OIAG PRESS RELEASE

OIAG achieves Record Business Result in 2006 

• OIAG posts a surplus of EUR 314.5 million, the best performance in its history
• Dividend of EUR 200 million paid to the Republic of Austria
• Further improvement in investment earnings
• Privatisation mandate of the last legislative period was fully carried out

Vienna, March 29, 2007

In the financial year 2006, the state investment and privatisation agency Österreichische Industrieholding AG (OIAG) generated the best business result in its history. This record result can be primarily attributed to the good performance of the Group’s investments, and the subsequent increased dividend performance. Investment earnings in the year under review amounting to EUR 218.9 million were EUR 49.6 million, or 29% higher, than the comparable figure for the previous year.

In addition to completely eliminating its debt, which totalled EUR 6.3 billion at the end of 1999, OIAG has also succeeded in considerably increasing the value of its investment portfolio. Despite the initial public offering of 49% of OIAG’s shareholding in Austrian Post, the portfolio of all OIAG investments had a total value of approximately EUR 8.2 billion at year-end 2006, only slightly below the 2005 level. 

OIAG reported a surplus for the year ending December 31, 2006 of EUR 314.5 million, which is considerably higher than the previous year’s level. After achieving proceeds of EUR 8.5 million from the writing back of restricted reserves, the net profit for the financial year 2006 amounted to EUR 323.05 million, compared to a net profit of EUR 225.0 million announced for 2005. 

In accordance with the resolution approved by today’s Annual General Meeting, this will be paid out in the form of a dividend totalling EUR 200 million for the year 2006. Total dividends paid to the Republic of Austria to date have amounted to EUR 980 million. OIAG has not only succeeded in paying off all its debt, but has been also in a position of distributing a substantial dividend to its owner, the Republic of Austria, which is used to finance research and development projects, among other purposes. 

During the year under review, privatisation proceeds totalled EUR 974.7 million, resulting from the initial public offering of Austrian Post, as well as the issue of  exchangeable notes for shares in Telekom Austria.

 
The initial public offering of Austrian Post was the largest stock market flotation on the Vienna Stock Exchange in the year 2006. The shares offered were seven times oversubscribed, due to high demand on the part of national and international investors. The issue price was fixed at the upper bound of the indicative price range. Through its sale of 49% of its shares in Austrian Post, OIAG received privatisation proceeds of

EUR 651.7 million. 

In 2003, OIAG had issued an exchangeable bond for shares in Telekom Austria, comprising 5% of its common stock. In 2006, OIAG finally delivered all the remaining shares in Telekom Austria to investors holding these notes exchangeable. As a result, OIAG’s share in Telekom Austria declined to 25.2%. (In the meantime, OIAG’s stake has risen to 27.37%, due to Telekom Austria’s cancellation of 40 million treasury shares.) OIAG assumed a leading role in Austria through its placement of “exchangeable notes”, an innovative financial instrument. Following the initial conversion of the exchangeable notes into common shares in 2005, OIAG realised privatisation proceeds of
EUR 323 million in 2006 by converting further exchangeable notes or through sales on the Vienna Stock Exchange.

Accordingly, OIAG has clearly fulfilled the Austrian Government’s mandate of the last legislative period with respect to privatisation and investment management. 

Moreover, OIAG participated in the capital increase of Austrian Airlines in 2006, fully exercising all the subscription rights allotted to its shareholding. The capital increase generated issue proceeds of EUR 366.9 million, which Austrian Airlines will use to strengthen the capital structure and earning power of the company.

Contact: 
Elisabeth Leeb
Dresdner Straße 87, 1201 Vienna, Austria
Tel.: +43/1/711 14-240
Mobile: +43/664/134 03 33
elisabeth.leeb@oiag.at