Altri SGPS — Interim / Quarterly Report 2015

May 8, 2015

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- 1st Quarter 2015 (unaudited)

Key Indicators of 1 st Q 2015 (vs. 1 st Q 2014)

• 256.4 thousand tons of eucalyptus pulp produced (+ 17%)
• 248.6 thousand tons of pulp sold (+ 7%)
• 230.3 thousand tons of pulp exported (+ 5%)
• Ongoing projects: Conversion of Caima for the production of specialty pulp and enhancing the operating efficiency of Celbi
• Total revenue: 154.1 million euros (+ 20%)
• EBITDA: 46.6 million Euros (+ 79%)
• Net income: 22.2 million euros (+ 189%)

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

Income Statement of 1st Q 2015

thousand euros	1Q 2014	1Q 2015	1Q15/1Q14 Var%	4Q 2014	1Q15/4Q14 Var%
Total Revenues	128,776	154,078	19.6%	146,171	5.4%
Cost of sales External supplies and services Payroll expenses Others Total Expenses (a)	62,421 32,594 6,911 763 102,688	58,545 40,490 7,735 729 107,499	-6.2% 24.2% 11.9% -4.5% 4.7%	65,317 41,004 8,602 9 114,931	-10.4% -1.3% -10.1% s s -6.5%
EBITDA (b) Margin	26,087 20.3%	46,580 30.2%	78.6% +10,0 pp	31,239 21.4%	49.1% +8,9 pp
Amortisation and depreciation	12,579	13,155	4.6%	10,770	22.2%
EBIT (c) Margin	13,508 10.5%	33,425 21.7%	147.4% +11,2 pp	20,470 14.0%	63.3% +7,7 pp
Financial profit	-5,426	-5,747	5.9%	-4,323	32.9%
Profit before income tax	8,082	27,677	242.5%	16,147	71.4%
Income tax Minority interest	-415 1	-5,514 6	s s s s	-1,613 6	s s s s
Profit for the period attributable to parent company's shareholders	7,666	22,157	189.0%	14,528	52.5%

(a) operating costs exclusing amortisation, financial expenses and income tax

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

(c) EBIT = Earnings before interest and taxes

The first quarter of 2015 was marked, on one side, by a sharp appreciation of the US dollar (USD) against the Euro (EUR), having the market price in EUR of bleached eucalyptus pulp (BEKP) raised about 13% during the first quarter of 2015 (comparing with the previous quarter) and, on other side, by a sales price increase in USD (about 2% comparing with the fourth quarter of 2014), reflecting the strong demand registered during the first quarter of 2015.

Compared with the first quarter of 2014, exchange rate variations are even more significant: in USD the selling price of pulp fell 2.4%, but the price in EUR raised about 18.2%.

Thus, total revenues recorded in 1Q 2015 amounted to 154.1 million Euros, an increase of about 5% compared to the previous quarter and an increase of 20% over the first quarter of 2014.

In the first quarter of 2015, the three Altri industrial units produced 256.4 thousand tons of pulp (+ 17% compared to the production of the first quarter of 2014 and + 1.4% compared to the fourth quarter of 2014) having been sold 248.6 thousand tons of pulp (-0.9% comparing with the fourth quarter of 2014 and + 7% comparing with the first quarter of 2014).

Evolution of pulp production between 1 Q 2014 and 1Q 2015 by mill (tons)

Evolution of pulp sales between 1Q 2014 and 1Q 2015 by mill (tons)

The reduction in pulp sales between the 1st quarter of 2015 and the fourth quarter of 2014, was due to the need to increase the stocks in order to allow the company to ensure with quality the trade commitments agreed with the clients, taking into account the scheduled maintenance stoppage in Celbi industrial unit which was held during the month of April.

In terms of exports, during the first three months of 2015, Altri exported about 230.6 thousand tons of pulp, corresponding to an increase of about 5% over the same period of last year.

Quarterly EBITDA grew 79% to 46.6 million Euros

The evolution of production level and sales prices was complemented with a very controlled evolution of operating costs, which led to an EBITDA in the quarter of 46.6 million Euros, corresponding to a growth of about 79% over EBITDA for the same period of the previous year and an increase of about 49% over the 4th quarter of 2014.

Total costs, excluding depreciation, financial expenses and taxes for the first quarter of 2015 amounted to about 107.5 million euros, which represents an increase of 4.7% over the same period of 2014 and a decrease of about 6.5% over the fourth quarter of 2014. Comparing with the previous quarter, the majority of the cost items have reduced.

The EBIT of the first quarter of 2015 reached about 33.4 million Euros, an increase of about 63% compared with the EBIT recorded in the fourth quarter of 2014 and an increase of about 147% over the same period of last year.

The financial result amounted to a net charge of around 5.7 million euros. It should be noted that during the month of February 2015 Altri paid back a bond issue amounting to 300 million Euros.

Net profit of Altri reached 22.2 million euros, recording a growth of about 189% over the same period of last year.

Net debt of 504 million euros: reduction of about 54 million compared to 1Q 2014

st Q 2015

Nominal debt net of cash and investments available for sale of Altri at March 31, 2015 amounted to 504.4 million euros, representing a decrease of approximately 10.3 million euros compared to net debt of 514.7 million euros registered at the end of 2014 and a decrease of about 54 million euros compared with the net debt at the end of first quarter 2014.

The total net investment (CAPEX) held in the 1st quarter of 2015 by the industrial units of the Group, amounted to 7.6 million Euros.

As already mentioned, during the month of February 2015, Altri reimbursed the bonds "Celbi 2015", amounting to 300 million Euros. Thus, the medium and long term commercial paper programs and bonds issued by Altri Group at the end of the 1st quarter 2015 are as follows:

TYPE	2015	2016	2017	2018	2019	2020	2021	2022	Total
Commercial papel - medium and long term	-	-	28,000,000	-	-	-	-	75,000,000	103,000,000
Bonds	-	-	-	145,000,000	80,000,000	50,000,000	35,000,000	-	310,000,000
CELBI Float 01/2018				50,000,000					50,000,000
CELBI Float 02/2018				25,000,000					25,000,000
CELBI Float 03/2019					80,000,000				80,000,000
CELBI Float 02/2021							35,000,000		35,000,000
ALTRI Float 04/2020						50,000,000			50,000,000
ALTRI Float 11/2018				70,000,000					70,000,000
TOTAL	-	-	28,000,000	145,000,000	80,000,000	50,000,000	35,000,000	75,000,000	413,000,000

Key Balance Sheet Indicators

thousand euros	2014	1Q 2015	Var%
Biological assets	105,158.8	103,706.4	-1%
Tangible assets	384,285.5	379,662.2	-1%
Goodw ill	265,531.4	265,531.4	0%
Investments avaiable for sale	10,691.2	10,691.2	0%
Others	43,226.9	43,496.3	1%
Total non current assets	808,893.7	803,087.5	-1%
Inventories	54,725.4	57,651.7	5%
Customers	88,868.1	93,445.5	5%
Cash and cash equivalents	260,855.0	239,021.1	-8%
Others	25,913.7	24,843.6	-4%
Total current assets	430,362.3	414,961.8	-4%
Total assets	1,239,256.0	1,218,049.3	-2%
Shareholder's equity and non controlling interests	272,264.0	294,760.5	8%
Bank loans	103,837.5	161,118.8	55%
Other loans	278,276.9	404,631.2	45%
Reimbursable incentives Others	11,723.8 48,330.3	11,899.1 47,290.1	1% -2%
Total non current liabilities	442,168.5	624,939.1	41%
Bank loans	77.2	2,775.0	3493%
Other current loans	398,648.0	180,841.4	-55%
Reimbursable incentives	9,082.8	5,314.8	-41%
Suppliers	61,686.4	54,551.0	-12%
Others	55,329.1	54,867.5	-1%
Total current liabilities	524,823.5	298,349.7	-43%

Pulp Market

According to data from the Pulp and Paper Products Council (PPPC), during the first quarter of 2015, total demand for hardwood pulp increased by 12.5% (comparing to the same period of 2014), it should be highlighted the eucalyptus pulp which recorded a demand increase of 18.7% in the same period.

Thus, in absolute terms, consumption of hardwood pulp increased by about 840 thousand tons compared to the same period of last year, having stayed in 7.6 million tons. Geographically China's consumption grew by 21.5%, reaching about 2.3 million tons in the quarter; while consumption in Western Europe grew by 6.6% to around 2.3 million tons.

The 1st quarter of 2015 in terms of prices evolution of BEKP pulp, was characterized by a slight increase of 2% of the price in USD compared to the previous quarter. However, when converted into Euros, the increase was much more pronounced (about 13%). Thus, the average price in the first quarter of the year amounted to 750 USD / ton (vs. 735 USD / ton in the previous quarter and 768 USD / ton in the same quarter of 2014), while in Euros stood at 663 EUR / ton (vs.589 EUR / ton in the previous quarter and 561 EUR / ton in the same quarter of 2014).

Evolution of BEKP pulp price in Europe since 2003 until April 2015 (EUR ) Source: FOEX

Outlook

Operationally, Celbi, main industrial plant of Altri, held in April 2015 a scheduled annual stoppage for maintenance of about 15 days, which - taking into account that Celbi represents about 70% of Altri's production capacity - significantly affected the production and the level of costs per ton of pulp in that month.

Caima will complete the conversion project for specialty pulp at the beginning of June, performing on the same date a maintenance stoppage of about one week, with the start of production scheduled for the second week of that month.

At the date of this release, the market price (PIX) of BHKP pulp is about 777 USD, thus positive prospects for the second quarter should be considered.

Altri – business profile

Altri is a reference European producer of eucalyptus pulp. Apart from the production of pulp, the Group is also present in the renewable energy sector of forest base, namely industrial cogeneration through black liquor and biomass. The forestry strategy is based on full utilization of all the components provided by the forest: pulp, black liquor and forest wastes.

Currently, Altri manages about 84,000 hectares of forest in Portugal, fully certified by the Forest Stewardship Council® (FSC®) 1 and the Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledge certification entities.

Currently, Altri owns three pulp factories in Portugal with an installed capacity in 2014 amounting to 990 thousand tons / year of bleached eucalyptus pulp. The company has an ongoing set of small operating efficiency optimization projects which will, in the medium term, increase production capacity.

Altri's organic structure is as follows:

*Joint venture with EDP

1 FSC-C004615

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE THREE MONTHS PERIODS ENDED 31 MARCH 2015 AND 2014

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

	31.03.2015	31.03.2014	4Q14
Sales	149,202,715	124,591,850	140,875,638
Services rendered	2,163,624	2,186,145	2,318,536
Other income	2,712,027	1,997,830	2,976,539
Cost of sales	(58,545,465)	(62,420,946)	(65,316,709)
External supplies and services	(40,490,003)	(32,593,581)	(41,003,547)
Payroll expenses	(7,734,658)	(6,910,716)	(8,602,410)
Amortisation and depreciation	(13,155,046)	(12,579,016)	(10,769,578)
Provisions and impairment losses	288,345	(22,233)	258,542
Other costs	(1,017,027)	(740,865)	(267,317)
Gains and losses in associated companies and joint ventures	159,957	308,311	701,826
Financial expenses	(9,270,788)	(7,266,138)	(7,189,505)
Financial income	3,363,787	1,531,507	2,164,689
Profit before income tax	27,677,468	8,082,148	16,146,704
Income tax	(5,514,084)	(414,984)	(1,613,419)
Profit after income tax	22,163,384	7,667,164	14,533,286
Consolidated net profit	22,163,384	7,667,164	14,533,286
Attributable to:
Parent company's shareholders	22,156,960	7,666,363	14,527,583
Non controlling interests	6,424	801	5,703
	22,163,384	7,667,164	14,533,286

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2015 AND 31 DECEMBER 2014

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

ASSETS	31.03.2015	31.12.2014
NON CURRENT ASSETS:
Biological assets	103,706,423	105,158,777
Tangible fixed assets	379,662,233	384,285,503
Investment property	456,936	456,936
Goodwill	265,531,404	265,531,404
Intangible assets	121,394	139,448
Investments in associated companies and joint ventures	9,174,755	9,058,140
Investments available for sale	10,691,197	10,691,197
Other non current assets	6,259,532	6,031,139
Deferred tax assets	27,483,647	27,541,201
Total non current assets	803,087,521	808,893,745
CURRENT ASSETS:
Inventories	57,651,653	54,725,440
Customers	93,445,496	88,868,133
Other debtors	7,842,064	7,776,064
State and other public entities	12,590,231	15,629,003
Other current assets	4,411,267	2,508,606
Cash and cash equivalents	239,021,101	260,855,007
Total current assets	414,961,812	430,362,253
Total assets	1,218,049,333	1,239,255,998
SHAREHOLDERS' FUNDS AND LIABILITIES	31.03.2015	31.12.2014
SHAREHOLDERS' FUNDS:
Share capital	25,641,459	25,641,459
Legal reserve	3,405,143	3,405,143
Other reserves	243,395,224	205,680,587
Consolidated net profit / (loss)	22,156,960	37,381,548
Total shareholders' funds attributable to the parent company's shareholders	294,598,786	272,108,737
Non controlling interests	161,664	155,240
Total Shareholders' funds	294,760,450	272,263,977
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	161,118,750	103,837,500
Other loans	404,631,179	278,276,931
Reimbursable subsidies	11,899,088	11,723,809
Other non current creditors	404,350	404,350
Other non current liabilities	26,535,688	27,568,617
Deferred tax liabilities	15,283,491	15,283,810
Provisions	5,066,588	5,073,481
Total non current liabilities	624,939,134	442,168,498
CURRENT LIABILITIES:
Bank loans	2,775,000	77,228
Other loans	180,841,359	398,648,024
Reimbursable subsidies	5,314,849	9,082,810
Suppliers	54,551,030	61,686,358
Other current creditors	18,008,135	14,170,871
State and other public entities	5,129,384	4,351,443
Other current liabilities	31,729,992	34,904,492
Derivatives	-	1,902,297
Total current liabilities	298,349,749	524,823,523
Total shareholders' funds and liabilities	1,218,049,333	1,239,255,998

Porto, May 8, 2015