Altri SGPS — Earnings Release 2023

Jul 27, 2023

Earnings Announcement | 2Q23

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This document is a translation of a document originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards adopted in European Union (IFRS-EU), some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

Highlights of 2Q23

Altri Group achieved total revenues of € 201.9 M in 2Q23, a decrease of 25.9% vs 2Q22. The slowdown in global pulp demand during 2023, which resulted from a relevant destocking process in the Pulp and Paper industry and the lower dynamism of economic activity, led the Altri Group to register a lower sales level and prices than the same period last year. Compared to the 1Q23, sales decreased 10.1%, impacted by a relevant decrease in the pulp prices, despite the increase in the volume sold.

Faced with a more challenging market environment, the Altri Group recorded an EBITDA of € 31.0 M in 2Q23, a decrease of 55.5% compared to the same period of last year. Also the EBITDA margin of 15.4% presented a decrease over the 25.6% reported in 2Q22. During 2Q23, the decrease in costs has accelerated, but not enough to offset the price drop of recent months. The Altri Group continues to actively work on continued cost reduction in the coming quarters.

During May 2023, the Altri Group distributed to its shareholders a cash dividend of € 0.25 per share and also a dividend in kind corresponding to 23,154,783 shares of Greenvolt (equivalent to € 0.74 per Altri share). Also in the month of May 2023, the Altri Group concluded the sale of the remaining shares of Greenvolt, through an accelerated bookbuilding operation. Both these operations were extremely well received by the market and the shareholders, and upon completion, the Altri Group no longer has any interest in Greenvolt.

The Altri Group continues to work on improving the efficiency of its industrial units. In addition, the Group expects to start up, still in 2023, with additional power-generating capacity, through the installation of photovoltaic electricity production units. Additionally, the surplus electricity production of Caima's new biomass boiler, which will make this industrial unit fossil fuel free, will be sold to the public grid.

The Altri Group continues to develop the Gama project with the intention to take a final investment decision by the end of 2023. The Gama project will be a transformational project, implying the construction of a new industrial unit for the production of dissolving pulp and sustainable textile fibers, in Galicia.

Message from the CEO

We continue to witness a process of adjustment of the pulp and paper market: while we see signs of recovery from one of the world's major consumers, China, we face a context of destocking and weak demand in Europe. This process leads to a recalibration between demand and supply, with a consequent fall in prices.

This challenging environment is forcing us to remain cautious, strengthening our efforts to optimize our operations. And we are doing this in two ways: by working to accelerate the downward trend in production costs, but also by matching our production volumes to actual market demand.

In terms of production costs, after some deflation already registered during the first half of the year, we continue to work to maintain the downward trend in costs in the second half of 2023, namely in the costs of wood, chemicals and energy, as well as in the containment of fixed costs.

In addition to the cost reduction effort, we expect to move forward this year with an increase in electricity generation through the installation of photovoltaic electricity production units.

The investment in Caima's biomass boiler, which represents more than a third of the total of 36.2 million Euro of the investment paid for only during the first six months of 2023, allows us not only to reduce costs but also to consistently advance our commitment to eliminate fossil fuels. The surplus electricity production of this new asset will be sold to the public grid.

We are focused on seizing the opportunities that the bioeconomy offers, seeking to generate greater value for all stakeholders. Among these opportunities is the Gama Project, directed to the production of sustainable fibers for the textile industry, in Galicia, in which we continue to work on the various fronts so that we can make the final investment decision by the end of 2023.

José Soares de Pina Altri's CEO

Operating and financial performance

Pulp market

Global demand for pulp in the first five months of 2023 presented a decrease of 3.0% vs the same period of the previous year, with demand for Hardwood pulp registering a slightly better evolution, with a reduction of 1.5%, according to the PPPC (World Chemical Market Pulp Global 100 Report – May 2023).

In regional terms, and focusing essentially on the Hardwood pulp market, which is predominant for the Altri Group, we positively highlight Latin America (+12.6%) and China (+8.1%). The European market in particular, as a consequence of the destocking effect already seen in the last months of 2022, showed a significant decrease of -18.0% in Western Europe and -16.0% in Eastern Europe during the first five months of the year. North America, despite a better performance than Europe, recorded a negative evolution of -4.6%.

000' Tons	Jan-May 23	Jan-May 22	YoY
Bleached Hardwood Sulphate	15,293	15,525	-1.5%
Bleached Softwood Sulphate	9,835	10,180	-3.4%
Unbleached Sulphite	1,082	1,312	-17.6%
Sulphite	42	48	-12.1%
Pulp Global Demand	26,252	27,066	-3.0%
Bleached Hardwood Sulphate per region
North America	1,257	1,317	-4.6%
Western Europe	2,997	3,654	-18.0%
Eastern Europe	523	623	-16.0%
Latin America	1,278	1,135	12.6%
Japan	418	452	-7.5%
China	6,303	5,828	8.1%
Rest of Asia/Africa	2,437	2,411	1.1%
Oceania	79	106	-25.0%
Total	15,293	15,525	-1.5%

Source: PPPC (World Chemical Market Pulp Global 100 Report - May 2023).

One of the relevant factors to confirm the balance of demand and supply of pulp in the european market is the level of stocks in European ports. Given the global destocking trend in the pulp and paper industry value chain in general, the level of stocks at European Ports continues to record increases during 2Q23, and is now at levels above the historical average. In any case, it should be noted that May 2023 saw the first reduction since October 2022, although slight, in the level of inventories in European Ports.

Pulp stocks in European Ports

		2022 2021 2020
1,157	1,198	1,542

Note: Monthly end-of-period stocks. Monthly average for quarterly and annual values. Source: Europulp (Federation of the National Associations of Pulp Sellers in Europe).

During 2Q23, the PIX pulp index price (BHKP) in Europe continued to decrease, ending the quarter at US\$958/ton. In average terms, the price of the European PIX pulp index (BHKP) in 2Q23 decreased by -18.0% vs. 1Q23, and this evolution was -19.3%, in Euros. After a year 2022 with several supply constraints, amplified by logistical difficulties, we now witness a process of normalization of the value chains. Additionally, global pulp demand in 2023 is lower than the previous year's levels, driven especially by the Printing & Writing (P&W) end-use segment.

BHKP average pulp price evolution in Europe (2018 to 2Q23)

US\$/ton	2023		2022	2021	2020	2019	2018
	2Q	1Q
Avg. Pulp Price (BHKP)	1,097	1,337	1,286	1,014	680	858	1,037

Source: FOEX.

Global demand for Dissolving Pulp (DP) has registered a 3.5% increase in the first four months of the year, according to Numera Analytics (Global DP Demand Report – April 2023). This positive variation is due to some recovery of demand in the textile sector, after the slowdown experienced during 4Q22. We recall that DP is targeted for textile and used mainly in Asia, the region that absorbs around 85% of the demand. In geographical terms, China registered an increase of 5.8%, with Asia growing at around 4.8%. The DP market maintained stable price levels during 2Q23 and a constant level of activity.

Global dissolving pulp demand

000' Tons	Jan-Apr 23	Jan-Apr 22	YoY
North America	192	153	25.2%
Western Europe	156	207	-24.4%
Asia	2,069	1,975	4.8%
China	1,522	1,439	5.8%
Japan	65	49	32.3%
Taiwan	9	16	-46.7%
Thailand	64	65	-1.9%
Other Asia	410	406	1.0%
Other	16	16	-4.6%
Total	2,433	2,351	3.5%

Source: Numera Analytics (Global DP Demand Report – April 2023).

Altri Group

Operating performance

Total volume of pulp produced in 2Q23 achieved 280.2 thousand tons, an increase of 17.0% when compared to the previous quarter, and almost aligned (-0.7%) with the same quarter in the previous year. This is a more normalized level of production, after the downtime that occurred during 1Q23 in Celbi, the main industrial unit of the Altri Group.

In terms of pulp sales, the recorded volume was approximately 274.2 thousand tons during 2Q23, a growth of 9.1% vs 1Q23 and a decrease of 5.7% when compared to the 2Q22.

The destocking effect along the value chain of the pulp and paper industry, as well as some slowdown in global demand for pulp, especially relevant in the 'Printing & Writing (P&W)' segment led to a lower level of sales in 2Q23 compared to the same period last year. In any case, the Altri Group's efforts in the search for new marketing destinations, led to a positive evolution of +9.1% in the level of sales in 2Q23 vs 1Q23.

000' tons	2Q23	2Q22	2Q23/2Q22	1Q23	2Q23/1Q23
Production Pulp BHKP	255.4	258.8	-1.3%	214.8	18.9%
Production Pulp DWP	24.8	23.4	6.1%	24.7	0.4%
Total Production	280.2	282.2	-0.7%	239.5	17.0%
Pulp Sales BHKP	248.8	266.6	-6.7%	228.8	8.8%
Pulp Sales DWP	25.4	24.3	4.7%	22.6	12.3%
Total Sales	274.2	290.9	-5.7%	251.4	9.1%

Operating indicators (Quarter)

In 1H23, the total volume of pulp produced was 519.8 thousand tons, -7.6% when compared to the same period in the previous year. A large part of the decrease is due to the fact that during 1H23 there was a planned shutdown in Celbi, the Altri Group's largest industrial site. In terms of pulp sales, a decrease of 10.8% was recorded compared to the same period last year, due to the destocking effect recorded in the first half of the year, as a result of the global slowdown in pulp demand.

000' tons	1H23	1H22	1H23/1H22
Production Pulp BHKP	470.3	515.3	-8.7%
Production Pulp DWP	49.5	47.1	5.0%
Total Production	519.8	562.5	-7.6%
Pulp Sales BHKP	477.6	530.7	-10.0%
Pulp Sales DWP	48.0	58.4	-17.8%
Total Sales	525.6	589.0	-10.8%

Operating indicators (1H23)

In terms of end use, Tissue continues to present solid demand levels, with a weight of 53% in the 1H23. The P&W segment, despite losing weight compared to 2022, remains the second most important, with 17% of the volume sold. P&W volumes have been declining during 2023, given the relevant destocking effect and apparent decline in final demand occurring in this segment. In regional terms, Europe (including Portugal), accounts for 61% of sales, followed by the Middle East with 26%, Turkey and Israel being the main destinations in the Middle East.

Weight of sales (volume) by end use Weight of sales (volume) by region

	1H23	2022	2021		1H23	2022	2021
Tissue P&W Dissolving	53% 17% 9%	53% 24% 8%	50% 19% 8%	Europe (excl. Portugal) Middle East	49% 26%	61% 17%	61% 17%
Décor Specialities	4% 4%	5% 5%	7% 6%	Portugal Asia	12% 13%	15% 7%	14% 8%
Packaging Other	2% 12%	2% 3%	2% 8%

Economic and financial performance

During 2Q23, total revenues of Altri Group amounted to € 201.9 M, a 25.9% decrease vs 2Q22 and a decrease of 10.1% vs 1Q23. This variation is mainly explained by the decrease in revenues from 'Cellulosic fibers' during the 2Q23, a consequence of the slowdown in global demand for pulp, and, consequently, by the destocking effect along the value chain of the pulp and paper industry. This slowdown in demand led to a significant drop in the price of Hardwood pulp (BHKP) as well as a lower sales volume for the Group. Although less relevant, the evolution of the €/US\$ also contributed negatively. Compared to 1Q23, and despite the increase in tons sold, the decrease in revenues from 'Cellulosic fibers' turns out to be a consequence of the rapid decline in the price of Hardwood pulp (BHKP) during 2Q23.

The variation of revenues included in the item 'Others' (-18.6% vs 2Q22) is explained essentially by a change in the Electric Energy (EE) sales regime, as a consequence of Celbi's production unit switching to Self-Consumption from 3Q22. As such, the sale of electric energy started to correspond only to the surplus, being previously sold the total gross energy produced.

After a slowdown at the end of 2022 and a slight reduction in the main variable costs in 1Q23, we saw a further reduction in costs during 2Q23 compared to the previous quarter. In this reduction we highlight the positive evolution of the price of chemicals, electricity and natural gas, as well as the average price of wood. Despite this favorable evolution at the cost level, it was not sufficient to cope with the price reduction during the quarter, ultimately leading to a negative evolution in the EBITDA margin when compared to the previous quarter and with the same quarter of the previous year.

In 2Q23, EBITDA reached € 31.0 M, a decrease of 55.5% vs 2Q22 with an EBITDA margin of 15.4%, a decrease of 10.2 p.p. when compared to the same period in the previous year and of 6.9 p.p. when compared to 1Q23.

The financial results of the Altri Group have gone from € -0.2M in the 2Q22 to € -10.3M in the 2Q23. To this variation, contributes the amount of € -5.8M related to the recognition of the ineffective part of the negative change in the fair value of a derivative contract (vPPA) in the form of a contract for differences (CFD), which the Group has contracted in 2Q23 as part of its strategy to hedge fluctuations in the long-term purchase price of energy. The fair value of this contract is determined based in long-term inputs, unobservable in the market, and, as such, its initial valuation is not accounted for. Therefore, and despite the fact that the contract shows a positive valuation as of 30.06, the decrease verified in energy prices forecasted for the long-term, since the contract date, negatively impacted its fair value. It is the Group's expectation, based on current projections in energy futures, that this variation could be compensated in the future by the differential between the future market price and the fixed contracted energy purchase price. Regarding the other types of financial results (i.e. interest, exchange rate differences and other derivative instruments), they were slightly more negative than in the same quarter of the previous year, as the higher interest cost (as a result of rising rates) was largely mitigated by gains from derivative instruments associated with the currency hedge. Finally, it should be noted that the results for the same quarter of the previous year had been positively impacted by the non-recurring gain on the sale of share subscription rights as part of the capital increase of Greenvolt.

The Net Profit of the Altri Group in 2Q23 reached € 8.4 M, a decrease of 79.0% when compared to the 2Q22 and of 57.4% vs 1Q23.

€ M	2Q23	2Q22	2Q23/2Q22	1Q23	2Q23/1Q23
Cellulosic fibres	162.1	223.7	-27.5%	189.1	-14.2%
Others1	39.8	48.8	-18.5%	35.6	11.6%
Total Revenues	201.9	272.5	-25.9%	224.7	-10.1%
EBITDA	31.0	69.8	-55.5%	50.2	-38.2%
EBITDA mg	15.4%	25.6%	-10.2 pp	22.3%	-6.9 pp
EBIT	13.7	53.4	-74.4%	32.8	-58.3%
EBIT mg	6.8%	19.6%	-12.8 pp	14.6%	-7.8 pp
Financial results	-10.3	-0.2	s.s.	-5.8	77.4%
Income tax	4.8	-13.3	s.s.	-7.6	s.s.
Net profit of cont. operations2	8.4	39.8	-79.0%	19.6	-57.4%

Income statement highlights of the 2Q23

¹ Others: includes essentially i) sale of biomass and rendering of operation and maintenance services to Greenvolt's biomass plants in Portugal and ii) sale of Electric Energy (cogeneration) related to the cellulosic fiber production process. ² Attributable to equity holders of the parent

During the first six months of 2023, the Altri Group's total revenues reached € 426.6 M, a decrease of 18.2% over 1H22. This decrease, as already mentioned, is attributable to a rapid negative evolution of hardwood pulp prices, as a result of a decrease in overall pulp demand, which also ended up affecting volumes sold. EBITDA reached € 81.2 M in 1H23, a decrease of 37.9% over 1H22, reaching an EBITDA margin of 19.0%, which translates into a reduction of 6.1 p.p. compared to the same period of the previous year. Cost reductions, with more visible results in 2Q23, were not sufficient to prevent a deterioration in the Group's profitability. The Net Profit of the Altri Group reached € 28.0 M in 1H23, a decrease of 59.8% when compared to 1H22.

€ M	1H23	1H22	1H23/1H22
Cellulosic fibres	351.2	423.6	-17.1%
Others1	75.4	98.1	-23.2%
Total Revenues	426.6	521.7	-18.2%
EBITDA	81.2	130.7	-37.9%
EBITDA mg	19.0%	25.1%	-6.1 pp
EBIT	46.5	97.8	-52.4%
EBIT mg	10.9%	18.7%	-7.8 pp
Financial results	-16.1	-3.7	330.1%
Income tax	-2.8	-24.4	-88.6%
Net profit of cont. operations2	28.0	69.6	-59.8%

Income statement highlights of the 1H23

¹ Others: includes essentially i) sale of biomass and rendering of operation and maintenance services to Greenvolt's biomass plants in Portugal and ii) sale of Electric Energy (cogeneration) related to the cellulosic fiber production process. ² Attributable to equity holders of the parent

Investment

The total net investment (i.e., payments in the period relating to acquisitions of property, plant and equipment) made by the Altri Group during the first six months of 2023 reached € 36.2 M, which compares with the € 18.8 M in the same period of 2022. The total investment for the six month period of 2023 includes € 14.2 M related to the new biomass boiler for the Caima industrial unit.

	2Q23	1Q23	2022	4Q22	3Q22	2Q22	1Q22
Total net investment	17.8	18.4	45.3	10.5	16.0	12.0	6.8

Debt

The Altri Group's net debt reached € 401.0 M at the end of the 2Q23, an increase vs € 327.5 M at the end of 1Q23. This level of debt is equivalent to a Net Debt/EBITDA LTM ratio of 1.6x. The total net debt, (i.e., when adding lease liabilities), was around € 477.3 M at the end of the first semester of 2023. The increase in the level of debt during 2Q23 compared to the previous quarter is mostly justified by the distribution of a cash dividend amounting to € 51.3 M.

€ M	2Q23	1Q23	4Q22	3Q22	2Q22	1Q22	2021
Net Debt	401.0	327.5	325.8	360.1	356.9	303.3	344.0

Sustainability

The Altri Group has defined four strategic development vectors that focus its activity and its future investments:

• To value the people
• Develop and enhance the forest
• Focus on operational excellence and technological innovation
• Affirming sustainability as a competitiveness factor

Based on this strategy, the main sustainability objectives for the Group were identified, in line with the Sustainable Development Goals (SDGs) of the United Nations, and with the expectations of our stakeholders, resulting in the definition of the "2030 Commitment" of the Altri Group. Every quarter we see progress towards a more sustainable Group, of which we highlight:

• At the top of the Altri Group's priorities is the safety of employees. For the first time in the Altri Group's history, in 2023, we achieved 2 consecutive months (April and May) with zero recorded incidents involving internal employees, contributing to the achievement of the 2030 Commitment.
• The Altri Group recorded a significant improvement in its ESG rating assigned by Sustainalytics, reaching the Top 5 worldwide among companies in the Paper and Forestry sector. In addition, Ecovadis awarded a Platinum score to the Altri Group, which places us in the top 1% worldwide of the sector analyzed by this ESG rating agency.

દિડેન Rating	Altri Score	Previous Score	Evolution	Last Assessment	Peers
*1 SUSTAINALYTICS	14.7	19.3	1	Q2'2023	Industry Group - Paper & Forestry 5th out of 80
1 MSCI (1)	BBB	BB	1	Q1.2023	Below industry average
3 CDF	Climate: A- Forest: B Water: B	Climate: A- Forest: B Water: B	1	Q4'2022	Above industry average
ecovadis	Platinum	N.A.		Q2'2023	Top 1% Worldwide

• The Altri Group was recognized by the Kaizen Institute, a leading global consultant in the implementation of continuous improvement and management processes, with the 1 st place of the 12th edition of the KAIZEN Awards Portugal, in the category of "Sustainability", a recognition for the work developed within the scope of its "Commitment 2030".

Perspectives

The year 2023 is a adjustment year for the global pulp market cycle, with China returning to a positive post-Covid dynamic and Europe and North America returning to a structurally declining demand trend for the P&W end-use segment, despite growth in Tissue.

The demand for hardwood pulp in the chinese market has been increasing throughout 2023, growing +8.1% according to the PPPC, but it took prices to fall below the cash costs of many chinese integrated producers for this increase in demand to be reactivated. While there is a significant increase in supply in the market stemming from Arauco and UPM's new industrial units, we believe this increased momentum could continue during the second half of 2023.

In the European market, the destocking effect along the pulp and paper industry value chain, experienced since the end of 2022, should be ending, with demand being the decisive factor entering the second half of 2023. The end-use segments of P&W, Décor and some Specialties continue to show low levels of demand, while Tissue maintains fairly resilient levels of demand. The Group is working to achieve the best commercial solutions to maintain adequate sales levels and counter the decrease in demand in the aforementioned segments.

The price of hardwood pulp (BHKP) in Europe has followed the global trend of falling prices, and recently, the difference between prices in Europe and China is practically nil. At the end of 2Q23, hardwood pulp (BHKP) prices in Europe reached US\$ 958/ton. The Group believes that this process may be coming to an end, and that, with it, a stabilization in price developments is expected. Dissolving Pulp, (DP), with a higher correlation with the textile market, showed consolidated demand levels and stable price levels during 2Q23, increasing its premium to historical levels against hardwood pulp prices. The Altri Group remains vigilant and cautious about the outlook for market developments in the coming quarters.

After the year 2022, in which main variable costs experienced widespread inflation, we were able to reverse this trend, on a quarterly basis, during 1Q23. This quarterly reduction in production costs accelerated during 2Q23. The Altri Group will continue to work towards maintaining a cost reduction trend in the second half of 2023, in particular in chemicals, energy and wood.

In what concerns the Gama project, in Galicia, the Altri Group maintains the intention to take a final investment decision by the end of 2023. The Group continues to work on the various fronts for the decision making, namely the environmental impact study, engineering design, economic feasibility, financing structure and access to funds of the EU (European Union). To be noted that the Gama project stems from a Memorandum of Understanding (MoU) signed with Impulsa, a public-private consortium from the Autonomous Community of Galicia, to study exclusively the construction of a greenfield industrial plant from scratch, with an annual production capacity of 200,000 tons of soluble pulp and sustainable textile fibers.

Annexes

Description of Altri Group

Altri is a reference in European cellulosic fibers producers. In addition to cellulosic fibers production, the Group is also present in the renewable power production business from forest base sources, namely industrial cogeneration through black liquor. The forestry strategy is based on the full use of all the components provided by the forest: cellulosic fibers, black liquor and forest wastes.

Currently, Altri manages around 90.4 thousand hectars of forest in Portugal, entirely certified by the Forest Stewardship Council® (FSC® -C004615) and by Programme for the Endorsement of Forest CertificationTM (PEFCTM), two of the most acknowledged certification entities worldwide.

Currently, Altri has three pulp mills in Portugal, with an installed capacity that, in 2022, surpassed 1.1 million tonnes/year of cellulosic fibers.

Altri's current organic structure at the end of June 2023 can be represented as follows:

Pulp mill's maintenance downtime schedule

In terms of stoppages for maintenance during 2023, the schedule is as follows:

Mill	2023	Status
Celbi	March	Concluded
Biotek	October	Scheduled
Caima	October	Scheduled

Debt maturity profile

Amounts in € M. Note: Commercial Paper renewable with multi-year maturity.

Income statement (2Q23)

€ M	2Q23	2Q22	2Q23/2Q22	1Q23	2Q23/1Q23
Cellulosic fibres	162.1	223.7	-27.5%	189.1	-14.2%
Others1	39.8	48.8	-18.5%	35.6	11.6%
Total revenues	201.9	272.5	-25.9%	224.7	-10.1%
Cost of sales	109.4	113.9	-4.0%	112.0	-2.4%
External supplies and services	46.5	71.5	-34.9%	47.2	-1.5%
Payroll expenses	11.6	12.7	-8.2%	11.6	0.5%
Other expenses	1.3	5.1	-74.3%	3.7	-65.0%
Provisions and impairment losses	2.0	-0.5	s.s.	-0.1	s.s.
Total expenses	170.9	202.7	-15.7%	174.5	-2.1%
EBITDA	31.0	69.8	-55.5%	50.2	-38.2%
EBITDA margin	15.4%	25.6%	-10.2 pp	22.3%	-6.9 pp
Amortisation and depreciation	-17.4	-16.4	5.7%	-17.4	-0.1%
EBIT	13.7	53.4	-74.4%	32.8	-58.3%
EBIT margin	6.8%	19.6%	-12.8 pp	14.6%	-7.8 pp
Financial results	-10.3	-0.2	s.s.	-5.8	77.4%
Profit before income tax of continued operations	3.4	53.1	-93.6%	27.0	-87.4%
Income tax	4.8	-13.3	s.s.	-7.6	s.s.
Consolidated net profit of continued operations in the period	8.2	39.8	-79.4%	19.4	-57.8%
Attributable to:
Equity holders of the parent	8.4	39.8	-79.0%	19.6	-57.4%
Non-controlling interests	-0.2	0.0	s.s.	-0.2	-2.1%

¹ Others: includes essentially i) sale of biomass and rendering of operation and maintenance services to Greenvolt's biomass plants in Portugal and ii) sale of Electric Energy (cogeneration) related to the cellulosic fiber production process.

Income statement (1H23)

€ M	1H23	1H22	1H23/1H22
Cellulosic fibres	351.2	423.6	-17.1%
Others1	75.4	98.1	-23.2%
Total revenues	426.6	521.7	-18.2%
Cost of sales	221.4	217.6	1.7%
External supplies and services	93.8	142.9	-34.4%
Payroll expenses	23.2	22.8	1.7%
Other expenses	5.0	8.2	-38.5%
Provisions and impairment losses	2.0	-0.5	-496.0%
Total expenses	345.4	391.0	-11.7%
EBITDA	81.2	130.7	-37.9%
EBITDA margin	19.0%	25.1%	-6.1 pp
Amortisation and depreciation	-34.7	-33.0	5.4%
EBIT	46.5	97.8	-52.4%
EBIT margin	10.9%	18.7%	-7.8 pp
Financial results	-16.1	-3.7	330.1%
Profit before income tax of continued operations	30.4	94.0	-67.6%
Income tax	-2.8	-24.4	-88.6%
Consolidated net profit of continued operations in the period Attributable to:	27.7	69.6	-60.3%
Equity holders of the parent company	28.0	69.6	-59.8%
Non-controlling interests	-0.3	0.0	s.s.

¹ Others: includes essentially i) sale of biomass and rendering of operation and maintenance services to Greenvolt's biomass plants in Portugal and ii) sale of Electric Energy (cogeneration) related to the cellulosic fiber production process.

Balance sheet (1H23)

€ M	1H23	2022	1H23/2022
Biological assets	110.6	109.1	1.4%
Property, plant and equipment	349.6	336.6	3.9%
Right-of-use assets	67.8	68.6	-1.3%
Goodwill	265.6	265.6	0.0%
Investments in joint ventures and associates	0.9	1.7	-47.5%
Others	20.2	22.0	-8.3%
Total non-current assets	814.7	803.7	1.4%
Inventories	139.6	112.9	23.7%
Trade receivables	116.4	134.6	-13.5%
Cash and cash equivalents	184.4	233.6	-21.1%
Others	36.0	32.9	9.4%
Total current assets	476.4	514.0	-7.3%
Group of assets classified as held for distribution to shareholders	0.0	180.6	-100.0%
Total assets	1,291.1	1,498.4	-13.8%
Total equity and Non-controlling interests	405.8	609.9	-33.5%
Bank loans	25.0	25.0	0.0%
Other loans	347.2	433.8	-20.0%
Reimbursable government grants	1.3	1.6	-20.0%
Lease liabilities	65.5	64.9	0.9%
Others	54.4	47.8	13.7%
Total non-current liabilities	493.4	573.2	-13.9%
Bank loans	0.3	19.1	-98.6%
Other loans	217.1	82.5	163.2%
Reimbursable government grants	0.7	0.7	0.0%
Lease liabilities	10.7	17.4	-38.2%
Trade payables	98.0	108.7	-9.9%
Others	65.1	86.9	-25.0%
Total current liabilities	391.9	315.3	24.3%
Total liabilities and equity	1,291.1	1,498.4	-13.8%

Note: Consolidated financial information included in this document was prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU).

Glossary

CDP: ESG Rating agency

EBIT: Profit before income tax and Financial results of continued operations

EBIT margin: EBIT / Total Revenues

EBITDA: Profit before income tax, Financial results and Amortisation and depreciation of continued operations

EBITDA LTM: EBITDA reported in the last twelve months

EBITDA margin: EBITDA / Total Revenues

Ecovadis: ESG Rating agency

ESG: Environment, Social and Governance

Financial results: Results related to investments, Financial expenses and Financial income

Net Debt: Bank loans (nominal amounts) + Other loans (nominal amounts) - Cash and cash equivalents

Net Profit: Net profit of continued operations attributable to equity holders of the parent

Sustainalytics: ESG Rating agency

Total Net Debt: Net Debt + Lease Liabilities

Total Revenues: Sales + Services rendered + Other income

vPPA: Virtual Power Purchase Agreement

E A R N I N G S A N N O U N C E M E N T

2Q23

ALTRI, SGPS, S.A.

Head office: Rua Manuel Pinto de Azevedo, 818, Porto Share capital: Euro 25,641,459 Registered in the Oporto Commercial Registry Office under the single registration and tax identification number - 507 172 086