ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE

ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE – SIX MONTHS ENDING 30 JUNE 2004

In keeping with its usual practice, Associated British Ports Holdings PLC is today issuing its trading statement for the six months ending 30 June 2004, prior to the group’s interim results announcement scheduled for 1 September 2004.

HIGHLIGHTS

The key highlights are as follows:

·Turnover from the core UK ports and transport activities for the six months ending 30 June 2004 is expected to increase by at least 4 per cent compared with the corresponding period

·Underlying operating profit from the UK ports and transport activities for the same period is expected to grow by at least 2 per cent

·New contracts won in recent years will underpin growth in the group’s UK ports business during 2004

·£49.8 million of the £130 million share repurchase programme announced during the first half of 2004 has been completed

PORTS AND TRANSPORT – UK

The UK ports business has continued to grow.Roll-on/roll-off trade, deep-sea container traffic at the Port of Southampton, vehicle imports and exports, coal imports, forest products and cruise-ship call volumes have all increased so far this year.As a result, turnover from the group’s UK ports and transport operations for the six months to 30 June 2004 is expected to increase by at least 4 per cent. Underlying operating profit is expected to increase by at least 2 per cent.

As previously reported, the cost reduction programme implemented during 2003 will reduce the group’s operating expenses by at least £3.0 million per annum from the beginning of this year.However, these savings will not benefit operating margins for the first half of the year due to growth in turnover at ABP Connect, the group’s lower margin value-added services operation, and demurrage costs incurred by the Port of Immingham following strong demand for imported coal.

In line with the group’s strategy to grow existing business and develop new business through rigorously targeted investment, new revenue-related investments contracted so far during this year total more than £33 million.These projects have construction lead times of up to 18 months and will only contribute to the group’s results once they become operational.

The group continues to plan major growth projects at its ports on the Humber Estuary. The Department for Transport is currently considering the necessary planning consents for the development of a shortsea container riverside terminal at the Port of Hull and a roll-on/roll-off riverside terminal at the Port of Immingham; decisions are expected this year.The group has already reached agreement with DFDS Tor Line for the £27.5 million development of this roll-on/roll-off facility, which will be built once Government consent is obtained.

Having already obtained approval to develop a further riverside terminal for coal imports at the Port of Immingham, the group believes that the robust demand for imported coal during the first half of the year strengthens the business case for the development of this major new facility. The development of a fourth riverside terminal at the Port of Hull continues to be explored.

PORTS AND TRANSPORT - USA

The performance of AMPORTS, the group’s ports and transport business in the USA, has continued to improve.Vehicle volumes grew by 14 per cent in the first five months of the year, led by increased Kia imports into AMPORTS’ facility at Baltimore, Maryland, and increased General Motors’ imports into AMPORTS’ terminal at Benicia, California.

Notwithstanding the weakening of the US dollar against sterling, turnover from ports and transport operations (which exclude property investment income) is expected to be at least 10 per cent ahead of last year. Operating profit, which has benefited from increased vehicle storage revenue and reduced overhead costs following last year’s streamlining and relocation of the head office to Jacksonville, Florida, is expected to improve by at least 80 per cent on the first six months of 2003.

PROPERTY INVESTMENT AND DEVELOPMENT

The group’s policy of selling non-operational, port-located property and exploiting the potential of its property portfolio continues. As previously reported, operating profit from property investment rentals in the UK and USA for the first half of the year will be lower than 2003 due to sales made last year and during the course of this year.

Following the sale of Caspian Point, the group’s last office development in Cardiff Bay, to Norwich Union for £16.5 million in May, the group expects turnover from property development to be substantially up on the corresponding period one year ago.As the overall base sale price of all of the assets sold to Norwich Union was broadly equal to their net book value, operating profit is expected to increase modestly.

ASSOCIATES While Southampton Container Terminals has experienced growth in container throughput this year, volumes have been lower at Tilbury Container Services. In addition, ancillary income at Tilbury Container Services has decreased as a result of reduced container storage. Accordingly, in overall terms, operating profit from continuing operations of associates is expected to be close to the first six months of last year.

The sale of the group’s 45 per cent interest in the Cardiff Bay Partnership to Norwich Union was completed in May.Up to the date of sale, the Cardiff Bay Partnership contributed a similar amount to group operating profit as in the corresponding period of 2003. It will now be reported as a discontinued operation.

EXCEPTIONAL ITEMS

In April, the Government rejected the group’s application to develop the Dibden Terminal deep-sea container port at Southampton. As previously reported, the group will write off substantially all of the related £45 million of capitalised costs in this year’s interim results.

NEW ACCOUNTING STANDARDS

The group will adopt Financial Reporting Standard (FRS) 17 – Retirement Benefits in full in 2004. This will not affect the group’s cash flow but will reduce pre-tax profit for the first six months of 2004.Pre-tax profit for the corresponding period in the previous year will be adjusted and reduced by £5.4 million for comparative purposes.

The 31 December 2003 actuarial valuation of the group’s main defined benefit scheme has been completed and as a result, the group will maintain its contribution holiday over the next three years. The group’s FRS 17 surplus as at 31 December 2003 was £34.4 million.

SHARE REPURCHASE PROGRAMME

In April, following the Government’s decision to deny approval for Dibden Terminal, the group announced its intention to commence a new £100 million share repurchase programme to increase the efficiency of its capital structure. Following the sale of its property interests in Cardiff Bay, the group extended this programme in May by a further £30 million. To date, the group has completed £49.8 million of this programme by repurchasing 11.3 million shares at an average price of 439 pence per share, before costs.

CHAIRMAN

Following the retirement of Ross Sayers as Chairman at the Annual General Meeting in April, the process of selecting a new Chairman is under way; progress will be reported in due course.

PROSPECTS

The Government’s decision on Dibden Terminal will have no significant short-term impact on the group’s underlying UK ports business; in the medium-term, the group will continue to concentrate on the development of its major growth projects on the Humber Estuary.

The group’s UK ports business is expected to grow by at least 2 per cent in the first half of 2004.The group also has the competitive advantage of many long-term contracts with quality customers.This leads the board to continue to believe that the new contracts secured over recent years will underpin growth in the UK ports business in 2004.

22nd June 2004

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