ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE

ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE – SIX MONTHS ENDING 30 JUNE 2005

Associated British Ports Holdings PLC is today issuing its trading statement for the six months ending 30 June 2005. Interim results, prepared under International Financial Reporting Standards, are due to be announced on 7 September 2005.

HIGHLIGHTS

·Growth of at least 3 per cent in underlying operating profit expected from UK ports and transport activities for the six months ending 30 June 2005.
·Underlying operating profit from property development is expected to be at least £5.0m compared to £0.4m in the first six months of last year, due to the phasing of property sales.
·Pre-tax profit for the half year to 30 June 2005 is expected to be ahead of current market expectations, led by the phasing of property sales.
·The group’s two major projects at the Port of Immingham, involving a total investment of £87m, continue to be on schedule and on budget. Both facilities are due to become operational during 2006.
·£128.1m of the £205m share repurchase programme announced during 2004 has been completed.

PORTS AND TRANSPORT – UK

Overall, our core UK ports business has continued to grow. Volumes have increased in a number of areas, including containers, coal and iron ore imports, agribulk exports and steel products. We expect roll-on/roll-off volumes and stevedoring activity to be lower than in the first half of 2004, due to the previously reported departure of a customer from the Port of Immingham. Although stevedoring is a low margin activity, this will constrain turnover growth in the group’s UK ports and transport operations for the period.

Nevertheless, the profitability of the group’s core business has been stronger, due to the volume growth noted above and the pre-emptive cost reduction measures that we implemented in 2004 to mitigate the effect of the anticipated decline in roll-on/roll-off volumes. Furthermore, congestion charges (demurrage costs) in relation to imported coal at the Port of Immingham have reduced. As a result, we expect the underlying operating profit of the UK ports and transport operations to increase by at least 3 per cent during the first half of 2005.

Our £400m, 10-year investment plan for our UK ports remains on track. At the Port of Immingham, construction of the £27.5m roll-on/roll-off facility is proceeding well. We are also investing a further £15m in coal-handling equipment for Phase 2 of Humber International Terminal at Immingham following an agreement with Scottish & Southern Energy. This brings our total investment in Phase 2 of Humber International Terminal to £59.5m. Both projects are on budget and on schedule to become operational next year.

Following the government’s “minded to approve” notification, and with the UK’s general election now over, we expect to receive a final decision on our planned £30m-£35m development of a shortsea riverside container terminal at the Port of Hull before the end of this year.

PORTS AND TRANSPORT - USA

As we expected, there has been a reduction in vehicle volumes at AMPORTS, the group’s much smaller ports and transport business in the USA. This follows the move of a customer from the terminal at Benicia, California, to a competing facility.

Consequently, turnover and operating profit (which exclude property investment income) are likely to be lower than the corresponding period of last year.

PROPERTY INVESTMENT AND DEVELOPMENT

Our policy of selling non-operational, port-located property and exploiting the potential of our property portfolio continues. Operating profit from property investment rentals in the UK and USA for the first half of the year will be similar to the first half of 2004, as a greater proportion of sales made last year and during the course of this year relate to non-income-producing surplus land.

Although turnover from property development is likely to be much lower compared to the corresponding period of last year, we expect a significant increase in operating profit. Anticipated operating profit of at least £5.0m for the period (2004: £0.4m) reflects the mix and phasing of this year’s sales. ASSOCIATES Container throughput has increased at Tilbury Container Services, but volumes have reduced at Southampton Container Terminals partly due to some de-stocking activity within the UK retail sector. As a result, we expect operating profit from continuing operations of associates to be lower than the first six months of last year.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Following our adoption of IFRS from 1 January 2005, we now report our interim results in accordance with IFRS. On 24 June 2005, we published a reconciliation of the consolidated financial statements of the group, converted from UK Generally Accepted Accounting Principles to an unaudited IFRS basis, for the six months ended 30 June 2004. This is available on our website at www.abports.co.uk. The adoption of IFRS reduced pre-tax profit before tax and earnings per share for the first half of 2004 by £2.6m and 0.2 pence, respectively.

SHARE REPURCHASE PROGRAMME

In 2004, we announced plans for a new £205m share repurchase programme to increase the efficiency of our capital structure. To date, £128.1m of this programme has been completed. We have repurchased 28.2m shares at an average price of 454 pence per share, before costs.

PROSPECTS

Our half year results will benefit from property sales being weighted towards the first six months of the year and the growth of our core UK ports business. The board believes that the UK ports business is well-positioned to continue to deliver growth in the second half of the year.

Looking further ahead, the first two of the group’s planned major growth projects on the Humber, where we operate the Ports of Grimsby & Immingham and Hull & Goole, remain on track to become operational, and start contributing to operating profit and our continued growth in 2006.

28th June 2005

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