KHD Humboldt Wedag International Ltd. Reports 49% Increase in Net Income for 2007

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1 KHD Humboldt Wedag International Ltd. Reports 49% Increase in Net Income for /31/2008 Backlog at $919 Million; New Strategic Initiatives for Expansion HONG KONG, March 31 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd. (NYSE: KHD) today announced results for 2007, when revenues from continuing operations increased 44 percent to $580.4 million vs $404.3 million in 2006, and income from continuing operations increased 49 percent to $51.0 million or $1.68 per share, compared to $34.2 million or $1.12 per share for Return on sales increased to 8.8 percent from 8.4 percent in The Company also announced it would expand its scope in the supply of cement in Eastern Europe and Russia, and that it plans to distribute securities worth approximately $92 million to its shareholders. All financial reports treat the spun-off real estate and financial services operations as discontinued operations, and are reported in US dollars. CEO Jim Busche commented, "2007 closed with record sales and order intake, and we entered 2008 with a record backlog. Most importantly, the contracts in our backlog are dominated by projects in the world's emerging economies. We believe that order intake, which was $884 million in 2007, and order backlog, which stood at $919 million at the end of 2007, are the most accurate indicators of the strength of our core business." "This year will be our first full year as an industrial plant engineering and equipment supply company," he added. "Our focus in 2008 will be to set the foundation for growth in our traditional markets of cement, coal and minerals processing and to expand our horizons beyond these traditional markets to adjacent industries for sustaining our track record of increasing shareholder value." During 2007, the Company listed on the New York Stock Exchange, split its stock 2:1, and announced the distribution of its real estate assets to the shareholders as it transferred its non-core real estate interests to SWA Reit and Investments Ltd ("SWA") as of September 25, Austrian depositary certificates representing the common shares of SWA were distributed to the shareholders of KHD on a one-for-one basis. On the distribution date the fair and book value of net assets transferred to SWA was $56.3 million. For the year ended December 31, 2007 the loss from these discontinued operations amounted to $9.4 million or $0.31 per share. Order intake is defined as the total value of all orders received during the respective period, while order backlog is defined as the value of orders received but not yet fulfilled. KHD books orders on the basis of firm contracts and receipt of the down payments. For comparative purposes, all the following analyses of amounts for order intake and backlog were translated directly from Euros to US dollars at , the exchange rate as of December 31, Order intake for the year ended December 31, 2007 was $883.8 million, an increase of 19% over 2006 and up 84% over 2005; 34% of the 2007 order intake came from the Middle East, 29% from the emerging Asia/Pacific region, 21% from Russia and Eastern Europe, 9% from Europe and 6% from the Americas. Order backlog as of December 31, 2007 was $919.4 million, up 38% over December 31, 2006 and an increase of 135% over 2005; 33% of the backlog going into 2008 is associated with projects in the Middle East, 29% in the emerging Asia/Pacific region, 24% in Russia and Eastern Europe, 6% in Europe and 6% in the Americas. As of the date of this release the order backlog exceeds $ 1 billion. Subsequent to the issuance of our Form 6-K for the nine months ended September 30, 2007, we identified certain accounting errors that impacted the previously filed quarterly financial statements as of March 31, June 30 and September 30, These errors, which had no effect on the year-end results, were caused by changes in the consolidation process resulting in incorrect elimination of certain intercompany transactions and the implementation of a new software system in a subsidiary. The required adjustments in thousands of US Dollars through the nine months ended September 30, 2007 are summarized as follows: As Reported Restated Adjustment Revenues $418,825 $416,893 $1,932 Cost of revenues $357,968 $356,809 $1,159 Gross profit $60,857 $60,084 $773 Income from continuing operations $38,639 $38,126 $513 Mr. Busche commented, "Our backlog and order intake continue to grow, and we ended the year with $370 million in cash and securities. Our latest innovative grinding and cooling technologies are also gaining further acceptance by the cement production industry." He added, "To sustain our growth and decrease our dependence on providing equipment to cement producers, we have recently focused on strategic technology partnerships to broaden both our scope of supply to existing industry customers and also to expand applications and introduce our technologies to a larger sphere of industries. While we

2 will continue this effort, we have chosen to launch another diversification strategy that we believe to be an attractive and effective use of our cash and resources. "Our approach is to combine our extensive knowledge of cement plants and our dominant position in the emerging markets of Russia and the CIS to form partnerships to build, own and operate (BOO) cement plants." As Mr. Busche described it, the KHD BOO (for "Build, Own and Operate") intends on partnering with experienced and well-established local entities that will become active majority shareholders in a series of ventures. These partners will use their local knowledge and contacts to identify the most attractive opportunities. KHD, in addition to being a passive minority equity partner, will design, fabricate, erect, commission and operate these cement plants. Investment banks will arrange and assist in structuring and arranging debt financing. We anticipate that we will have the opportunity to generate earnings on the engineering and equipment supply, as well as on plant operations and on the downstream sale of the commodity. KHD believes that the revenue stream from production would be constant and predictable. He said, "In the past few months we have explored the market for interest in this concept and are currently negotiating with a number of potential partners. In our November investor conference call we committed to provide a plan for our free cash by the end of the first quarter We have just described how we plan to deploy free cash, in the BOO operations. "Additionally, as committed in November, we are pleased to announce that we intend to distribute to our shareholders the value associated with the preferred shares of Mass Financial Corp ("Mass"). As part of this distribution, the preferred shares, through a series of transactions, will be exchanged for common shares of Mass. The value of the preferred shares at December 31, 2007 was approximately $92 million. The value of the distribution will be determined by certain tax requirements and an evaluation will be conducted to determine a fair ratio for the exchange of the preferred shares for the common shares. Upon completion those shareholders that prefer cash may sell the shares and those that prefer equity may hold the shares." This year we are issuing annual guidance on what we consider two key indicators: (1) order intake, which we believe to be an accurate measure of the progress and quality of sustainable growth, and (2) earnings per share as it is the traditional measure used by our shareholders and analysts. For 2008, we expect order intake to increase to $1.1 billion and we project that our diluted earnings per share will be in the range of $ $2.15. Order intake and earnings per share are not evenly spread among all quarters and therefore this guidance is for 2008 as a full year. It should be noted that this guidance does not include the benefits of the planned business expansion and diversification programs. Foreign exchange currency rates have a material effect on our business performance in two ways. As much of our business is transacted in currencies other than the US dollar a weakening US dollar increases both our revenues and costs. In addition we hold US dollar cash deposits in certain of our subsidiaries outside the US. A weakening US dollar results in unrealized foreign exchange losses on these cash deposits. In preparing our forecast we used currency assumptions at exchange rates similar to those prevailing at year-end. The forecast (guidance) information and other statements in this release are forward-looking and are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially. See the section entitled "Disclaimer for Forward Looking Information" at the end of this release for a description of those risks and uncertainties. Today at 10:00am EDT (7:00am PDT), a conference call will be held to review the KHD results; this call will be broadcast live over the Internet at or An online archive will be available immediately following the call and continue for seven days or to listen to the audio replay by phone, dial 1 (888) using conference pass code # International callers should dial 1 (617) About KHD Humboldt Wedag International Ltd. KHD Humboldt Wedag International Ltd. owns companies that operate internationally in the industrial plant engineering and equipment supply business, and specializes in the cement, coal and minerals processing industries. To obtain further information on KHD, please visit our website at Disclaimer for Forward-Looking Information Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future growth, results of operations, performance and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future and include, without limitation, the following: (1) that the Company will distribute securities worth $92 million to its shareholders by distributing common shares of Mass; (2) that the Company will form partnerships to build, own and operate (BOO) cement plants; (3) that these BOO plants will generate revenue and such revenue will be constant and predictable; (4) that order intake will increase to $1.1 billion; and (5) that earnings per share for 2008 will be in the range of $2.05 to $2.15. Such statements are subject to risks and

3 uncertainties that may cause actual results, performance or developments to differ materially from those contained in, the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions including management's current expectations, estimates and assumptions about certain projects and the markets the Company operates in. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) that the Company will have sufficient paid-up capital and that Mass will have sufficient exempt surplus to effect the distribution of the common shares of Mass in a tax efficient manner; (2) that the Company's shareholders approve the distribution of the common shares of Mass; (3) that the Company obtains all necessary regulatory approvals required for the distribution of the common shares of Mass; (4) that the Company identifies appropriate partners to facilitate the build, own and operate partnerships; (5) that the Company obtains the necessary regulatory approvals and/or the financing necessary to build and operate such cement plants; (6) a downturn in general economic conditions in Asia, Europe, the United States and internationally, (7) a decreased demand for the Company's products, (8) a decrease in the demand for cement, minerals and related products, (9) the number of competitors with competitively priced products and services, (10) product development or other initiatives by the Company's competitors, (11) shifts in industry capacity, (12) fluctuations in foreign exchange and interest rates, (13) fluctuations in availability and cost of raw materials or energy, (14) delays in the start of projects included in our forecasts, (15) delays in the implementation of projects included in our forecasts and disputes regarding the performance of our services, (16) the uncertainty of government regulation and politics in Asia, Russia, Eastern Europe, the Middle East and other markets, (17) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, and (18) other factors beyond the Company's control. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in our Form 20-F filed with the Securities and Exchange Commission and our MD&A filed with Canadian security regulators. Contact Information: Allen & Caron Inc. Rene Randall Joseph Allen (investors) KHD Humboldt Wedag International Ltd. 1 (212) (604) ex 224 joe@allencaron.com randall.r@khd.de or Brian Kennedy (media) 1 (212) brian@allencaron.com -FINANCIAL TABLES FOLLOW- CONSOLIDATED BALANCE SHEETS December 31, 2007 and 2006 (U.S. Dollars in Thousands) ASSETS Current assets Cash and cash equivalents $354,397 $204,530 Securities 15,510 4,111 Restricted cash 24,116 16,180 Accounts receivable, trade 62,074 67,157 Other receivables 18,585 33,351 Inventories 124,980 85,799 Contract deposits, prepaid and other 33,775 24,069 Future income tax assets Current assets of discontinued operations 0 4, , ,261 Non-current assets Securities 0 64 Receivables 0 8,878 Property, plant and equipment 2,957 2,936 Interest in resource property 32,865 29,037 Equity method investments Future income tax assets 24,658 27,724 Investment in preferred shares of former subsidiaries 91,960 77,976 Other non-current assets 1,955 0 Non-current assets of discontinued operations 0 54, , ,659 $789,311 $641,920

4 CONSOLIDATED BALANCE SHEETS (con't) December 31, 2007 and 2006 (U.S. Dollars in Thousands) LIABILITIES Current liabilities Accounts payable and accrued expenses $147,869 $129,668 Long-term debt, current portion 0 4,596 Progress billing above costs and estimated earnings on uncompleted contracts 184,830 92,518 Advance payments received from customers 9,190 8,878 Income tax liabilities 20,658 11,088 Accrued pension liabilities, current portion 2,205 1,664 Provision for warranty costs, current portion 31,503 21,868 Current liabilities of discontinued operations , ,244 Long-term liabilities Long-term debt, less current portion 13,920 10,725 Accrued pension liabilities, less current portion 30,981 28,559 Provision for warranty costs, less current portion 11,799 7,247 Deferred credit, future income tax assets 15,712 15,539 Future income tax liability 2,593 9,180 Other long-term liabilities 4, Long-term liabilities of discontinued operations 0 3,047 79,936 74,922 Total liabilities 476, ,166 MINORITY INTERESTS 5,926 22,466 SHAREHOLDERS' EQUITY Common stock 138, ,595 Treasury stock (93,793) (64,383) Contributed surplus 4,319 2,131 Retained earnings 162, ,742 Accumulated other comprehensive income 95,676 50, , ,288 $789,311 $641,920 CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, 2007 and 2006 (U.S. Dollars in Thousands, Except per Share Data) Revenues $580,391 $404,324 Cost of revenues 494, ,495 Gross profit 85,959 65,829 Income from interest in resource property 18,132 6,660 General and administrative expense (46,700) (29,802) Stock-based compensation (4,381) (2,132) Operating income 53,010 40,555 Interest income 13,155 5,044 Interest expense (2,668) (2,238) Other income, net 2,308 7,763 Income before taxes from continuing operations 65,805 51,124 Provision for income tax: Income taxes (8,278) (9,658) Resource property revenue taxes (4,161) (644) (12,439) (10,302) Income before minority interests, continuing operations 53,366 40,822 Minority interests (2,386) (6,670) Income from continuing operations 50,980 34,152 Loss from discontinued operations, net of tax (9,351) (2,874) Extraordinary gain, net of tax Net income $42,142 $31,278 Basic earnings (loss) per share continuing operations $1.71 $1.13 discontinued operations (0.31) (0.10)

5 extraordinary gain $1.42 $1.03 Diluted earnings (loss) per share continuing operations $1.68 $1.12 discontinued operations (0.31) (0.09) extraordinary gain $1.39 $1.03 Weighted average shares outstanding - basic 29,895,468 30,162,412 Weighted average shares outstanding - diluted 30,402,130 30,415,452 FINANCIAL SUMMARY As of December 31, 2007 (U.S. Dollars in Thousands, Except per Share Data and Ratios) Cash and cash equivalents $354,397 Short-term securities 15,510 Restricted cash 24,116 Working capital 238,007 Total assets 789,311 Shareholders' equity 307,194 Book value per share Current ratio Long-term debt to equity ratio SOURCE KHD Humboldt Wedag International Ltd. CONTACT: Joseph Allen (investors), joe@allencaron.com, or Brian Kennedy (media), brian@allencaron.com, both of Allen & Caron Inc., , for KHD Humboldt Wedag International Ltd.; or Rene Randall of KHD Humboldt Wedag International Ltd., , ext. 224, randall.r@khd.de/ /Web site: / (KHD)