Altri SGPS — Interim / Quarterly Report 2018

Aug 30, 2018

REPORT AND ACCOUNTS

30 June 2018

INTRODUCTION 4
STOCK EXCHANGE EVOLUTION 6
GROUP'S ACTIVITY 8
FINANCIAL REVIEW 10
OUTLOOK 12
SUBSEQUENT EVENTS 13
CORPORATE GOVERNANCE 14
LEGAL MATTERS 15
CLOSING REMARKS 17
STATEMENT UNDER THE TERMS OF ARTICLE 246, PARAGRAPH 1, C) OF THE SECURITIES
MARKET CODE 19
STATEMENT OF RESPONSABILITY 19
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES……………………………………………… 21

(This is a translation of a document originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails – Note 20)

To the Shareholders

Pursuant to the legal requirements, the Board of Directors of Altri, SGPS, S.A. ("Altri") hereby presents its Management Report for the first half of 2018.

INTRODUCTION

Altri was incorporated as of March 2005, as a result of Cofina's demerger. Altri is a reference European producer of bleached eucalyptus pulp and is a listed company included in Euronext Lisbon, integrating the PSI 20 (Portuguese Stock Index), the benchmark stock market index. In addition to pulp and dissolving pulp production, the company is also present in the sector of renewable energy based on forest resources, namely industrial cogeneration from black liquor and biomass. The forestry strategy is based on full use of all the components provided by the forest: pulp, black liquor and forest wastes.

Over the past years, Altri invested in Portugal more than 600 million Euro on its industrial units. Currently, Altri owns three pulp mills in Portugal with a total capacity over 1 million tons/year of bleached eucalyptus pulp in 2017.

Forest is a strategic asset of Altri, with a forest area under management amounting 79,000 hectares in Portugal. Eucalyptus stands out as the main production of Altri's forest, ensuring a self-supply of wood and biomass that complements the market supply. This forest area is certified by the Forest Stewardship Council® (FSC®)1 and by the Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities. Altri Florestal management practices are certified by the main sustainable forest management certification systems, ensuring the achievement of the company's current and future goals.

Although Altri's forests are scattered across the country, the vast majority is concentrated in Tejo's valley close to the group's mills, increasing its relevance. This proximity has a strategy importance as it allows the optimisation of transportation costs, as well as an increase in efficiency in wood mobility when compared to productions held at higher distances.

Altri's industrial strategy implementation is based on integrated forest management in Portugal. This model is based on forest optimisation, ensuring a full recovery of all its components. Thus, the eucalyptus is processed in Altri mills, producing pulp and power (cogeneration). The bark, the branches and forest waste are used to produce electric energy from biomass.

Altri's development strategy is clearly based on strengthening its operating efficiency and, at the same time, the diversification of revenue into segments with higher value added, enabling an increase in the value chain. In order to compete in the commodities market and with an adverse exchange rate environment, the Company has to cut its operating costs to invest on the production of higher value-added products, allowing for future growth, despite the increases of pulp production capacity in recent years and despite the investments already announced for the near future all over the world.

Altri aims to be the most efficient producer in placing pulp at the client's facilities.

Since the beginning of its activity Altri carried out various acquisitions (Celtejo in 2005 and in 2006 Celbi) that allowed Altri to reinforce its position in its operating markets through the development of several capacity increase projects.

¹ FSC‐C004615

For a better valuation of forest resources, Altri acquired in 2005, 50% of EDP Produção – Bioeléctrica, S.A., in a joint venture with EDP to produce electricity from forest biomass. This company is leader in its market segment with a share of 50% of licenses to produce electricity through forest biomass.

STOCK EXCHANGE EVOLUTION

(Note: in order to enable a better comparison of the stock fluctuations, the PSI 20 index has been considered as being equal in value to the opening price of the shares.)

Altri's share price closed in the first half of 2018 at 8.650 Euro per share, an increase of 67.3% over the end of 2017. The market capitalization at the end of that period was around 1,774 million Euro.

During the first half of 2018, Altri's shares were traded at a maximum price of 8.840 Euro per share and at a minimum of 4.410 Euro per share. In total, 41.9 million shares were traded in the first half of the year.

The main events that marked the evolution of the Company's shares in the first half of 2018 can be described chronologically as follows:

• On March 8th, 2018, the Group announced its financial performance for the year 2017, reaching a consolidated net profit of 96.1 million Euro. Total revenue amounted to 665.8 million Euro. Consolidated EBITDA amounted to 191 million Euro, being a record year in terms of production and pulp sales. On that date, shares closed at 4.78 Euro per share;
• As of 20 April 2018, Altri announced to the market the issuance, by its subsidiary Celbi, of "CELBI 2018/2026" bonds, in the nominal amount of 50,000,000 Euro;
• In the press release issued on May 10th, 2018, Altri announced that the dividends for the 2017 fiscal year, corresponding to 0.30 Euro per share, would be paid as from May 30th;
• Through an announcement made on May 11th, the Group released the results for the first quarter of 2018. In that period, total revenue amounted to 173.4 million Euro, EBITDA reached about 63.3 million Euro, while the consolidated net profit amounted to 32.7 million Euro;
• As of 28 May 2018, Altri announced to the market the issuance, by its subsidiary Celbi, of "CELBI 2018/2028" bonds, in the nominal amount of 50,000,000 Euro.

GROUP'S ACTIVITY

With its genesis in the reorganization process of Cofina, held in 2005, with the purpose of setting into a separate holding the industrial operations, Altri held until June 1, 2008 the investments in pulp and in steel and storage systems. On that date, the steel and storage systems business was demerged to F. Ramada – Investimentos, SGPS, S.A. (currently named Ramada Investimentos e Indústria, S.A.). This reorganization was part of a focusing and business transparency strategy, aiming at giving greater visibility to each area and increasing market's perception of value.

The main investments held by Altri are as follows:

• Caima Indústria de Celulose, S.A. (Constância) producer and distributor of dissolving pulp;
• Celulose Beira Industrial (Celbi), S.A. (Figueira da Foz) producer and distributor of paper pulp;
• Celtejo Empresa de Celulose do Tejo, S.A. (Vila Velha de Ródão) producer and distributor of paper pulp;
• Altri Florestal, S.A. (Constância) manager of the Group's forestry resources.

Moreover, in order to fulfil its energetic needs and expand its activity in a strategic sector, the Group holds a participation of 50% of the share capital of EDP Bioeléctrica.

Altri's complete structure of participation as of 30 June 2018 is as follows:

Pulp market

According to the latest data from the Pulp and Paper Products Council (PPPC World Chemical Market Pulp Global 100 Report - May 2018), during the first five months of 2018, total demand for hardwood pulp grew 4.3% over the same period of 2017, corresponding to an additional consumption of approximately 0.6 million tons, reaching around 14.0 million tons.

Analysing in terms of geography, it is noted that in Europe the consumption of hardwood pulp increased by about 5.5%, while in China the growth was 7.8%.

In terms of BEKP pulp price evolution, the second quarter of 2018 was characterised by a 3% increase in the price in USD, when compared to the previous quarter, and a 6% increase in the price in Euro. The average price recorded in the period under analysis achieved 1,043 USD/ton (vs. 1,009 USD/ton in the previous quarter), while in Euros it stood at 871 EUR/ton (vs. 824 EUR/ton in the previous quarter).

Market price evolution in BEKP pulp in Europe since 2003 until July 2018

During the first half of 2018, Altri's industrial units produced 527.9 thousand tons of pulp, from which 54.5 thousand tons were dissolving pulp, comparatively with 528.4 thousand tons produced in the same period of the previous year.

In the first half, Altri sold 528 thousand tons of pulp, from which 54.2 thousand tons were dissolving pulp. When compared to the same period of 2017, there was a decrease of 2.5% on the quantity sold.

In terms of exports, during the first half of 2018, Altri exported 464.2 thousand tons (vs. 492.9 thousand tons in the same period of 2017).

In monetary terms, total pulp sales recorded in the first half of 2018 reached to 327.7 million Euro, which corresponds to an increase of approximately 24% over the same period of the previous year, where sales amounted to 264.9 million Euro.

FINANCIAL REVIEW

The consolidated financial information of Altri was prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union.

The main indicators and data of Altri Group are as follows:

thousand Euro	1H 2018	1H 2017	1H18/1H17 Var%
Total revenue	378,425	325,253	16.3%
Cost of sales	133,352	137,962	-3.3%
External supplies and services	88,855	81,832	8.6%
Payroll expenses	16,911	16,181	4.5%
Other expenses	4,501	1,776	153.5%
Provisions and impairment losses	-1,199	-	-
Variation of the fair value in the biological assets
Total expenses (a)	242,420	237,750	2.0%
EBITDA (b)	136,004	87,503	55.4%
Margin	35.9%	26.9%	+9.0 pp
Depreciation and amortisation	25,584	27,833	-8.1%
EBIT (c)	110,421	59,670	85.1%
Margin	29.2%	18.3%	+10.9 pp
Gains and losses in associated companies	1,172	1,420	-17.5%
Financial expenses	-12,220	-12,194	0.2%
Financial income	5,361	1,698	215.6%
Financial profit	-5,687	-9,075	-37.3%
Profit before income tax	104,734	50,595	107.0%
Income tax	-30,924	-9,042	242.0%
Net consolidated profit	73,810	41,552	77.6%

(a) Operating costs excluding amortisation, financial expenses and taxes

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

(c) EBIT = Earnings before interest and taxes

Altri's total revenue amounted, in the first half of 2018, to 378.4 million Euro, which corresponds to an increase of 16.3% over the same period of 2017.

In the first half of 2018, total costs excluding amortisation, financial expenses and taxes, amounted to around 242.4 million Euro.

On the other hand, EBITDA reached to 136.0 million Euro, which corresponds to an increase of 55.4% over the first half of 2017. The half-year net result reached 73.8 million Euro, a 77.6% increase when compared to the same period of 2017.

Balance sheet key indicators

thousand Euro	Jun-18	Dec-17	Var%
Biological assets	95,413.1	94,848.3	1%
Tangible fixed assets	396,841.6	396,515.7	0%
Goodw ill	265,531.4	265,531.4	0%
Investments available for sale	27,129.4	17,456.9
Other non current assets	58,439.6	52,609.1	11%
Non current assets	843,355.1	826,961.4	2%
Inventories	63,233.8	50,728.0	25%
Customers	126,223.3	113,284.7	11%
Cash and cash equivalents	332,099.0	193,599.7	72%
Other current assets	15,467.5	25,514.6	-39%
Current assets	537,023.5	383,127.1	40%
Total assets	1,380,378.7	1,210,088.5	14%
Shareholders' funds and non-controlling interests
	400,520.2	394,567.1	2%
Bank loans	33,500.0	39,500.0	-15%
Other loans	587,436.0	442,483.9	33%
Reimbursable subsidies Other non current liabilities	10,560.2 52,420.7	14,565.8 45,427.5	-27% 15%
Non current liabilities	683,916.8	541,977.1	26%
Bank loans	9,964.8	6,216.6	60%
Other loans	77,472.0	94,830.7	-18%
Reimbursable subsidies	4,805.4	3,121.5	54%
Suppliers	114,101.8	95,373.3	20%
Other current liabilities	89,597.7	74,002.2	21%

The total net investment (CAPEX) made until the end of June 2018 by the Group's industrial units amounted to 40 million Euro.

The nominal net debt of Altri as of June 30, 2018 amounted to 375.6 million Euro, which corresponds to an increase of 10 million Euro over the nominal net debt recorded at the end of March 2018, which materialised about 61.5 million Euro delivered to the shareholders of the company.

Relatively to risk management, Altri uses exchange rate derivatives to hedge future cash flows. Hence, Altri has contracted European-style call and put options (exchange rate collars) on USD 10 million per month, covering all 2018 financial year. Moreover, as of June 30, 2018, Altri had contracted Asian-style exchange collars, in the amount of USD 12 per month, covering all 2019 financial year.

OUTLOOK

For the third quarter of 2018, in terms of BHKP pulp selling price, it is expected to be maintained the level of prices in USD. Regarding operational terms, it is expected an operational efficiency growth, due to the conclusion of Celtejo's investment project, which occurs in the scheduling time and it is expectable to finish during this quarter.

SUBSEQUENT EVENTS

In the end of July, Altri announced that has reached an agreement with EDP – Energias de Portugal, S.A. (EDP), to buy, directly and through its subsidiary Caima Indústria, 50% of the share capital, credits and voting rights that EDP holds, directly and indirectly, in the share capital of EDP Produção – Bioeléctrica, S.A., hence assuming, as a consequence of this agreement, the control of 100% of this Company.

The transaction amounts to an estimated global value of Euro 55,000,000.00 (fifty-five million Euro).

The transaction is subject to prior notification to the Competition Authority, under the terms established in the competition legal regime and, therefore, contingent to the decision of non-opposition by the Competition Authority, being its conclusion estimated to occur during the second half of 2018.

CORPORATE GOVERNANCE

According to legal provisions, the Company is not required to provided information relating to corporate governance, since it is compulsory only together with the annual management report. The detailed annual corporate governance report is part of the Annual Report and Accounts of 2017 and is available on the website (www.altri.pt).

LEGAL MATTERS

Treasury Shares

Pursuant to the requirements of article 66 of the Portuguese Companies Act, the Directors inform as of 30 June 2018 that Altri had no treasury shares and did not acquire nor sell any treasury shares during this semester.

Shares held by Altri's corporate boards

As of 30 June 2018, hereby informs that the Directors of the Company held the following shares:

Paulo Jorge dos Santos Fernandes (a)	24,324,874
João Manuel Matos Borges de Oliveira (b)	30,000,000
Domingos José Vieira de Matos (c)	24,250,110
Ana Rebelo de Carvalho Menéres de Mendonça (d)	42,954,552
José Manuel de Almeida Archer	11,500

(a) – The 24,324,874 shares correspond to Altri, SGPS, S.A. total shares held by the company ACTIUM CAPITAL, S.A., of which Paulo Jorge dos Santos Fernandes is director and dominant shareholder.

(b) – The 30,000,000 shares correspond to Altri, SGPS, S.A. total shares held by the company CADERNO AZUL, S.A., of which João Manuel Matos Borges de Oliveira is director and shareholder.

(c) – The 24,250,110 shares correspond to Altri, SGPS, S.A. total shares held by the company LIVREFLUXO, S.A., of which Domingos José Vieira de Matos is director and dominant shareholder.

(d) – The 42,954,552 shares correspond to Altri, SGPS, S.A. total shares held by the company PROMENDO – SGPS, S.A., of which Ana Rebelo de Carvalho Menéres de Mendonça is director and dominant shareholder.

As of 30 June 2018, the Statutory Auditor, the members of the Supervisory Board and the members of the Board of the General Shareholders' Meeting held no shares of Altri.

Participation in the Company's share capital

Pursuant to the requirements of articles 16 and 20 of the Securities Market Code and article 448 of the Portuguese Companies Act, the Directors inform that, in accordance with the notifications received at Altri's head office until 30 June 2018, the companies and/or individuals that hold qualified participations exceeding 2%, 5%, 10%, 20%, 33% and 50% of the voting rights are as follows:

	No. of shares held on 30	% share capital with voting
Norges Bank	June 2018	rights
Directly	4,149,572	2.02%
Total attributable	4,149,572	2.02%

	No. of shares held on 30	% share capital with voting
Lazard Frères Gestion	June 2018	rights
Directly	4,150,000	2.02%
Total attributable	4,150,000	2.02%

	No. of shares	% share capital
	held on 30	with voting
Indumenta Pueri, S.L.	June 2018	rights
Through Global Portfolio Investments, S.L.	10,093,768	4.92%
Total attributable	10,093,768	4.92%

	No. of shares	% share capital
	held on 30	with voting
1 Thing, Investments, S.A.	June 2018	rights
Directly (a)	14,359,708	7.00%
Total attributable	14,359,708	7.00%

(a) - The 14,359,708 shares represent Altri, SGPS, S.A. total shares held directly by 1 THING, INVESTMENTS, S.A. w hose board of directors includes Altri's director Pedro Miguel Matos Borges de Oliveira.

Domingos José Vieira de Matos		No. of shares held on 30 June 2018	% share capital with voting rights
Through Livrefluxo, S.A. (of which he is dominant shareholder and director)		24,250,110	11.82%
	Total attributable	24,250,110	11.82%
		No. of shares	% share capital
		held on 30	with voting
Paulo Jorge dos Santos Fernandes		June 2018	rights
Through Actium Capital, S.A. (of which he is dominant shareholder and director)		24,324,874	11.86%
	Total attributable	24,324,874	11.86%

	No. of shares	% share capital
	held on 30	with voting
João Manuel Matos Borges de Oliveira	June 2018	rights
Through CADERNO AZUL, S.A. (of which he is shareholder and director)	30,000,000	14.62%
Total attributable	30,000,000	14.62%

Promendo - SGPS, S.A.	No. of shares held on 30 June 2018	% share capital with voting rights
Directly (a)	42,954,552	20.94%
Through its director José Manuel de Almeida Archer	11,500	0.01%
Total attributable	42,966,052	20.95%

(a) - The 42,966,052 shares represent Altri, SGPS, S.A. total shares held by Promendo - SGPS, S.A. that are considered equally attributable to Ana Rebelo de Carvalho Menéres de Mendonça, director and dominant shareholder of Promendo - SGPS, S.A. and director of Altri, SGPS, S.A.

Altri was not informed of any participation exceeding 33% of voting rights.

CLOSING REMARKS

The Board of Directors concludes by expressing a vote of gratitude to all of the Group's Stakeholders, for the trust demonstrated in our organization. We would like to thank the Statutory Audit Board for the continued monitoring of our operations.

Oporto, July 26, 2018

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 Carvalho Menéres Mendonça

__________________________________

José Manuel de Almeida Archer

STATEMENT UNDER THE TERMS OF ARTICLE 246, PARAGRAPH 1, C) OF THE SECURITIES MARKET CODE

The signatories individually declare that, to the best of their knowledge, the Condensed Consolidated Financial Statements prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting, and other accounting documents required by law or regulation, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated results of Altri, SGPS, S.A. and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.

STATEMENT OF RESPONSABILITY

The members of the Board of Directors of Altri, SGPS, S.A. declare that they assume responsibility for this information and affirm that the items included herein are true and that, to the best of their knowledge, there are no omissions.

As required by article 8 paragraph 3 of the Securities Market Code, the Board of Directors informs that these condensed consolidated financial statements were not subject to a limited review.

As required by article 210 of the Social Security Contributions Plan Code (approved by Law 110/2009 of 16 September), the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security.

Article 14, paragraph 7 of Portuguese Securities Market Commission (CMVM) Regulation no. 5/2008

Disclosure of shares and other securities held by members of the Board of Directors and by those discharging managerial responsibilities, as well as by people closely connected with them (article 248-B of the Portuguese Securities Code), and disclosure of the respective transactions during the first semester involving such shares and other securities:

	Shares held at			Shares held at
Members of the Board of Directors	31-Dec-2017	Acquisitions	Disposals	30-Jun-2018
Paulo Jorge dos Santos Fernandes (imputation through ACTIUM CAPITAL, S.A.)	24,324,874	-	-	24,324,874
João Manuel Matos Borges de Oliveira (imputation through CADERNO AZUL, S.A.)	30,000,000	-	-	30,000,000
Domingos José Vieira de Matos (imputation through LIVREFLUXO, S.A.)	24,150,110	-	-	24,150,110
Ana Rebelo Carvalho Menéres de Mendonça (imputation through PROMENDO - SGPS, S.A.)	42,954,552	-	-	42,954,552
José Manuel de Almeida Archer	11,500	-	-	11,500

CONSOLIDATION STATEMENTS OF FINANCIAL POSITION AS OF 30 JUNE 2018 AND 31 DECEMBER 2017

(Translation of financial statements orignally issued in Portuguese - Note 21) (Amounts expressed in Euro)

ASSETS	Notes	30.06.2018	31.12.2017
NON CURRENT ASSETS:
Biological assets		95,413,133	94,848,275
Tangible fixed assets		396,841,599	396,515,699
Investments property		4,497,546	113,310
Goodwill		265,531,404	265,531,404
Intangible assets		849,989	1,019,232
Investments in associated companies and joint ventures	4.2	27,129,400	17,456,932
Investments available for sale	4.3	8,695,730	8,692,628
Other non current assets		3,210,260	3,210,260
Derivative financial instruments	11	544,006	1,796,781
Deferred tax assets Total non current assets	7	40,642,043 843,355,110	37,776,892 826,961,413
CURRENT ASSETS:
Inventories		63,233,824	50,728,047
Biological assets		628,172	628,172
Customers		126,223,310	113,284,683
Other debtors		2,413,477	1,304,931
State and other public entities		8,875,513	16,435,629
Other current assets		1,986,456	2,242,035
Derivative financial instrument	11	1,563,835	4,903,860
Cash and cash equivalents	6	332,098,956	193,599,737
Total current assets		537,023,543	383,127,094
Total assets		1,380,378,653	1,210,088,507
SHAREHOLDERS' FUNDS AND LIABILITIES		30.06.2018	31.12.2017
SHAREHOLDERS' FUNDS: Share capital	8	25,641,459	25,641,459
Legal reserve		5,128,292	5,128,292
Other reserves		295,940,574	267,729,157
Consolidated net profit / (loss)		73,809,856	96,068,168
Total shareholders' funds attributable to the parent company's shareholders		400,520,181	394,567,076
Non controlling interests		-	-
Total shareholders' funds		400,520,181	394,567,076
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	9	33,500,000	39,500,000
Other loans	9	587,435,961	442,483,927
Reimbursable subsidies	9	10,560,172	14,565,750
Other non current liabilities		16,931,105	14,627,018
Deferred tax liabilities	7	24,288,276	23,003,709
Pensions liabilities		2,771,471	2,771,471
Derivative financial instruments	11	3,281,647	-
Provisions	10	5,148,164	5,025,260
Total non current liabilities		683,916,796	541,977,135
CURRENT LIABILITIES:
Bank loans	9	9,964,759	6,216,583
Other loans	9	77,471,990	94,830,698
Reimbursable subsidies	9	4,805,438	3,121,502
Suppliers		114,101,760	95,373,275
Other current creditors		10,994,835	21,489,230
State and other public entities		37,599,265	10,308,029
Other current liabilities		40,224,387	40,398,914
Derivative financial instruments	11	779,242	1,806,065
Total current liabilities		295,941,676	273,544,296
Total shareholders' funds and liabilities		1,380,378,653	1,210,088,507

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

III. Consolidated financial statements and notes

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS

FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2018 AND 2017

(Translation of financial statements originally issued in Portuguese - Note 21) (Amounts expressed in Euro)

		SIX MONTHS PERIOD ENDED		THREE MONTHS PERIOD ENDED
	Notes	30.06.2018	30.06.2017	30.06.2018	30.06.2017
Sales		370,948,109	316,662,824	201,055,291	161,663,673
Services rendered		4,629,002	4,726,357	2,313,546	2,314,724
Other income	14	2,847,448	3,863,837	1,670,935	1,438,807
Cost of sales		(133,351,653)	(137,961,937)	(74,657,293)	(68,700,477)
External supplies and services		(88,854,954)	(81,831,799)	(47,868,835)	(40,048,706)
Payroll expenses		(16,911,500)	(16,180,527)	(8,596,528)	(8,461,466)
Amortisation and depreciation		(25,583,541)	(27,833,269)	(11,720,587)	(13,918,157)
Provisions and impairment losses	10	1,198,930	-	1,198,930	-
Other costs	15	(4,500,993)	(1,775,842)	(2,390,046)	(825,606)
Gains and losses in associated companies and joint ventures	4.2	1,172,468	1,420,490	449,241	925,277
Financial expenses	12	(12,220,137)	(12,194,054)	(7,353,578)	(7,112,344)
Financial income	12	5,361,032	1,698,434	3,127,370	1,249,983
Profit before income tax		104,734,211	50,594,514	57,228,446	28,525,708
Income tax		(30,924,355)	(9,042,390)	(16,063,935)	(4,097,673)
Profit after income tax		73,809,856	41,552,124	41,164,511	24,428,035
Consolidated net profit		73,809,856	41,552,124	41,164,511	24,428,035
Attributable to: Parent company's shareholders		73,809,856	41,552,124	41,164,511	24,428,035
Non controlling interests		-	-	-	-
		73,809,856	41,552,124	41,164,511	24,428,035
Earnings per share
Basic	13	0.36	0.20	0.20	0.12
Diluted	13	0.36	0.20	0.20	0.12

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

III. Consolidated financial statements and notes

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2018 AND 2017

(Translation of financial statements originally issued in Portuguese - Note 21) (Amounts expressed in Euro)

		SIX MONTHS PERIOD ENDED		THREE MONTHS PERIOD ENDED
	Notes	30.06.2018	30.06.2017	30.06.2018	30.06.2017
Net consolidated profit / (loss) for the period		73,809,856	41,552,124	41,164,511	24,428,035
Other comprehensive income: Items that may be reclassified to profit and loss Change in fair value of cash flow hedging derivatives Change in exchange currency reserves Others		(6,329,424) 13,365 (1,189) (6,317,248)	3,989,443 (12,208) 32,225 4,009,460	(6,151,752) 20,524 (1,157) (6,132,385)	2,016,116 (14,430) 18,296 2,019,981
Other comprehensive income for the period		(6,317,248)	4,009,460	(6,132,385)	2,019,981
Total comprehensive income for the period		67,492,608	45,561,584	35,032,126	26,448,016
Attributable to: Parent company's shareholders Non controlling interests		67,492,608 -	45,561,584 -	35,032,126 -	26,448,016 -

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2018 AND 2017

(Translation of financial statements originally issued in Portuguese - Note 21) (Amounts expressed in Euro)

			Att rib ble th uta to
	No tes	Sh ita l are ca p	Le al g res erv e	Ot he r res erv es	Ne rof it t p	To tal	No n ntr olli co ng inte ts res	To tal sh ho lde rs' are fun ds
Ba lan of 1 J 20 17 ce as an ua ry	8	25 64 1, 45 9 ,	128 29 2 5, ,	23 89 4, 61 9 5,	76 97 82 6 7, ,	34 3, 64 2, 196	-	34 3, 64 2, 196
Ap iat ion of th lida ted rof it o f 2 t p 01 6 pro pr e c on so ne		-	-	76 97 7, 82 6 ,	( ) 76 97 7, 82 6 ,	-	-	-
Div ide nd dis trib utio n		-	-	( ) 51 28 2, 91 8 ,	-	( ) 51 28 2, 91 8 ,	-	( ) 51 28 2, 91 8 ,
To tal reh siv e i fo r th eri od co mp en nco me e p		-	-	4, 00 9, 46 0	41 55 2, 124 ,	45 56 1, 58 4 ,	-	45 56 1, 58 4 ,
Ba lan of Jun 30 e 2 01 7 ce as	8	25 64 1, 45 9 ,	5, 128 29 2 ,	26 5, 59 8, 98 7	41 55 2, 124 ,	33 7, 92 0, 86 2	-	33 7, 92 0, 86 2
Ba lan of 1 J 20 18 ce as an ua ry	8	25 64 1, 45 9 ,	128 29 2 5, ,	26 72 9, 157 7,	96 06 8, 168 ,	39 4, 56 07 6 7,	-	39 4, 56 07 6 7,
Ap iat ion of th lida ted rof it o f 2 t p 01 7 pro pr e c on so ne		-	-	96 06 8, 168 ,	( ) 96 06 8, 168 ,	-	-	-
Div ide nd dis trib utio n		-	-	( ) 61 53 9, 50 3 ,	-	( ) 61 53 9, 50 3 ,	-	( ) 61 53 9, 50 3 ,
fo To tal reh siv e i r th eri od co mp en nco me e p		-	-	( ) 6, 31 7, 24 8	73 80 9, 85 6 ,	67 49 2, 60 8 ,	-	67 49 2, 60 8 ,
Ba lan of Jun 30 e 2 01 8 ce as	8	25 64 1, 45 9 ,	5, 128 29 2 ,	29 5, 94 0, 57 4	73 80 9, 85 6 ,	40 0, 52 0, 18 1	-	40 0, 52 0, 18 1

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

The official chartered accountant

The Board of Directors

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS

FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2018 AND 2017

(Translation of financial statements originally issued in Portuguese - Note 21) (Amounts expressed in Euro)

		SIX MONTHS PERIOD ENDED		THREE MONTHS PERIOD ENDED
	Notes	30.06.2018	30.06.2017	30.06.2018	30.06.2017
Operating activities
Cash flow from operating activities (1)		144,836,965	84,817,260	89,306,621	48,425,853
Investment activities:
Receipts relating to:
Tangible assets		177,651	55,086	171,673	38,277
Financial investments	6	96,000	-	48,000	-
Interest and similar income		1,782,495	316,817	431,777	223,816
Other financial assets		6,000,000	-	6,000,000	-
Dividends distribution		-	55,000	-	55,000
Investment subsidies		1,747,075	-	1,747,075	-
Payments relating to:		-
Investment subsidies		(877,048)	(1,729,914)	(875,988)	(1,729,914)
Financial investments	6	(8,500,000)	-	(8,500,000)	-
Tangible assets		(40,033,127)	(47,699,292)	(16,600,309)	(23,264,075)
Intangible assets		-	(36,772)	-	(34,708)
Other financial assets		(9,450,636)	-	(7,033,490)	-
Cash flow from investment activities (2)		(49,057,590)	(49,039,075)	(24,611,262)	(24,711,604)
Financing activities
Receipts relating to:
Loans obtained		155,666,807	37,400,461	70,666,807	14,289,416
Other financial operations		153,764	-	52,715	-
Payments relating to:		-
Loans obtained		(47,125,888)	(123,473,361)	(42,799,607)	(383,479)
Interest and similar costs		(8,154,880)	(8,488,465)	34,517,363	(2,923,678)
Dividends distribution		(61,539,503)	(51,282,918)	(61,539,503)	(51,282,918)
Cash flow from financing activities (3)		39,000,300	(145,844,283)	897,775	(40,300,659)
Cash and cash equivalents at the beginning of the period	6	193,599,737	300,094,254	262,786,279	206,614,566
Exchange rate effects		-	-	-	-
Variation of cash and cash equivalents: (1)+(2)+(3)		134,779,675	(110,066,098)	65,593,134	(16,586,410)
Cash and cash equivalents at the end of the period	6	328,379,412	190,028,156	328,379,412	190,028,156

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

1. INTRODUCTORY NOTE

Altri, SGPS, S.A. ("Altri" or "Company") is a public company 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 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 ACCOUNTING POLICIES AND BASIS FOR PRESENTATION

The consolidated financial statements as of 30 June 2018 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 2017, except regarding the adoption of the new policies whose application became effective as of January 1st, 2018, being that the application of IFRS 9 and IFRS 15 have not a significant impact in these financial statements.

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 30 June 2018 and 31 December 2017, are as follows:

Company	Head Office		Percentage Held	Main Activity
		2018	2017
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, Suíça	100%	100%	Group management support services
Altri, Participaciones Y Trading, S.L.	Pontevedra, Espanha	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. (a)	Constância	---	100%	Agriculture production
Sociedade Imobiliária Porto Seguro - Investimentos Imobiliários, S.A.	Porto	100%	100%	Purchase and sale of properties
Viveiros do Furadouro Unipessoal, Lda.	Óbidos	100%	100%	Production of plants in nurseries and services related w ith forests and landscapes

(a) - Company liquidated during the first half of 2018

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 June 2018 and 31 December 2017 were as follows:

Company	Head Office		Statement of financial position Percentage Held		Activity
		2018	2017	2018	2017
Associated companies:
Operfoz – Operadores do Porto da Figueira da Foz, Lda.	Figueira da Foz	762,158	701,421	33.33%	33.33%	Harbor operations
Joint ventures:
EDP Produção – Bioeléctrica, S.A.	Lisboa	26,367,242	16,755,511	50%	50%	Energy production
		27,129,400	17,456,932

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 six months periods ended in 30 June 2018 and 2017 were as follows:

		Statement of financial position
	30.June.2018		30.June.2017
	EDP Bioeléctrica			EDP Bioeléctrica
	Operfoz	(a)	Operfoz	(a)
Opening balance	701,421	16,755,511	719,057	14,264,044
Loans granted (Note 6) Equity method:	-	8,500,000	-	-
Effects on gains and losses in associated companies and joint ventures	60,737	1,111,731	65,166	1,300,324
Closing balance	762,158	26,367,242	784,223	15,564,368

(a) – Includes loans granted.

EDP Produção – Bioeléctrica, S.A. owns shares representing the total share capital of Ródão Power – Energia e Biomassa do Ródão, S.A., of Biorodão, S.A. and of Sociedade Bioeléctica do Mondego, 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 30 June 2018 and 31 December 2017 the investments available for sale are as follows:

	Statement of financial position
	2018	2017
Rigor Capital - Produção de Energia, Lda.	7,957,111	7,957,111
Other investments	738,619	735,517
	8,695,730	8,692,628

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 OCCURRED IN THE CONSOLIDATION PERIMETER

During the six months period ended as of 30 June 2018, there was the disposal of the subsidiary Pedro Frutícola, Sociedade Frutícola, S.A.. This operation did not have any relevant material impacts in these financial statements.

6. CASH AND CASH EQUIVALENTS

As of 30 June 2018 and 2017, the caption "Cash and cash equivalents" can be detailed as follows:

REPORT AND ACCOUNTS 1H2018

III. Consolidated financial statements and notes

	30.06.2018	30.06.2017
Cash	36,157	49,249
Bank deposits	332,062,799	189,978,907
Total available cash w ithin balance sheet	332,098,956	190,028,156
Bank overdrafts (Note 9)	(3,719,544)	-
Cash and cash equivalents	328,379,412	190,028,156

During the six months period ended at 30 June 2018, payments related to financial investments refer to loans granted to EDP Bioeléctrica (Note 4.2).

During the six months period ended at 30 June 2018, receipts related to financial investments refer to partial receipt from the sales of subsidiary Sócasca – Recolha e Comércio de Recicláveis, S.A. (sold at 2011).

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 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 2014 might be subjected to review.

The Board of Directors of Altri believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 30 June 2018.

The movements occurred in deferred tax assets and liabilities in the six months periods ended at 30 June 2018 and 2017 were as follows:

		2018
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2018	37,776,892	23,003,709
Effects on income statement:
Harmonization of depreciation rates	(492,770)	(57,836)
Total effect on income statement	(492,770)	(57,836)
Effects on shareholders' funds:
Fair value of derivatives	3,357,921	1,342,403
Closing balance as of 30.06.2018	40,642,043	24,288,276

REPORT AND ACCOUNTS 1H2018

III. Consolidated financial statements and notes

		2017
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2017	39,508,901	18,731,619
Effects on income statement:
Harmonization of depreciation rates	(176,570)	-
Goodw ill tax amortization (Spain)	-	500,000
Others	(979,258)	-
Total effect on income statement	(1,155,828)	500,000
Effects on shareholders' funds:
Fair value of derivatives	(801,274)	356,951
Closing balance as of 30.06.2017	37,551,799	19,588,570

8. SHARE CAPITAL

As of 30 June 2018 and 2017, the Company's fully subscribed and paid up capital consisted of 205,131,672 shares with a nominal value of 12.5 cents of Euro each.

9. BANK LOANS, OTHER LOANS AND REIMBURSABLE SUBSIDIES

As of 30 June 2018 and 31 December 2017, the captions "Bank loans", "Other loans" and "Reimbursable subsidies" can be detailed as follows:

			30.06.2018
		Nominal value
	Current	Non current	Total	Current	Non current	Total
Bank loans	6,000,000	33,500,000	39,500,000	6,245,215	33,500,000	39,745,215
Bank overdrafts	3,719,544	-	3,719,544	3,719,544	-	3,719,544
Bank loans	9,719,544	33,500,000	43,219,544	9,964,759	33,500,000	43,464,759
Commercial paper	10,000,000	103,500,000	113,500,000	9,979,901	103,485,821	113,465,722
Bonds	20,000,000	485,900,000	505,900,000	22,732,176	483,662,140	506,394,316
Other loans	44,759,913	288,000	45,047,913	44,759,913	288,000	45,047,913
Other loans	74,759,913	589,688,000	664,447,913	77,471,990	587,435,961	664,907,951
Reimbursable subsidies	4,805,438	10,560,172	15,365,610	4,805,438	10,560,172	15,365,610
	89,284,895	633,748,172	723,033,067	92,242,187	631,496,133	723,738,320

			31.12.2017
		Nominal value			Book value
	Current	Non current	Total	Current	Non current	Total
Bank loans	6,000,000	39,500,000	45,500,000	6,216,583	39,500,000	45,716,583
Bank loans	6,000,000	39,500,000	45,500,000	6,216,583	39,500,000	45,716,583
Commercial paper	-	58,500,000	58,500,000	34,654	58,500,000	58,534,654
Bonds Other loans	55,000,000 37,356,127	384,900,000 384,000	439,900,000 37,740,127	57,439,917 37,356,127	383,599,927 384,000	441,039,844 37,740,127
Other loans	92,356,127	443,784,000	536,140,127	94,830,698	442,483,927	537,314,625
Reimbursable subsidies	3,121,502	14,565,750	17,687,253	3,121,502	14,565,750	17,687,253
	101,477,629	497,849,750	599,327,380	104,168,783	496,549,677	600,718,461

The expenditures with the constitution of the loans were deducted from its nominal value, being these recognise 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 six months periods ended at 30 June 2018 and 2017 can be detailed as follows:

		30.06.2018
			Impairment losses in
		Impairment losses in	inventories and biological
	Provisions	accounts receivable	assets	Total
Opening balance	5,025,260	3,604,839	7,803,018	16,433,117
Increases	129,006	-	200,000	329,006
Reversals and utilisations	(6,102)	(1,518)	(1,526,418)	(1,534,038)
Closing balance	5,148,164	3,603,321	6,476,600	15,228,085
		30.06.2017
			Impairment losses in
		Impairment losses in	inventories and biological
	Provisions	accounts receivable	assets	Total
Opening balance	5,064,402	3,717,961	8,319,880	17,102,243
Increases	-	-	-	-
Reversals and utilisations	(6,102)	(1,518)	-	(7,620)

The amount recorded under the caption "Provisions" as of 30 June 2018 and 2017 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 30 June 2018 and 2017, the companies of the Group operated with derivatives contracts to hedge interest rate variations and derivatives contracts to hedge exchange rate variations. As if 30 June 2018, Altri Group's companies have also derivatives contracts to hedge the paper pulp price variations, being these derivatives recorded at its fair value.

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

As of 30 June 2018 and 31 December 2017, the detail of the financial derivative instruments is as follows:

		30.06.2018				31.12.2017
		Assets		Liabilities		Assets		Liabilities
	Current	Non current	Current	Non current	Current	Non current	Current	Non current
Interest rate derivatives	-	-	779,242	-	-	-	557,215	-
Exchange rate derivatives	914,741	544,006		99,801	4,048,407	1,796,781	-	-
Pulp price derivatives	649,094	-	-	3,181,846	855,453	-	1,248,850	-
	1,563,835	544,006	779,242	3,281,647	4,903,860	1,796,781	1,806,065	-

12. FINANCIAL RESULTS

The financial results for the six months period ended at 30 June 2018 and 2017 are detailed as follows:

	30.06.2018	30.06.2017
Financial expenses
Interests	8,663,888	7,281,807
Other financial expenses	3,556,249	4,912,247
	12,220,137	12,194,054
Financial income
Interests	235,566	310,964
Other financial income	5,125,466	1,387,470
	5,361,032	1,698,434

The caption "Other financial expenses" includes, mainly, expenses with loans setup, which are recognised in the profit and loss statement through the duration of those loans (Note 9). The caption "Other financial expenses" includes, mainly, exchange rate earnings.

13. EARNINGS PER SHARE

Earnings per share for the six months periods ended as of 30 June 2018 and 2017 were determined taking into consideration the following amounts:

	30.06.2018	30.06.2017
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	73,809,856	41,552,124
Earnings per share
Basic	0.36	0.20
Diluted	0.36	0.20

14. OTHER INCOME

As of 30 June 2018 and 2017 the caption of the statement of profit and loss "Other income" is detailed as follows:

	30.06.2018	30.06.2017
Subsidies to investment and exploitation	2,076,578	2,368,049
Gains on disposal of fixed assets	458,561	41,829
Other income	312,309	1,453,959
	2,847,448	3,863,837

15. OTHER EXPENSES

As of 30 June 2018 and 2017 the caption of the statement of profit and loss "Other expenses" is detailed as follows:

	30.06.2018	30.06.2017
Direct taxes and charges	1,333,103	878,727
Other costs	3,167,890	897,115
	4,500,993	1,775,842

The caption "Other expenses" includes, among others, losses with derivative financial instruments to hedge changes in pulp prices.

16. SEGMENTAL INFORMATION

In 2008, it 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 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 six months periods ended at 31 June 2018 and 2017, there were no transactions or loans granted to the members of the Board of Directors.

III. Consolidated financial statements and notes

As of 30 June 2018 and 2017 the balances and transactions with related parties are as follow:

Purchases and services obtained			Sales and services rendered		Interest income
Transactions	30.06.2018	30.06.2017	30.06.2018	30.06.2017	30.06.2018	30.06.2017
Associated companies and joint ventures (a)	1,349,143	1,223,508	7,781,083	8,478,506	60,552	152,732
Other related parties (b)	353,518	1,050,010	-	-	-	-
	1,702,661	2,273,518	7,781,083	8,478,506	60,552	152,732
	Payable Accounts		Accounts receivables		Loans conceded
Balances	30.06.2018	30.06.2017	30.06.2018	30.06.2017	30.06.2018	30.06.2017
Associated companies and joint ventures (a)	505,774	321,851	6,071,613	2,295,348	19,982,905	11,482,905
Other related parties (b)	111,972	675,197	756,762	20,790	-	-
	617,746	997,048	6,828,375	2,316,138	19,982,905	11,482,905

• (a) All entities consolidated by the equity method as of 30 June 2018 and 2017 (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 30 June 2018 can be detailed as follow:

• Actium Capital, S.A.
• Adcom Media Anúncios e Publicidade S.A
• A Nossa Aposta Jogos e Apostas On-line, S.A.
• Caderno Azul, S.A.
• Cofihold, S.A.
• Cofihold II, 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, Lda.
• Expeliarmus Consultoria, S.A.
• F. Ramada II, Imobiliária, S.A.
• Ramada Investimentos e Indústria, S.A.
• Grafedisport Impressão e Artes Gráficas, S.A
• Livrefluxo, S.A.
• Mercados Globais Publicação de Conteúdos, Lda.
• Planfuro Global, S.A.
• Préstimo Prestígio Imobiliário, S.A.
• Promendo, SGPS, S.A.
• Ramada Aços, S.A.
• Socitrel Sociedade Industrial de Trefilaria, S.A.
• Universal Afir, S.A.
• Valor Autêntico, S.A.
• VASP Sociedade de Transportes e Distribuições, Lda.
• 1 Thing, Investments, S.A.

18. APPLICATION OF THE NET PROFIT

Regarding 2017 financial year, the Board of Directors proposed, in its annual report, approved at the General Shareholders' Meeting held on May 4, 2018, that the individual net profit of Altri, SGPS, S.A. amounting to 56,705,382.66 Euro, would be integrally allocated as dividends distribution. The Board of Directors proposed, as well, the distribution of free reserves amounting to 4,834,118.94 Euro as dividends, which corresponds to a total dividend of 0.30 Euro/share.

19. SUBSEQUENT EVENTS

In a press release as of 31 July 2018, Altri announced to the market the achievement of an agreement, together with its subsidiary Caima Indústria, with EDP – Energias de Portugal, S.A. (EDP), to buy 50% of the share capital, credits and voting rights that EDP holds in the share capital of EDP Produção – Bioeléctrica, S.A., hence assuming, as a consequence of this agreement, the control of 100% of this Company. The transaction is subject to prior notification to the Competition Authority, under the terms established in the competition legal regime and, therefore, contingent to the decision of non-opposition by the Competition Authority, being its conclusion estimated to occur during the second half of 2018.

The transaction amounts to an estimated global value of € 55,000,000.00 (fifty-five million Euro).

1. FINANCIAL STATEMENT APPROVAL

The financial statements were approved by the Board of Directors and authorised for issuance on July 26, 2018.

21. 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 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