ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE

ASSOCIATED BRITISH PORTS HOLDINGS PLC TRADING UPDATE – YEAR ENDING 31 DECEMBER 2005

TRADING IN LINE WITH MARKET EXPECTATIONS

Associated British Ports Holdings PLC is today issuing its trading statement for the year ending 31 December 2005, prior to the group’s preliminary results announcement scheduled for 22 February 2006.

HIGHLIGHTS

Underlying operating profit from UK ports and transport activities expected to grow by some 3 per cent.
Underlying pre-tax profit expected to be in line with market expectations.
Two major projects at the Port of Immingham, involving a total investment of £87m, on budget and on schedule to become operational in first half of 2006.
£140.5m completed of £205m share repurchase programme announced in 2004.

Our core UK ports business has continued to grow during the first 11 months of this year. Volumes overall have increased, with growth in coal, iron ore and other bulk imports, cruise-ship calls and agribulk and steel exports.As previously indicated, we expect roll-on/roll-off volumes and stevedoring activity to be lower than in 2004.

The group’s core business has benefited from the volume growth noted above and the pre-emptive cost reduction measures implemented in 2004 to mitigate the anticipated decline in roll-on/roll-off volumes. In addition, congestion charges (demurrage costs) incurred in relation to imported coal handled at the Port of Immingham have reduced. As a result, we expect the underlying operating profit of the UK ports and transport operations to increase by some 3 per cent.

The group’s £400m, 10-year investment plan for our UK ports business remains on track. At the Port of Immingham, construction of the £27.5m roll-on/roll-off facility and the £59.5m extension of the Humber International Terminal, the UK’s premier coal import facility, is proceeding well. Both projects are on budget and on schedule to become operational in the first half of 2006.

Following the government’s “minded to approve” notification earlier this year, we expect to receive a final decision on our planned £30m-£35m development of a shortsea riverside container terminal at the Port of Hull shortly.

As expected, there has been a reduction in vehicle volumes at AMPORTS, the group’s much smaller ports and transport business in the USA. This follows the departure of a customer from the terminal at Benicia, California, to a competing facility during the second half of last year. As previously reported, the group has secured a new contract with Toyota to replace this business during 2006.

Despite the decline in vehicle volumes, operating profit (which excludes property investment income) is likely to be similar to last year due to an improvement in the mix of business and a number of cost efficiency initiatives.

Our policy of selling non-operational, port-located property and exploiting the potential of our property portfolio continues. We expect operating profit from property investment rentals in the UK and USA for the year to be similar to 2004, as a greater proportion of sales made last year and during the course of this year relate to non-income producing surplus land.

Although turnover from property development is likely to be significantly lower than last year, the mix and phasing of sales mean that operating profit should be greater than the level generated in 2004.

Container throughput has increased at Tilbury Container Services, but volumes have reduced at Southampton Container Terminals. This reduction reflects a continuation of de-stocking activity within the UK retail sector seen in the first half of the year and the loss of a service in the second half of 2004. As a result, we expect operating profit from the continuing operations of associates to be lower than last year.

In 2004, we announced plans for a new £205m share repurchase programme to increase the efficiency of our capital structure. To date, £140.5m of this programme has been completed. We have repurchased 30.5m shares at an average price of 460p per share, before costs.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

As of 1 January 2005, we report our results in accordance with IFRS. On 24 June 2005, we published a reconciliation of the consolidated financial statements of the group, converted from UK Generally Accepted Accounting Principles to an unaudited IFRS basis, for the year ended 31 December 2004. This is available on our website www.abports.co.uk. The adoption of IFRS reduced pre-tax profit by £0.8m and increased earnings per share by 1.0p for 2004, respectively.

We expect the UK ports business, the primary driver of the group’s performance, to grow by some 3 per cent in 2005.

We are confident that the first two of the group’s planned major growth projects on the Humber will become operational, and start contributing to operating profit, in the first half of 2006. This leads the board to believe that, subject to the wider economy, the group is well positioned to deliver higher growth in its UK ports business during the second half of 2006.