Waste Solutions for a Sustainable Future

Interim results announced

On Tuesday the 19th of February 2008 interim results were announced for the six months ending 31 December 2007.

The Group posted revenue growth of 27% over the prior period, and increased operatingprofit by 36%, improving its operating margin to 15% from 14% the year before. Diluted headline earnings per share were up 30% to 44,9 cents (2006: 34,5 cents).

EnviroServ’s strong revenue growth reflects the increasing volumes of hazardous waste being managed, transported, treated and disposed of by the Group. Revenue growth outpaced fixed cost growth, despite higher overheads to accommodate increased levels of activity, and rising fuel prices. Cash generated by operations was up 25% to R142,5 million from R114,0 million in the prior period. Capital expenditure of R75,5 millionincluded R34,7 million invested in replacement assets and R40,8 million in expansion.Capital expenditure for the next six month period will be higher as the Group acquiresvehicles and additional plant, and constructs new cells in two of its landfill sites.

As South Africa becomes more focused on environmental issues, EnviroServ has
prioritised the search for alternative ways to treat and re-use waste. A number of pilot studies are underway in diverse waste streams such as waste plastic beneficiation, metalrecovery and organic composting and fertilizers. The benefits of these initiatives should start to emerge in the second half of the current financial year and into the coming year.

The Group has recently finalised two acquisitions. Ply-Pak, which manufactures wood
replacement products from waste wood and plastic, was acquired in August 2007 and
renamed EnviroServ Polymer Solutions as well as the acquisition of Brollo Tailings (renamed EnviroServ Tailings), specialising in managing mines’ tailings dams, which obtained Competition Commission approval at the end of December 2007. The financial performance of these businesses will only impact Group results from January 2008. We are confident these businesses will deliver growth in revenue and profits through innovative product development in the case of our polymer solutions business, and entering a new market for EnviroServ in managing
tailings for the mining industry.

The Group’s operations in five other African countries continued to contribute positively to its financial results and growth strategy, while expansion efforts in the Middle East are proceeding slowly. The Group aims to continue expanding off its established bases in these regions, and will seek to grow its presence in areas where demand for the Group’s existing service offering is experienced.

As we complete the announcement of another set of good results, recognition goes out to each and every EnviroServ employee who has put in such a great effort towards our growth and continues to be part of our company’s continuing successes.

To all our customers we would like to take this opportunity to thank you for your continued support and wish you all the same great success.

Is your waste a liability?
EnviroServ Waste Management will take the worry out of waste management. We will assess your various waste streams, classify them according to the appropriate legislation for safe handling, transportation and disposal, explore alternatives to landfill, investigate options to beneficiate your waste, recycle, re-use, and ultimately reduce the time, effort and money you spend on waste management.