Andritz

Graz, Austria, 04 August 2006 -- International Technology Group Andritz reports a very favorable business development for the first half of 2006, with increases in order intake and in sales and net income compared to the reference period of last year. Order backlog as of 30 June 2006 reached a new record level of more than EUR 2 billion. For the full year 2006, Andritz expects to achieve new record results, with increases in sales and earnings.

Increase in Sales

During the first half of 2006, sales of the Andritz Group were EUR 967.5 million, an increase of 24.4% compared to the reference period of last year (H1 2005: EUR 777.5 million). Each business area, in particular the rolling mills and strip processing lines and environment and process business areas, was able to increase its sales compared to the first half of last year.

Order intake up, order backlog at record level
Group order intake for the first half of 2006 increased by 43.4%, to EUR 1277.1 million (H1 2005: EUR 890.3 million), thus continuing the upward trend. In particular, the pulp and paper (+86.1% vs. H1 2005) and the feed and biofuel business areas (+38.0% vs. H1 2005) were able to increase order intake significantly compared to the reference period of last year.

Order backlog as of 30.6.2006 reached a record level of EUR 2059.1 million (31 March 2006: EUR 2007.1 million), thus providing a solid visibility for the Group's sales development in the coming quarters.

Earnings increased
In step with higher sales, earnings before interest and taxes (EBIT) in the first half of 2006 increased by 27.7%, to EUR 57.7 million (H1 2005: EUR 45.2 million). The EBIT margin for the period amounted to 6.0%, slightly up compared to the reference period of last year (H1 2005: 5.8%). Net income, excluding minority interests, also increased significantly, to EUR 39.9 million (H1 2005: EUR 32.3 million).

Balance sheet structure
As a result of the first-time consolidation of VA TECH HYDRO and due to the issue of the EUR 200 million corporate bond, total assets of the Andritz Group as of 30 June 2006 increased significantly, from EUR 1391 million as of 31 December 2005 to EUR 2039 million as of 30 June 2006. As a result, the equity ratio as of 30 June 2006 declined to 16.9% (31 December 2005: 23.6%).

Gross liquidity (marketable securities plus cash and cash equivalents) as of 30 June 2006, i.e. after deduction of the purchase price for VA TECH HYDRO, amounted to EUR 523.4 million (31 December 2005: EUR 494.0 million). Net liquidity as of 30 June 2006 (gross liquidity minus financial liabilities, including the corporate bond issued in June 2006) reached a value of EUR 192.4 million (31 December 2005: EUR 383.9 million), which corresponds to the long-term average.

Outlook
For the second half of 2006, Andritz expects project activity to continue to develop favorably in all business areas. Wolfgang Leitner, president and CEO of Andritz: "Based on strong organic growth as a result of the high order backlog and the first-time sales and earnings consolidation of Andritz VA TECH HYDRO as from Q3 2006, we expect group sales in 2006 to increase significantly, to approximately 2.5 billion euros. Correspondingly, the Group's EBIT in 2006 will also be up compared to last year; however, the percentage increase of the EBIT will not fully meet the sales growth, mostly due to the first-time consolidation of Andritz VA TECH HYDRO's sales and earnings."

The Letter to Shareholders for the first half of 2006 is available on the Andritz Web site (www.andritz.com) both as an online and a PDF version. Printed versions can be requested by telephone (+43 316 6902 2722), fax (+43 316 6902 465) or e-mail (petra.wolf@andritz.com).

The Andritz Group
Andritz Group is a global market leader for advanced production systems for pulp and paper, steel, and other specialized industries. Andritz has a staff of approximately 9000 employees worldwide. It develops and makes its high-tech systems at 35 production sites in Austria, Germany, Finland, Denmark, France, Netherlands, the United States, Canada, and China.