Commentary on the half-year results of Stalexport Autostrady Group for 1H2011

In 1^st semester 2011 Stalexport Autostrady Grouprevenues from tolls amounted to PLN 78,404k, while in the same period last year they amounted to PLN 70,205k. It resulted first of all from an increase in Average Daily Traffic by 8.2%, and also from an increase in compensation fee for vehicles using vignette as from 1 July 2010, as well as from higher sale of coupons for toll motorway A4 Katowice-Kraków.

In the reporting period net profit of the Group amounted to PLN 1,003k and it was by 91% lower than in the same period last year. This decline – observed despite the high growth of toll revenues and gross profit on sales – was mostly a consequence of drawing the last credit tranche (PLN 210,000k) in 3Q2010 for investments made on A4 motorway concession section. As a result of this in the 1^st semester 2011, interests amounted to PLN 12,216k and they were by PLN 6,312k higher than in the corresponding period a year earlier.

The results of the Group recorded in 1st semester 2011 were affected by a negative one-off event, i.e. the rejection by the Supreme Administrative Court a complaint lodged by Stalexport Autostrady against the decision of the Head of 1^st Silesian Inland Revenue in Sosnowiec. As a result the Group recognized an allowance of PLN 6,894k for its VAT receivables, which reduced the consolidated net result in the reporting period.

The above mentioned events affected the amount of net profit generated by the Group in 1^st semester 2011. Comparing the results of this period to the results of 1^st semester 2010 one should also notice that – due to the changes in the expected schedule of payments – in the comparable period last year, the Group revalued the concession payments to the National Road Fund. As a result, financial income in 1^st semester 2010 increased by PLN 15,804k. The change in expected schedule of concession payments had no effect on the Group's results in 1^st semester 2011.