Foreign Exchange Rate Recommendatives for 2012

Transcription

1 // TO STAY AHEAD 1H2012 REPORT AUGUST 2012

2 CONTENTS MANAGEMENT REPORT MARTIFER GROUP 05 Highlights 06 Key Financial Indicators 06 Main Events FINANCIAL PERFORMANCE 09 Results Analysis 10 Revenues 11 EBITDA and Net Profit 12 Capex 13 Capital Structure Analysis ANALYSIS BY SEGMENT 17 Metallic Constructions 18 Solar 21 Other Areas MARTIFER SHARE S PERFORMANCE 25 CONSOLIDATED FINANCIAL INFORMATION CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 43 PAGE 2 1H2012 REPORT

3 // MANAGEMENT REPORT

4 PAGE 4 1H2012 REPORT

5 01 MARTIFER GROUP

6 HIGHLIGHTS Operating Revenues of M ; an increase of 4.4% comparing with the same period last year, in an extreme adverse macroeconomic environment EBITDA of 21.2 M (versus 1.6M YoY), with a margin of 8.7 %, i.e., +8.0 p.p. YoY, reflecting strong recovery in the operational performance Net consolidated Profit of -9.9 M, negatively impacted by the higher net financial costs Significant increase in the order books of Metallic Construction (390 M ) and Solar (235 M ) The volume activity growth is expected to be confirmed in the second half 2012 KEY FINANCIAL INDICATORS 1H 1H 1H M IFRS 2012 Marg Marg Marg. Var. % Restated Revenues % EBITDA % % % >100% EBIT % % % n.m. Financial Results % Profit Before Tax % Income tax n.m. Consolidated Net Profit % % % 37.5% Attributable to non-controlling interests n.m. to shareholders % PAGE 6 1H2012 REPORT

7 MAIN EVENTSSUBSEQUENT EVENTS JANUARY 2012 Martifer decides to close Benavente factory The Board of Martifer Metallic Constructions has taken the decision to close the steel structures unit in Benavente. This is due to an internal re-adjustment of the response capacity at the industrial level, due to the decreasing demand in the Iberian construction sector. MARCH 2012 Martifer wins the award of two hotel-boats Martifer was awarded with the construction of two hotel-boats from Douro Azul. The work will be done by its subsidiary Navalria by APRIL 2012 Martifer sells Silverton Project in Australia Macquarie Capital Wind Fund Pty Limited signed the share sale agreement that defines the terms and conditions to sell the 3,240,001 ordinary shares, representing 50 % of the share capital of the company Silverton Wind Farm Holdings Pty Limited, and consequently the development rights for the Silverton wind farm in New South Wales, Australia, for approximately AUD 5.6 million. Martifer sells wind towers facility in the US Martifer sold the shares representative of 50 % of Martifer-Hirschfeld Energy Systems LLC, a company that holds the towers factory in the United States of America, to Hirschfeld Group, for USD 2.3 million. The impact of this transaction in the consolidated financial statements of the Group was accounted for in December 2011, through the recognition of an impairment loss. Martifer returns to 55% share capital in Martifer Solar Martifer sold 10,000,000 shares, representative of 20 % of the share capital of Martifer Solar, to HSF, for 15.6 million Euro, and returned to the shareholders structure owned by the two partners in the past ( 55 % and 45 %, Martifer SGPS and HSF, respectively). SUBSEQUENT EVENTS JULY 2012 Nutre, controlled at 49 % by Martifer SGPS, has concluded a deal for a joint venture with Bunge in Romania. Nutre will have a 45 % participation in this joint venture, which includes the Biodiesel facility (Prio Biocombustibil srl); the Oil extraction facility (Prio Extractie, srl), and in the refining and packaging facility, previously Bunge s. 1Q2012 REPORT PAGE 7

8 PAGE 8 1H2012 REPORT

9 02 FINANCIAL PERFORMANCE

10 02 FINANCIAL PERFORMANCE RESULTS ANALYSIS M 1H12 1H11 Restated 1H11 Var. % Revenues % Earnings before depreciation, amortization and provisions & impairment losses (EBITDA) >100% EBITDA margin 8.7% 0.7% 0.7% 8 pp Depreciation & Amortization % Provisions & Impairment Losses >100% Operating Income (EBIT) n.m. EBIT margin 2.8% -3.4% -3.7% n.m. Financial Results % Profit before taxes % Income tax n.m. Net Profit % Attributable to non-controlling interests n.m. Attributable to shareholders % per share PAGE 10 1H2012 REPORT

11 REVENUES In the first half 2012 Operating Revenues increased by 4.4 % YoY to million euro, in one hand reflecting the recovery in the metallic constructions activity supported by the strong order book, less exposed to the Iberian market, on the other hand, showing an extraordinary performance in the current economic conditions. Especially if we consider the adverse impacts of the austerity plans underway in Europe and the negative impact at the sectorial level, mostly in the fields of infrastructure, which require the implementation of new financing models. Metallic Construction business area presented an increase of 7.0 % YoY in Revenues. Stronger markets such as the UK, France and Brazil are gradually compensating the weak performance in the Iberian market. Particularly Brazil is living a very positive period with strong demand on the back of the coming up of important events, such as the next World Cup and the Olympic Games. The Solar business ended the first half 2012 with a flat growth, to million euro. The company continues its internationalization process, always with a focus on maintaining a strategic position in mature countries, with a favourable regulatory framework, and emerging countries, with good solar potential. Revenues 1H2012 1H2011 M Weight M Weight Var. Martifer Consolidated % Metallic Construction % % 7.0% Solar % % 0.1% Others % % -55.4% Note: Others include RE Developer, Holding, Shared Services and eliminations The contribution of the Iberian Peninsula for the total value of revenues was 23 % in the semester, which compares to 29 % in the first quarter. The remaining 77% of the Revenues came from: North America; Latin America; Africa & Saudi Arabia. This level of international diversification has permitted the offset of the Portuguese and Spanish revenue fall, mostly in the metallic construction. REVENUES BREAKDOWN 2% 13% 6% 23% 13% 43% Iberia Africa & Saudi Arabia Latin America European Union Australia North America 1Q2012 REPORT PAGE 11

12 EBITDA AND NET PROFIT First half 2012 consolidated EBITDA reached 21.2 million euro, versus 1.6 million euro in the same period last year, with a margin of 8.7 %, improving 8 p.p. on a YoY basis. The operational performance recovery is explained by: (1) better margins in metallic constructions, impacted by the restructuring plan under way, and (2) the Improvement of the margin mix of solar projects. EBITDA 1H2012 1H2011 M Margin M Margin Var. Martifer Consolidated % % Metallic Construction % % Solar % % Others >100% n.m. >100% >100% Note: Others include RE Developer, Holding and Shared Services The Depreciation & Amortization is almost flat in the 9.1 million euros, after a restated value of Depreciation & Amortization in 2011, due to changes in the accounting policy regarding the measurement of land and building held for use, from fair value to acquisition cost. In the first half 2012, net financial expenses totalled 13.3 million euro, which is comparable with 9.3 million euro (+42.9 % YoY, in a recurrent base). In 2011, it includes 5.9 million euro of capital gains, mostly with the sale of Home Energy and REpower Portugal and in the first half 2012 includes a capital gain of 1.5 million euro related with the sale of Silverton project in Australia. Net foreign exchange result was postive, reaching a 0.4 million euro gain, which compares with 2.2 million euro in the first half Net interest expense was 9.2 million euro in the first half, 7.8 % below the 10 million euro achieved in the first half The net contribution from the application of the Equity Method to the subsidiaries Prio Energy and Nutre (accounted at 49 %) was negative in 1.0 million euro. Thus, the Net Profit attributable to shareholders in the first half amounted to negative 12.4 million euro. PAGE 12 1H2012 REPORT

13 CAPEX The amount of investment in fixed assets in the first half 2012 reached 21.4 million euro, mostly applied to: (i) the development of solar projects at Martifer Solar (16.6 million euro) and (ii) the end of the metallic construction facility in Brazil and to a varied maintenance capex in the Metallic Constructions (4.5 million euro). INVESTMENT IN FIXED ASSETS QUARTER TREND ( ) - M ,1 27,6 22,8 20 M ,9 9,5 11,1 14,6 11,0 10, Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12-4,0 1Q2012 REPORT PAGE 13

14 CAPITAL STRUCTURE ANALYSIS FINANCIAL POSITION M 1Q Restated 2011 Var. Fixed Assets (including Goodwill) % Other non-current assets % Inventory and Receivables % Cash and cash equivalents % Total Assets % Shareholders Equity % Non-controlling interests % Total Equity % Non-current debt and leasings % Other non-current liabilities % Current debt and leasings % Other current liabilities % Total Liabilities % Total assets at 30 th June 2012, amounted to 1,013.3 million euro, which compares to 1,018.0 million euro at 31 st December Non-current assets reached million euro compared with million euro, at the end of Total Equity was million euro at the end of the first half. Non-controlling interests changed from 31.8 million euro to 53.8 million euro, when compared with 31 st December 2011, due to the share participation change in Martifer Solar from 75% to 55%. At the end of the period, Martifer continues to show a robust capital structure with a financial autonomy ratio of approximately 26.7 %. PAGE 14 1H2012 REPORT

15 NET DEBT M Metallic Construction Solar RE Developer Holding Martifer Consolidated Corporate Net Debt allocated to operating activities Corporate Net Debt allocated to non-operating activities Non-Recourse Net Debt Total Net Debt Holding debt allocated to business units Note: Net Debt = Borrowings + Financial Leases (+/-) Derivatives Cash and Cash Equivalents The Group s Consolidated Net Debt at 30 th June 2012 totalled million euro. We highlight that it is Martifer Group s objective to have a debt level between 230 million euro and 250 million euro by the end of Considering the present debt level (382 million euro) it is our goal to pursue further debt reduction of 132 million euro up to 152 million euro until the end of 2013 by the sale of non-core assets, mainly wind farms, solar projects and, residually, from the sale of real estate projects. 1Q2012 REPORT PAGE 15

16 PAGE 16 1H2012 REPORT

17 04 ANALYSIS BY SEGMENT

18 03 ANALYSIS BY SEGMENT METALLIC CONSTRUCTIONS SECTOR TRENDS In Europe, Construction output fell by the sharpest pace in three years in 1 st half 2012, which highlights the unfavourable effect the government's austerity measures are having on the industry, which conducted Euroconstruct institute to downgrade its construction forecasts, i.e., from -0.3% to -2.1% in 2012 and from +1.8% to +0.4% in Moreover, according to Euroconstruct, Europe can be divided in four categories with different shapes of growth between 2012 and 2014: Denmark and Norway - that are projected to experience growth in excess of 2% per annum on average Austria, France, Germany, Hungary, Poland, Slovakia, Sweden, Switzerland and the UK - expected to see modest growth of between 0.1% and 2% a year over the forecast period Belgium, Czech Republic, Finland, Italy and the Netherlands - likely to see no growth to moderate decline (0% to -3% a year) Ireland, Portugal, and Spain - with construction activity still in deep recession In Portugal, small and medium sized contractors are struggling to compete; on the other hand larger companies are cutting down their national operations and looking for worldwide opportunities. News about the economic growth pack of stimulus that backed infrastructure investment plan could provide some comfort to an industry which is struggling to keep its head above water. Only emerging markets have been driving economic growth and there has been significant demand for metallic structure, mostly in Asia and South America. PAGE 18 1H2012 REPORT

19 ACTIVITY The order book presented a very significant growth in the second quarter to 390 million euros of projects, in 12 different countries. From the last awarded projects, the most significant are: the Réaménagement des Halles in Paris, the KASK stadium in Jeddah, (Saudi Arabia), the EDF building in Paris, and the the GV steel mill in São Paulo. ORDER BACKLOG FEATURED PROJECTS PROJECT LOCATION TOTAL VALUE BEGINNING YEAR END YEAR Douro Azul Ships Aveiro, Portugal Euro 13.0 M Galp Petrogal (conversion of refinery) Sines, Portugal Euro 29.5 M Ulla Bridge Corunna, Spain Euro 20.8 M Amiens Hospital Amiens, France Euro 7.4 M Office Building ZAC Victor Hugo Paris, France Euro 3.1 M CHU D'Orleans Paris, France Euro 9.6 M Lille Stadium (locksmiths) Lille, France Euro 6.4 M Réaménagement des Halles Paris, France Euro 6.2 M EDF Paris, France Euro 26.5 M Lyon Stadium Lyon, France Euro Canberra Airport Terminal Canberra, Australia AUD 10.6 M Bridges in the new A1Highway Torun, Poland PLN 66.5M Office Building in Luanda Luanda, Angola Euro 13.3 M Financial City Luanda, Angola Euro 13.6 M Airport Catumbela second phase Catumbela, Angola Euro 3.5 M Scotland s National Arena Glasgow, Scotland GBP 12.9 M Birmingham New Street Birmingham, England GBP 8.2 M BBVA Headquarters Madrid, Spain Euro 11.8 M King Abdullah Financial District Riyadh, Saudi Arabia Euro 20.8 M KASK Steel Structure Jeddah, Saudi Arabia Euro 24.9 M KASK Stadium Roof Jeddah, Saudi Arabia Euro 9,5 M Vale Verde Shopping São Paulo, Brazil BRL 13.0 M Fonte Nova Stadium Salvador, Brazil BRL 37.5 M Castelão Stadium Fortaleza, Brazil BRL 39.5 M Grémio de Porto Alegre, Stadium Porto Alegre, Brazil BRL 32.6 M Shopping Londrina Londrina, Brazil BRL 15.3 M GV do Brasil, steel mill São Paulo, Brazil BRL 40.4 M Q2012 REPORT PAGE 19

20 ORDER BOOK BREAKDOWN BY COUNTRY RESULTS Metallic Construction Revenues reached million euro in the first half 2012, corresponding to a growth of 7 % YoY, supported by the strong order book. The new facility in Pindamonhangaba, São Paulo region with a production capacity of 12,000 tons/year of metallic structures is operating since January The EBITDA in the first half increased from -3.4 million euro to 5.8 million euro, corresponding to a 4.5 % margin, equivalent to an improvement of 7.2 p.p. This increase is justified by the higher margins, already showing signs of the restructuring plan focused in increasing the operating efficiency, higher productivity and lower capex. In the second quarter 2012, the poor operating performance is mostly justified by the costs related with the closure of Benavente factory in Portugal. Net Financial Expenses in the first half were stable at 5.6 million euro. Net Profit totalled -9.2 million euro, of which 0.4 million euro attributable to non-controlling interests. Net Financial Debt in Metallic Constructions is stable at million euro of financial debt, which is the outcome of a rigorous control of working capital. Total capex reached 4.5 million euro mostly of it applied in the end of the construction of the factory in Brazil and maintenance investment in machinery and facilities. Metallic Construction M 1H12 1H11 Var. % Revenues % EBITDA n.m. EBITDA Margin 4.5% -2.8% 7.2 pp EBIT % EBIT Margin -1.86% -7.03% 5.2 pp Net Financial Expenses % Income tax n.m. Net Profit >100% Attributable to non-controlling interests n.m. Attributable to shareholders >-100% PAGE 20 1H2012 REPORT

21 1Q2012 REPORT PAGE 21

22 SOLAR SECTOR TRENDS Following a relatively brisk 1 st Quarter in PV sector positively driven by tariff deadlines in Germany, UK and Italy, and US import solar duties on chinese modules, the pace seen in the 2 nd Quarter was much lower. Bloomberg Energy Finance forecasts for 2012 a total volume between 26.3 and 35.0 GW, as some markets become slightly clearer now. The markets in Germany and Italy are not closed despite several cuts in the feed-in tariff (pushing German systems prices to incredibly low levels). Thanks to rapidly expanding new markets, it has been possible to offset the cooling in other markets, such as Germany or Italy. There is a new high-feed-in tariff in Japan, and China has released a larger-than-expected pipeline of projects approvals for its Golden Sun commercial incentive scheme, which means that new markets are being created maintaining the sector very active. Margins for solar companies, in general, are negative and expected to remain as such until significant capacity drops out. Investment for solar companies has been quiet, with the asset financing moving slowly in the 1H2012 and public market investment all but silent. Venture Capital and M&A activity continued with numerous small deals. ACTIVITY The backlog of turnkey contracts is 235 million euro, with Portugal, USA, France and UK as the geographies with the most significant contributions. RESULTS Solar Revenues were flat YoY in the first half 2012, totalling million euro, but are expected to continue growing in the following quarters. Some projects started later than expected, and some other projects will advance at stronger pace in the second half of the year. The company continues its internationalization process, always with a focus on maintaining a strategic position in mature countries, with a favourable regulatory framework, and emerging countries, with good solar potential, for the execution of on-grid and off-grid solutions. The geographies with higher input in terms of Revenues in the period were France, USA, Portugal and Belgium. EBITDA in the first half increased substantially, from 2.8 to 10.8 million euro, corresponding to a rise in margin of 7.3 p.p. to 9.8%. This increase in margin is justified by the mix of sales registered in the semester, which had more EPC projects, with higher margins, than distribution sales. Net Financial Expenses recorded 2.4 million euro in the first half Net Profit totalled 4.7 million euro, revealing a strong increase when compared with 1.3 million euro in the same period last year. CAPEX in the first half 2012 was 16.6 million euro. This value is explained by the investment in project development, mostly in the USA and France, expected to be sold by Net Debt increased from 45.8 million euro at the end of the 2011, to 74.0 million euro, an increase of 28.2 million euro explained by the capex in the period and increase in working capital effort. PAGE 22 1H2012 REPORT

23 Solar M 1H12 1H11 Var. % Revenues % EBITDA >100% EBITDA Margin 10% 3% 7.3 pp EBIT >100% EBIT Margin 8.4% 1.5% 6.9 pp Net Financial Expenses s.s. Income tax >100% Net Profit >100% Attributable to non-controlling interests >100% Attributable to shareholders >100% 1Q2012 REPORT PAGE 23

24 OTHER AREAS RESULTS The results of the Others segment groups the activity of RE Developer, the Holding and Shared Services. Of the total amount of Revenues, RE Developer contributed with 7.1 million euro in the first half representing a YoY growth of 10 %, justified by the better performance of the Spanish solar parks and the Brazilian wind farms, despite the sale of the Polish wind farms in the second half Total EBITDA of RE Developer reached 3.5 million euro in the first half, representing an EBITDA margin of 49 % that compares with 30.5 % in the same period last year, as a result of further reductions in structure and development costs. Net Profit, in the first half, was 0.1 million euro negative, impacted by the positive net financial expenses, which include a capital gain of 1.5 million euro related with the sale of Silverton Project in Australia. Total net capex of RE developer in the period reached 0.85 million euro, mostly in the construction of the wind farm in Romania (Babadag). Net Financial Debt of RE Developer is stable at 40.8 million euro at the end of the semester, of which 14.7 million euro from project finance. RE Developer 1H12 1H11 Var. % M Revenues % EBITDA % EBITDA Margin 49.0% 30.5% 18.5 pp EBIT % EBIT Margin -3.3% -16.0% 79% Net Financial Expenses s.s. Income tax s.s. Net Profit % Attributable to non-controlling interests s.s. Attributable to shareholders % PAGE 24 1H2012 REPORT

25 04 SHARE PERFORMANCE

26 SHARE PRICE PERFORMANCE Martifer PSI20 Index Source: Reuters The economic environment got significantly worst in the second quarter of the year. The risk and the volatility increased again and the stock markets entered the red, with the higher uncertainty in Europe, after the financial help to the Spanish Banks and rumours of another country bailout on the way. Due to lower liquidity of the stock and lack of investors interest in the Portuguese Stock market, Martifer s share price performance suffered as much as its peer companies, and underperformed by 43.5 % in the first half 2012, when the PSI-20, the major Euronext Lisbon market index dropped by 14.5 %. Apart from Dax index which outperform by 4.26 %, and has been seen as safe heaven in Europe, in general all the main indexes in Europe had a poor behaviour, namely IBEX (-17.7 %) and FTSE100 (-1.42 %). In the US the climate was better than in Europe in the semester, Dow Jones Ind. was up by 3.15 % and NASDAQ was up by %. Martifer s share price ended the first half 2012 at 0.61 /share. The highest price achieved was 1.14 /share and the lowest price was 0.58 /share. The daily average volume of stock traded during the period was shares. Overall, Martifer s market capitalization totalled 61 million euro at the end of the period. PAGE 26 1H2012 REPORT

27 PURCHASE OF OWN SHARES In accordance with CMVM regulation 5/2008, namely article 11, numbers 1 and 2, we inform that Martifer SGPS, SA (Martifer) purchased in the Stock Exchange: Date Market / Transaction Size (shares) Price ( ) Number Hold 02-Jan-12 Euronext Lisbon Purchase 5, , Jan-12 Euronext Lisbon Purchase 5, , Jan-12 Euronext Lisbon Purchase 19, , Jan-12 Euronext Lisbon Purchase 7, , Jan-12 Euronext Lisbon Purchase 2, , Jan-12 Euronext Lisbon Purchase 1, , Jan-12 Euronext Lisbon Purchase 16, , Jan-12 Euronext Lisbon Purchase , Jan-12 Euronext Lisbon Purchase 5, , Jan-12 Euronext Lisbon Purchase , Jan-12 Euronext Lisbon Purchase 5, , Jan-12 Euronext Lisbon Purchase 5, , Jan-12 Euronext Lisbon Purchase 1, , Jan-12 Euronext Lisbon Purchase 8, , Jan-12 Euronext Lisbon Purchase 9, , Jan-12 Euronext Lisbon Purchase 1, , Jan-12 Euronext Lisbon Purchase 12, , Jan-12 Euronext Lisbon Purchase 3, , Jan-12 Euronext Lisbon Purchase 14, , Jan-12 Euronext Lisbon Purchase 3, , Feb-12 Euronext Lisbon Purchase 7, , Feb-12 Euronext Lisbon Purchase 2, , Feb-12 Euronext Lisbon Purchase 2, , Feb-12 Euronext Lisbon Purchase 11, , Feb-12 Euronext Lisbon Purchase 21, , Feb-12 Euronext Lisbon Purchase 3, , Feb-12 Euronext Lisbon Purchase 4, , Feb-12 Euronext Lisbon Purchase 1, , Mar-12 Euronext Lisbon Purchase 6, , Mar-12 Euronext Lisbon Purchase 7, , Mar-12 Euronext Lisbon Purchase 6, , Mar-12 Euronext Lisbon Purchase 7, , Mar-12 Euronext Lisbon Purchase 25, , Mar-12 Euronext Lisbon Purchase 35, , Mar-12 Euronext Lisbon Purchase 6, , Mar-12 Euronext Lisbon Purchase 18, , Mar-12 Euronext Lisbon Purchase 37, , Mar-12 Euronext Lisbon Purchase 22, , Mar-12 Euronext Lisbon Purchase 6, , Mar-12 Euronext Lisbon Purchase , Mar-12 Euronext Lisbon Purchase 3, , Mar-12 Euronext Lisbon Purchase , Mar-12 Euronext Lisbon Purchase 6, , Mar-12 Euronext Lisbon Purchase 1, , Mar-12 Euronext Lisbon Purchase 5, , Mar-12 Euronext Lisbon Purchase 17, , Mar-12 Euronext Lisbon Purchase , Mar-12 Euronext Lisbon Purchase , Mar-12 Euronext Lisbon Purchase 5, , Apr-12 Euronext Lisbon Purchase , Apr-12 Euronext Lisbon Purchase , Apr-12 Euronext Lisbon Purchase 3, , Apr-12 Euronext Lisbon Purchase 5, , Apr-12 Euronext Lisbon Purchase 4, , Apr-12 Euronext Lisbon Purchase 2, , Apr-12 Euronext Lisbon Purchase 1, , May-12 Euronext Lisbon Purchase 21, , May-12 Euronext Lisbon Purchase 20, ,359 Following these transactions Martifer holds 2,210,010 own shares representing 2.21 % of its share capital. 1Q2012 REPORT PAGE 27

28 Oliveira de Frades, 24 July 2012 The Board of Directors, Carlos Manuel Marques Martins (Chairman of the Board of Directors) Jorge Alberto Marques Martins (Vice-Chairman of the Board of Directors) Luis Filipe Cardoso da Silva (Member of the Board of Directors) Arnaldo José Nunes da Costa Figueiredo (Member of the Board of Directors) Luís Valadares Tavares (Member of the Board of Directors) Jorge Bento Ribeiro Barbosa Farinha (Member of the Board of Directors) PAGE 28 1H2012 REPORT

29 MANDATORY INFORMATION SHAREHOLDINGS OF THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BODIES HOLDER GOVERNING BODY NUMBER OF SHARES HELD ON 30/06/2012 Carlos Manuel Marques Martins Board of Directors 70,030 Jorge Alberto Marques Martins Board of Directors 211,080 I M SGPS, S.A. * Board of Directors 42,694,057 Luis Filipe Cardoso da Silva Board of Directors 2,000 Arnaldo José Nunes da Costa Figueiredo Board of Directors 3,000 MOTA-ENGIL, SGPS, S.A. ** Board of Directors 37,500,000 Luís Valadares Tavares Board of Directors - Jorge Bento Ribeiro Barbosa Farinha Board of Directors - Manuel Simões de Carvalho e Silva Supervisory Board - Carlos Alberto da Silva e Cunha Supervisory Board - João Carlos Tavares Ferreira de Carreto Lages Supervisory Board - Américo Agostinho Martins Pereira Statutory Auditor - José Carreto Lages Chairman of the General Meeting - * Directors Carlos Manuel Marques Martins and Jorge Alberto Marques Martins are holders of the share capital of I M SGPS, SA and are, respectively, its Chairman of the Board of Directors and Director. ** Directors Luis Filipe Cardoso da Silva and Arnaldo José Nunes da Costa Figueiredo are Directors of MOTA-ENGIL, SGPS, S.A. EVENTS DESCRIBED IN ARTICLE 447 OF THE PORTUGUESE COMPANIES CODE MEMBER OF THE GOVERNING BODIES SHARES HELD ON SHARE TRANSACTIONS DURING 1 ST HALF 2012 PURCHASE SALE SHARES HELD ON Carlos Manuel Marques Martins 70, ,030 Jorge Alberto Marques Martins 131,760 79, ,080 Arnaldo José Nunes da Costa Figueiredo 3, ,000 Luis Filipe Cardoso da Silva 2, ,000 Directors Carlos Manuel Marques Martins and Jorge Alberto Marques Martins, besides the shares held as described above, are sole equal shareholders of I M SGPS, SA, that, on 30 June 2012, held a total of 42,694,057 of shares of Martifer SGPS, SA.. SHARE TRANSACTIONS DURING 1 ST HALF 2012 MEMBER OF THE GOVERNING BODIES DATE PURCHASE SALE AVERAGE PRICE ( ) Jorge Alberto Marques Martins 15/03/ , Jorge Alberto Marques Martins 22/03/ Jorge Alberto Marques Martins 26/03/ , Jorge Alberto Marques Martins 02/04/2012 8, Jorge Alberto Marques Martins 03/04/2012 8, Jorge Alberto Marques Martins 04/04/2012 4, Jorge Alberto Marques Martins 12/04/ , Q2012 REPORT PAGE 29

30 The following are the share transactions of I M SGPS, SA during the 1st Half 2012: DATE PURCHASES SALES AVERAGE PRICE ( ) 05-Jan 6, Feb 3, Feb 7, Feb Feb Feb Mar 9, Mar 7, Mar 2, Mar 2, Apr Apr 1, Apr 3, May 7, May HOLDERS OF QUALIFING SHAREHOLDINGS According to paragraph 1c) of article 9 of CMVM regulation number 5/2008, the following is the list of qualifying shareholders, with an indication of number of shares and percentage of voting rights held. SHAREHOLDERS NUBER OF SHARES % OF THE SHARE CAPITAL % OF VOTING RIGHTS I M SGPS, SA 42,694, % 43.66% Carlos Manuel Marques Martins * 70, % 0.07% Jorge Alberto Marques Martins * 211, % 0.22% Attributable to I M SGPS, SA 42,975, % 43.95% Mota-Engil SGPS, SA 37,500, % 38.35% Arnaldo José Nunes da Costa Figueiredo** 3, % 0.00% Luis Filipe Cardoso da Silva ** 2, % 0.00% Attributable to Mota-Engil SGPS, SA 37,505, % 38.35% * Holder of a position in the Governing Bodies of I M SGPS, SA; ** Holder of a position in the Governing Bodies of Mota-Engil SGPS, SA. PAGE 30 1H2012 REPORT

31 STATEMENT BY THE BOARD OF DIRECTORS In the terms sub-paragraph c) of paragraph 1 of article 246 of the Securities Code (Código de Valores Mobiliários) Dear Shareholders, In accordance with sub-paragraph c) of paragraph 1 of article 246 of the Securities Code (Código de Valores Mobiliários), we hereby declare that, to the best of our knowledge: (i) the consolidated financial statements reported in the interim report of Martifer SGPS, SA for the period ended 30th June 2012 (ii) were compiled according to the applicable accounting standards, giving a true and fair view of the assets and liabilities, financial position and results of Martifer SGPS, SA and of the companies included in its consolidation perimeter; the interim management report of Martifer SGPS, SA faithfully reviews the relevant events that occurred in the period and the impact of such events on the consolidated financial statements, as well as a description of the main risks and uncertainties it faces for the subsequent six months. Oliveira de Frades, 24th July 2012 The Board of Directors, Carlos Manuel Marques Martins (Chairman of the Board of Directors) Jorge Alberto Marques Martins (Vice-Chairman of the Board of Directors) Luis Filipe Cardoso da Silva (Member of the Board of Directors) Arnaldo José Nunes da Costa Figueiredo (Member of the Board of Directors) Luís Valadares Tavares (Member of the Board of Directors) Jorge Bento Ribeiro Barbosa Farinha (Member of the Board of Directors) 1Q2012 REPORT PAGE 31

32 STATEMENT BY THE SUPERVISORY BOARD In the terms sub-paragraph c) of paragraph 1 of article 246 of the Securities Code (Código de Valores Mobiliários) Dear Shareholders, In accordance with the law, statutes and our mandate, we hereby declare that, to the best of our knowledge: (iii) the consolidated financial statements reported in the interim report of Martifer SGPS, SA for the period ended 30 th June 2012 were compiled according to the applicable accounting standards, giving a true and fair view of the assets and liabilities, financial position and results of Martifer SGPS, SA and of the companies included in its consolidation perimeter; (iv) the interim management report of Martifer SGPS, SA faithfully reviews the relevant events that occurred in the first half of 2012 and the impact of such events on the financial statements, as well as a description of the main risks and uncertainties it faces for the subsequent six months. Oliveira de Frades, 27 th July 2012 Manuel Simões de Carvalho e Silva President of the Supervisory Board Carlos Alberto da Silva e Cunha Member of the Supervisory Board João Carlos Tavares Ferreira de Carreto Lages Member of the Supervisory Board PAGE 32 1H2012 REPORT

33 // CONSOLIDATED FINANCIAL INFORMATION

34 PAGE 34 1H2012 REPORT

35 05 CONSOLIDATED FINANCIAL STATEMENTS

36 05 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS FOR THE 1 ST HALF OF 2012 AND 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) NOTES 1 ST HALF 2012 (NON AUDITED) 1 ST HALF 2011 RESTATED (NON AUDITED) 1 ST HALF 2011 (NON AUDITED) Sales and services rendered 4 and 5 241,113, ,276, ,276,752 Other income 6 2,669,746 9,313,192 9,313,192 Cost of goods sold 7 (106,821,855) (111,344,419) (111,344,419) Subcontractors 7 (46,007,521) (50,776,368) (50,776,368) Gross profit 90,953,428 71,469,157 71,469,157 External supplies and services 8 (36,998,661) (39,631,941) (39,631,941) Staff costs 9 (42,935,439) (38,354,056) (38,354,056) Other operational gains and losses 10 10,184,984 8,121,114 8,121, ,204,312 1,604,274 1,604,274 Amortizations 4, 17 and 18 (9,079,951) (8,999,857) (9,686,064) Impairment losses 11 (827,500) (299,870) (299,870) Provisions 11 and 30 (4,569,595) (295,679) (295,679) Operating income 4 6,727,265 (7,991,132) (8,677,339) Financial income 12 13,590,116 14,597,421 14,597,421 Financial expenses 12 (26,811,601) (23,081,249) (23,081,249) Gains / (losses) on associate companies and joint arrangements 13 (48,404) (806,680) (806,680) Income tax 14 (3,356,405) 1,942,109 2,095,105 Profit after tax (9,899,028) (15,339,531) (15,872,742) Earnings of the disposal group classified as held for sale 3 (23,701) - - Attributable to: non-controlling interests owners of Martifer (23,701) - - Profit for the year 4 (9,922,729) (15,339,531) (15,872,742) Attributable to: non-controlling interests 2,428,806 (578,707) (578,707) owners of Martifer (12,351,535) (14,760,824) (15,294,035) Earnings per share: Basic 15 (0.1261) (0.1490) (0.1544) from continuing operations (0.1259) (0.1490) (0.1544) from disposal group classified as held for sale (0.0002) - - Diluted 15 (0.1261) (0.1490) (0.1544) from continuing operations (0.1259) (0.1490) (0.1544) from disposal group classified as held for sale (0.0002) - - The accompanying notes are part of these financial statements PAGE 36 FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION

37 CONSOLIDATED INCOME STATEMENTS FOR THE QUARTERS OF 30 JUNE 2012 AND 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) 2 ND QUARTER 2012 (NON AUDITED) 2 ND QUARTER 2011 RESTATED (NON AUDITED) 2 ND QUARTER 2011 (NON AUDITED) Sales and services rendered 130,050, ,989, ,784,397 Other income 1,496,722 4,811,036 4,936,246 Cost of goods sold (57,591,748) (62,331,903) (62,032,589) Subcontractors (23,848,294) (27,520,380) (27,520,380) Gross profit 50,107,396 28,948,597 28,167,674 External supplies and services (19,644,330) (20,722,749) (20,333,883) Staff costs (22,153,607) (19,587,195) (19,424,257) Other operational gains and losses 2,602,618 7,685,144 7,147,141 10,912,077 (3,676,203) (4,443,325) Amortizations (4,550,313) (4,715,771) (4,719,779) Impairment losses (827,500) (879,462) (868,434) Provisions (4,159,373) 101,235 (242,313) Operating income 1,374,890 (9,170,201) (10,273,851) Financial income 7,097,169 3,229,534 3,776,096 Financial expenses (12,521,949) (10,952,161) (10,707,615) Gains / (losses) on associate companies and joint arrangements 361,887 (1,959,318) (1,652,024) Income tax (1,655,929) 2,448,378 2,656,504 Profit after tax (5,343,931) (16,403,768) (16,200,890) Earnings of the disposal group classified as held for sale (21,549) - - Attributable to: non-controlling interests owners of Martifer (21,549) - - Profit for the year (5,365,480) (16,403,768) (16,200,890) Attributable to: non-controlling interests 2,287,506 (525,435) (525,435) owners of Martifer (7,652,986) (15,878,333) (15,675,455) Earnings per share: Basic (0.0782) (0.1603) (0.1582) from continuing operations (0.0780) (0.1606) (0.1586) from disposal group classified as held for sale (0.0002) - - Diluted (0.0782) (0.1603) (0.1582) from continuing operations (0.0780) (0.1606) (0.1586) from disposal group classified as held for sale (0.0002) - - The accompanying notes are part of these financial statements FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 37

38 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE 1 ST HALF OF 2012 E 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) 1 ST HALF 2012 (NON AUDITED) 1 ST HALF 2011 RESTATED (NON AUDITED) 1 ST HALF 2011 (NON AUDITED) Profit for the year (9,922,729) (15,339,531) (15,872,742) Fair value of cash flow hedges (derivatives), net of tax (48,811) 157, ,861 Fair value of available for sale financial assets, net of tax Exchange differences arising on (i) translating foreign operations; (ii) net investment in subsidiaries and (iii) goodwill (215,776) (1,110,627) (1,110,627) Gains on revaluation of tangible fixed assets, net of tax Income recognized directly in equity (264,587) (952,766) (952,766) Total comprehensive income for the period (10,187,316) (16,292,296) (16,825,508) Attributable to: non-controlling interests 2,532,702 (582,546) (582,546) owners of Martifer (12,720,018) (15,709,750) (16,242,959) The accompanying notes are part of these financial statements PAGE 38 FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION

39 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AT 30 JUNE 2012 AND 31 DECEMBER 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) ASSETS Non-current assets The accompanying notes are part of these financial statements FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 39 NOTES 30 JUNE 2012 (NON AUDITED) 31 DECEMBER 2011 RESTATED (NON AUDITED) 31 DECEMBER 2011 (AUDITED) Goodwill 16 18,554,496 18,136,268 18,136,268 Intangible assets 17 43,393,674 40,000,945 40,000,945 Tangible assets ,994, ,084, ,939,148 Investment property 19 17,460,213 17,274,846 17,274,846 Financial assets under the equity method 20 14,532,578 14,867,827 14,867,827 Available for sale investments 21 2,129,348 2,179,021 2,179,021 Other non-current receivables ,203, ,575, ,575,300 Deferred tax assets 11,445,095 11,490,963 11,490, ,713, ,610, ,464,318 Current assets Inventories 22 27,449,180 31,152,897 31,152,897 Trade receivables ,493, ,107, ,107,588 Other receivables 23 72,362,176 43,066,127 43,066,127 Income tax 24 2,397,253 2,366,787 2,366,787 Current tax assets 24 19,905,133 19,670,837 19,670,837 Other current assets ,826, ,118, ,118,298 Cash and cash equivalents 26 29,909,735 77,886,483 77,886,483 Disposal group classified as held for sale 3 4,241, ,584, ,369, ,369,017 Total assets 4 1,013,297,857 1,017,979,156 1,037,833,335 EQUITY Issued capital 27 50,000,000 50,000,000 50,000,000 Reserves 178,743, ,520, ,133,360 Profit for the year (12,351,535) (48,587,256) (49,600,348) Equity attributable to owners of Martifer 216,392, ,933, ,533,012 Non-controlling interests 27 53,786,498 31,783,623 31,783,623 Non-controlling interests attributable to the disposal group classified as held for sale Total equity 270,178, ,717, ,316,635 LIABILITIES Non-current liabilities Borrowings ,562, ,440, ,440,560 Obligation under finance leases 15,214,104 17,902,006 17,902,006 Other non-current liabilities 29 19,935,841 17,458,625 17,458,625 Provisions 30 18,199,245 13,383,765 13,383,765 Deferred tax liabilities 3,563,687 3,851,678 8,106, ,475, ,036, ,291,302 Current liabilities Borrowings ,752, ,209, ,209,008 Obligation under finance leases 7,464,104 7,209,061 7,209,061 Trade payables ,291, ,293, ,293,996 Other payables 29 50,297,300 38,281,720 38,281,720 Income tax 31 5,457,549 5,051,259 5,051,259 Current tax liabilities 31 12,542,904 23,232,579 23,232,579 Other current liabilities 32 52,230,632 38,470,310 38,470,310 Derivatives 540, , ,465 Liabilities related to the disposal group classified as held for sale 3 66, ,643, ,225, ,225,398 Total liabilities 4 743,119, ,262, ,516,700 Total equity and liabilities 1,013,297,857 1,017,979,156 1,037,833,335

40 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE 1 ST HALF OF 2012 AND 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) FAIR VALUE RESERVES ISSUED CAPITAL TREASURY STOCK SHARE PREMIUM REVALUATION OF FIXED ASSETS AVAILABLE FOR SALE INVESTMENS CASH FLOW HEDGE DERIVATIVES FOREIGN CURRENCY TRANSLATION RESERVES STOCK OPTIONS RESERVES OTHER RESERVES NET PROFIT OF THE YEAR EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT NON- CONTROLLING INTERESTS TOTAL EQUITY Balance at 1 January ,000,000 (852,587) 186,500,000 15,927,250 - (228,755) (13,497,358) 113, ,191,830 (54,894,057) 309,259,817 30,988, ,247,995 Changes in the consolidated method and measurement policy (Note 1) (15,927,250) (119,411) 533,211 (15,513,450) - (15,513,450) 50,000,000 (852,587) 186,500, (228,755) (13, 497,358) 113, ,072,419 (54,360,846) 293,746,367 30,988, ,734,545 Appropriation of the profit of (54,894,057) 54,894, Comprehensive income for the year: Profit for the year (15,294,035) (15,294,035) (578,705) (15,872,740) Exchange differences arising on (i) translating foreign operations and (ii) net investment in subsidiaries (918,565) (918,565) (33,965) (952,531) Exchange differences arising on goodwill (151,089) (151,089) (7,008) (158,096) Gains on revaluation of properties Other changes in equity of subsidiaries , ,730 37, ,861 Total comprehensive income for the year ,730 1,069, (15,294,035) (16,242,959) (582,546) (16,825,506) Acquisition of treasury stock - (1,114,125) (1,114,125) - (1,114,125) Stock options , ,106-44,106 Share capital increase in subsidiaries ,630,459 1,630,459 Non-controlling interests transactions (326,504) - (326,504) 75,234 (251,270) Other changes in equity of subsidiaries ,483,338-5,483, ,845 6,189,183 Changes in the consolidation perimeter ,059,420 2,059,420 Balance at 30 june ,000,000 (1,966,712) 186,500, (108,025) (14,567,012) 157,601 76,454,606 (15,294,035) 281,590,222 34,876, ,466,812 Balance at 1 January ,000,000 (2,415,630) 186,500, (289,985) (19,563,611) 198,979 70,091,004 (48,587,256) 235,933,501 31,783, ,717,124 Appropriation of the profit of (48,587,256) 48,587, Comprehensive income for the year: - - Profit for the year (12,351,535) (12,351,535) 2,428,806 (9,922,729) Exchange differences arising on (i) translating foreign operations and (ii) net investment in subsidiaries (686,823) (686,823) 123,662 (563,161) Exchange differences arising on goodwill , , ,385 Other changes in equity of subsidiaries (29,044) (29,044) (19,766) (48,811) Total comprehensive income for the year (29,044) (339,439) - - (12,351,535) (12,720,018) 2,532,702 (10,187,316) Acquisition of treasury stock - (449,460) (449,460) - (449,460) Share capital increase in subsidiaries , ,000 Other changes in equity of subsidiaries (2,940,766) - (2,940,766) 1,411,001 (1.529,766) Changes in the consolidation perimeter ,440-41,440-41,440 Non-controlling interests transactions (3,472,370) - (3,472,370) 17,957,172 14,484,802 Balance at 30 june ,000,000 (2,865,090) 186,500, (319,029) (19,903,049) 198,979 15,132,051 (12,351,535) 216,392,326 53,786, ,178,824 The accompanying notes are part of these financial statements / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / PAGE 40 FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION

41 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 1 ST HALF OF 2012 AND 2011 (Amounts expressed in Euro) (TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN PORTUGUESE - NOTE 36) OPERATING ACTIVITIES 1 ST HALF 2012 (NON AUDITED) 1 ST HALF 2011 (NON AUDITED) 2 ND QUARTER 2012 (NON AUDITED) 2 ND QUARTER 2011 (NON AUDITED) Receipts from customers 289,135, ,811, ,142, ,941,647 Payments to suppliers (253,183,252) (338,366,268) (123,719,996) (175,157,387) Payments to employees (40,400,675) (38,351,267) (20,735,180) (20,982,987) Cash generated from operations (4,448,206) (25,906,427) (12,312,430) (24,198,727) Income tax paid (3,703,358) (1,840,891) (3,159,199) (678,887) Other receipts/(payments) relating to operating activities (6,013,999) (10,821,764) 1,609,072 (5,973,672) Cash generated from other operating activities (9,717,357) (12,662,655) (1,550,127) (6,652,559) Net cash generated by operating activities (1) (14,165,563) (38,569,082) (13,862,557) (30,851,286) INVESTING ACTIVITIES Receipts arising from: Financial assets 2,698, ,000 2,698,813 - Tangible assets 1,199,212 2,201, ,119 2,053,874 Intangible assets 623, , , ,019 Investment grants 1,336,652-1,336,652 - Interest and similar income 1,875,125 1,250, , ,139 Dividends Others 408, ,142,008 4,186,233 5,674,096 3,115,033 Payments arising from: Financial assets (883,937) (5,238,750) Tangible assets (11,387,271) (22,112,281) (3,969,035) (13,564,202) Intangible assets (10,953,929) (12,987,381) (6,743,695) (9,172,926) Others (5,000) (23,230,137) (40,338,412) (10,712,730) (22,737,128) Net cash generated by investing activities (2) (15,088,129) (36,152,179) (5,038,634) (19,622,095) FINANCING ACTIVITIES Receipts arising from: Borrowings 297,705, ,787, ,515, ,723,833 Issue of equity shares, supplementary capital and share premiums - 4,443,280-1,761,981 Grants and donations 16, , ,293 Others 607,829 2,409, ,633 1,895, ,329, ,347, ,865, ,088,206 Payments arising from: Borrowings (292,040,226) (373,344,997) (208,784,001) (221,886,134) Leasings (2,432,859) (3,355,511) (883,054) 2,767,000 Interest and similar costs (14,982,871) (11,034,829) (8,621,959) (6,637,799) Acquisition of treasury stock (449,460) (1,106,328) (42,181) (434,582) Others (2,848,198) (541,122) (2,576,718) 474,354 (312,753,614) (389,382,786) (220,907,913) (225,717,161) Net cash generated by financing activities (3) (14,423,834) 38,964,661 1,957,180 20,371,045 Net increase in cash and cash equivalents (4)=(1)+(2)+(3) (43,677,526) (35,756,599) (16,944,011) (30,102,336) Changes in the consolidation perimeter and others (4,262,697) (2,148,081) 16,639,825 (1,389,889) Effect of foreign exchange currencies (36,525) (205,103) 433, ,298 Cash and cash equivalents at the beginning of the period 77,886,483 76,666,431 29,780,204 69,158,575 Cash and cash equivalents at the end of the period 29,909,735 38,556,648 29,909,735 38,556,648 The accompanying notes are part of these financial statements FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 41

42 PÁGE 42 FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION

43 06 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

44 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INTRODUCTORY NOTE Martifer SGPS, S.A., with its head-office at Zona Industrial, Apartado 17, Oliveira de Frades Portugal ( Martifer SGPS or the Company ), and its group of companies ( Group ), have as its main activity the construction of steel infrastructures and solar activity - which focuses on the development of photovoltaic projects, the installation of turnkey photovoltaic parks or under the EPC and the development of architectural integration projects and microgeneration. They also have other activities which highlight the promotion and development of renewable energy projects (Nota 4). Martifer SGPS was incorporated on 29 October 2004, its share capital having been realized through the delivery of shares, valued at its market value, that the shareholders held in Martifer - Construções, S.A., a company that was incorporated in 1990 and which, at that time, was the holding company of the current Martifer Group. As of June 2007, after the initial public offering Martifer SGPS, S.A. shares have been listed on Euronext Lisbon. At 30 June 2012, the Group has developed its activity in Portugal, Spain, Poland, Slovakia, Romania, Czech Republic, Angola, Brazil, Greece, United States of America, Australia, Mozambique, Ireland, Italy, Belgium, Bulgary, Netherlands, France, Thailand, Morocco, United Kingdom, Canada, Mexico, Saudi Arabia, Germany, Chile and Equator. All the amounts presented in these notes are expressed in Euros (rounded at unit), unless otherwise stated. The accompanying notes were selected to help the understanding of the more significant changes in the financial position and the financial performance of the Group since the last annual reporting, dated of 31 December The restated figures are presented in the notes below, only in the situations where there are differences for the reported amounts. These financial statements are not audited. 1. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PREPARATION These accompanying consolidated financial statements relate to the consolidated financial statements of the Martifer Group and were prepared in accordance with the International Financial Reporting Standards ( IFRS ), as adopted by the European Union, in force at the beginning of the economic period started 1 January These are the International Financial Reporting Standards, issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), that have been endorsed by the European Union. The interim consolidated financial report for the period ended at 30 June 2012 has been prepared in accordance with IAS 34 - Interim Financial Reporting as adopted by the European Union. These consolidated financial statements have been prepared on a going concern basis from the books and accounting records of the companies included in the consolidation (Note 2) and have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, which are stated at fair value. The accounting policies adopted are consistent with those considered in the financial statements for the year ended as of 31 December 2011 and disclosed in the corresponding notes, prepared under the International Financial Reporting Standards (IFRS) approved by the EU, except in respect of the standards and interpretations entering into force on or after 1 January 2012, the adoption of which have not had an impact on the Group s profits or financial position and with exception of the referred in the following paragraph. The IAS 16 Property, plant and equipment establishes two options to the subsequent recognition of fixed assets, either the cost model or the revaluation model. For land and buildings held for use, the Group used the fair value model, based on regular PAGE 44 FIRST HALF 2012 INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION