The Board of Directors of IFI – Istituto Finanziario Industriale met today in Turin under the chairmanship of Umberto Agnelli to examine the performance for the first half of 2003.

The first half of the year showed a consolidated loss for the IFI Group of € 130 million mainly as a result of its share of the loss of the Fiat Group for the first half of 2003 (€ 110.8 million). In the corresponding period of 2002, the consolidated loss of the IFI Group had been € 75 million.

Shareholders’ equity of the Group at June 30, 2003 was € 1,848.8 million (€ 2,026.2 million at the end of 2002). The reduction was due to the consolidated loss of the Group and the translation adjustments of certain subsidiaries.

IFI S.p.A. reported a net profit for the first half of € 13.8 million (€ 72.5 million for the corresponding period of 2002).

The net financial position of IFI S.p.A. at June 30, 2003 showed a net debt position of € 436.4 million (compared to € 426.5 million at December 31, 2002).

Significant events in the first months of 2003

In April 2003, IFI and IFIL executed the Reorganization Plan of the Group announced on March 3. IFI therefore contributed to IFIL the investments held in Fiat S.p.A., SANPAOLO IMI S.p.A., Juventus Football Club S.p.A. and Soiem S.p.A. against a capital increase by IFIL reserved for IFI.

Successively, IFI exercised the right to voluntarily convert the IFIL savings shares to IFIL ordinary shares as established by the Reorganization Plan. Against 119,750,000 IFIL savings shares held, IFI thus received 101,787,500 IFIL ordinary shares.

The Board of Directors of IFI, which met on June 27, 2003, voted to increase capital stock by issuing 55,575,000 IFI ordinary shares and a maximum of 45,926,460 IFI preferred shares, both of par value € 1, at the price of € 4.5 each, in a ratio of 9 new shares for every 5 shares held. The capital increase ended with a 100% subscription of the shares offered and raised capital of € 457.4 million.

In July, IFI took part in IFIL’s capital increase by subscribing to 233,861,025 new IFIL ordinary shares for a total outlay of € 304.2 million. IFI currently holds 643,783,399 IFIL ordinary shares, equal to 62.03% of ordinary capital stock.

At August 31, 2003, after the conclusion of these transactions, the net debt of IFI S.p.A. displayed a significant reduction to € 287.2 million.

Future outlook for the operations of the IFI Group for the current year

The unrelenting negative international economic situation will continue to influence the consolidated result for the current year. The economic results of the subsidiaries will have a significant impact on IFI S.p.A.’s cash flows which, in 2003, could be negative. Nevertheless, the efforts in progress to turn around Fiat and the new organization of the companies IFI and IFIL, which clearly attribute a role of control to the first and a role of operating holding company to the second, constitute the premises for a turnaround of the Group.