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Cementos Portland Valderrivas to apply consolidated taxation system

22/11/2006

Cementos Portland Valderrivas to apply consolidated taxation system

The FCC subsidiary will attain over 1.8 billion euro in revenues in 2007

The Special Shareholders' Meeting of Cementos Portland Valderrivas today in Pamplona resolved to apply the consolidated taxation system to the companies in its Group.

The Cementos Portland Valderrivas group consists of the parent company, Cementos Portland Valderrivas, S.A., and the companies in which it owns at least 75%, directly or indirectly, that are taxed in Spain's common tax territory. Cementos Lemona, S.A. is not included since it is subject to the Basque tax system, nor are the companies that are taxed under the Navarra system.

The consolidated taxation system is regulated by Chapter VII, Title VII, articles 64 and subsequent of the Company Tax Law. It is a special voluntary tax system available to groups of companies.

As company chairman, José Ignacio Martínez-Ynzenga, told shareholders, the system will mean that the companies in the Group will not be taxed individually under company tax, and it requires that the Group produce consolidated financial statements separately for the whole Group and for the Tax Group.

The concept of Tax Group is more restrictive than the concept of consolidated group under company law; the consolidated taxation system reduces the tax burden since it allows taxable losses at companies within the group to be offset against taxable gains at other companies.

The companies in the Cementos Portland Valderrivas Group to which the tax consolidation system will be applied are as follows:

  • Companies owned 100% by Cementos Portland Valderrivas: Hormigones y Morteros Preparados; Portland, S.L.
  • Compañía Auxiliar de Bombeo de Hormigón; Áridos y Premezclados; Atracem; Ceminter Madrid and Hormigones Tabarca.
  • Companies owned over 85%: Cementos Alfa; Carbocem, S.A.; Explotaciones San Antonio; Cántabra Industrial y Minera; Hormigones Reinosa; Cementrade; Cemensilos; and Canteras Villallano.

The Shareholders' Meetings of all the companies involved must adopt the decision to apply the consolidated taxation system.

Acquisition of Uniland

José Ignacio Martínez-Ynzenga also gave shareholders details of the recent Uniland acquisition, as a result of which Cementos Portland Valderrivas is now Spain's largest cement company and one of the biggest in the world.

He expressed his gratitude to Esther Koplowitz, FCC's largest shareholder and Vice-Chairwoman of Cementos Portland Valderrivas, for her support, and that of the Board of Directors, in successfully undertaking the Lemona and Uniland acquisitions.

The acquisition of 51% of Corporación Uniland cost 1.092 billion euro, and there is a put option to acquire another 22.5% at the same price per share within the next five years (i.e. giving a total holding of 73.5%). The deals were financed with two loans for a total of 1.580 billion euro. A total of 900 million euro of goodwill was generated in the acquisitions, most of which will be assigned to assets.

 Following the acquisition, the Cementos Portland Valderrivas Group controls:

  • 15 cement factories, with a total annual capacity of 18.8 million tonnes.
  • 154 concrete plants, with a total annual capacity of 8.6 million cubic metres.
  • 61 gravel plants with a total annual capacity of 25.9 million tonnes.
  • 18 dry mortar plants with a total annual capacity of 2.7 million tonnes.
  • 11 cement terminals.

The production plants are located in Spain, the United States, Tunisia, Argentina, Uruguay, the United Kingdom and The Netherlands.

Martínez-Ynzenga stated that revenues in 2007 are expected to exceed 1.8 billion euro, with EBITDA amounting to over 600 million euro. Those figures are practically double the numbers reported in 2005 (revenues: 978 million euro; EBITDA: 312 million euro).