PADICO Holding

PADICO HoldingInvestors’ Presentation 2009

Agenda

The Palestinian Economy

Overview of PADICO

PADICO Financial Statements

Future Plans 2010 – 2013

The Palestinian Economy

About Palestine

The Palestinian Territory landscape is 6,020 sqkm, divided into the West Bank, East Jerusalem (5,655 sqkm) and Gaza Strip (365 sqkm).

The Palestinian National Authority governs the West Bank and Gaza Strip. It was established in 1994, pursuant to the Oslo Accords between the PLO and the government of Israel.

The Palestinian Economy’s Key Indicators

DemographicsTotal Population 4,016,416Literacy Rate 94%

Median age 18 years

Life expectancy at birth 73.5 years3000

3500

4000

4500

5000

1997 1999 2001 2003 2005 2007

GDP Trend

25%

14% 14% 13% 11% 9%5% 5% 5%

Real GDP growth rate increased by 2% in 2008 compared to 2007

Estimated growth in 2009 is 6.4%

2010 real GDP growth is projected to be 7.5%

GDP by Sector

GDP Trend

Amounts in USD millions

About PADICO

• PADICO Holding was the first and largest investment holding company in the Palestinian Territory, established by Palestinian expatriates after the Oslo agreement in 1993.

• PADICO Holding has a paid up capital of USD 250 million and is traded on the Palestine Securities Exchange (PADICO.PS).

Who We Are

• Since its inception in 1993, its mission has been to develop and strengthen the Palestinian economy, through investing in vital economic sectors.

Our Mission

Who We Are

Our Investment Strategy

Invest in Palestine

Invest in entrepreneurial projects, targeting infrastructure and environmental sectors in the medium term

Target ROE of 20% Invest in large and strategic growth investments

Balanced Portfolio Diversification

Being a leader in the country Thought Leadership

Risk Management

PADICO manages the risk associated with the political and economic environment through: Sector diversification, with the

concentration being on sectors characterized as defensive sectors that are associated with infrastructure, real estate and telecommunications.

A financial portfolio that invests in regional and international equity markets, that is separated from the main operations of the holding company through a subsidiary; Rawan International Investment Co.

PADICO Investments - by sector

A Highlight Of Our Key Investments

Capital* 185.7

% ** 31.7

Capital 14.1

% 62.7

Capital 10.00

% 78.0

Capital 26.5

% 60.1

Capital 4.9

% 41.5

Capital 70.5

% 70.9

*Authorized capital in USD millions ** % owned by PADICO ***Holding as of 31-12-2009

Capital 26.5

% 55.3

Results from some of our key investments

Profits 1997USD 14.3 million

Listed Companies 199719

Operating Profits 1998USD (40.4) thousand

Total Assets 1997USD 17.2 million

Profits 2009USD 99.2 million

Listed Companies 200939

Operating Profits 2009USD 4.8 million

Total Assets 2009USD 114 million

PADICO Financial Statements

Consolidated Income Statement Summary

(Amounts in USD thousand)

2006

2007

2008

2009

Operating Revenue 18,697

16,971

26,250

31,018

Profits from Associates 16,515

23,267

39,508

29,529

Revenue (Loss) from investment portfolios

8,047

11,608

(8,128)

340

Revenues from Consolidation

- - - 15,449

Recovery of Provision for a loan granted to an affiliate

- - - 6,359

Total Revenues 59,813

64,366

59,815

85,478

Operating Expenses 13,023

11,276

16,984

20,270

Total Expenses 31,686

28,393

36,075

43,147

Net Profit 27,688

35,560

22,526

42,236

Net profits increased by 87.5% in 2009 compared to 2008 due to:

An increase in operating revenues by 18%, backed by the performance of PPC and consolidated revenues of PRICO.Registration of positive revenues from the investment portfolios compared to a total loss of USD 8.1 million in 2008.The recovery of provision for a loan granted to an associate (PTIC) amounting USD 6.4 million, following the restructuring process.

Revenues & Net Profit

27,688

35,560

22,526

42,236

2006 2007 2008 2009

Amounts in USD thousand

CAGR= 15%

Net ProfitRevenue Sources

Amounts in USD thousand

Consolidated Balance Sheet Summary

(Amounts in USD thousand)

2006 2007 2008 2009

Cash at banks 35,500 21,523 20,720 20,862

Current assets 100,352 98,134 73,805 79,475

Total assets 452,527 455,699 530,028 620,197

Current liabilities

62,440 44,249 60,198 83,430

Total liabilities 112,051 105,132 144,883 190,492

Total equity 340,476 350,567 385,145 429,705

Outstanding shares

249,989 249,989 250,000 250,000

452,527 455,699530,028

620,197

2006 2007 2008 2009

Amou

nts i

n U

SD th

ousa

nd

CAGR = 11%

Total Assets

Total Assets increased by 17% in 2009 compared to 2008 due mainly to the consolidation of PRICO which led to increases of around USD 121 million in:

Projects in progress Real estate investmentsIntangible assets

Profitability Ratios

6%

8%

5%

7%

8%

10%

7%

10%

2006 2007 2008 2009

ROA ROE

0.12

0.14

0.09

0.17

2006 2007 2008 2009

An increase of 89%

Am

ount

s in

USD

EPS ROA & ROE

Capital Structure

39% 34% 39%

222%

123%95%

2007 2008 2009

Debt/Equity Current Ratio

New Loans were used for expansionary

purposes; acquisition of affiliates

Debt Ratios

Stock PerformanceU

SD

Stock Ratios

2006 2007 2008 2009

Closing Share Price (USD)

2.98 2.23 1.21 1.19

BV/ Share (USD)

1.29 1.33 1.38 1.47

EPS (USD) 0.12 0.14 0.09 0.17

P/E (x) 24.8 15.93 13.44 7.0

P/BV (x) 2.31 1.68 0.87 0.82

Market Capitalization (USD Million)

465 558 303 298

Multiples

Future Plans 2010-2013

Existing Investments

•Restructuring and focusing its investments in each sector:•Real Estate and Tourism sectors •Manufacturing sector•Services Sector

•Divestiture of investments that PADICO has no controlling stake in them or have no future prospects

Future Projects •Expansions into new and viable sectors mainly in infrastructure and real estate with

an allocated budget of USD 100 million in the coming 3 years, 30% long term and 70% short and medium term.

Where is PADICO heading in the future?

Real Estate Restructuring Plan

Merging and acquiring 16 companies into one holding company.

The value of the transaction is USD 95 millionPADICO to own a controlling stake in the new holding.

Phase one has been completed relating to the due diligence of the related companies in addition to the valuations.

Restructuring of current separate entities is being finalized, in terms of loans repayment and capital reductions.

Business plan is being finalized for the new holding

StatusSynergiesRationale

Cost synergies:

Integration in HR, IT and operations practices; especially in terms of purchases and usage of equipment.

Revenue synergies:

Market and client business integration:

Consolidate PADICO activities in the real estate into one structure

Establish a strong and a leading company in Palestine

The new holding to concentrate on real estate development, management and contracting

Transaction Summary

Manufacturing Sector Restructuring Plan

Consolidating 6 companies into one holding company.The value of the transaction is USD 9.7 millionPADICO owns a controlling stake in the holding (PIIC).

The holding has acquired most related companies in PADICO Portfolio

The holding to finalize an internal restructuring and add a strong marketing department

StatusSynergiesRationale

Cost synergies:

Integration in HR, IT and operations practices, especially in terms of acquiring raw materials.

Revenue synergies:

Market, client business integration especially in terms of effective distribution.

Consolidate PADICO activities in the manufacturing sector into one structure

Establish a strong and a leading company in Palestine

The new holding to invest in Oil production, carton, plastics and packaging industry, in addition to Poultry.

Transaction Summary

PSE Restructuring Plan

Transforming the PSE from a private shareholding company to a public shareholding company

Separate the depository and clearance centre from the trading activities

PADICO to reduce its holdings in the PSE from 76% to around 50%

The Government approved the transformation

In the process of marketing the PSE to a strategic investor

StatusRationale

Corporate governance implementation

Attract strategic international investors into the PSE.

Transaction Summary

Power Generation

There is only one Power Generation Plant in Palestine based in the Gaza Strip and provides only 30% of the electricity needs there.

In the West Bank, Palestinians import around 2 million MWh/ year from Israel to match the demand.

Electricity tariffs are higher than neighboring countries by around 30%. Se

ctor

Ove

rvie

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PADICO will establish a power generation station located in Northern West Bank, with a total capacity of 400 MWh.

The estimated cost will be USD 300 million, USD 120 million will be financed through equity, while the USD 180 million will be debt.

The plant is expected to start operations by end 2012.

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Solid WasteSe

ctor

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w 1.4 million tones of municipal waste is generated every year

in the West Bank and Gaza Strip

The average growth in waste generation is estimated at 4% per year, depending on population growth, economic growth and the extent to which people adopt consumer and disposable lifestyles.

PADICO established the first recycling company in Palestine (including the composting) “ The Palestinian Recycling Company”.

The new company's first pilot projects will be building, managing , and operating a recycling facility in Nablus with a total cost of USD 2 million, to start operations mid 2010

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Waste WaterSe

ctor

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w The average quantity of wastewater in Palestine is over

100 mcm per year More than 75% of the waste water go into the ground 80% of the collected wastewater can be retreated and

utilized for irrigation.

PADICO will be the first private company to enter the water sector in Palestine.

An MOU has been signed with Jenin Municipality to upgrade the wastewater treatment plant.

The project estimated cost is around USD 1- 2 million, and will start operations beginning of 2011.

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Contact Information

PADICO HoldingRamallah- Palestine

Tel: + 970 2 240 3336Fax: + 970 2 240 3363

P.O.Box: 1708 Ramallah- PalestineEmail: [email protected]