Mota-Engil

Interim / Quarterly Report • Nov 21, 2011

MANAGEMENT REPORT AND
CONSOLIDATED
FINANCIAL
STATEMENTS AS
OF THE FIRST NINE
MONTHS OF 2011

A World of Inspiration

Highlights

• Revenues rose 6.4% to € 1.56 billion
• Group's activity in foreign markets represented 52% of total revenues
• EBITDA and EBIT margins of 12.8% and 7.9%
• Group's net income after non-controlling interests of € 22 million
• Group's net income excluding Martifer of € 35 million (Martifer's negative contribution of € 13 million
• Order book of € 3.3 billion (more than 60% in foreign markets)
• Net corporate debt of € 1.02 billion

	9M11	% T	∆	9M10	% T	3Q11	% T	∆	3Q10	% T
Turnover	1,556,452		6.4%	1,462,912		582,121		3.4%	562,812
EBITDA	199,423	12.8%	17.0%	170,404	11.6%	75,606	13.0%	12.6%	67,173	11.9%
EBIT	122,540	7.9%	18.6%	103,298	7.1%	50,457	8.7%	17.1%	43,107	7.7%
Net financial income	(66,018)	(4.2%)	(36.7%)	(48,302)	(3.3%)	(26,844)	(4.6%)	(24.8%)	(21,514)	(3.8%)
Net income/losses from equity method	3,299	0.2%	41.5%	2,332	0.2%	229	0.0%	343.8%	(94)	(0.0%)
Income before taxes	59,821	3.8%	4.3%	57,328	3.9%	23,841	4.1%	10.9%	21,498	3.8%
Net income	46,105	3.0%	19.8%	38,478	2.6%	16,207	2.8%	12.3%	14,434	2.6%
Attributable to:
Non-controlling interests	24,152	1.6%	212.2%	7,736	0.5%	9,945	1.7%	202.7%	3,285	0.6%
Group	21,953	1.4%	(28.6%)	30,742	2.1%	6,263	1.1%	(43.8%)	11,148	2.0%
Martifer gains/losses	(13,050)			(1,232)		(7,425)			(1,255)
Group net income (ex Martifer)	35,003	2.2%	9.5%	31,974	2.2%	13,688	2.4%	10.4%	12,403	2.2%

Ebitda = Earnings before interest and taxes + depreciation + provisions and imparity losses Net Debt = Interest bearing debt – cash and equivalents Non-audited financial statements.

Index

Highlights	3
Management Report	5
Financial Analysis Business Areas' Analysis Stock price performance and dividends	7 11 15
Interim Consolidated Financial Information	16
Interim Consolidated Financial Information Statement of Consolidated Comprehensive Income Consolidated Statement of Financial Position Statement of Consolidated Changes in Equity	18 19 20 21

MANAGEMENT
REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
AS OF THE FIRST NINE
MONTHS OF 2011

$1.$ INTERIM

1. Financial Analysis

Mota-Engil Group's net income attained € 46.1 million in the first nine months of 2011, € 22 million of which attributable to the Group. Excluding profit & losses of Martifer, net profit was € 35 million (2010: € 32 million).

Revenues rose 6.4% to € 1.56 billion (2010: € 1.46 billion) in the first nine months of the year. This came mainly as a result of the good performance reached in foreign markets that represented more than 50% of total revenues. Notwithstanding, the latter figure is below expectations and therefore should not allow for the expected 10% growth initially targeted.

In terms of the revenues mix, the Environment & Services division's weight in total revenues further increased (2011: 23%; 2010: 20%) and therefore the Construction division's weight decreased (2011: 77%; 2010: 80%).

At the EBITDA level, margins improved in the Environment & Services division in the first nine months of 2011 (20.1% in 2011 as compared to 18.8% in 2010). This evolution, coupled with the increase in revenues, allowed for the division's excellent operating performance (EBITDA of € 72.6 million in 2011, as compared to € 55.6 million in 2010). Likewise, the Construction division performance improved as compared to the first nine months of the previous year both in terms of revenues (€ 1.2 billion in 2011, as compared to € 1.17 billion in 2010) and margins (10.6% in 2011, as compared to 10.2% in 2010). It is also worth mentioning that the balance between geographies had improved as compared to previous quarters. The combination of these results allowed the Group to report good results, with EBITDA advancing by approximately 17%.

As far as the EBITDA mix is concerned, the Environment & Services division's share in total EBITDA went up to 36% (2010: 32%). The Construction division's share therefore fell to 64% of EBITDA (2010: 68%).

Net consolidated capital expenditure in the first nine months of the year reached € 98 million, € 57 million of which in the Environment & Services division (it mainly includes maintenance and expansion capex in the water distribution & sewage concessions, namely Indaqua Matosinhos, Vila do Conde and Feira). The construction division's capex reached € 41 million, including € 14 million in Central Europe and € 6 million in Latin America.

Maintenance capital expenditure was € 37 million, € 12 million of which spent in the third quarter, in line with the previous quarters figures. Growth capital expenditure reached € 60 million.

Total capital expenditure in the first nine months of 2011, though moderate, contributed to the slight increase in net debt (€ 1.14 billion in September 2011, as compared to € 1.02 billion in December 2010) although it rose by € 47 million as compared to the first nine months of the previous year (mainly as a result of changes in the consolidation perimeter).

Recourse net debt was € 1.02 billion (December 2010: € 907 million; September 2010: € 999 million), € 570 million of which allocated to the Group's operating activity and the remaining (€ 453 million) to investment in affiliated companies that do not contribute to Group's EBITDA. Per division, € 393 million came from the Construction division and € 373 million from the Environment & Services division. It is also important to stress that medium to long term debt increased as did debt raised in foreign markets.

In addition, the Group's indebtedness includes non-recourse debt (project finance contracts, therefore without recourse to the shareholders) that comes from the consolidation of both water & sewage and port concessions. In June 2011, the amount of net non-recourse debt was € 120 million (December 2010: € 108 million).

Group's consolidated financial expenses reached € 66 million (2010: € 48.3 million), up 36.7%, year on year. The increase in the latter figure was due to an increase of € 13.3 million in the interest paid account as a result of higher spreads charged by financial institutions.

In the first nine months of 2011, net income from equity consolidated companies contributed positively to the bottom line with € 3.3 million (2010: € 2.3 million), including a positive contribution from Ascendi, the subholding company for transport concessions, and a negative one from Martifer.

As a result of the above reported operating and financial performances, earnings before taxes were of € 59.8 million (2010: € 57.3 million) and net consolidated earnings rose 20% to € 46.1 million (2010: € 38.5 million), € 22 million of which attributable to the Group (2010: € 30.7 million).

E&C Portugal 30%

E&C Central Europe 18%

The order book was of € 3.3 billion by the end of September 2011, € 2.9 billion of which came from the Construction division.

During the first nine months of 2011, the Group strengthened its order book in African, Latin American and Central European markets, reaching a total of approximately € 2 billion as of September 2011 (2010: € 1.7 billion), representing more than 60% of the total aforementioned figure.

As is usually the case, the order book of the Environment & Services division only includes contracts in waste management and multi-services, therefore excluding expected revenues from concession contracts in water sewage & distribution or ports.

2. Business Areas' Analysis

Construction

Revenues in the Construction division reached € 1.2 billion in the nine months of 2011 (2010: € 1.17 million), up 2.3% year on year. This small increase was due to the combination of the following two factors: the good performance of Central Europe and America's segments (where revenues rose € 101 million and € 73 million, respectively) that together allowed for a 15% increase in their aggregated turnover and the poor performance of Portugal and Africa's segments (where revenues slipped € 42 million and € 100 million, respectively) that led to the combined turnover of these two segments to fall by 12%.

At the operating margin level, the EBITDA margin improved (2011: 10.6%; 2010: 10.2%) and EBITDA grew moderately (2011: € 127.4 million; 2010: € 119.2 million) on the back of a beneficial change in markets' contribution.

In the first nine months of 2011, net financial expenses rose to € 27.1 million (2010: € 23.3 million).

As a result of the above mentioned operating and financial performances, earnings before taxes amounted to € 54.8 million (2010: € 51.1 million) and net earnings advanced 19% to € 44.7 million (2010: € 37.6 million), of which € 29.3 million attributable to the Group (2010: € 37.4 million).

Despite the expected decline in revenues in Portugal in the first nine months of 2011, the EBITDA margin improved to 7.1% (2010: 5.1%).

Revenues in Central Europe had a stellar growth of 65% in the first nine months of 2011 as compared to the same period of the previous year (2011: € 256 million; 2010: € 156 million). Similarly, the EBITDA margin improved as compared to last year.

Revenues in Africa amounted to € 364 million (2010: € 464 million). This performance was due to the lower contribution of Angola that did not recover as initially expected. The order book in the latter country however is high and should allow for a recovery in the delays in the coming quarters. Unlike Angola, the other African markets behave very positively (namely Mozambique). In addition, the change in the contribution of each African country allowed for an improvement of the EBITDA margin that stood above 20%.

In Latin America it is worth mentioning the improvement of margins (EBITDA of 10% in 2011) and the substantial increase in activity that could even further accelerate in the coming quarters in accordance with the strong backlog in both Peru and Mexico.

Environment & Services

The Environment & Services division reported an outstanding performance in the first nine months of 2011 both in terms of revenues and operating margins.

Revenues rose 22.3% to € 362 million (2010: € 296 million). All three segments posted a good performance (it also includes the first time consolidation of Geo Vision). EBITDA margins also improved (2011: 20.1%; 2010: 18.8%) leading EBITDA to rise 31% (2011: € 72.6 million; 2010: € 55.6 million).

Net financial expenses of the division were of € 28 million (2010: € 19.4 million), a deterioration of some 44% as compared to 2010. Geo Vision's contribution to the latter figure was € 4 million.

In light of these operating and financial performances, earnings before taxes attained € 16.2 million (2010: € 12.7 million) and net earnings € 8.5 million (2010: € 2.5 million).

The urban solid waste segment, thanks to Geo Vision's consolidation, increased its weight within the Environment & Services division reporting an excellent performance in the first nine months of the year in terms of activity (revenues soared 53.1%) but the EBITDA margin slipped to a still high figure of 23.6%.

Revenues in the logistics segment grew 13.1% year on year (revenues of € 129 million in 2011, as compared to € 114 million in 2010) due to an outstanding performance of the ports activity that has been recording all time high containers movements.

During the first half of 2011, Mota-Engil, through a Spanish company (Ferrol Terminal Containers) fully owned by TCL - Terminal of Containers of Leixões, signed a concession contract of the port terminal of Ferrol, in Galicia (Spain).

The water sewage & distribution segment reported an increase in revenues in the nine months of 2011 mainly because of the accounting procedure to book as revenues the capital expenditure in some of its concessionaires, the recurring business of Indaqua having remained roughly flat.

As far as the Multiservices segment is concerned, both revenues (€ 40 million in 2011 as compared to € 42 million in 2010) and EBITDA margin (5.7% in 2011 and 5% in 2010) remained roughly unchanged.

3. Stock price performance and dividends

In an environment where the European sovereign debt crisis further aggravated, of mounting expectations of a strong deceleration of global economic growth, including a mild recession in Europe, the Portuguese stock market tumbled 19.6% in the third quarter and 22.4% year to date. Mota-Engil's stock had an even worse performance with -35.4% and -40.7%, respectively.

As far as turnover is concerned and as had been the case in the two previous quarters, volumes fell year on year although they rose slightly as compared to the previous quarter.

The General Shareholders Meeting as of April 14th, 2011 decided, according to the Board of Directors proposal, to pay 11 € cents per share as dividend, paid in May 13th.

Porto, November 14th, 2011

Jorge Coelho Chief Executive Officer

Luís Silva Chief Financial Officer

MANAGEMENT REPORT AND
CONSOLIDATED FINANCIAL
STATEMENTS
AS OF THE FIRST NINE
MONTHS OF 2011

2.
INTERIM CONSOLIDATED

Consolidated Income Statement For The First Nine Months and Quarters Ended September 30, 2011 & 2010

	9 Months		3rd Quarter
	2011 Euro	2010 Euro	2011 Euro	2010 Euro
	(non audited)	(non audited)	(non audited)	(non audited)
Sales & services rendered	1,556,451,950	1,462,911,711	582,121,284	562,811,558
Other revenues	55,606,783	57,426,456	12,863,798	23,136,368
Cost of goods sold, mat. cons. & Subcontractors	(816,873,415)	(822,709,417)	(293,684,635)	(333,047,716)
Gross profit	795,185,318	697,628,750	301,300,447	252,900,210
Third-party supplies & services	(301,807,215)	(251,770,782)	(121,549,517)	(95,552,648)
Wages and salaries	(289,683,183)	(264,731,530)	(97,555,953)	(87,970,041)
Other operating income / (expenses)	(4,271,519)	(10,722,368)	(6,588,564)	(2,204,863)
	199,423,401	170,404,070	75,606,413	67,172,658
Depreciation & Amortization	(71,604,138)	(64,738,085)	(24,088,525)	(22,359,291)
Provisons and impairment losses	(5,278,833)	(2,368,285)	(1,061,339)	(1,706,811)
Operating profit	122,540,430	103,297,700	50,456,549	43,106,556
Financial income & gains	50,701,090	50,548,130	16,733,812	23,394,356
Financial costs & losses	(116,719,519)	(98,849,726)	(43,578,028)	(44,908,694)
Gains / (losses) on associated companies	3,299,113	2,332,030	228,884	(93,870)
Income Tax	(13,716,312)	(18,850,283)	(7,634,030)	(7,064,517)
Consolidated net profit of the year	46,104,802	38,477,851	16,207,187	14,433,831
Attributable:
to non-controlling interests	24,152,063	7,735,889	9,944,563	3,285,402
to the Group	21,952,739	30,741,962	6,262,624	11,148,429
Earnings per share:
basic	0.1134	0.1593	0.0323	0.0576
diluted	0.1134	0.1593	0.0323	0.0576

Statement of Consolidated Comprehensive Income For The First Nine Months and Quarters Ended September 30, 2011 & 2010

	9 Months		3rd Quarter
	2011 Euro	2010 Euro	2011 Euro	2010 Euro
	(non audited)	(non audited)	(non audited)	(non audited)
Consolidated net profit for the period	46,104,802	38,477,851	16,207,187	14,433,831
Other comprehensive income
Exchange differences stemming from transposition of financial statements expressed in foreign currencies	(16,761,257)	(421,659)	(3,981,688)	(8,888,292)
Variation, net of tax, of the fair value of financial derivatives	(6,867,189)	(2,548,816)	(9,285,833)	79,733
Variation, net of tax, of the fair value of mineral resources	2,061,605	-	-	-
Other comprehensive income in investments in associates using the equity method	(1,510,144)	(8,302,825)	(7,457,773)	(11,101,056)
Total comprehensive income for the period	23,027,817	27,204,552	(4,518,107)	(5,475,784)
Attributable:
to non-controlling interests	14,881,225	1,173,112	3,083,964	(871,563)
to the Group	8,146,592	26,031,440	(7,602,071)	(4,604,221)

Consolidated Statement of Financial Position as at September 30, 2011 & December 31, 2010

	30-Sep	31-Dec
	2011 Euro	2010 Euro
Assets	(non audited)	(audited)
Non-current
Goodwill	146,919,940	135,309,629
Intangible fixed assets	309,629,475	264,980,820
Tangible fixed assets	597,036,268	569,058,903
Financial investments under the equity method	318,736,188	336,920,636
Available for sale financial assets	4,915,578	20,678,852
Investment properties	84,745,904	88,614,797
Customers & other debtors	87,605,390	80,680,939
Deferred tax assets	52,997,347	47,869,265
	1,602,586,090	1,544,113,841
Non-current Assets Held for Sale	65,468,387	67,807,496
Current
Inventories	223,175,998	203,023,766
Customers	1,039,025,732	1,008,220,486
Other debtors	277,782,656	303,982,065
Other current assets	227,903,435	127,927,830
Derivative financial instruments	392,240	464,598
Cash & cash equivalents without recourse	8,075,108	8,636,101
Cash & cash equivalents with recourse	190,455,218	191,990,001
	1,966,810,387	1,844,244,847
Total Assets	3,634,864,864	3,456,166,184
Liabilities
Non-current
Debt without recourse	126,451,154	112,974,953
Debt with recourse	599,226,805	584,034,666
Sundry Creditors	223,131,459	231,298,170
Provisions	79,359,448	71,774,463
Other non-current liabilities	24,175,491	16,929,087
Deferred tax liabilities	31,180,059	32,482,904
	1,083,524,416	1,049,494,243
Current
Debt without recourse	2,070,834	3,413,463
Debt with recourse	614,468,723	514,952,264
Suppliers	484,872,960	482,169,565
Derivative financial instruments	22,043,190	13,684,750
Sundry Creditors	455,136,009	441,011,161
Other current liabilities	470,436,132	470,710,839
	2,049,027,848	1,925,942,042
Total Liabilities	3,132,552,264	2,975,436,285
Shareholders' equity
Equity capital	204,635,695	204,635,695
Reserves	171,133,130	170,120,973
Consolidated net profit for the year	21,952,739	36,950,674
Own funds attributable to the Group	397,721,564	411,707,342
Non-controlling interests	104,591,036	69,022,557
Total shareholders' equity	502,312,600	480,729,899
Total shareholders' equity & liabilities	3,634,864,864	3,456,166,184

Statement of Consolidated During The First Nine Months

					Fair value reserves
	Equity capital	Own Shares	Issue premiums	Available-for-sale investments	Lands assigned to quarrying operations	Derivatives
Balance as at January 1, 2010 (as restated)	204,635,695	(22,558,792)	87,256,034	45,586,328	(1,841,058)	(8,361,134)
Total comprehensive income for the period	-	-	-	-	-	114,862
Dividend distribution	-	-	-	-	-	-
Other distributions of results	-	-	-	-	-	-
Aquisition of own shares	-	(67,728)	-	-	-	-
Transfers for other reserves	-	-	-	-	-	-
Alterations to the consolidation perimeter	-	-	-	-	-	-
Balance as at September 30, 2010	204,635,695	(22,626,520)	87,256,034	45,586,328	(1,841,058)	(8,246,272)
Balance as at January 1, 2011	204,635,695	(22,626,520)	87,256,034	27,702,096	4,791,226	(5,527,456)
Total comprehensive income for the period	-	-	-	-	2,061,605	(3,601,140)
Dividend distribution	-	-	-	-	-	-
Other distributions of results	-	-	-	-	-	-
Aquisition of own shares	-	(122,705)	-	-	-	-
Transfers for other reserves	-	-	-	-	-	-
Alterations to the consolidation perimeter	-	-	-	-	-	-
Balance as at September 30, 2011	204,635,695	(22,749,226)	87,256,034	27,702,096	6,852,831	(9,128,596)

Changes in Equity Ended September 30, 2011 & 2010

Currency translation reserve	Other reserves and results	Net Profit	Own funds attributable to shareholders	Own funds attributable to non controlling interests	Shareholders' equity
(31,263,466)	11,387,040	71,738,092	356,578,740	47,842,644	404,421,384
(588,935)	(4,236,449)	30,741,962	26,031,440	1,173,112	27,204,552
-	(21,302,947)	-	(21,302,947)	-	(21,302,947)
-	(1,842,540)	-	(1,842,540)	-	(1,842,540)
-	-	-	(67,728)	-	(67,728)
-	71,738,092	(71,738,092)	-	-	-
-	(8,019,355)	-	(8,019,355)	(1,819,900)	(9,839,255)
(31,852,400)	47,723,842	30,741,962	351,377,610	47,195,856	398,573,466
(30,985,744)	109,511,336	36,950,674	411,707,342	69,022,557	480,729,899
(13,220,158)	953,546	21,952,739	8,146,592	14,881,225	23,027,817
-	(21,299,303)	-	(21,299,303)		(21,299,303)
-	(900,000)	-	(900,000)	-	(900,000)
-	-	-	(122,705)	-	(122,705)
-	36,950,674	(36,950,674)	-	-	-
-	189,638	-	189,638	20,687,254	20,876,892
(44,205,902)	125,405,891	21,952,739	397,721,564	104,591,036	502,312,600