EnviTec Biogas overcomes the challenges in Q2

Business picks up again - Major contracts worth almost EUR 100 million signed in Q2 - Order backlog totals EUR 190.8 million at end of June - Projections for 2008: EUR 105 - 115 million in sales, EUR 5 - 8 million in EBIT

Lohne, 28 August 2008 – “The long awaited decision to amend the Renewable Energy Sources Act in June 2008 and the planned higher funding of biogas has given our sector a strong boost,” says Olaf von Lehmden, CEO of EnviTec Biogas AG. “Demand for biogas plants has picked up markedly since.” As had been anticipated, the first six months of 2008 were a difficult period, but major contracts have now led to a positive outlook on the second half of the year.

In the first six months of 2008, EnviTec Biogas generated sales of EUR 32.1 million (H1 2007: EUR 65.6 million). Earnings before interest and taxes (EBIT) amounted to EUR -1.4 million (H1 2007: EUR 11.2 million). A net profit of EUR 0.3 million (H1 2007: EUR 7.1 million) means that the company was profitable even during this difficult phase, in which customers were reluctant to place orders due to the uncertain legal framework in Germany. This is not least attributable to the company’s lean and flexible structures, thanks to which no capacity cuts were necessary. EnviTec Biogas now has the resources that are needed to respond immediately to the pick-up in demand. Shortly after the amendment of the German Renewable Energy Sources Act (EEG) in June of this year, the company received several major orders, thus consolidating its leading market position. It was particularly gratifying that the largest order ever in the company’s history was placed by a German customer. Under this contract, EnviTec will deliver 500 KW plants worth EUR 60 million to a German project developer. In the second quarter alone, the company received orders in a total amount of roughly EUR 100 million.

At EUR 4 million, the Own Plant Operation segment made the first significant contribution to total sales. An important strategic step was the start of construction of the first company-owned plant abroad. In the Dutch town of Bergharen, EnviTec Biogas is building a 625 KW plant in cooperation with a local farmer. In Germany, another 2.1 MW was connected to the grid in the first half of the year. Going forward, EnviTec Biogas will continue to push ahead the operation of its own plants. The company was also successful in markets outside Germany, where it could reap the fruit of its early expansion. Customers in Belgium and the Czech Republic placed orders in a total amount of approx. EUR 37 million, most of which will be executed before the end of the year. As of 30 June 2008, the company’s order backlog totalled EUR 190.8 million; EUR 55.5 million of the total order volume came from abroad.

The main reason for the rise in demand is the attractive environment for biogas. The record oil price and the announcement by many utilities to raise the prices of natural gas by over 50% has strengthened the focus on the global search for solutions to reduce the dependence on natural gas imports and other fossil energy sources. EnviTec is currently building the world’s largest plant for the refinement of biogas to natural gas standards in Güstrow. In future, the plant will generate 10,000 cubic metres of biogas per hour, refine it to natural gas standards and fee it into the natural gas grid. This is equivalent to an installed rated electrical output of approx. 22 MWel per hour.

The EEG amendment and the Gas Grid Access Directive, which was adopted in February, have created an attractive environment for biogas. Under the amended EEG, biogas and especially the smaller plants will be promoted more strongly. “We have responded quickly and added 190 KW plants to our portfolio,” says Olaf von Lehmden. The decline in agricultural prices is also having a positive effect on the biogas industry. Good harvests in the USA and Europe have brought relief and made the production of biogas even more attractive. The company believes that it is becoming increasingly clear that biogas hardly competes with the food industry at all and has virtually no impact on food prices.

The company plans to more than double its sales to over EUR 70 million and to generate a positive result in the second half of the year. For the full year 2008, EnviTec projects EBIT of EUR 5 - 8 million on sales of EUR 105 - 115 million. This positive sales and earnings performance should continue next year. The broad product portfolio, which ranges from 190 KW plants to 4 MW modules, will enable EnviTec Biogas to satisfy the demand of farmers, institutional investors and utilities in Germany and abroad. “The environment is right again. Our technological expertise, our distribution activities in more than 14 countries worldwide and our liquid funds in an amount of over EUR 80 million mean that we have got what it takes to take full advantage of our opportunities.”

The interim report 2008 is available on the Internet at www.envitec-biogas.de.

EnviTec Biogas AG covers the entire value chain for the production of biogas - including the planning and turnkey construction of biogas plants as well as their commissioning. The company provides the biological and technical service and also offers the full plant and operating management. In addition, the company also operates its own biogas plants. In Penkun, in the German state of Mecklenburg-Western Pomerania, EnviTec constructed the world's largest biogas park with an electrical connected load of 20 megawatts. Today, the company is represented in more than 14 countries throughout Europe and as well in China and India. In 2007 EnviTec generated revenues of EUR 132 million and EBIT of EUR 18 million. The EnviTec Group has about 260 employees. Since July 2007 EnviTec is listed on the Prime Standard segment of the Frankfurt Stock Exchange.

Investor Relations:
Olaf Brandes
EnviTec Biogas AG
Tel: +49 44 42 80 65-118
E-mail: ir@envitec-biogas.de

Press Contact:
Fabian Lorenz, Grit Pauli
HOSCHKE & CONSORTEN Public Relations GmbH
Tel: +49 40 36 90 50- 56 /-31
E-mail: f.lorenz@hoschke.de; g.pauli@hoschke.de

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