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KHD Humboldt Wedag International Ltd. Reports Results for 2005

04/03/2006

HONG KONG, April 3 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd. ("KHD") (Nasdaq: KHDH) today reported its financial results for the twelve months and fourth quarter ended December 31, 2005.

All figures are in US dollars and earnings per share amounts are on a fully diluted basis. For the year ended December 31, 2005, total revenues increased to $820.0 million from $579.7 million in the previous year. Revenues from our industrial and engineering services business increased to $341.8 million in 2005 from $165.4 million in 2004. Revenues from our financial services business, the majority of which was distributed to shareholders effective January 31, 2006, as part of Mass Financial Corp, were $478.2 million in 2005, versus $414.3 million in 2004.

Net income for 2005 decreased to $29.3 million, or $2.14 per share on a diluted basis, from $30.7 million, or $2.24 per share on a diluted basis, in the prior year. Total expenses for the year increased to $782.1 million, compared to $547.8 million in the previous year. Gross profit margins for the industrial and engineering services business were 18.2 percent in 2005. Margins in the financial services segment, which is now part of Mass Financial Corp, were 9.9 percent in 2005.

Income before taxes and minority interests for the year ended 2005 from our industrial and engineering business was $26.2 million or $1.90 per share on a diluted basis compared to $14.2 million or $1.03 per share on a diluted basis in 2004. The net income for the now separated financial services, Mass Financial Corp, was $4.0 million for 2005.

Revenues for the fourth quarter ended December 31, 2005, increased to $202.5 million, compared to $171.6 million in the fourth quarter of 2004. Net income for the 2005 fourth quarter decreased to $4.9 million, or $0.36 per share, compared to $6.3 million, or $0.46 per share in the same quarter last year. Total expenses for the fourth quarter of 2005 increased to $195.8 million, compared to $165.9 million in the same quarter last year. The industrial and engineering services segment revenues for the fourth quarter increased to $107.4 million from $53.1 million the prior year; for the financial services segment, fourth quarter revenues decreased to $95.1 million from $118.4 million for the year-earlier period.

Order Intake in the industrial and engineering services segment for the year 2005 increased to $394.3 million compared to $280.6 million in 2004.

Backlog Orders for the industrial and engineering services business increased to $318.4 million at the close of the fourth quarter of 2005, compared to $225.0 million at the same time in 2004.

There are several noteworthy characteristics of the Order Intake and Backlog. All of the orders in 2005 demonstrate the Company's strategic policy of minimizing risk by focusing on core business, i.e., equipment design and supply contracts, as opposed to turn-key contracts. Furthermore, the geographic origin of the orders is also significant. The geographic breakdown of 2005 Order Intake may be summarized as 43 percent from Asia; 32 percent from the Middle East; 19 percent from the Americas and the balance primarily from Russia and Europe.

Order Intake is defined as the total of all orders received during the respective period, while Order Backlog is defined as the amount of orders received but not yet fulfilled (for easy comparison, all amounts were translated from euro to $ at 1.1841, the exchange rate prevailing on December 31, 2005).

In January 2006, we distributed substantially all of the non-industrial assets to our shareholders by means of a non-taxable distribution of Mass Financial Corp common shares. This will allow KHD to focus on its industrial engineering business, while Mass Financial focuses exclusively on the growth and development of the financial services business.

Commenting, Michael Smith, Chairman of KHD Humboldt Wedag International Ltd., said "In 2005, we began the transition of KHD from a multi-segment financial services company to two separate entities: a global industrial plant engineering company, and the now separated financial services company. We believe that as a pure industrial plant engineering company, KHD will be able to achieve more attractive capital market multiples, based on our analysis of publicly traded companies in this peer group. KHD is a competitive, financially strong, global company well positioned for today's markets."

Jim Busche, newly appointed President and CEO of KHD, commented, "The segments that we serve in natural resources and infrastructure materials -- ores, precious and semi-precious minerals and cement -- are growing very solidly and quickly in the developed and developing areas of the world. We are seeing this growth in North America and areas of Eastern Europe, Asia and South America. We believe that we have an extraordinary opportunity, an exceptional team of talented and experienced people, and an established presence in all important economies of the world. We intend to be the premier provider of industrial plant engineering equipment in our geographies, which are primarily Asia, the Americas, Eastern Europe and the Middle East."

Mr. Smith added, "We have acceptable financial ratios at December 31, 2005. Our balance sheet had total assets of $523.1 million, shareholders' equity of $244.3 million, with cash and short-term securities totaling $210.6 million and working capital of $209.4 million with long-term debt of $6.3 million. We have strong liquidity, a three-fold increase in bonding capacity and substantial backlog of orders. Sustained effort focused on the further implementation of this strategy will be a high priority as we strive to achieve our goals. We encourage our shareholders to read our SEC Form 20-F filing, now available on our website, for a greater understanding of our industrial engineering prospects, as well as the distribution of the financial services business."

About KHD Humboldt Wedag International Ltd.

KHD Humboldt Wedag International Ltd. (the "Company") owns companies that operate internationally in the industrial plant engineering and equipment supply industry, and specializes in the cement, coal and mineral industries. To obtain further information on the Company, please visit our website at http://www.khdhumboldt.com.

    Contact Information:
            Allen & Caron Inc                    Rene Randall
            Joseph Allen (investors)             KHD Humboldt Wedag International Ltd
            (212) 691-8087                       (604) 683-8286
            joe@allencaron.com                   rrandall@bmgmt.com
            or
            Len Hall (media)
            (949) 474-4300
            len@allencaron.com
            

Certain statements included herein are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Forward- looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Factors that could cause actual results to differ materially from anticipated results in connection with management's belief that KHD Humboldt Wedag International Ltd.'s expansion into Asia and the Middle East will continue to see increasing opportunities for the Company include risks and uncertainties such as: general market conditions that may adversely impact revenue generated by the demand for the products and services of KHD Humboldt Wedag International Ltd; the number of competitors with competitively priced products and services; the uncertainty of government regulation and politics in Asia and the Middle East and other markets; product development or other initiatives of the KHD Humboldt Wedag International Ltd.'s competitors; and other risks and uncertainties detailed in the KHD Humboldt Wedag International Ltd.'s Form 20-F and other reports filed with the Securities and Exchange Commission.

                    KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED BALANCE SHEETS
            December 31, 2005 and 2004
            (Unaudited)
            (amounts in U.S. dollars; in thousands)
            2005           2004
            ASSETS
            Current assets
            Cash and cash equivalents                       $194,313       $179,231
            Restricted cash                                   22,016         13,706
            Securities                                        16,265         17,542
            Loans                                             10,638          8,156
            Receivables, commodities transactions             10,450         27,384
            Receivables, industrial and engineering services  34,588         26,129
            Receivables                                       25,533         28,014
            Commodity investments                             24,356         21,415
            Inventories                                       38,641          9,155
            Real estate held for sale                         27,479         35,663
            Contract deposits, prepaid and other              11,201         18,128
            Future income tax assets                           7,594          6,664
            423,074        391,187
            Non-current assets
            Securities                                         7,893          8,190
            Loans                                              9,436         14,165
            Properties, plant and equipment                   10,835         18,368
            Resource property                                 30,312         29,363
            Goodwill                                          12,987         16,987
            Equity method investments                         16,021         15,362
            Future income tax assets                          12,496          7,957
            99,980        110,392
            $523,054       $501,579
            LIABILITIES
            Current liabilities
            Accounts payable and accrued expenses           $159,628       $132,944
            Notes payable, commodities transactions            9,890          6,397
            Notes payable, industrial and engineering
            services                                          2,944          8,866
            Long-term debt, current portion                    1,606          6,790
            Pension liabilities                                1,489          1,557
            Deposits                                          17,327         38,653
            Provision for warranty costs                      20,527          9,672
            Future income tax liability                          303          5,213
            213,714        210,092
            Long-term liabilities
            Long-term debt, less current portion               6,253         11,950
            Pension liabilities                               25,584         29,011
            Provision for warranty costs                       4,427          1,295
            Future income tax liability                       10,154              0
            Other long-term liabilities                          575          1,030
            46,993         43,286
            Total liabilities                              260,707        253,378
            Minority interests                                  18,088         24,352
            SHAREHOLDERS' EQUITY
            Common stock                                      62,481         59,415
            Equity component of convertible debt                 125            121
            Retained earnings                                209,416        174,444
            Cumulative translation adjustment                (27,763)       (10,131)
            244,259        223,849
            $523,054       $501,579
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED STATEMENTS OF INCOME
            For the Years Ended December 31, 2005 and 2004
            (Unaudited)
            (amounts in U.S. dollars; in thousands, except per share data)
            2005           2004
            Revenue
            Financial services                              $478,201       $414,318
            Industrial and engineering services              341,775        165,413
            819,976        579,731
            Expenses
            Financial services                               430,992        358,047
            Industrial and engineering services              279,637        131,546
            General and administrative                        63,691         52,037
            Interest                                           7,776          6,184
            782,096        547,814
            Income before income taxes                          37,880         31,917
            Recovery of (Provision for) income taxes            (2,710)         3,463
            35,170         35,380
            Minority interests                                  (5,838)        (4,679)
            Net income                                         $29,332        $30,701
            Earnings per share
            Basic                                              $2.16          $2.27
            Diluted                                            $2.14          $2.24
            Weighted average shares outstanding (000's)
            Basic                                             13,609         13,520
            Diluted                                           13,755         13,818
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            FINANCIAL SUMMARY
            December 31, 2005 and 2004
            (Unaudited)
            (amounts in U.S. dollars; in thousands, except per share data and ratios)
            2005           2004
            Cash and cash equivalents                       $194,313       $179,231
            Short-term securities                             16,265         17,542
            Working capital                                  209,360        181,095
            Total assets                                     523,054        501,579
            Long-term debt, less current portion               6,253         11,950
            Shareholders' equity                             244,259        223,849
            Book value per share                               17.91          16.49
            Current ratio                                       1.98           1.86
            Long-term debt to equity ratio                      0.03           0.05
            

SOURCE KHD Humboldt Wedag International Ltd.
-0- 04/03/2006 CONTACT: Rene Randall of KHD Humboldt Wedag International Ltd,
+1-604-683-8286, rrandall@bmgmt.com; or Investors - Joseph Allen,
+1-212-691-8087, joe@allencaron.com, or Media - Len Hall, +1-949-474-4300,
len@allencaron.com, both of Allen & Caron Inc. for KHD Humboldt Wedag International Ltd.

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