RHA Eksportfinans 8.70 Pfd Accelerated Return Notes Linked TO The Russell 2000 Index

Following the meeting of the Board of Directors on August 3, Rhodia (NYSE: RHA) today reported its financial results for the second quarter of 2005, prepared in accordance with IFRS accounting standards. Highlights for the period included: -- Net sales(a) of 1,393 million euros, versus 1,296 million euros in the second quarter of 2004. At same perimeter and constant exchange rates, net sales were up 7.4% for the period, supported by the 9.3% impact of price increases, offset by a negative 2.1% transactional exchange rate effect. -- Sustained improvement in recurring EBITDA, which rose 16% quarter-on-quarter at same perimeter and constant exchange rates -- Savings of 32 million euros, in line with the 2005 objective of reducing fixed costs by 114 million euros. -- Successful completion of the action plans undertaken in the least profitable businesses, which led to improved performance by the Silicones, TDI and Organics businesses. -- Rhodia Pharma Solutions has not demonstrated the expected signs of improvement. Therefore, a strong focus is now on delivering a sustainable long term solution. In this context, the net book value of the business' tangible assets has been fully written off. -- An operating loss of 69 million euros, versus a loss of 33 million euros in the second quarter 2004, after 101 million euros full impairment of Rhodia Pharma Solutions assets. Excluding this charge, the Group would have reported operating income of 32 million euros, representing a 65 million euros improvement versus second-quarter 2004. -- Consolidated net debt of 2,646 million euros remained stable at a constant exchange rate basis, from March 31, 2005. -- Liquidity (cash + marketable securities + unused syndicated bank line) of around 550 million euros as of June 30, 2005. -0- *T Simplified income statement for the second quarter 2005 (unaudited) In millions of euros, under IFRS Q2 2004 Q2 2004 Q2 Actual Restated(b) 2005 ---------------------------------------------------------------------- 1,276 1,296 Net sales(a) 1,393 ---------------------------------------------------------------------- 130 135 Recurring EBITDA(c) 156 ---------------------------------------------------------------------- 10.2% 10.4% Recurring EBITDA margin 11.2% ---------------------------------------------------------------------- (21) (33) Operating loss (69) ---------------------------------------------------------------------- 55 N/A Net income /(loss) - Group share (197) ---------------------------------------------------------------------- (a)Excluding services and other revenues (b)At same perimeter and constant exchange rates (c)Before restructuring and other gains and losses *T -- Further improvement in operating performance, led by price increases Net sales(a) amounted to 1,393 million euros compared with 1,296 million euros in the second quarter of 2004. At same perimeter and constant exchange rates, net sales were up 7.4%(b) for the period, reflecting the very significant impact of price increases (9.3%), offset by a negative 2.1% transactional exchange rate effect. With the exception of Rhodia Pharma Solutions, phosphorus derivatives and adipic acid, the Group has delivered a solid volume performance across its portfolio. Volumes were also impacted by the major maintenance shutdown at the Pont-de-Claix plant (which occurs every three years) and the ongoing refocusing of the Organics enterprise. Overall markets served by the Group volumes remained stable compared with the second quarter 2004. In the second quarter, price increases offset significantly the increase in raw materials costs. The Group continued to implement the fixed cost reduction program, generating savings of 32 million euros (before inflation), in line with the targeted 114 million euros reduction over the full year 2005. On the last 12 months, the Group's headcount in France has been reduced by more than 1,000 people (-12 %). At same perimeter and constant exchange rates, recurring EBITDA rose by 16%(b) and recurring EBITDA margin widened to 11.2% from 10.4% a year earlier. The operating loss amounted to 69 million euros, versus a loss of 33 million euros in the second quarter 2004, reflecting the 101 million euros full impairment of Rhodia Pharma Solutions assets. Excluding this exceptional charge, the Group would have reported operating income of 32 million euros, representing a 65 million euros improvement compared to the second quarter 2004. Financial result, which was unchanged at a negative 95 million euros, included principally 58 million euros in interest expense, 27 million euros in unrealized foreign exchange losses on the conversion of US dollar-denominated debt and 3 million euros in non-recurring refinancing costs. The Group's overall net loss for the period came to 197 million euros, compared with a net loss of 132 million euros in the second quarter 2004 (before the taking into account 187 million euros of results from discontinued operations). -- Continued implementation of action plans in the least profitable businesses -- The merger of Nylstar and Radici, which will reduce our exposure to the European textile market, is proceeding as planned. -- The Pont-de-Claix TDI unit is running reliably and the business is continuing to restore its margins. -- The Silicones business is sharply improving its operating performance. -- Organics is continuing to refocus on a limited number of technologies, driving a clear improvement in operating performance. -- On the other hand, Rhodia Pharma Solutions has not demonstrated the expected signs of improvement, strong focus is now on delivering a sustainable long term solution. (a)Excluding services and other revenues (b)Compared with the second quarter 2004 -- Stable consolidated net debt Capital expenditure totalled 63 million euros in the second quarter 2005. The ratio of working capital requirement to net sales improved over the period, to 14.6% of net sales from 15.4% at June 30, 2004. Consolidated net debt at June 30, 2005 remained stable at 2,646 million euros on a constant exchange rates basis, from March 31, 2005. Liquidity (cash + marketable securities + unused syndicated bank line) totalled around 550 million euros as of June 30, 2005. -- Outlook In the first half of 2005, the Group's overall operating performance was in line with its objectives. In the second half, the business environment should continue to be shaped by satisfactory demand, particularly in North America and Asia, and by high volatility in the price of raw materials. Operating performance over the period should reflect these market conditions, as well as the seasonal effect observed in previous years, and EBITDA is expected to be slightly lower than in the first half. For the full year, Rhodia's operating performance (EBITDA) should be significantly better than in 2004. Nonetheless, the Group will post a net loss reflecting the asset write-offs reported in the first half and full year restructuring costs. Rhodia confirms its 2006 objectives, under IFRS: -- A recurring EBITDA margin of at least 13% -- A return to positive net income in 2006 -- A ratio of consolidated net debt to EBITDA of less than 3.5 This press release and a detailed presentation of the second-quarter 2005 results will be available at www.rhodia.com as of 7:30 am today. This press release contains elements that are not historical facts including, without limitation, certain statements on future expectations and other forward-looking statements. Such statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated. Rhodia is a global specialty chemicals company recognized for its strong technology positions in applications chemistry, specialty materials & services and fine chemicals. Partnering with major players in the automotive, electronics, fibers, pharmaceuticals, agrochemicals, consumer care, tires and paints & coatings markets, Rhodia offers tailor-made solutions combining original molecules and technologies to respond to customers' needs. Rhodia subscribes to the principles of Sustainable Development communicating its commitments and performance openly with stakeholders. Rhodia generated net sales of 5.3 billion euros in 2004 and employs around 20,000 people worldwide. Rhodia is listed on the Paris and New York stock exchanges. -0- *T Consolidated Income Statements ------------------------------ (IFRS) ------------------------------------------------------------------ (Millions of euros) Q2 2004 Q2 2005 ------------------------------------------------------------------ ------------------------------------------------------------------ Sales 1,276 1,393 ------------------------------------------------------------------ Sales of services & other revenues 110 102 ------------------------------------------------------------------ ------------------------------------------------------------------ EBITDA (recurring) 130 156 ------------------------------------------------------------------ ------------------------------------------------------------------ Restructuring costs - 52 - 27 ------------------------------------------------------------------ ------------------------------------------------------------------ Other gains and losses 1 - 16 ------------------------------------------------------------------ ------------------------------------------------------------------ EBIT - 21 - 69 ------------------------------------------------------------------ ------------------------------------------------------------------ Financial result - 96 - 95 ------------------------------------------------------------------ ------------------------------------------------------------------ Income Tax - 19 - 28 ------------------------------------------------------------------ ------------------------------------------------------------------ Equity earning in affiliates(b) 4 ------------------------------------------------------------------ ------------------------------------------------------------------ Discontinued Operations 187 - 3 ------------------------------------------------------------------ ------------------------------------------------------------------ Minority Interests - 1 - 1 ------------------------------------------------------------------ ------------------------------------------------------------------ Net Income 55 - 197 ------------------------------------------------------------------ ------------------------------------------------------------------ Earnings Per Share (euro)(a) 0.17 - 0.31 ------------------------------------------------------------------ (a) calculated on a 314 776 294 shares basis as of June 30, 2004 and 627 582 158 shares basis as of June 30, 2005 (b) Net of Income Tax CONSOLIDATED SIMPLIFIED BALANCE SHEET ------------------------------------- (IFRS) ----------------------------- 31 March 05 30 June 05 ----------------------------- (Millions of euros) --------------------------------------------------------------- Non current Assets 2,928 2,923 --------------------------------------------------------------- --------------------------------------------------------------- Net Current Assets 836 830 --------------------------------------------------------------- --------------------------------------------------------------- Total net Assets 3,764 3,753 --------------------------------------------------------------- --------------------------------------------------------------- Shareholders' Equity(a) - 572 - 685 --------------------------------------------------------------- --------------------------------------------------------------- ST & LT Liabilities 1,720 1,792 --------------------------------------------------------------- --------------------------------------------------------------- Consolidated Net Debt 2,616 2,646 --------------------------------------------------------------- --------------------------------------------------------------- Total net Liabilities & Shareholders' Equity 3,764 3,753 --------------------------------------------------------------- (a) Including minority interests ---------------------------------------------------------------------- (Millions of euros) Q2 2004 Q2 2004 Q2 2005 % ---------------------------------------------------------------------- Restated(a) ----------------------------------- RHODIA (consolidated) (A) (B) (B)/(A) ---------------------------------------------------------------------- Sales 1,276 1,296 1,393 107.5% ---------------------------------------------------------------------- Sales of services & other revenues 110 111 102 ---------------------------------------------------------------------- EBITDA (recurring) 130 135 156 115.6% ---------------------------------------------------------------------- EBITDA margin on sales 10.2% 10.4% 11.2% ---------------------------------------------------------------------- EBIT -21 -33 -69 ---------------------------------------------------------------------- ----------------------------------- NOVECARE ---------------------------------------------------------------------- Sales 232 227 237 104.4% ---------------------------------------------------------------------- EBITDA (recurring) 27 32 29 90.6% ---------------------------------------------------------------------- EBITDA margin on sales 11.6% 14.0% 12.2% ---------------------------------------------------------------------- EBIT 33 n/a 21 ---------------------------------------------------------------------- ----------------------------------- SILCEA ---------------------------------------------------------------------- Sales 190 188 210 111.7% ---------------------------------------------------------------------- EBITDA (recurring) 12 12 25 210.4% ---------------------------------------------------------------------- EBITDA margin on sales 6.3% 6.4% 11.9% ---------------------------------------------------------------------- EBIT 1 n/a 2 ---------------------------------------------------------------------- ----------------------------------- COATIS ---------------------------------------------------------------------- Sales 173 184 196 106.5% ---------------------------------------------------------------------- EBITDA (recurring) 12 10 7 70% ---------------------------------------------------------------------- EBITDA margin on sales 6.9% 5.5% 3.6% ---------------------------------------------------------------------- EBIT 5 n/a -1 ---------------------------------------------------------------------- ----------------------------------- POLYAMIDE ---------------------------------------------------------------------- Sales 385 405 454 112.1% ---------------------------------------------------------------------- EBITDA (recurring) 41 47 70 148.9% ---------------------------------------------------------------------- EBITDA margin on sales 10.6% 11.6% 15.4% ---------------------------------------------------------------------- EBIT -6 n/a 36 ---------------------------------------------------------------------- ---------------------------------- ACETOW ---------------------------------------------------------------------- Sales 99 105 105 100% ---------------------------------------------------------------------- EBITDA (recurring) 28 29 25 86.2% ---------------------------------------------------------------------- EBITDA margin on sales 28.3% 27.4% 23.8% ---------------------------------------------------------------------- EBIT 19 n/a 17 ---------------------------------------------------------------------- (a) Restated: same perimeter and exchange rate (conversion) ----------------------------------- ECO SERVICES ---------------------------------------------------------------------- Sales 55 53 54 101.9% ---------------------------------------------------------------------- EBITDA (recurring) 17 16 18 112.5% ---------------------------------------------------------------------- EBITDA margin on sales 30.9% 30.8% 33.3% ---------------------------------------------------------------------- EBIT 10 n/a 12 ---------------------------------------------------------------------- ----------------------------------- ORGANICS ---------------------------------------------------------------------- Sales 91 92 90 97.8% ---------------------------------------------------------------------- EBITDA (recurring) 8 9 11 122.2% ---------------------------------------------------------------------- EBITDA margin on sales 8.8% 10.3% 12.2% ---------------------------------------------------------------------- EBIT -1 n/a 4 ---------------------------------------------------------------------- ---------------------------------- RPS ---------------------------------------------------------------------- Sales 62 57 55 96.5% ---------------------------------------------------------------------- EBITDA (recurring) 3 3 - 5 -147.1% ---------------------------------------------------------------------- EBITDA margin on sales 4.8% 6.0% - 9.1% ---------------------------------------------------------------------- EBIT -14 n/a - 104 ---------------------------------------------------------------------- ---------------------------------- CORPORATE & OTHER ---------------------------------------------------------------------- Other sales net of inter company eliminations - 11 - 15 - 8 ---------------------------------------------------------------------- EBITDA (recurring) - 16 - 23 - 23 100% ---------------------------------------------------------------------- EBIT - 68 n/a - 56 ---------------------------------------------------------------------- Consolidated Income Statements ------------------------------ (IFRS) --------------------------------------------------------- (Millions of euros) H1 2004 H1 2005 --------------------------------------------------------- --------------------------------------------------------- Sales 2,464 2,705 --------------------------------------------------------- Services & other revenues 238 248 --------------------------------------------------------- --------------------------------------------------------- EBITDA (recurring) 251 310 --------------------------------------------------------- --------------------------------------------------------- Restructuring costs - 75 - 33 --------------------------------------------------------- --------------------------------------------------------- Other gains and losses 2 - 16 --------------------------------------------------------- --------------------------------------------------------- EBIT - 15 - 14 --------------------------------------------------------- --------------------------------------------------------- Financial result - 173 - 211 --------------------------------------------------------- --------------------------------------------------------- Income Tax - 42 - 36 --------------------------------------------------------- --------------------------------------------------------- Equity earning in affiliates(b) - 2 --------------------------------------------------------- --------------------------------------------------------- Discontinued Operations 196 - 9 --------------------------------------------------------- --------------------------------------------------------- Minority Interests - 1 1 --------------------------------------------------------- --------------------------------------------------------- Net Income - 37 - 269 --------------------------------------------------------- --------------------------------------------------------- Earnings Per Share (euro)(a) - 0.12 - 0.43 --------------------------------------------------------- (a) calculated on a 314 776 294 shares basis as of June 30, 2004 and 627 582 158 shares basis as of June 30, 2005 (b) Net of Income Tax CONSOLIDATED SIMPLIFIED BALANCE SHEET ------------------------------------- (IFRS) ------------------------- 31 Dec. 04 30 June 05 ------------------------- (Millions of euros) ---------------------------------------------------- Non current Assets 2,938 2,923 ---------------------------------------------------- ---------------------------------------------------- Net Current Assets 540 830 ---------------------------------------------------- ---------------------------------------------------- Total net Assets 3,478 3,753 ---------------------------------------------------- ---------------------------------------------------- Shareholders' Equity(a) - 521 - 685 ---------------------------------------------------- ---------------------------------------------------- ST & LT Liabilities 1,671 1,792 ---------------------------------------------------- ---------------------------------------------------- Consolidated Net Debt 2,328 2,646 ---------------------------------------------------- ---------------------------------------------------- Total net Liabilities & Shareholders' Equity 3,478 3,753 ---------------------------------------------------- (a) Including minority interests (Millions of euros) H1 2004 H1 2004 H1 2005 % ----------------------------------------------------------------- Restated(a) ------------------------- RHODIA (consolidated) (A) (B) (B)/(A) ----------------------------------------------------------------- Sales 2,464 2,486 2,705 108.8% ----------------------------------------------------------------- Services & other revenues 238 254 248 ----------------------------------------------------------------- EBITDA (recurring) 251 256 310 121.1% ----------------------------------------------------------------- EBITDA margin on sales 10.2% 10.3% 11.5% ----------------------------------------------------------------- EBIT - 15 - 32 - 14 ----------------------------------------------------------------- ------------------------- NOVECARE ----------------------------------------------------------------- Sales 458 441 464 105.2% ----------------------------------------------------------------- EBITDA (recurring) 58 60 58 96% ----------------------------------------------------------------- EBITDA margin on sales 12.7% 13.6% 12.5% ----------------------------------------------------------------- EBIT 54 n/a 41 ----------------------------------------------------------------- ------------------------- SILCEA ----------------------------------------------------------------- Sales 378 373 405 108.6% ----------------------------------------------------------------- EBITDA (recurring) 26 26 49 188.5% ----------------------------------------------------------------- EBITDA margin on sales 6.9% 7.0% 12.1% ----------------------------------------------------------------- EBIT 1 n/a 12 ----------------------------------------------------------------- ------------------------- COATIS ----------------------------------------------------------------- Sales 322 337 381 119.4% ----------------------------------------------------------------- EBITDA (recurring) 13 14 23 164.3% ----------------------------------------------------------------- EBITDA margin on sales 4.0% 4.2% 6.0% ----------------------------------------------------------------- EBIT -1 n/a 7 ----------------------------------------------------------------- ------------------------- POLYAMIDE ----------------------------------------------------------------- Sales 733 764 893 116.9% ----------------------------------------------------------------- EBITDA (recurring) 86 97 144 148.5% ----------------------------------------------------------------- EBITDA margin on sales 11.7% 12.7% 16.1% ----------------------------------------------------------------- EBIT 17 n/a 86 ----------------------------------------------------------------- ------------------------- ACETOW ----------------------------------------------------------------- Sales 194 204 197 96.6% ----------------------------------------------------------------- EBITDA (recurring) 55 56 47 83.9% ----------------------------------------------------------------- EBITDA margin on sales 28.4% 27.5% 23.9% ----------------------------------------------------------------- EBIT 38 n/a 30 ----------------------------------------------------------------- (a) Restated: same perimeter and exchange rate (conversion) ------------------------- ECO SERVICES ----------------------------------------------------------------- Sales 103 99 102 103.0% ----------------------------------------------------------------- EBITDA (recurring) 30 29 30 103.4% ----------------------------------------------------------------- EBITDA margin on sales 29.1% 29.3% 29.4% ----------------------------------------------------------------- EBIT 19 n/a 19 ----------------------------------------------------------------- ------------------------- ORGANICS ----------------------------------------------------------------- Sales 172 174 177 101.7% ----------------------------------------------------------------- EBITDA (recurring) 13 15 17 113.3% ----------------------------------------------------------------- EBITDA margin on sales 7.6% 8.6% 9.6% ----------------------------------------------------------------- EBIT - 18 n/a 5 ----------------------------------------------------------------- ------------------------- RPS ----------------------------------------------------------------- Sales 122 118 106 90.2% ----------------------------------------------------------------- EBITDA (recurring) - 3 - 1.3 - 12 -923.1% ----------------------------------------------------------------- EBITDA margin on sales - 2.5% - 1.1% - 11.3% ----------------------------------------------------------------- EBIT - 28 n/a - 115 ----------------------------------------------------------------- ------------------------- CORPORATE & OTHER ----------------------------------------------------------------- Other sales net of inter company eliminations - 18 - 24 - 20 ----------------------------------------------------------------- EBITDA (recurring) - 27 - 40 - 46 - 115 % ----------------------------------------------------------------- EBIT - 97 n/a - 99 ----------------------------------------------------------------- *T