Altri SGPS — Interim / Quarterly Report 2015

Nov 27, 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 Euro

Financial information – 3rd Quarter of 2015 (Unaudited)

This document is a translation of a document 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.

Key indicators: nine months of 2015 (vs. nine months of 2014)

• Total revenue: 494.3 million Euro (+22%)
• EBITDA: 163.2 million Euro (+98%)
• EBIT: 123.9 million Euro (+178%)
• Net profit: 84.7 million Euro (+271%)
• Free cash flow1 of 86.2 million Euro in the end of September 2015 - 46.4 million Euro of free cash flow generated in the 3rd quarter of 2015
• Net Debt: 444.9 million Euro
• EBITDA for the third quarter of 2015 reaches a record: 63.1 million Euro
• 754.3 thousand tons of pulp produced (+2%)
• 758.3 thousand tons of pulp sold (+2%)

1 Dividends paid and net debt variation

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

Income Statement - 3Q 2015 - a quarter of records

thousand euros	3Q 2014	3Q 2015	3Q15/3Q14 Var%	2Q 2015	3Q15/2Q15 Var%
Total Revenues	142,985	181,492	26.9%	158,709	14.4%
Costs of sales External supplies and services Payroll expenses Ohters expenses Provisions and impairment losses	65,063 39,516 7,254 936 128	63,244 42,383 8,818 1,892 2,031	-2.8% 7.3% 21.6% 102.0% ss	57,468 38,268 7,922 1,600 -19	10.1% 10.8% 11.3% 18.2% ss
Total expenses (a)	112,898	118,369	4.8%	105,240	12.5%
EBITDA (b) Margin	30,088 21.0%	63,124 34.8%	109.8% +13,7 pp	53,469 33.7%	18.1% +1,1 pp
Amortisation and depreciation	12,595	13,111	4.1%	12,991	0.9%
EBIT (c) Margin	17,493 12.2%	50,013 27.6%	185.9% +15,3 pp	40,478 25.5%	23.6% +2,1 pp
Financial profit	-6,728	-4,450	-33.8%	-5,391	-17.5%
Profit before income tax	10,765	45,563	323.2%	35,087	29.9%
Income tax Minority interests	-608 3	-11,134 0	ss ss	-6,961 10	60.0% -100.0%
Profit for the period attributable to parent company's shareholders	10,154	34,428	239.1%	28,115	22.5%

(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 third quarter of 2015 was Altri's best quarter ever, both in operational terms and in financial terms. Thus, total revenues amounted to 181.5 million Euro, which led to an EBITDA of 63.1 million Euro and an EBITDA margin of 34.8%. The net profit was 34.4 million Euro.

In detail, as referred, the total revenue of the third quarter of 2015 amounted 181.5 million Euro, an increase of 14% compared to the amount recorded in the previous quarter and an increase of 27% comparing to the third quarter of 2014.

The revenues from sales of pulp amounted to 156.1 million Euro, corresponding to an increase of 36% comparing to the 114.5 million Euro of pulp sales in the third quarter of 2014.

During the third quarter, the three industrial units of Altri produced around 273.0 thousand tons of pulp (+4% comparing to the same period of 2014 and +21.4% comparing to the production of the second quarter of 2015), and were sold 270.4 thousand tons of pulp (+3% comparing to the third quarter of 2014 and +13% comparing to the second quarter of 2015). Both values - tons produced and sold - correspond to an absolute record.

Evolution of pulp production between 3Q 2015 and 3Q 2014 by industrial unit (tons)

Evolution of pulp sales between 3Q 2015 and 3Q 2014 by industrial unit (tons)

Regarding to the type of pulp produced, during the third quarter of 2015, it was produced 246.3 thousand tons of BEKP pulp and 26.7 tons of VSF dissolving pulp.

In terms of exports, during the third quarter of 2015, Altri exported 252.3 thousand tons of pulp (+3%), corresponding to an amount of 146.4 million Euro (+37%).

Quarterly EBITDA reaches record: 63.1 million Euro. 34.8% margin.

The evolution of production level and sales prices complemented with a reduction of production unit costs led to an EBTIDA in the quarter of 63.1 million Euro, corresponding to a growth of 110% over EBITDA of the same period of the previous year and to an increase of 18% over the second quarter of 2015. EBITDA margin reached 34.8% which corresponds to a 1.1 pp increase compared to the EBITDA margin recorded in the previous quarter.

Total costs, excluding depreciation, interest and taxes, on the third quarter of 2015, amounted to approximately 118.4 million Euro, which represents an increase of 4.8% compared to the same period of 2014 and about 12.5% compared to the second quarter of 2015. The evolution of costs is closely related to the production evolution, since (as referred) the production increased 4% over the same quarter of 2014 and 21% over the 2nd quarter of 2015.

It should be remarked that the third quarter records a seasonal effect which results in a lower cost of wood, motivated by the reduction of imports from South America and by the lower specific consumption of wood in the production of one ton of pulp, due to the lower humidity level.

The operational income (EBIT) of the third quarter of 2015 reached 50.0 million Euro, an increase of 186% comparing to the EBIT recorded in the same period of 2014 and an increase of 24% compared to the previous quarter.

Altri's net profit reached 34.4 million Euro in the third quarter of 2015, recording an increase of more than three times the amount recorded in the same period of 2014. Comparing to the net profit recorded in the second quarter of 2015 the increase was of 23%.

Income Statement for the nine months period ended on September 2015

thousand euros	9M 2014	9M 2015	9M15/9M14 Var%
Total Revenues	406,687	494,279	21.5%
Costs of sales	189,508	179,258	-5.4%
External supplies and services	111,036	121,141	9.1%
Payroll expenses	21,175	24,475	15.6%
Other xpenses	2,491	4,509	81.0%
Provisions and impairment losses	180	1,724	ss
Total expenses (a)	324,391	331,107	2.1%
EBITDA (b)	82,296	163,172	98.3%
Margin	20.2%	33.0%	+12,8 pp
Amortisation and depreciation	37,751	39,257	4.0%
EBIT (c)	44,545	123,916	178.2%
Margin	11.0%	25.1%	+14,1 pp
Financial profit	-20,078	-15,589	-22.4%
Profit before income tax	24,467	108,327	342.7%
Income tax Minority interest	-1,610 3	-23,609 17	ss ss
Profit for the period attributable to parent company's shareholders	22,854	84,701	270.6%

(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

In cumulative terms, in the first nine months of 2015 it was achieved a record amount of EBITDA, which amounted to about 163.2 million euros, close to the double of the EBITDA for the same period of 2014.

The net profit amounted to 84.7 million Euro, compared with a net profit of 22.9 million Euro reached in the same period of the previous year.

Quarterly Cash Flow of 46.4 M€: net debt of 445 M€

The total net investment (CAPEX) made in the first nine months of 2015 by the industrial units of the Group, amounted to 29.5 million Euro, which corresponds to a quarterly investment of 1.9 million Euro.

Altri's nominal remunerated debt net of cash and cash equivalents and investments available for sale on September 30, 2015 amounted to 444.9 million Euro, corresponding to a decrease of 46.4 million Euro comparing to the net debt of 491.3 million Euro, recorded in the end of June 2015.

The weighted average cost of Altri's net debt with maturity greater than one year is currently below 3%.

The scheduling of Altri's remunerated gross debt maturity is as follows:

Key balance sheet indicators

thousand euro	2014	9M 2015	Var%
Biological assets	105,158.8	102,195.7	-3%
Tangible assets	384,285.5	377,030.9	-2%
Goodwill	265,531.4	265,531.4	0%
Investmens available for sale	10,691.2	10,691.2	0%
Others	43,226.9	45,132.8	4%
Total non current assets	808,893.7	800,582.0	-1%
Inventories	54,725.4	65,662.6	20%
Customers	88,868.1	102,426.7	15%
Cash and cash equivalents	260,855.0	201,958.2	-23%
Others	25,913.7	18,754.5	-28%
Total current assets	430,362.3	388,802.0	-10%
Total assets	1,239,256.0	1,189,384.0	-4%
Shareholder's equity and non controlling interests	272,264.0	340,781.8	25%
Bank loans	103,837.5	156,531.3	51%
Other loans	278,276.9	380,070.1	37%
Reimbursable incentives	11,723.8	17,750.8	51%
Others	48,330.3	45,462.0	-6%
Total non current liabilities	442,168.5	599,814.2	36%
Bank loans	77.2	7,775.0	9968%
Other current loans	398,648.0	110,765.0	-72%
Reimbursable incentives	9,082.8	558.9	-94%
Suppliers	61,686.4	53,346.4	-14%
Others	55,329.1	76,342.7	38%

Pulp market: price evolution

At the end of the third quarter of 2015, the price of bleached pulp hardwood type, according to market index FOEX reached 810 USD, which results in 724 EUR. During the third quarter the average price reached 804 USD (724 EUR), which corresponds to an increase of 3% in USD and an increase of about 2% in EUR compared to the second quarter of the year.

Market price evolution in BEKP pulp in Europe since 2003 to the end of September 2015 (EUR) Source: FOEX

Future events – dividend of 0.25€ per share

Taking into consideration the favorable evolution of net profit during the first months of 2015 and the liquidity available which are compatible with an advance on profits, the Board of Directors of Altri started a process aiming the approval of an advance on profits of 2015 in the maximum amount of 51,282,918 Euro, which corresponds to a dividend of 0.25 Euro per share.

Once all legal requirements are fulfilled, the Board of Directors will be able to decide upon the advance on profits, in a meeting to be held probably in the first quarter of November.

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 by Forest Stewardship Council® (FSC®)2 and by 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 that reached in 2014 990 thousand tons/year of bleached eucalyptus pulp. The Group concluded a series of ongoing small projects for optimizing operating efficiency which will allow, in the medium term, to increase the production capacity and diversify the client basis.

Altri's organic structure is as follows:

2 FSC-C004615

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2015 AND 31 DECEMBER 2014

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

ASSETS	Notes	30.09.2015	31.12.2014
NON CURRENT ASSETS:
Biological assets		102.195.682	105.158.777
Tangible fixed assets		377.030.942	384.285.503
Investment property		113.310	456.936
Goodwill		265.531.404	265.531.404
Intangible assets		85.643	139.448
Investments in associated companies and joint ventures	4.2	11.143.438	9.058.140
Investments available for sale	4.3	10.691.197	10.691.197
Other non current assets		6.189.815	6.031.139
Deferred tax assets Total non current assets	7	27.600.546 800.581.977	27.541.201 808.893.745
CURRENT ASSETS:
Inventories Customers		65.662.564 102.426.724	54.725.440 88.868.133
Other debtors		8.061.740	7.776.064
State and other public entities		7.201.977	15.629.003
Other current assets		3.482.214	2.508.606
Derivatives	11	8.558	-
Cash and cash equivalents	6	201.958.247	260.855.007
Total current assets		388.802.024	430.362.253
Total assets		1.189.384.001	1.239.255.998
SHAREHOLDERS' FUNDS AND LIABILITIES		30.09.2015	31.12.2014
SHAREHOLDERS' FUNDS:
Share capital	8	25.641.459	25.641.459
Legal reserve		4.336.498	3.405.143
Other reserves		226.103.322	205.680.587
Consolidated net profit / (loss)		84.700.554	37.381.548
Total shareholders' funds attributable to the parent company's shareholders		340.781.833	272.108.737
Non controlling interests		-	155.240
Total Shareholders' funds		340.781.833	272.263.977
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	9	156.531.250	103.837.500
Other loans	9	380.070.137	278.276.931
Reimbursable incentives	9	17.750.759	11.723.809
Other non current creditors		404.350	404.350
Other non current liabilities		24.711.719	27.568.617
Deferred tax liabilities	7	15.283.443	15.283.810
Provisions	10	5.062.519	5.073.481
Total non current liabilities		599.814.177	442.168.498
CURRENT LIABILITIES:
Bank loans	9	7.775.000	77.228
Other loans	9	110.765.034	398.648.024
Reimbursable incentives	9	558.872	9.082.810
Suppliers		53.346.355	61.686.358
Other current creditors		16.553.521	14.170.871
State and other public entities		17.926.181	4.351.443
Other current liabilities		41.863.028	34.904.492
Derivatives	11	-	1.902.297
Total current liabilities		248.787.991	524.823.523
Total shareholders' funds and liabilities		1.189.384.001	1.239.255.998

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 2015 AND 2014

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

		NINE MONTHS ENDED		QUARTER ENDED
	Notes	30.09.2015	30.09.2014	30.09.2015	30.09.2014
Sales		481.148.805	392.803.346	177.348.409	137.879.499
Services rendered		6.872.042	6.681.022	2.429.795	2.310.645
Other income	14	6.258.604	7.202.664	1.714.132	2.795.344
Cost of sales		(179.257.768)	(189.507.863)	(63.244.455)	(65.063.243)
External supplies and services		(121.141.133)	(111.036.322)	(42.383.125)	(39.516.254)
Payroll expenses		(24.475.244)	(21.175.213)	(8.818.386)	(7.254.174)
Amortisation and depreciation		(39.256.638)	(37.750.801)	(13.110.647)	(12.594.991)
Provisions and other impairment losses	10	(1.724.099)	(180.479)	(2.031.140)	(127.576)
Other expenses	15	(4.508.909)	(2.491.421)	(1.891.544)	(936.267)
Gains and losses in associated companies and joint ventures	4.2	2.128.639	2.039.005	1.423.273	786.040
Financial expenses	12	(24.164.547)	(27.316.958)	(7.355.165)	(9.517.475)
Financial income	12	6.446.966	5.199.863	1.481.448	2.003.925
Profit before income tax		108.326.718	24.466.843	45.562.595	10.765.473
Income tax		(23.609.376)	(1.609.649)	(11.134.460)	(608.130)
Consolidated net profit		84.717.342	22.857.194	34.428.135	10.157.343
Attributable to:
Parent company's shareholders	13	84.700.554	22.853.965	34.428.135	10.154.550
Non controlling interests		16.788	3.229	-	2.793
		84.717.342	22.857.194	34.428.135	10.157.343
Earnings per share:
Basic	13	0,41	0,11	0,17	0,05
Diluted	13	0,41	0,11	0,17	0,05

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 2015 AND 2014

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

(Amounts expressed in Euro)

	NINE MONTHS ENDED		QUARTER ENDED
	30.09.2015	30.09.2014	30.09.2015	30.09.2014
Net consolidated profit / (loss) for the period	84.717.342	22.857.194	34.428.135	10.157.343
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 Others	226.436 (15.388) 211.048	1.034.344 34.286 1.068.630	(94.408) 10.423 (83.985)	(132.362) 34.286 (98.076)
Other comprehensive income	211.048	1.068.630	(83.985)	(98.076)
Total comprehensive income for the period	84.928.390	23.925.824	34.344.150	10.059.266
Attributable to: Shareholders' of the parent company Non controlling interests	84.911.602 16.788	23.922.595 3.229	34.344.150 -	10.056.473 2.793

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 2015 AND 2014

(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 2014		25.641.459	2.862.981	157.811.081	55.347.961	241.663.482	146.308	241.809.790
Appropriation of the consolidated net profit of 2013		-	542.162	54.805.799	(55.347.961)	-	-	-
Dividends		-	-	(8.615.530)	-	(8.615.530)	-	(8.615.530)
Others		-	-	(9.941)	-	(9.941)	1	(9.940)
Total comprehensive income for the period		-	-	1.068.630	22.853.965	23.922.595	3.229	23.925.824
Balance as of 30 September 2014		25.641.459	3.405.143	205.060.039	22.853.965	256.960.606	149.538	257.110.144
Balance as of 1 January 2015		25.641.459	3.405.143	205.680.587	37.381.548	272.108.737	155.240	272.263.977
Appropriation of the consolidated net profit of 2014	18	-	931.355	36.450.193	(37.381.548)	-	-	-
Dividends	18	-	-	(16.410.534)	-	(16.410.534)	-	(16.410.534)
Others	5	-	-	172.028	-	172.028	(172.028)	-
Total comprehensive income for the period		-	-	211.048	84.700.554	84.911.602	16.788	84.928.390
Balance as of 30 September 2015	8	25.641.459	4.336.498	226.103.322	84.700.554	340.781.833	-	340.781.833

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 2015 AND 2014

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

		SEMESTER ENDED		QUARTER ENDED
	Notes	30.09.2015	30.09.2014	30.09.2015	30.09.2014
Operating activities:
Cash flow from operating activities (1)		136.024.965	82.475.061	61.686.372	33.928.121
Investment activities:
Collections relating to:
Investments	6	-	3.676.836	-	2.551.836
Tangible assets		1.043.354	76.543	16.619	75.343
Intangible assets		-	-	-	(30.192)
Interest and similar income		2.842.561	3.540.256	172.388	1.477.701
Investment subsidies		1.444.079	8.903.680	91.419	448.846
Payments relating to:
Investments	5	(149.687)	-	-	-
Investment subsidies		-	(1.495.878)	3.763.645	(747.939)
Tangible assets		(34.857.952)	(25.786.213)	(11.236.738)	(6.554.411)
Cash flow from investment activities (2)		(29.677.646)	(11.084.776)	(7.192.667)	(2.778.815)
Financing activities:
Collections relating to:
Loans obtained		349.373.918	421.561.707	63.732.113	5.646.696
Payments relating to:
Loans obtained		(479.927.108)	(439.946.173)	(113.444.973)	(114.839.609)
Interest and similar costs		(18.203.127)	(26.581.944)	(5.317.795)	(9.144.794)
Distribution of dividends	18	(16.410.534)	(8.615.530)	-	-
Cash flow from financing activities (3)		(165.166.851)	(53.581.940)	(55.030.655)	(118.337.707)
Cash and cash equivalents at the beginning of the period		260.777.779	232.371.783	202.495.197	337.368.530
Variation of cash and cash equivalents: (1)+(2)+(3)		(58.819.532)	17.808.346	(536.950)	(87.188.401)
Cash and cash equivalents at the end of the period	6	201.958.247	250.180.129	201.958.247	250.180.129

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, as a result of the reorganization process of Cofina, SGPS, S.A., through a demerger, and 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 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 reality of Altri Group, the Board of Directors believe that there is only one business segment (production and commercialization of bleached paper pulp from eucalyptus) and the management 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.

2. MAIN ACCOUNTING POLICIES AND BASIS FOR PRESENTATION

The consolidated financial statements as of 30 September 2015 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 2014.

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 2015 and 31 December 2014, are as follows:

Company	Head Office		Percentage Held	Main activity
Mother-Company:		2015	2014
Altri, SGPS, S.A.	OPorto			Investment management
Subsidiaries:
Altri Abastecimento de Madeira, S.A.	Figueira da Foz	100%	100%	Commercialization of wood
Altri Florestal, S.A.	Figueira da Foz	100%	100%	Sylvan exploration
Altri Sales, S.A.	Nyon, Switzerland	100%	100%	Group management support services
Altri, Participaciones Y Trading, S.L.	Vigo, Spain	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
Celtejo – Empresa de Celulose do Tejo, S.A. (a)	Vila Velha de Ródão	100%	99.83%	Production and Commercialization of pulp
Celulose Beira Industrial (Celbi), S.A.	Figueira da Foz	100%	100%	Production and Commercialization of pulp
Inflora – Sociedade de Investimentos Florestais, S.A.	Figueira da Foz	100%	100%	Sylvan exploration
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 with forests and landscapes

(a) During the nine month period ended September 30, 2015, Altri acquired the remaining shares of Celtejo – Empresa de Celulose do Tejo, S.A. (Note 5).

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 2015 and 31 December 2014 are as follows:

Company	Percentage held		Main activity
	2015	2014
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, equity and net profit for the period ended on 30 September 2015 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.	573,240	7,070,175	2,007,073	157,331
Joint ventures:
EDP – Produção Bioeléctrica, S.A. (b)	10,570,198	139,257,373	25,978,896	3,723,645
	11,143,438

(a) – includes loans granted.

(b) – EDP – Produção Bioeléctrica, S.A. holds 100% of the share capital of Ródão Power – Energia e Biomassa do Ródão, S.A.

4.3 INVESTMENTS AVAILABLE FOR SALE

As of 30 September 2015 and 31 December 2014 the investments available for sale are as follows:

Company	Book value
	2015	2014
Rigor Capital - Produção de Energia. Lda.	10,527,397	10,527,397
Other investments	163,800	163,800
	10,691,197	10,691,197

It is the understanding of the Altri Group that the book value of the caption "Investments available for sale", which 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, does not differ significantly from their fair value.

5. CHANGES OCCURED IN THE CONSOLIDATION PERIMETER

During the nine month period ended September 30, 2015, Altri acquired shares representing 0.17% of the share capital of Celtejo - Empresa de Celulose do Tejo, S.A., becoming the holder of 100% of its share capital and rights voting (Note 4.1).

6. CASH AND CASH EQUIVALENTS

As of 30 September 2015 and 2014, the caption "Cash and cash equivalents" can be detailed as follows:

	30.09.2015	30.09.2014
Cash	19,191	12,498
Bank deposits	201,939,056	250,167,631
	201,958,247	250,180,129
Cash and cash equivalents	201,958,247	250,180,129

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

(Amounts expressed in Euro)

During the nine months period ended September 30, 2015 there were no receipts or payments relating to financial investments, other than those related to the acquisition of shares representing the share capital of Celtejo - Empresa de Celulose do Tejo, S.A. (Note 5).

During the nine months period ended 30 September 2014, receipts from investments were as follows:

	Transaction Amount	Amount Received
EDP – Produção Bioelétrica, S.A. (a) Investments available for sale	2,325,000 1,351,836	2,325,000 1,351,836
	--------------- 3,676,836	---------------- 3,676,836
(a) – Repayment of loans granted	=========	=========

During the nine months period ended 30 September 2014, there were no payments related to financial investments

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 2011 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 2015.

The movements occurred in deferred tax assets and liabilities in the nine months periods ended in 30 September 2015 and 2014 were as follows:

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 SEPTEMBER 2015

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

(Amounts expressed in Euro)

		2015
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2015	27,541,201	15,283,810
Effects on income statement:
Harmonization of depreciation rates	(202,454)	-
Other effects	322,832	(367)
Total effect on income statement	120,378	(367)
Effect on shareholders' funds:
Fair values of derivatives	(61,033)	-
Closing balance as of 30.09.2015	27,600,546	15,283,443
	2014
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2014	31,165,814	17,896,214
Effects on income statement:
Harmonization of depreciation rates	1,003,499	-
Other effects	(366,883)	(259)
Total effect on income statement	636,616	(259)
Effect on shareholders' funds:
Fair values of derivatives	(717,760)	(309,846)
Closing balance as of 30.09.2014	31,084,669	17,586,109

8. SHARE CAPITAL

As of 30 September 2015 the Company's fully subscribed and paid up capital consisted of 205,131,672 shares with a nominal value of 12.5 cents of a Euro each.

9. BANK LOANS, OTHER LOANS AND REIMBURSABLE INCENTIVES

As of 30 September 2015 and 31 December 2014, the captions "Bank loans", "Other loans" and "Reimbursable incentives" can be detailed as follows:

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

(Amounts expressed in Euro)

	30.09.2015
	Nominal Value		Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	8,000,000	157,000,000	165,000,000	7,775,000	156,531,250	164,306,250
Bank loans	8,000,000	157,000,000	165,000,000	7,775,000	156,531,250	164,306,250
Commercial paper Bonds	61,500,000 -	78,000,000 303,326,900	139,500,000 303,326,900	60,994,399 -	77,227,843 302,842,294	138,222,242 302,842,294
Other loans	49,770,635	-	49,770,635	49,770,635	-	49,770,635
Other loans	111,270,635	381,326,900	492,597,535	110,765,034	380,070,137	490,835,171
Reimbursable incentives	558,872	17,750,759	18,309,631	558,872	17,750,759	18,309,631
	119,829,507	556,077,659	675,907,166	119,098,906	554,352,146	673,451,052
		Nominal Value	31.12.2014		Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans Bank overdrafts	- 77,228	105,000,000 -	105,000,000 77,228	- 77,228	103,837,500 -	103,837,500 77,228
Bank loans	77,228	105,000,000	105,077,228	77,228	103,837,500	103,914,728
Commercial paper Bonds Other loans	108,600,000 251,300,682 40,722,848	5,000,000 275,000,000 -	113,600,000 526,300,682 40,722,848	107,220,536 250,704,640 40,722,848	5,000,000 273,276,931 -	112,220,536 523,981,571 40,722,848
Other loans	400,623,530	280,000,000	680,623,530	398,648,024	278,276,931	676,924,955
Reimbursable incentives	9,082,810	11,723,809	20,806,619	9,082,810	11,723,809	20,806,619
	409,783,568	396,723,809	806,507,377	407,808,062	393,838,240	801,646,302

The expenses with the setup of the loans were deducted from its nominal value, being 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 periods ended at 30 September 2015 and 2014 can be detailed as follows:

30.09.2015
			Provisions
5,073,481	7,838,675	12,912,156
-	2,012,357	2,012,357
(10,962)	(288,258)	(299,220)
5,062,519	9,562,774	14,625,293
		Impairment losses in current

		30.09.2014 Impairment losses in current
	Provisions	assets	Total
Opening balance	5,123,914	9,505,979	14,629,893
Increases	280,670	-	280,670
Utilizations	(75,221)	(385,928)	(461,148)
Closing balance	5,329,363	9,120,051	14,449,414

The amount recorded under the caption "Provisions", at 30 September 2015 and 2014, is the management best estimate in order to face all the losses that may arise from general risks of Altri's Group activity.

11. DERIVATIVE FINANCIAL INSTRUMENTS

As of 30 September 2015 and 2014 Altri's Group companies had financial derivative contracts to hedge interest rate and pulp price changes (September 30, 2014), which were recorded according to its fair value.

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

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

(Amounts expressed in Euro)

As of 30 September 2015 and 2014 the detail of the financial derivative instruments are as follows:

	Pulp price hedging derivatives	Interest rates derivatives	Total
Opening balance as of 31.12.2014	-	(1,902,297)	(1,902,297)
Derivatives fair value variation/cessation Effects on shareholders' funds Effects on the profit and loss statement	- -	287,469 1,623,386	287,469 1,623,386
Closing balance as of 30.09.2015	-	8,558	8,558
	Pulp price hedging derivatives	Interest rates derivatives	Total
Opening balance as of 31.12.2013	720,362	(6,004,727)	(5,284,365)
Derivatives fair value variation/cessation Effects on shareholders' funds Effects on the profit and loss statement	(645,470) -	2,087,728 2,012,133	1,442,258 2,012,133
Closing balance as of 30.09.2014	74,892	(1,904,866)	(1,829,974)

12. FINANCIAL RESULTS

The financial results for the nine months periods ended at 30 September 2015 and 2014 are detailed as follows:

	30.09.2015	30.09.2014
Financial expenses:
Interests	12,341,740	15,579,903
Other financial expenses	11,822,807	11,737,055
	24,164,547	27,316,958
Financial income:
Interests	2,311,161	3,462,656
Other financial income	4,135,805	1,737,207
	6,446,966	5,199,863

The caption "Other financial expenses" includes expenses incurred with the loans setup which are being recognized as costs through the life period of the respective loans (Note 9), and losses regarding 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 2015 and 2014 were calculated considering the following amounts:

	30.09.2015	30.09.2014
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	84,700,554	22,853,965
Earnings per share Basic Diluted	0.41 0.41	0.11 0.11

14. OTHER INCOME

As of 30 September 2015 and 2014 the caption of the statement of profit and loss "Other Income" is detailed as follows:

	30.09.2015	30.09.2014
Investment and exploration subsidies	3,818,783	3,739,263
Gains in commodities derivatives contracts (Note 11)	-	550,452
Other income	2,439,821	2,912,949
	6,258,604	7,202,664

15. OTHER EXPENSES

As of 30 September 2015 and 2014 the caption of the statement of profit and loss "Other expenses" is detailed as follows:

	30.09.2015	30.09.2014
Direct taxes and charges	1,251,606	1,246,375
Other costs	3,257,303	1,245,045
	4,508,909	2,491,421

16. SEGMENTAL INFORMATION

On 16 April 2008, the Board of Administration 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 operates 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 paper pulp form eucalyptus, so the Board of Directors believes 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

Altri Group companies have transactions between them that qualify as related parties' transactions, which 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, therefore they are not disclosed in this note.

During the nine months periods ended at 30 September 2015 and 2014, there were no transactions with the Directors of the Group and were no granted loans.

As of 30 June 2015 and 2014 the balances and transactions with related parties are as follow:

	Purchases and services received		Sales and services		Interest income
Transactions	30.09.2015	30.09.2014	30.09.2015	30.09.2014	30.09.2015	30.09.2014
Associated companies and joint ventures (a)	1,768,924	2,582,232	11,395,766	12,044,140	181,572	226,960
Other related parties (b)	4,777,684	4,869,052	4,256	-	-	-
	6,546,608	7,451,284	11,400,022	12,044,140	181,572	226,960
		Accounts payable		Accounts receivable	Granted Loans
Balances	30.09.2015	30.09.2014	30.09.2015	30.09.2014	30.09.2015	30.09.2014
Associated companies and joint ventures (a)	666,134	379,456	2,682,010	2,505,843	11,482,905	11,482,905
Other related parties (b)	31,346	45,317	1,419	-	-	-
	697,480	424,773	2,683,428	2,505,843	11,482,905	11,482,905

(a) All entities consolidated by the equity method as of 30 September 2015 and 2014 (Note 4.2);

(b) Were considered as related parties the companies of Ramada Group and Cofina Group.

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 2015 can be detailed as follow:

Actium Capital, S.G.P.S., S.A. Adcom Media Anúncios e Publicidade, S.A. Alteria, S.G.P.S., S.A. Caderno Azul, S.G.P.S., S.A. Cofihold, S.G.P.S., S.A. Cofina Media, S.A. Cofina, SGPS, S.A. Destak Brasil – Editora de Publicações, S.A. Destak Brasil – Empreendimentos e Participações, S.A. Elege Valor, S.G.P.S., S.A. F. Ramada – Investimentos, SGPS, S.A. F. Ramada II, Imobiliária, S.A. Grafedisport – Impressão e Artes Gráficas, S.A. Livrefluxo, S.G.P.S., S.A. Malva – Gestão Imobiliária, S.A. Mercados Globais – Publicação de Conteúdos, Lda. Ramada – Aços, S.A. Ramada Storage Solutions, S.A. Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. Storax Benelux Storax Limited Storax S.A. Torres da Luz – Investimentos Imobiliários, S.A. Universal Afir, S.A. Valor Autêntico, SGPS, S.A.

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

VASP – Sociedade de Transportes e Distribuições, Lda

18. APPLICATION OF THE NET INCOME

The Board of Directors proposed, in its anual report, approved at the General meeting held on 14 April 2015, that the individual net income of Altri SGPS, S.A. amounted to 18,627,109.20 Euros was allocated as follows:

Legal reserve	931,355.46
Others reserve	1,285,219.98
Distribution of dividends	16,410,533.76
	---------------------
	18,627,109.20
	============

19. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 30 October 2015.

20. EXPLANATION ADDED FOR TRANSLATION

These condensed 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

João Manuel Matos Borges de Oliveira

Domingos José Vieira de Matos

Laurentina da Silva Martins

Pedro Miguel Matos Borges de Oliveira

Ana Rebelo de Carvalho Menéres de Mendonça

José Manuel de Almeida Archer