Altri SGPS — Interim / Quarterly Report 2013

Nov 28, 2013

ALTRI, SGPS, S.A. Public Company

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

Financial Information – 3rd Quarter of 2013 (Unaudited)

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

Income Statement

thousand euros	3Q 2012	3Q 2013	3Q13/3Q12 Var%
Sales	392.677	424.454	8%
Services rendered	5.612	6.405	14%
Other Income	4.207	8.825	110%
Total Revenues	402.495	439.684	9,2%
Costs of sales	159.517	184.792	16%
External supplies and services	106.011	111.728	5%
Payroll expenses	24.257	20.371	-16%
Provisions and impairment losses	0	230	-
Other expenses	5.913	10.941	85%
Total expenses (a)	295.697	328.062	10,9%
EBITDA (b)	106.799	111.623	4,5%
Margin	26,5%	25,4%	-1,1 pp
Amortisation and depreciation	37.088	36.926	-0,4%
Other indirect taxes	-	2.723
EBIT (c)	69.711	71.974	3,2%
Margin	17,3%	16,4%	-1,0 pp
Gains and losses in associated companies	1.875	1.124	-40,1%
Financial expenses	-28.686	-23.030	-19,7%
Financial income	4.931	3.147	-36,2%
Financial profit	-21.880	-18.759	-14,3%
Profit before income tax	47.831	53.215	11,3%
Income tax	-8.148	-10.071	23,6%
Non controlling interests	9	16	69,5%
Profit for the period from discontinued operations attributable to	39.674	43.129	8,7%
parent company's shareholders

(a) Operating costs excluding amortisation, financial expenses and income tax

(b) EBITDA = Earnings before interests, taxes, depreciation and amortisation

(c) EBIT = Earnings before interest and taxes

During the first nine months of 2013, total revenues reached to approximately 440 million Euro, which represents an increase of 9% compared to the same period of 2012. During this period, Altri produced about 725 thousand tons of pulp, which corresponds to an increase of about 7% compared to the 675 thousand tons of pulp produced between January and September of 2012.

Evolution of pulp production between 9M 2013 and 9M 2012 by industrial unit (thousands tons)

Exports reached to the amount of 345.5 million Euro

In terms of sales, it was set another volume record, which amounted to about 736 thousand tons of pulp, 6% more than the pulp sales made in the same period of 2012. Additionally, in monetary terms, pulp sales amounted to about 366 million Euro, representing approximately 83% of Altri's total revenue.

In the first nine months of 2013, Altri exported about 692.3 thousand tons of pulp, which resulted in 94% of the company's total pulp sales. The amount of these exports reached to 345.5 million Euro.

Total costs, excluding depreciation, interest and taxes amounted to approximately 328 million Euro, 11% higher compared to the first nine months of 2012.

Profit for the first nine months of 2013 recorded a growth of 9%

EBITDA of the first nine months of 2013 reached to approximately 112 million Euro, which represents an increase of 4.5% compared to the EBITDA of 106.8 million Euro recorded in the same period of 2012. The EBITDA margin reached 25.4%. Operating profit (EBIT) amounted to about 72 million Euro, which represents an increase of about 3.2% compared to the EBIT of the third quarter of 2012, and the margin was 16.4%.

Altri's net profit reached about 43.1 million Euro, an increase of 8.7% compared to the profit recorded in the same period of 2012.

Third quarter of 2013: quarterly production record

thousand euros	3Q 2012	2Q 2013	3Q 2013	3Q13/3Q12 Var%	3Q13/2Q13 Var%
Sales	132.685	145.508	138.616	4,5%	-4,7%
Services rendered	2.147	2.143	2.105	-1,9%	-1,8%
Other Income	1.666	2.651	3.474	108,5%	31,0%
Total Revenues	136.498	150.302	144.195	5,6%	-4,1%
Costs of sales External supplies and services Payroll expenses Provisions and impairment losses Other expenses Total expenses (a)	51.142 34.712 7.650 0 2.807 96.313	62.599 36.659 6.764 628 4.628 111.278	60.961 37.139 6.867 -398 3.332 107.901	19,2% 7,0% -10,2% 18,7% 12,0%	-2,6% 1,3% 1,5% -28,0% -3,0%
EBITDA (b)	40.186	39.024	36.294	-9,7%	-7,0%
Margin	29,4%	26,0%	25,2%	-4,3 pp	-0,8 pp
Amortisation and depreciation Other indirect taxes	12.252 -	12.266 2.723	12.287	0,3%	0,2%
EBIT (c)	27.934	24.036	24.007	-14,1%	-0,1%
Margin	20,5%	16,0%	16,6%	-3,8 pp	+0,7 pp
Gains and losses in associated companies	790	635	15	-98,2%	-97,7%
Financial expenses	-8.984	-6.769	-8.412	-6,4%	24,3%
Financial income	1.270	691	1.174	-7,6%	69,9%
Financial profit	-6.924,2	-5.442,6	-7.222,6	4,3%	32,7%
Profit before income tax	21.009	18.593	16.784	-20,1%	-9,7%
Income tax	-3.530	-2.526	-3.907	10,7%	54,7%
Non controlling interests	8	6	5	-27,9%	-13,2%
Profit for the period from discontinued operations attributable to parent company's shareholders	17.472	16.061	12.872	-26,3%	-19,9%

(a) Operating costs excluding amortisation, financial expenses and income tax

(b) EBITDA = Earnings before interests, taxes, depreciation and amortisation

(c) EBIT = Earnings before interest and taxes

The pulp production, during the third quarter of 2013, set once more a quarter record, achieving 242.7 thousand tons. During the period in question (more precisely, in September), it was held the annual stoppage in Celtejo.

Evolution of Pulp production in the last seven quarters (tons)

Revenue from pulp sales decreased approximately 4.7% vis-à-vis the last quarter, reflecting the downward price trend seen during the quarter, which was reinforced by the devaluation of the US dollar. Net revenues of energy associated with cogeneration and other forest components amounted to 8.1 million of Euro.

EBITDA for the third quarter of 2013 reached to approximately 36.3 million of Euro, representing a decrease of 9.7% and 7% compared to third quarter of 2012 and second quarter of 2013, respectively. The EBITDA margin was 25.2%.

Net debt of 576 million Euro, implies a EBITDA ratio of 3.9x

Total investment during the first nine months of 2013 amounted to 14.7 million Euro.

Altri's nominal remunerated debt net of cash and cash equivalents and investments available for sale on September 30, 2013 amounted to 576 million Euro, which represents a decrease of about 44 million Euro compared to December 31, 2012.

The net debt over trailing 12 months EBITDA set at 3.9x.

Financial Information 3Q 2013

Key balance sheet indicators: cash and cash equivalents above 187 million Euro

Financing needs are fully assured. The Group held 187.7 million Euro of cash and cash equivalents and investments available for sale on September 30, 2013.

In terms of ratios, considering the accumulated EBIT of the past four quarters that reached 96.5 million Euros, Altri shows in the end of September 2013, a Return on Capital Employed¹ of 12%.

The Return on Equity (Net profit/equity), based on trailing 12 months (55.4 million Euros) reached to about 24.4%.

thousand euro	2012	3rdQ 2013	Var%
Biological assets	108.034,8	107.549,3	0%
Tangible assets	424.105,2	396.997,8	-6%
Goodw ill	265.531,4	265.531,4	0%
Investments available for sale	14.981,9	14.936,1	0%
Others	41.153,4	42.813,0	4%
Total non current assets	853.806,6	827.827,6	-3%
Inventories	47.440,3	55.665,7	17%
Customers	94.859,4	89.161,7	-6%
Cash and cash equivalentes	112.392,5	172.788,7	54%
Others	19.861,2	21.763,3	10%
Total current assets	274.553,4	339.379,5	24%
Total assets	1.128.360,0	1.167.207,1	3%
Shareholder's equity and non controlling interests	183.926,9	227.154,9	24%
Bank loans	103.556,9	149.836,4	45%
Other loans	454.999,1	409.840,0	-10%
Reimbursable incentives	22.770,2	13.422,4	-41%
Others	41.092,2	52.048,7	27%
Total non current liabilities	622.418,4	625.147,5	0%
Bank loans	45.467,2	14.631,0	-68%
Other current loans	139.404,0	185.374,4	33%
Reimbursable subsidies	11.694,6	1.502,0	-87%
Suppliers	56.343,4	59.220,6	5%
Others	69.105,5	54.176,6	-22%
Total current liabilities	322.014,7	314.904,7	-2%

¹ EBIT of the past four quarters/(net debt + equity)

Pulp market

By the end of August of 2013, the pulp market was characterized by an increase of about 3.5% of total demand for hardwood pulp that amounted to about 36.3 million tons. Detailing, demand grew across all geographies, with the exception of Europe, which showed a small decrease of 0.1%, and China increasing its demand pulp on about 6.6%

In terms of hardwood pulp, the global demand, during the same period, achieved 18.8 million tons (+5.6%). Western Europe is still the biggest buyer of this kind of pulp, with 5.8 million tons of pulp consumed by the end of August (-0.5%), followed by China with 5.2 million tons (+16.4%) and North America with 2.1 million tons (+7.4%).

In the referred period, the shipment-to-capacity ratio of eucalypt hardwood pulp achieved 89% (PPPC data).

In terms of end markets, there has been a structural decrease of printing and writing, for which demand has contracted about 1.6% during the first eight months of the year, with a particular focus on Western Europe where the plunge was about 5.8%.

On the other hand, the production of tissue paper, during the same period, increased 2.1%, with emphasis on the North America which surged 4.2% (PPPC data).

During the first nine months of 2013, the average market price of BEKP pulp was about 798.7 USD / ton, which corresponds to an average price of approximately 607 Euro. In the end of September the market price was 774 USD/ ton (573 EUR / ton).

Market price evolution in BEKP pulp in Europe since 1990 to the end of 3rd Q 2013 (EUR) Source: Hawkins Wright

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 84 thousand hectares of forest in Portugal entirely certified from Forest Stewardship Council® (FSC®)² and from the Program for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities.

Currently, Altri has three pulp mills in Portugal with an installed capacity in 2012 that reached about 910 thousand tons/year of pulp bleached eucalyptus. The company has some ongoing small projects of optimizing operating efficiency which will allow, in the medium term, to increase the productive capacity.

2 FSC-C004615

Altri's organic structure is as follows:

Oporto, October 29, 2013

CONSOLIDATED FINANCIAL STATEMENTS

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2013 AND 31 DECEMBER 2012

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

ASSETS	Notes	30.09.2013	31.12.2012
NON CURRENT ASSETS:
Biological assets		107.549.308	108.034.768
Tangible fixed assets		396.997.804	424.105.163
Investment property		462.471	468.006
Goodwill		265.531.404	265.531.404
Intangible assets		195.740	605.388
Investments in associated companies and joint ventures	4.2	7.461.338	6.337.694
Investments available for sale	4.3	14.936.092	14.981.903
Other non current assets	10	3.223.490	384.915
Deferred tax assets	7	31.469.980	33.357.371
Total non current assets		827.827.627	853.806.612
CURRENT ASSETS:
Inventories		55.665.736	47.440.279
Customers		89.161.686	94.859.425
Other debtors		4.452.413	7.241.482
State and other public entities		13.362.210	9.810.537
Other current assets		3.948.698	2.547.443
Derivatives		-	261.783
Cash and cash equivalents	6	172.788.719	112.392.485
Total current assets		339.379.462	274.553.434
Total assets		1.167.207.089	1.128.360.046
SHAREHOLDERS' FUNDS AND LIABILITIES		30.09.2013	31.12.2012
SHAREHOLDERS' FUNDS:
Share capital	8	25.641.459	25.641.459
Legal reserve		2.862.981	2.862.981
Other reserves		155.378.162	103.112.415
Consolidated net profit / (loss)		43.128.584	52.181.891
Total shareholders' funds attributable to the parent company's shareholders		227.011.186	183.798.746
Non controlling interests		143.692	128.166
Total Shareholders' funds		227.154.878	183.926.912
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	9	149.836.425	103.556.923
Other loans	9	409.840.006	454.999.132
Reimbursable incentives	9	13.422.434	22.770.236
Other non current creditors		528.802	528.802
Other non current liabilities		29.779.797	22.096.030
Deferred tax liabilities	7	17.482.060	16.931.978
Provisions	10	4.257.993	1.535.342
Total non current liabilities		625.147.517	622.418.443
CURRENT LIABILITIES:
Bank loans	9	14.631.031	45.467.181
Other loans	9	185.374.379	139.404.040
Reimbursable incentives	9	1.501.997	11.694.604
Suppliers		59.220.648	56.343.385
Other current creditors		4.515.304	6.679.435
State and other public entities		5.312.632	5.091.056
Other current liabilities		35.327.152	35.221.194
Derivatives	11	9.021.551	22.113.796
Total current liabilities		314.904.694	322.014.691
Total shareholders' funds and liabilities		1.167.207.089	1.128.360.046

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

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE NINE AND THREE MONTHS PERIODS ENDED 30 SEPTEMBER 2013 AND 2012

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

		NINE MONTHS PERIOD ENDED		QUARTER ENDED
	Notes	30.09.2013	30.09.2012	30.09.2013	30.09.2012
Sales		424.453.652	392.676.592	138.615.661	132.685.127
Services rendered		6.405.236	5.612.347	2.105.286	2.146.815
Other income	14	8.825.252	4.206.537	3.474.334	1.666.170
Cost of sales		(184.792.469)	(159.517.238)	(60.960.951)	(51.142.453)
External supplies and services		(111.727.584)	(106.010.574)	(37.139.423)	(34.712.377)
Payroll expenses		(20.371.003)	(24.256.532)	(6.866.749)	(7.650.345)
Amortisation and depreciation		(36.925.735)	(37.087.643)	(12.287.225)	(12.251.852)
Provisions and other impairment losses	10	(229.704)	-	398.051	-
Other expenses	15	(10.940.870)	(5.912.556)	(3.332.080)	(2.807.404)
Other indirect taxes	10	(2.722.651)	-	-	-
Gains and losses in associated companies and joint ventures	4.2	1.123.643	1.875.496	14.554	789.845
Financial expenses	12	(23.030.347)	(28.686.304)	(8.411.578)	(8.984.471)
Financial income	12	3.147.440	4.930.776	1.174.434	1.270.421
Profit before income tax		53.214.860	47.830.901	16.784.314	21.009.476
Income tax		(10.070.750)	(8.147.515)	(3.906.608)	(3.529.878)
Consolidated net profit		43.144.110	39.683.386	12.877.706	17.479.598
Attributable to:
Parent company's shareholders	13	43.128.584	39.674.225	12.872.294	17.472.096
Non controlling interests		15.526	9.161	5.412	7.502
		43.144.110	39.683.386	12.877.706	17.479.598
Earnings per share:
Basic	13	0,21	0,19	0,06	0,09
Diluted	13	0,21	0,19	0,06	0,09

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 2013 AND 2012

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

(Amounts expressed in Euro)
-----------------------------	--

	NINE MONTHS PERIOD ENDED		QUARTER ENDED
	30.09.2013	30.09.2012	30.09.2013	30.09.2012
Net consolidated profit / (loss) for the period	43.144.110	39.683.386	12.877.706	17.479.598
Other comprehensive income:
Items that will not be reclassified to profit or loss	-	-	-	-
	-	-	-	-
Items that may be reclassified to profit or loss
Change in fair value of cash flow hedging derivatives	5.277.625	(7.799.905)	3.635.225	5.524.488
Change in fair value of available for sale investments	(65.306)	300.000	(43.106)	300.000
	5.212.319	(7.499.905)	3.592.119	5.824.488
Other comprehensive income	5.212.319	(7.499.905)	3.592.119	5.824.488
Total comprehensive income for the period	48.356.429	32.183.481	16.469.825	23.304.086
Attributable to:
Shareholders' of the parent company	48.340.903	32.174.320	16.464.413	23.296.584
Non controlling interests	15.526	9.161	5.412	7.502

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 2013 AND 2012

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

Attributable to the parent company's shareholders

	Notes	Share capital	Legal reserve	Others reserves	Net profit	Total	Non controlling interests	Total shareholder's funds
Balance as of 1 January 2012		25.641.459	2.862.981	89.585.006	22.567.762	140.657.208	105.421	140.762.629
Appropriation of the consolidated net profit of 2011		-	-	22.567.762	(22.567.762)	-	-	-
Dividends		-	-	(4.102.633)	-	(4.102.633)	-	(4.102.633)
Others		-	-	19.212	-	19.212	-	19.212
Total comprehensive income for the period		-	-	(7.499.905)	39.674.225	32.174.320	9.161	32.183.481
Balance as of 30 September 2012		25.641.459	2.862.981	100.569.442	39.674.225	168.748.107	114.582	168.862.689
Balance as of 1 January 2013		25.641.459	2.862.981	103.112.415	52.181.891	183.798.746	128.166	183.926.912
Appropriation of the consolidated net profit of 2012		-	-	52.181.891	(52.181.891)	-	-	-
Dividends	18	-	-	(5.128.292)	-	(5.128.292)	-	(5.128.292)
Others		-	-	(171)	-	(171)	-	(171)
Total comprehensive income for the period		-	-	5.212.319	43.128.584	48.340.903	15.526	48.356.429
Balance as of 30 September 2013	8	25.641.459	2.862.981	155.378.162	43.128.584	227.011.186	143.692	227.154.878

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 2013 AND 2012

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

		NINE MONTHS PERIOD ENDED		QUARTER ENDED
	Notes	30.09.2013	30.09.2012	30.09.2013	30.09.2012
Operating activities:
Cash flow from operating activities (1)		92.282.179	71.707.016	25.926.307	34.713.629
Investment activities:
Collections relating to:
Investments	6	48.000	200.000	36.000	-
Tangible assets		341.203	702.013	35.287	330.537
Interest and similar income		2.735.371	530.718	1.000.114	-
Investment subsidies		2.186.673	3.393.619	1.573.830	1.374.119
Payments relating to:
Investments	6	(2.993.239)	(4.050.469)	(19.395)	-
Investment subsidies		(4.783.887)	(3.223)	(747.939)	-
Intangible assets		-	(10.228.292)	-	(3.792.022)
Tangible assets		(10.442.155)	(277.862)	(3.539.660)	(277.862)
Cash flow from investment activities (2)		(12.908.034)	(9.733.496)	(1.661.763)	(2.365.228)
Financing activities:
Collections relating to:
Loans obtained		119.481.119	18.540.089	16.261.032	2.692.508
Payments relating to:
Loans obtained		(103.038.644)	(81.221.292)	(70.328.915)	(51.730.668)
Interest and similar costs		(30.479.492)	(31.722.049)	(10.641.276)	(13.710.793)
Distribution of dividends	18	(5.128.292)	(4.102.633)	-	-
Cash flow from financing activities (3)		(19.165.309)	(98.505.885)	(64.719.159)	(62.748.953)
Cash and cash equivalents at the beginning of the period		110.624.494	111.418.007	211.287.944	105.286.194
Variation of cash and cash equivalents: (1)+(2)+(3)		60.208.836	(36.532.365)	(40.454.615)	(30.400.552)
Cash and cash equivalents at the end of the period	6	170.833.330	74.885.642	170.833.329	74.885.642

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 NYSE 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. occurred in 2005, 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 current 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 from eucalyptus) and the management information is also analysed 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.

2. MAIN ACCOUNTING POLICIES AND BASIS FOR PRESENTATION

The consolidated financial statements as of 30 September 2013 were prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard and 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 condensed 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 2012.

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 years.

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

4. INVESTMENTS

4.1 INVESTMENTS IN SUBSIDIARIES

The companies included in the consolidated financial statements by the full consolidation method, its headquarters, percentage participation held and main activity as of 30 September 2013 and 31 December 2012, are as follows:

Company	Head Office		Percentage Held	Main activity
		2013	2012
Mother-Company:
Altri, SGPS, S.A.	OPorto			Investment management
Subsidiaries
Altri - Energias Renováveis, SGPS, S.A.	Vila Velha de Ródão	99,83%	99,83%	Investment management
Altri Florestal, S.A.	Figueira da Foz	100%	100%	Sylvan exploration
Altri Sales, S.A.	Nyon, Suiça	100%	100%	Group management support services
Altri, Participaciones Y Trading, S.L.	Madrid, Espanha	100%	100%	Commercialization of pulp
Caima Energia – Empresa de Gestão e Exploração de Energia, S.A.	Constância	100%	100%	Production of thermal and electrical energy
Caima Indústria de Celulose, S.A.	Constância	100%	100%	Production and commercialization of pulp
Captaraíz Unipessoal, Lda.	Figueira da Foz	100%	100%	Property buying and selling
Celbinave – Tráfego e Estiva SGPS, Unipessoal, Lda.	Figueira da Foz	100%	100%	Freightage of ships
Celtejo – Empresa de Celulose do Tejo, S.A.	Vila Velha de Ródão	99,83%	99,83%	Production and Commercialization of pulp
Celulose Beira Industrial (Celbi), S.A.	Figueira da Foz	100%	100%	Production and Commercialization of pulp
Celulose do Caima, SGPS, S.A.	Figueira da Foz	100%	100%	Investment management
Inflora – Sociedade de Investimentos Florestais, S.A.	Figueira da Foz	100%	100%	Sylvan exploration
Invescaima – Investimentos e Participações, SGPS, S.A.	Figueira da Foz	100%	100%	Investment management
Pedro Frutícola, Sociedade Frutícola, S.A.	Constância	100%	100%	Agriculture production
Viveiros do Furadouro Unipessoal, Lda.	Óbidos	100%	100%	Production of plants in nurseries and services related w ith forests and landscapes

All the above companies were included in the Altri Group consolidated financial statements in accordance with the full consolidation method.

4.2 INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES

The associated companies and joint ventures, percentage of capital held and main activity as of 30 September 2013 and 31 December 2012 are as follows:

Company	Percentage held		Main activity
	2013	2012
Associated companies:
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	33,33%	33,33%	Harbor operations
Joint ventures:
EDP – Produção Bioeléctrica, S.A.	50%	50%	Electric energy production

Those associated companies and joint ventures were included in the Altri Group consolidated financial statements in accordance with the equity method.

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

(Amounts expressed in Euro)

The book value, net assets, share capital and net profit for the period ended on 30 September 2013 for these associated companies and joint ventures are as follows:

Company	Book value (a)	Asset	Equity	Net profit
Associated companies:
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	530.986	4.117.906	1.593.135	314.532
Joint ventures:
EDP – Produção Bioeléctrica, S.A.	6.930.352	142.867.067	15.158.995	1.808.050
	7.461.338

(a) – Includes loans granted.

4.3 INVESTMENTS AVAILABLE FOR SALE

As of 30 September 2013 and 31 December 2012 the investments available for sale are as follows:

Company	Book value
	2013	2012
Rigor Capital - Produção de Energia. Lda.	10.527.397	10.527.397
Other investments	4.408.695	4.454.506
	14.936.092	14.981.903

The caption "Investments available for sale" includes mainly financial investments under 20%, in companies where Altri Group has no significant influence on its management and is stated at acquisition cost, reduced by impairment losses.

"Other investments" corresponds mainly to listed securities which are stated at their market value.

5. CHANGES OCCURED IN THE CONSOLIDATION PERIMETER

During the nine months period ended 30 September 2013, there were no changes in the consolidation perimeter compared to 31 December 2012.

6. CASH AND CASH EQUIVALENTS

As of 30 September 2013 and 2012, the caption "Cash and cash equivalents" can be detailed as follows:

	30.09.2013	30.09.2012
Cash	13.524	15.498
Bank deposits	172.775.195	76.475.611
	172.788.719	76.491.109
Bank overdrafts (Note 9)	(1.955.389)	(1.605.467)
Cash and cash equivalents	170.833.330	74.885.642

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 SEPTEMBER 2013 (Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

During the nine months period ended 30 September 2013, receipts from investments were as follows:

	Transaction Amount	Amount received
Sócasca –Recolha e Comércio de Recicláveis, S.A.
(Sold in 2011)	2.300.000 ---------------	48.000 ----------------
	2.300.000	48.000
	=========	=========

During the nine months period ended 30 September 2012, receipts from investments were as follows:

	Transaction Amount	Amount received
Sócasca –Recolha e Comércio de Recicláveis, S.A. (Sold in 2011)	2.300.000	200.000
	---------------	----------------
	2.300.000	200.000
	=========	=========

During the nine months period ended 30 September 2013, payments from investments were as follows:

	Transaction Amount	Amount paid
Other investments available for sale (Note 4.3)	2.993.239	2.993.239
	--------------- 2.993.239	---------------- 2.993.239
	=========	=========

During the nine months period ended 30 September 2012, payments from investments were as follows:

	Transaction Amount	Amount paid
Other investments available for sale (Note 4.3)	4.050.469	4.050.469
	--------------- 4.050.469	---------------- 4.050.469
	=========	=========

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

(Amounts expressed in Euro)

7. CURRENT AND DEFERRED 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), with the exception when there have been tax losses, cases with 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 Company tax returns since 2009 are still subject to review.

The Board of Directors 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 2013.

The movements occurred in deferred tax assets and liabilities in the nine months periods ended in 30 September 2013 and 2012 were as follows:

		2013
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2013	33.357.371	16.931.978
Effects on income statement:
Harmonization of depreciation rates	1.017.609	-
Other effects	744.208	550.082
Total effect on income statement	1.761.817	550.082
Effect on shareholders' funds:
Fair values of derivatives	(3.649.208)	-
Closing balance as of 30.09.2013	31.469.980	17.482.060
		2012
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2012	13.699.322	444.167
Effects on income statement:
Harmonization of depreciation rates	1.237.893	-
Other effects	744.893	(4.337)
Total effect on income statement	1.982.786	(4.337)
Effect on shareholders' funds:
Fair values of derivatives	2.812.210	-
Closing balance as of 30.09.2012	18.494.318	439.830

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

(Amounts expressed in Euro)

8. SHARE CAPITAL

As of 30 September 2013 the Company's fully subscribed and paid up capital consisted of 205.131.672 shares with nominal value of 12,5 cents of a Euro each.

As of 30 September 2013 there were no entities holding more than 20% of the Company's subscribed share capital.

9. BANK LOANS, OTHER LOANS AND REIMBURSABLE INCENTIVES

As of 30 September 2013 and 31 December 2012, the captions "Bank loans", "Other loans" and "Reimbursable incentives" can be detailed as follows:

			30-09-2013
		Nominal Value		Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	12.900.642	150.680.175	163.580.817	12.675.642	149.836.425	162.512.067
Bank overdrafts (note 6)	1.955.389	-	1.955.389	1.955.389	-	1.955.389
Bank loans	14.856.031	150.680.175	165.536.206	14.631.031	149.836.425	164.467.456
Commercial paper	153.450.000	36.000.000	189.450.000	152.853.837	35.942.085	188.795.922
Bonds	-	375.000.000	375.000.000	-	373.897.921	373.897.921
Other loans	33.589.774	-	33.589.774	32.520.542	-	32.520.542
Other loans	187.039.774	411.000.000	598.039.774	185.374.379	409.840.006	595.214.385
Reimbursable incentives	1.501.997	13.422.434	14.924.431	1.501.997	13.422.434	14.924.431
	203.397.802	575.102.609	778.500.411	201.507.407	573.098.865	774.606.272

			31-12-2012
		Nominal Value			Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	43.699.190	103.556.923	147.256.113	43.699.190	103.556.923	147.256.113
Bank overdrafts	1.767.991	-	1.767.991	1.767.991	-	1.767.991
Bank loans	45.467.181	103.556.923	149.024.104	45.467.181	103.556.923	149.024.104
Commercial paper	106.000.000	82.000.000	188.000.000	105.717.328	81.894.700	187.612.028
Bonds Other loans	- 34.857.197	375.000.000 -	375.000.000 34.857.197	- 33.686.712	373.104.432 -	373.104.432 33.686.712
Other loans	140.857.197	457.000.000	597.857.197	139.404.040	454.999.132	594.403.172
Reimbursable incentives	11.694.604	22.770.236	34.464.840	11.694.604	22.770.236	34.464.840
	198.018.982	583.327.159	781.346.141	196.565.825	581.326.291	777.892.116

As of 30 September 2013 there are bank overdrafts in use amounting to 4.750.000 Euro (14.001.000 Euro as of 31 December 2012), classified in the caption "Bank Loans".

The set-up expenses of the loans were deducted from its nominal value, being these recognized as financial expenses along the loan's life period (Note 12).

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

(Amounts expressed in Euro)

10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses for the nine months period ended at 30 September 2013 and 2012 can be detailed as follows:

	30.09.2013
		Impairment losses in
	Provisions	current assets	Total
Opening balance	1.535.342	5.536.965	7.072.307
Increases	2.722.651	450.000	3.172.651
Utilizations	-	(1.051.789)	(1.051.789)
Closing balance	4.257.993	4.935.176	9.193.169

		30.09.2012
		Impairment losses in
	Provisions	current assets	Total
Opening balance	1.149.668	6.851.677	8.001.345
Increases	770.000	-	770.000
Utilizations	-	-	-
Closing balance	1.919.668	6.851.677	8.771.345

During the nine months period ended as of September 30 2013, the subsidiary Caima Indústria de Celulose, S.A., proceeded to the payment of an additional settlement of Value Added Tax from previous years in the amount of 2,722,651 Euro which was recorded under the caption "Other non-current assets" because the company does not agree with the fundamentals of that settlement. To face the risk of such settlement, Altri recorded a liability under the caption "Provisions" against the caption "Other indirect taxes" of the income statement.

The remaining increase in provisions and impairment losses in the amount of 450.000 Euros is recorded against the income statement caption "Provisions and other impairment losses".

The reduction of impairment losses occurred in the nine months period ended in 30 September 2013 relates to the use of impairment losses in the amount of 831.493 Euro and reversals of impairment losses in the amount of 220.296 Euro.

The amount recorded under the caption "Provisions", at 30 September 2013 and 2012 is the Board of Directors' best estimate of the amount needed to face all the losses that may be supported due to general risks arising from the activity of the Group.

11. DERIVATIVE FINANCIAL INSTRUMENTS

As of 30 September 2013 and 2012 the companies of Altri's Group had contracts concerning financial derivative instruments to hedge variations in pulp price and interest rates being these instruments recorded according to its fair value.

The companies of Altri's Group only use derivatives to hedge cash flows from the operations generated by their activity.

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

(Amounts expressed in Euro)

As of 30 September 2013 and 2012 the detail of the financial derivative instruments are as follows:

	Pulp price hedging derivatives	Interest rates derivatives	Exchange rate derivatives	Total
Opening balance as of 31.12.2012	(8.696.330)	(13.417.466)	261.783	(21.852.013)
Derivatives fair value variation/cessation
Effects on shareholders' funds	6.521.809	2.405.024	-	8.926.833
Effects on the profit and loss statement	-	4.165.412	(261.783)	3.903.629
Closing balance as of 30.09.2013	(2.174.521)	(6.847.030)	-	(9.021.551)
	Pulp price hedging derivatives	Interest rates derivatives	Total
Opening balance as of 31.12.2011	(302.933)	(14.449.051)	(14.751.984)
Derivatives fair value variation/cessation
Effects on shareholders' funds	(9.801.398)	(810.717)	(10.612.115)
Effects on the profit and loss statement	-	2.377.518	2.377.518
Closing balance as of 30.09.2012	(10.104.331)	(12.882.250)	(22.986.581)

12. FINANCIAL RESULTS

The financial results for the nine months periods ended at 30 September 2013 and 2012 are detailed as follows:

	30-09-2013	30-09-2012
Financial expenses:
Interest	14.592.184	19.388.083
Other financial expenses	8.438.163	9.298.221
	23.030.347	28.686.304
Financial income:
Interest	2.441.675	3.763.153
Other financial income	705.765	1.167.623
	3.147.440	4.930.776

The caption "Other financial expenses" includes, mainly, expenses incurred with the set-up of the loans which are being recognized as costs through the life period of the respective loans (Note 9) and losses relative to interest rate financial derivative instruments (Note 11).

The "Gains and losses in associated companies and joint ventures" relate to the appropriation of the Group share in the results of the investments in the associated companies and joint ventures (Note 4.2).

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

(Amounts expressed in Euro)

13. EARNINGS PER SHARE

Earnings per share in the nine months periods ended as of 30 September 2013 and 2012 were computed considering the following amounts:

	30-09-2013	30-09-2012
Share number considered for the computation of basic and diluted earning	205.131.672	205.131.672
Net profit considered for the computation of basic and diluted earning	43.128.584	39.674.225
Earnings per share Basic Diluted	0,21 0,21	0,19 0,19

14. OTHER INCOME

As of 30 September 2013 and 2012 the caption of the statement of profit and loss "Other Income" is detailed as follows:

	30-09-2013	30-09-2012
Investment and exploration subsidies	6.737.587	2.000.761
Gains obtained from the alienation of fixed assets	82.712	399.558
Other income	2.004.953	1.806.218
	8.825.252	4.206.537

15. OTHER EXPENSES

As of 30 September 2013 and 2012 the caption of the statement of profit and loss "Other expenses" is detailed as follows:

	30-09-2013	30-09-2012
Direct taxes and charges	1.385.447	1.052.223
Losses in commodities derivative contracts (Note 11)	7.735.839	3.936.226
Other costs	1.819.584	924.107
	10.940.870	5.912.556

16. SEGMENTAL INFORMATION

On 16 April 2008, the Board of Directors of Altri, S.G.P.S., S.A. approved a simple demerger project of the company which implied the split of Altri's two business units that operated 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, and allowed Altri Group to focus its activity on its core business, production and commercialization of bleached eucalyptus pulp. Consequently the Board of Directors considers that there is only one business segment and the management information is reported and analyzed on this basis.

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

(Amounts expressed in Euro)

17. RELATED PARTIES

The subsidiaries of the Group have transactions between them which are based in market prices and classify as transactions with related parties.

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, therefore they are not disclosed in this note.

During the nine months periods ended at 30 September 2013 and 2012, there were no transactions with the Directors of the Group nor granted loans.

As of 30 September 2013 and 2012 the balances and transactions with related parties are as follow:

	Purchases and services		Sales and services		Interest income
Transactions	30.09.2013	30.09.2012	30.09.2013	30.09.2012	30.09.2013	30.09.2012
Associated companies and joint ventures (a)	1.313.112	1.093.923	3.758.101	3.422.244	240.192	503.638
Other related parties (b)	4.791.880	4.429.161	-	-	-	-
	6.104.992	5.523.084	3.758.101	3.422.244	240.192	503.638
	Accounts payable		Accounts receivable		Granted loans
Balances	30.09.2013	30.09.2012	30.09.2013	30.09.2012	30.09.2013	30.09.2012
Associated companies and joint ventures (a)	129.697	143.298	1.632.021	540.541	13.807.905	16.807.905
Other related parties (b)	23.590	609.532	-	124.779	-	-
	153.287	752.830	1.632.021	665.320	13.807.905	16.807.905

(a) All entities consolidated by the equity method as of 30 September 2013 and 2012 (Note 4.2);

(b) The companies of Ramada Group were considered as related parties.

Besides the transactions identified above, there are no other transactions with related companies.

Besides the companies included in consolidation (Note 4), entities considered as related parties as of 30 September 2013 can be detailed as follows:

Adcom Media Anúncios e Publicidade, S.A. Alteria, S.G.P.S., S.A. Storax – Equipements, S.A. Caderno Azul, S.G.P.S., S.A. Actium Capital, S.G.P.S., S.A. Cofihold, S.G.P.S., S.A. Cofina, SGPS, S.A. 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. Livre Fluxo, S.G.P.S., S.A. Malva – Gestão Imobiliária, S.A. Mediafin, SGPS, S.A. Metronews – Publicações S.A.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 SEPTEMBER 2013

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

(Amounts expressed in Euro)

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 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, Lda Web Works – Desenvolvimento de Aplicações para Internet, S.A. Valor Autêntico, SGPS, S.A.

18. NET PROFIT/LOSS APPROPRIATION

Relating to the year ended in 2012, the Board of Directors proposed, in its annual report, that the individual net loss of Altri, SGPS, S.A. in the amount of 4.145.968,07 Euro would be transferred to retained earnings. The proposal was approved in the General Shareholders' Meeting held on 18 April 2013.

The Board of Directors also proposed the distribution of free reserves in the amount of 5.128.292,80 Euro, as dividends, corresponding to a dividend of 0.025 Euro per share. This proposal was also approved on the General Shareholders' Meeting held on 18 April 2013.

19. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 24 October 2013.

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 with 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