•The pre tax profit in 2006 was 162.54 millions and the sales profit margin more than 21%.
•The increases in the real estate and construction areas and their investment strategy have been key factors during the financial year.
•Consolidates its position in Poland and anticipates breaking into other East European markets. .
Grupo Sando is one of the leading companies in Spain in the construction business, with a turnover in 2006 of 759.5 million Euros, being an increase of 46.2% over and above the 519.6 million in the previous year. In this way Sando has become consolidated as one of the top ten most important companies in the business in Spain ranked by turnover.
Pre tax profit was 162.54 million Euros (246.4% more than in 2005), of which 88.3 million were extraordinary income as a result of the sale of 9% of its shares in the DUSE real estate company. The Sando Group, together with Realia, had 74% of the share capital of this company, which subsequent to the sale has been reduced down to 65%.
Without taking into account the extraordinary income, the operating income reached 74.2 million Euros, 58.2% more than the 46.9 million in 2005.
The Sando Group has increased its turnover by 2.6 as much over the past five years, which was 263 million Euros in 2001. This evolution has been based on their diversification strategy, above all in the areas of real estate, Concessions and international activities, not forgetting the excellent results of the rest of their activities: building materials, construction and civil building works, and the environment.
The Group has total assets of 1,490 million Euros, with investments of 91 million in fixed assets in 2006. Equity was 225 million Euros, with a ROE (return on equity) of 70% which, together with the quality of its liabilities, gives the company a high level of financial solvency. In 2006 the Cash Flow was 140 million Euros.
In terms of areas of activity, the continuous increase obtained by the Building Division should be highlighted, with a turnover of 434.38 million Euros, 58% more than in the previous year, with a contribution of 57.20% to the group total. Amongst the works that commenced during the course of 2006, the following outstand: the Madrid – Toledo toll motorway (construction and concession); the stretch of the AVE High speed Train between the localities of Iniesta and Minglanilla; the Ciudad de la Justicia in Malaga (due to be opened next week), the stretch of the A-382 main road between Jerez and Cadiz. Amongst the most outstanding contacts that were started in 2007, the following are of significance: El Cañaveral building development in Madrid, with more than 538 hectares for the construction of 14,000 homes; the improvements in the Bajo Guadalquivir canal; the Torres de Hércules in Los Barrios (Cadiz); the East Coast Railway Access Platform (AVE); the San Pedro tunnel in Madrid (in a Temporary Joint Venture), the High Speed Train stretch Seville-Cadiz, which is an outstanding work within the Ministry of Public Works Transport and Infrastructure Strategic Plan, with a budget of 123.4 million Euros.
The performance of the Real Estate division has been another of the key factors in this financial year, with a turnover of 158.8 million Euros, 60.4% more than in 2005, and a land portfolio of more than 7.7 million square metres. This land portfolio will allow the Sando Group to commence and finish 1,500 homes a year over a period of three years. Currently the market value of this land is valued at 2,240 million Euros.
The consolidation of the position of the group in Poland is one of the outstanding activities being carried out by the real estate division, where 290,000 square metres are in hand for building 2,600 homes in various areas of Warsaw. The Sando Group real estate division has invested 150 million Euros in purchasing land during the course of 2006.
Apart from these activities, the Real Estate Division, which already contributes more than 20% of the group business, has commenced more than 1,100 units in 2006, of which 994 are residential and the rest in the industrial area where the division is also very active. At the beginning of this month of March, the division has acquired 100,000 square metres in the Valdebebas area of Madrid, which together with the recently purchased area in Villaverde (Madrid), will allow the construction and development of 500 homes.
The Concessions area has been one of those that has also experienced a very positive evolution during the course of 2006, with a contribution of 14% of the group total. This increasingly consolidated division with an ever increasing potential, has commenced the following in 2006: the Paseo de la Victoria car park in Cordoba, with 447 parking spaces; the Madrid – Toledo toll motorway; the Vélez-Málaga tramway; the photovoltaic installations in La Rinconada in Seville. This year, amongst others, the following portfolio is still pending completion: the cloverleaf interchange in Mairena del Aljarafe, also in Seville, and the Rosa Amarilla Project (the construction of the Biomedicine Investigation Centre and administration building for the Virgen del Rocío Hospital in Seville, with parking space for 1,000 vehicles, child care facilities, shopping mall, etc).
DIVERSIFICATION
The diversification strategy adopted by the Sando Group four years ago, entering into other areas of business such as real estate, concessions and the environment has had clear confirmation in 2007 with the adjudication of the construction and maintenance of the Las Dalías Waste water treatment plant en Almeria. The Sando Group, in a Temporary Joint Venture with Veolía and Inypsa, will be responsible firstly for the construction and then the later maintenance for a period of 15 years. The overall investment will be for more than 100 million Euros.
The acquisition of 24.5% of the share capital of AT4 Wireless, previously called Centro de Tecnología de las Comunicaciones (CETECOM), should be added to this operation.
The shareholding was acquired by means of an increase in share capital to which the Sando Group subscribed with an amount of 3.4 million Euros, and a direct purchase for the amount of 2.6 million Euros from Soprea, a shareholder of the company. The total investment was 6 million Euros.
In this way the Sando Group became part of the strategic telecommunications sector, by means of a shareholding in a prestigious internationally recognised company. . CETECOM is the only laboratory in the world authorised to certify WIMAX technology devices.
The Sando Group maintains its sector and geographical diversification, together with paying special attention to person management, prevention and safety, respect for the environment, and continued quality progress.
In 2006, the number of staff was 1,724 employees, with an increase of 465 over and above the previous year.
The Sando Group is also progressing in its Social Responsibility activities. The Sando Fundación has been created to manage all the social actions carried out by the group, which started its activities in 2007, with the objective of being active throughout Spain in areas of culture and investigation support.
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