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Analyses Financières

Further progress have been made

14/06/2004

Further progress have been made

In 2003 the net profit increased by 16.5% while the net current EPS stood at EUR 3.14 versus EUR 1.75 in 2002. The CFPS jumped by a strong 76%. This is quite a good performance given the difficult economic context that has prevailed in FY03.

The huge investment & modernisation programmes of the last three years started to pay-off in 2003. While there are some uncertainties, mainly at the agrochemicals business (due to a regulation change initiated by the EU authorities), we believe there are still room for substantial improvement of Sapec earnings in the coming years.

While improving, the profitability remains too low taking into account the invested capital (FY03 ROCE of 4.0%), due to the still large amount of capital invested in non-operational real estate that does not generate any return. Things should improve somewhat in the coming years, as Sapec has accelerated the property asset sales.

Since the publication of the FY03 results, Sapec share price has gained 20%. Now the upside potential seems limited. We keep our “Hold” recommendation unchanged.

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Bernard Hanssens

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