poland, Colombia and New York. Furthermore, in December OHL USA became the strategic partner of the New York contractor Judlau Contracting, with 50.1%. In Poland in 2011, it is planned to incorporate two new companies into the group: Aprivia and Hydrobudowa, PBG Group companies. This geographic expansion has continued into the early months of 2011, in which OHL International Construction has expanded into Canada and Kuwait.

Regarding the Group’s order book, it reached a record high of 84,306.8 million euros, representing an increase of 26.3% compared to that on 31 December ’09. Of the total, 7% is short-term contracts and 93% long term, which, with 78.546 million, experienced an annual growth of 28.1%.

Lastly, also as a significant event was the important IPO on 11 November of the subsidiary OHL concessions Mexico, which was the largest operation of its kind in the Mexican stock market in the previous ten years and the third largest of the transport infrastructures sector globally in the last five years.

This operation demonstrated the success of the strategy pursued by the Group since 2002 and the significant value generated in their investment in concessions, and is a decisive step towards the policy of financial independence defined for the future growth of the Concessions activity. With it, the Group has achieved the following strategic objectives:

• Incorporating into the shareholders of OHL Mexico a substantial base of local and international investors, consolidating the company as a market leader in infrastructures in Mexico, putting it in an excellent position to take advantage of the anticipated growth in infrastructure investment that country
• Maintaining a 73.85% stake in the company, and therefore control, which ensures the continuity of the strategy and policies pursued by it
• Crystallizing the value generated in the Group’s investments in concessions in Mexico. The placement price, 25 pesos per share, implies a valuation of OHL Mexico (before the capital increase) of EUR 1,661 million, a figure that multiplies by 2.6 times the funds invested by the Group in this company and that exceeds the estimated value of 1,455 million euros reported to analysts in April 2010
• Providing OHL Mexico with the resources needed for future development without needing support from the parent company
• Raising funds to reduce the debt with recourse of the OHL Group by an amount exceeding 250 million euros

Group Divisions

OHL Concessions has continued its upward trend and closed 2010 with growths of 32.1% in sales, 71.3% in EBITDA and 78.0% in EBIT. These results have benefited from the overall increase in traffic on concession motorways, the opening of new sections of the Bicentennial Viaduct and the Mexican Outer Loop, the updating of rates, and the revaluation of euro against the Brazilian real, Mexican peso and Chilean peso.

In 2010, OHL Concessions was awarded three new concessions: the Luis Cabrera-Los Poetas motorways and the Northern Urban motorway, in Mexico, and the new container terminal at Ennore port, India. They ended the year with a portfolio of 28 main concessions: 23 toll roads, with a total network of 4,414 km; an airport; two commercial ports; and two railway concessions. With such they have asserted themselves as one of the most important infrastructure operators worldwide.

The division OHL International Construction has established itself as the second in the Group in terms of EBITDA (14.9% of the total) and first in terms of sales, accounting for which 37.3%. It reached this position thanks to the good performance in the U.S., Central and Eastern Europe, Qatar, and the positive rate of implementation of projects linked to concessions in Mexico (Mexican Outer Loop and Bicentennial Viaduct).

The turnover in 2010 was similar to that obtained in 2009 and the EBITDA dropped 16.8% since the fourth quarter was significantly lower than the previous year, which saw the completion of major contracts such as the Oran Convention Centre (in Algeria).

In any case, the growth of OHL International Construction is secure with its large order book of works (3,298.0 million euros, 24.0% more than in late 2009), the incorporation of New York contractor Judlau Contracting, the possible acqisitioin of Polish companies Aprivia and Hydrobudowa in 2011, and the significant projects awarded in January and February of this year in Kuwait, and the subways of New York and Toronto. To this we must add that OHL has been appointed selected bidder in the new University Hospital Centre of Montreal (CHUM).

National Construction, as a result of cuts in public investment in infrastructure, has seen declines in sales of 22.6%, and 30.0% in EBITDA. Facing this situation, which was expected, OHL conducted the necessary adjustments in the cost structure of this division in order to maintain its profitability, despite its lower volume of activity.

Sales of other activities were 330.2 million euros, an increase of 55.3%. What stands out are the increases of OHL Industrial of 196.8%, and 96.9% of OHL Developments. OHL Environment grew by 6.9%. The combined EBITDA all these activities amounted to 17.7 million euros, 1.8% of the groups total, which is in negotiations to sell OHL Environmental Inima.

OHL GROUP 2010