Sonae SGPS — Interim / Quarterly Report 2005

Sep 30, 2005

SONAE, SGPS, SA Sociedade Aberta Head Office: Lugar do Espido - Via Norte - 4471- 909 MAIA Share Capital: Euro 2,000,000,000 Maia Commercial Registry Nr. 14 168 Fiscal Nr. 500 273 170

REPORT AND ACCOUNTS 1ST HALF 2005

(Translation from the Portuguese original)

REPORT OF THE BOARD OF DIRECTORS 1ST HALF 2005

Sonae, SGPS, SA - Sociedade Aberta Lugar do Espido Via Norte Apartado 1011 4471-909 Maia Portugal Share Capital Euro 2 000 000 000.00 Maia Commercial Registry (Nr. 14168) Fiscal Nr. 500 273 170

(Translation from the Portuguese original)

REPORT OF THE BOARD OF DIRECTORS

FIRST HALF OF 2005

(Unless otherwise stated, the figures in this report relate to the first half of 2005. The figures shown in brackets are the comparable figures for the same period of the previous year.)

HIGHLIGHTS

			Values in million euro
Economic Indicators	30.06.2005	30.06.2004	∆
Turnover	3,205.3	3,034.8	5.6%
Operating Cash-Flow (EBITDA)	447.5	410.5	9.0%
EBITDA margin	14.0%	13.5%	0.5 p.p.
Operating Profit (EBIT)	267.9	236.3	13.4%
Profit for the period	228.3	101.1	127.2
Profit Attributable to Equity Holders of Sonae	164.7	48.6	116.1

Contributions to Profit for the Period

MAIN CORPORATE EVENTS DURING THE FIRST HALF OF 2005

On 11 February 2005, Sonae, SGPS, SA announced that it had agreed the terms and conditions for the sale to Europac SA of all of its shares and loans in Imocapital, SGPS, SA, which holds 65% of the share capital of Gescartão, SGPS, SA, as well as its direct shareholding of 3.58% in Gescartão. The sale of the share capital of Imocapital was subject to the approval of the Competition Authority as required by Portuguese Law, and this was obtained on 6 April 2005. This sale impacted the consolidated net profit attributable to Sonae equity holders in the first half of 2005 by circa 39 million euro. The cash inflow associated with this transaction, of circa 97.9 million euro, was received in the month of April.

Following the announcement made on 22 December 2004, a further 27.8% of ba Vidro was sold, resulting in a capital gain of 37.8 million euro and a cash inflow of 97.4 million euro (including share sales proceeds, reimbursement of shareholders' loans and dividends).

On 19 May 2005, in an over the counter transaction, Sonae, SGPS, SA acquired 83,375,000 shares (7.58% of the share capital) of its affiliate Modelo Continente, SGPS, SA, for 150.4 million euro, under the terms of the Call Option contract signed on 16 November 2004 between Sonae, SGPS, SA and Banco Santander Central Hispano, SA and its affiliated companies. As a result of this acquisition, Sonae owns directly 75.64% of the share capital of Modelo Continente, SGPS, SA, while 98.06% of the share capital and voting rights of the company continue to be attributed to Sonae.

The decision to spin-off Sonae Indústria was announced on 10 March 2005. The Board of Directors announced on 23 September 2005 that, together with the Boards of Directors of the other companies involved (Sonae Indústria and Sonae 3P), it has approved the demerger-merger and merger project, and expects this to be completed by the end of 2005. Under the terms of the project, shares held in Sonae Indústria corresponding to 90.36% of Sonae Indústria's share capital, will be demerged from Sonae and merged into Sonae 3P. Sonae Indústria will then be merged into Sonae 3P which will be renamed Sonae Indústria, SGPS, SA. The new Sonae Indústria will have a share capital of 700 million euro corresponding to 140 million shares, each with a nominal value of 5 euro. Admission to Euronext Lisbon will be requested for these shares. In the demerger-merger, one share in Sonae 3P will be granted for every 14.75 shares in Sonae, SGPS, SA, and in the merger one share in Sonae 3P will be granted for each share in Sonae Indústria.

CORPORATE GOVERNANCE

There were no significant changes in the first half of 2005, and the guidelines set in the 2004 Report of the Board of Directors remain unchanged.

SHARE PERFORMANCE

During the first half of 2005, the Sonae share price maintained the rising trend evidenced in the previous year, increasing by around 6.5%, compared to a decrease in the PSI 20 Index of 1.2%.

The highest closing price in the first half of the year 2005 was 1.27 euro (which occurred on 22 April) and the average daily transaction volume was around 5.5 million shares.

OWN SHARES

On 4 May 2005, Sonae, SGPS, SA sold on the stock exchange 1,321,949 own shares at 1.20 euro per share. On the same day, Sonaecom, SGPS, SA purchased on the stock exchange 1,321,949 Sonae, SGPS, SA shares at 1.20 euro per share. After executing this transaction, Sonae, SGPS, SA held 134,178,021 own shares, directly or through its affiliated companies.

On 11 May 2005, Sonaecom, SGPS, SA transferred, in an over the counter transaction and in accordance with its Deferred Performance Bonus Plan, 201,875 Sonae, SGPS, SA shares to employees. After this transaction, Sonae, SGPS, SA holds directly or through its affiliated companies 133,976,146 own shares (6.70% of its share capital).

BUSINESS ANALYSIS 1

WOOD BASED PANELS

			Values in million euro
	1H'05	1H'04	∆
Turnover	737	745	-1%
Operational Cash-Flow (EBITDA)	116	110	5%
EBITDA Margin	15.7%	14.7%	1.0 p.p.
Profit Attributable to Equity Holdersof Sonae Indústria	23	17	6

	30 Jun'05	31 Dec'04	∆
Net Debt	587	564	4%

Turnover by market

Capacity

1 The figures included in this section are those from the consolidated financial statements of each business. 2

PB – Particleboard.

3 MDF – Medium Density Fibreboard.

4 OSB – Oriented Strands Board.

Main highlights

• Sales volumes (m3 ) increased 1.2% in the second quarter of 2005 over the first quarter 2005, and decreased 3.1% over the second quarter 2004.2
• Overall, average prices showed an increase of 0.7% compared to the first quarter of 2005. The main contributors to this change were, on the positive side, the rising trend in the prices of Particle Board based products, and on the negative side, the strong pricing pressure facing OSB5 . During the second quarter, MDF6 prices remained relatively stable.
• On the basis of the total plant capacity installed in 2005, capacity utilisation at a consolidated level reached 91% in the first half of the year (90%).
• On a like for like basis, excluding Gescartão, consolidated turnover increased 5% to 737 million euro (702 million euro), whereas EBITDA went up 13% to 116 million euro (103 million euro). EBITDA for the period included capital gains of 12 million euro, resulting from the sale of Gescartão and Tafisa shares in the first quarter of 2005.
• Consolidated Net Debt increased 23 million euro during the first half of the year. This was mainly due to lower usage of receivables securitisation and factoring, 26 million euro, and to the impact on working capital of an increased level of business activity.
• The conditions necessary for the spin-off of Sonae Indústria have been met with the achievement of financial independence from the reference shareholder.
• Iberia: turnover increased 7.6% and EBITDA (excluding non recurrent items) was 33.2 million euro, posting a 22% increase. Some volume in commodity products was switched to export markets removing local pricing pressures. The negative impact of the cost of oil on variable costs (fuel and chemical prices) has been minimised mainly through improved wood costs for particleboard. Overall production efficiency was maintained at excellent levels.
• France: despite the decrease in sales volumes, turnover remained at the same level compared to the first half of 2004 due to an average selling price increase of 4%. This was mainly the result of significant efforts to improve the product mix. EBITDA totalled 7.3 million euro. Production was affected by several issues, in particular the adverse winter weather conditions, some technical problems and weak market demand during the second quarter of the year. Variable costs were impacted by increased wood costs and high oil prices that affected costs of fuel and chemicals.
• Germany: in spite of a reduction in overall market demand for particleboard, melamine faced chipboard and MDF6 , and a significant decrease in OSB5 prices, Glunz was able to strengthen its position. Sales volume and turnover show an increase of 2%, mainly due to an increase in export volumes to US markets. All plants produced close to full capacity, yielding an increase of 1.9% over 2004 levels. Overall, the profitability of the German operation was weaker compared with the same period in 2004.

5 OSB – Oriented Strands Board.

6 MDF – Medium Density Fibreboard.

• United Kingdom: interest rate increases during 2004, resulted in a slowdown of the UK economy. Volumes sold were 9% down, although average prices went up reflecting product mix improvements and significant raw material cost increases, which were passed on to customers. Production volumes were also down by 7.5%, as a result of mainly the effect of the annual shutdown in both UK plants. The planned investment in a new chip cleaning process and handling equipment was completed in July and is expected to positively impact plant utilisation and productivity in the second half of the year. Utilisation of the Coleraine plant fell by 5 percentage points, due to increased use of recycled timber to 47%.
• Canada: the North American particleboard market has shown some signs of softer demand, with shipments down 5%. Turnover in Canadian dollars in the second quarter has stayed at a similar level compared to the same period of last year, while volumes were 3% lower. Costs of wood were significantly up mainly due to higher transport costs, whereas costs of chemicals are under significant pressure due to the increase in the price of oil. Improvements in productivity have partially offset increases in transport costs through shipping by train. 3
• Brazil: the Brazilian board market grew 8%, due to a strong recovery in MDF7 volume (17%) and a small increase in Particleboard (3%). The flooring market showed a 10% reduction in volume. Exports sales volumes decreased around 36% due to the devaluation of the US Dollar against the Brazilian Real. Tafisa Brazil's profitability improved significantly, as a result of a shift in the commercial policy with an emphasis on value added products and margin generation. Sales in volume increased 3.8% and sales in Brazilian Real grew 22%.
• South Africa: thanks to the continuing favourable economic conditions, Sonae Novoboard posted a volume improvement of 10%. This was mainly driven by the building related sectors of the economy. Price levels remained stable despite increased pressure from a greater percentage of imported products sourced from South America. Overall, plant performance improved over the previous year (Panbult up by 5 percentage points, White River up by 2 percentage points). The EBITDA margin increased 4 percentage points (6 percentage points in the quarter), as result of higher sales volumes and price increases implemented in January 2005.

7 MDF – Medium Density Fibreboard.

RETAIL

			Values in million euro
	1H'05	1H'04	∆
Gross Sales	2,088	1,856	13%
Operational Cash-Flow (EBITDA)	128	112	14%
EBITDA Margin (% of net sales)	7.1%	7.0%	0.1 p.p.
Profit Attributable to Equity Holdersof Modelo Continente	43	32	35%

	30 Jun'05	30 Jun'04	∆
Net Debt	731	811	-10%

Gross Sales by market

88 24 112 128 47 81 Portugal Brazil Consolidated

1H'04 figures

Contributions to EBITDA

Main highlights

• Gross sales increased 13% to 2,088 million euro, and consolidated cash flow (EBITDA) increased 16 million euro to 128 million euro.
• Consolidated net profit for the period totalled 43 million euro, up 35%. During the period, net profit was impacted by around 29 million euro of non-recurring income (15 million euro).
• The company has been steadily reducing its debt level in the last few months, further strengthening its capital structure. At 30 June 2005, net debt totalled 731 million euro. After the balance sheet date, the company has restructured its financing through two bond issues (totalling 415 million euro), significantly extending its debt maturity.
• Portugal
  • The retail sector continued to suffer from increased competitive pressure and sales volume of the major operators grew by less than 4%, despite higher growth in the available sales area.
  • Food retail sales grew 3% to 1,052 million euro, and non food retail sales grew 11% to a total of 316 million euro.
  • Operational cash flow (EBITDA) was 81 million euro and the EBITDA margin was 6.7% of net sales, below the level of the first half of 2004. This margin is clear evidence of increased competition in the market and of additional commercial aggressiveness. Modelo Continente's policy resulted in a reduction of average selling prices with a very positive impact on sales volumes.
  • Modelo Continente opened a further 27 thousand square metres of sales area during the first half of the year, corresponding to 23 new stores (21 non-food and 2 food).

• Brazil

• The retail sector experienced a slowdown in the first six months of the year, resulting in lower levels of investment by the major retail operators and was the result of lower consumer demand due to the pressure of higher interest rates.
• Modelo Continente's performance in the first half of 2005 was clearly above market average and that of its main competitors, resulting in strengthening of its key business indicators and increasing market share.
• Gross sales totalled 2,354 million Brazilian Real, an increase of 19% in local currency. Converted to Euro, this increase was 32% totalling 720 million euro.
• The contribution of the Brazilian operation to consolidated EBITDA was 47 million euro, an increase of 23 million euro, and includes the impact of the sale of the 10 stores in the metropolitan area of São Paulo – 29 million euro. EBITDA margin was 8% of net sales.

SHOPPING CENTRES

			Values in million euro
	1H'05	1H'04	∆
Operational Cash-Flow (EBITDA)	57	46	24%
Direct Profits8	27	18	48%
Profit Attributable to Equity Holdersof Sonae Sierra	40	32	24%

	30 Jun'05	31 Dec'04	∆
NAV per share	35.3	32.6	8%
Asset gearing94	34.4%	28.8%	5.6 p.p.

NAV10 per share (€)

GLA11 under management

Total: 1.97 million square metres

8 Direct Profits = Net Profit before Minorities + Deferred Tax – Value created on Investments – Income realised on Properties

9 Asset Gearing = Net Bank Debt / (Total Assets – Cash and Cash Equivalents and Current Investments). 10 NAV – Net Asset Value. 11 GLA – Gross Lettable Area.

Main highlights

• Consolidated turnover totalled 99.2 million euro (83.3 million euro), up 19%.
• EBITDA increased by around 24%, to 56.7 million euro. Such an improvement was mainly due to (i) the opening of 3 new shopping centres in Spain (Luz de Tajo, in Toledo, Zubiarte, in Bilbao, and Plaza Éboli, in Madrid), (ii) the renewal of tenant contracts in some of the Portuguese shopping centres, and (iii) the growth of rental income in Brazil.
• Consolidated net profit increased strongly by 45%, to 72.6 million euro, mainly due to the value created in investment properties, as a result of an overall decrease in yields in both Portugal and Spain.
• As of 30 June 2005, the open market value (OMV) of Sonae Sierra total assets amounted to 3,646 million euro (an increase of 9% compared to 31 December 2004), of which 2,236 million euro are attributable to Sonae Sierra.
• During the first quarter of 2005, Sonae Imobiliária changed its name to Sonae Sierra. The global scale of the operation is part of the company's international expansion strategy building upon a new identity of shared values: Innovative, Modern and Spirited.
• Sonae Sierra is the owner or co-owner of 34 operating shopping and leisure centres, totalling 1.438 million square metres of GLA12.
• The main changes in the company's asset portfolio included, (i) the opening of Plaza Éboli shopping centre (Madrid, Spain), an investment of 56.1 million euro, (ii) the acquisition of two new shopping centres in Italy (Valecenter, in Venice, and Airone, in Padova), and (iii) the acquisition of Eroski's stakes in four shopping centres in Spain (Dos Mares, Luz del Tajo, Plaza Éboli and Avenida M40) totalling 99.3 million euro.
• The company has fourteen new projects under development: in Portugal, Rio Sul (Seixal), SerraShopping (Covilhã), Setúbal Retail Park (Setúbal) and Loureshopping (Loures), the latter due to open on 27 October 2005; in Spain, Plaza Mayor Shopping (Malaga) and Las Médulas shopping and leisure center (Ponferrada); in Germany, Alexa (Berlin) and 3DO (Dortmund); in Italy, Freccia Rossa (Brescia), Caselle (Turin), shopping and leisure centres in Biella and La Spezia; and in Greece, Mediterranean Cosmos (Salonika) and Aegean Park (Athens).
• The company manages 6,493 contracts with tenants worldwide, occupying 1.97 million square metres of GLA12.
• In Portugal, the number of visitors to the shopping centres under management totalled 124.5 million and tenant sales grew 4.2% to 893 million euro. In Spain, tenant sales grew 42.8%, or 7.8% on a like for like basis, and the number of visitors was up by 30.7%. In Brazil, the number of visitors rose to 35.3 million, a 20.6% growth, or 10.8% on a like for like basis, and tenant sales grew to 763.8 million Brazilian Real, a 31.2% growth in local currency, corresponding to 23.1% on a like for like basis.

12 GLA – Gross Lettable Area.

TELECOMMUNICATIONS

			Values in million euro
	1H'05	1H'04	∆
Turnover	406	429	-5%
Operational Cash-Flow (EBITDA)	84	98	-14%
EBITDA Margin	21%	23%	-2 p.p.
Profit Attributable to Equity Holdersof Sonaecom	6	6	0

	30 Jun'05	30 Jun'04	∆
Net Debt	276	321	-14%

Turnover trend

EBITDA

Sonae, SGPS, SA Report of the Board of Directors – 1st Half 2005 Page 11 of 18

Main highlights

• Consolidated turnover was 406 million euro, 5% below that achieved in the same period of last year. There were two main reasons for this fall. Firstly, an 18% decrease in Optimus' operator revenues, as a result of the decline of mobile termination rates and the continuous reduction in incoming traffic from fixed operators, and secondly, a lower Turnover generated by Público (22% down on the first half of 2004), due to lower sales of associated products.
• Consolidated EBITDA fell 14% to 84 million euro in the first half of the year, generating an EBITDA margin of 21%, down from 23% in the first half of 2004. This result was driven by the lower EBITDA achieved at Optimus and by the negative EBITDA generated at Sonaecom Fixed and Público.
• Consolidated net profits fell 7% to 14 million euro, mostly driven by the fall in EBITDA. The trend of financial results was positive, with a charge of 6 million euro in the first half of 2005 compared to a charge of 11 million euro in the same period of last year. Net profits were also positively impacted by a lower tax charge (2 million euro compared to 10 million euro in the first half of 2004).
• Consolidated net debt improved by 14% to 276 million euro, thanks to the 91 million increase in consolidated liquidity (primarily due to the net proceeds from the 150 million euro unsecured privately placed bond issue in June, that was invested in treasury applications).

• Telecom businesses

• Optimus continued its investment efforts to improve its competitive position and growth, targeting an increase in market share and focusing on a differentiation strategy. At the same time, it continued to invest in its 3G network and, by the end of June, reached 50% coverage of the Portuguese population.

• Mobile service revenues recorded a 6% drop to 278 million euro, driven by an 18% reduction in operator revenues.

• Optimus continued to suffer the negative impact from an imbalance in the ratio of traffic terminated on other mobile networks relative to the termination of incoming traffic from other mobile networks. The net interconnection paid in the first half of 2005 amounted to 7.7 million euro.

• By the end of June, Optimus had a total of 1.74 million active users compared to 1.59 million in the same period of last year (up 9.4%).

• Optimus Home (launched during 1st Quarter 2005) recorded circa 40 thousand subscribers and is expected to reach 130 thousand customers by the end of 2006. In June, Optimus launched rede4, based on an autonomous low-cost service that uses Optimus' infrastructure.

• Optimus EBITDA decreased 7%, to 86 million euro. Contributing to this was the reduction in operator revenues (reflecting in turn the reduction in roaming in revenues, the new mobile termination rates and the reduction in incoming fixed minutes) and an increase in marketing costs. EBITDA margin was 29%, in line with the margin of the first half of 2004.

• Sonaecom Fixed's turnover reached 75 million euro, marginally above the level achieved in the first half of 2004. This revenue performance reflects the reduction of indirect voice and narrowband internet revenues that were not compensated by increased direct access revenues. Sonaecom Fixed's operating costs reached 81 million euro, a 9% increase, as a result of its focus on continuing to grow its direct access customer base. As a result, EBITDA in the period deteriorated significantly from positive 1 million euro in the first half of 2004 to negative 4 million euro.

• Total traffic managed by Sonaecom Fixed increased 29% to 2,813 million minutes (2,177 million minutes), driven mainly by the increase of ADSL usage. The number of active direct services at the end of June was 26.4 thousand, growing strongly compared to 1.4 thousand services in June 2004.

• Media

• Público's consolidated Turnover decreased 22%. This result was driven by a 45% reduction in associated products sales and a 2% reduction in advertising sales. Nevertheless, newspaper sales grew 4% in the period, mainly helped by a price increase on all its editions as from January 2005.
• EBITDA deteriorated generating a loss of 0.7 million euro compared to a positive 1 million euro in the first half of 2004.

• S&SI 13

• S&SI companies delivered good performance in their respective key markets.
• Consolidated turnover of S&SI grew 7% to 43 million euro, while the EBITDA margin was slightly higher at 12%. WeDo was the main contributor to this result, reflecting operational rearrangements, better negotiations with suppliers and the financial impact of a backlog of orders.

13 S&SI – Software and Systems Integration.

SONAE CAPITAL14

Sonae Capital is made up of businesses in Tourism, Construction, Engineering and Residential Development, Transport and Logistics, Insurance Brokerage, Auto Sector and Others.

Sonae Capital's contribution to consolidated turnover grew by around 21% to 260 million euro (215 million euro).

The contribution to consolidated operational cash-flow (EBITDA) was 10.6 million euro, 1.3 million euro down on the first half of 2004.

In the first half of 2005, Sonae Capital contributed 66 million euro to the consolidated net profit for the period, posting a significant recovery from the 3 million euro obtained in the same period of 2004. The 2005 contribution was positively impacted by the capital gain of around 38 million euro obtained on the sale of a further 27.8% stake in ba Vidro.

14 The figures in this section are Sonae Capital's contributes to the consolidated financial statements of Sonae.

PROFITABILITY

Consolidated turnover increased 6% to 3,205 million euro (3,035 million euro). In absolute terms, the contribution of the Retail business posted the most significant increase, benefiting from double digit growth in the sales of Brazilian operations and non-food formats in Portugal, whereas the contributions from the Wood Based Panels and Telecommunications businesses decreased slightly. On a like for like basis, excluding Gescartão (which was disposed of in the first quarter of 2005), the contribution from Wood Based Panels improved 5%. As for the Telecommunications business the decrease in operator revenues, following the reduction of mobile incoming traffic from fixed operators and lower mobile termination rates set by the regulator, was the main driver for the lower contribution to consolidated turnover. At constant exchange rates, turnover was 3,142 million euro, an increase of 3.5%.

Consolidated operational cash flow (EBITDA) was 448 million euro (411 million euro), an increase of 9%. The Retail and Shopping Centres businesses were the major contributors to EBITDA growth. The Retail business contribution includes gains of 29 million euro on the sale, in June of 2005, of 10 stores in the metropolitan area of São Paulo. The Shopping Centres contribution was positively impacted by the increase in the valuation of investment properties, due to lower yields in Portugal and Spain, and by the increase in rental income, as a result of the increase in the number of shopping centres under operation in Spain and Brazil, of the renegotiation of tenant contracts in Portugal and of a higher occupancy rate in some of the Brazilian centres. As for the Wood Based Panels business, on a like for like basis, contribution to consolidated EBITDA increased 5%. The consolidated EBITDA margin was 14.0% (13.5%). At constant exchange rates, operational cash flow (EBITDA) was 442 million euro, an increase of 7.6%.

Consolidated operational profit (EBIT) improved by 32 million euro to 268 million euro (236 million euro). The Shopping Centres business was the main positive contributor to consolidated EBIT.

Consolidated net financial expenses fell 25% to 84 million euro (113 million euro). This improvement was for the most part due to a reduction in interest expenses, as a result of lower average debt levels and cost of debt, and to higher net exchange gains (largely associated with the appreciation of the Brazilian Real against the Euro).

Consolidated net profit for the period was 228 million euro, up 127 million euro. In addition to considerable improvements in both operational and financial performance, the profit for the first half of 2005 includes 95 million euro of investment income, of which around 80 million euro relate to the sale of shareholdings in Imocapital/Gescartão and ba Vidro.

The consolidated net profit attributable to equity holders of Sonae was 165 million euro (49 million euro). The growth is mainly explained by the higher investment income generated in companies that are fully owned by Sonae.

	Turnover	EBITDA15	Values in million euroProfit for thePeriod
Wood Based Panels	737.5	103.9	20.0
Retail	1,805.0	127.1	45.9
Shopping Centres	130.6	118.6	72.6
Telecommunications	406.0	87.8	13.2
Sonae Capital & Holding	260.2	6.6	73.1
Eliminations	(134.0)	3.5	3.5
TOTAL	3,205.3	447.5	228.3

Contributions to the consolidated total of Sonae, SGPS, SA were as follows:

FINANCIAL STRUCTURE

Consolidated net debt 16 at the end of the second quarter of 2005 reflects, as usual, the seasonality of most consumer businesses, and was 3,330 million euro, an increase of 508 million euro and 256 million euro compared to the end of 2004 and the end of the first quarter of the year, respectively. Compared to the end of the year 2004, the Wood Based Panels business increased its contribution as a consequence of a lower usage of securitization of receivables and factoring and of increased levels of business activity in the period. In Retail, the contribution rose due to the business seasonality effect. The increase in Shopping Centres contribution reflects, among other factors, the ongoing development projects and the acquisition of the Eroski stakes in four Spanish shopping centres. At the Sonae Capital and Holding level, the decrease during the period was the result of the sale of the shareholdings in ba Vidro and Imocapital/Gescartão.

			Values in million euro
	30 Jun'05	31 Dec'04	∆
Wood Based Panels	596.9	429.9	167.0
Retail	728.2	496.9	231.3
Shopping Centres	974.9	811.0	163.9
Telecommunications	276.5	260.9	15.6
Sonae Capital & Holding	604.6	768.7	(164.1)
Eliminations	148.5	54.3	94.2
TOTAL	3,329.6	2,821.7	507.9

Contributions to the consolidated net debt of Sonae, SGPS, SA were as follows:

15 EBITDA = Operational Profit (EBIT) + Depreciation and Amortisation + Provisions and Impairment Losses – Reversal of Impairement Losses (included in Other Operational Income and amounting to 3.9 M.€ in the first half of the year).

16 Net Debt = Non-Current Borrowings + Current Borrowings – Cash and Cash Equivalents – Current Investments.

The ratio of net debt to annualised operational cash flow (EBITDA) was 3.4. Annualised interest cover was 6.0, up from 5.1 at the end of 2004. This increase reflects improvements at the operational cash flow level and a reduction in interest expenses, mainly driven by better financial conditions achieved due to renegotiation of some of the major loan contracts and by an increase in the proportion of debt issued directly in capital markets.

OUTLOOK

The outlook for the Wood Based Panels business remains in line with the expectations announced in the first quarter of the year. The profitability of OSB and MDF will continue to be affected as a consequence of the start-up of several new OSB plants in the North American market and the volatility of flooring (affecting MDF prices). Also, in view of the normal seasonal pattern of the Wood Based Panels business, it is expected that the third quarter of 2005 will deliver a lower EBITDA level compared to the previous quarter and the same quarter of last year. Following the consolidation movements in the Wood Based Panels industry, the company remains attentive and will analyse any opportunity that can contribute towards improving its competitive position.

In Portugal, the development of the Retail business will be based on three main pillars of action: focus on deployment of the growth projects as outlined in the strategic business plan; enhancement of strong innovative practices; and improvement in internal processes that sustain a customer-oriented culture. Leveraging on the opportunities created under new legislation, Modelo Continente plans the opening of a new hypermarket in 2005 (located at LoureShopping), 4 new Modelo stores and several other non-food retail stores. At the same time, the company will pursue the selection and licensing of new locations, which will strengthen its commercial offer, while searching for new business opportunities, leveraging on the potential of existing synergies. In Brazil, after an initial stage of strong investment in attaining critical mass, and the subsequent stage of increased knowledge of the market, and operational experience and the fine tuning of commercial proposals, the company is now able to make decisions as to in which cluster of assets capital employed should be increased, maintained or reduced.

The Shopping Centres business will continue to look for new investment opportunities whilst maintaining the pace of development of projects already announced. Already scheduled for 2005 are the openings of LoureShopping (Loures, Portugal) on 27 October, and of Mediterranean Cosmos (Salonica, Greece) on 16 October. Serra Shopping (Covilhã, Portugal) is expected to open in November 2005.

The Telecommunications business has decided to pursue an investment for growth strategy during 2005, aimed at strengthening its core brands and developing particular market opportunities (fixed-mobile substitution, ultra broadband and launch of triple play). This will result in increased spending on network development, marketing expenses and customer acquisition costs, while the benefits on revenues and EBITDA will only begin to be visible from 2006 onwards. Additional financial pressure is expected to arise from the continued cuts in mobile termination rates and from the increased competition in the mobile market.

The spin-off of Sonae Indústria is progressing as scheduled and we expect it to be completed up to the end of the year.

Maia, 26 September 2005

The Board of Directors

Belmiro Mendes de Azevedo

Álvaro Carmona e Costa Portela

Álvaro Cuervo García

Ângelo Gabriel Ribeirinho dos Santos Paupério

Duarte Paulo Teixeira de Azevedo

Luíz Felipe Palmeira Lampreia

Michel Marie Bon

Nuno Manuel Moniz Trigoso Jordão

Nuno Miguel Teixeira de Azevedo

DISCLOSURE OF SHARES AND OTHER SECURITIES HELD BY MEMBERS OF THE BOARD OF DIRECTORS AND OF TRANSACTIONS DURING THE YEAR INVOLVING SHARES AND OTHER SECURITIES

As required by article 9, nr. 1 b) of CMVM Regulation 04/2004, the following is a summary of the information disclosed to the company:

						Balance as of
			Purchases		Sales	30.06.2005
	Date	Quantity	Aver. Price €	Quantity	Aver. Price €	Quantity
Belmiro Mendes de Azevedo
Efanor Investimentos, SGPS, SA (1)						49,999,997
Imparfin, SGPS, SA (3)						150,000
Sonae, SGPS, SA						14,901
Sonaecom, SGPS, SA						75,537
Álvaro Carmona e Costa Portela
Sonae, SGPS, SA						25,934
Sonaecom, SGPS, SA						5,000
Ângelo Gabriel Ribeirinho dos Santos Paupério
Sonae, SGPS, SA						4,564
Sonae.com, SGPS, SA						60,070
Duarte Paulo Teixeira de Azevedo
Efanor Investimentos, SGPS, SA (1)						1
Imparfin, SGPS, SA (3)						150,000
Sonae, SGPS, SA						360,591
Shares attributed under a Share
Based Compensation Plan	09.05.2005	83,105	0
Sonaecom, SGPS, SA						315,795
Shares attributed under a Share
Based Compensation Plan	01.04.2005	36,828	0.00
Luiz Felipe Lampreia
Sonaecom, SGPS, SA						0
Sale	10.03.2005			14,970	3.88
Michel Marie Bon
Sonae, SGPS, SA						21,863
Purchase	11.01.2005	4,500	1.12
Purchase	29.04.2005	4,000	1.24
Nuno Miguel Teixeira de Azevedo
Efanor Investimentos, SGPS, SA (1)						1
Sonae, SGPS, SA						14,320

					Balance as of30.06.2005
Date	Quantity	Aver. Price €	Quantity	Aver. Price €	Quantity
					949,983,715
					20,000
24.03.2004		3.08			1,000
					108,820,695
					4,105,273
			Purchases1,000		Sales

SHARES HELD AND VOTING RIGHTS OF COMPANIES OWNING MORE THAN 2% OF THE SHARE CAPITAL OF THE COMPANY

As required by article 9, nr. 1 d) of CMVM Regulation 04/2004, the following shareholders held more than 2% of the company's share capital:

Shareholder	Nr. of shares	% of VotingRights
Efanor Investimentos, SGPS, S.A.	949,983,715	50.910%
Pareuro, BV	108,820,695	5.832%
Maria Margarida CarvalhaisTeixeira de Azevedo	14,901	0.001%
Maria Cláudia Teixeira de Azevedo	326,655	0.018%
Duarte Paulo Teixeira de Azevedo	360,591	0.019%
Nuno Miguel Teixeira de Azevedo	14,320	0.001%
Total attributable to Efanor Investimentos, SGPS, S.A.	1,059,520,877	56.780%
Banco BPI, S.A.	51,868	0.003%
Banco Português de Investimento, S.A.Fundos de pensões geridos pela BPI - Sociedade Gestora	6,149,558	0.330%
de Fundos de Pensões, S.A.	2,253,776	0.121%
Fundos de Investimento geridos pela BPI - Gestão de
Fundos de Investimento Mobiliário, S.A.	31,693,846	1.698%
BPI Vida - Companhia de Seguros de Vida, S.A.Clientes institucionais cuja carteira é gerida ao abrigo de	199,523	0.011%
gestão discricionária	934,513	0.050%
Clientes particulares cuja carteira é gerida ao abrigo de
gestão discricionária	844,765	0.045%
Total attributable to Banco BPI, S.A.	42,127,849	2.258%
Centaurus Capital LP
Centaurus Alpha Master Fund Limited	46,576,696	2.496%
Citi Centaurus Limited	817,127	0.044%
Greenway Account Series Limited - Portfolio E	1,866,536	0.100%
Total attributable to Centaurus Capital LP	49,260,359	2.640%

CONSOLIDATED FINANCIAL STATEMENTS

1ST HALF 2005

CONSOLIDATED BALANCE SHEETS AS AT 30 JUNE 2005 AND AS AT 31 DECEMBER 2004

(Amounts expressed in euro)

			IFRS	LOCAL GAAP
ASSETS	Notes	30.06.2005	31.12.2004	31.12.2004
NON-CURRENT ASSETS:
Tangible and intangible assets	9	3,429,347,561	3,452,680,051	4,700,852,146
Investment properties	10	2,491,848,563	2,204,846,415	-
Goodwill	11	552,769,492	453,242,056	-
Investments	12	96,939,238	106,235,352	347,102,653
Deferred Tax Assets	15	223,105,012	216,951,425	-
Other Non-Current Assets	13	115,436,093	111,497,267	89,019,748
Total Non-Current Assets		6,909,445,959	6,545,452,566	5,136,974,547
CURRENT ASSETS:
Stocks		725,736,374	673,858,951	672,703,272
Trade Debtors and Other Current Assets	14	824,104,891	802,507,030	1,222,534,169
Investments	12	70,641,754	89,558,911	182,274,470
Cash and Cash Equivalents	16	298,683,060	486,213,442	340,808,878
Total Current Assets		1,919,166,080	2,052,138,334	2,418,320,789
TOTAL ASSETS		8,828,612,038	8,597,590,900	7,555,295,336
EQUITY AND LIABILITIES
EQUITY:
Share Capital	17	2,000,000,000	2,000,000,000	2,000,000,000
Own Shares	17	(143,630,520)	(144,537,597)	(144,537,597)
Reserves and Retained Earnings		(613,997,714)	(1,034,084,068)	(1,365,429,064)
Profit/(Loss) for the Period Attributable to the Equity Holders of Sonae		164,656,786	283,521,010	192,060,205
Equity Attributable to the Equity Holders of Sonae		1,407,028,552	1,104,899,345	682,093,544
Equity Attributable to Minority Interests	18	787,048,746	785,515,291	527,771,715
TOTAL EQUITY		2,194,077,298	1,890,414,636	1,209,865,259
LIABILITIES:
NON-CURRENT LIABILITIES:
Borrowings	19	2,898,945,258	2,447,782,272	2,220,386,496
Other Non-Current Liabilities	21	782,894,762	940,739,879	827,530,423
Deferred Tax Liabilities	15	435,731,683	388,090,849	-
Provisions	25	66,088,027	57,189,153	-
Total Non-Current Liabilities		4,183,659,731	3,833,802,153	3,047,916,919
CURRENT LIABILITIES:
Borrowings	19	799,970,539	949,660,987	805,324,564
Trade Creditors and Other Current Liabilities	24	1,633,738,755	1,909,775,272	2,344,147,178
Provisions	25	17,165,716	13,937,852	148,041,416
Total Current Liabilities		2,450,875,010	2,873,374,111	3,297,513,158
TOTAL EQUITY AND LIABILITIES		8,828,612,038	8,597,590,900	7,555,295,336

The accompanying notes are part of these financial statements.

CONSOLIDATED INCOME STATEMENTS BY NATURE

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

30.06.200530.06.200430.06.20042nd2ndNotesQuarter 05Cumulative 1Quarter 04Cumulative 1CumulativeOperational IncomeSales1,352,789,8792,642,848,6861,267,450,3602,470,176,9502,511,688,536Services Rendered288,413,994562,473,144290,187,590564,613,959596,639,458Value Created on Investment Properties1049,705,26358,216,32536,323,09845,938,281-Other Operational Income165,351,743274,748,696111,990,515197,613,269147,281,451Total Operational Income1,856,260,8793,538,286,8521,705,951,5633,278,342,4593,255,609,445Operational ExpensesCost of Goods Sold and Materials Consumed(946,152,693)(1,840,554,836)(854,973,970)(1,662,827,550)(1,670,892,525)Changes in Stocks of Finished Goods and Work in Progress6,853,7526,691,326(6,132,901)(18,505,959)(17,540,195)External Supplies and Services(397,803,605)(761,125,131)(365,878,343)(711,014,115)(790,216,239)Staff Costs(210,359,953)(424,414,203)(204,741,462)(408,563,867)(414,769,486)Depreciation and Amortisation9(85,416,671)(166,566,941)(72,743,590)(159,008,367)(185,259,759)Provisions and Impairment Losses9, 11 e 25(16,175,724)(16,931,017)(9,770,951)(19,267,522)(21,780,765)Other Operational Expenses(38,488,909)(67,468,387)(31,905,384)(62,809,370)(30,431,272)Total operational Expenses(1,687,543,803)(3,270,369,189)(1,546,146,602)(3,041,996,750)(3,130,890,241)Operational Profit/(Loss)168,717,076267,917,663159,804,962236,345,709124,719,204Net Financial Expenses(41,167,452)(84,443,626)(58,246,623)(112,875,098)(85,768,988)Share of Results of Associated Undertakings(137,916)1,245,3778,095,65211,052,0747,179,348Investment Income4,991,92794,756,531(571,105)10,527,81632,505,396Profit/(Loss) before Taxation132,403,635279,475,946109,082,885145,050,50178,634,960Taxation29(38,463,438)(51,203,539)(25,192,085)(43,912,073)(23,052,659)Profit/(Loss) after Taxation93,940,197228,272,40683,890,800101,138,42855,582,301Profit/(Loss) after Tax from Discontinuing Operations-----Profit/(Loss) for the Period93,940,197228,272,40683,890,800101,138,42855,582,301Attributable to:Equity Holders of Sonae44,176,786164,656,78645,937,64348,622,02623,956,198Minority Interests49,763,41163,615,62037,953,15552,516,40231,626,103Profit/(Loss) per shareBasic0.0236750.0882460.0246210.0260590.012839Diluted0.0236750.0882460.0246210.0260590.012839		IFRS	IFRS	LOCAL GAAP

The accompanying notes are part of these financial statements.

1 Subject to a limited review by external auditors as required by CMVM (Stock Exchange Regulator) for half year financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

		Attributable to EityHoldef Squrs oonae
	Notes	ShareCaital	OwnSh	RedservesanRetainedEarnin	NetProLos	Total	MiitynorIntsts	Total
		p	ares	gs	fit/(s)		(3)ere	Equity
Balanat1 J2004(1)ceasanuary		2,000000000,,	(144537,597),	(1,054128192),,	-	801,334211,	921,125745,	1,722459,956,
Dividendsdistributed		-	-	(27987,330),	-	(27987,330),	-	(27987,330),
Purch/(Sale)of oshasewnares		-	-	-	-	-	-	-
Chin cionangesonversreserves		-	-	(1)9,85925,	-	(1)9,85925,	()2,523993,	()12,383244,
Chin hedgndfairlueangese avareserves		-	-	(1,257,418)	-	(1,257,418)	154,267	(1,103151),
Chin otheangesr reservesColidatedProfitLosforthe half		-	-	(23946894),,	-	(23946894),,	(24917,521),	(48864415),,
/(s)nsoyear30e 2004endedJun		-	-	-	48622026	48622026	52516402	101,138428
Others		-	-	-	,,-	,,-	,,-	,-
Balanat30June 2004ceas		2,000000000,,	(7)144537,59,	()1,117179085,,	48622026,,	786,905344,	946,354900,	1,733260,244,
Balanat1 J2005ceasanuary		2,000000000	(144537,597)	(1,034084068)	283,521,010	1,104899345	785,515291	1,890414636
Apiatioffit of 2004propronpro:		,,-	,-	,,-	-	,,-	,-	,,-
Transftolegal rndretainedrninereserves aeags		-	-	283,521,010	(283,521,010)	-	-	-
Dividendsdistribdute	30	-	-	(37316439),,	-	(37316439),,	-	(37316439),,
Chin cionangesonversreserves		-	-	185,260,050	-	185,260,050	16024832,,	201,284882,
Chin hedgndfairlueangese avareserves		-	-	24136518,,	-	24136518,,	(2,007,191)	22129327,,
Chin othe(2)angesr reserves	18	-	-	(35514785),,	-	(35514785),,	(76099806),,	(111614591),,
ColidatedProfit/(Loss)forthe halfnsoyear
30e 2005endedJun		-	-	-	166567864,,	166567864,,	63616205,,	228,272406,
Others		-	907,077	-	-	907,077	-	907,077-
Balanat30June 2005ceas		2,000000000,,	(143630,520),	(613,997,714)	164,656786,	1,407,028552,	787,048746,	2,194077,298,

The accompanying notes are part of these financial statements.

(1) The 2003 consolidated profit for the year is included in "Reserves and Retained Earnings" because 1 January 2004 is the date of transition;

(2) Includes 17,729,243 euro relating to the writte-off of negative goodwill of the Gescartão group, sold in the period;

(3) The line "Changes in other reserves" includes -67.307.448 euro (in 30 June 2004 -15.540.956 euro) related to the acquisition and disposals of affiliated undertakings.

CONSOLIDATED CASH FLOWS STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

OPERATING ACTIVITIES	Notes	30.06.2005	30.06.2004
Net cash flow from operating activities (1)		53,902,724	135,551,416
INVESTMENT ACTIVITIES
Cash receipts arising from:InvestmentsTangible and intangible assetsDividendsOthers		210,291,25377,411,20313,056,736110,474,340	162,380,22445,031,1996,289,18878,927,601
Cash Payments arising from:		411,233,532	292,628,212
InvestmentsTangible and intangible assetsOthers		(318,789,140)(342,849,142)(20,216,399)	(63,939,539)(225,039,754)(71,982,445)
Net cash used in investment activities (2)		(681,854,681)(270,621,149)	(360,961,738)(68,333,526)
FINANCING ACTIVITIES
Cash receipts arising from:Loans obtainedCapital increases, additional paid in capital and share premiumsSale of own sharesOthers		2,315,420,2083,505,5891,586,339175,0102,320,687,146	930,073,1891,000,000--931,073,189
Cash Payments arising from:Loans obtainedInterest and similar chargesReimbursement of capital and paid in capitalDividendsOthers		(2,092,722,350)(121,180,711)(72,367)(46,013,071)(39,842,484)(2,299,830,983)	(1,121,843,776)(129,821,535)-(32,267,578)(194,581)(1,284,127,470)
Net cash used in financing activities (3)		20,856,163	(353,054,281)
Net increase in cash and cash equivalents (4) = (1) + (2) + (3)Effect of foreign exchange rateCash and cash equivalents at the beginning of the period		(195,862,262)(8,514,448)461,406,436	(285,836,391)(631,583)399,071,640
Cash and cash equivalents at the end of the period	16	274,058,622	113,866,832

The accompanying notes are part of these financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2005

(Amounts expressed in euro)

1. INTRODUCTION

SONAE, SGPS, SA ("the Company" or "Sonae"), whose head-office is at Lugar do Espido, Via Norte, Apartado 1011, 4470-909 Maia, Portugal, is the parent company of a group of companies, as detailed in Notes 4 to 7 ("Sonae Group"). The Group's operations and business segments are described in Note 31.

2. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted in preparing the accompanying consolidated financial statements are as follows:

2.1. Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS" – previously named International Accounting Standards – "IAS"), issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), applicable to financial years beginning on 1 January 2005.

International Financial Reporting Standards ("IFRS") were adopted for the first time in 2005. As a result, the transition date from Portuguese generally accepted accounting principles to the standards referred to above is 1 January 2004, as established by IFRS 1 – "First Time Adoption of International Financial Reporting Standards".

According to that standard, adjustments as at the date of transition to IFRS (1 January 2004) are recorded in Equity and described in Note 34. This note also includes the description of adjustments made to the last annual consolidated financial statements presented (31 December 2004).

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

The accompanying consolidated financial statements have been prepared from the books and accounting records of the companies included in the consolidation (Notes 4 to 6) on a going concern basis and under the historical cost convention, except for investment properties and financial instruments which are stated at fair value (Notes 2.4 and 2.14).

2.2. Consolidation principles

The consolidation methods adopted by the Group are as follows:

a) Investments in Group companies

Investments in companies in which the Group owns, directly or indirectly, more than 50% of the voting rights at Shareholders' General Meetings and is able to establish financial and operational policies so as to benefit from its activities (definition of control normally used by the Group), are included in the consolidated financial statements using the full consolidation method. Equity and net profit attributable to minority shareholders are shown separately, under the caption Minority interests, in the consolidated balance sheet and in the consolidated income statement, respectively. Companies included in the consolidated financial statements are listed in Note 4.

When losses attributable to minority interests exceed the minority interest in the equity of the Group company, the excess, and any further losses attributable to minority interests, are charged against the equity holders of Sonae except to the extent that minority shareholders have a binding obligation and are able to cover such losses. If the Group company subsequently reports profits, such profits are allocated to the equity holders of Sonae until the minority's share of losses previously absorbed by the equity holders of Sonae has been recovered.

Assets and liabilities of each Group company are measured at their fair value at the date of acquisition. Any excess of the cost of acquisition over the Group's interest in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.d)). Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost, is recognised as income in profit or loss for the period of acquisition, after reassessment of the estimated fair value. Minority interests include their proportion of the fair value of net identifiable assets and liabilities recognised on acquisition of Group companies.

The results of Group companies acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group. All intra-group transactions, balances, income and expenses and distributed dividends are eliminated on consolidation.

Financial investments in companies excluded from consolidation are recorded at acquisition cost net of impairment losses (Note 7).

Whenever the Group has, in substance, control over other entities created for a specific purpose, even if no share capital interest is directly held in those entities, these are consolidated by the full consolidation method. Such entities, when applicable, are disclosed in Note 4.

b) Investments in jointly controlled companies

Investments in jointly controlled companies are included in the accompanying consolidated financial statements in accordance with the proportionate consolidation method as from the date joint control is acquired. In accordance with this method the Group includes in the accompanying consolidated financial statements its share of assets, liabilities, income and expenses of these companies, on a line-by-line basis.

Any excess of the cost of acquisition over the Group's interest in the fair value of identifiable net assets acquired is recognised as goodwill (Note 2.2.d)). Any excess of the Group's share in the fair value of net assets acquired over cost is recognised as income in the profit or loss for the period of acquisition after reassessment of the estimated fair value of the net assets acquired.

The Group's share of inter-company balances, transactions and dividends distributed are eliminated.

Investments in jointly controlled companies are classified as such based on shareholders' agreements that establish joint control.

Companies included in the accompanying consolidated financial statements in accordance with the proportionate method are listed in Note 5.

c) Investments in associated companies

Investments in associated companies (companies where the Group exercises significant influence but does not establish financial and operational policies – usually corresponding to holdings between 20% and 50% in a company's share capital) are accounted for in accordance with the equity method.

Under the equity method, investments are recorded at cost, adjusted by the amount corresponding to the Group's share of changes in equity (including net profit) of associated companies and to dividends received.

Any excess of the cost of acquisition over the Group's share in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.d)), which is included in the caption Investment in associated companies. Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost is recognised as income in the profit or loss for the period of acquisition, after reassessment of the estimated fair value of the net assets acquired.

An assessment of investments in associated companies is performed when there is an indication that the asset might be impaired. Any impairment loss is disclosed in the income statement. Impairment losses recorded in prior years that are no longer justifiable, are reversed.

When the Group's share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition of losses is discontinued, unless the Group is committed beyond the value of its investment.

The Group's share in unrealized gains arising from transactions with associated companies is eliminated. Unrealized losses are eliminated, but only to the extent that there is no evidence of impairment of the asset transferred.

Investments in associated companies are disclosed in Note 6.

d) Goodwill

The excess of the cost of acquisition of investments in group, jointly controlled and associated companies over the Group's share in the fair value of the assets and liabilities of those companies at the date of acquisition is shown as Goodwill (Note 11) or as Investments in associated companies (Note 12). The excess of the cost of acquisition of investments in foreign companies over the fair value of their identifiable assets and liabilities at the date of acquisition is calculated using the functional currency of each of those companies. Translation to the Group's currency (Euro) is made using the closing exchange rate. Exchange rate differences arising from this translation are disclosed in Reserves and retained earnings.

Goodwill is not amortised, but it is subject to impairment tests on an annual basis. Impairment losses identified in the period are disclosed in the income statement under Provisions and impairment losses, and may not be reversed.

Any excess of the Group's share in the fair value of identifiable assets and liabilities in group, jointly controlled and associated companies over cost, is recognised as income in the profit or loss for the period, at the date of acquisition, after reassessment of the fair value of the identifiable assets and liabilities acquired.

Goodwill recognised prior to the transition date

Goodwill arising from acquisitions made prior to the date of transition to IFRS (1 January 2004) is stated using the carrying amounts, net of accumulated amortisation, calculated in accordance with generally accepted accounting principals in Portugal, adjusted for intangible assets which do not meet IFRS criteria, and is subject to impairment tests. Impacts of these adjustments were recorded in Retained earnings, in accordance with IFRS 1. Goodwill arising from foreign companies was recalculated retrospectively using the functional currency of each such company. Exchange rate differences generated in the translation are also disclosed as Retained earnings (IFRS 1).

e) Translation of financial statements of foreign companies

Assets and liabilities denominated in foreign currencies in the individual financial statements of foreign companies are translated to euro using exchange rates at the balance sheet date. Profit and loss and cash flows are converted to euro using the average exchange rate for the period. Exchange rate differences originated after 1 January 2004 are recorded as equity under Translation reserves in Reserves and retained earnings. Exchange rate differences that originated prior to 1 January 2004 (date of transition to IFRS) were written-off through Retained earnings.

Goodwill and fair value adjustments arising from the acquisition of foreign companies are recorded as assets and liabilities of those companies and translated to euro using exchange rates at the balance sheet date.

Whenever a foreign company is sold, accumulated exchange rate differences are recorded in the income statement as a gain or loss on the disposal, in the caption Investment income.

Exchange rates used on translation of foreign group, jointly controlled and associated companies are listed below:

	30.06.05		31.12.04	30.06.04
	End of period	Average ofperiod	End of period	End of period	Average ofperiod
Pound Sterling	1.48324	1.45814	1.41824	1.49087	1.48508
Brazilian Real	0.35101	0.30319	0.27665	0.26428	0.27475
South African Rand	0.12460	0.12538	0.13004	0.13127	0.12205
Canadian Dollar	0.67114	0.63040	0.60916	0.61188	0.60896
Swiss Franc	0.64520	0.64675	0.64813	0.65608	0.64404

Source: Bloomberg

2.3. Tangible assets

Tangible assets acquired up to 1 January 2004 (transition date to IFRS) are recorded at acquisition cost, or revalued acquisition cost, in accordance with generally accepted accounting principles in Portugal until that date, net of depreciation and accumulated impairment losses.

Tangible assets acquired after that date are recorded at acquisition cost, net of depreciation and accumulated impairment losses.

Depreciation is calculated on a straight line basis, as from the date the asset is first used, over the expected useful life for each class of assets.

The depreciation rates used correspond to the following estimated useful lives:

	Years
Buildings	10 to 50
Plant and machinery	10 to 20
Vehicles	4 to 5
Tools	4 to 8
Fixture and fittings	3 to 10
Other tangible assets	4 to 8

Maintenance and repair costs related to tangible assets are recorded directly as expenses in the year they are incurred.

Tangible assets in progress represent fixed assets still under construction/development and are stated at acquisition cost net of impairment losses. These assets are depreciated from the date they are completed or start being used.

Gains or losses on sale or disposal of tangible assets are calculated as the difference between the selling price and the carrying amount of the asset at the date of its sale/disposal. These are recorded in the income statement under either Other operational income or Other operational expenses.

2.4. Investment properties

Investment properties consist of shopping centre buildings and other constructions that are held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes or for sale in the ordinary course of business.

Investment properties are initially recorded at cost and then adjusted to their fair value based on half-yearly valuations performed by an independent valuer. Changes in fair values of investment properties are accounted for in the period in which they occur, in the income statement under the caption Value created on Investment Properties.

Assets built and developed, which qualify as investment properties, are recognised as such only when they start being used. During the construction or development period of assets, which will qualify as investment properties, such assets are accounted for at cost in the caption Investment properties under development. At the end of the construction and development period, the difference between cost and the fair value at that date is accounted for in the income statement under the caption Value created on Investment Properties.

Costs incurred with investment properties in use, such as maintenance, repairs, insurance and property taxes, are recognised in the income statement for the period to which they refer.

2.5. Intangible assets

Intangible assets are stated at acquisition cost, net of depreciation and accumulated impairment losses. Intangible assets are only recognised if it is probable that future economic benefits will flow from them, if they are controlled by the Group and if their cost can be reliably measured.

Expenditure on research associated with new technical know-how is recognised as an expense recorded in the income statement when it is incurred.

Expenditure on development is recognised as an intangible asset if the Group demonstrates the technical feasibility and its intention to complete the asset, its ability to sell or use it and the probability that the asset will generate future economic benefits. Expenditure on development which does not fulfill these conditions is recorded as an expense in the period in which it is incurred.

Internal costs associated with maintenance and development of software are recorded as an expense in the period in which they are incurred. Only costs directly attributable to projects for which the generation of future economic benefits is probable are capitalized as intangible assets.

Amortisation is calculated on a straight line basis, as from the date the asset is first used, over the expected useful life which normally is 5 years, except for property occupation rights which are amortised over the duration of the contract which establishes these rights.

Brands and patents with indefinite useful lives are not amortised, but are subject to impairment tests on an annual basis.

2.6. Accounting for leases

Accounting for leases where the Group is the lessee

Lease contracts are classified as (i) a finance lease if the risks and rewards incidental to ownership lie with the lessee and (ii) as an operating lease if the risks and rewards incidental to ownership do not lie with the lessee.

Whether a lease is classified as a finance or an operating lease depends on the substance of the transaction rather than the form of the contract.

Tangible assets acquired through finance lease contracts are recorded as assets and corresponding obligations as liabilities in the balance sheet. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. Both the finance charge and the depreciation expense for depreciable assets are taken to the income statement in the period in which they are incurred.

Lease payments under operating lease contracts are recognised as an expense on a straight line basis over the lease term.

Accounting for leases where the Group is the lessor

Most of the cases where the Group is the lessor arise from contracts with shopping centre tenants. These contracts are usually for a period of six years and establish the payment by the tenant of a monthly fixed rent - invoiced in advance –, a variable rent, invoiced if the monthly sales of the tenant are higher than the limit established in the contract and the payment of the tenant's share in the shopping centre operational expenses. The contract with the tenant may also establish the payment of an entrance fee to the shopping centre (key money). These contracts can be renewed or cancelled by any of the parties involved (the company or the tenant). If the cancellation is made by the tenant it must pay a cancellation fee which is established in the contract.

These contracts are classified as operating leases. Rents (fixed and variable) and common charges are recognised as income in the period to which they refer. Costs as well as entrance fees (key money) and cancellation fees arising from operating leases are recorded as expenses or income in the period in which they are incurred or earned.

2.7. Government grants

Government grants are recorded at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions attaching to them.

Grants received as compensation for expenses, namely grants for personnel training, are recognised as income in the same period as the relevant expense.

Grants related to depreciable assets are disclosed as Other non-current liabilities and are recognised as income on a straight line basis over the expected useful lives of those assets.

2.8. Impairment of non-current assets, except for goodwill

Assets are assessed for impairment at each balance sheet date whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the income statement under Provisions and impairment losses.

The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit to which the asset belongs.

Reversal of impairment losses recognised in prior years is only recorded when it is concluded that the impairment losses recognised for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment loss previously recognised has been reversed. The reversal is recorded in the income statement as Operational income. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in prior years.

2.9. Borrowing costs

Borrowing costs are normally recognised as an expense in the period in which they are incurred.

Borrowing costs directly attributable to the acquisition, construction or production of tangible and intangible assets are capitalised as part of the cost of the qualifying asset. Borrowing costs are capitalised from the time of preparation of the activities to construct or develop the asset up to the time the production or construction is complete or when asset development is interrupted. Any income earned on funds temporarily invested pending their expenditure on the qualifying asset, is deducted from the borrowing costs that qualify for capitalisation.

2.10. Non-current assets held for sale

Non-current assets are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case the sale must be highly probable and the asset or disposal group is available for immediate sale in its present condition. In addition, the sale should be expected to occur within 12 months from the date of classification.

Non-current assets (or disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell. These assets are not depreciated.

2.11. Stocks

Consumer goods and raw materials are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis.

Finished goods and work in progress are stated at the lower of the weighted average production cost or net realisable value. Production cost includes cost of raw materials, labour costs and overheads (including depreciation of production equipment based on normal levels of activity).

Net realisable value is the estimated selling price less estimated costs of completion and estimated costs necessary to make the sale.

Differences between cost and net realisable value, if negative, are shown as operating expenses under Cost of sales or Changes in stocks of finished goods and work in progress, depending on whether they refer to consumer goods and raw materials or finished goods and work in progress.

2.12. Construction contracts

Income and costs associated with construction contracts are recorded using the stage of completion method. Under this method, at the end of each period, income and expenses are recognised by reference to the stage of completion of the contract activity. The stage of completion is determined by the ratio between costs incurred until the closing balance sheet date and total estimated contract costs. The difference between income determined by this ratio and total amounts invoiced is recorded in Other current assets or Other current liabilities.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recorded only to the extent of the amount of contract costs incurred that will probably be recoverable. Contract costs are recorded as expenses in the period in which they are incurred.

Revenue arising from contract variations, claims and completion premiums is recorded when these are agreed with the customer, or when negotiations are at an advanced stage and it is probable that these will be favorable to the Group.

2.13. Provisions

Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) resulting from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at the balance sheet date to reflect the best estimate as of that date.

Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and that plan has been communicated to the parties involved.

2.14. Financial instruments

a) Investments

Investments are classified into the following categories:

• Held to maturity
• Investments measured at fair value through profit or loss
• Available-for-sale

Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Group has the intention and ability to hold them until the maturity date. Investments measured at fair value through profit or loss are classified as current assets. Available-for-sale investments are classified as non-current assets.

All purchases and sales of investments are recognised on the trade date, independently of the settlement date.

Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs.

Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured, are stated at cost, less impairment losses.

Gains or losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, included in Reserves and retained earning until the investment is sold or otherwise disposed of, or until it is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.

Changes in the fair value of investments measured at fair value through profit or loss are included in the consolidated income statement for the period.

Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.

b) Accounts receivable

Receivables are stated at net realisable value, corresponding to their nominal value less impairment losses (recorded under the caption Impairment losses in accounts receivable).

c) Classification as equity or liability

Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.

d) Loans

Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.9.. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.

e) Trade accounts payable

Accounts payable are stated at their nominal value.

f) Derivatives

The Group uses derivatives in the management of its financial risks, only to hedge such risks. Derivatives are not used by the Group for trading purposes.

Derivatives classified as cash flow hedge instruments are used by the Group mainly to hedge interest and exchange rate risks on loans obtained. Conditions established for these cash flow hedge instruments are identical to those of the corresponding loans in terms of base rates, calculation rules, rate setting dates and repayment schedules of the loans and for these reasons they qualify as perfect hedges.

The Group's criteria for classifying a derivative instrument as a cash flow hedge instrument include:

• the hedge transaction is expected to be highly effective in offsetting changes in cash flows attributable to the hedged risk;
• the effectiveness of the hedge can be reliably measured;
• there is adequate documentation of the hedging relationships at the inception of the hedge;
• the forecasted transaction that is being hedged is highly probable.

Cash flow hedge instruments used by the Group to hedge the exposure to changes in interest and exchange rates of its loans are initially accounted for at cost and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity under the caption Hedging reserves, and then recognised in the income statement over the same period in which the hedged instrument affects income statement.

Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity under the caption Hedging reserve are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.

In those cases in which derivatives, in spite of having been negotiated to hedge financial risks inherent to the business (essentially, currency "forwards" to cover future imports), no longer meet the criteria for hedge accounting under IAS 39, changes in the fair value are recorded directly in the income statement.

When embedded derivatives exist, they are accounted for as separate derivatives when the risks and the characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value.

Additionally, the Group also negotiates, in specific situations, interest and exchange rate derivatives in order to hedge fair values. In these cases, derivatives are stated at fair value through profit or loss. When the hedged instrument is not measured at fair value (i.e. loans which are recorded at amortised cost) the book value is adjusted by the amount which is effectively hedged through profit or loss.

g) Equity instruments

Equity instruments are those that represent a residual interest on the Group's net assets and are recorded at the amount received, net of costs incurred with their issuance.

h) Own shares

Own shares are recorded at acquisition cost as a reduction to equity. Gains or losses arising from sales of own shares are recorded in Reserves and retained earnings under Other reserves.

i) Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.

In the consolidated statement of cash flows, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption Borrowings.

2.15. Retirement benefit plans

As referred to in Note 22, some of the Group companies are committed to provide pension complements to their employees. These commitments are considered as defined benefit plans.

In order to estimate its obligations, the Group obtains, annually, actuarial valuations according to the "Projected Unit Credit Method". When unrecognised cummulative actuarial gains and losses exceed the greater of 10% of the present value of the defined benefit obligation and 10% of the fair value of plan assets, these are recorded as income or expense on a straight line basis over the average remaining service period of the participants.

Past service costs are recorded immediately when benefits are being paid. Otherwise, these are recorded on a straight line basis over the average remaining service period until they vest (generally, the date of retirement if they still work for the Group).

Obligations recorded at the closing balance sheet date reflect the present value of obligations for defined benefits adjusted for actuarial gains or losses and/or past service costs not recorded, net of the fair value of net assets of the pension fund.

2.16. Share-based payments

Share based payments result from Deferred Performance Bonus Plans that are referenced to the Sonae share price and/or that of its publicly listed affiliated companies (Sonae Sierra uses the "Net Asset Value" as a reference) and vest within a period of 3 years after being granted.

Share-based payment liabilities are measured at fair value on the date they are granted (normally in March of each year) and are subsequently remeasured at the end of each reporting period, based on the number of shares or share options granted and the corresponding fair value at the closing date. The fair value of share options is estimated based on the "Black-Scholes" model. These obligations are stated as Personnel costs and Other liabilities, and are recorded on a straight-line basis, between the date the shares are granted and their vesting date, taking into consideration the time elapsed between these dates, when the Group has the choice to settle the transaction in cash. In the case of equity-settled share-based payment transactions, these obligations are stated as Personnel expenses and Reserves and are recorded on a straight line basis between the date the shares are granted and their vesting date.

2.17. Contingent assets and liabilities

Contingent liabilities are not recorded in the consolidated financial statements. Instead they are disclosed in the notes to the financial statements, unless the probability of a cash outflow is remote, in which case, no disclosure is made.

Contingent assets are not recorded in the consolidated financial statements but disclosed when future economic benefits are probable.

2.18. Income tax

Current income tax is determined based on the taxable income of companies included on consolidation, in accordance with the tax rules in force in the respective country of incorporation, considering the interim period profit and using the estimated effective average annual income tax rate.

Deferred taxes are calculated using the balance sheet liability method, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are calculated and annually remeasured using the tax rates that have been enacted or substantively enacted and therefore are expected to apply in the periods when the temporary differences are expected to reverse.

Deferred tax assets are recognised only when it is probable that sufficient taxable profits will be available against which the deferred tax assets can be used, or when taxable temporary differences are recognised and expected to reverse in the same period. At each balance sheet date a review is made of the deferred tax assets recognised, which are reduced whenever their future use is no longer probable.

Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity. In these cases the corresponding deferred tax is recorded in equity.

2.19. Revenue recognition and accrual basis

Revenue from the sale of goods is recognised in the income statement when the risks and benefits have been transferred to the buyer and the amount of the revenue can be measured reasonably. Sales are recognised net of sales taxes and discounts and other expenses arising from the sale, and are measured as the fair value of the amount received or receivable.

Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction at the balance sheet date.

Dividends are recognised as income in the year they are attributed to the shareholders.

Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.

Other current assets and Other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.

2.20. Balances and transactions expressed in foreign currencies

Transactions in currencies other than the Euro, are translated to Euro using the exchange rate as at the transaction date.

At each balance sheet date, all monetary assets and liabilities expressed in foreign currencies are translated to the functional currency of each foreign company at the exchange rates as at that date. All non-monetary assets and liabilities recorded at fair value and stated in foreign currencies are converted to the functional currency of each company, using the exchange rate at the date the fair value was determined.

Exchange gains and losses arising from differences between historical exchange rates and those prevailing at the date of collection, payment or the date of the balance sheet, are recorded as income or expenses of the period, except for those related to non-monetary assets or liabilities, for which adjustments to fair value are directly recorded under equity.

When the Group wants to reduce currency exposure, it negotiates hedging currency derivatives (Note 2.14.f)).

2.21. Subsequent events

Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the consolidated financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes when material.

2.22. Segment information

All business and geographic segments of the Group are identified annually.

Information regarding business and geographic segments identified is included in Note 31.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF ERRORS

During the period there were no changes in accounting policies or prior period errors.

4. GROUP COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

Group companies included in the consolidated financial statements, their head offices and percentage of capital held by the Group as at 30 June 2005 and 31 December 2004 are as follows:

					Percentage of capital held
				30.06.2005	31.12.2004
COMPANY		Head Office	Direct	Total	Direct	Total
Sonae - SGPS, S.A.		Maia	Holding	Holding	Holding	Holding
Sonae Indústria
Agloma-Soc.Ind.Madeiras e Aglom., SA	a)	Oliveira do Hospital	100.00%	97.01%	100.00%	89.90%
Cia.de Industrias e Negócios, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Ecociclo - Energia e Ambiente, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
Euro Decorative Boards, Ltd	a)	Knowsley (U.K.)	100.00%	88.45%	100.00%	89.90%
Euromegantic, Lteé	a)	Lac Megantic (Canada)	100.00%	88.45%	100.00%	89.90%
Euroresinas-Indústrias Quimicas, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
Explotaciones Com.Ind. e Servicios, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Explotationes Madereras Catalanas, SA	a)	Barcelona (Spain)	100.00%	88.45%	100.00%	89.90%
Florestal y Maderera, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Glunz AG	a)	Meppen (Germany)	99.12%	87.67%	99.12%	89.11%
Glunz Service, GmbH	a)	Hamm (Germany)	100.00%	87.67%	100.00%	89.11%
Glunz UK Holdings, Ltd	a)	London (U.K.)	100.00%	87.67%	100.00%	89.11%
Glunz Uka, GmbH	a)	Hamm (Germany)	100.00%	87.67%	100.00%	89.11%
1) Gollin, Gmbh	a)	Bad Oeynhausen(Germany)	90.00%	78.90%	90.00%	80.20%
Isoroy SAS	a)	Boulogne (France)	99.94%	88.45%	100.00%	89.90%
Isoroy Transformation	a)	St. Dizier (France)	100.00%	88.45%	100.00%	89.90%
Maiequipa-Gestão Florestal, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
2) Manipulaciones Florestales, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Megantic, BV	a)	Amsterdam(Netherlands)	100.00%	88.45%	100.00%	89.90%
Movelpartes-Comp.para Ind.Mobiliária, SA	a)	Paredes	100.00%	97.02%	100.00%	97.02%
Novobord (PTY), Ltd	a)	Woodnead (SouthAfrica)	100.00%	88.45%	100.00%	89.90%
Orpin, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
OSB Deustchland, GmbH	a)	Hamm (Germany)	100.00%	88.45%	100.00%	89.90%
Poliface Brasil, Ltda	a)	Sao Paulo (Brazil)	100.00%	97.02%	100.00%	97.02%
Poliface North America	a)	Baltimore (E.U.A.)	100.00%	88.45%	100.00%	89.90%
Racionaliz. y Manufact.Florestales, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Resoflex-Mob.e Equipamentos Gestão, SA	a)	Vila de Conde	100.00%	97.02%	100.00%	97.02%
SCS Beheer, BV	a)	Amsterdam(Netherlands)	100.00%	88.45%	100.00%	89.90%
Siaf-Soc.Iniciat.Aprov.Florestais, SA	a)	Mangualde	100.00%	88.45%	100.00%	89.90%
Soc.Inic.Aproveit.Florest.-Energias, SA	a)	Mangualde	100.00%	88.47%	100.00%	89.91%
Socelpac SGPS, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
Sociéte Industrielle et Financére Isoroy	a)	Rungis (France)	100.00%	88.45%	100.00%	89.90%
Somit Imobiliária, SA	a)	Oliveira do Hospital	100.00%	88.45%	100.00%	89.90%
Sonae 4P, SA	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Sonae Espanha, SA	a)	Madrid (Spain)	99.94%	96.96%	99.94%	96.96%
Sonae Ind., Prod. e Com.Deriv.Madeira, SA	a)	Mangualde	100.00%	88.69%	100.00%	97.02%
Sonae Indústria Brasil, Ltda	a)	Sao Paulo (Brazil)	100.00%	97.02%	100.00%	97.02%
Sonae Industria de Revestimentos, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
Sonae Indústria-SGPS, SA	a)	Maia	97.02%	97.02%	97.02%	97.02%

Sonae Novoboard (PTY), Ltd	a)	Woodnead (SouthAfrica)	100.00%	88.45%	100.00%	89.90%
Sonae Serviços de Gestão, SA	a)	Maia	100.00%	97.02%	100.00%	97.02%
Sonae Tafibra (UK), Ltd	a)	Knowsley (U.K.)	100.00%	88.45%	100.00%	89.90%
Sonae Tafibra Benelux, BV	a)	Woerden (Netherlands)	100.00%	88.45%	100.00%	89.90%
Sonae UK, Ltd	a)	Knowsley (U.K.)	100.00%	88.45%	100.00%	89.90%
Spanboard Products, Ltd	a)	Belfast (U.K.)	100.00%	88.45%	100.00%	89.90%
Tableros Tradema, SL	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Tafiber,Tableros de Fibras Ibéricas, SL	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Tafibra South Africa, Ltd	a)	South Africa	100.00%	88.45%	100.00%	89.90%
Tafibras Participações, SA	a)	Curitiba (Brazil)	54.32%	48.07%	54.32%	48.53%
Tafibra-Tableros AglomeradosFibras, AIE	a)	Madrid (Spain)	100.00%	88.47%	100.00%	90.80%
Tafisa Brasil, SA	a)	Curitiba (Brazil)	100.00%	55.74%	100.00%	56.39%
Tafisa Canadá Societé en Commandite	a)	Lac Megantic (Canada)	100.00%	88.45%	100.00%	89.90%
Tafisa France, SAS	a)	Paris (France)	100.00%	88.45%	99.99%	89.90%
Tafisa UK, Ltd	a)	Knowsley (U.K.)	100.00%	88.45%	100.00%	89.90%
Tableros de Fibras, SA	a)	Madrid (Spain)	91.16%	88.45%	92.66%	89.90%
Taiber,Tableros Aglomerados Ibéricos, SL	a)	Madrid (Spain)	100.00%	88.45%	100.00%	89.90%
Tavapan, SA	a)	Tavannes (Switzerland)	100.00%	87.67%	100.00%	89.11%
Teconologias del Medio Ambiente, SA	a)	Barcelona (Spain)	100.00%	88.45%	100.00%	89.90%
Tool, GmbH	a)	Meppen (Germany)	100.00%	87.67%	100.00%	89.11%
Modelo Continente
Best Offer-Prest. Inf. p/Internet, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Bikini, Portal de Mulheres, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Cacetinho-Com. Retalhista e Expl.Centros Com., SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Carnes do Continente-Ind.Distr.Carnes, SA	a)	Santarém	100.00%	98.06%	100.00%	98.06%
Chão Verde-Soc.Gestora Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Citorres-Sociedade Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Contibomba-Comérc.Distr.Combustiveis, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Contifin,SGPS, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Contimobe-Imobil.Castelo Paiva, SA	a)	Castelo de Paiva	100.00%	98.06%	100.00%	98.06%
3) Cumulativa - Sociedade Imobiliária, SA	a)	Marinha Grande	100.00%	98.06%	-	-
Difusão-Sociedade Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Distrifin-Comercio y Prest.Servicios, SA	a)	Madrid (Spain)	100.00%	98.06%	100.00%	98.06%
Efanor-Design e Serviços, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Efanor-Indústria de Fios, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Estêvão Neves-Hipermercados Madeira, SA	a)	Madeira	100.00%	98.06%	100.00%	98.06%
Fozimo-Sociedade Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Fozmassimo-Com.Indust.Prod.Alim., SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Global S-Hipermercado, Lda	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
IGI-Investimento Imobiliário, SA	a)	Porto	100.00%	98.06%	100.00%	98.06%
Igimo-Sociedade Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Imoconti- Soc.Imobiliária, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Imoestrutura-Soc.Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Imomuro-Sociedade Imobiliária, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Imoponte-Soc.Imobiliaria, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Imoresultado-Soc.Imobiliaria, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Imosistema-Sociedade Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Infofield-Informática, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Informeios-Projectos e Representacões, SA	a)	Lisboa	100.00%	98.06%	100.00%	98.06%
Inventory-Acessórios de Casa, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Max Office Artigos Serviços p/escrit., SA	a)	Maia	100.00%	98.06%	100.00%	98.06%

Modalfa-Comércio e Serviços, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Modelo - Dist.de Mat. de Construção, SA	a)	Maia	50.00%	49.03%	50.00%	49.03%
Modelo Continente Hipermercados,SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Modelo Continente, SGPS, SA	a)	Matosinhos	98.06%	98.06%	98.06%	98.06%
Modelo Continente-Oper.Retalho SGPS, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Modelo Hiper Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Modelo Investimentos (Brasil), Ltda	a)	Sao Paulo (Brazil)	100.00%	98.06%	100.00%	98.06%
3) Modelo Investimentos Financeiros, Ltda	a)	Porto Alegre (Brazil)	100.00%	98.06%	-	-
Modelo,SGPS, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Modelo.com-Vendas p/Correspond., SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Modis Distribuição Centralizada, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Modis Internacional Trading, SA	a)	Madrid (Spain)	100.00%	98.06%	100.00%	98.06%
Modis-SGPS, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
OK Bazar-Comércio Geral, SA	a)	Ermesinde	100.00%	98.06%	100.00%	98.06%
3) Pinto Ribeiro - Supermercados, SA	a)	Viana do Castelo	90.00%	88.25%	-	-
Predicomercial-Promoção Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Sempre à Mão - Sociedade Imobiliária, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Sesagest-Proj.Gestão Imobiliária, SA	a)	Porto	100.00%	98.06%	100.00%	98.06%
Socijofra-Sociedade Imobiliária, SA	a)	Gondomar	100.00%	98.06%	100.00%	98.06%
Sociloures-Soc.Imobiliária, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Soflorin, BV	a)	Amsterdam(Netherlands)	100.00%	98.06%	100.00%	98.06%
Sonae Distribuição Brasil, SA	a)	Porto Alegre (Brazil)	97.67%	95.77%	96.56%	94.68%
3) Sonae Promotora de Vendas, Ltda	a)	Porto Alegre (Brazil)	100.00%	98.06%	-	-
Sonae Retalho Espana-Servicios Gen., SA	a)	Madrid (Spain)	100.00%	98.06%	100.00%	98.06%
Sondis Imobiliária, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Sondis, BV	a)	Amsterdam(Netherlands)	100.00%	98.06%	100.00%	98.06%
Sontária-Empreend.Imobiliários, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Sonvecap, BV	a)	Amsterdam	100.00%	98.06%	100.00%	98.06%
Sport Zone-Comércio Art.Desporto, SA	a)	(Netherlands)Matosinhos	100.00%	98.06%	100.00%	98.06%
SRE-Projectos e Consultadoria, SA	a)	Maia	100.00%	98.06%	100.00%	98.06%
Tlantic Sistemas de Informação, Ltda	a)	Porto Alegre (Brazil)	100.00%	98.06%	100.00%	98.06%
Todos os Dias-Com.Ret.Expl.C.Comer., SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Worten-Equipamento para o Lar, SA	a)	Matosinhos	100.00%	98.06%	100.00%	98.06%
Sonae Sierra
3DO Holding GmbH	a)	Dusseldorf (Germany)	100.00%	67.04%	100.00%	67.04%
3DO Shopping GmbH	a)	Dusseldorf (Germany)	100.00%	67.04%	100.00%	67.04%
3shoppings - Holding,SGPS, SA	a)	Maia	100.00%	33.59%	100.00%	33.59%
4) ALEXA Shopping Centre GmbH	a)	Dusseldorf (Germany)	100.00%	33.52%	100.00%	34.19%
Algarveshopping- Centro Comercial, SA	a)	Maia	100.00%	33.59%	100.00%	33.59%
Avenida M-40, BV	a)	Amsterdam	100.00%	67.04%	100.00%	67.04%
Avenida M-40, SA	a)	(Netherlands)Madrid (Spain)	100.00%	67.04%	60.00%	40.22%
Boavista Shopping Centre, BV	a)	Amsterdam	100.00%	67.04%	100.00%	67.04%
		(Netherlands)
Cascaishopping Holding I, SGPS, SA	a)	Lisboa	100.00%	33.59%	100.00%	33.59%
Clérigoshopping- Gestão do C.Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Coimbrashopping- Centro Comercial, SA	a)	PortoAmsterdam	100.00%	33.59%	100.00%	33.59%
Dos Mares - Shopping Centre, BV	a)	(Netherlands)	100.00%	33.59%	100.00%	67.04%
Dos Mares-Shopping Centre, SA	a)	Madrid (Spain)	100.00%	33.59%	65.00%	43.58%
3) Efanet, SGPS, SA	a)	Matosinhos	100.00%	67.04%	-	-
Estação Oriente-Gest.de Galerias Com., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%

Estação Viana- Centro Comercial, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
3) Fundo Investimento Imob. Shopping Parque D.Pedro	a)	Sao Paulo (Brazil)	100.00%	65.63%	-	-
Guimarãeshopping- Centro Comercial, SA	a)	Maia	100.00%	33.59%	100.00%	33.59%
Inparsa-Gestão de Centros Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Loureshopping- Centro Comercial, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Luz del Tajo - Centro Comercial, SA	a)	Madrid (Spain)	100.00%	67.04%	65.00%	43.58%
Luz del Tajo, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Maiashopping- Centro Comercial, SA	a)	Maia	100.00%	33.59%	100.00%	33.59%
3) Monselice Center, Srl	a)	Venice (Italy)	100.00%	33.59%	-	-
Norteshopping 2-Gestão C. Comercial, SA	a)	Porto	100.00%	67.04%	100.00%	67.04%
Parque D. Pedro 1, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Parque D. Pedro 2, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Parque de Famalicão - Empr. Imob., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Parque Dom Pedro Shopping, SA	a)	Sao Paulo (Brazil)	100.00%	65.63%	100.00%	65.63%
Pátio Boavista Shopping, Ltda	a)	Sao Paulo (Brazil)	100.00%	65.50%	100.00%	65.40%
Pátio Penha Shopping, Ltda	a)	Brazil	99.99%	67.03%	100.00%	67.04%
Plaza Eboli - Centro Comercial, SA	a)	Madrid (Spain)	100.00%	67.04%	65.00%	43.58%
Plaza Eboli, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Plaza Mayor Holding, SGPS, SA	a)	Maia	100.00%	33.59%	100.00%	33.59%
Plaza Mayor Parque de Ócio, BV	a)	Amsterdam(Netherlands)	100.00%	33.59%	100.00%	33.59%
Plaza Mayor Parque de Ocio, SA	a)	Madrid (Spain)	100.00%	33.59%	100.00%	33.59%
Plaza Mayor Shopping, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Plaza Mayor Shopping, SA	a)	Maia	75.00%	50.28%	75.00%	50.28%
Pridelease Investments, Ltd	b)	Cascais	100.00%	67.04%	100.00%	67.04%
Project Sierra – Shopping Centre, GmbH	a)	Austria	100.00%	67.04%	100.00%	67.04%
Project Sierra 1, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra 2, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra Brazil 1, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra Holding Portugal I,SGPS, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Holding Portugal II, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Holding Portugal III, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
3) Project Sierra Italy 2-Shop.Centre, Srl	a)	Milan (Italy)	100.00%	67.04%	-	-
Project Sierra Portugal I- C.Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Portugal II-C.Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Portugal III-C.Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Portugal IV-C.Comerc., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Portugal V-C.Comercial, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Project Sierra Spain 1, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra Spain 1-C.Comercial, SA	a)	Madrid (Spain)	70.00%	46.93%	100.00%	67.04%
Project Sierra Spain 2, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra Spain 2-Centro Comer., SA	a)	Madrid (Spain)	75.00%	50.28%	75.00%	50.28%
Project Sierra Spain 3, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Project Sierra Spain 3-Centro Comer., SA	a)	Madrid (Spain)	100.00%	67.04%	100.00%	67.04%
Rio Sul - Centro Comercial, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
Serra Shopping - Centro Comercial, S.A.	a)	Maia	100.00%	67.04%	100.00%	67.04%
Shopping Centre Parque Principado, BV	a)	Amsterdam(Netherlands)	100.00%	33.59%	100.00%	67.04%
Shopping Penha, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
Sierra Asset Management-Gest. Activos, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%

	Sierra Brazil 1, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Corporate Services- Ap.Gestão, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sierra Corporate Services Holland, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Develop.Iberia 1, Prom.Imob., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sierra Developments Germany AG	a)	Germany	100.00%	67.04%	100.00%	67.04%
	Sierra Developments Germany Holding, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Developments Holding, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Developments Italy, Srl	a)	Milan (Italy)	100.00%	67.04%	100.00%	67.04%
	Sierra Developments Spain-Prom.C.Com., SL	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Developments, SGPS, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sierra Developments-Serv. Prom.Imob., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sierra European R.R.E. Assets Hold., BV	a)	Amsterdam	50.10%	33.59%	50.10%	33.59%
	Sierra GP, Ltd	a)	(Netherlands)Guernsey (U.K.)	100.00%	67.04%	100.00%	67.04%
	Sierra Investments (Holland) 1, BV	a)	Amsterdam	100.00%	67.04%	100.00%	67.04%
			(Netherlands)Amsterdam
	Sierra Investments (Holland) 2, BV	a)	(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Investments Holding, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Investments SGPS, SA	a)	Porto	100.00%	67.04%	100.00%	67.04%
	Sierra Italy Holding, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sierra Man.New Tech.Bus.-Serv.Comu.CC, SA	a)	Matosinhos	100.00%	67.04%	100.00%	67.04%
	Sierra Management Germany, GmbH	a)	Dusseldorf (Germany)	100.00%	67.04%	100.00%	67.04%
	Sierra Management Italy, Srl	a)	Milan (Italy)	100.00%	67.04%	100.00%	67.04%
	Sierra Management Portugal-Gest. CC, SA	a)	Lisboa	100.00%	67.04%	100.00%	67.04%
	Sierra Management Spain-Gestión C.Com., SA	a)	Madrid (Spain)	100.00%	67.04%	100.00%	67.04%
	Sierra Management, SGPS, SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sierra Mangement II-Gestão de C.C., SA	a)	Maia	100.00%	67.04%	100.00%	67.04%
	Sonae Sierra Brasil, Ltda	a)	Brazil	100.00%	67.04%	100.00%	67.04%
	5) Sonae Retalho Especializado-SGPS, SA	a)	Matosinhos	100.00%	67.04%	100.00%	99.05%
	Sonae Sierra Brazil, BV	a)	Amsterdam(Netherlands)	100.00%	67.04%	100.00%	67.04%
	Sonae Sierra, SGPS, SA	a)	Maia	67.04%	67.04%	67.04%	67.04%
	3) Templo, Srl	a)	Venice (Italy)	100.00%	33.59%	-	-
	Valecenter Sierra Srl	a)	Venice (Italy)	100.00%	33.59%	100.00%	67.04%
	3) Valecenter, Spa	a)	Milan (Italy)	100.00%	33.59%	-	-
	Sonaecom
	Clixgest-Internet e Contéudos, SA	a)	Maia	56.67%	46.51%	56.67%	46.73%
	Digitmarket-Sistemas de Informação, SA	a)	Maia	75.10%	61.63%	75.10%	61.93%
	Enabler & Retail Consult, GmbH	a)	Germany	85.00%	51.89%	85.00%	46.44%
	Enabler Brasil, Ltda	a)	Curitiba (Brazil)	99.99%	61.04%	99.99%	54.62%
	Enabler UK, Ltd	a)	U.K.	100.00%	61.05%	100.00%	54.63%
	Enabler-Informática, SA	a)	Maia	98.50%	61.05%	97.30%	54.63%
	Exit Travel, SA	a)	Maia	100.00%	82.06%	100.00%	86.32%
	10) JAUA, SGPS, SA	a)	Lisboa	100.00%	46.50%	100.00%	46.73%
10)	KPNQwest Portugal Telecomunicações, Lda	a)	Lisboa	100.00%	46.50%	100.00%	46.73%
	M3G-Edições Digitais, SA	a)	Lisboa	100.00%	82.06%	100.00%	82.46%
	MAINROAD Information Technology	a)	Maia	100.00%	46.50%	100.00%	46.73%
	Miauger-Org. Gestão Leilões El., SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
10)	Noriema, SGPS, SANovis Telecom, SA	a)a)	LisboaMaia	100.00%56.67%	46.50%46.50%	100.00%56.67%	46.73%46.73%
	Optimus Telecomunicações, SA	b)	Maia	49.06%	40.26%	46.29%	38.17%

Optimus Towering-Explor. Torres Telecom, SA	a)	Maia	100.00%	40.26%	100.00%	38.17%
Per-Mar-Sociedade de Construções, SA	a)	Maia	100.00%	40.26%	100.00%	38.17%
Publico.pt-Serv.Digitais Multimedia, SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
Público-Comunicação Social, SA	a)	Porto	99.99%	82.06%	99.99%	82.46%
Retailbox, BV	a)	Amsterdam	77.00%	61.98%	70.00%	56.15%
Sonae Matrix Multimédia, SGPS, SA	a)	(Netherlands)Maia	100.00%	82.06%	100.00%	82.46%
Sonae Telecom SGPS, SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
Sonae Telecom, BV	a)	Amsterdam	100.00%	82.06%	100.00%	82.46%
		(Netherlands)
Sonae.com,SGPS, SA	a)	Maia	82.06%	82.06%	82.46%	82.46%
Sonae.com-Sistemas de Informação, SGPS, SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
We Do Brasil-Soluções Informáticas, Ltda	a)	Rio de Janeiro (Brazil)	99.99%	81.97%	99.89%	82.37%
We Do Consulting-SI, SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
XS-Comunicação, Inf. e Lazer, SA	a)	Maia	100.00%	82.06%	100.00%	82.46%
Sonae Capital
Águas Furtadas - Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Aqualuz - Turismo e Lazer, Lda	a)	Lagos	100.00%	100.00%	100.00%	99.98%
Aquapraia, SGPS, SA	a)	Lisboa	100.00%	100.00%	100.00%	99.98%
Aquapraia-Investimentos Turísticos, SA	a)	Grandola	100.00%	100.00%	100.00%	99.98%
Aserraderos de Cuellar, SA	a)	Madrid (Spain)	100.00%	100.00%	100.00%	100.00%
Atlantic Ferries, SA	a)	Grandola	100.00%	100.00%	100.00%	99.98%
Azulino Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Bertimóvel - Sociedade Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Bloco Q-Sociedade Imobiliária, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Bloco W-Sociedade Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	99.98%
Box Lines Navegação, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Campimeios - Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	99.98%
Casa da Ribeira - Hotelaria e Turismo, SA	a)	Marco de Canaveses	100.00%	100.00%	100.00%	99.98%
Casino Hotel Troia, SA	a)	Grandola	100.00%	100.00%	100.00%	99.98%
Centro Residencial da Maia,Urban., SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
6) Cequip-Equipamentos de Construção, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Cinclus Imobiliária, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Cinclus-Plan. e Gestão de Projectos, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
6) CMO-Construções, Lda	a)	Porto	100.00%	100.00%	100.00%	100.00%
Contacto Concessões, SGPS, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Contacto-SGPS, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Contacto-Sociedade de Construções, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Contry Club da Maia-Imobiliaria, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Elmo SGPS, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Empreend.Imob.Quinta da Azenha, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Equador & Burnay, Lda	a)	Lisboa	100.00%	97.87%	75.00%	73.41%
Equador & Mendes, Lda	a)	Lisboa	75.00%	73.41%	75.00%	73.41%
Espimaia -Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Gestholdings-SGPS, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Golfe time Inv.Turisticos, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Grano Salis, Lda	a)	Grandola	100.00%	100.00%	100.00%	99.98%
Imoareia, SGPS, SA	a)	Matosinhos	100.00%	100.00%	100.00%	99.98%
Imobiliária da Cacela, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Imoclub-Serviços Imobilários, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Imodivor - Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Imoferro-Soc.Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	99.98%
Imohotel-Emp.Turist.Imobiliários, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%

Imopenínsula - Sociedade Imobiliária, SA	a)	Grandola	100.00%	88.46%	100.00%	88.69%
Imoplamac Gestão de Imóveis, SA	a)	Santarém	100.00%	100.00%	100.00%	100.00%
Imoresort - Sociedade Imobiliária, SA	a)	Grandola	100.00%	88.46%	100.00%	88.69%
Imosedas-Imobiliária e Seviços, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Implantação - Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Inparvi SGPS, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Insulatroia - Sociedade Imobiliária, SA	a)	Grandola	100.00%	88.46%	100.00%	88.69%
7) Integrum-Serviços Partilhados, SA	a)	Maia	100.00%	35.07%	100.00%	100.00%
Interlog-SGPS, SA	a)	Lisboa	100.00%	100.00%	100.00%	100.00%
Invicta - Comércio Internacional, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
INVSAUDE - Gestão Hospitalar, SA	a)	Maia	100.00%	50.00%	100.00%	50.00%
ISF - Imobiliário, Serviços e Participações	a)	Porto	100.00%	100.00%	100.00%	100.00%
Isoroy Casteljaloux	a)	Casteljaloux (France)	100.00%	100.00%	100.00%	89.90%
Leroy Gabon, SA	a)	Libreville (Gabon)	99.99%	99.99%	99.99%	99.99%
Libra Serviços, Lda	a)	Funchal	100.00%	100.00%	100.00%	100.00%
Marimo -Exploração Hoteleira Imobiliária	a)	Grandola	100.00%	88.46%	100.00%	88.69%
Marina Magic - Exploração de Centros Lúd	a)	Lisboa	100.00%	100.00%	100.00%	99.98%
Marmagno-Expl.Hoteleira Imob., SA	a)	Grandola	100.00%	88.46%	100.00%	88.64%
Martimope - Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Marvero-Expl.Hoteleira Imob., SA	a)	Grandola	100.00%	88.46%	100.00%	88.64%
MDS-Soc.Mediadora de Seguros, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
NAB, Sociedade Imobiliária, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Nova Equador Internacional,Ag.Viag.T, Lda	a)	Lisboa	75.00%	73.41%	75.00%	73.41%
Parcomarco, Gest Parq Est Centros Comer	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Partnergiro-Part.Neg.Ren.G.Int.Rec, SA	a)	Maia	100.00%	100.00%	100.00%	99.98%
PJP - Equipamento de Refrigeração, Lda	a)	Matosinhos	100.00%	35.07%	100.00%	35.07%
Placage d'Okoumé du Gabon	a)	Libreville (Gabon)	99.88%	99.88%	99.88%	99.88%
Plysorol SAS	a)	Niort (France)	100.00%	100.00%	100.00%	100.00%
Plysorol SNC	a)	Lisieux (France)	98.00%	98.00%	98.00%	98.00%
Porturbe-Edificios e Urbanizações, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Praedium II-Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Praedium III-Serviços Imobiliários, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Praedium-Desenvolvimento Imobiliário, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Prédios Privados Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Predisedas-Predial das Sedas, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Promessa Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Promosedas-Prom.Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Publimeios-Soc.Gestora Part. Finan., SA	a)	Maia	50.10%	50.10%	50.10%	50.10%
Quinta da Covilhã-Empr.Imobiliários, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Rochester Real Estate, Ltd	a)	Kent (U.K.)	100.00%	100.00%	100.00%	100.00%
Safira Services-Limpeza Espaços Verd., SA	a)	Porto	51.00%	25.55%	51.00%	25.55%
Santos Taborda & Carvalho,SU, Lda	a)	Lisboa	100.00%	97.87%	100.00%	97.88%
Saúde Atlântica - Gestão Hospitalar, SA	a)	Maia	50.00%	50.00%	50.00%	50.00%
SC Insurance Risks Services, SGPS, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
SC-Consultadoria,SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Selfrio,SGPS, SA	a)	Matosinhos	70.00%	35.07%	70.00%	35.07%
Selfrio-Engenharia do Frio, SA	a)	Matosinhos	100.00%	35.07%	100.00%	35.07%
Sistavac-Sist.Aquecimento,V.Ar C., SA	a)	Matosinhos	100.00%	35.07%	100.00%	35.07%
SKK-Central de Distr., SA	a)	Porto	100.00%	35.07%	100.00%	35.07%
SKKFOR - Ser. For. e Desen. de Recursos	a)	Maia	96.00%	33.67%	96.00%	33.67%
SMP-Serv. de Manutenção Planeamento	a)	Matosinhos	100.00%	35.07%	100.00%	35.07%
Soberana-Investimentos Imobiliários, SA	a)	Grandola	100.00%	88.46%	100.00%	88.64%

19 of 48

Société de Tranchage Isoroy SAS	a)	France	100.00%	100.00%	100.00%	89.90%
Société des Essences Fines Isoroy	a)	Honfleur (France)	100.00%	100.00%	100.00%	89.90%
Soconstrução, BV	a)	Amsterdam(Netherlands)	100.00%	100.00%	100.00%	100.00%
Soira-Soc.Imobiliária de Ramalde, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Solinca III-Desporto e Saúde, SA	a)	Lisboa	100.00%	100.00%	100.00%	99.98%
Solinca Lazer,SGPS, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Solinca-Investimentos Turísticos, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Solinfitness - Club Malaga, SL	a)	Malaga (Spain)	100.00%	100.00%	100.00%	99.98%
Soltroia-Investimentos Turísticos, SA	a)	Lisboa	58.93%	58.93%	58.93%	58.92%
Somit-Soc.Mad.Ind.Transformadas, SA	a)	Oliveira do Hospital	100.00%	100.00%	100.00%	100.00%
Sonae 3P, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Sonae Capital,SGPS, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Sonae International, Ltd	a)	London (U.K.)	100.00%	100.00%	100.00%	100.00%
Sonae Turismo Gestão e Serviços, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Sonae Turismo-SGPS, SA	a)	Porto	100.00%	100.00%	100.00%	99.98%
Sonae Wood Products, BV	a)	Amsterdam(Netherlands)	100.00%	100.00%	100.00%	100.00%
Sontrade Lines, Ltd	a)	Hants (U.K.)	63.75%	63.75%	63.75%	63.75%
Sontur, BV	a)	Amsterdam(Netherlands)	100.00%	100.00%	100.00%	99.98%
Sopair, SA	a)	Madrid (Spain)	60.00%	30.06%	60.00%	30.06%
Sótaqua - Soc. de Empreendimentos Turist	a)	Maia	100.00%	100.00%	100.00%	100.00%
Spinarq, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Spinveste - Promoção Imobiliária, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Spinveste-Gestão Imobiliária SGII, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Star-Viagens e Turismo, SA	a)	Lisboa	100.00%	97.87%	100.00%	97.88%
Terceiro Frente - Imobiliária, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Textil do Marco, SA	a)	Marco de Canaveses	90.37%	90.37%	90.37%	90.37%
Torralta-Clube Internacional Férias, SA	a)	Grandola	88.46%	88.46%	88.69%	88.64%
Torre São Gabriel-Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	100.00%
Troiaverde-Expl.Hoteleira Imob., SA	a)	Grandola	100.00%	88.46%	100.00%	88.64%
Tulipamar-Expl.Hoteleira Imob., SA	a)	Grandola	100.00%	88.46%	100.00%	88.64%
Urbisedas-Imobiliária das Sedas, SA	a)	Matosinhos	100.00%	100.00%	100.00%	100.00%
Venda Aluga-Sociedade Imobiliária, SA	a)	Maia	100.00%	100.00%	100.00%	99.98%
World Trade Center Porto, SA	a)	Porto	100.00%	100.00%	100.00%	100.00%
Others
3) Casa Agrícola João e António Pombo, SA	a)	Portel	66.67%	32.67%	-	-
8) Iginha-Sociedade Imobiliária, SA	a)	Matosinhos	100.00%	49.00%	100.00%	98.06%
Investalentejo, SGPS, SA	b)	Vila de Conde	100.00%	49.00%	100.00%	35.97%
9) Ipaper-Industria Papeis Impregnados, SA	a)	Maia	100.00%	72.53%	100.00%	65.89%
3) Sete e Meio - Investimentos e Consultadoria, SA	a)	Grandola	100.00%	49.00%	-	-
Sonae Investments, BV	a)	Amsterdam(Netherlands)	100.00%	100.00%	100.00%	100.00%
Sonaegest-Soc.Gest.Fundos Investimentos	a)	Maia	100.00%	92.04%	100.00%	92.04%

1. Company sold in the period;

2. Company merged into Tecnologias del Medio Ambiente,SA;

3. Company acquired or incorporated in the period;

4. Company partially sold, consolidated in the period by the proportionate method;

5. Company shown under Sonae Capital in the previous year;

6. Company merged into Contacto - Sociedade de Construções, SA;

7. Company shown under Others in the previous year;

8. Company shown under Modelo Continente in the previous year;

• 1. Company shown under Sonae Indústria in the previous year;
• 1. Company merged into Novis Telecom, SA.
• a) Majority of voting rights;
• b) Management control.

These group companies are consolidated using the full consolidation method as described in Note 2.2.a).

5. JOINTLY CONTROLLED COMPANIES

Jointly controlled companies included in the consolidated financial statements, their head offices and the percentage of share capital held by the Group as at 30 June 2005 and 31 December 2004 are as follows:

				Percentage of capital held
			30.06.2005	31.12.2004
COMPANY	Head Office	Direct	Total	Direct	Total
Sonae Sierra
Aegean Park, SA	Athens (Greece)	100.00%	33.52%	100.00%	33.52%
ALEXA Holding GmbH	Dusseldorf (Germany)	50.00%	33.52%	51.00%	34.19%
Arrábidashopping- Centro Comercial, SA	Vila Nova de Gaia	50.00%	16.79%	50.00%	16.79%
Berlin Alexanderstraße G. mbH & Co. KG	Dusseldorf (Germany)	99.00%	33.18%	50.00%	17.10%
Berlin Alexanderstraße Verwaltung. MbH	Dusseldorf (Germany)	99.00%	33.18%	50.00%	17.10%
Cascaishopping- Centro Comercial, SA	Lisboa	100.00%	16.79%	100.00%	16.79%
Cascaishopping Holding II, SGPS, SA	Maia	50.00%	16.79%	50.00%	16.79%
Centro Colombo- Centro Comercial, SA	Lisboa	50.00%	16.79%	50.00%	16.79%
Centro Vasco da Gama-Centro Comercial, SA	Maia	50.00%	16.79%	50.00%	16.79%
2) Corso Magenta 85, Sarl	Milan (Italy)	50.00%	33.52%	-	-
1) CRP-Parque Comercial de Coimbra, SA	Porto	50.00%	33.52%	50.00%	33.52%
Freccia Rossa- Shopping Centre, Srl	Sondrio (Italy)	50.00%	33.52%	50.00%	33.52%
Gaiashopping I- Centro Comercial, SA	Maia	50.00%	16.79%	50.00%	16.79%
Gaiashopping II- Centro Comercial, SA	Maia	100.00%	16.79%	100.00%	16.79%
Hospitalet Center, SL	Barcelona (Spain)	50.10%	8.38%	50.10%	8.38%
Iberian Assets	Barcelona (Spain)	49.78%	16.72%	49.78%	16.72%
Madeirashopping- Centro Comercial, SA	Funchal	50.00%	16.79%	50.00%	16.79%
MC Property Management, SA	Athens (Greece)	75.00%	25.14%	75.00%	25.14%
NorteShop. Retail and Leisure Centre, BV	Amsterdam(Netherlands)	50.00%	16.79%	50.00%	16.79%
Norteshopping-Centro Comercial, SA	Porto	100.00%	16.79%	100.00%	16.79%
Oriogest, Srl	Milan (Italy)	80.00%	26.82%	80.00%	26.82%
Parque Atlântico - Centro Comercial SA	Ponta Delgada	50.00%	16.79%	50.00%	16.79%
Parque Principado, SL	Madrid (Spain)	50.00%	16.79%	50.00%	33.52%
Proj.Sierra Charagionis 1-Dev.Sh.C., SA	Athens (Greece)	100.00%	33.52%	100.00%	33.52%
Project SC, BV	Amsterdam(Netherlands)	50.00%	33.52%	50.00%	33.52%
SC Aegean, BV	Amsterdam(Netherlands)	50.00%	33.52%	50.00%	33.52%
SC Mediterraneum Cosmos, BV	Amsterdam(Netherlands)	50.00%	33.52%	50.00%	33.52%
Segest -Sonae Espansione Gestione, Srl	Milan (Italy)	50.00%	33.52%	50.00%	33.52%
Sierra Charagionis Propert.Management, SA	Athens (Greece)	50.00%	33.52%	50.00%	33.52%
Sierra Enplanta, SA	Sao Paulo (Brazil)	50.00%	33.52%	50.00%	33.52%
Sierra Charagionis Develop. of Shop, Centers, SA	Athens (Greece)	50.00%	33.52%	50.00%	33.52%
SRP-Parque Comercial de Setúbal, SA	Maia	50.00%	33.52%	50.00%	33.52%
Torre Colombo Ocidente-Imobiliária, SA	Porto	100.00%	16.79%	100.00%	16.79%
Torre Colombo Oriente-Imobiliária, SA	Porto	100.00%	16.79%	100.00%	16.79%

Unishopping Administradora, Ltda	Sao Paulo (Brazil)	99.99%	33.52%	99.99%	33.52%
Unishopping Consultoria Imob., Ltda	Sao Paulo (Brazil)	99.98%	33.51%	99.98%	33.51%
Via Catarina- Centro Comercial, SA	Maia	50.00%	16.79%	50.00%	16.79%
Zubiarte Inversiones Inmob, SA	Barcelona (Spain)	49.83%	33.40%	49.83%	33.40%
Others
1) Celnave-Agência de Navegação, Lda	Viana do Castelo	100.00%	34.17%	100.00%	34.17%
1) Celpap-Terminal de Cel. Papel Por, Lda	Viana do Castelo	100.00%	34.17%	100.00%	34.17%
1) Emprobal-Emp.Prod. e Com.Emb., Lda	Funchal	60.00%	21.58%	60.00%	21.58%
1) Gescartão,SGPS, SA	Lisboa	68.58%	35.97%	68.58%	35.97%
1) Imocapital,SGPS, SA	Maia	50.00%	50.00%	50.00%	50.00%
1) Lepe-Empresa Portuguesa Embalagens, SA	Marinha Grande	100.00%	35.97%	100.00%	35.97%
1) Papelnova Recolha Recup.Desperdícios, SA	Mourão	100.00%	35.97%	100.00%	35.97%
1) Portucel Embalagem-Emp.Prod.E.Cartão, SA	Cascais	100.00%	35.97%	100.00%	35.97%
1) Portucel Espana, SA	Madrid (Spain)	100.00%	35.97%	100.00%	35.97%
1) Portucel Recicla-Indústria Papel R., SA	Mourão	100.00%	35.97%	100.00%	35.97%
1) Portucel Viana-Emp.Prod.P.Ind., SA	Viana do Castelo	100.00%	35.97%	100.00%	35.97%
1) Portucel Viana Energia - Empresa de CogeraçãoEnergética, SA	Viana do Castelo	100.00%	35.97%	100.00%	35.97%
1) Sulpac, Emp. Prod. Emb. Cartão, SGPS, SA	Mourão	100.00%	35.97%	100.00%	35.97%

1. Company sold in the period;

2. Company acquired in the period.

These entities are consolidated using the proportionate consolidation method, as referred to in Note 2.2.b).

Aggregated amounts corresponding to the percentage of capital held in these jointly controlled companies included in the financial statements for the period, using the proportionate consolidation method, can be summarised as follows:

	30.06.2005	31.12.2004	30.06.2004
Non-current assets	1,669,226,047	1,713,712,764	1,547,072,537
Current assets	75,587,079	130,456,929	146,001,362
Non-current liabilities	1,172,060,297	1,153,956,212	1,028,732,872
Current liabilities	116,255,458	136,684,618	113,106,726
	Six month period		Six month period
	ended on 30.06.2005	2004	ended on 30.06.2004
Income	93,711,648	285,399,683	126,629,938
Expenses	56,119,813	208,169,915	97,664,588

6. INVESTMENTS IN ASSOCIATED COMPANIES

Associated companies, their head offices and the percentage of share capital held as at 30 June 2005 and 31 December 2004 are as follows:

				Percentage of capital held
		30.06.2005			31.12.2004
COMPANY	Head Office	Direct	Total	Direct	Total
Sonae Indústria
Promodeco - Projecto Imobiliário Decoração e Construção, Lda	Maia	27.60%	24.48%	27.60%	26.46%
Serradora Boix	Barcelona (Spain)	31.25%	27.64%	31.25%	28.29%
Stinnes Holz Gmbh	Hamm (Germany)	35.25%	30.90%	35.25%	31.33%
Comfloresta - Companhia Catarinense de Emp. Florestais, SA	Brazil	4.55%	2.54%	4.55%	2.52%
Modelo Continente
Sempre a Postos - Produtos Alimentares e Utilidades, Lda	Lisboa	25.00%	24.51%	25.00%	18.92%
Sonaecom
Global S - Centro Comercial Lda	Matosinhos	99.89%	13.65%	99.89%	13.34%
Global S - Tecnologias de Informação Lda	Matosinhos	75.00%	20.02%	75.00%	20.02%
Global S 24, SGPS, SA	Matosinhos	50.00%	13.34%	50.00%	13.65%
Global S, SGPS, SA	Matosinhos	64.73%	26.56%	64.73%	26.69%
Net Mall SGPS, SA	Maia	50.00%	41.03%	50.00%	41.23%
SIRS – Sociedade Independente de Radiodifusão Sonora, SA	Porto	45.00%	36.93%	45.00%	37.11%
Unipress - Centro Gráfico, Lda	Vila Nova de Gaia	40.00%	32.82%	40.00%	32.98%
Sonae Capital
Andar - Sociedade Imobiliária, SA	Maia	50.00%	50.00%	50.00%	50.00%
Autocenter - Serviços, Acessórios e Peças para Viaturas, SA	Maia	50.00%	25.00%	50.00%	25.00%
CarPlus – Comércio de Automóveis, SA	Vila Nova de Gaia	100.00%	50.00%	100.00%	50.00%
Change, SGPS, SA	Porto	25.00%	25.00%	25.00%	25.00%
Choice Car - Comércio de Automóveis, SA	Porto	100.00%	50.00%	100.00%	50.00%
Choice Car SGPS, SA	Maia	50.00%	50.00%	50.00%	50.00%
Finlog - Aluguer e Comércio de Automóveis, SA	Matosinhos	100.00%	50.00%	100.00%	50.00%
Guerin – Rent a Car (Dois), Lda	Lisboa	100.00%	50.00%	100.00%	50.00%
Holdingpar, SGPS, SA	Porto	40.00%	40.00%	40.00%	40.00%
Interclean, SA	Brazil	49.99%	12.77%	49.99%	12.77%
Lazam Corretora, Ltda	Brazil	45.00%	45.00%	45.00%	45.00%
Lidergraf - Artes Gráficas, Lda	Vila de Conde	25.50%	25.50%	25.50%	25.50%
Luso Assistência - Gestão de Acidentes, SA	Porto	100.00%	50.00%	100.00%	50.00%
Mundo Vip – Operadores Turísticos, SA	Lisboa	33.34%	33.34%	-	-
Norscut - Concessionária de Scut Interior Norte, SA	Lisboa	25.00%	25.00%	25.00%	25.00%
Pargeste SGPS, SA	Maia	40.00%	40.00%	40.00%	40.00%
Sociedade de Construções do Chile, SA	Lisboa	100.00%	50.00%	100.00%	50.00%
Vastgoed One - Sociedade Imobiliária, SA	Maia	100.00%	50.00%	100.00%	50.00%
Vastgoed Sun - Sociedade Imobiliária, SA	Maia	100.00%	50.00%	100.00%	50.00%
Operscut - Operação e Manutenção de Auto-estradas, SA	Lisboa	15.00%	15.00%	15.00%	15.00%
1) ba - Fábrica de Vidros Barbosa & Almeida, SA	Porto	11.64%	11.74%	45.00%	40.09%
1) Bar-Bar-Idade Glass - Serviços de Gestão e Investimentos, SA	Porto	11.75%	11.75%	39.55%	39.55%
Sodesa, SA	Lisboa	50.00%	50.00%	50.00%	50.00%
TP - Sociedade Térmica, SA	Porto	50.00%	50.00%	50.00%	50.00%

1. Sale of 27.80% of the share capital of the associated company in the period.

Associated companies are consolidated using the equity method, as referred to in Note 2.2.c).

7. GROUP COMPANIES, JOINTLY CONTROLLED COMPANIES AND ASSOCIATED COMPANIES EXCLUDED FROM CONSOLIDATION AND OTHER SHAREHOLDINGS

Group companies, jointly controlled companies and associated companies excluded from consolidation, their head offices, percentage of share capital held and book value as at 30 June 2005 and 31 December 2004 are made up as follows:

				Percentage of capital held
				30.06.2005		31.12.2004		Book Value
COMPANY	Head Office	Reasonforexclusion	Direct	Total	Direct	Total	30.06.2005	31.12.2004
Sonae Indústria
OKO Zentrum NRW	Germany	a)	25.00%	21.92%	25.00%	22.22%	-	-
Plysorol BV	Soest	a)	100.00%	88.39%	100.00%	90.53%	72,574	72,574
	(Netherlands)Labruguière
Tarnaise des Panneaux, SA	(France)	a)	99.99%	88.44%	99.99%	89.89%	-	-
Construction Modulaire de l´Ouest SARL	Lisieux (France)		15.00%	13.26%	15.00%	13.27%	20,489	20,489
Modelo Continente
Dispar – Distrib. de Participações, SGPS, SA	Lisboa		7.14%	7.00%	7.14%	7.00%	4,988	4,988
Insco – Insular de Hipermercados, SA	Ponta Delgada		10.00%	9.81%	10.00%	9.81%	748,197	748,197
Sonae Sierra
Lamda Pylea, SA	Athens (Greece)	a)	39.90%	13.37%	39.90%	13.37%	2,787,769	2,787,769
SIC Indoor – Gest. Suportes Publicitários, SA	Oeiras	a)	35.00%	23.46%	35.00%	23.46%	17,500	17,500
Sonaecom
Altitude, SGPS, SA	Lisboa		11.50%	9.44%	11.50%	9.48%	1,000,000	1,000,000
Despegar.com	Porto		5.90%	4.84%	5.90%	4.87%	2	2
Lusa - Agência de Noticias de Portugal, SA	Lisboa		1.38%	1.13%	1.38%	1.14%	197,344	197,344
Minhodigital.com - Inv. na Área Tecnológ., SA	Porto		4.76%	3.91%	4.76%	3.93%	-	-
Outsystems, Software de Rede, SA	Oeiras		1.50%	1.23%	2.03%	1.67%	-	-
SESI - Soc. de Ens. Sup. e Investigação, SA	Porto		9.75%	3.93%	9.75%	3.94%	1	1
Sonae Capital
2) Cronosaúde – Gestão Hospitalar, SA	Porto	a)	100.00%	50.00%	-	-	50,000	-
Delphinus – Soc. de Tur. e Div. de Tróia, SA	Grandola	a)	79.00%	79.00%	79.00%	99.98%	-	-
Friengineering, SA	Matosinhos	a)	100.00%	50.10%	100.00%	50.10%	69,438	69,438
Plysorol Contreplaques, SAS	France	a)	100.00%		100.00% 100.00% 100.00%		37,000	2,775
Sonae Capital Brasil, Lda	Sao Paulo (Brazil)	a)	100.00%		100.00% 100.00% 100.00%		5,312	5,312
Sonae RE, SA	Luxemburg	a)	100.00%		100.00% 100.00% 100.00%		1,250,000	1,250,000
Developpement & Partenariat Assurances, SA	Paris (France)	a)	35.00%	35.00%	35.00%	35.00%	238,000	372,428
Fun International Entertainement, SA	Porto	a)	50.00%	50.00%	50.00%	49.99%	361,000	361,000
Infratroia – Emp. de Infraest. de Troia, E.N.	Grandola	a)	25.90%	25.90%	25.90%	25.89%	55,659	55,659
Portuguese Paradise INC	Panama	a)	42.50%	42.50%	42.50%	42.49%	4,838	4,838
Sociedade Imobiliária Troia - B3, SA	Grandola	a)	20.00%	17.73	20.00%	17.74%	468,571	408,425
Net, SA	Lisboa		2.80%	2.80%	2.80%	2.80%	11,132	11,132
Sear - Sociedade Europeia de Arroz, SA	Santiago do Cacém		15.00%	15.00%	15.00%	15.00%	150,031	150,031
Societé Naturel de Bois Gabonais	Gabon		4.24%	4.24%	4.24%	4.24%	-	-
Spidouro S.P.E.I. Douro e Trás-os-Montes,SA	Vila Real		8.30%	8.30%	8.30%	8.30%	-	-
Vebego Services – Serv.Limpeza, SA	Porto	a)	100.00%	25.55%	100.00%	25.55%	818,400	818,400
Others
Sonae Investimentos América Latina, Lda	Sao Paulo (Brazil)	a)	99.99%	99.99%	99.99%	99.99%	25,687	25,687

1) Enercicla. Lda	Mourão	a)	100.00%	35.97%	100.00%	35.97%	-	-
First Assur, SA	France		10.80%	10.80%	10.80%	10.80%	837,244	837,244

• 1. Company sold in the period;
• 1. Company incorporated in the period.
• a) Group company, jointly controlled company or associated company for which, at the date of the issuance of these financial statements, complete financial information was not available.

8. CHANGES TO THE CONSOLIDATION PERIMETER

Main acquisitions and disposals of companies over the six month period ended 30 June 2005 are as follows:

Acquisitions

			Percentage of capital held
			30.06.2005
COMPANY	Head Office	Direct	Total
Modelo Continente
Cumulativa – Sociedade Imobiliária, SA	Marinha Grande	100.00%	98.06%
Pinto Ribeiro – Supermercados, SA	Viana do Castelo	90.00%	88.25%
Sonae Sierra
Corso Magenta 85, Sarl	Milan (Italy)	50.00%	33.52%
Efanet, SGPS, SA	Matosinhos	100.00%	67.04%
Monselice Center, Srl	Venice (Italy)	100.00%	33.59%
Project Sierra Italy 2-Shop.Centre Srl	Milan (Italy)	100.00%	67.04%
Templo, Srl	Venice (Italy)	100.00%	33.59%
Valecenter, Spa	Milan (Italy)	100.00%	33.59%
Others
Casa Agrícola João e António Pombo, SA	Portel	100.00%	49.00%
Sete e Meio - Investimentos e Consultadoria, SA	Grândola	66.67%	32.67%

Disposals

		Percentage of capital held
		30.06.2005
COMPANY	Head Office	Direct	Total
Sonae Indústria
Gollin,Gmbh	Bad Oeynhausen (Germany)	90.00%	78.90%
Sonae Sierra
CRP-Parque Comercial de Coimbra, SA	Porto	50.00%	33.52%
Others
Celnave-Agência de Navegação, Lda	Viana do Castelo	100.00%	34.17%
Celpap-Terminal de Cel. Papel Por, Lda	Viana do Castelo	100.00%	34.17%
Emprobal-Emp.Prod. e Com.Emb., Lda	Funchal	60.00%	21.58%
Gescartão,SGPS, SA	Lisboa	68.58%	35.97%
Imocapital,SGPS, SA	Maia	50.00%	50.00%
Lepe-Empresa Portuguesa Embalagens, SA	Marinha Grande	100.00%	35.97%
Papelnova Recolha Recup.Desperdícios, SA	Mourão	100.00%	35.97%
Portucel Embalagem-Emp.Prod.E.Cartão, SA	Cascais	100.00%	35.97%
Portucel Espana, SA	Madrid (Spain)	100.00%	35.97%

Portucel Recicla-Indústria Papel R., SA	Mourão	100.00%	35.97%
Portucel Viana-Emp.Prod.P.Ind., SA	Viana do Castelo	100.00%	35.97%
Portucel Viana Energia - Empresa de CogeraçãoEnergética, SA	Viana do Castelo	100.00%	35.97%
Sulpac, Emp. Prod. Emb. Cartão, SGPS, SA	Mourão	100.00%	35.97%
Enercicla. Lda	Mourão	100.00%	35.97%

Acquisitions above mentioned had the following impact on the financial statements of 30 June 2005:

Net assets acquired
Investment Properties	110,149,000
Tangible and intangible assets	7,657,000
Stocks	2,901,028
Other current assets	3,262,917
Cash and cash equivalents	3,016,641
Other assets	1,243,268
Deferred taxes	(26,506,901)
Borrowings	(30,715,797)
Other liabilities	(13,845,766)
	57,161,390
Goodwill	12,340,808
Minority interests	18,069,978
Total consideration paid	87,572,176
Cash consideration paid	87,572,176
Amounts payable	-
	87,572,176
Net cash ouflow arising from acquisitions
Cash consideration paid	87,572,176
Cash and cash equivalents acquired	(3,016,641)
	84,555,535

The impact of these acquisitions on the income statement is not materially relevant.

Net assets of the group companies sold and the corresponding carrying amounts as at 31 December 2004 are as follows:

	Date of disposal	31.12.2004
Net assets disposed of
Investment Properties	9,650,000	8,277,500
Tangible and intangible assets	72,041,239	72,041,239
Investments	760,422	760,422
Stocks	10,802,781	10,802,781
Other current assets	7,372,081	7,329,392
Cash and cash equivalents	6,640,241	6,579,808
Other assets	9,677,011	8,816,257
Deferred taxes	(3,710,258)	(3,341,438)
Borrowings	(9,445,159)	(9,691,772)
Other liabilities	(23,563,888)	(21,648,697)
Provisions	(113,595)	(113,595)
	80,110,875	79,811,897
Goodwill	(15,679,249)	(15,679,249)
Minority interests	7,025,948	7,025,948
	71,457,574	71,158,596
Gain on sale	29,809,942
Total consideration	101,267,516
Cash received	101,267,516
Amounts receivable	-
	101,267,516
Net cash inflow arising from disposals
Cash consideration received	101,267,516
Cash and cash equivalents disposed of	(6,640,241)
	94,627,275

The impact of these disposals on the income statement is as follows:

	Date of disposal	31.12.2004
Operational income	1,567,820	92,888,229
Operational expenses	(41,384)	(81,081,123)
Net financial expenses	(105,292)	(235,466)
Investment income	-	12,361
Profit before taxation	1,421,144	11,584,001
Taxation	(368,821)	(2,115,377)
Profit for the period	1,052,323	9,468,624

9. TANGIBLE AND INTANGIBLE ASSETS

During the six month period ended 30 June 2005, movements in Tangible and intangible assets as well as depreciation and accumulated impairment losses, are made up as follows: 30.06.2005

			Tangible assets				Intangible assets
			Other	Tangible		Patents and	Other	Intabgible
	Land and	Plant and	tangible	assets in	Total	other similar	intangible	assets in	Total	Total
	buildings	Machinery	assets	progress	tangible	rights	assets	progress	intangible	fixed assets
Gross cost:
Opening balance	1,727,616,246	2,958,818,634	388,224,825	111,637,032	5,186,296,737	236,158,799	272,055,450	13,183,616	521,397,865	5,707,694,602
Changes in consolidation perimeter	(36,155,227)	(106,383,718) (15,687,724)		(1,555,550)	(159,782,219)	(9,617)	(2,675,310)	(2,017,088)	(4,702,015)	(164,484,234)
Capital expenditure	14,239,153	12,795,399	4,525,443	114,653,874	146,213,869	10,140,694	700,037	17,767,675	28,608,406	174,822,275
Disposals	(48,716,076)	(29,264,984)	(5,873,120)	(1,881,737)	(85,735,917)	(145,424)	(518,743)	(195,850)	(860,017)	(86,595,934)
Exchange rate effect	39,818,496	92,037,851	10,393,388	1,629,945	143,879,680	1,988,558	1,942,722	-	3,931,280	147,810,960
Transfers	46,907,511	53,337,749		11,558,029 (112,551,576)	(748,287)	360,300	6,259,856	(11,409,071)	(4,788,915)	(5,537,202)
Closing balance	1,743,710,103	2,981,340,931	393,140,841	111,931,988	5,230,123,863	248,493,310	277,764,012	17,329,282	543,586,604	5,773,710,467
Accumulated depreciation, amortisation
and impairment losses
Opening balance	344,754,929	1,483,094,824	240,382,179	713,997	2,068,945,929	14,448,820	171,619,802	-	186,068,622	2,255,014,551
Changes in consolidation perimeter	(12,387,643)		(68,327,368) (13,596,221)	-	(94,311,232)	(8,325)	(2,418,890)	-	(2,427,215)	(96,738,447)
Charge for the period	21,364,886	101,935,302	19,882,659	686,769	143,869,616	7,336,740	13,935,805	-	21,272,545	165,142,161
Disposals	(8,057,648)	(11,522,860)	(4,320,551)	-	(23,901,059)	(32,092)	(206,924)	-	(239,016)	(24,140,075)
Exchange rate effect	4,820,532	34,901,386	5,547,183	-	45,269,101	122,985	1,218,262	-	1,341,247	46,610,348
Transfers	103,538	(16,693,023)	19,607,966	(586,189)	2,432,292	820,710	(4,823,994)	45,360	(3,957,924)	(1,525,632)
Closing balance	350,598,594	1,523,388,261	267,503,215	814,577	2,142,304,647	22,688,838	179,324,061	45,360	202,058,259	2,344,362,906
Carrying amount	1,393,111,509	1,457,952,670	125,637,626	111,117,411	3,087,819,216	225,804,472	98,439,951	17,283,922	341,528,345	3,429,347,561

The amount under Changes in consolidation perimeter refers mainly to assets of companies disposed of, as stated in Note 8.

As at 30 June 2005, the amount under the caption Patents and other similar rights includes assets related with UMTS technology, 141,616,426 euro, and the fair value attributed to a group of brands with indefinite useful lives, among which the "Continente" brand, 75,000,000 euro.

Major amounts included in the caption Tangible assets in progress, refer to the following projects:

Refurbishment and expansion of stores located in Portugal	16,301,525
New projects in Portugal of the Retail business segment	26,684,655
Troia project	12,922,732
	55,908,912

10. INVESTMENT PROPERTIES

As referred to in Note 2.4, investment properties are recorded at fair value.

As at 30 June 2005, Investment properties in operation correspond to the fair value of the Group's share of shopping centres, which can be detailed as follows:

	30.06.2005			31.12.2004
	Amount	Yield	Amount	Yield
Portugal	1,273,331,500	6.35% e 7.75%	1,225,424,500	6.50% to 8.25%
Spain	663,550,000	6.25% e 7.50%	604,979,752	6.60% to 7.75%
Italy	110,149,000	7.00% e 7.75%	-	-
Brazil	186,691,184	11.00% e 13.00%	153,527,129	11.00% to 13.00%
	2,233,721,684		1,983,931,381

The fair value of each investment property was determined by a valuation as at 30 June 2005, performed by an independent entity, based on valuation criteria generally accepted in the real estate business.

Value created on investment properties over the six month periods ended 30 June 2005 and 2004 can be detailed as follows:

	2nd Quarter 2005	1st Half 2005	2nd Quarter 2004	1st Half 2004
Properties which were under development and were concluded
during the three month period	1,124,193	9,635,255	4,978,099	15,584,326
Changes in fair value of investment properties in operationAdjustments to construction cost estimates of properties under development which	55,772,009	55,772,009	36,681,788	36,681,788
were transfered to investment properties	(7,190,938)	(7,190,938)	(5,336,789)	(6,327,833)
	49,705,264	58,216,325	36,323,098	45,938,281

As at 30 June 2005 and 31 December 2004, investment properties in progress are made up as follows:

	30.06.2005	31.12.2004
Portugal:
Parque de Famalicão	2,909,770	2,902,631
Setubal Retail Park	1,410,146	1,349,363
Louresshopping	56,064,782	27,697,819
Torres Colombo	8,408,912	8,541,831
Cacém Shopping	1,692,593	1,641,090
Serra Shopping	12,182,817	3,989,183
Rio Sul	34,682,481	20,605,857
Algarveshopping - expansion	1,139,150	-
Others	183,921	627,898
Germany:
Berlin Alexanderplatz	59,325,035	58,645,410
3DO	13,372,400	10,241,710
Brazil:
Others	15,533	-
Spain:
Plaza Mayor Shopping	10,802,068	9,651,675
Plaza Éboli	-	29,403,151
Dos Mares - expansion	3,305,289	2,805,289
Ponferrada	1,033,229	-
Others	4,061	101,942
Greece:
Aegean Park	18,670,812	18,496,605
Others	19,284	-
Italy:
Brescia Centre	25,645,996	24,213,580
Biella	7,258,600	-
	258,126,879	220,915,034

As at 30 June 2005, the following investment properties were mortgaged:

• Norteshopping Cascaishopping

• Gaiashopping Viacatarina

• Guimarãeshopping Parque Atlântico

• Arrabidashopping Algarveshopping

• Plaza Éboli

• Centro Colombo Centro Vasco da Gama

• Maiashopping Coimbrashopping

• Madeirashopping Parque Principado

• Plaza Mayor Grancasa

• Kareaga Valle Real

• La Farga Dos Mares

• Avenida M40 Coimbra Retail Park

• Zubiarte Luz del Tajo

11. GOODWILL

During the six month period ended 30 June 2005, movements in goodwill, as well as in the corresponding impairment losses, are as follows:

	Goodwill
Gross value:
Opening balance	453,242,056
New companies	-
Increases	109,318,871
Decreases	(6,481,955)
Closing balance	556,078,972
Accumulated impairmentlosses:
Opening balance	-
Increases	3,309,480
Decreases	-
Closing balance	3,309,480
Carrying amount:	552,769,492

Goodwill is not depreciated. Impairment tests are performed on an annual basis.

During the period, increases in shareholdings generated goodwill amounting to 18,641,704 euro.

Goodwill increases include 78,287,939 euro of exchange rate differences, recorded in the Exchange conversion reserve disclosed under Reserves and retained earnings.

12. INVESTMENTS

As at 30 June 2005, this caption is made up as follows:

	Investments
	Non current	Current
Investments in group companies, jointly controlled companies
or associated companies excluded from consolidation
Opening balance as at 1 January 2005	74,125,286	-
Acquisitions in the six month period	6,479,008	-
Disposals in the six month period	(8,355,853)	-
Closing balance as at 30 June 2005	72,248,441	-
Accumulated impairment losses (Note 25)	(50,604,111)	-
	21,644,330	-
Investment in associated companies
Opening balance as at 1 January 2005	29,392,647	-
Acquisitions in the six month period	4,023,539	-
Disposals in the six month period	(33,940,406)	-
Equity method effect	22,380,389	-
Closing balance as at 30 June 2005	21,856,169	-
Accumulated impairment losses (Note 25)	-	-
	21,856,169	-
Investments held for sale
Fair value as at 1 January 2005	33,073,103	-
Acquisitions in the six month period	68,467	-
Disposals in the six month period	(52,050)	-
Increase/(Decrease) in fair value	20,349,219	-
Fair value as at 30 June 2005	53,438,739	-
Investments measured at fair value through profit and loss
Fair value as at 1 January 2005	-	2,233,266
Acquisitions in the six month period	-	4,001,471
Disposals in the six month period	-	(5,598,447)
Increase/(Decrease) in fair value	-	(57,222)
Fair value as at 30 June 2005	-	579,068
Derivative financial instruments (Note 20)
Fair value as at 1 January 2005	-	87,325,644
Acquisitions in the six month period	-	301,901
Disposals in the six month period	-	-
Increase/(Decrease) in fair value	-	(17,564,859)
Fair value as at 30 June 2005	-	70,062,686
	96,939,238	70,641,754

Investments in associated companies include goodwill amounting to 5,002,255 euro (20,524,891 euro as at 31 December 2004). During the period part of a shareholding in an associated company was disposed of, with the remaining shareholding recorded at fair value under the caption Investments held for sale.

Investments in group companies, jointly controlled companies and associated companies excluded from consolidation include 6,546,896 euro relating to advances made for the acquisition of investments.

Investments held for sale are disclosed above net of accumulated impairment losses (Note 25) amounting to 2,781,200 euro (2,813,383 euro as at 31 December 2004).

13. OTHER NON-CURRENT ASSETS

As at 30 June 2005 and 31 December 2004, Other non-current assets are detailed as follows:

	30.06.2005	31.12.2004
Loans granted to associated companies	21,809,685	1,928,849
Other loans granted	21,862,193	25,096,753
Trade accounts receivable and other debtors	84,663,895	95,310,775
Taxes recoverable	5,518,403	5,175,261
Other non-current assets	3,285,415	6,046,821
	137,139,591	133,558,459
Accumulated impairment losses (Note 25)	(21,703,498)	(22,061,192)
	115,436,093	111,497,267

Trade accounts receivable and other debtors include legal deposits made by an affiliated company in Brazil totalling 38,125,719 euro (29,543,621 euro) related with claims mentioned in Note 21.

14. TRADE DEBTORS AND OTHER CURRENT ASSETS

As at 30 June 2005 and 31 December 2004, Other current assets are made up as follows:

	30.06.2005	31.12.2004
Trade accounts receivable	460,028,001	471,035,636
Taxes recoverable	132,048,828	116,962,237
Securitisation of trade receivables	50,987,941	23,239,989
Credit sales to third parties	54,089,292	48,224,563
Trade suppliers - debit balances	38,605,025	32,873,600
Other debtors	88,197,038	86,441,612
Accounts receivable from the sale of investments	5,562,356	12,986,746
Accounts receivable from the sale of tangible assets	23,884,825	22,500,900
Loans granted to associated companies	14,055,931	53,789,657
Invoices to be issued	43,692,764	39,094,202
Other current assets	56,374,944	36,114,802
	967,526,945	943,263,944
Accumulated impairment losses (Note 25)	(143,422,054)	(140,756,914)
	824,104,891	802,507,030

15. DEFERRED TAX

Deferred tax assets and liabilities as at 30 June 2005 and 31 December 2004 can be detailed as follows, split between the different types of temporary differences:

	Deferred tax assets		Deferred tax liabilities
	30.06.2005	31.12.2004	30.06.2005	31.12.2004
Difference between fair value and acquisition cost	-	-	348,746,401	315,370,711
Harmonisation adjusments	1,577,026	1,280,059	67,121,820	53,638,912
Provisions and impairment losses not accepted for tax purposes	11,011,656	9,281,199	54,347	(1,141,273)
Write off of tangible and intangible assets	12,593,069	11,619,107	3,564,784	(101,621)
Write off of deferred costs	18,062,774	211,763	3,139,970	1,547,494
Valuation of hedging derivatives	5,535,899	4,852,097	3,159,892	3,542,519
Revaluation of tangible fixed assets	-	-	3,882,517	3,875,316
Tax losses carried forward	174,357,862	189,801,921	-	-
Reinvested capital gains/losses	-	-	5,300,725	5,455,564
Others	(33,275)	(94,721)	761,227	5,903,227
	223,105,012	216,951,425	435,731,683	388,090,849

16. CASH AND CASH EQUIVALENTS

As at 30 June 2005 and 31 December 2004 Cash and cash equivalents can be detailed as follows:

	30.06.2005	31.12.2004
Cash at hand	5,066,390	3,839,186
Bank deposits	172,762,274	337,966,921
Treasury applications	120,854,396	144,407,335
Cash and cash equivalents on the balance sheet	298,683,060	486,213,442
Bank overdrafts	(24,624,438)	(24,735,790)
Cash and cash equivalents on the statement of cash flows	274,058,622	461,477,652

Bank overdrafts are recorded in the balance sheet under Current borrowings.

17. SHARE CAPITAL

As at 30 June 2005, the share capital, which is fully subscribed and paid for, is made up of 2,000,000,000 ordinary shares, which do not have the right to a fixed remuneration, with a nominal value of 1 euro each. As at that date, the company and group companies held 133,976,146 own shares, recorded at 143,630,520 euro.

As at 30 June 2005, the following entities held more than 20% of the subscribed share capital:

Entity	%
Efanor Investimentos, SGPS, SA and associated companies	52.94

18. MINORITY INTERESTS

Movements in minority interests in the three month period ended 30 June 2005 are as follows:

	30.06.2005
Opening balance as at 1 January	785,515,291
Increased shareholding by acquisitions	(37,304,398)
Changes resulting from currency translation	16,024,832
Acquisition of group companies	(18,069,978)
Sale of group companies	(7,025,948)
Changes in financial instruments hedges	(2,007,191)
Others	(13,699,482)
Profit for the period attributable to minority interests	63,615,620
Closing balance as at 30 June	787,048,746

19. BORROWINGS

As at 30 June 2005 and 31 December 2004, Borrowings are made up as follows:1

			30.06.2005			31.12.2004
		Amount in the Balance Sheet1		Nominal value	Amount in the Balance Sheet1			Nominal value
		Non		Non		Non		Non
	Current	Current	Current	Current	Current	Current	Current	Current
Bank loans	665,949,963	1,716,046,641	666,426,504	1,740,403,592	774,487,573	1,825,940,672	775,922,177	1,868,172,461
Bonds	-	981,862,767	-	996,641,337	35,078,955	431,782,099	35,080,762	436,116,630
Obligations under finance leases	11,815,904	47,203,955	11,815,904	47,203,955	11,439,067	40,779,698	11,439,067	40,779,698
Other loans	3,398,174	146,194,488	3,398,174	140,974,419	5,381,527	145,646,891	5,381,527	140,758,506
Bank overdrafts	24,624,438	-	24,624,438	-	24,735,790	-	24,735,790	-
Hedging derivatives (Note 20)	94,182,059	7,637,407			98,538,076	3,632,912
	799,970,539	2,898,945,258	706,265,020	2,925,223,303	949,660,987	2,447,782,272	852,559,323	2,485,827,295

Derivatives are recorded at fair value (Note 20).

The repayment schedule of nominal value of borrowings may be summarised as follows:

	30.06.2005	31.12.2004
2005	581,744,459	852,630,539
2006	697,798,484	757,798,417
2007	167,111,030	160,912,179
2008	281,080,915	179,019,440
2009	478,366,990	478,382,160
2010	270,198,443	112,039,422
After 2010	1,155,188,002	797,604,461
	3,631,488,323	3,338,386,618

Major loans can be summarised as follows:

• A bank loan of 340,000,000 euro, of which 200,000,000 euro is a revolving facility, repayable in 2006, bearing interest payable half-yearly at market rates, obtained by an affiliated company of Modelo Continente from a syndicate of banks. As at 30 June 2005, 270,000,000 euro are disclosed in the caption Non-current borrowings and 70,000,000 euro in the caption Current borrowings (see Note 32);
• A bank loan in the amount of 68,087,485 brazilian real (23,899,388 euro), repayable in 2009, bearing interest payable monthly at market rates, obtained by an affiliated company of Modelo Continente in Brazil;
• Bank loans of 119,000,000 euro, obtained by an affiliated company of Sonae Indústria, in 2002. These loans bear interest at market rates and are repayable in sixteen half-yearly instalments beginning in June 2005. As at 30 June 2005, the outstanding amount is 112.526.400 euros. As a consequence of the strategic objective of making Sonae Indústria financially independent from Sonae SGPS, Sonae SGPS no longer guarantees this loan;
• In 1999 several Sonae Indústria´s affiliated companies negotiated a revolving syndicated loan up to 400,000,000 euro. The loan reduced to 300,000,000 euro on 20 December 2002, to 100,000,000 euro on 20 December 2004, and was repayable in full on 20 December 2006. In June, Sonae Indústria repaid the amount outstanding;
• Tafisa Canada signed in prior years a financing arrangement in the amount of 101,200,000 canadian dollars. This loan bears interest at market rates and 45% of notional were repaid in 9 half-yearly instalments, started in June 2000, and 55% of notional were repaid in a bullet payment made on June 2005;
• Sonae UK obtained a loan in the amount of 35,000,000 pounds sterling. This loan bears interest at market rates and is repayable in 15 equal half-yearly instalments, started June 2002. As at 30 June 2005, the outstanding amount is 27,687,147 euro;

1 Amount in the Balance Sheet is defined as amortised cost for bank loans and bonds and as fair value for derivatives.

• A bank loan of 50,000,000 euro, originally contracted by Sonae SGPS, was transferred to Sonae Indústria in the second quarter of 2005. This loan bears interest at market rates and is repayable in 16 equal instalments. As at 30 June 2005, the outstanding amount is 37,500,000 euros;
• Optimus signed a 5 year guarantee and revolving credit facilities on 6 August 2004, with an international bank syndicate, in the amount of 450,000,000 euro. This facility has been used to refinance all of Optimus' existing debt facilities obtained under the previous project finance agreement (dated July 2003) and will be used to fully fund its business plan. Interest rate equals Euribor plus a spread linked to Optimus' financial performance, measured amongst others by the ratio of Net Debt to EBITDA. The guarantee facility used to secure loans made by the European Investment Bank (EIB) will be repaid in 2 instalments (30% in June 2008 and 70% in June 2009). The revolving credit facility will be repaid in June 2009. As at 30 June 2005 the outstanding amount is of 324,458,200 euro, which is disclosed as Non-current borrowings;
• Bank loans of 848,123,572 euro, obtained by affiliated companies of Sonae Sierra from several financial institutions, bearing interest at market rates, repayable from August 2005 to September 2026. As at 30 June 2005 outstanding amount is 730,871,008 euro, of which 709,124,020 euro are disclosed as Non-current borrowings and 21,746,988 euro as Current borrowings. These loans are guaranteed by mortgages of investment properties held by these affiliated companies and are nonrecourse;
• Bank loans of 289,241,609 euro, obtained by affiliated companies of Sonae Sierra from several financial institutions, bearing interest at market rates, repayable from September 2005 to March 2017. As at 30 June 2005, the outstanding amount is 204,494,299 euro, of which 183,494,394 euro are disclosed as Non-current borrowings and 20,999,905 euro as Current borrowings. These loans are guaranteed by mortgages of investment properties held by these affiliated companies and by a pledge of shares held in those affiliated companies, and are non-recourse;
• Bank loans of 32,154,000 euro, obtained by an affiliated company of Sonae SGPS from a syndicate of banks in 2001. The loan bears interest at market rates and is repayable in twenty quarterly instalments with a two year grace period. As at 30 June 2005 the amount disclosed in the caption Non-current borrowings amounted to 13,839,616 euro and in the caption Current borrowings to 6,150,940 euro;
• Bonds MODELO CONTINENTE / 2003 amounting to 82,000,000 euro, repayable in full after 8 years, in one instalment, on 15 October 2011. Interest rate equal to Euribor 6 months plus 0.75%;
• Bonds MODELO CONTINENTE / 2004 amounting to 100,000,000 euro, repayable after 5 years, in one instalment, on 18 March 2009. Interest rate equal to Euribor 6 months plus 1.15%;
• Bonds SONAE / 97 amounting to 149,639,369 euro repayable, at par value, in two equal instalments on the 18th and 20th coupons. Interest rate equal to Lisbor2 plus 0.17% from the 1st to the 13th coupon, plus 1.17% in the 14th coupon and plus 1.22% from the 15th to the 20th coupons;
• Bonds SONAE / 05 amounting to 100,000,000 euro, repayable after 8 years, in one instalment, on 31 March 2013. Interest rate equal to Euribor 6 months plus 0.875%, with interest paid half-yearly;
• Bonds SONAE IMOBILIÁRIA / 99 amounting to 50,000,000 euro repayable in full in December 2006. Earning interest at a rate equal to Euribor 6 months plus 0.5% from the 1st to the 10th coupon and Euribor 6 months plus 0.55% from the 11th to the 14th coupon. This loan had a put option exercisable on the 10th coupon by its bondholders. The bondholders exercised this put option in December 2004 and therefore a reimbursement of 20,000,000 euro was made;
• Bonds TAFISA / 98 amounting to 23,138,966 euro repaid in May 2005;
• Bonds SONAE INDÚSTRIA / 2004 amounting to 80,000,000 euro, repayable after 5 years, in one instalment, on 15 October 2009, and earning interest at a rate equal to Euribor 6 months plus 0.875%;
• Bonds SONAE INDÚSTRIA / 2005 amounting to 55,000,000 euro, repayable after 8 years, in one instalment, on 31 March 2013, and earning interest at a rate equal to Euribor 6 months plus 0.875%;
• Bonds SONAE INDÚSTRIA / 2005 amounting to 100,000,000 euro, repayable after 3 years, in one instalment, on 27 April 2008, and earning interest at a rate equal to Euribor 6 months plus 1.000%;
• Bonds SONAE INDÚSTRIA / 2005 amounting to 150,000,000 euro, repayable after 5 years, in one instalment, on 27 April 2010, and earning interest at a rate equal to Euribor 6 months plus 1.100%;
• Bonds SONAECOM/ 2005 amounting to 150,000,000 euro, repayable after 8 years, in one instalment, in June 2013, and earning interest at a rate equal to Euribor 6 months plus 0.875%;

2 Subsequently changed to Euribor.

• Sonae SGPS launched on 23 August 2004 a commercial paper programme up to 350,000,000 euro, with 10 years duration. As at June 2005, amounts outstanding totalled 210,000,000 euro;
• The caption Other non-current loans includes a loan granted by a third party, bearing interest at market rates, repayable in 2006. For disclosure purposes, this loan is offset against a risk free treasury application amounting to 27,500,000 euro, with the same maturity. The net amount is 157,499,755 euro. Additionally, the book value of the loan includes 5,220,069 euro (4.888.385 euro as at 31 December 2004) of fair value hedges in the form of interest rate swaps (Note 20), net of deferred interest and up-front fees.

20. DERIVATIVES

Exchange rate derivatives

The Group uses exchange rate derivatives, essentially to hedge future cash flows.

The Group contracted several exchange rate forwards and options in order to manage its exchange rate exposure.

As at 30 June 2005, the fair value of exchange rate derivatives, calculated based on present market value of equivalent financial instruments, is of 426,786 euro (307,485 euro as at 31 December 2004), and is shown in Current investments. As at 31 December 2004 a liability of 573 euro has also been disclosed, which does not exist as at 30 June 2005.

Gains and losses for the six month period arising from changes in the fair value of instruments that do not qualify for hedging accounting treatment, amounting to 163,034 euro, were recorded directly in the income statement in the caption Net financial expenses.

Additionally, the Group sold currency call options in order to hedge the fair value of currency put options embedded in non-current loans obtained. The fair value of these options, which is identical to the fair value of the hedged options, amounts to 4,722,949 euro (5,494,113 euro as at 31 December 2004).

Interest rate derivatives

As at 30 June 2005, derivatives used by the Group essentially refer to "swaps" and interest rate options ("cash flow hedges"). These were negotiated to hedge the interest rate risk of loans amounting to 765,692,746 euro (984,264,932 euro as at 31 December 2004). The fair value of these derivatives amounts to -10,022,498 euro (-8,444,082 euro as at 31 December 2004).

These interest rate derivatives are valued at fair value, at the balance sheet date, based on valuations performed by the Group using specific software and on external valuations when this software does not deal with specific instruments. The fair value of swaps was calculated, as at the balance sheet date, based on the discounted cash flow of the difference between the fixed interest rate of the fixed leg and the indexed variable interest rate inherent to the variable leg. The calculation of the fair value of options was based on the "Black-Scholes" model and similar models.

The hedging principles used by the Group when negotiating these financial derivatives are as follows:

• Perfect "matching" between cash in-flows and out-flows, i.e., rate setting dates of bank loans coincide with those of the interest rate derivative;
• Perfect "matching" of indices used: the index of the hedging derivative and that of the related loan are the same;
• In a scenario of an extreme increase in interest rates, the maximum financing cost is limited.

Counterparts issuing derivative financial instruments are selected based on financial strength and credit risk established by internationally recognised rating agencies. These counterparts are nationally and internationally recognised first class financial institutions.

Additionally, the Group negotiated interest rate derivatives (interest rate swaps) with the objective of hedging the fair value of specific fixed interest rate loans. The fair value of these derivatives was recorded in the income statement. The portion of the hedge which is effective has adjusted related loans, which are measured at amortised cost. The fair value of these derivatives amounts to 6,606,597 euro (8,823,291 euro as at 31 December 2004).

Interest rate and exchange rate derivatives

As at 30 June 2005 the Group maintained derivatives to manage its interest rate risk and foreign exchange rate risk exposure. The purpose of such derivates is to reduce the volatility, which is caused by fluctuation in exchange rates, of the hedged asset or liability and of related interest. These derivates incorporate swapping the interest rate of the hedged instrument with the market interest rate for assets or liabilities denominated in the local currency of the affiliated company which is the counterpart to such hedged instruments.

In order to comply with hedging objectives main variables (notional, payment dates and interest periods) of the derivate instrument match the ones of the hedged instrument.

These hedging instruments are measured at fair value using the same valuation criteria as for other derivates used by the Group.

As at 30 June 2005 the fair value of these hedging instruments was -26,484,015 euro, of which -26,125,091 euro are hedging the fair value of the hedged instrument and the remainder are hedging related cash flows.

	30.06.2005	31.12.2004
AssetsLiabilities	58,306,355(84,790,369)	72,700,757(85,787,551)
	(26,484,014)	(13,086,794)

Fair value of derivatives

The fair value of derivatives is detailed as follows:

	Investments(Note 12)		Borrowings(Note 19)
	30.06.2005	31.12.2004	30.06.2005	31.12.2004
Derivatives not qualified as hedging	162,461	-	-	573
Hedging derivatives
Exchange rate	4,987,273	5,801,597	4,722,949	5,494,113
Interest rate	6,606,597	8,823,290	10,022,498	8,444,082
Interest and exchange rate	58,306,355	72,700,757	84,790,369	85,787,551
Other derivatives	-	-	2,283,650	2,444,669
	70,062,686	87,325,644	101,819,466	102,170,988

21. OTHER NON-CURRENT LIABILITIES

As at 30 June 2005 and 31 December 2004 Other non-current liabilities were made up as follows:

	30.06.2005	31.12.2004
Shareholder loans	95,984,208	106,324,498
Investments grants	78,910,288	84,845,088
Fixed assets suppliers	28,241,167	38,657,095
Other non-current liabilities	520,822,445	652,750,726
Taxes and contributions payable	20,008,496	14,056,100
Retirement benefits (Note 22)	21,948,932	23,758,519
Share based payments (Note 23)	16,979,226	20,347,853
	782,894,762	940,739,879

The caption Other non-current liabilities includes 452,436,035 euro (593,463,454 euro as at 31 December 2004) which correspond to the present value of the consideration paid by Santander Group for Modelo Continente, SGPS, SA shares, currently amounting to 22.42% of the share capital, under the terms of the call option agreement.

On 9 May 2002, the company sold shares representing 19.95% of the share capital of its affiliated company Modelo Continente, SGPS, S.A. to Banco Santander Central Hispano and related companies (the Santander Group). This sale was part of agreements entered into with the Santander Group on 8 February 2002 to launch a tender offer for the whole of the share capital of that affiliated company not yet owned by Sonae, and the sales price per share was the offer price (1.85 euro).

At the same time, agreements with the Santander Group were signed, giving Sonae an option to repurchase the shares mentioned in the previous paragraph (open to be exercised during 4 years by an affiliated company appointed on 16 December 2002 for that purpose) and the Santander Group an option to sell them (open between the end of the 3rd year up to the end of the 4th year to be exercised by an affiliated company appointed on 16 December 2002 for that purpose). The share prices for these options are specified in the agreements and are indexed to the sales price and to financial variables.

In January 2003 the Santander Group subscribed shares representing 5.7% of the capital increase of Modelo Continente, SGPS, SA, under the same contractual arrangement. Consequently, the Santander Group changed its shareholding to 18.65% of the share capital of this company.

On 16 November 2004, the agreements mentioned above were renegotiated including a portion of the Modelo Continente, SGPS, S.A. shares acquired during the year. Consequently, as at 31 December 2004, the Santander Group held 30% of the share capital of that affiliated company.

The terms of the renegotiation maintained the share call option held by Sonae over the shares owned by the Santander Group which can be exercised at any moment, as well as the put option held by the Santander Group which can only be exercised after 30 November 2008. The share prices for these options are specified in the agreements and are indexed to the sales price and to financial variables.

On 19 May 2005, in an over the counter transaction, Sonae, SGPS, SA acquired 83,375,000 shares (7.58% of the share capital) of its affiliate Modelo Continente, SGPS, SA, for 150.4 million euro, under the terms of the Call Option contract signed on 16 November 2004.

Under the contract terms, generally accepted accounting principles establish that those shares must be maintained in Sonae, SGPS, S.A.´s assets, because of the existence of the share repurchase option which determines that Sonae maintains control over those shares, in spite of all rights and obligations having been legally transferred to the acquirer (the Santander Group). To exercise this repurchase option, one affiliated company included in the consolidation was appointed. A liability has been recognised corresponding to the amount payable to the Santander Group if and when the share repurchase option is actioned.

Other non-current liabilities include also 32,609,091 euro (26,865,801 euro as at 31 December 2004) of contingent liabilities arising from legal and tax claims still open in an affiliated company in Brazil. These contingent liabilities are guaranteed by legal deposits disclosed in Non-current trade accounts receivable and other debtors (Note 13).

22. RETIREMENT BENEFIT PLANS

Some Group companies provide defined benefit plans for its employees, under which they are entitled to complementary retirement pensions.

These complementary retirement pensions are calculated based on the employee's years of service and on an increased percentage of annual salaries.

The group company Glunz AG has an unfunded defined benefit plan. Corresponding obligations are calculated in accordance with IAS 19 based on an actuarial valuation made by an independent entity. The company has recorded a 20,432,590 euro provision, under the caption Non-current Provisions, to cover the present value of the obligations calculated according to the actuarial valuation as at 31 December 2004.

The group company Tafibra South Africa Ltd has a funded defined benefit plan, managed by an external entity. Corresponding obligations are calculated in accordance with IAS 19 based on an actuarial valuation made by an independent entity. Based on the actuarial valuation made on 31 December 2004, these obligations amount to 29,033,000 rands, 3,617,512 euros, the fund has a market value of 25,080,000 rands, 3,124,968 euro, and a provision, included under the caption Non-current Provisions, has been set up in the amount of 3,953,000 rands, 492,544 euro.

Some group companies have a funded defined benefit plan, managed by an external entity. Corresponding obligations are calculated in accordance with IAS 19 based on an actuarial valuation made by an independent entity. This plan applies to all employees recruited until 31 December 1994 that, after retirement and for the rest of their lives, will receive a monthly pension corresponding to 20% of their salary at retirement date. Obligations for past service as at 31 March 2005, according to an actuarial valuation reported to 31 December 2004, amount to 1,934,556 euro, guaranteed by the fund and by a provision recorded under the caption Non-current provisions, of 1,187,196 euro and 1,023,798 euro, respectively.

	30.06.2005	31.12.2004
Present value of obligations	25,984,658	24,669,277
Fair value of plan assets	4,312,164	1,187,196
Excess provision	276,438	276,438
Non-current liabilities	21,948,932	23,758,519

23. SHARE-BASED PAYMENTS

In 2005 and in previous years, the Sonae Group granted deferred performance bonuses to its directors and eligible employees. These are either based on shares to be acquired at nil cost, three years after they were attributed to the employee, or based on share options with the exercise price equal to the share price at the grant date, to be exercised three years later. In both cases, the acquisition can be exercised during the period commencing on the third anniversary of the grant date and the end of that year. The company has the choice to settle in cash instead of shares. The option can only be exercised if the employee still works for the Group on the vesting date.

Liabilities arising from deferred performance bonuses are valued in accordance with Note 2.16.. As at 30 June 2005 and 31 December 2004, the market value of total liabilities arising from share-based payments, which have not yet vested, may be summarised as follows:

	Year of	Vesting	Number of	Fair value
	grant	year	participants	30.06.2005	31.12.2004
Shares
	2002	2005	-	-	6,701,663
	2003	2006	295	10,734,614	10,564,485
	2004	2007	464	7,894,074	8,187,276
	2005	2008	485	7,094,199
				25,722,887	25,453,424
Options
	2001	2004	59	-	654,041
	2002	2005	118	3,485,172	4,830,099
	2003	2006		-	-
	2004	2007		-	-
	2005	2008		-	-
				3,485,172	5,484,140
Total				29,208,059	30,937,564

As at 30 June 2005 and 31 December 2004 the financial statements include the following amounts corresponding to the period elapsed between the date of granting and those dates for each deferred bonus plan, which has not yet vested:

	30.06.2005	31.12.2004
Personnel costs	5,024,755	10,033,207
Retained earnings	11,954,471	10,314,646
	16,979,226	20,347,853
Other current liabilities	-	-
Other non-current liabilities	16,979,226	20,347,853
	16,979,226	20,347,853

The movement in the number of options open for the six month period is as follows:

	30.06.2005
Opening balance	3,086,290
Granted in the period	-
Expired in the period	(66,486)
Expired and not exercised in the period	(402,040)
Closing balance	2,617,764

Options are only granted on Sonaecom shares, and may be summarised as follows:

Vesting date	2004	2005	2006	2007	2008	Total
Exercisable until:	31.03.05	31.03.06	31.03.07	31.03.08	31.03.09
Exercise price (defined at date of grant)	3.014 €	1.694 €	-	-	-
Total liability	561,344	3,485,172	-	-	-	4,046,516
Recorded liability	561,344	2,904,310	-	-	-	3,465,654
Number of options open	457,576	2,160,188	-	-	-	2,617,764
Number of options exercised in the six month period	(66,486 )	-	-	-	-	(66,486 )
Number of options expired but not exercised in the sixmonth period	(208,443 )	(127,657 )	-	-	-	(336,100 )
Average market-price of options exercised in the sixmonth period	3.803 €

During the six month period, the Group recorded Personnel costs arising from Sonaecom options amounting to 2,408,527 euro (1,142,743 euro for the same period in 2004).

24. OTHER CURRENT LIABILITIES

As at 30 June 2005 and 31 December 2004, Other current liabilities were made up as follows:

	30.06.2005	31.12.2004
Trade creditors	903,464,413	1,098,881,938
Shareholders	7,302,935	12,256,999
Fixed asset suppliers	67,031,083	122,228,489
Other accounts payable	116,604,294	177,734,675
Factoring	46,052,673	33,184,749
Taxes and contributions payable	94,828,729	100,032,108
Holiday Pay and Bonuses	114,718,577	116,463,773
Accrued expenses	236,053,109	196,895,534
Deferred income	47,682,942	52,097,007
	1,633,738,755	1,909,775,272

25. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

Movements in Provisions and impairment losses over the three month period ended 30 June 2005 are as follows:

	Opening			Closing
	balance	Increase	Decrease	balance
Accumulated impairment losses on investments (Note 12)	53,682,219	-	(296,908)	53,385,311
Accumulated impairment losses on other non-current assets (Note 13)	22,061,192	248,611	(606,303)	21,703,500
Accumulated impairment losses on current assets (Note 14)	140,756,914	10,711,247	(8,046,110)	143,422,051
Provisions	71,127,005	21,197,105	(9,070,367)	83,253,741
	287,627,330	32,156,963	(18,019,688)	301,764,605

Impairment losses are deducted from the book value of the corresponding asset.

26. CONTINGENT ASSETS AND LIABILITIES

	30.06.2005	31.12.2004
Guarantees given:
on tax claims	58,137,956	43,461,384
on judicial claims	1,353,449	586,599
others	136,926,135	142,830,019

27. RELATED PARTIES

Balances as at 30 June 2005 and 31 December 2004 and transactions during the three month periods ended 30 June 2005 and 2004 with related parties are detailed as follows:

		Sales and services rendered	Purchases and services obtained		Interest income			Interest expenses
Transactions	30.06.2005	30.06.2004	30.06.2005	30.06.2004	30.06.2005	30.06.2004	30.06.2005	30.06.2004
Parent company and group companies excluded from consolidationJointly controlled companiesAssociated companies	6,386,1167,185,7521,208,679	84,22510,567,549144,744	6,397,594513,4333,793,106	4,890,2101,258,3063,055,473	406,10268,39131,055	48,2331,628,794580,627	25,146--	14,702283,900-
	14,780,547	10,796,518	10,704,133	9,203,989	505,548	2,257,654	25,146	298,602
						Loans
		Accounts receivable	Accounts payable		Obtained			Granted
Balance	30.06.2005	31.12.2004	30.06.2005	31.12.2004	30.06.2005	31.12.2004	30.06.2005	31.12.2004
Parent company and group companies excluded from consolidationJointly controlled companiesAssociated companiesOther partners in Group companies	9,507,8221,386,463386,693-	22,661,2812,444,300838,034-	197,2092,365,35258,850-	148,8013,441,742387,313-	1,797,000201,500,00083,129,449	1,750,000--110,983,248	221,8014,523,3745,370,043-	14,132,8997,141,8328,416,67042,848,656
	11,280,978	25,943,615	2,621,411	3,977,856	86,426,469	112,733,248	10,115,218	72,540,057

28. INCOME TAX

Income tax for the six month period ended 30 June 2005 and 2004 is made up as follows:

	2nd Quarter 2005	1st Half 2005	2nd Quarter 2004	1st Half 2004
Current tax	9,766,325	22,035,680	9,464,537	17,206,761
Deferred tax	28,697,113	29,167,859	15,727,548	26,705,312
	38,463,438	51,203,539	25,192,085	43,912,073

29. EARNINGS PER SHARE

Earnings per share for the period, excluding the effect of discontinuing operations, were calculated taking into consideration the following amounts:

	2nd Quarter 2005	1st Half 2005	2nd Quarter 2004	1st Half 2004
Net profit
Net profit taken into consideration to calculate basic earnings per share (Netprofit for the period attributable to equity holders of Sonae)	44,176,786	164,656,786	45,937,643	48,622,026
Effect of dilutive potential sharesInterest related to convertible bonds (net of tax)	-	-	-	-
Net profit taken into consideration to calculate diluted earnings per share:	44,176,786	164,656,786	45,937,643	48,622,026
Number of shares
Weighted average number of shares used to calculated basic earnings pershare	1,865,938,543	1,865,880,261	1,865,821,979	1,865,821,979
Effect of dilutive potential ordinary sharesfrom convertible bonds	-	-	-	-
Weighted average number of shares used to calculated diluted earnings pershare	1,865,938,543	1,865,880,261	1,865,821,979	1,865,821,979

There are no discontinuing operations, therefore the respective basic earnings per share was not calculated. There are no convertible instruments included in Sonae, SGPS shares thereby, hence is no dilutive effect.

30. DIVIDENDS

In the Annual General Meeting held on 6 April 2005, payment of a gross dividend of 0.02 euro per share (0.015 euro per share in 2003) was approved. This was paid on 6 May 2005, the total amount paid being 37,316,439.58 euro (27,987,329.69 euro in 2003).

31. SEGMENT INFORMATION

In 2005 and 2004, the following were identified as business segments:

• Wood Based Panels
• Retailing
• Shopping Centres
• Telecommunications
• Others

The geographic segments identified in 2005 and 2004 are listed as follows:

• Portugal
• Spain
• France
• United Kingdom
• Germany
• Other European countries
• Brazil
• Canada
• South Africa

The contribution of the business segments to the income statement for the six month periods ended on 30 June 2005 and 2004 can be detailed as follows:

							euro
30-Jun-05	Wood Based		Shopping			Consolidation
	Panels	Retailing	Centres	Telecommunications	Others	adjustments	Consolidated
Operational income
Sales	730,884,355	1,793,846,108	-	40,305,886	77,812,338	(1)	2,642,848,686
Services rendered	1,414,877	3,638,218	123,242,968	353,740,182	80,436,900	(1)	562,473,144
Other operational income	4,581,698	145,888,585	73,187,508	14,089,361	104,936,241	(9,718,372)	332,965,021
	736,880,930	1,943,372,911	196,430,476	408,135,429	263,185,479	(9,718,374)	3,538,286,852
Inter-segment income	18,353,469	33,605,893	3,546,466	5,668,451	9,747,719	(70,921,998)	0
	755,234,399	1,976,978,804	199,976,942	413,803,880	272,933,198	(80,640,372)	3,538,286,852
Operational cash-flow (EBITDA)	103,884,087	127,097,784	118,565,770	87,835,736	6,614,671	3,462,636	447,460,684
Operational profit/(loss)	51,754,003	75,697,101	111,005,308	20,703,072	3,093,354	5,664,825	267,917,663
Net profit/(loss)	20,026,357	45,877,982	72,611,770	13,155,714	73,146,211	3,454,373	228,272,406
- attributable to Equity holders of Sonae							164,656,786
- attributable to Minority interests							63,615,620
							euro
30-Jun-04	Wood Based		Shopping			Consolidation
	Panels	Retailing	Centres	Telecommunications	Others	adjustments	Consolidated
Operational income
Sales	736,990,631	1,597,761,707	-	47,874,300	87,550,312	-	2,470,176,950
Services rendered	2,601,488	3,299,003	107,873,614	366,857,392	83,982,460	2	564,613,959
Other operational income	(878,414)	102,901,502	58,531,724	7,868,349	75,128,387	2	243,551,550
	738,713,705	1,703,962,212	166,405,338	422,600,041	246,661,159	4	3,278,342,459
Inter-segment income	34,706,208	32,304,600	11,944,066	6,129,748	(973,789)	(84,110,833)	0
	773,419,913	1,736,266,812	178,349,404	428,729,789	245,687,370	(84,110,829)	3,278,342,459
Operational cash-flow (EBITDA)	105,973,057	112,061,513	92,820,031	101,346,893	15,549,778	(17,256,261)	410,495,011
Operational profit/(loss)	53,794,816	69,775,794	84,997,925	29,350,136	14,353,851	(15,926,813)	236,345,709
Net profit/(loss)	13,923,119	33,305,072	45,363,863	13,683,228	(7,988,727)	2,851,874	101,138,428
- attributable to Equity holders of Sonae							48,622,026
- attributable to Minroity interests							52,516,402

32. SUBSEQUENT EVENTS

The main events occurred after 30 June 2005 which, due to their relevance, are detailed as follows:

• Modelo Continente, SGPS, SA issued two bond loans, of 150,000,000 euro on 2 August 2005, repayable after 7 years, and of 265,000,000 euro on 3 August 2005, repayable after 5 years, both without guarantees. The proceeds of theses loans where used to repay the syndicated loan of 340,000,000 euro (Note 19);
• The decision to spin-off Sonae Indústria was announced on 10 March 2005. The Board of Directors announced on 23 September 2005 that, together with the Boards of Directors of the other companies involved (Sonae Indústria and Sonae 3P) it has approved the demerger-merger and merger project and expects this to be completed by the end of 2005. Under the terms of the project, shares held in Sonae Indústria corresponding to 90.36% of Sonae Indústria's share capital will be demerged from Sonae and merged into Sonae 3P. Sonae Indústria will then be merged into Sonae 3P which will be renamed Sonae Indústria, SGPS, SA. The new Sonae Indústria will have a share capital of 700 million euro corresponding to 140 million shares each with a nominal value of 5 euro. Admission to Euronext Lisbon will be requested for these shares. In the demerger-merger, one share in Sonae 3P will be granted for every 14.75 shares in Sonae, SGPS, SA, and in the merger one share in Sonae 3P will be granted for each share in Sonae Indústria.

33. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Board of Directors and authorized for issue on 26 September 2005.

34. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Group adopted International Financial Reporting Standards ("IFRS") in 2005, having taken into consideration "IFRS 1 – First-Time Adoption of International Financial Reporting Standards". In terms of presentation of the financial statements, the transition date was set at 1 January 2004.

The effect on the balance sheets as at 1 January 2004 and 31 December 2004 of converting financial statements prepared under Portuguese GAAP ("POC") to financial statements re-expressed under International Financial Reporting Standards ("IFRS"), applicable to financial years beginning on 1 January 2005, can be detailed as follows:

		01.01.2004			31.12.2004
		Transition			Transition
		adjustments			adjustments
	POC	to IFRS	IFRS	POC	to IFRS	IFRS
NON CURRENT ASSETS
Tangible and intangible assets	4,529,088,468	(1,097,920,835)	3,431,167,633	4,700,852,146	(1,248,172,096)	3,452,680,051
Investment properties	-	1,798,066,946	1,798,066,946	-	2,204,846,415	2,204,846,415
Goodwill	-	346,346,597	346,346,597	-	453,242,056	453,242,056
Investments	508,785,437	(238,129,851)	270,655,585	347,102,653	(240,867,301)	106,235,352
Deferred Tax Assets	-	237,832,317	237,832,317	-	216,951,425	216,951,425
Other Non-Current Assets	59,521,228	71,466,338	130,987,566	89,019,748	22,477,519	111,497,267
Total Non-Current Assets	5,097,395,133	1,117,661,512	6,215,056,645	5,136,974,547	1,408,478,018	6,545,452,566
CURRENT ASSETS
Stocks	680,092,444	(1,174,104)	678,918,340	672,703,272	1,155,679	673,858,951
Trade Debtors and Other Current Assets	1,245,560,174	(461,815,067)	783,745,107	1,222,534,169	(420,027,137)	802,507,030
Investments	379,979,627	(130,544,552)	249,435,074	182,274,470	(92,715,559)	89,558,911
Cash and Cash Equivalents	271,654,983	216,787,242	488,442,226	340,808,878	145,404,564	486,213,442
Total Current Assets	2,577,287,228	(376,746,481)	2,200,540,747	2,418,320,789	(366,182,454)	2,052,138,334
TOTAL ASSETS	7,674,682,361	740,915,031	8,415,597,392	7,555,295,336	1,042,295,564	8,597,590,900
EQUITY
Share Capital	2,000,000,000	0	2,000,000,000	2,000,000,000	0	2,000,000,000
Own Shares	(144,537,597)	0	(144,537,597)	(144,537,597)	0	(144,537,597)
Reserves and Retained Earnings	(1,272,970,680)	218,842,489	(1,054,128,191)	(1,365,429,064)	331,345,141	(1,034,084,068)
Profit/(Loss) for the Period Attributable to the
Equity Holders of Sonae				192,060,205	91,460,805	283,521,010
Equity Attributable to the Equity Holders of Sonae	582,491,722	218,842,489	801,334,212	682,093,544	422,805,946	1,104,899,345
Minority Interests	749,664,275	171,461,470	921,125,745	527,771,715	257,743,576	785,515,291
TOTAL EQUITY	1,332,155,997	390,303,959	1,722,459,957	1,209,865,259	680,549,523	1,890,414,636
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings	2,074,762,849	322,118,429	2,396,881,277	2,220,386,496	227,395,776	2,447,782,272
Other Non-Current Liabilities	789,279,202	87,895,506	877,174,708	827,530,423	113,209,456	940,739,879
Deferred Tax Liabilities	-	328,125,407	328,125,407	-	388,090,849	388,090,849
Provisions	-	53,696,014	53,696,014	-	57,189,153	57,189,153
Total Non-Current Liabilities	2,864,042,051	791,835,356	3,655,877,407	3,047,916,919	785,885,234	3,833,802,153
CURRENT LIABILITIES
Borrowings	1,151,066,667	106,777,505	1,257,844,172	805,324,564	144,336,423	949,660,987
Trade Creditors and Other Current Liabilities	2,178,391,620	(416,548,674)	1,761,842,946	2,344,147,178	(434,372,051)	1,909,775,272
Provisions	149,026,026	(131,453,115)	17,572,911	148,041,416	(134,103,565)	13,937,852
Total Current Liabilities	3,478,484,313	(441,224,284)	3,037,260,029	3,297,513,158	(424,139,193)	2,873,374,111
TOTAL EQUITY AND LIABILITIES	7,674,682,361	740,915,031	8,415,597,392	7,555,295,336	1,042,295,564	8,597,590,900

As at 1 January 2004 and 31 December 2004, main impacts of the transition to IFRS in equity can be detailed as follows:

	Transition adjustmentsto IFRS
	01.01.2004	31.12.2004
Adjustments to Portuguese GAAP financial statements
Investment Properties	327,922,054	419,434,124
Goodwill	357,968,891	452,690,551
Tangible and Intangible Assets	(252,550,020)	(239,764,253)
Deferrals and Accruals	(134,593,148)	(106,183,565)
Proportionate Consolidation	168,658,896	214,233,933
Inclusion of previously excluded companies	(7,752,415)	(4,213,889)
Derivative instruments	(51,343,220)	(42,150,698)
Others	(18,007,079)	(13,496,680)
Total adjustments from conversion to IFRS	390,303,959	680,549,523

In POC, investment properties were shown as tangible assets and were measured at acquisition or construction cost (01.01.04: 1,313,346,387 euro; 31.12.04: 1,475,670,137 euro). Buildings were depreciated over 50 years and land was not depreciated. In IFRS, investment properties are shown on a separate line on the balance sheet and are measured at fair value based on independent valuations performed every six months (01.01.04: 1,798,165,533 euro; 31.12.04: 2,098,849,495 euro). Changes in fair value are recorded in the profit and loss account and shown on a separate line (31.12.04: 111,451,062 euro). Investment properties under development are maintained at construction cost until the properties are used. At that moment, properties are valued and the difference between fair value and construction cost is recorded in the profit and loss account.

The Sonae Group, in accordance with IFRS, presents goodwill as an asset that is not depreciated but is subject to annual impairment tests. Goodwill resulting from the acquisition of affiliated, jointly controlled and associated companies is allocated to each company, and as such is expressed in their functional currency and translated into the reporting currency of the Group at the closing exchange rate. Exchange rate differences arising from this translation are disclosed as Currency translation reserves.

This accounting treatment differs from that adopted by the Sonae Group since 2001 which consisted of writing off goodwill against reserves. This is a different approach to that recommended by POC as mentioned in previously reported financial statements.

Goodwill arising from acquisitions prior to the date of transition to IFRS (1 January 2004) was maintained at the carrying amount calculated under POC, adjusted for intangible assets that do not meet the criteria of IFRS and subject to impairment tests (01.01.04: 538,678,125 euro; 31.12.04: 628,760,403 euro). The impact of these adjustments is shown in retained earnings, as specified in IFRS 1. In the case of foreign affiliated companies, goodwill was reexpressed in the functional currency of each company, retrospectively. Exchange differences arising from the translation process are shown in Retained earnings (IFRS 1) (01.01.04: -206,029,653 euro; 31.12.04: -160,729,564 euro).

Tangible and intangible assets are valued at their acquisition cost, less accumulated depreciation and impairment losses. On the transition date, all tangible and intangible assets that did not meet IFRS requirements were written off against retained earnings (01.01.04: 146,566,180 euro; 31.12.04: 122,706,443 euro). Any such tangible and intangible assets recorded under POC after that date were written-back to expenses in the profit and loss account (31.12.04: 6,378,829 euro). Useful lives, previously used on consolidation under POC, were reviewed to take in account the difference in the nature of assets used in each business (with the following impact on Equity, 01.01.04: -125,007,688 euro; 31.12.04: -134,006,998 euro).

Deferred costs that did not meet the requirements of IFRS were written back to Retained earnings (with the following impact on Equity, 01.01.04: -134,593,148 euro; 31.12.04: -106,183,565 euro), thus no longer being treated as deferred costs during the deferral period.

Interests in jointly controlled companies were consolidated for the first time using the proportionate method, as from the date on which joint control is acquired. In accordance with this method, the Group's share of assets, liabilities, income and expenses has been included in each accounting line in the consolidated financial statements. The excess of the acquisition cost over the fair value of identifiable assets and liabilities of jointly controlled companies, is recognised as goodwill (01.01.04: 11,420,982 euro; 31.12.04: 20,890,568 euro). The Group's share of transactions, balances and dividends distributed between these companies and Group companies is eliminated. The accounting classification of interests in jointly controlled companies is based on shareholders agreements that define the terms of joint control.

According to IFRS all companies must be included on consolidation, therefore the adjustment inclusion of previously excluded companies reflects the inclusion of companies that were not included under POC, mostly because they were immaterial or engaged in dissimilar activities.

Most derivatives used by the Sonae Group are cash flow hedges associated with loans. Current Investments and Current Borrowings include derivatives, mostly interest rate and currency swaps (Note 20).

Additionally, the effect of the conversion to IFRS on the balance sheet as at 30 June 2004 can be detailed as follows:

		30.06.2004
		Transition
		adjustments
	POC	to IFRS	IFRS
NON CURRENT ASSETS
Tangible and intangible assets	4,554,262,036	(1,176,993,663)	3,377,268,373
Investment properties	-	1,918,285,398	1,918,285,398
Goodwill	-	349,114,340	349,114,340
Investments	519,923,317	(240,314,198)	279,609,119
Deferred Tax Assets	-	228,693,655	228,693,655
Other Non-Current Assets	71,599,758	56,105,186	127,704,944
Total Non-Current Assets	5,145,785,111	1,134,890,718	6,280,675,829
CURRENT ASSETS
Stocks	652,995,300	(2,024,079)	650,971,221
Trade Debtors and Other Current Assets	1,285,484,535	(429,212,030)	856,272,505
Investments	213,943,427	(113,293,969)	100,649,458
Cash and Cash Equivalents	172,778,069	180,752,839	353,530,908
Total Current Assets	2,325,201,331	(363,777,239)	1,961,424,092
TOTAL ASSETS	7,470,986,442	771,113,479	8,242,099,921
EQUITYShare Capital	2,000,000,000	-	2,000,000,000
		-
Own Shares	(144,537,597)		(144,537,597)
Reserves and Retained Earnings	(1,316,754,445)	199,575,361	(1,117,179,084)
Profit/(Loss) for the Period Attributable to the
Equity Holders of Sonae	23,956,198	24,665,827	48,622,025
Equity Attributable to the Equity Holders of Sonae	562,664,156	224,241,187	786,905,344
Minority Interests	718,463,677	227,891,224	946,354,901
TOTAL EQUITY	1,281,127,833	452,132,412	1,733,260,245
LIABILITIESNON-CURRENT LIABILITIES
Borrowings	2,153,714,516	235,860,441	2,389,574,957
Other Non-Current Liabilities	793,731,307	106,817,053	900,548,360
Deferred Tax Liabilities	-	342,356,960	342,356,960
Total Non-Current Liabilities	2,947,445,823	685,034,454	3,632,480,277
CURRENT LIABILITIES
Borrowings	1,051,141,596	124,467,672	1,175,609,268
Trade Creditors and Other Current Liabilities	2,040,674,364	(358,837,283)	1,681,837,081
Provisions	150,596,826	(131,683,776)	18,913,050
Total Current Liabilities	3,242,412,786	(366,053,387)	2,876,359,399
TOTAL EQUITY AND LIABILITIES	7,470,986,442	771,113,479	8,242,099,921

As at 30 June 2004, main impacts of the transition to IFRS in equity can be detailed as follows:

Adjustments to Portuguese GAAP financial statements
Investment Properties	372,410,752
Goodwill	349,135,279
Tangible and Intangible Assets	(245,163,861)
Deferrals and Accruals	(120,943,148)
Proportionate Consolidation	152,195,117
Inclusion of previously excluded companies	(21,003,611)
Derivative instruments	(48,017,055)
Others	13,518,939
Total adjustments from conversion to IFRS	452,132,412

The nature of these adjustments is the same as the adjustments described for the transition date (1 January 2004) and 31 December 2004.

Main impacts on the income statements for the year ended 31 December 2004 and for the six month period ended 30 June 2004 can be detailed as follows:

		31.12.2004			30.06.2004
		Transition			Transition
		Adjustments			Adjustments
	POC	to IFRS	IFRS	POC	to IFRS	IFRS
Operational Income
Sales	5,398,949,241	(84,742,122)	5,314,207,119	2,511,688,536	(41,511,586)	2,470,176,950
Services Rendered	1,235,043,902	(84,960,457)	1,150,083,445	596,639,458	(32,025,499)	564,613,959
Value Created on Investment Properties	-	111,451,062	111,451,062	-	45,938,281	45,938,281
Other Operational Income	344,345,577	100,313,398	444,658,975	147,281,451	50,331,818	197,613,269
Total Operational Income	6,978,338,720	42,061,881	7,020,400,601	3,255,609,445	22,733,014	3,278,342,459
Operational Expenses
Cost of Goods Sold and Materials Consumed	(3,658,222,905)	14,144,201	(3,644,078,704)	(1,670,892,525)	8,064,975	(1,662,827,550)
Changes in Stock of Finished Goods and Work in Progress	(8,851,856)	660,199	(8,191,657)	(17,540,195)	(965,764)	(18,505,959)
External Supplies and Services	(1,646,506,633)	175,505,975	(1,471,000,658)	(790,216,239)	79,202,124	(711,014,115)
Staff Costs	(826,481,369)	7,809,106	(818,672,263)	(414,769,486)	6,205,619	(408,563,867)
Depreciation and Amortisation	(382,592,797)	56,004,704	(326,588,093)	(185,259,759)	26,251,392	(159,008,367)
Provisions and Impairment Losses	(40,959,050)	22,623,769	(18,335,281)	(21,780,765)	2,513,243	(19,267,522)
Other Operational Expenses	(59,583,569)	(80,539,909)	(140,123,478)	(30,431,271)	(32,378,099)	(62,809,370)
Total operational Expenses	(6,623,198,179)	196,208,045	(6,426,990,134)	(3,130,890,240)	88,893,490	(3,041,996,750)
Operational Profit/(Loss)	355,140,541	238,269,926	593,410,467	124,719,205	111,626,504	236,345,709
Net Financial Expenses	(167,049,653)	(33,505,902)	(200,555,555)	(85,768,988)	(27,106,110)	(112,875,098)
Share of Results of Associated Undertakings	15,755,063	3,025,200	18,780,263	7,179,348	3,872,726	11,052,074
Investment Income	122,556,665	(9,578,018)	112,978,647	32,505,396	(21,977,580)	10,527,816
Profit/(Loss) before Taxation	326,402,616	198,211,206	524,613,822	78,634,961	66,415,540	145,050,501
Taxation	(56,544,690)	(52,186,547)	(108,731,237)	(23,052,660)	(20,859,413)	(43,912,073)
Profit/(Loss) after Taxation	269,857,926	146,024,659	415,882,585	55,582,301	45,556,127	101,138,428
Profit/(Loss) after Tax from Discontinuing Operations	-	-	-	-	-	-
Profit/(Loss) for the Period	269,857,926	146,024,659	415,882,585	55,582,301	45,556,127	101,138,428
Attributable to:
Equity Holders of Sonae	192,060,205	91,460,805	283,521,010	23,956,199	24,665,827	48,622,026
Minority Interests	77,797,721	54,563,854	132,361,575	31,626,102	20,890,300	52,516,402

Main impacts of transition adjustments to International Financial Reporting Standards, on the net profit for the year ended 31 December 2004 and for the three and six month periods ended 30 June 2004, can be detailed as follows:

	31.12.2004	2nd Quarter 2004	30.06.2004
Investment Properties	94,435,515	29,049,908	37,914,769
Tangible and Intangible Assets	19,183,958	1,485,403	4,031,691
Deferrals and Accruals	28,732,394	4,299,798	12,544,086
Proportionate Consolidation	(13,880,996)	2,596,126	(6,013,636)
Inclusion of previously excluded companies	9,482,645	1,145,948	791,454
Derivative Instruments	(354,887)	659	(6,549,674)
Others	8,426,030	12,564,284	2,837,437
Total adjustments from conversion to IFRS	146,024,659	51,142,126	45,556,127

Main impacts on the statements of cash flows refer to the restatement of payments related with intangible assets, from investment activities, which, under IFRS, are not considered as such and are reclassified to operational expenses. Therefore no adjustments were made.

INDIVIDUAL FINANCIAL STATEMENTS

1ST HALF 2005

BALANCE SHEETS AS AT 30 JUNE 2005 AND AS AT 31 DECEMBER 2004

(Amounts expressed in euro)

		IFRS		LOCAL GAAP
ASSETS	Notas	30.06.2005	31.12.2004	31.12.2004
NON-CURRENT ASSETS:
Tangible and Intangible Assets		459,855	573,614	573,615
Investments	4	3,501,284,581	3,046,689,003	4,249,761,501
Other Non-Current Assets	5	552,985,210	807,328,131	13,897
Total Non-Current Assets		4,054,729,647	3,854,590,748	4,250,349,013
CURRENT ASSETS:
Trade Debtors and Other Current Assets		14,371,947	21,741,073	22,473,892
Cash and Cash Equivalents	6	244,338	415,418	30,732,998
Total Current Assets		14,616,285	22,156,491	53,206,890
TOTAL ASSETS		4,069,345,931	3,876,747,239	4,303,555,903
EQUITY AND LIABILITIES
EQUITY:
Share Capital	7	2,000,000,000	2,000,000,000	2,000,000,000
Own Shares	7	(138,044,363)	(143,984,221)	(143,984,221)
Reserves and Retained Earnings		1,262,243,566	1,131,494,011	1,558,101,937
Profit/(Loss) for the Period		23,890,005	12,724,783	12,151,572
TOTAL EQUITY		3,148,089,208	3,000,234,573	3,426,269,288
LIABILITIES:
NON-CURRENT LIABILITIES:
Borrowings	8	246,914,950	183,691,632	184,014,369
Total Non-Current Liabilities		246,914,950	183,691,632	184,014,369
CURRENT LIABILITIES:
Borrowings	8	259,879,790	402,131,441	401,729,790
Trade Creditors and Other Current Liabilities	9	414,461,983	290,689,593	291,542,456
Total Current Liabilities		674,341,773	692,821,034	693,272,246
TOTAL EQUITY AND LIABILITIES		4,069,345,931	3,876,747,239	4,303,555,903

The accompanying notes are part of these financial statements.

INCOME STATEMENTS BY NATURE

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

		IFRS		IFRS		LOCAL GAAP
	Notes	2ndQuarter 05	30.06.2005Cumulative 1	2ndQuarter 04	30.06.2004Cumulative 1	30.06.2004Cumulative
Operational Income
Services RenderedOther Operational Income		357,148995,037	688,8651,032,148	376,51360,799	708,24592,597	708,24575,925
Total Operational Income		1,352,185	1,721,013	437,312	800,842	784,170
Operational Expenses
External Supplies and Services		(1,358,001)	(1,904,357)	(497,637)	(1,121,225)	(1,121,225)
Staff Costs		(1,134,322)	(2,462,594)	(1,367,660)	(2,742,984)	(3,122,187)
Depreciation and Amortisation		(63,898)	(126,682)	(59,372)	(62,333)	(62,333)
Other Operational Expenses		(60,571)	(240,132)	(49,457)	(744,999)	(1,232,590)
Total operational Expenses		(2,616,792)	(4,733,765)	(1,974,126)	(4,671,541)	(5,538,335)
Operational Profit/(Loss)		(1,264,607)	(3,012,752)	(1,536,814)	(3,870,699)	(4,754,165)
Net Financial Expenses		(881,986)	(142,001)	3,145,966	10,840,788	12,412,343
Investment Income	11	6,138,017	27,044,758	1,017,521	1,017,521	4,468
Profit/(Loss) before Taxation		3,991,424	23,890,005	2,626,674	7,987,611	7,662,646
Taxation		-	-	-	-	-
Profit/(Loss) after Taxation		3,991,424	23,890,005	2,626,674	7,987,611	7,662,646
Profit/(Loss) per share	12
Basic		0.0021	0.0128	0.0014	0.0043	0.0041
Diluted		0.0021	0.0128	0.0014	0.0043	0.0041

The accompanying notes are part of these financial statements.

1 Subject to a limited review by external auditors as required by CMVM (Stock Exchange Regulator) for half year financial statements.

STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

				Reserves and
	Notes	Share	Own	Retained	Net
		Capital	Shares	Earnings	Profit/(Loss)	Total
Balance as at 1 January 2004Appropriation of profit of 2003:		2,000,000,000	(143,984,221)	743,775,282	29,684,383	2,629,475,444
Transfer to legal reservesDividends distributedTransfer retained earnings		---	---	1,484,220-212,833	(1,484,220)(27,987,330)(212,833)	-(27,987,330)-
Purchase/(Sale) of own sharesChanges in reservesProfit/(Loss) for the quarter	13	--	--	-200,827,145	--	-200,827,145
ended 30 June 2004		-	-	-	7,987,611	7,987,611
Balance as at 30 June 2004		2,000,000,000	(143,984,221)	946,299,480	7,987,611	2,810,302,870
Balance as at 1 January 2005Appropriation of profit of 2004:		2,000,000,000-	(143,984,221)-	1,131,494,011-	12,724,783-	3,000,234,573
Transfer to legal reserves		-	-	607,579	(607,579)	-
Dividends distributed		-	-	(25,772,446)	(11,543,993)	(37,316,439)
Transfer retained earnings		-	-	573,211	(573,211)	-
Purchase/(Sale) of own shares		-	5,939,858	-	-	5,939,858
Changes in reserves	13	-	-	155,341,211	-	155,341,211
Profit/(Loss) for the quarterended 30 June 2005		---	---	---	-23,890,005-	23,890,005
Balance as at 30 June 2005		2,000,000,000	(138,044,363)	1,262,243,566	23,890,005	3,148,089,208

The accompanying notes are part of these financial statements.

CASH FLOW STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2005 AND 30 JUNE 2004

(Amounts expressed in euro)

OPERATING ACTIVITIES	Notes	30.06.2005	30.06.2004
Net cash flow from operating activities (1)		(3,597,477)	(4,082,360)
INVESTMENT ACTIVITIES
Cash receipts arising from:InvestmentsTangible and intangible assetsDividendsInterest and similar incomeLoans granted		73,265,0261008,718,96818,527,991480,630,970	13,0501421,019,47122,628,084811,977,273
Cash Payments arising from:InvestmentsTangible and intangible assetsLoans granted		581,143,055(340,915,676)(10,818)(225,049,108)(565,975,602)	835,638,020(471,520,283)(8,836)(381,822,289)(853,351,408)
Net cash used in investment activities (2)		15,167,453	(17,713,388)
FINANCING ACTIVITIES
Cash receipts arising from:Loans obtainedSale of own sharesOthers		2,314,232,5931,586,339-	687,384,599--
Cash Payments arising from:Loans obtainedInterest and similar chargesDividendsOthers		2,315,818,932(2,238,736,013)(11,849,924)(37,307,385)(39,666,666)(2,327,559,988)	687,384,599(732,921,757)(15,022,706)(27,993,401)-(775,937,864)
Net cash used in financing activities (3)		(11,741,056)	(88,553,265)
Net increase in cash and cash equivalents (4) = (1) + (2) + (3)Cash and cash equivalents at the beginning of the periodCash and cash equivalents at the end of the period	66	(171,080)415,418244,338	(110,349,013)(7,973,007)(118,322,020)

The accompanying notes are part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 30 JUNE 2005

(Amounts expressed in euro)

1. INTRODUCTION

SONAE, SGPS, SA ("the Company" or "Sonae"), whose head-office is at Lugar do Espido, Via Norte, Apartado 1011, 4470-909 Maia, Portugal.

2. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted in preparing the accompanying consolidated financial statements are as follows:

2.1. Basis of preparation

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS" – previously named International Accounting Standards – "IAS"), issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), applicable to financial years beginning on 1 January 2005.

International Financial Reporting Standards ("IFRS") were adopted for the first time in 2005. As a result, the transition date from Portuguese generally accepted accounting principles to the standards referred to above is 1 January 2004, as established by IFRS 1 – "First Time Adoption of International Financial Reporting Standards".

According to that standard, adjustments as at the date of transition to IFRS (1 January 2004) are recorded in Equity and described in Note 15. This note also includes the description of adjustments made to the last annual financial statements presented (31 December 2004).

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

The accompanying consolidated financial statements have been prepared from the books and accounting records on a going concern basis and under the historical cost convention, except for financial instruments which are stated at fair value (Notes 2.6).

2.2 Tangible assets

Tangible assets acquired up to 1 January 2004 (transition date to IFRS) are recorded at acquisition cost, or revalued acquisition cost up to 1 January 2004, in accordance with generally accepted accounting principles in Portugal until that date, net of depreciation and accumulated impairment losses.

2.3 Intangible assets

Intangible assets are stated at acquisition cost, net of depreciation and accumulated impairment losses. Intangible assets are only recognised if it is probable that future economic benefits will flow from them, if they are controlled by the Group and if their cost can be reliably measured.

Brands and patents with indefinite useful lives are not amortised, but are subject to impairment tests on an annual basis.

2.4 Borrowing costs

Borrowing costs are normally recognised as an expense in the period in which they are incurred.

2.5 Non-current assets held for sale

Non-current assets are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case the sale must be highly probable and the asset or disposal group is available for immediate sale in its present condition. In addition, the sale should be expected to occur within 12 months from the date of classification.

Non-current assets (or disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell. These assets are not depreciated.

2.6 Financial instruments

a) Investments

Investments are classified into the following categories:

• Held to maturity
• Investments measured at fair value through profit or loss
• Available-for-sale

Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Group has the intention and ability to hold them until the maturity date. Investments measured at fair value through profit or loss are classified as current assets. Available-for-sale investments are classified as non-current assets. Investments in affiliated and associated companies are classified as available-for-sale investments.

All purchases and sales of investments are recognised on the trade date, independently of the settlement date.

Investments are initialy measured at cost, which is the fair value of the consideration paid for them, including transaction costs.

Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured, are stated at cost, less impairment losses.

Gains or losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, included in Reserves and retained earnings until the investment is sold or otherwise disposed of, or until it is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.

Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.

b) Accounts receivable

Receivables are stated at net realisable value, corresponding to their nominal value less impairment losses (recorded under the caption Impairment losses in accounts receivable).

c) Classification as Equity or Liability

Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.

d) Loans

Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.8. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.

e) Trade accounts payable

Accounts payable are stated at their nominal value.

f) Derivatives

The Company uses derivatives in the management of its financial risks, only to hedge such risks. Derivatives are not used by the Company for trading purposes.

Derivatives classified as cash flow hedge instruments are used by the Group mainly to hedge interest and exchange rate risks on loans obtained. Conditions established for these cash flow hedge instruments are identical to those of the corresponding loans in terms of base rates, calculation rules, rate setting dates and repayment schedules of the loans and for these reasons they qualify as perfect hedges.

The Group's criteria for classifying a derivative instrument as a cash flow hedge instrument include:

• the hedge transaction is expected to be highly effective in offsetting changes in cash flows attributable to the hedged risk;
• there is adequate documentation of the hedging relationships at the inception of the hedge;

Cash flow hedge instruments used by the Group to hedge the exposure to changes in interest and exchange rates of its loans are initially accounted for at cost and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity under the caption Hedging reserves, included in Reserves and retained earnings, and then recognised in the income statement over the same period in which the hedged instrument affects profit and loss.

Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity under the caption Hedging reserve, included in Reserves and retained earnings, are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.

When embedded derivatives exist, they are accounted for as separate derivatives when the risks and the characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value.

g) Own shares

Own shares are recorded at acquisition cost as a reduction to equity. Gains or losses arising from sales of own shares are recorded in Reserves and retained earnings under Other reserves.

h) Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.

In the cash flow statement, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption Borrowings.

2.7 Contingent assets and liabilities

Contingent liabilities are not recorded in the financial statements. Instead they are disclosed in the notes to the financial statements, unless the probability of a cash outflow is remote, in which case, no disclosure is made.

Contingent assets are not recorded in the financial statements but disclosed when future economic benefits are probable.

2.8 Revenue recognition and accrual basis

Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction at the balance sheet date.

Dividends are recognised as income in the year they are attributed to the shareholders.

Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.

Other current assets and Other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.

2.9 Subsequent events

Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes when material.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF ERRORS

During the period there were no changes in accounting policies or prior period errors.

4. INVESTMENTS

At 30 June 2005 and 31 December 2004 the Company held investments in the following affiliated and associated undertakings:

			30.June.2005			31.December.2004
Companies	% Held	Fair Value	BookValue	Fair ValueReserve	% Held	Fair Value	BookValue	Fair ValueReserve
Modelo Continente, SGPS, SA	75.64%	1,314,546,410	1,456,491,762	(141,945,352)	68.06%	1,092,979,944	1,306,055,748	(213,075,804)
Sonae Sierra SGPS, SA	67.04%	770,756,736	650,121,066	120,635,670	50.00%	530,992,017	469,503,439	61,488,578
Sonae Industria, SGPS, SA	97.02%	717,195,315	802,792,348	(85,597,033)	97.02%	658,787,363	802,792,348	(144,004,985)
Sonaecom, SGPS, SA	17.40%	127,536,114	280,146,314	(152,610,200)	17.40%	149,579,393	280,146,314	(130,566,921)
Outras	-	571,250,006	568,817,463	2,432,543	-	614,350,286	614,266,999	83,287
Total		3,501,284,581	3,758,368,953	(257,084,372)		3,046,689,003	3,472,764,848	(426,075,845)

5. OTHER NON-CURRENT ASSETS

As at 30 June 2005 and 31 December 2004, other non-current assets are detailed as follows:

	30.June.2005	31.December.2004
Loans granted to group companies	552,727,672	807,314,234
Guarantee deposits	13,647	13,897
Other	243,891	-
	552,985,210	807,328,131

6. CASH AND CASH EQUIVALENTS

As at 30 June 2005 and 31 December 2004 cash and cash equivalents can be detailed as follows:

	30.June.2005	31.December.2004
Cash at hand	2,500	2,498
Bank deposits	241,838	412,920
Cash and cash equivalents on the balance sheet	244,338	415,418
Bank overdrafts	-	-
Cash and cash equivalents on the statement of cash flows	244,338	415,418

7. SHARE CAPITAL

As at 30 June 2005 and 31 December and 30 June 2004 share capital consisted of 2,000,000,000 ordinary shares of 1 euro each.

During the first half the company sold 1,321,949 own shares to an affiliated company. As at 30 June 2005 the company held directly 132,806,072 own shares.

8. LOANS

As at 30 June 2005 and 31 December 2004 this caption included the following loans:

	30.June.2005	31.December.2004
Nominal value of bonds	249,639,369	149,639,369
Up-front fees not yet charged to income statement	2,724,419	293,184
Bonds	246,914,950	149,346,185
Nominal value of other loans	-	34,375,000
Up-front fees not yet charged to income statement	-	29,553
Non-current loans	246,914,950	183,691,632
Commercial paper	259,879,790	395,479,790
Current portion of other loans	-	6,250,000
Derivative instruments	-	401,651
Current loans	259,879,790	402,131,441

Bonds SONAE / 97 amounting to 149,639,369 euro repayable, at par value, in two equal instalments on the 18th and 20th coupons. Interest rate equal to Lisbor (subsequently changed to Euribor) plus 0.17% from the 1st to the 13th coupon, plus 1.17% in the 14th coupon and plus 1.22% from the 15th to the 20th coupons;

Bonds SONAE / 05 amounting to 100,000,000 euro, repayable after 8 years, in one instalment, on 31 March 2013. Interest rate equal to Euribor 6 months plus 0.875%, with interest paid half-yearly;

In the first half of 2005 the company transferred to its affiliated company Sonae Indústria, SGPS, S.A. a loan obtained from the European Investment Bank, witch initially has been granted to both companies with joint responsibility.

9. OTHER CURRENT LIABILITIES

As at 30 June 2005 and 31 December 2004, other current liabilities were made up as follows:

	30.June.2005	31.December.2004
Trade creditors	197,624	209,160
Group companies	397,483,529	243,303,520
Taxes and contributions payable	157,294	560,139
Accrued expenses	7,009,463	6,172,494
Others	9,614,073	40,444,280
	414,461,983	290,689,593

10. CONTINGENT ASSETS AND LIABILITIES

	30.June.2005	31.December.2004
Guarantees given:
on tax claims	1,668,260	1,668,260
on judicial claims	355,199	355,199
Others	-	159,625,000 (a)

(a) Includes 119,000,000 euro relating to guarantees given together with the affiliated undertakings Sonae Indústria, SGPS, SA and Glunz, AG.

11. INVESTMENT INCOME

As at 30 June 2005 and 30 June 2004 and in each of the quarters ended on those dates, investment income can be detailed as follows:

	2005			2004
	2nd Quarter	Cumulative	2nd Quarter	Cumulative
Dividend received	8,718,968	8,718,968	1,019,471	1,019,471
Profit/(Loss) on sale investments	(2,580,951)	18,325,790	(1,950)	(1,950)
	6,138,017	27,044,758	1,017,521	1,017,521

12. EARNINGS PER SHARE

Earnings per share for the period were calculated taking into consideration the following amounts:

	2005			2004
	2nd Quarter	Cumulative	2nd Quarter	Cumulative
Net profit
Net profit taken into consideration to calculate basic earnings per share (Net profitfor the period)	3,991,424	23,890,005	2,626,674	7,987,611
Effect of dilutive potential shares
Interest related to convertible bonds (net of tax)	-	-	-	-
Net profit taken into consideration to calculate diluted earnings per share:	3,991,424	23,890,005	2,626,674	7,987,611
Number of shares
Weighted average number of shares used to calculated basic earnings
per share	1,865,938,543	1,865,880,261	1,865,821,979	1,865,821,979
Effect of dilutive potential ordinary shares
from convertible bonds	-	-	-	-
Weighted average number of shares used to calculated diluted earnings per share
	1,865,938,543	1,865,880,261	1,865,821,979	1,865,821,979

13. CHANGES IN RESERVES

Details of changes in reserves in the half years ended on 30 June 2005 and 30 June 2004 may be summarised as follows:

	30.June.2005	30.June.2004
Fair value reserve	168,991,473	198,070,784
Sale of own shares	(4,353,519)	-
Hedging reserve	(9,296,743)	2,756,361
	155,341,211	200,827,145

14. SUBSEQUENT EVENTS

The decision to spin-off Sonae Indústria was announced on 10 March 2005. The Board of Directors announced on 23 September 2005 that, together with the Boards of Directors of the other companies involved (Sonae Indústria and Sonae 3P) it has approved the demerger-merger and merger project and expects this to be completed by the end of 2005. Under the terms of the project, shares held in Sonae Indústria corresponding to 90.36% of Sonae Indústria's share capital will be demerged from Sonae and merged into Sonae 3P. Sonae Indústria will then be merged into Sonae 3P which will be renamed Sonae Indústria, SGPS, SA. The new Sonae Indústria will have a share capital of 700 million euro corresponding to 140 million shares each with a nominal value of 5 euro. Admission to Euronext Lisbon will be requested for these shares. In the demerger-merger, one share in Sonae 3P will be granted for every 14.75 shares in Sonae, SGPS, SA, and in the merger one share in Sonae 3P will be granted for each share in Sonae Indústria.

15. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors and authorized for issue on 26 September 2005.

16. FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Company adopted International Financial Reporting Standards ("IFRS") in 2005, having taken into consideration "IFRS 1 – First-Time Adoption of International Financial Reporting Standards". In terms of presentation of the financial statements, the transition date was set at 1 January 2004.

The effect on the balance sheets as at 1 January 2004 and 31 December 2004 of converting financial statements prepared under Portuguese GAAP ("POC") to financial statements re-expressed under International Financial Reporting Standards ("IFRS"), applicable to financial years beginning on 1 January 2005, can be detailed as follows:

	1.January.2004		31.December.2004
	Transitionadjustments				Transition
					adjustments
	POC	to IFRS	IFRS	POC	to IFRS	IFRS
NON-CURRENT ASSETS
Tangible and intangible assets	28,331	-	28,331	573,615	(1)	573,614
Investments	4,009,392,205	(2,262,689,423)	1,746,702,782	4,249,761,501	(1,203,072,498)	3,046,689,003
Other Non-Current Assets	20,369	1,455,391,482	1,455,411,851	13,897	807,314,234	807,328,131
Total non-current assets	4,009,440,905	(807,297,941)	3,202,142,964	4,250,349,013	(395,758,265)	3,854,590,748
CURRENT ASSETS
Trade Debtors and Other Current Assets	25,768,680	-	25,768,680	22,473,892	(732,819)	21,741,073
Cash and Cash Equivalents	132,821	-	132,821	30,732,998	(30,317,580)	415,418
Total current assets	25,901,501	-	25,901,501	53,206,890	(31,050,399)	22,156,491
TOTAL ASSETS	4,035,342,406	(807,297,941)	3,228,044,465	4,303,555,903	(426,808,664)	3,876,747,239
EQUITY
Share Capital	2,000,000,000	-	2,000,000,000	2,000,000,000	-	2,000,000,000
Own Shares	(143,984,221)	-	(143,984,221)	(143,984,221)	-	(143,984,221)
Reserves and Retained Earnings	1,586,089,267	(812,629,605)	773,459,662	1,558,101,937	(426,607,926)	1,131,494,011
Profit/(Loss) for the Period		-	-	12,151,572	573,211	12,724,783
TOTAL EQUITY	3,442,105,046	(812,629,605)	2,629,475,441	3,426,269,288	(426,034,715)	3,000,234,573
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings	190,264,369	(431,810)	189,832,559	184,014,369	(322,737)	183,691,632
Total non-current liabilities	190,264,369	(431,810)	189,832,559	184,014,369	(322,737)	183,691,632
CURRENT LIABILITIES
Borrowings	224,246,158	-	224,246,158	401,729,790	401,651	402,131,441
Trade Creditors and Other Current Liabilities	178,726,833	5,763,474	184,490,307	291,542,456	(852,863)	290,689,593
Total current liabilities	402,972,991	5,763,474	408,736,465	693,272,246	(451,212)	692,821,034
TOTAL EQUITY AND LIABILITIES	4,035,342,406	(807,297,941)	3,228,044,465	4,303,555,903	(426,808,664)	3,876,747,239

As at 1 January 2004 and 31 December 2004, main impacts of the transition to IFRS in equity can be detailed as follows:

	Transition adjustments to IFRS
	1.January.2004	31.December.2004
Investments	(807,297,941)	(426,075,847)
Derivative instruments	(5,081,189)	(281,608)
Others	(250,475)	322,740
Total adjustments on conversion to IFRS	(812,629,605)	(426,034,715)

Investments were valued at the lower of cost and net realisable value under POC. Under IFRS Investments are classified as available-for-sale and are disclosed at fair value whenever this can be reliably measured. The effect of this change amounted to 807,297,941 euro (Note 2.6.a)).

Additionally, the effect of the conversion to IFRS on the balance sheet as at 30 June 2004 can be detailed as follows:

		30.June.2004
		Transition
		adjustments
	POC	to IFRS	IFRS
NON-CURRENT ASSETS
Tangible and intangible assets	694,025	1	694,026
Investments	4,065,810,651	(1,649,566,797)	2,416,243,854
Other Non-Current Assets	20,725	1,040,339,645	1,040,360,370
Total non-current assets	4,066,525,401	(609,227,151)	3,457,298,250
CURRENT ASSETS
Trade Debtors and Other Current Assets	13,610,660	(618,150)	12,992,510
Cash and Cash Equivalents	71,707	-	71,707
Total current assets	13,682,367	(618,150)	13,064,217
TOTAL ASSETS	4,080,207,768	(609,845,301)	3,470,362,467
EQUITY
Share Capital	2,000,000,000	-	2,000,000,000
Own Shares	(143,984,221)	-	(143,984,221)
Reserves and Retained Earnings	1,558,101,937	(611,802,457)	946,299,480
Profit/(Loss) for the Period	7,662,646	324,965	7,987,611
TOTAL EQUITY	3,421,780,362	(611,477,492)	2,810,302,870
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings	187,139,369	(377,572)	186,761,797
Total non-current liabilities	187,139,369	(377,572)	186,761,797
CURRENT LIABILITIES
Borrowings	270,824,795	(1)	270,824,794
Trade Creditors and Other Current Liabilities	200,463,242	2,009,764	202,473,006
Total current liabilities	471,288,037	2,009,763	473,297,800
TOTAL EQUITY AND LIABILITIES	4,080,207,768	(609,845,301)	3,470,362,467

As at 30 June 2004, main impacts of the transition to IFRS in equity can be detailed as follows:

Investments	(609,227,155)
Derivative instruments	(2,324,827)
Others	74,490
Total adjustments on conversion to IFRS	(611,477,492)

Main impacts on the income statements for the year ended 31 December 2004 and for the six month period ended 30 June 2004 can be detailed as follows:

		31.December.2004		30.June.2004
		Transition			Transition
		adjustments			adjustments
	POC	to IFRS	IFRS	POC	to IFRS	IFRS
Operational Income
Services Rendered	2,181,217	-	2,181,217	708,245	-	708,245
Other Operational Income	184,078	64,615	248,693	75,925	16,672	92,597
Total Operational Income	2,365,295	64,615	2,429,910	784,170	16,672	800,842
Operational Expenses						-
External Supplies and Services	(2,397,560)	-	(2,397,560)	(1,121,225)	-	(1,121,225)
Staff Costs	(5,723,093)	682,283	(5,040,810)	(3,122,187)	379,203	(2,742,984)
Depreciation and Amortisation	(1,046,223)	777,600	(268,623)	(62,333)	-	(62,333)
Other Operational Expenses	(1,682,243)	(808,241)	(2,490,484)	(1,232,590)	487,591	(744,999)
Total operational Expenses	(10,849,119)	651,642	(10,197,477)	(5,538,335)	866,794	(4,671,541)
Operational Profit/(Loss)	(8,483,824)	716,257	(7,767,567)	(4,754,165)	883,466	(3,870,699)
Net Financial Expenses	20,619,700	(1,128,596)	19,491,104	12,412,343	(1,571,555)	10,840,788
Investment Income	31,834	985,687	1,017,521	4,468	1,013,053	1,017,521
Profit/(Loss) before Taxation	12,167,710	573,348	12,741,058	7,662,646	324,964	7,987,610
Taxation	(16,138)	(137)	(16,275)		-	-
Profit/(Loss) after Taxation	12,151,572	(573,211)	12,724,783	7,662,646	(324,964)	7,987,610

Main impacts of transition adjustments to International Financial Reporting Standards, on the net profit for the year ended 31 December 2004 and for the three and six month periods ended 30 June 2004, can be detailed as follows:

	31.December.2004	2nd Quarter 2004	30.June.2004
Staff Costs	682,284	443,676	379,203
Up-front fees	(109,073)	(27,120)	(54,239)
Total adjustments on conversion to IFRS	573,211	416,556	324,964

There were no significant adjustments to the cash flow statement.

17. INFORMATION REQUIRED BY LAW

Decree-Law nr 318/94 art 5 nr 4

During the 1st half of 2004 shareholders' loan contracts were entered into with the following companies:

Sonae Investments, BV

During the 1st half of 2004 short-term loan contracts were entered into with the following companies:

Modelo Continente, SGPS, SA Somit- Sociedade de Madeiras Industrializadas e Transformadas, SA Sonae Capital, SGPS, SA Sonae Indústria de Revestimentos, SA Sonae Investments, BV Sonae Retalho Especializado, SGPS, SA Sonae Sierra, SGPS, SA Sonaecom, SGPS, SA

As at 30 June 2004 the amounts owed by affiliated undertakings can be summarized as follows:

Loans granted

Companies	Closing Balance
MDS - Sociedade Mediadora de Seguros, SA	600,000
Somit- Sociedade de Madeiras Industrializadas e Transformadas, SA	3,497,636
Sonae Capital, SGPS, SA	60,541,000
Sonae Investments, BV	492,186,672
Sonae Turismo, SGPS, SA	5,500,000
	562,325,308

As at 30 June 2004 the amounts owed to affiliated undertakings can be summarized as follows:

Loans obtained

Companies	Closing Balance
Cinclus - Planeamento e Gestão de Projectos, SA	2,750,000
Integrum, Serviços Partilhados, SA	25,000
Interlog, SGPS, SA	18,253,000
Sonae Capital, SGPS, SA	197,515,150
Sonae Sierra, SGPS, SA	274,000
Sonaecom, SGPS, SA	143,450,000
	362,267,150

LIMITED REVIEW REPORT PREPARED BY THE AUDITOR REGISTED WITH CMVM ON HALF-YEAR FINANCIAL INFORMATION

Introduction

• 1. In compliance with Article 246 of the Securities Market Code, we hereby present our Limited Review Report on the financial information of Sonae, SGPS, S.A. ("Company") for the half-year ended 30 June 2005 included in: the Report of the Board of Directors, the consolidated and individual Balance Sheets (that reflect a total of 8,828,612,038 Euro and 4,069,345,931 Euro, respectively, and a consolidated and individual equity of 2,194,077,298 Euro and 3,148,089,208 Euro respectively, including a consolidated net profit attributable to Equity holders and an individual net profit of 164,656,786 Euro and 23,890,005 Euro, respectively), the consolidated and individual Statements of profit and loss, changes in equity and cash flows for the half-year then ended and the related notes.
• 1. The amounts in the financial statements, as well as the additional consolidated and individual financial information, are in accordance with the accounting records of the Company and its subsidiaries.

Responsibilities

• 1. The Company's Board of Directors is responsible for: (i) the preparation of consolidated and individual financial information that present a true and fair view of the financial position of the Company and of the companies included in the consolidation and the consolidated and individual results of their operations, changes in equity and cash flows; (ii) the preparation of historical financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and that is complete, true, timely, clear, objective and licit, as required by the Securities Market Code; (iii) the adoption of adequate accounting policies and criteria; (iv) the maintenance of an appropriate internal control system; and (v) informing any significant facts that have influenced their operations, financial position or results.
• 1. Our responsibility is to examine the financial information contained in the above mentioned documents, namely verifying that, in all material respects, the information is complete, true, timely, clear, objective and licit, as required by the Securities Market Code, and to issue a moderate assurance, professional and independent report on that financial information based on our work.

Scope

• 1. The objective of our work was to obtain moderate assurance as to whether the above mentioned financial information is free of material misstatement. Our work was performed in accordance with the Auditing Standards issued by the Portuguese Institute of Statutory Auditors, was planned in accordance with that objective, and consisted essentially of enquiries and analytical procedures with the objective of reviewing: (i) the reliability of the assertions included in the consolidated and individual financial information; (ii) the adequacy of the accounting principles used, taking into consideration the circumstances and the consistency of their application; (iii) the applicability, or not, of the going concern concept; (iv) the presentation of the consolidated and individual financial information; and (v) whether, in all material respects, the consolidated and individual financial information is complete, true, timely, clear, objective and licit as required by the Securities Market Code.
• 1. Our work also included verifying that the consolidated and individual financial information included in the Report of the Board of Directors is consistent with the other above mentioned financial information.
• 1. We believe that our work provides a reasonable basis for issuing the present limited review report on the half-year financial information.

Opinion

1. Based on our work, which was performed with the objective of obtaining moderate assurance, nothing came to our attention that leads us to believe that the consolidated and individual financial information for the half-year ended 30 June 2005 referred to in paragraph 1 above of Sonae, S.G.P.S., S.A. is not exempt from material misstatement that affects its conformity with International Financial Reporting Standards as adopted by the European Union and that, in terms of the definitions included in the Auditing Standards referred to in paragraph 5 above, it is not complete, true, timely, clear, objective and licit.

Emphasis

• 1. As referred to in Notes 2.1 to the consolidated and individual financial statements, the Company used International Financial Reporting Standards as adopted by the European Union (IAS/IFRS) in the preparation of its financial statements for the first time in 2005. In the transition from the previous generally accepted accounting principles (Portuguese Official Chart of Accounts – "POC") to IAS/IFRS, the Company followed the requirements of International Financial Reporting Standard 1 – First Time Adoption of International Financial Reporting Standards, the transition date was set at 1 January 2004. As a result, the financial information as at that date and for the year 2004, previously reported in accordance with POC, was restated under IAS/IFRS for comparability purposes. The Company adopted International Accounting Standard 34 – Interim Financial Reporting, and included in Notes 34 and 16 of the consolidated and individual financial statements, respectively, additional disclosures required in respect with the transition process to International Financial Reporting Standards as adopted by the European Union.
• 1. Our Limited Review Report, dated 10 September 2004, on the half-year consolidated financial statements as at 30 June 2004 prepared in accordance with POC, includes a qualification relating to the accounting policy followed by the Company as to Goodwill. As a result of the use of International Financial Reporting Standards as adopted by the European Union, referred to in the preceding paragraph, the Company changed this policy, having the impacts of such change been included in the transition adjustments as disclosed in Note 34 to the consolidated financial statements. As a result, that qualification is no longer applicable those restated financial statements. Additionally, the mentioned report included an emphasis on the uncertainty of the full recoverability of deferred tax assets recorded in some of Sonae Indústria's foreign subsidiaries which is no longer applicable due to its present recoverability expectations, resulting from restructuring transactions and future operational activities.

Porto, 26 September 2005

_________________________________________ DELOITTE & ASSOCIADOS, SROC, S.A. Represented by Jorge Manuel Araújo de Beja Neves