Altri SGPS — Interim / Quarterly Report 2016

May 31, 2016

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 – 1 st Quarter of 2016 (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.

Financial Information 1Q 2016

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

Income Statement - 1Q 2016 - a quarter of records

thousand Euro	1Q 2015	1Q 2016	1Q16/1Q15 Var%	4Q 2015	1Q16/4Q15 Var%
Total Revenues	154,078	161,706	5.0%	170,546	-5.2%
Costs of sales External supplies and services Payroll expenses Ohters expenses Provisions and impairment losses	58,545 40,490 7,735 1,017 -288	60,240 40,325 7,789 1,254 8	2.9% -0.4% 0.7% 23.3%	58,646 41,695 10,802 -460 1,928	2.7% -3.3% -27.9% -372.9% -99.6%
Total Expenses (a)	107,499	109,616	2.0%	112,611	-2.7%
EBITDA (b) Margin	46,580 30.2%	52,090 32.2%	11.8% +2,0 pp	57,935 34.0%	-10.1% -1,8 pp
Amortisation and depreciation	13,155	13,263	0.8%	13,577	-2.3%
EBIT (c) Margin	33,425 21.7%	38,827 24.0%	16.2% +2,3 pp	44,358 26.0%	-12.5% -2,0 pp
Gains/Losses in associated companies Financial costs Financial gains Financial results	160 -9,271 3,364 -5,747	258 -6,569 1,466 -4,845	61.4% -29.1% -56.4% -15.7%	821 -7,781 1,827 -5,133	-68.6% -15.6% -19.7% -5.6%
Profit Before Income Tax	27,677	33,982	22.8%	39,225	-13.4%
Income tax Minority interests	-5,514 6	-8,865 0	60.8% s s	-6,269 0	41.4% s s
Profit for the period attributable to parent company's shareholders	22,157	25,117	13.4%	32,956	-23.8%

(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 first quarter of 2016 was characterized by a decrease in the pulp price of 5% (both in USD and EUR) in relation to the last quarter of 2015, which had the same impact on revenues. In the first quarter of 2016 the pulp price was 1.7% and 4.6% higher than in the same period of 2015, in USD and EUR, respectively.

In detail, the total revenue of the first quarter of 2016 amounted to 161.7 million Euro, an increase of 5% comparing to the first quarter of 2015 and a decrease of 5% compared to the amount recorded in the previous quarter (4Q2015).

Financial Information 1Q 2016

During the first quarter, the three industrial units of Altri produced around 250.7 thousand tons of pulp (-2% comparing to the same period of 2015), of which 23.1 thousand tons were dissolving pulp (-7% comparing to the same period of 2015). In terms of sales, during the first quarter of 2016, they were sold 253.5 thousand tons of pulp (+2% comparing to the first quarter of 2015), of which 25.8 thousand tons were dissolving pulp (+2% comparing to the same period of 2015).

During the first quarter of 2016, Caima – Altri's industrial unit in charge of the dissolving pulp production - performed its scheduled annual stoppage for maintenance.

In terms of exports, during the first quarter of 2016, Altri exported 232.0 thousand tons of pulp (+1% comparing to first quarter of 2015).

The revenues from sales of pulp of the first quarter of 2016 amounted to 139.4 million Euro, an increase of 8% comparing to the first quarter of 2015 and a decrease of 4.1% compared to the amount recorded in the previous quarter (4Q2015).

Quarterly EBITDA amounted to 52 million Euro

The operating costs increased 2% when compared to the same period of 2015 in line with the sales evolution. Total costs, excluding depreciation, interest and taxes, on the first quarter of 2016, amounted to approximately 109.6 million Euro, which represents a decrease of 2.7% compared to the last quarter of 2015.

The EBITDA of the first quarter of 2016 reached 52.1 million Euro, a decrease of 10% comparing to the EBITDA recorded in the previous quarter and an increase of 12% compared to the same period of 2015.

The financial result amounted to a net charge of around 4.8 million Euro.

Net profit of Altri reached 25 million Euro.

Net debt of 412 million Euro: reduction of 30 million compared to 2015

Altri´s nominal debt net of cash and cash equivalents as of 31 March 2016 amounted to 412.2 million Euro, representing a decrease of approximately 30.4 million Euro compared to net debt of 442.6 million Euro recorded in the end of 2015.

The total net investment (CAPEX) made in the 1 st quarter of 2016 by the industrial units of the Group amounted to 4.0 million Euro.

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

	2016	2017	2018	2019	2020	2021	2022
Bank loans	-	14	31	24	16	-	-
Commercial paper	41	28	-	-	-	-	25
Bonds	-	-	105	110	50	35	-
Other loans (includes factoring)	43	-	-	-	-	-	-
TOTAL	83	42	136	133	66	35	25

Altri Group issued, in April 2016, a bond loan of 40 million Euro, with maturity in 2024.

Financial Information 1Q 2016

Key balance sheet indicators

thousand Euro	2015	1Q 2016	Var%
Biological assets	101,472.9	102,038.2	1%
Tangible assets	364,119.6	354,196.7	-3%
Goodw ill	265,531.4	265,531.4	0%
Investmens available for sale	10,691.1	10,691.1	0%
Others	42,756.7	43,575.7	2%
Total non current assets	784,571.7	776,033.1	-1%
Inventories	56,396.6	64,027.9	14%
Customers	91,521.3	89,427.5	-2%
Cash and cash equivalents	243,154.2	107,398.4	-56%
Others	19,597.6	23,930.5	22%
Total current assets	410,669.6	284,784.4	-31%
Total assets	1,195,241.4	1,060,817.5	-11%
Shareholder's equity and non controlling interests	322,349.6	347,455.6	8%
Bank loans	153,587.5	78,000.0	-49%
Other loans	413,733.4	353,078.0	-15%
Reimbursable incentives	17,439.1	17,439.1	0%
Others	45,566.5	44,601.9	-2%
Total non current liabilities	630,326.6	493,119.0	-22%
Bank loans	10,775.0	6,000.0	-44%
Other current loans	105,438.1	82,746.5	-22%
Reimbursable incentives	558.9	558.9	0%
Suppliers	61,243.4	55,963.0	-9%
Others	64,549.8	74,974.4	16%
Total current liabilities	242,565.3	220,242.8	-9%

Financial Information 1Q 2016

Pulp Market

In accordance with information from the Pulp and Paper Products Council (PPPC Global – 100 flash report), during the first quarter of 2016, total demand for hardwood pulp increased by 1.3% (comparing to the same period of 2015). It is highlighted the eucalyptus pulp, which recorded an increase in demand of 5.5% in the same period.

Geographically, the consumption of hardwood pulp in Europe increased 1.4% while in China the increase reached 6.9%. In relation with eucalyptus pulp, the demand grew 3.8% in Europe and 13.1% in China. The market share of eucalyptus pulp increased, in the hardwood segment, from 68.9% in the first quarter of 2015, to 71.4% in the end of the reporting period (1Q2016).

The 1st quarter of 2016 in terms of prices evolution of BEKP pulp, was characterized by a decrease of 5% of the price (both in USD and EUR), when compared to the previous quarter. The average price in the first quarter of the year amounts to 762 USD / ton (vs. 802 USD / ton in the previous quarter and 750 USD / ton in the same quarter of 2015), while in Euro recorded 693 EUR / ton (vs.732 EUR / ton in the previous quarter and 663 EUR / ton in the same quarter of 2015).

Evolution of BEKP pulp price in Europe since 2003 until April 2016 (EUR) Source: FOEX

Future Perspectives – 2Q 2016

During the second quarter of 2016 it is scheduled the annual stoppage for maintenance for the remaining industrial units of the Altri Group: Celtejo on April and Celbi and May. Consequently the production and productivity will be affected by these annual stoppages.

Concerning the pulp market, it is expected a decrease of the price in Euro on the second quarter of 2016.

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 has under its intervention over 82 thousand hectares of forest in Portugal entirely certified by Forest Stewardship Council® (FSC®)¹ 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 2015 1 million tons/year of bleached eucalyptus pulp. The Group is concluding a series of ongoing small projects for optimizing operating efficiency.

Porto, May 5, 2016

The Board of Directors

______________________________

¹ FSC-C004615

Consolidated financial statements and notes

(translation of a document originally issued in Portuguese – note 20)

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2016 AND 31 DECEMBER 2015

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

	ASSETS	Notes	31.03.2016	31.12.2015
NON CURRENT ASSETS:
Biological assets			102 038 220	101 472 915
Tangible fixed assets			354 196 685	364 119 629
Investment property			113 310	113 310
Goodwill			265 531 404	265 531 404
Intangible assets			63 939	83 821
	Investments in associated companies and joint ventures	4.2	12 266 332	12 008 219
Investments available for sale		4.3	10 691 097	10 691 097
Other non current assets			3 511 234	3 490 469
Deferred tax assets		7	27 620 894	27 060 866
	Total non current assets		776 033 115	784 571 730
CURRENT ASSETS:
Inventories			64 027 878	56 396 615
Customers			89 427 529	91 521 269
Other debtors			10 614 161	8 401 481
State and other public entities			10 625 934	8 469 842
Other current assets			2 690 431	2 726 281
Cash and cash equivalents		6	107 398 419	243 154 160
	Total current assets		284 784 352	410 669 648
Total assets			1 060 817 467	1 195 241 378
	SHAREHOLDERS' FUNDS AND LIABILITIES		31.03.2016	31.12.2015
SHAREHOLDERS' FUNDS:
Share Capital		8	25 641 459	25 641 459
Legal reserve			4 336 498	4 336 498
Other reserves			292 360 622	225 998 128
Advance on profits			-	(51 282 918)
Consolidated net profit / (loss)	Total shareholders' funds attributable to the parent company's sharedholders		25 117 063 347 455 642	117 656 401 322 349 568
Non controlling interests			-	-
	Total shareholders' funds		347 455 642	322 349 568
LIABILITIES:
NON CURRENT LIABILITES:
Bank loans		9	78 000 000	153 587 500
Other loans		9	353 078 027	413 733 394
Reimbursable subsidies		9	17 439 139	17 439 139
Other non current liabilities			22 892 549	23 854 161
Deferred tax liabilities		7	15 871 624	15 871 624
Pension liabilities			778 000	778 000
Provisions	Total non current liabilities	10	5 059 690 493 119 029	5 062 741 630 326 559
CURRENT LIABILITIES:
Bank loans		9	6 000 000	10 775 000
Other loans		9	82 746 543	105 438 128
Reimbursable subsidies		9	558 872	558 872
Suppliers			55 962 984	61 243 404
Other current creditors			6 489 376	3 908 405
State and other public entities			28 459 852	26 453 118
Other current liabilities			39 878 502	34 051 538
Derivatives		11	146 667	136 786
	Total current liabilites		220 242 796	242 565 251
	Total shareholders' funds and liabilities		1 060 817 467	1 195 241 378

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

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE THREE MONTHS PERIODS ENDED 31 MARCH 2016 AND 2015

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

		Notes	31.03.2016	31.03.2015
Sales			157 663 504	149 202 715
Services rendered			2 198 818	2 163 624
Other income		14	1 843 640	2 712 027
Cost of sales			(60 239 977)	(58 545 465)
External supplies and services			(40 325 058)	(40 490 003)
Payroll expenses			(7 789 024)	(7 734 658)
Amortisation and depreciation			(13 262 855)	(13 155 046)
Provisions and impairment losses		10	(8 196)	288 345
Other costs		15	(1 253 979)	(1 017 027)
Gains and losses in associated companies and joint ventures		4.2	258 113	159 957
Financial expenses		12	(6 569 155)	(9 270 788)
Financial income		12	1 466 100	3 363 787
	Profit befor income tax		33 981 931	27 677 468
Income tax			(8 864 868)	(5 514 084)
	Profit after income tax		25 117 063	22 163 384
Consolidated net profit			25 117 063	22 163 384
Attributable to:
Parent company's shareholders			25 117 063	22 156 960
Non controlling interests			-	6 424
			25 117 063	22 163 384
Earnings per share:
Basic		13	0,12	0,11
Diluted		13	0,12	0,11

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

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

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS PERIODS ENDED 31 MARCH 2016 AND 2015

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

	Notes	31.03.2016	31.03.2015
Net consolidated profit / (loss) for the period		25 117 063	22 163 384
Other comprehensive income:
Items that will not be reclassified to profit or loss		-	-
Items that may be reclassified to profit and loss		-	-
Change in fair value of cash flow hedging derivatives		-	210 224
Changes in currency translation reserves		(10 989)	-
Others		-	122 865
		(10 989)	333 089
Other comprehensive income for the period		(10 989)	333 089
Total comprehensive income for the period		25 106 074	22 496 473
Attributable to:
Shareholders' of the parent company Non controlling interest		25 106 074 -	22 490 049 6 424

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE THREE MONTHS PERIODS ENDED 31 MARCH 2016 AND 2015

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

		Attr ibu tab le to the nt c 's s har eho lde p are om p any rs
	Not es	Sha ital re c ap	Leg al r ese rve	Oth er r ese rve s	Adv anc e o n rofi ts p	Net rofi t p	To tal	Non lling ntro co inte t res	Tot al sha reh old er's fun ds
Bal f 1 Jan 201 5 anc e a s o uar y Ap riat ion of t he sol ida ted t p rofi t of 201 4 p rop con ne		25 641 45 9 -	3 4 05 143 -	205 68 0 5 87 37 381 54 8	- -	37 381 54 8 ( ) 37 381 54 8	272 10 8 7 37 -	155 24 0 -	272 26 3 9 77 -
Tot al c reh ive inco for the erio d om p ens me p Bal f 31 rch Ma 20 15 anc e a s o		- 25 641 45 9	- 3 4 05 143	333 08 9 243 39 5 2 24	- -	22 156 96 0 22 156 96 0	22 490 04 9 294 59 8 7 86	6 4 24 161 66 4	22 496 47 3 294 76 0 4 50
Bal f 1 Jan 201 6 anc e a s o uar y Ap riat ion of t he sol ida ted rofi t of 201 5 t p p rop con ne		25 641 45 9 -	4 3 36 498 -	225 99 8 1 28 66 373 48 3	( ) 51 282 91 8 51 282 91 8	117 65 6 4 01 ( ) 117 65 6 4 01	322 34 9 5 68 -	- -	322 34 9 5 68 -
Tot al c reh ive inco for the erio d om p ens me p Bal f 31 Ma rch 20 16 anc e a s o	8	- 25 641 45 9	- 4 3 36 498	( ) 10 989 292 36 0 6 22	- -	25 117 06 3 25 117 06 3	25 106 07 4 347 45 5 6 42	- -	25 106 07 4 347 45 5 6 42

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

The official chartered accountant

The Board of Directors

ALTRI , SGPS, S.A.

CONDENSED CONSOLIDATED CASH-FLOW STATEMENTS FOR THE THREE MONTHS PERIODS ENDED 31 MARCH 2016 AND 2015

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

	Notes		31.03.2016		31.03.2015
Operating activies:
Cash flow from operating activities (1)			37 715 624		29 091 149
Investment activities:
Receipts relating to:
Tangible assets		223 796		530 066
Investment subsidies		531		646
Interest and similar income		524 625	748 952	875 023	1 405 735
Payments relating to:
Tangible assets		(3 439 606)		(9 781 786)
Intagible assets		(39 750)		-
Other financial assets		(103 000)		-
Investment subsidies		-	(3 582 356)	(3 592 682)	(13 374 468)
Cash flow from investment activities (2)			(2 833 404)		(11 968 732)
Financing activities:
Receipts relating to:
Loans obtained		5 555 736		284 460 287
Other financial operations		5 103	5 560 839	-	284 460 287
Payments relating to:
Interest and similar costs		(4 264 858)		(6 788 487)
Loans obtained		(171 933 942)	(176 198 800)	(316 628 123)	(323 416 610)
Cash flow from financing activities (3)			(170 637 961)		(38 956 323)
Cash and cash equivalents at the beginning of the period			243 154 160		260 855 007
Variation of cash and cash equivalents: (1)+(2)+(3)			(135 755 741)		(21 833 906)
Cash and cash equivalents at the end of the period	6		107 398 419		239 021 101

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

1. INTRODUCTORY NOTE

Altri, SGPS, S.A. ("Altri" or "Company") is an open capital company incorporated as of 1 March 2005, as a result of the reorganization process of Cofina, SGPS, S.A., has its head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and its shares are listed in the Euronext Lisbon 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 pulp of eucalyptus through three mills (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 believes that there is only one business segment (production and commercialization of bleached 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 ACCOUTING POLICIES AND BASIS FOR PRESENTATION

The consolidated financial statements as of 31 March 2016 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 2015.

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.

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 31 March 2016 and 31 December 2015, are as follows:

Company	Head Office Percentage Held		Main Activity
		2016	2015
Parent-Company
Altri, SGPS, S.A.	Porto			Investment management
Subsidiaries
Altri Abastecimento de Madeira, S.A.	Figueira da Foz	100%	100%	Wood commercialization
Altri Florestal, S.A.	Figueira da Foz	100%	100%	Forest management
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 energy
Caima Indústria de Celulose, S.A.	Constância	100%	100%	Production and commercialization of pulp
Captaraíz Unipessoal, Lda.	Figueira da Foz	100%	100%	Purchase and sale of properties
Celtejo – Empresa de Celulose do Tejo, S.A.	Vila Velha de Ródão	100%	100%	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%	Forest 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 with 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 31 March 2016 and 31 December 2015 are as follows:

Company	Head Office	Statement of financial position			Percentage Held	Activity
		2016	2015	2016	2015
Associated companies:
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	Figueira da Foz	697 453	697 453	33,33%	33,33%	Harbor operations
Joint ventures: EDP – Produção Bioeléctrica, S.A.	Lisboa	11 568 879	11 310 766	50%	50%	Energy production
		12 266 332	12 008 219

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

The movements occurred in the balance of this caption in the periods ended in 31 March 2016 and 31 December 2015 were as follows:

	Statement of financial position
	31.March.2016		31.March.2015
	Operfoz (b)	EDP Bioeléctrica (a)	Operfoz	EDP Bioeléctrica (a)
Opening balance	697 453	11 310 766	616 581	8 441 559
Reimbursment of supplementary capital Equity method:	-	-	-	-
Effects on gains and losses in associated companies and joint ventures	-	258 113	-	159 957
Closing balance	697 453	11 568 879	616 581	8 601 516

The total amount of the statement of financial position, equity and net profit for the periods ended on 31 March 2016 and 31 December 2015 for the main joint ventures and associated companies were as follows:

	31.03.2016	31.12.2015
	EDP Bioeléctrica (c)	EDP Bioeléctrica (c)
Non-current assets	127,457,550	126,905,069
Current assets	19,773,446	15,245,714
Non-current liabilities	79,430,536	70,276,436
Current liabilities	45,193,740	44,620,574
Equity attributable to shareholders of the parent company	22,606,720	27,253,773
Turnover	8,373,358	40,049,682
Net profit	515,191	4,998,523
Total comprehensive income	515,191	4,998,523

(a) – includes loans granted.

(b) – Financial statements as of 31 December 2015.

(c) – EDP – Produção Bioeléctrica, S.A. owns shares representing the entire share capital of Ródão Power – Energia e Biomassa do Ródão, S.A..

The accounting policies used by these companies do not differ significantly from those used by Altri Group, fact that led to no accounting policies harmonization.

4.3 INVESTMENTS AVAILABLE FOR SALE

As of 31 March 2016 and 31 December 2015 the investments available for sale are as follows:

		Statement of financial position
	2016	2015
Rigor Capital - Produção de Energia, Lda.	10 527 397	10 527 397
Other investments	163 700	163 700
	10 691 097	10 691 097

It is the understanding of the Altri Group that the caption "Investments available for sale" includes 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 three months period ended on 31 March 2016, there were no changes in the consolidation perimeter compared to 31 December 2015.

6. CASH AND CASH EQUIVALENTS

As of 31 March 2016 and 2015, the caption "Cash and cash equivalents" can be detailed as follows:

	31.03.2016	31.03.2015
Cash Bank deposits	53,437 107,344,982	22,225 238,998,876
Cash and cash equivalents	107,398,419	239,021,101

During the three months periods ended on 31 March 2016 and 2015, there were no receipts or payments related to 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 fouryear period (five years for Social Security), with the exception when there have been tax losses, cases when 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 2012 are still subject to review.

The Board of Directors of Altri believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 31 March 2016.

The movements occurred in deferred tax assets and liabilities in the three months periods ended in 31 March 2016 and 2015 were as follows:

	2016
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1 January 2016	27 060 866	15 871 624
Effects on income statement:
Increases/(Decreases) in provisions not accepted	627 000	-
Harmonization of depreciation rates	(66 972)	-
Total effect on income statement	560 028	-
Closing balance as of 31 March 2016	27 620 894	15 871 624

	2015
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1 January 2015	27 541 201	15 283 810
Effects on income statement:
Harmonization of depreciation rates	(54 627)	-
Others	58 105	(319)
Total effect on income statement	3 479	(319)
Effects on sharedholders' funds:
Fair value of derivatives	(61 033)	-
Closing balance as of 31 March 2015	27 483 647	15 283 491

8. SHARE CAPITAL

As of 31 March 2016 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 SUBSIDIES

As of 31 March 2016 and 31 December 2015, the captions "Bank loans", "Other loans" and "Reimbursable subsidies" can be detailed as follows:

	31.03.2016
	Nominal Value			Book Value
	Current	Non Current	Total	Current	Non Current	Total
Bank loans	6 000 000	78 000 000	84 000 000	6 000 000	78 000 000	84 000 000
Bank loans	6 000 000	78 000 000	84 000 000	6 000 000	78 000 000	84 000 000
Commercial paper Bonds	40 500 000 -	53 000 000 299 500 000	93 500 000 299 500 000	40 175 026 -	53 186 928 299 891 099	93 361 954 299 891 099
Other loans	42 571 517	-	42 571 517	42 571 517	-	42 571 517
Other loans	83 071 517	352 500 000	435 571 517	82 746 543	353 078 027	435 824 570
Reimbursable subsidies	558 872	17 439 139	17 998 011	558 872	17 439 139	17 998 011
	89 630 389	447 939 139	537 569 528	89 305 415	448 517 166	537 822 581
		Nominal Value	31.12.2015		Book Value
	Current	Non Current	Total	Current	Non Current	Total
Bank loans	11 000 000	154 000 000	165 000 000	10 775 000	153 587 500	164 362 500
Bank loans	11 000 000	154 000 000	165 000 000	10 775 000	153 587 500	164 362 500
Commercial paper	64 000 000	115 500 000	179 500 000	63 519 337	115 500 000	179 019 337
Bonds	-	299 376 900	299 376 900	-	298 233 394	298 233 394
Other loans	41 918 791	-	41 918 791	41 918 791	-	41 918 791
Other loans	105 918 791	414 876 900	520 795 691	105 438 128	413 733 394	519 171 522
Reimbursable subsidies	558 872	17 439 139	17 998 011	558 872	17 439 139	17 998 011
	117 477 663	586 316 039	703 793 702	116 772 000	584 760 033	701 532 033

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

10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses for the three months periods ended at 31 March 2016 and 2015 can be detailed as follows:

		31.03.2016
	Provisions	Impairment losses in accounts receivable	Impairment losses in inventories and biological assets	Total
Opening balance	5 062 741	3 720 996	7 764 789	16 548 526
Increases	-	8 196	-	8 196
Utilizations	(3 051)	-	-	(3 051)
Closing balance	5 059 690	3 729 192	7 764 789	16 553 671

	31.03.2015
	Provisions	Impairment losses in accounts receivable	Impairment losses in inventories and biological assets	Total
Opening balance	5 073 481	7 838 675	-	12 912 156
Increases	-	-	-	-
Utilizations	(6 893)	(288 345)	-	(295 238)
Closing balance	5 066 588	7 550 330	-	12 616 918

The amount recorded under the caption "Provisions" as at 31 March 2016 and 2015 is the best estimate of the Board of Directors in order to face all the losses that may be supported due to claims in force.

11. DERIVATIVE FINANCIAL INSTRUMENTS

As of 31 March 2016 and 2015 the companies of the Group operated with contracts for derivatives related to hedge interest rate variations, which are recorded according to their fair value.

Altri Group's companies only use derivatives to hedge cash flows associated with operations created related with their activities.

As of 31 March 2016 and 2015 the detail of the financial derivative instruments and its movements occurred in the three months period then ended are as follows:

	Interest rate derivatives
Opening balance as of 1 January 2016	(141 283)
Derivatives fair value variation/cessation
Effects on shareholder's funds	-
Effects on the profit and loss statement	(5 384)
Closing balance as of 31 March 2016	(146 667)
	juro
Opening balance as of 1 January 2015	(1 902 297)
Derivatives fair value variation/cessation
Effects on shareholder's funds	271 257
Effects on the profit and loss statement	1 631 040

12. FINANCIAL RESULTS

The financial results for the three months periods ended at 31 March 2016 and 2015 are detailed as follows:

	31.03.2016	31.03.2015
Financial expenses:
Interests	3,306,273	4,465,879
Other financial expenses	3,262,882	4,804,909
	6,569,155	9,270,788
Financial income:
Interests	325,265	888,962
Other financial income	1,140,835	2,474,825
	1,466,100	3,363,787

The caption "Other financial expenses" includes, mainly, expenses with loans setup, which are recognized in the profit and loss statement through the duration of those loans (Note 9) and on interest rate derivatives instruments that matured or were paid until that date (Note 11).

13. EARNINGS PER SHARE

Earnings per share for the three months periods ended as of 31 March 2016 and 2015 were determined taking into consideration the following amounts:

	31.03.2016	31.03.2015
Share number considered for the computation of basic and diluted earnings	205,131,672	205,131,672
Net profit considered for the computation of basic and diluted earnings	25,117,063	22,156,960
Earnings per share Basic Diluted	0.12 0.12	0.11 0.11

14. OTHER INCOME

As of 31 March 2016 and 2015 the caption of the statement of profit and loss "Other Income" is detailed as follows:

	31.03.2016	31.03.2015
Subsidies to investment and exploitation	1 334 498	1 398 148
Gains on disposal of fixed assets	184 714	20 609
Other income	324 428	1 293 271
	1 843 640	2 712 027

15. OTHER EXPENSES

As of 31 March 2016 and 2015 the caption of the statement of profit and loss "Other expenses" is detailed as follows:

	31.03.2016	31.03.2015
Direct taxes and charges	401,716	432,741
Other costs	852,263	584,286
	1,253,979	1,017,027

16. SEGMENTAL INFORMATION

On 16 April 2008, was signed the Altri SGPS, S.A. spin-off public deed. Under the terms of that project, the planned reorganization implies the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and storage systems sector. This reorganization aimed a bigger focus and transparency on ALTRI's business, and giving each of the areas an opportunity to be better seen and better evaluated by the market. This allows for the Altri Group to focus its activity on its core business, production and commercialization of bleached paper pulp from eucalyptus, so the Board of Directors believes that there is only one business segment and the management information is reported and analysed on this basis.

17. RELATED PARTIES

The subsidiary companies of the Group have between each other transactions that classify as transactions with related parties and 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 three months periods ended at 31 March 2016 and 2015, there were no transactions or loans granted to members of the Board of Directors.

As of 31 March 2016 and 2015 the balances and transactions with related parties are as follow:

		Purchases and services obtained		Sales and services rendered		Interest income
Transactions	31.03.2016	31.03.2015	31.03.2016	31.03.2015	31.03.2016	31.03.2015
Associated companies and joint ventures (a)	489 179	675 954	3 619 280	3 741 010	76 436	61 627
Other related parties (b)	1 664 054	1 581 936	-	1 419	-	-
	2 153 233	2 257 890	3 619 280	3 742 429	76 436	61 627
	Accounts payable		Accounts receivable		Loans granted
Balances	31.03.2016	31.12.2015	31.03.2016	31.12.2015	31.03.2016	31.12.2015
Associated companies and joint ventures (a)	380 656	284 249	3 863 629	2 550 399	11 569 312	11 544 780
Other related parties (b)	43 204	6 365 430	2 521 897	2 650 057	-	-
	423 859	6 649 679	6 385 526	5 200 456	11 569 312	11 544 780

(a) All entities consolidated by the equity method as of 31 March 2016 and 2015 (Note 4.2);

(b) Were considered as related parties the companies listed below.

Besides the companies included in consolidation (Note 4), entities considered as related parties as of 31 March 2016 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 Storax, S.A. Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. Storax Benelux, S.A. Storax España, S.L. Storax Limited Storax S.A. Torres da Luz – Investimentos Imobiliários, S.A. Universal Afir, S.A. Valor Autêntico, SGPS, S.A. VASP – Sociedade de Transportes e Distribuições, Lda.

1. APPLICATION OF THE NET PROFIT

The Board of Directors proposed, in its annual report, approved at the General Shareholders' Meeting held on 21 April 2016, that the individual net profit of Altri SGPS, S.A. amounting to 103,489,990.30 Euros would be allocated as follows:

Legal reserve 791,793.55 Other reserves 132,360.75 Distribution of dividends 102,565,836.00

--------------------- 103,489,990.30 ============

19. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 5 May 2016.

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

ALTRI, SGPS, S.A.

Rua do General Norton de Matos, 68 - R/C 4050 – 424 Porto PORTUGAL Tel: + 351 22 834 65 02

www.altri.pt