SEPI Sociedad Estatal de Participaciones Industriales

The Board of Directors approves the Annual Accounts for 2010

The Board of Directors of the state-owned holding company Sociedad Estatal de Participaciones Industriales (SEPI) approved in the meeting held today the Annual Accounts of this state-owned enterprise and of its consolidated Group for the financial year 2010. The Group's consolidated results has reached 35.95 Million Euros, against the loss recorded a year before of 105.96 Million Euros. This difference is consequence of both the improvement in the results of the parent company and of those achieved by its companies which consolidate their results through the equity method.

SEPI's standalone results as a holding company amounted to a 47.8 Million Euros loss, which meant an improvement of 108.38 Million Euros against the losses recorded in 2009, mostly due to the reversion of reserves for risks and expenses.On the other hand, the results from the companies which consolidate through the application of the equity method, basically REC, ENAGAS and EADS have provided the SEPI Group with a positive result of 126.74 Million Euros, above the 78.42 Million Euros recorded in 2009.

The aggregate result of the companies in which SEPI has a majority shareholding has been negative, -2.85 Million Euros, against a positive result of 48,59 Million Euros during the previous financial year. The profits obtained by some companies, among which stand out the groups COFIVACASA with 37.90 Million Euros, TRAGSA, with 32.24 Million Euros, ENUSA, with 19.28 Million Euros and MERCASA, with 12.25 Million Euros, were not enough for setting off the losses generated by the remaining companies, especially by the shipbuilders IZAR Construcciones Navales en Liquidación, with 54.37 Million Euros and NAVANTIA, with 44.44 Million Euros.

The consolidated operating turnover of Grupo SEPI amounted to a total of 3,868.74 Million Euros, of which 3,698.51 Million Euros correspond to the net turnover, which was 6.3% below of that recorded the previous year, basically due to the 19% decrease in the turnover of the Grupo TRAGSA, as in 2009 ended the Irrigation Plan and the most significant part of the 'Plan E' which the Spanish Government approved as a financial stimulus for the Economy and employment.

The consolidated operating expenses of the Grupo SEPI amounted to 4,012.18 Million Euros, 8% below those recorded in 2009. The decrease in expenses took place mostly in procurement expenses, which were 11.82% below those recorded in the previous year, and in personnel expenses, which were 6.8% lower, due to the decrease in the average staff of the Group in 3,831 workers. In the reduction of the expenses also played a role the application of the guidelines included in the Immediate Action Plan 2010 and in the Austerity Plan for the General Government for the years 2011-2013, which was approved by the agreement of the Council of Ministers on January 29th, 2010.

On the basis of these income and expenses, Grupo SEPI's operating losses amounted to 143.44 Million Euros against 207.73 Million Euros in the previous year. These negative operating results have been offset by a positive financial result, which amounted to 82.79 Million Euros which, together with the results of the companies which consolidate through the application of the equity method - 126.74 Million Euros- resulted in the Group having a profit during the financial year amounting to 64.92 Million Euros, of which 28.97 Million Euros correspond to the external partners, and thus the positive result for SEPI, as the dominant company, amounted to 35.95 Million Euros.

The orders won during the year reached a total of 2,142 Million Euros, of which 910 Million Euros correspond to the Grupo TRAGSA, basically to its parent company a TRAGSA; 518 Million Euros to the Grupo NAVANTIA, mostly in the ship-repair area, due to the price review of building programs, and as a result of the expansions of current programs; 446 Million Euros to the Grupo ENUSA, and 153 Million Euros to the Grupo ENSA, which is specialized in the fabrication of nuclear components, such as steam generators and vessel caps.

As for the order book, special mention must be made to that of the Grupo NAVANTIA, which reached 2,887 Million Euros, of which 80% corresponds to shipbuilding construction projects, mostly of a military nature. It is also significant the order book of the Grupo TRAGSA, which reached 1,046 Million Euros, of which 40 Million Euros correspond still to the last projects of the E Plan, which will be implemented in 2011. In the Grupo ENSA, the order book reaches 273 Million Euros, of which 12.2 Million Euros correspond to its affiliated company ENWESA. Finally, the aggregate order book of all the activities in which is engaged the Grupo ENUSA amounts to 1,915 Million Euros.

The final workforce in 2010 of the Grupo SEPI reaches 27,266 workers, which represents a net decrease of 6,623 workers on the previous year, mostly due to the reduction in hiring by the Grupo TRAGSA. Of the total workforce of the Grupo SEPI, 55.8% belongs to the Grupo TRAGSA, while the Grupo NAVANTIA has 20.8% of the total workforce; the Grupo HUNOSA, 7.7%; AGENCIA EFE, 4.%, and the Grupo ENUSA, 3.4%; the remaining 7.6% is distributed among the other companies of the Group.