SEPI Sociedad Estatal de Participaciones Industriales

The individual results of Sociedad Estatal de Participaciones Industriales (SEPI), as a holding company, during the financial year 2005, according to interim results, has amounted to the loss of 100.7 Million Euros, notwithstanding the disinvestment of minority stakes listed in the stock exchange, such as Altadis, Aldeasa and Red Eléctrica, and the sale of Inisas and Clinisas, which have contributed 441 Million Euros.

The interim consolidated results of the SEPI Group have amounted to a profit of 191.6 Million Euros, basically due to the reversion of accounting provisions, which were funded in previous financial years, and which compensate SEPI´s aggregated losses, fundamentally generated by the companies Izar, Navantia and Hunosa. SEPI submits, for the first time, the consolidated yearly results, in accordance with the modification of article 42 of the Commerce Code, which was introduced by Act 62/2003.

The SEPI Group´s operating income as of December 31st, 2005 amounted to 2,509.6 Million Euros, basically supplied by Navantia (37%), the Grupo Tragsa (30%), and by the Grupo Enusa (9%). The running costs amounted to 2,872.8 Million Euros, of which 38% correspond to Navantia, 25% to Tragsa, 9% to Hunosa and the same percentage to IZAR, 7% to Enusa and the remaining 12% to the other companies.

Regarding the orders won by the companies which make up the Group in the last year, it is worthwhile to point out the 996 Million Euros of the Grupo Tragsa; the 949 Million Euros of Navantia; the 334 Million Euros of the Grupo Enusa, and the Grupo Ensa, which recorded orders amounting to 62 Million Euros.

As for the order book of the companies which make up the SEPI Group, also stand out that of Navantia, with a value at the end of the year of 3,503 Million Euros; that for the Grupo Enusa, with 1,192 Million Euros; the Grupo Tragsa, with 981 Million Euros; and the Grupo Ensa, with an order book amounting to 128 Million Euros.

The Group´s average workforce through the financial year 2005 amounted to 25,923 workers, of which 49% belong to the Grupo Tragsa, 21% to Navantia, 15% to the Grupo Hunosa, 4% to the Agencia EFE and 1% to the remaining companies. The final workforce as of December 31st, 2005 was of 24,316 workers.
 

Significant events in the financial year 2005

Among the most significant events with financial effects of the financial year 2005 stands out the spin-off of Izar´s military activity to a new company, Navantia - whose shares were transferred to SEPI , trough the contribution of the assets corresponding to the plants of El Ferrol, Fene, Cartagena, Puerto Real, San Fernando and Cádiz, as well as the central offices in Madrid.

In March 2005 the redundancy scheme (ERE) for the reorganization of the Izar´s workforce was authorized, which was included in the agreement reached with the trade unions regarding the future of the state-owned shipyards, which envisaged 3,983 early retirements and whose cost was funded in the Accounts of the financial year 2004. After the notification issued to Spain by the European Commission on January 2005, which required Izar to recover the aid which had been declared as incompatible with the European regulation, which together with the interests amounted at the end of 2005 to 1,325 Million Euros, Izar´s General Meeting of Shareholders, which took place on April 1st, 2005 took the decision of winding-up and liquidating the Company, as a result of its being in legal cause of dissolution according to article 260.1.4º of the Joint-Stock Company Act.

During 2005 also took place, in April, the sale of 5.06% of the social capital of Aldeasa, through the acceptance of the IPO issued by Retail Airport Finance, at a price of 36.57 Euros per share. In July took place the sale of 2.08% of the social capital of Altadis, through a bought deal, at a price of 34.57 Euros per share, before commissions.

In September 2005, SEPI sold 8.5% of the social capital of Red Eléctrica de España, at a price of 23.05 Euros per share, before commissions, also through a bought deal.

In December took place the sale of all the capital of the companies Clínica Castelló (Clinisas), which was awarded to Mapfre Caja Salud for a price of 18.95 Million Euros, and of Inisas Compañía de Seguros y Reaseguros, to the company Adeslas for a price of 16.04 Million Euros.

During the year 2005, SEPI made contributions to some of its affiliated companies for a total amount of 971 Million Euros and bought to Izar the totality of the social capital of Navantia for the amount of 151 Million Euros. Equally, in July took place the maturity of the bonds issued by the INI on July 1995, for a total of 101.12 Million Euros and in December, the maturity of the bonds issued by SEPI in December 1995 for a total of 21.64 Million Euros.

As a result of all the above deals, SEPI´s cash assets suffered during the year 2005 a 614 Million Euros reduction.

Another relevant event was, on December 9th, the submission to the Parliament by the Council of Ministers of a Bill which modifies the Act for the Creation of some Public Law Entities, dated on January 10th, 1996. This Bill introduces some innovations regarding SEPI´s financing and its ability to raise funds.