Altri SGPS — Interim / Quarterly Report 2010

Nov 29, 2010

ALTRI, SGPS, S.A. Open Capital Company

Head Office: Rua do General Norton de Matos, 68, r/c – Porto Fiscal Number: 507 172 086 Share Capital: 25.641.459 euro

3Q 2010 Financial Information

3Q10 EBITDA reached 49M€ and EBITDA margin exceeds 36%

The financial information of the Group was prepared in accordance with the International Financial Relating Standards (IFRS).

Main financial indicators

	30 10	3009	2010	3010/2010 Var ч.	3010/3009 Var%
operating income	134.518	BO B 23	135.549	$-0.8%$	66.4%
Cost of sales External supplies and services Payroll expenses Provisions and impairment losses	40.057 29.883 7.931 0.059	32388 28.255 7.934 0.100	41.400 31.391 8.109 0.000	$-3.2%$ $-4.8%$ $-2.2%$	23.7% 5.8% 0.0%
Other expenses Total expenses (a)	7.569 85.499	0.655 69332	6.428 87.328	17.7% $-2.1%$	S.S. 23.3%
EBITDA (b) Margin	49.019 36.4%	11.491 14.2%	48.221 35.6%	1.7% $+0.9$ pp	326.6% $+22,2$ pp
Am ortisation and depreciation	12.977	6.173	12.969	0.1%	110.2%
EBIT(c) Margin	36.042 26.8%	5.31B 6.6%	35.252 26.0%	2.2% $+0.8$ pp	577.8% $+20,2$ pp
Gains and losses in associated companies Gains and losses in other investments Financial expenses Financial income	0.660 0.000 $-10.343$ 0.743	0.099 0.084 $-7126$ 1.093	0.410 0.000 $-9477$ $-0.003$	60.9% 9 1%	567.6% $-45.2%$ $-32.1%$
Financial profit	$-8.941$	$-5.850$	$-9.069$	$-1.4%$	$-52.8%$
Profit before income tax	27.101	$-0.532$	26.182	3.5%	S.S.
Income tax Minority interests	$-6.878$ 0.004	0.556 $-0.003$	$-8.710$ 0.003
Profit after income tax	20.219	0.027	17.470	15.7%	SS
Profit for the period from discounted operations	0.428	0.026	0.123	$\overline{\phantom{a}}$	SS
Consolidate d net profit	20.647	0.052	17.593	17.4%

In the third quarter 2010 total revenues, excluding the financial income, reached approximately 134.5 million euro, representing an increase of more than 66% over the third quarter of 2009. Compared to the first quarter of 2010, there was a decrease of 0.8%.

During 3Q 2010, the three Altri industrial units produced and sold approximately 211 and 197 thousand tonnes of bleached eucalyptus pulp respectively. In the third quarter production was approximately 6% higher than production in the previous quarter, but the tons sold in the third quarter were lower than for the second quarter (-3%). This was due to the need to place stocks at minimum levels to ensure a normal flow of business.

Quarterly pulp production and sales (k tonnes)

Sales of electric power produced through cogeneration and other forest derivatives (liquor and bark) amounted during the third quarter of 2010 to 16.5 million euro. During the same period of 2009 this figure was 16.5 million euro, while in the second quarter of 2010 had been 16.1 million euro.

Purchases of electricity rose in the third quarter of 2010, to 7.2 million euro.

Total expenses excluding amortization, financial expenses and taxes, reached 85.5 million euro in the 3Q 2010. This represents a decrease of 2.1% over the second quarter of 2010. This decrease is due to the stabilization of the production process, resulting in either reduction of variable and fixed costs.

EBITDA 3Q10 exceeds 49 million euro

3Q 2010 EBITDA was about 49 million euro, representing an increase of 1.7% comparing to the 2Q 2010 and representing an increase of approximately 327% comparing to the 3Q 2009. The EBITDA margin in 3Q 2010 was 36.4% (+ 0.9 basis points comparing to the 2Q 2010).

The earnings before financial results and taxes (EBIT) was approximately 36 million euro, representing an increase of 2.2% when compared to 2Q 2010 and a growth of 578% comparing to 3Q 2009. The EBIT margin was 26.8%.

Net income after minority interests amounted to 20.2 million euro.

CAPEX and Net Debt

Total investment (CAPEX), during the first nine months of 2010 was 19.5 million, which represents an investment of 6.2 million euro in this quarter.

The Altri nominal net debt as of September 30, 2010 was to 762.0 million euro.

All financing needs are totally assured, and as of September 30, 2010 Altri has 93.8 million euro in cash and equivalents and, approximately, 115.9 million euro of financing plafond not in use.

3Q10 Financial information

Main September 2010 indicators

	9M 10	9M 09	9M 10/9M 09 Var%
Operating income	378.733	222.320	70.4%
Cost of sales	119.111	89.917	32.5%
External supplies and services	90.961	79.877	13.9%
Payroll expenses	23.165	24.348	-4.9%
Provisions and impairment losses	0.159	1.150	$-86.2%$
Other expenses	17.038	1.750	873.7%
Total expenses (a)	250.434	197.042	27.1%
EBITDA (b)	128.300	25.278	407.6%
Margin	33.9%	11.4%	+22,7 pp
Amortisation and depreciation	38.916	21.653	79.7%
EBIT(c)	89.384	3.625	SS.
Margin	23.6%	1.6%	+23,0 pp
Gains and losses in associated companies	0.838	$-0.529$	S S
Gains and losses in other investments	0.000	0.130
Financial expenses	$-27.726$	$-23.083$	20 1%
Financial income	1.966	3.819	$-48.5%$
Financial profit	24 9 23	19664	26.7%
Profit before income tax	64.461	$-16.039$	S.S.
Income tax	$-17.617$	2.880	S.S.
Minority interests	0.005	$-0.035$	S.S.
Profit after income tax	46.839	$-13.124$	S.S.
Profit for the period from discontinued operations	0.501	1.102	$-54.5%$
Consolidated net profit	47.340	$-12.021$	S.S.

The 9M 2010 operating income amounted to 379 million euro, representing a growth exceeding 70% comparing to 9M 2009. In terms of operating results, EBITDA amounted 128.3 million euro, with a margin of 33.9%, and EBIT stood at 89.4 million euro, with a margin of 23.6%.

The 9M 2010 net profit after minority interests amounted to about 46.8 million euro.

3Q10 Financial information

Pulp market

The third quarter was characterized by a lower selling price of Bleached Hardwood Kraft (BEHP) of 50 USD, announced in late July to be implemented in August, which set the price in Europe at 870 USD per tonne. Moreover, there was a continued evolution demand in Europe and the United States while, until August noted, a slowdown in Asian demand, particularly from China. Detailing we have:

1) Demand: The year 2010 has been characterized by two distinct trends: firstly there are rates of double-digit growth in demand in Western Europe, being the nominal amount of pulp consumed in this geography in line with the historical average, after the fall of 11% recorded in 2009. Moreover, in China, whose rate of demand growth was 40% in 2009, verified in the end of August a reduction amount of pulp consumed. In September, taking into account data provided by PPPC, there was a significant increase in demand from China.

	1999	2006	2007	2008		2009 % Var 08/09
Nort America	7879	8.465	8,688	7.979	7.080	$-11%$
Scandinavia	1.269	1.625	1,705	1.765	1.610	-9%
Western Europe	14.293	15.435	15.718	15.225	13,555	$-11%$
Eastern Europe	339	1.125	1.204	1.210	1.260	4%
LatAm	1.877	2.145	2.354	2.435	2.795	15%
Oceania	270	300	360	320	285	$-11%$
Japan	2.660	2.495	2.330	2.240	1,875	-16%
China	n/a	6.130	6.595	7.990	11,180	40%
Asia/Africa	6.953	6.455	6,689	6.475	6.115	$-6%$
TOTAL	35.540	44,175	45,643	45,630	45,755	0.3%

Pulp world demand by region between 1999 and 2009

Pulp world demand by region on 1st half 2010 (versus same period of 2009)

Source: Hawkins Wright

2) Stocks: In Europe, the biggest consumer of pulp in absolute terms, the stocks in producers (Europulp) remain at historically low levels and it was fixed at 834 thousand tonnes at the end of September 2010.

European ports stocks evolution until September 2010

In late September 2010, the market price of BEKP was set at 870 USD/ton in Europe. Although the price in USD is stable since August, the price in EUR has been affected by the appreciation of the currency against the USD, so at the end of September 2010, the price of this pulp was around EUR 649 EUR/ton

Evolution of BEKP pulp price since 2002 to 26th October 2010 (€)

Source: FOEX

3Q10 Financial information

Altri – business profile

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

Currently, Altri manages over 82,000 hectares of forest in Portugal. The company obtained certification from the Forest Stewardship Council (FSC) and from the Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities, for the whole 82,000 ha of forest under their management in Portugal.

Nowadays, Altri major assets are three pulp mills, with a 2009 total capacity above 650 thousand tonnes/year of bleached eucalyptus pulp. The Company has investment projects on an advanced ramp up phase that will increase its production capacity to more than 900 thousand tonnes/year.

Altri's organic structure as of 30 September 2010 is as follows:

Porto, November 3, 2010

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2010 AND 31 DECEMBER 2009

(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)

ASSETS	Notes	30.09.2010	31.12.2009
NON CURRENT ASSETS:
Biological assets		85,890,316	80,486,847
Tangible assets		504,380,320	525,137,385
Goodwill		269,444,954	269,401,310
Intangible assets		475,965	290,122
Investments in associated companies	4.2	10,172,686	10,509,914
Investments available for sale	4.3	680,789	714,354
Other non current assets		857,779	694,667
Deferred tax assets Total non current assets	7	15,284,859 887,187,668	18,063,845 905,298,444
CURRENT ASSETS:
Inventories		52,758,041	37,887,922
Customers		97,794,813	69,602,593
Other debtors		11,242,614	6,982,879
State and other public entities		10,114,561	15,643,774
Other current assets		5,402,665	6,548,231
Investments recorded at fair value through profit and loss		-	602,670
Cash and cash equivalents	6	93,798,596	80,261,966
		271,111,290	217,530,035
Assets classified as held for sale or in discontinuation	4.4	130,999	695,758
Total current assets		271,242,289	218,225,793
Total assets		1,158,429,957	1,123,524,237
SHAREHOLDERS' FUNDS AND LIABILITIES		30.09.2010	31.12.2009
SHAREHOLDERS' FUNDS:
Share capital	8	25,641,459	25,641,459
Legal reserve		2,862,981	2,862,981
Other reserves		21,266,938	40,079,391
Consolidated net profit/(loss)		47,340,193	(10,910,016)
Total shareholders' funds attributable to the parent company's shareholders		97,111,571	57,673,815
Non controlling interests		114,723	109,371
Total Shareholders' funds		97,226,294	57,783,186
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	9	149,880,162	149,913,243
Other loans	9	572,983,765	612,519,785
Other non current creditors		299,234	339,766
Other non current liabilities		24,284,715	24,101,086
Deferred tax liabilities	7	970,499	981,007
Provisions Total non current liabilities	10	2,409,386 750,827,761	2,424,509 790,279,396
CURRENT LIABILITIES:
Bank loans Other loans	9 9	23,918,387 144,135,502	46,559,986 109,171,440
Suppliers		66,058,292	65,999,089
Other current creditors		12,145,986	10,779,891
State and other public entities		12,553,501	3,806,882
Other current liabilities		22,868,774	20,755,541
Derivatives	11	28,486,880	18,213,114
		310,167,322	275,285,943
Liabilities associated with assets classified as held for sale or in discontinuation	4.4	208,580	175,712
Total current liabilities		310,375,902	275,461,655
Total shareholders' funds and liabilities		1,158,429,957	1,123,524,237

The accompanying notes form an integral part of the consolidated financial statements.

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS BY NATURE FOR THE NINE AND THREE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese - Note 20) (Amounts expressed in Euro)

	NINE MONTH PERIODS ENDED			QUARTER ENDED
	Notes	30.09.2010	30.09.2009	30.09.2010	30.09.2009
Continuing operations
Sales		369,413,689	190,098,684	133,471,866	75,640,235
Services rendered		1,205,702	2,140,469	31,473	492,032
Other income		8,113,906	30,080,527	1,014,619	4,690,589
Cost of sales		(119,111,408)	(89,916,801)	(40,056,716)	(32,387,952)
External supplies and services		(90,960,796)	(79,877,370)	(29,883,470)	(28,254,520)
Payroll expenses		(23,164,850)	(24,347,881)	(7,931,123)	(7,933,879)
Amortisation and depreciation		(38,916,170)	(21,652,617)	(12,976,617)	(6,173,345)
Provisions and impairment losses	10	(158,624)	(1,150,000)	(58,624)	(100,000)
Other expenses	14	(17,037,935)	(1,749,880)	(7,569,285)	(655,319)
Gains and losses in associated companies	12	837,770	(528,754)	659,854	98,834
Gains and losses in other investments		-	129,761	-	83,877
Financial expenses	12	(27,725,905)	(23,083,219)	(10,343,394)	(7,125,799)
Financial income	12	1,965,531	3,818,573	742,861	1,093,433
Profit/(loss) before income tax		64,460,910	(16,038,508)	27,101,444	(531,814)
Income tax		(17,616,630)	2,880,138	(6,878,243)	555,651
Profit/(loss) after income tax		46,844,280	(13,158,370)	20,223,201	23,837
Attributable to:
Parent company's shareholders		46,838,928	(13,123,525)	20,219,202	26,642
Non controlling interests		5,352	(34,845)	3,999	(2,805)
Discontinued operations
Profit for the period from discontinued operations	4.4	501,265	1,102,404	427,854	25,636
Attributable to:
Parent company's shareholders		501,265	1,102,404	427,854	25,636
Non controlling interests		-	-	-	-
Consolidated net profit/(loss)		47,345,545	(12,055,966)	20,651,055	49,473
Attributable to:
Parent company's shareholders		47,340,193	(12,021,121)	20,647,056	52,278
Non controlling interests		5,352	(34,845)	3,999	(2,805)
		47,345,545	(12,055,966)	20,651,055	49,473
Earnings per share
Continuing operations
Basic	13	0.457	(0.128)	0.197	0.000
Diluted	13	0.457	(0.128)	0.197	0.000
Continuing and discontinued operations
Basic	13	0.462	(0.117)	0.201	0.001
Diluted	13	0.462	(0.117)	0.201	0.001

The accompanying notes form an integral part of the consolidated financial statements.

ALTRI, S.G.P.S., S.A.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE NINE AND THREE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese - Note 20) (Amounts expressed in Euro)

		NINE MONTH PERIODS ENDED		QUARTER ENDED
	Notes	30.09.2010	30.09.2009	30.09.2010	30.09.2009
Consolidated net profit/(loss)		47,345,545	(12,055,966)	20,651,055	49,473
Hedging reserves	7 and 11	(7,951,188)	(11,546,449)	11,949,406	(4,258,055)
Other comprehensive income		(7,951,188)	(11,546,449)	11,949,406	(4,258,055)
Total comprehensive income for the period		39,394,357	(23,602,415)	32,600,461	(4,208,582)
Attributable to: Parent company's shareholders Non controlling interests		39,389,005 5,352	(23,567,570) (34,845)	32,596,462 3,999	(4,205,777) (2,805)

The accompanying notes form an integral part of the consolidated financial statements.

ALTRI, S.G.P.S., S.A.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE NINE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)

	Attr ibut able the 's s har eho lder to t co pa ren mp any s
					Oth er r ese rves
	Not es	Sha apit al re c	Leg al r ese rve	Hed ging res erv es	Oth d er r ese rves an reta ined rnin ea gs	Tot al o the r res erv es	Net fit/( ) loss pro	Tot al	Non trol ling con inte rest s	Tot al sha reh olde rs' fun ds
Bal s of 1 J 20 09 anc e a anu ary		25, 641 ,459	1,6 30, 523	7,2 94, 181	46, 862 ,442	54, 156 ,623	4,6 68, 149	86, 096 ,754	283 ,99 1	86, 380 ,745
App riat ion of t he soli dat ed fit o f 20 08 net rop con pro		-	1,2 32, 458	-	3,4 35, 691	3,4 35, 691	(4, 668 ,149 )	-	-	-
Oth er		-	-	-	(13 ,408 )	(13 ,408 )	-	(13 ,408 )	-	(13 ,408 )
Cel Ce , S. Par ticip atio isiti tejo - E de lulo se d o T ejo A. n a cqu on on mp resa		-	-	-	-	-	-	-	(14 31) 0,9	(14 31) 0,9
Tot al c hen sive inc e fo r th erio d om pre om e p		-	-	(11 ,546 ,449 )	-	(11 ,546 ,449 )	(12 ,02 1,12 1)	(23 ,567 ,570 )	(34 ,845 )	(23 ,602 ,415 )
Bal s of Se mb 30 pte er 2 009 anc e a		25, 641 ,459	2,8 62, 981	(4,2 ) 52, 268	50, 284 ,725	46, 032 ,457	(12 1) ,02 1,12	62, 515 ,776	108 ,215	62, 623 ,99 1
Bal s of 1 J 20 10 anc e a anu ary	8	25, 641 ,459	2,8 62, 981	(10 ,205 ,900 )	50, 285 ,29 1	40, 079 ,39 1	(10 ,910 ,016 )	57, 673 ,815	109 ,37 1	57, 783 ,186
App riat ion of t he soli dat ed loss of 200 9 net rop con		-	-	-	(10 ,910 ,016 )	(10 ,910 ,016 )	10, 910 ,016	-	-	-
Oth er		-	-	-	48, 751	48, 751	-	48, 751	-	48, 751
Tot al c hen sive inc e fo r th erio d om pre om e p		-	-	(7, 951 ,188 )	-	(7, 951 ,188 )	47, 340 ,193	39, 389 ,005	5,3 52	39, 394 ,357
Bal s of Se mb 30 pte er 2 010 anc e a		25, 641 ,459	2,8 62, 981	(18 ) ,157 ,088	39, 424 ,026	21, 266 ,938	47, 340 ,193	97, 111 ,57 1	114 ,723	97, 226 ,294

The accompanying notes form an integral part of the consolidated financial statements.

ALTRI, SGPS, S.A.

CONDENSED CONSOLIDATED CASH-FLOW STATEMENTS FOR THE NINE AND THREE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese - Note 20) (Amounts expressed in Euro)

		NINE MONTH PERIODS ENDED		QUARTER ENDED
	Notes	30.09.2010	30.09.2009	30.09.2010	30.09.2009
Operating activities:
Cash flow from operating activities (1)		87,562,518	46,766,339	32,811,210	22,899,699
Investment activities:
Collections relating to:
Financial investments	17	1,175,000	-	-	-
Tangible assets		221,357	1,716,765	(37,196)	426,337
Interest and similar income		2,793,812	4,948,097	651,535	1,375,304
Investment subsidies		887,948	2,951,044	887,948	1,111,356
Payments relating to:
Financial investments	17	-	(5,040,021)	-	(78,202)
Intangible assets		(450,000)	(47,671)	(450,000)	-
Tangible assets		(20,936,373)	(89,631,921)	(4,164,483)	(12,307,994)
Biological assets		(7,464,910)	(9,970,979)	(19,126)	(2,927,389)
Cash flow from investment activities (2)		(23,773,166)	(95,074,686)	(3,131,322)	(12,400,588)
Financing activities:
Collections relating to:
Loans obtained		28,295,620	145,145,863	15,120,620	11,792,245
Payments relating to:
Lease contracts		(160,492)	(39,703)	(53,499)	(9,037)
Interest and similar costs		(23,613,769)	(37,577,554)	(10,354,553)	(14,177,960)
Loans obtained		(52,144,915)	(45,412,464)	(17,482,048)	(20,423,836)
Cash flow from financing activities (3)		(47,623,556)	62,116,142	(12,769,480)	(22,818,588)
Cash and cash equivalents at the beginning of the period		77,632,800	73,023,397	7,688,188	99,150,669
Variation of cash and cash equivalents: (1)+(2)+(3)		16,165,796	13,807,795	16,910,408	(12,319,477)
Cash and cash equivalents at the end of the period	6	93,798,596	86,831,192	24,598,596	86,831,192

The accompanying notes form an integral part of the consolidated financial statements.

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

1. INTRODUCTORY NOTE

Altri, SGPS, S.A. ("Altri" or "Company") was incorporated as of 1 March 2005, has its head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and its shares are listed in the Lisbon Euronext Stock Exchange. Its main activity is the management of investments.

Altri was incorporated as a result of the reorganization process of Cofina, SGPS, S.A. through the demerger of the investment previously held by this group in Celulose do Caima, SGPS, S.A. (representing 97.23% of this company's share capital), under a simple demerger operation predicted in item 1.a), article 118 of the Commercial Companies Code ("Código das Sociedades Comerciais").

Altri is the parent company of a group of companies listed in Note 4 known as Altri Group, the activity of Altri Group focuses on the production of bleached paper pulp of eucalyptus through three production units (Celbi in Figueira da Foz, Caima in Constância do Ribatejo and Celtejo in Vila Velha de Ródão).

Due to this new reality of Altri Group, the Board of Directors believes that there is only one business segment (production and commercialization of bleached paper pulp of eucalyptus) and management's information is also analyzed on this basis, for which the segmental information mentioned in Note 16 is limited by this.

The consolidated financial statements of Altri Group are presented in Euro rounded off to the unit, which is the currency used by the Group in its operations and considered as the functional currency.

The consolidated financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting.

2. BASIS OF PRESENTATION AND MAIN ACCOUNTING POLICIES

The consolidated financial statements as of 30 September 2010 were prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard 34 – Interim Financial Reporting and includes the statement of financial position, the statement of profit and loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows as well as the selected explanatory notes.

The accounting policies used in the preparation of the consolidated financial statements of Altri are consistent with those used in the year ended 31 December 2009.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

During the period there were no changes in accounting policies and were identified no material mistakes related to previous periods.

Additionally, during this period has taken place the adoption – for the first time – of the revised versions of IFRS 3 – Business combinations and IAS 27 – Consolidated and Separate Financial Statements (2008 revision). These modifications involve changes on the recording of new business combinations, namely:

• a) on the calculation of goodwill and non-controlling interests (formerly designated as minority interests): an option is given, on a transaction by transaction basis, allowing the non-controlling interests value to be determined in accordance with the proportion of the fair value of the acquired assets and liabilities, or in accordance with its fair value. Additionally, goodwill is now the difference between the investment's acquisition price plus the value of the non-controlling interests less the fair value of the acquired assets and liabilities;
• b) on the contingent payments' recognition and subsequent valuation: under the current version of IFRS 3, the future contingent payments are recorded as liabilities, at their fair value, when the business combination takes place. Any changes to the value initially computed are recorded through goodwill only if these changes occur within the remensuration period (12 months after the acquisition date) and if they relate to events previous to the acquisition date; otherwise, these changes shall be recorded through profit and loss;

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

• c) on the treatment of direct costs related to the business combination: these are now generally recorded directly on profit and loss, and cease to affect the acquisition price of the investment;
• d) on the recording of acquisitions of interests in entities already controlled and sales of interests that imply no loss of control: until the adoption of the revised version of IAS 27, an increase on the control percentage over any subsidiary would imply the recording of goodwill, and a decrease on the control percentage over a subsidiary would imply the recognition of profit or loss in the moment of the sale. With the adoption of the revised version, the transactions that originate no gain or loss of control are treated as transactions between shareholders and affect only equity captions, having no impact on goodwill nor on profit and loss;
• e) the calculation of the result of a participation disposal that implies loss of control and remensuration of the interests held on the disposed participation: under the revised version of the standard, the loss of control implies the derecognition of the assets and liabilities of that entity and any interest held over that entity shall be remeasured at fair value. The amount received for the disposal, plus the remeasuring effect mentioned above, will affect the net profit or loss of the period.

The adoption of these standards, however, had no impact on Altri's consolidated financial statements as of 30 September 2010.

4. INVESTMENTS

4.1 INVESTMENTS IN GROUP COMPANIES

The companies included in the consolidated financial statements by the full consolidation method, their headquarters, percentage participation held and activity developed as of 30 September 2010 and 31 December 2009 are as follows:

Company	Head Office		Percentage Held	Activity
Altri, SGPS, S.A. (Parent-Company)	Oporto	2010	2009	Investment management
Celulose do Caima, SGPS, S.A.	Lisbon	100%	100%	Investment management
Caima Indústria de Celulose, S.A.	Lisbon	100%	100%	Production and commercialisation of pulp
Altri Florestal, S.A.	Lisbon	100%	100%	Sylvan exploration
Caima Energia – Empresa de Gestão e Exploração de Energia, S.A.	Lisbon	100%	100%	Production of energy
Invescaima – Investimentos e Participações, SGPS, S.A.	Lisbon	100%	100%	Investment management
Inflora – Sociedade de Investimentos Florestais, S.A.	Lisbon	100%	100%	Sylvan exploration
Sócasca – Recolha e Comércio de Recicláveis, S.A.	Águeda	100%	100%	Commercialisation of recycled products
Celtejo – Empresa de Celulose do Tejo, S.A.	Vila Velha de Ródão	99.83%	99.83%	Production and commercialisation of pulp
CPK – Companhia Produtora de Papel Kraftsack, S.A. (a)	Vila Velha de Ródão	99.83%	99.83%	Production and commercialisation of paper
Altri - Energias Renováveis, SGPS, S.A.	Lisbon	99.83%	99.83%	Investment management
Sosapel – Sociedade Comercial de Sacos de Papel, Lda. (b)	Vila Velha de Ródão	-	99.83%	Commercialisation of pulp
Celbi – Celulose da Beira Industrial, S.A.	Figueira da Foz	100%	100%	Production and commercialisation of pulp
Celbinave – Tráfego e Estiva SGPS, Unipessoal, Lda.	Figueira da Foz	100%	100%	Freightage of ships
Viveiros do Furadouro Unipessoal, Lda.	Óbidos	100%	100%	Production of plants in nurseries and services related w ith forests and landscapes
Altri, Participaciones Y Trading, S.L.	Madrid, Spain	100%	100%	Investment management
Altri Sales, S.A.	Nyon, Sw itzerland	100%	100%	Commercialisation of pulp
Pedro Frutícola, Sociedade Frutícola, Lda.	Constância	100%	100%	Agriculture production
Captaraíz Unipessoal, Lda.	Lisbon	100%	100%	Property bying and selling

(a) – company whose assets and liabilities were classified in 2008 as "in discontinuation" (Note 4.4);

(b) – company dissolved in the first quarter of 2010 (Note 5).

The above companies were included in the consolidated financial statements in accordance with the full consolidation method.

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

4.2 INVESTMENTS IN ASSOCIATED COMPANIES

The associated companies, included in the consolidated financial statements in accordance with the equity method, the percentage participation held and the activity developed as of 30 September 2010 and 31 December 2009, can be detailed as follows:

Company	Percentage held		Activity
	2010	2009
EDP – Produção Bioeléctrica, S.A.	50%	50%	Energy production and trading
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	33.33%	33.33%	Harbor operations

The book value, share capital and net profit for the period ended on 30 September 2010 for these associated companies were as follows:

Company	Book value (a)	Asset	Equity	Net profit
EDP – Produção Bioeléctrica, S.A.	9,815,260	162,811,494	5,990,415	1,420,163
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	357,426	3,873,602	1,072,279	260,842
	10,172,686
(a) – including loans granted.

4.3 INVESTIMENTS AVAILABLE FOR SALE

The caption "Investments available for sale" as of 30 September 2010 and 31 December 2009 can be detailed as follows:

	Book value
	2010	2009
Buildings	579,309	671,546
Others	101,480	42,808
	680,789	714,354

4.4 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION

In the end of December 2008 the industrial paper unit of CPK - Companhia Produtora de Papel Kraftsack, S.A, was closed so its assets and liabilities were classified as in discontinuation (net from intragroup operations).

The detail of assets and liabilities from CPK in discontinuation as of 30 September 2010 and 31 December 2009 are as follow:

	30.09.2010	31.12.2009
Customers	107,389	680,334
Other debtors	23,610	15,424
Assets classified as in discontinuation	130,999	695,758
Provisions	(49,500)	(49,500)
Suppliers	(156,557)	(125,195)
Other payables	(2,523)	(1,017)
Liabilities associated with assets classified as in discontinuation	(208,580)	(175,712)
Assets net from liabilities in discontinuation	(77,581)	520,046

During the period ended 30 September 2010 the net profit of CPK – Companhia Produtora de Papel Kraftsack, S.A. (net from intragroup operations) amounted to 501.265 Euro (1,102,404 Euro in 30 September 2009), which is presented in the caption "Profit for the period from discontinued operations" of the profit and loss statement.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

5. CHANGES IN THE GROUP COMPANIES

During the period ended 30 September 2010 Sosapel – Sociedade Comercial de Sacos de Papel, Lda. was closed, having no relevant impacts in Altri consolidated financial statements.

Additionally, during the period ended 30 September~2009 the Group acquired an additional percentage of 0.232% of Celtejo Group share capital amounting to 91.819 Euros (Note 17) which was fully paid.

6. CASH AND CASH EQUIVALENTS

As of 30 September 2010 and 2009 the caption "Cash and cash equivalents" can be detailed as follows

	30.09.2010	30.09.2009
Cash	26,759	23,307
Bank deposits	93,771,837	88,812,733
	93,798,596	88,836,040
Bank overdrafts	-	(2,004,848)
Cash and its equivalents	93,798,596	86,831,192

7. CURRENT AND DEFERRED INCOME TAXES

In accordance with current legislation, tax returns are subject to review and correction by the tax authorities during a four-year period (five years for Social Security), except when there have been tax losses, there have been granted tax benefits, or tax inspections or claims are in progress, in which cases the periods may be extended or suspended. Therefore, the tax returns of Altri and its subsidiaries and associated companies for the years 2006 to 30 September 2010 are still subject to review.

The Board of Directors of Altri believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 30 September 2010.

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

The movement occurred in deferred tax assets and liabilities in the periods ended at 30 September 2010 and 2009 were as follows:

		2010
	Deferred tax assets	Deferred tax liabilities
Balance as of 1 January 2010	18,063,845	981,007
Effect on the profit and loss statement:
Tax losses carried forw ard	(6,369,888)	-
Other effects	724,147	(10,508)
Total effect on the profit and loss statement	(5,645,741)	(10,508)
Effect on shareholders' funds:
Fair values of derivatives (Note 11)	2,866,755	-
Balance as of 30 September 2010	15,284,859	970,499

	2009
	Deferred tax assets	Deferred tax liabilities
Balance as of 1 January 2009	10,983,234	3,914,691
Effect on the profit and loss statement:
Tax losses carried forw ard	4,614,001	-
Other effects	(1,594,680)	(18,377)
Total effect on the profit and loss statement	3,019,321	(18,377)
Effect on shareholders' funds:
Fair values of derivatives (Note 11)	1,221,032	(2,941,973)
Balance as of 30 September 2009	15,223,587	954,341

8. SHARE CAPITAL

As of 30 September 2010 the Company's fully subscribed and paid up capital consisted of 102,565,836 shares with a nominal value of 25 cents of Euro each.

As of 30 September 2010 there were no entities holding more than 20% of the subscribed share capital.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

9. BANK LOANS AND OTHER LOANS

As of 30 September 2010 and 31 December 2009 the captions "Bank loans" and "Other loans" can be detailed as follows:

			30.09.2010
		Nominal Value			Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	24,001,663	150,357,724	174,359,387	23,918,387	149,880,162	173,798,549
Bank loans	24,001,663	150,357,724	174,359,387	23,918,387	149,880,162	173,798,549
Commercial paper	119,965,000	144,000,000	263,965,000	119,729,830	143,689,365	263,419,195
Bonds	20,000,000	375,000,000	395,000,000	19,914,897	369,666,031	389,580,928
Other loans	4,490,775	59,628,369	64,119,144	4,490,775	59,628,369	64,119,144
Other loans	144,455,775	578,628,369	723,084,144	144,135,502	572,983,765	717,119,267
	168,457,438	728,986,093	897,443,531	168,053,889	722,863,927	890,917,816
			31.12.2009
		Nominal Value			Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans Bank overdrafts	44,097,371 2,629,166	150,516,358 -	194,613,729 2,629,166	43,930,820 2,629,166	149,913,243 -	193,844,063 2,629,166
Bank loans	46,726,537	150,516,358	197,242,895	46,559,986	149,913,243	196,473,229
Commercial paper	85,000,000	180,000,000	265,000,000	84,891,974	179,641,980	264,533,954
Bonds	20,500,000	375,000,000	395,500,000	20,338,303	368,872,544	389,210,847
Other loans	3,941,163	64,005,261	67,946,424	3,941,163	64,005,261	67,946,424
Other loans	109,441,163	619,005,261	728,446,424	109,171,440	612,519,785	721,691,225
	156,167,700	769,521,619	925,689,318	155,731,426	762,433,028	918,164,454

As of 30 September 2010, there are bank overdrafts in use amounting 17,797,500 Euro (31,842,276 Euro as of 31 December 2009), classified in the caption "Bank Loans".

The expenses incurred with the issuance of loans are deducted to its nominal value and deferred and recognized as interest expenses during the period of the loan (Note 12).

10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses during the periods ended 30 September 2010 and 2009 can be detailed as follows:

	30.09.2010
		Impairment losses in
	current assets Provisions		Total
Opening balance	2,424,509	6,703,074	9,127,583
Increases	158,624	-	158,624
Decreases and utilizations	(173,747)	(390,567)	(564,314)
Closing balance	2,409,386	6,312,507	8,721,893

	30.09.2009
		Impairment losses in
	Provisions	current assets	Total
Opening balance	5,107,335	9,444,693	14,552,028
Increases	1,100,000	50,000	1,150,000
Decreases and utilizations	(3,921,134)	(3,059,158)	(6,980,292)
Closing balance	2,286,201	6,435,535	8,721,736

The increases in impairment losses occurred in the period ended 30 September 2010 were recorded against the caption "Provisions and impairment losses" of the profit and loss statement.

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

The amount recorded under the caption "Provisions", at 30 September 2010 and 2009, is the best estimate of the Board of Directors of the amounts required to face all the losses that may be supported due to the law suits under trial.

11. DERIVATIVES FINANCIAL INSTRUMENTS

As of 30 September 2010 Altri Group companies held derivative financial instruments to cover the variations in pulp paper prices, in interest and exchange rates, which were recorded at fair value.

Altri Group companies only use derivatives to hedge future cash flows that results from its activity.

The detail of the financial instruments fair value as of 30 September 2010 e 2009 is as follows:

	Pulp price hedging derivatives	Interest rates derivatives	Exchange rates derivatives	Total
Balance as of 31 December 2009	(5,603,720)	(10,060,728)	(2,548,666)	(18,213,114)
Fair value variation
Effect on equity	(3,647,684)	(8,427,596)	1,257,337	(10,817,943)
Effect on the profit and loss statement	-	544,177	-	544,177
Closing balance as of 30 September 2010	(9,251,404)	(17,944,147)	(1,291,329)	(28,486,880)
	Pulp price hedging derivatives	Interest rates derivatives	Exchange rates derivatives	Total
Balance as of 31 December 2008	12,546,735	(6,059,446)	-	6,487,289
Fair value variation
Effect on equity	(12,579,632)	(3,065,745)	(64,077)	(15,709,454)
Effect on the profit and loss statement	-	(1,436,095)	-	(1,436,095)
Closing balance as of 30 September 2009	(32,897)	(10,561,286)	(64,077)	(10,658,260)

12. NET FINANCIAL LOSS

Net financial loss for the periods ended 30 September 2010 and 2009 can be detailed as follows:

	30.09.2010	30.09.2009
Financial expenses:
Interests	15,128,465	17,314,343
Other financial expenses	12,597,440	5,768,876
	27,725,905	23,083,219
Financial income:
Interests	1,662,233	2,700,874
Exchange gains	280,275	713,895
Other financial income	23,023	403,804
	1,965,531	3,818,573

The caption "Other financial expenses" includes, mainly, expenses with loans settlement, which are recognized in the profit and loss statement during the period of those loans (Note 9) as well as losses with interest and exchange rates derivatives.

The caption "Gains and losses in associated companies" corresponds, mainly, to the appropriation of the Group quota of the results in the investments in associated companies (Note 4.2).

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 20) (Amounts expressed in Euro)

13. EARNINGS PER SHARE

Earnings per share for the periods ended 30 September 2010 and 2009 were computed as follows:

	30.09.2010	30.09.2009
Share number considered for the computation of basic and diluted earning	102,565,836	102,565,836
Net profit / (loss) considered for the computation of basic and diluted earning for continuing operations	46,838,928	(13,123,525)
Continuing operations earnings per share Basic Diluted	0.457 0.457	(0.128) (0.128)
Net profit / (loss) considered for the computation of basic and diluted earning for continuing and non-continuing activities	47,340,193	(12,021,121)
Continuing and non-continuing operations earnings per share Basic Diluted	0.462 0.462	(0.117) (0.117)

14. OTHER EXPENSES

As of 30 September 2010 this caption includes, mainly, losses in derivative contracts (Note 11).

15. SEGMENTAL REPORTING

On 16 April 2008 the F. Ramada – Aços e Indústrias, S.A. demerger public deed was signed. Under the terms of the project, the planned reorganization implies the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and storage systems sector. This reorganization aimed a bigger focus and transparency on ALTRI's business, and giving each of the areas an opportunity to be better seen and better evaluated by the market.

Furthermore, in the end of 2008 ALTRI decided to shut down its Kraft paper industry unit. This decision was based on the declining Kraft paper business perspectives and on the poor contribute that this unit was giving to Group Altri's EBITDA. Therefore, the contribute of the units mentioned above was recorded as "Operational units in discontinuation" in the profit and loss statement (Notes 4.4 and 5).

This decision allows Altri Group to focus its activity on its core business, production and commercialization of bleached paper pulp of eucalyptus, thus the Board of Directors believes that there is only one business segment and management's information is also reported and analyzed on this basis.

16. RELATED PARTIES

The participated companies of the Group perform transactions between them that are classified as transactions with related parties. Those transactions are made at market prices.

In the consolidation procedures the transactions between the companies included in consolidation by the full consolidation method are eliminated, once the consolidated financial statements present the owner and its subsidiaries information as one single company so they are not disclosed in this note.

There were no loans or transactions with Altri Directors during the periods ended 30 September 2010 and 2009.

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

As of 30 September 2010 and 2009 the balances and transactions with related parties are as follow:

	Sales and services rendered		Purchases and services acquired		Interest expense
Transactions	30.09.2010	30.09.2009	30.09.2010	30.09.2009	30.09.2010	30.09.2009
Associated companies (a)	1,245,484	455,813	3,420,922	6,735,065	480,343	659,220
Other related parties (b)	4,050,000	4,050,000	58,194	181,123	-	208,155
	5,295,484	4,505,813	3,479,116	6,916,188	480,343	867,375
	Accounts receivable		Accounts payable		Loans obtained
Balances	30.09.2010	30.09.2009	30.09.2010	30.09.2009	30.09.2010	30.09.2009
Associated companies (a)	427,698	10,941	1,205,912	1,205,912	21,667,905	22,842,905
Other related parties (b)	6,682,776	4,432,225	4,586,457	4,343,984	-	2,522,810
	7,110,474	4,443,166	5,792,369	5,549,896	21,667,905	25,365,715

(a) All entities consolidated by the equity method as of 30 September 2010 and 2009 (Note 4.2);

(b) CPK – Papel Kraft, S.A. (Note 4.4) and Ramada Group companies were considered to be related parties as of 30 September 2010 and 2009.

There are no other transactions with related parties besides the above mentioned.

Besides the companies included in consolidation (Note 4), entities considered as related parties as of 30 September 2010 can be detailed as follows:

AdCom Media Anúncios e Publicidade, S.A. Alteria, S.G.P.S., S.A. BPS – Equipements, S.A. Caderno Azul, S.G.P.S., S.A. Caminho Aberto, S.G.P.S., S.A. Cofihold, S.G.P.S., S.A. Cofina, SGPS, S.A. Cofina B.V. Cofina Media, SGPS, S.A. Cofina Eventos e Comunicação, S.A. Destak Brasil – Editora de Publicações, S.A. Destak Brasil – Empreendimentos e Participações, S.A. Edisport – Sociedade de Publicações, S.A. Edirevistas – Sociedade Editorial, S.A. Efe Erre Participações, S.G.P.S., S.A. Elege Valor, S.G.P.S., S.A. F. Ramada – Investimentos, SGPS, S.A. F. Ramada – Aços e Indústrias, S.A. F. Ramada – Produção e Comercialização de Estruturas Metálicas de Armazenagem, S.A. F. Ramada II, Imobiliária, S.A. F. Ramada Serviços de Gestão, Lda. Grafedisport – Impressão e Artes Gráficas, S.A. Holdimédia, SGPS, S.A. Jardins de França – Empreendimentos Imobiliários, S.A Livre Fluxo, S.G.P.S., S.A. Malva – Gestão Imobiliária, S.A. Mediafin, SGPS, S.A. Metronews – Publicações S.A. Mercados Globais – Publicação de Conteúdos, Lda. Presselivre – Imprensa Livre, S.A. Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. Storax Racking Systems, Ltd. Storax Benelux, S.A. Transjornal – Edição de Publicações, S.A. Torres da Luz – Investimentos Imobiliários, S.A. Universal Afir – Aços, Máquinas e Ferramentas, S.A. VASP – Sociedade de Transportes e Distribuições, S.A. Web Works – Desenvolvimento de Aplicações para Internet, S.A.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 20) (Amounts expressed in Euro)

17. PAYMENTS/COLLECTIONS RELATING TO INVESTMENTS

During the period ended 30 September 2010 the collections relating to investments were as follows:

	Transaction amount	Collected amount
EDP – Produção Bioeléctrica, S.A. (a)	1,175,000 ---------------	1,175,000 ----------------
	1,175,000 =========	1,175,000 =========

(a) – Reimbursement of loans granted.

During the period ended 30 September 2010 there were no payments relating to investments.

During the period ended 30 September 2009 there were no collections relating to investments.

During the period ended 30 September 2009 the payments relating to investments were as follows:

Acquisitions	Transaction amount	Amount paid
EDP – Produção Bioeléctrica, S.A. (a) Socasca – Recolha e Comércio de Recicláveis, S.A. (b)	4,720,000 5,197,126	4,720,000 228,202
Celtejo – Empresa de Celulose do Tejo S.A. (c)	91,819	91,819
	-------------- 10,008,945	-------------- 5,040,021
	========	========

(a) – Increase of loans granted;

(b) – It was paid until 31 December 2008 the amount of 4,808,924 Euro;

(c) – Acquisition of an additional share of 0.232% of the share capital (Note 5).

18. NET LOSS APPROPRIATION

In the Shareholders' General Meeting held on 17 May 2010 it was decided that the individual net loss of Altri, SGPS, S.A. amounting to 2,004,309.13 Euro would be transferred to retained earnings.

19. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 2 November 2010.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 20) (Amounts expressed in Euro)

20. EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard 34 – Interim Financial Reporting, 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.

The Board of Directors

Paulo Jorge dos Santos Fernandes – President

João Manuel Matos Borges de Oliveira

Pedro Macedo Pinto de Mendonça

Domingos José Vieira de Matos

Laurentina da Silva Martins

STANDALONE FINANCIAL STATEMENTS

ALTRI, SGPS, S.A.

STATEMENTS OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2010 AND 31 DECEMBER 2009

(Translation of financial statementes originally issued in Portuguese - Note 13)

(Amounts expressed in Euro)

ASSETS	Notes	30.09.2010	31.12.2009
NON CURRENT ASSETS:
Tangible assets		1,518	1,789
Intangible assets		5,638	11,270
Investments in group companies	4	118,470,641	118,470,641
Total non current assets		118,477,797	118,483,700
CURRENT ASSETS:
Other debtors	4	191,757	203,450
State and other public entities		74,537	48,904
Other current assets		308	92,256
Cash and cash equivalents	5	207,230	3,722,927
Total current assets		473,832	4,067,537
Total assets		118,951,629	122,551,237
SHAREHOLDERS' FUNDS AND LIABILITIES		30.09.2010	31.12.2009
SHAREHOLDERS' FUNDS:
Share capital	6	25,641,459	25,641,459
Legal reserve		2,862,981	2,862,981
Other reserves		35,058,431	35,800,049
		63,562,871	64,304,489
Net profit/(loss)	10	(3,524,699)	(741,617)
Total shareholders' funds		60,038,173	63,562,872
LIABILITIES:
CURRENT LIABILITIES:
Bank loans	7	860,000	1,875,000
Other loans	7	38,729,830	39,891,974
Suppliers		5,019	6,392
Other current creditors	4	16,547,225	16,182,106
State and other public entities		84,148	69,733
Other current liabilities		-	50,050
Derivatives	8	2,687,235	913,110
Total current liabilities		58,913,456	58,988,365
Total shareholders' funds and liabilities		118,951,629	122,551,237

The accompanying notes form an integral part of the financial statements.

ALTRI, SGPS, S.A.

STATEMENTS OF PROFIT AND LOSS BY NATURE FOR THE NINE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statementes originally issued in Portuguese - Note 13)

(Amounts expressed in Euro)

	Notes	30.09.2010	30.09.2009
Other income		102,728	8,334
External supplies and services		(236,918)	(186,132)
Payroll expenses		(140,113)	(140,293)
Amortisation and depreciation		(5,904)	(13,389)
Other expenses		(327,609)	(24,568)
Financial expenses	9	(3,056,513)	(1,263,627)
Financial income	9	139,630	1,783,292
	Profit / (loss) before income tax	(3,524,699)	163,617
Income tax		-	-
	Profit / (loss) after income tax	(3,524,699)	163,617
Earnings per share
Basic	10	(0.034)	0.002
Diluted	10	(0.034)	0.002

The accompanying notes form an integral part of the financial statements.

ALTRI, S.G.P.S., S.A.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE NINE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese - Note 13) (Amounts expressed in Euro)

	Notes	30.09.2010	30.09.2009
Consolidated net profit/ (loss)	10	(3,524,699)	163,617
Other comprehensive income		-	-
Total comprehensive income for the period		(3,524,699)	163,617

The accompanying notes form an integral part of the financial statements.

ALTRI, S.G.P.S., S.A.

STATEMENTS OF CHANGES IN EQUITY FOR THE NINE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese – Note 13) (Amounts expressed in Euro)

	Share capital	Legal reserve	Other reserves	Net profit/ (loss)	Total shareholders' funds
Balance as of 1 January 2009	25,641,459	1,630,523	14,559,066	22,473,441	64,304,489
Appropriation of the net profit of 2008	-	1,232,458	22,473,441	(22,473,441)	1,232,458
Total comprehensive income for the period	-	-	-	163,617	163,617
Balance as of 30 September 2009	25,641,459	2,862,981	37,032,507	163,617	65,700,564
Balance as of 1 January 2010	25,641,459	2,862,981	35,800,049	(741,617)	63,562,872
Appropriation of the net loss of 2009	-	-	(741,617)	741,617	-
Total comprehensive income for the period	-	-	-	(3,524,699)	(3,524,699)
Balance as of 30 September 2010	25,641,459	2,862,981	35,058,432	(3,524,699)	60,038,173

The accompanying notes form an integral part of the financial statements.

ALTRI, SGPS, S.A.

CASH-FLOW STATEMENTS FOR THE NINE MONTHS PERIODS ENDED 30 SEPTEMBER 2010 AND 2009

(Translation of financial statements originally issued in Portuguese - Note 13) (Amounts expressed in Euro)

	Notes	30.09.2010	30.09.2009
Operating activities:
Cash flow from operating activities (1)		(709,356)	(84,424)
Investment activities:
Collections relating to:
Interest and similar income		227,019	-
Other assets		102,728	233,463
Payments relating to:
Tangible assets		-	(376)
Cash flow from investment activities (2)		329,747	233,088
Financing activities:
Collections relating to:
Loans obtained		-	3,090,000
Payments relating to:
Interest and similar costs		(1,086,088)	(1,108,262)
Loans obtained		(2,050,000)	(3,000,000)
Cash flow from financing activities (3)		(3,136,088)	(1,018,262)
Cash and cash equivalents at the beginning of the period		3,722,927	977,363
Variation of cash and cash equivalents: (1)+(2)+(3)		(3,515,697)	(869,599)
Cash and cash equivalents at the end of the period	5	207,230	107,765

The accompanying notes form an integral part of the financial statements.

ALTRI, S.G.P.S., S.A. NOTES TO THE FINANCIAL STATEMENTS

AS OF 30 SEPTEMBER 2010

(Translation of notes originally issued in Portuguese – Note 13)

(Amounts expressed in Euro)

1. INTRODUCTORY NOTE

Altri, SGPS, S.A. ("Altri" or "Company") was incorporated at the 1st of March 2005, with head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and shares listed in the Lisbon Euronext Stock Exchange, its main activity is the management of investments.

Altri was incorporated as a result of the reorganization process of Cofina, SGPS, S.A. through the demerger of the investment previously held by this group in Celulose do Caima, SGPS, S.A. (representing 97.23% of this company's share capital), under a simple demerger operation predicted in item 1.a), article 118 of the Commercial Companies Code ("Código das Sociedades Comerciais").

Altri is the parent company of a group of companies known as Altri Group, the activity of Altri Group focuses on the production of bleached paper pulp of eucalyptus through three production units (Celbi in Figueira da Foz, Caima in Constância do Ribatejo and Celtejo in Vila Velha de Ródão).

The financial statements of Altri are presented in Euro rounded off to the unit, which is the currency used by the Group in its operations and considered as the functional currency.

2. BASIS OF PRESENTATION AND MAIN ACCOUNTING POLICIES

The financial statements as of 30 September 2010 were prepared using accounting policies consistent with the International Financial Reporting Standards ("IFRS") and in accordance with the International Accounting Standard 34 – Interim Financial Reporting and include the statement of financial position, the statement of profit and loss by nature, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows as well as the selected explanatory notes.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

As disposed in paragraph 3 of article 4 of Decree law number 158/2009 of 13 July, Altri chose to present its standalone financial statements in accordance with the International Financial Reporting Standards starting from 1 January 2010.

The equity reconciliation at the transition date, 1 January 2009, and at 31 December 2009 under the portuguese generally accepted accounting principles ("POC") and in accordance with the International Financial Reporting Standards (IFRS) is as follows:

	1 January 2009	31 December 2009
Equity in accordance with POC	66,480,369	64,476,060
Accounting of derivative financial instruments	(2,175,723)	(913,110)
Intangible assets write-off	(157)	(78)
Equity in accordance with IFRS	64,304,489	63,562,872

The reconciliation of the net loss for the year ended 31 December 2009 prepared in accordance with POC and in accordance with IFRS is as follows:

2009 net loss in accordance with POC (Note 11)	(2,004,309)
Accounting of derivative financial instruments	1,262,613
Intangible assets write-off	79
2009 net loss in accordance with IFRS (Note 11)	(741,617)

As shown above the main impact on net loss for the year ended 31 December 2009 and on equity at that date and on the transition date, 1 January 2009 results of the accounting of interest rate derivatives.

(Translation of notes originally issued in Portuguese – Note 13)

(Amounts expressed in Euro)

During the period ended at 30 September 2010 there were identified no material mistakes related to previous periods.

4. INVESTMENTS

As at 30 September 2010 and 31 December 2009 this caption was made by the 100% participation in Celulose do Caima SGPS, S.A. amounting to 60,470,641 Euro and non remunerated supplementary capital granted to that entity amounting to 58,000,000 Euro.

Additionally, Altri has prepared consolidated financial statements in accordance with the recognition and measurement principles of the International Financial Reporting Standards, as adopted in the European Union and in accordance with the International Accounting Standard 34 – Interim Financial Reporting. A summary of the key financial data is presented below:

	30.09.2010	31.12.2009
Consolidated net assets	1,158,429,957	1,123,524,237
Consolidated equity (a)	97,226,294	57,783,186
Consolidated net profit / (loss)	47,340,193	(10,910,016)

(a) - including non controlling interests

As at 30 September 2010 balances with the group companies details are as follows:

	Accounts receivable	Accounts payable
F. Ramada Group	172,806
Celulose do Caima, SGPS, S.A.	18,164	(1,174,278)
Celbi - Celulose da Beira Industrial, S. A.		(15,000,000)
	190,970	(16,174,278)

Balances with F. Ramada Group and Celulose do Caima, SGPS, S.A. refer to income tax computed in accordance with the Special regime of Group's taxation ("Regime Especial de Tributação de Grupos de Sociedades").

The credit balance with Celbi – Celulose da Beira Industrial, S.A. refers to loans obtained to cover lack of liquidity, which bear interests at market rates and will be reimbursed on the short term (Note 9).

5. CASH AND CASH EQUIVALENTS

As at 30 September 2010 and 2009 the caption "Cash and cash equivalents" can be detailed as follows:

	30.09.2010	30.09.2009
Cash	2,055	148
Bank deposits	205,175	107,617
Cash and equivalents	207,230	107,765

6. SHARE CAPITAL

As at 30 September 2010 the Company's fully subscribed and paid up capital consisted of 102,565,836 shares with a nominal value of 25 cents of Euro each.

As at 30 September 2010 there were no entities holding more than 20% of the subscribed share capital.

ALTRI, S.G.P.S., S.A. NOTES TO THE FINANCIAL STATEMENTS

AS OF 30 SEPTEMBER 2010

(Translation of notes originally issued in Portuguese – Note 13)

(Amounts expressed in Euro)

7. BANK LOANS AND OTHER LOANS

As at 30 September 2010 and 31 December 2009 the captions "Bank loans" and "Other loans" can be detailed as follows:

			30/09/2010
		Nominal Value	Book Value
		Current	Current
Commercial Paper		38,965,000	38,729,830
Bank overdrafts		860,000	860,000
	Total	39,825,000	39,589,830

		31/12/2009
		Nominal Value Book Value
		Current	Current
Commercial Paper		40,000,000	39,891,974
Bank overdrafts		1,875,000	1,875,000
	Total	41,875,000	41,766,974

The expenses incurred with the issuance of loans are deducted to their nominal value and deferred and recognized as interest expenses during the period of the loan (Note 9).

8. DERIVATIVES FINANCIAL INSTRUMENTS

As at 30 September 2010 Altri held a derivative financial instrument to cover the variation in interest rate, which was recorded at fair value.

The detail of the derivatives' fair value as at 30 September 2010 and 2009 is as follows:

	2010
Balance as of 31 December 2009	(913,110)
Fair Value Variation (Note 9)	(1,774,125)
Balance as of 30 September 2010	(2,687,235)
	2009
Balance as of 31 December 2008	(2,175,723)
Fair Value Variation (Note 9)	1,638,440
Balance as of 30 September 2009	(537,283)

ALTRI, S.G.P.S., S.A. NOTES TO THE FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2010 (Translation of notes originally issued in Portuguese – Note 13) (Amounts expressed in Euro)

9. NET FINANCIAL INCOME / (LOSS)

Financial income / (loss) for the periods ended 30 September 2010 and 2009 can be detailed as follows:

	30/09/2010	30/09/2009
Financial expenses:
Interests	1,276,962	1,060,528
Other financial expenses	1,779,551	203,099
	3,056,513	1,263,627
Financial income:
Interests	139,630	144,852
Other financial income	-	1,638,440
	139,630	1,783,292

As at 30 September 2010 the caption "Other financial expenses" includes 1,774,125 Euro related to fair value variation of derivative financial instruments (Note 8).

As at 30 September 2009 the caption "Other financial income" refers to the fair value variation of interest rates derivatives (Note 8).

The caption "Financial expenses - interests" as at 30 September 2010 includes 318,328 Euro related with interests on loans granted by group companies (Note 4).

10. EARNINGS PER SHARE

Earnings per share for the periods ended 30 September 2010 and 2009 were computed based on the following values:

	30/09/2010	30/09/2009
Share number considered for the computation of basic and diluted earning	102,565,836	102,565,836
Net profit/ (loss) considered for the computation of basic and diluted earning per share	(3,524,699)	163,617
Earnings per share Basic Diluted	(0.034) (0.034)	0.002 0.002

11. NET LOSS APPROPRIATION

In the Shareholders' General Meeting held on 17 May 2010 it was decided that the individual net loss of Altri, SGPS, S.A. amounting to 2,004,309.13 Euro would be transferred to retained earnings.

(Translation of notes originally issued in Portuguese – Note 13)

(Amounts expressed in Euro)

12. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 2 November 2010.

13. EXPLANATION ADDED FOR TRANSLATION

These financial statements are a translation of financial statements originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard 34 – Interim Financial Reporting, 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.

The Board of Directors

Paulo Jorge dos Santos Fernandes – President

João Manuel Matos Borges de Oliveira

Pedro Macedo Pinto de Mendonça

Domingos José Vieira de Matos

Laurentina da Silva Martins