Altri SGPS — Management Reports 2011

Sep 1, 2011

DIRECTORS' REPORT

Consolidated Accounts

1st semester of 2011

INTRODUCTION 3
STOCK EXCHANGE EVOLUTION 4
GROUP'S ACTIVITY 6
FINANCIAL REVIEW 10
SECOND SEMESTER 2011 OUTLOOK 13
CORPORATE GOVERNANCE 14
LEGAL MATTERS 15
DECLARATION OF RESPONSIBILITY 17
CLOSING REMARKS 17

To the Shareholders

Pursuant to the legal requirements, the Board of Directors of Altri, S.G.P.S., S.A. (Public Company) hereby presents its Directors' Report for the first semester of 2011.

INTRODUCTION

Altri was incorporated as of March 2005, as a result of the demerger of Cofina. Altri is a reference European producer of bleached eucalyptus pulp and is a listed company included in NYSE Euronext Lisbon, integrating the PSI 20 (Portuguese Stock Index), the benchmark stock market index. In addition to pulp production, the company is also present in electric energy from forest renewable sources, namely industrial cogeneration, 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.

Currently, Altri owns three pulp mills in Portugal with a total capacity, in 2010, above 785,000 tons/year of bleached eucalyptus pulp. In a full speed stage, Altri's nominal production capacity will be about 900,000 tons/year.

Altri obtained certification from the Forest Stewardship Council (FSC) and from the Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities, for the whole 84,000 ha of forest under their management in Portugal.

Altri's industrial strategy implementation is based on integrated forest management in Portugal. This model is based on forest optimization, 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.

The last years were highlighted by various acquisitions (Celtejo in 2005 and in 2006 Celbi) that allowed Altri to reinforce its position in its operating markets and by the development of a set of expansion activity projects.

Altri's structure as of 30 June 2011 is as follows:

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 in question.)

The world economy continued to expand during the first half of 2011, with economic growth showing yet some moderation, particularly in developed countries.

The crisis in the public debt market in Europe deepened, with renewed worries not only about the situation in Greece, with fears of Greek debt restructuring, but also in the public finance situation in other peripheral countries of the region.

The increasing difficulty from Portugal in obtaining funding in international markets led the Government to formalize, in April, a request for foreign aid from the IMF, the European Commission and European Central Bank (ECB). Still, the yields of domestic debt continued increasing substantially and, as it happened in other countries in the periphery, where new highs were also recorded, the spreads in yields facing Germany widened considerably.

The first half of 2011 was marked by the deterioration of the feeling of the participants in financial markets. In addition to the European public debt situation, other factors contributed to this effect, especially fears of economic slowdown worldwide. These based on a slowdown in the developed block, more evident in the second quarter, with the adoption of more restrictive monetary and fiscal policies.

The stock market, after reaching the highest values since September 2008, by February in Europe and April in the U.S.A., recorded a fall during the second quarter, reversing, in some European peripheral countries, the gains of the previous months. While the German DAX closed the half with a gain of +6.7% and the American stock market rose +5.0% (S&P500), the Portuguese PSI20 corrected -3.5%.

Altri's share price closed the first six months of 2011 at 1.46 Euros per share, representing a depreciation of 14% over the end of 2010. The market capitalization at the end of that period was 299.5 million Euros.

During the first half of 2011, Altri's share price reached the maximum of 1.732 Euros per share and the minimum of 1.352 Euros per share, with 43.6 million shares traded.

On February 9, 2011, Altri was notified of the favorable decision of the administrative appeal brought by it, concerning the change in nominal value of shares of 0.25 Euros to 0.125 Euros per share and the resulting change in the number of shares representing the capital stock to 205,131,672. On February 22, 2011, shares of Altri started to be traded on the NYSE Euronext Lisbon with the new nominal value. Such restatement has been operationally completed on February 25, 2011, by splitting each share into two.

The main events that marked the evolution of the shares of the Company during the first half of 2011 can be described chronologically as follows:

• On March 9, the Group announced the financial performance of the year 2010 with a consolidated net profit around 62 million Euros. The consolidated total revenues exceeded 507 million Euros, representing an increase of 64% compared to 2009. Consolidated EBITDA amounted to 160.8 million Euros, registering a growth of over 200% compared to 2009. On that date shares' closing price reached 1.685 Euros per share;
• Through a statement made on May 11, the Group announced the results of the first quarter of 2011. During that period, the consolidated total revenues reached about 125.7 million Euros, representing an increase of about 18% over the same period of 2010. The EBITDA exceeded 32 million Euros, which means a growth of around 4.5% over the first quarter of 2010;
• In a statement made on May 27, Altri informed the market about the deliberations of the General Meeting held on May 26, 2011 which approved, among others, the proposed distribution of dividends corresponding to 0.02 Euros per share, to be paid from 21 June 2011.

GROUP'S ACTIVITY

With its genesis in the reorganization process of Cofina with the purpose of setting into a separate holding the industrial operations, Altri held until 1 June 2008 the investments in the paper, pulp, steel and storage systems, date considered for the demerger process the business of steel and storage systems. This reorganization is part of a focusing and business transparency strategy, aiming at giving greater visibility to each area and increasing market perception of value.

The main participations were Altri holds the majority of capital are indirectly hold, and are as follows:

• Caima Indústria de Celulose (Constância), producer and distributor of paper pulp;
• Celbi Celulose da Beira Industrial, 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 (Constância), manager of the Group's forestry resources.

Moreover, in order to fulfill 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 2011 is as follows:

Pulp market

Source: FOEX

The first half of 2011 was characterized by some unpredictability in the demand for pulp: in the end of the first quarter a price increase was announced, while at the end of second quarter/early third quarter price cuts were announced.

The average market price of BEKP during the first half of 2011 was 860 USD/ton, which resulted in 614 €/ton. In quarterly terms, the price recorded in the second quarter was 871 USD/ton (606 €/ton), while in the first quarter were 846 USD/ton and 623 €/ton, respectively. Thus, although the price in USD recorded an increase from the first to the second quarter, the price in EUR was affected by the devaluation of the dollar, falling approximately 3%.

The first quarter of 2011 was characterized by strong growth in demand for pulp, particularly eucalyptus pulp (BEKP) which grew 8% year-on-year, most notably the demand from China, with an increase of 46% over the same period of the previous year. It should be noted that this growth results mainly from low levels of consumption recorded in China in the first quarter of 2010. The second quarter, on the other hand, was characterized by some volatility in the demand especially, again, for the Asian market. The quarter began with a rise in the price (30 USD/ton) and ended with the announcement of a decline for the month of July 30 USD/ton in Europe and 50 USD/ton in Asia.

The ratio supply/demand of bleached pulp, according to data from PPPC, reached about 91% in the first half of 2011, with demand growing 5.3% - being this growth almost entirely driven by growing demand from China. In terms of eucalyptus pulp (BEKP), there was an increase of 2%, being Europe the main driver of this growth.

Evolution of pulp stock in European ports since 2005 to Jun-11 (ton)

Source: FOEX

During the semester, the three Altri industrial units, Celbi, Caima and Celtejo, produced and sold 408.2 and 400.5 thousand tons of pulp, respectively.

Evolution of European BEKP pulp prices in €: 2002-Jun11

Pulp sales by region and detail by application

In terms of using the pulp, the tissue paper producers are major customers of Altri, with a 39% share (40% in Dec. 2010).

In the first six months of 2011, Altri exported about 192 million Euros of pulp, which corresponds to a growth of around 3.2% over the same period last year. Altri strengthened its position as one of the largest Portuguese exporters with international sales accounting for approximately 91% of its sales, being Europe the main destination region.

FINANCIAL REVIEW

The consolidated financial information of Altri on the first half of 2011 and comparative information for 2010 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with International Accounting Standard 34 - Interim Financial Reporting

During the period ended 30 June 2011 Altri Group began negotiations for the sale of the subsidiary Socasca – Recolha e Comércio de Recicláveis, S.A in the short term, a process that the Board of Directors of Altri estimates to be completed during the year ended 31 December 2011, which explains the fact that the assets and liabilities of this subsidiary were classified as a discontinued operation.

Therefore, the key data and indicators of the consolidated operations of the Altri Group are detailed as follows:

thousand euros	1H 2011*	1H 2010*	1H11/1H10 Var%
Sales	243,759	232,721	4.7%
Services rendered Other income	2,471 4,508	1,174 6,986	110.4% -35.5%
Total revenues	250,737	240,881	4.1%
Costs of sales	103,691	77,443	33.9%
External supplies and services	61,434	59,952	2.5%
Payroll expenses	15,929	15,039	5.9%
Provisions and impairment losses	0	100	-
Other expenses	6,624	9,361	-29.2%
Total expenses (a)	187,679	161,895	15.9%
EBITDA (b)	63,057	78,986	-20.2%
Margin	25.1%	32.8%	-7.6 pp
Amortisation and depreciation	26,376	25,676	2.7%
EBIT (c)	36,681	53,310	-31.2%
Margin	14.6%	22.1%	-7.5 pp
Gains and losses in associated companies and joint ventures	357	178	n.a
Financial expenses	-19,252	-17,347	11.0%
Financial income	3,369	1,223	n.a
Financial profit	-15,526	-15,946	-2.6%
Profit before income tax	21,155	37,364	-43.4%
Income tax	-3,369	-10,738	n.a
Minority interests	1	1	n.a
Profit for the period from discountinued operations attributable to parent company's shareholders	17,786	26,625	-33.2%
Profit for the period from discountinued operations	11	68	n.a
Consolidated net profit attributable to parent company's shareholders	17,796	26,693	-33.3%

* Considering the subsidiary in descontinuation

(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 the first half of 2011, total revenues excluding interest income, amounted to around 250.7 million Euros, representing an increase of about 4% over the first half of 2010.

Net revenues of electric power, liquor and bark amounted, during the first half of 2011, to 16.8 million Euros. During the first half of 2010 it amounted to 12.5 million Euros.

Operational costs (excluding amortizations) reached 187.7 million Euros, rising 16% compared with the first half of 2010.

Cost increases result from the rising wood cost, mainly from the wood imports. It is expected that these costs will slightly decrease during the rest of the year.

EBITDA reached 63 million Euros in the first half of 2011, representing a 20% decrease compared with EBITDA obtained in the first half of 2010. EBITDA margin in the first half of 2011 was 25.1%.

EBIT reached 36.7 million Euros, representing a 30% decrease relatively to first half of 2010 EBIT.

Net income after minority interest reached 17.8 million Euros.

Total investment (CAPEX) during the first six months of 2011 was 8.5 million Euros.

Altri's nominal remunerated net debt net of cash and investments available for sale as of 30 June 2011 was 713.7 million Euros. During the second quarter, the Group increased its outflows due mainly to the payment of dividends (4 million Euros) and taxes (7 million Euros) and the change in working capital (10 million Euros). In terms of working capital, it should be highlighted that inventories increased more than 18 million Euros from first to second quarter of 2011 driven largely by the strategic stock of wood, although it is certain that it shall reduce by the end of the year.

The average cost of net debt amounts to 4.5%.

Detail of the remunerated net debt

million euros	31-Dec-2011	30-Jun-11
Cash and cash equivalents	129.8	141.8
Investments available for sale	10.1	10.1
Bank loans and overdrafts	166.6	163.1
Other remunerated liabilities	22.5	22.5
Commercial paper	274.5	285.0
Bonds	395.0	395.0
Remunerated net debt	718.7	713.7

Financing needs are fully assured. Altri holds 90 million Euros in available financing lines not used.

The evolution of the Group's performance over the quarter was as follows:

thousand euros	2Q 2011*	2Q 2010*	1Q 2011*	2Q11/2Q10 Var%	2Q11/1Q11 Var%
Sales	121,694	132,535	122,064	-8.2%	-0.3%
Services rendered	1,430	557	1,041	156.8%	37.3%
Other income	1,879	811	2,629	131.7%	-28.5%
Total revenues	125,003	133,902	125,734	-6.6%	-0.6%
Costs of sales	50,992	40,541	52,699	25.8%	-3.2%
External supplies and services	31,740	30,866	29,695	2.8%	6.9%
Payroll expenses Provisions and impairment losses	8,389	8,011	7,540	4.7%	11.3%
Other expenses	- 3,130	- 6,404	- 3,494	- -51.1%	- -10.4%
Total expenses (a)	94,251	85,822	93,428	9.8%	0.9%
EBITDA (b)	30,752	48,080	32,306	-36.0%	-4.8%
Margin	24.6%	35.9%	25.7%	-11.3 pp	-1.1 pp
Amortisation and depreciation	12,960	12,840	13,417	0.9%	-3.4%
EBIT (c)	17,792	35,240	18,889	-49.5%	-5.8%
Margin	14.2%	26.3%	15.0%	-12.1 pp	-0.8 pp
Gains and losses in associated companies and joint ventures Financial expenses Financial income Financial profit	608 -10,008 1,537 -7,863	410 -9,460 -3 -9,053	-251 -9,243 1,831 -7,663	n.a 5.8% n.a -13.1%	n.a 8.3% -16.1% 2.6%
Profit before income tax	9,929	26,187	11,226	-62.1%	-11.6%
Income tax Minority interests	-1,336 3	-8,710 3	-2,033 -2	-84.7% -3.6%	-34.3% s.s.
Profit for the period from discountinued operations attributable to parent company's shareholders	8,590	17,474	9,196	-50.8%	-6.6%
Profit for the period from discountinued operations	-9	119	20	n.a	n.a
Consolidates net profit attributable to parent company's shareholders	8,581	17,593	9,215	-51.2%	-6.9%

* Considering the subsidiary in descontinuation

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

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

(c) EBIT = Earnings before interest and taxes

During the second quarter of 2011, total revenues reached 125 million Euros, representing a slight decrease of 0.6% compared with the first quarter of 2011. During this period, Altri produced 219.1 thousand tons of pulp (+16% comparing with the first quarter of 2011) and sold 202 thousand tons (+2% comparing with the first quarter of 2011). The fact that production exceeded sales relates to two factors: (a) the need to restore pulp inventories at sustainable levels, ensuring a good level of quality service, and (b) the reduction in demand from overseas markets, particularly, in Asia.

Net revenues of electric power, liquor and bark amounted, during the second quarter of 2011, to 9.1 million Euros. During the first quarter of 2011 it amounted to 7.7 million Euros.

Operational costs (excluding amortizations) reached 94.3 million Euros, rising 1% compared with the first quarter of 2011.

SECOND SEMESTER 2011 OUTLOOK

The outlook for European and American markets show a modest slowdown in demand which, however, should stay in solid levels, considering the lack of stocks in the paper industry. A possible slowdown in demand will be due to some "downtime" of paper mills, resulting from the breakdown of the volume of orders by seasonal issues and the current economic climate.

In terms of the Asian market, taking into account the slowdown in demand in the second quarter of 2011, which resulted in a reduction of stocks, especially in China, it shall be expected an upturn in demand until the end of the year and, consequently, prices.

CORPORATE GOVERNANCE

According to legal provisions, the Company is not required to provide information relating to corporate governance, since it is compulsory only in conjunction with the annual Directors' report.

At this point, however, it should be noted that the Annual General Meeting held on 26 May 2011 elected the corporate bodies for the 2011/2013 triennium.

Thus, were elected to the Board of Directors for the term 2011/2013:

• Paulo Jorge dos Santos Fernandes President
• João Manuel Matos Borges de Oliveira Member
• Pedro Macedo Pinto de Mendonça Member
• Domingos José Vieira de Matos Member
• Laurentina da Silva Martins Member

For the Statutory Audit Board were elected the following:

• João da Silva Natária President
• Cristina Isabel Linhares Fernandes Member
• Manuel Tiago Alves Baldaque Marinho Fernandes Member
• Jacinto da Costa Vilarinho Substitute

The Statutory Auditor elected for the triennium 2011/2013 was Deloitte & Associados, SROC SA, represented by António Manuel Martins Amaral.

LEGAL MATTERS

Own shares

Pursuant to the requirements of article 66 of the Commercial Company Code ("Código das Sociedades Comerciais"), the Directors inform that as of 30 June 2011 Altri and its subsidiaries had no own shares and did not acquire or sell any own shares during the period.

Shares held by Altri's corporate boards

Pursuant to the requirements of article 447 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that, as of 30 June 2011, the held shares were as follows:

Paulo Jorge dos Santos Fernandes	14,001,492
Pedro Macedo Pinto de Mendonça	1,705,000
Domingos José Vieira de Matos	13,939,432
João Manuel Matos Borges de Oliveira (a)	18,693,320
Laurentina da Silva Martins	0

(a) – 18.693.320 shares correspond to the total number of shares of Altri, S.G.P.S., S.A. held by Caderno Azul – S.G.P.S., S.A. which the administrator João Manuel Matos Borges de Oliveira is shareholder.

As of 30 June 2011, the Statutory Auditor, the members of the Statutory Audit Board and of the Shareholders' General Meeting held no shares of the Company.

Participation in the Company's capital

Pursuant to the requirements of articles 16 and 20 of the Securities Market Code ("Código de Valores Mobiliários") and article 448 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that, in accordance with the notifications received, the companies and/or individuals that hold qualified participations exceeding 2%, 5%, 10%, 20%, 33% and 50% of the voting rights, are as follows:

Exceeding 2% of the voting rights	Shares Held	Direct % of the voting rights
Credit Suisse AG	10,190,874	4.97%
Pedro Miguel Matos Borges de Oliveira	9,781,582	4.77%
UBS AG – ZURIQUE	8,594,920	4.19%
Bestinver Gestión, S.A.SGIIC	4,187,740	2.04%
Norges Bank	4,149,572	2.02%

Exceeding 5% of the voting rights	Shares Held	Direct % of the voting rights
CADERNO AZUL – SGPS, S.A. (a)	18,693,320	9.11%
PROMENDO – SGPS, S.A. (b)	16,324,000	7.96%
Paulo Jorge dos Santos Fernandes	14,001,492	6.83%
Domingos José Vieira de Matos	13,939,432	6.80%
Ana Rebelo Mendonça Fernandes (c)	13,463,782	6.56%

• (a) 18,693,320 shares represent the total shares of Altri SGPS, SA owned by Caderno Azul SGPS SA, which the administrator João Manuel Matos Borges de Oliveira is shareholder.
• (b) 16,324,000 shares of Altri SGPS, S.A. held by PROMENDO SGPS, S.A., are attributable to Ana Rebelo Mendonça Fernandes, manager and shareholder, holder of 59.6% of the capital.
• (c) It is also due to Ana Rebelo Fernandes Mendonça, in addition to the 16,324,000 of Altri SGPS, SA held by the company Promendo SGPS, SA mentioned in (b). Thus, in legal terms, are considered attributable to Ana Rebelo Fernandes Mendonça, a total of 29,787,782 shares, representing 14.52% of the capital and voting rights of Altri - SGPS, SA.

Altri was not informed of any participation exceeding 10% of the voting rights.

DECLARATION OF RESPONSIBILITY

The members of the Board of Directors of Altri, S.G.P.S., 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, nr. 3, of the Stock Exchange Regulation, the Board of Directors declares that the accounts that integrate this report were not subject to Limited Review.

As required by article 21 of Decree-Law 411/91 of 17 October, the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security.

CLOSING REMARKS

The Board of Directors concludes by expressing a vote of thanks to the Personnel of the Altri Group for their dedication and effort, and also wishes to express its' thanks to the other Corporate Boards and to the Financial Institutions that co-operated with the Group.

Porto, 24th August 2011

The Board of Directors:

Paulo Jorge dos Santos Fernandes – President

João Manuel Matos Borges de Oliveira

Domingos José Vieira de Matos

Pedro Macedo Pinto de Mendonça

Laurentina da Silva Martins

Article 447 of the Commercial Companies Code ("Código das Sociedades Comerciais") and article 14 nr. 7 of the Portuguese Securities Regulator (CMVM) Regulation nr. 05/2008

Disclosure of shares and other securities held by the Board of Directors and by those discharging managerial responsibilities, as well as people with these closely related, in accordance with Article 248. B of the Portuguese Securities Code and transactions made on them during the semester.

Member of the Board of Directors	Shares held at 31 December 2010	Acquisitions	Disposals	Shares held at 30 June 2011
Paulo Jorge dos Santos Fernandes	14.001.492	-	-	14.001.492
João Manuel Matos Borges de Oliveira (allocation via CADERNO AZUL - SGPS, S.A.)	18.693.320	-	-	18.693.320
Domingos José Vieira de Matos	13.939.432	-	-	13.939.432
Pedro Macedo Pinto de Mendonça	1.705.000	-	-	1.705.000

Statement Under the terms of Article 245, paragraph 1, c) of the Securities Code

The signatories individually declare that, to their knowledge, the Interim Management Report, the Individual and Consolidated Financial Statements prepared in accordance with the standards of the applicable International Financial Accounting as adopted by the European Union, and 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 and individual results of Altri, SGPS, S.A. ("Altri") and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.

Porto, 24 August 2011

Paulo Jorge dos Santos Fernandes Chairman of the Board of Directors

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João Manuel Matos Borges de Oliveira Member of the Board of Directors

Domingos José Vieira de Matos Member of the Board of Directors

Pedro Macedo Pinto de Mendonça Member of the Board of Directors

Laurentina da Silva Martins Member of the Board of Directors

CONSOLIDATED FINANCIAL STATEMENTS

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011 AND 31 DECEMBER 2010

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

ASSETS	Notes	30.06.2011	31.12.2010
NON CURRENT ASSETS:
Biological assets		98,681,777	93,551,872
Tangible fixed assets		479,042,441	500,486,555
Investment property		171,789	214,213
Goodwill		265,531,404	269,593,886
Intangible assets		346,114	523,807
Investments in associated companies and joint ventures	4.2	6,751,958	10,721,629
Investments available for sale	4.3	10,089,935	10,101,484
Other non current assets		724,237	516,976
Deferred tax assets	7	14,000,058	14,712,478
Total non current assets		875,339,713	900,422,900
CURRENT ASSETS:
Inventories		72,809,359	49,548,856
Customers		82,499,547	92,068,214
Other debtors		10,798,313	4,569,242
State and other public entities		16,041,704	7,733,949
Other current assets		4,117,052	6,265,601
Cash and cash equivalents	6	141,785,785	129,867,635
		328,051,760	290,053,497
Assets classified as held for sale or in discontinuation	4.4	8,315,956	-
Total current assets		336,367,716	290,053,497
Total assets		1,211,707,429	1,190,476,397
SHAREHOLDERS' FUNDS AND LIABILITIES		30.06.2011	31.12.2010
SHAREHOLDERS' FUNDS:
Share capital	8	25,641,459	25,641,459
Legal reserve		2,862,981	2,862,981
Other reserves		87,300,870	24,531,445
Consolidated net profit / (loss)		17,796,363	62,014,069
Total shareholders' funds attributable to the parent company's shareholders		133,601,673	115,049,954
Non controlling interests		109,932	112,365
Total Shareholders' funds		133,711,605	115,162,319
LIABILITIES:
NON CURRENT LIABILITIES:
Bank loans	9	127,867,989	139,152,447
Other loans	9	560,814,556	548,481,286
Other non current creditors		-	373,396
Other non current liabilities		20,348,655	23,628,430
Deferred tax liabilities	7	773,873	777,344
Provisions	10	1,980,728	1,980,728
Total non current liabilities		711,785,801	714,393,631
CURRENT LIABILITIES:
Bank loans	9	34,833,827	26,959,384
Other loans	9	160,914,030	154,668,303
Suppliers		81,349,769	82,686,678
Other current creditors		42,387,927	39,869,439
State and other public entities		5,242,810	13,606,447
Other current liabilities		21,535,219	19,673,418
Derivatives	11	16,553,928	23,456,778
	4.4	362,817,510	360,920,447
Liabilities associated with assets classified as held for sale or in discontinuation Total current liabilities		3,392,513 366,210,023	- 360,920,447
Total shareholders' funds and liabilities		1,211,707,429	1,190,476,397

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

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2011 AND 2010

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

			SEMESTER ENDED				QUARTER ENDED
		Notes	30.06.2011*	30.06.2010*	30.06.2010	30.06.2011*	30.06.2010*	30.06.2010
Continuing operations
Sales			243,758,506	232,720,980	235,941,823	121,694,455	132,534,871	134,101,126
Services rendered			2,470,609	1,174,229	1,174,229	1,429,534	556,770	556,770
Other income		14	4,507,525	6,986,011	7,099,287	1,878,960	810,786	891,299
Cost of sales			(103,691,380)	(77,442,860)	(79,054,692)	(50,992,198)	(40,540,985)	(41,399,544)
External supplies and services			(61,434,318)	(59,951,993)	(61,077,326)	(31,739,666)	(30,866,188)	(31,391,125)
Payroll expenses			(15,929,215)	(15,038,934)	(15,233,727)	(8,389,275)	(8,010,761)	(8,108,942)
Amortisation and depreciation			(26,376,438)	(25,675,677)	(25,939,553)	(12,959,843)	(12,840,371)	(12,969,465)
Provisions and impairment losses		10	-	(100,000)	(100,000)	-	-	-
Other expenses		15	(6,624,264)	(9,361,368)	(9,468,650)	(3,130,295)	(6,404,168)	(6,428,451)
Gains and losses in associated companies and joint ventures		12	357,151	177,916	177,916	608,426	410,151	410,151
Financial expenses		12	(19,251,636)	(17,346,518)	(17,382,511)	(10,008,151)	(9,460,325)	(9,476,574)
Financial income		12	3,368,541	1,222,670	1,222,670	1,537,114	(2,762)	(2,762)
	Profit before income tax		21,155,081	37,364,456	37,359,466	9,929,061	26,187,018	26,182,483
Income tax			(3,368,702)	(10,738,307)	(10,738,387)	(1,335,969)	(8,709,708)	(8,709,762)
	Net profit		17,786,379	26,626,149	26,621,079	8,593,092	17,477,310	17,472,721
Attributable to:
Parent company's shareholders		13	17,785,817	26,624,796	26,619,726	8,590,227	17,474,338	17,469,749
Non controlling interests			562	1,353	1,353	2,865	2,972	2,972
Discontinued operations
Profit for the period from discontinued operations		4.4	10,546	68,341	73,411	(9,262)	118,835	123,424
Attributable to:
Parent company's shareholders			10,546	68,341	73,411	(9,262)	118,835	123,424
Non controlling interests			-	-	-	-	-	-
Consolidated net profit			17,796,925	26,694,490	26,694,490	8,583,830	17,596,145	17,596,145
Attributable to:
Parent company's shareholders		13	17,796,363	26,693,137	26,693,137	8,930,965	17,593,173	17,593,173
Non controlling interests			562	1,353	1,353	2,865	2,972	2,972
			17,796,925	26,694,490	26,694,490	8,933,830	17,596,145	17,596,145
Earnings per share:
Continuing operations
Basic		13	0.09	0.13	0.13	0.04	0.09	0.09
Diluted		13	0.09	0.13	0.13	0.04	0.09	0.09
Continuing and discontinued operations
Basic		13	0.09	0.13	0.13	0.04	0.09	0.09
Diluted		13	0.09	0.13	0.13	0.04	0.09	0.09

* Considering the subsidiary Sócasca - Recolha e Comércio de Recicláveis, S.A. in descontinuation (Note 4.4)

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 SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2011 AND 2010

(Translation of financial statements originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

		SEMESTER ENDED		QUARTER ENDED
	Notes	30.06.2011	30.06.2010	30.06.2011	30.06.2010
Net consolidated profit / (loss) for the period		17,796,925	26,694,490	8,933,830	17,596,145
Change in fair value of cash flow hedging derivatives	11	4,879,879	(19,900,594)	3,838,967	(6,929,928)
Other comprehensive income		4,879,879	(19,900,594)	3,838,967	(6,929,928)
Total comprehensive income for the period		22,676,804	6,793,896	12,772,797	10,666,217
Attributable to: Shareholders' of the parent company Non controlling interests		22,676,242 562	6,792,543 1,353	12,769,932 2,865	10,663,245 2,972

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 SIX MONTHS PERIODS ENDED 30 JUNE 2011 AND 2010

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

				Attr ibut able to	the t co pa ren mp	's s har eho lder any s
					Oth er r ese rves
					Oth ers
					nd res erv es a				Non	Tot al
				Hed ging	ined reta	Tot al o the rs			trol ling con	sha reh olde r's
	Not es	Sha apit al re c	Leg al r ese rve	res erv es	ning ear s	res erv es	Net fit pro	Tot al	inte rest s	fun ds
Bal s of 1 J 20 10 anc e a anu ary		25, 641 ,459	2,8 62, 981	(10 ,205 ,900 )	50, 285 ,29 1	40, 079 ,39 1	(10 ,910 ,016 )	57, 673 ,815	109 ,37 1	57, 783 ,186
App riat ion of t he soli dat ed fit o f 20 net 09 rop con pro		-	-	-	(10 ) ,910 ,016	(10 ) ,910 ,016	10, 910 ,016	-	-	-
Oth ers		-	-	-	40, 645	40, 645	-	40, 645	-	40, 645
Tot al c hen sive inc e fo r th erio d om pre om e p		-	-	(19 ,900 ,594 )	-	(19 ,900 ,594 )	26, 693 ,137	6,7 92, 543	1,3 53	6,7 93, 896
s of Bal 30 Ju 201 0 anc e a ne		25, 641 ,459	2,8 62, 981	(30 ) ,106 ,494	39, 415 ,920	9,3 09, 426	26, 693 ,137	64, 507 ,003	110 ,724	64, 617 ,727
Bal s of 1 J 20 11 anc e a anu		25, 641 ,459	2,8 62, 981	(14 ,855 ,870 )	39, 387 ,315	24, 531 ,445	62, 014 ,069	115 ,049 ,954	112 ,365	115 ,162 ,319
ary App riat ion of t he soli dat ed fit o f 20 10 net con					62, 014 ,069	62, 014 ,069	(62 ,014 ,069 )
rop pro Div iden ds	19	-	-	-	(4, 102 ,633 )	(4, 102 ,633 )		- (4, 102 ,633 )	-	- (4, 102 ,633 )
Oth ers		- -	-	-	(21 ,890 )	(21 ,890 )	-	(21 ,890 )	- (2, 995 )	(24 ,885 )
e fo Tot al c hen sive inc r th erio d om pre om e p		-	- -	- 4,8 79, 879	-	4,8 79, 879	- 17, 796 ,363	22, 676 ,242	562	22, 676 ,804
Bal s of 30 Ju 201 1 anc e a ne		25, 641 ,459	2,8 62, 981	(9,9 75, 991 )	97, 276 ,86 1	87, 300 ,870	17,7 96, 363	133 ,60 1,67 3	109 ,932	133 ,71 1,60 5

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

The official chartered of accounts

The Board of Directors

ALTRI , SGPS, S.A.

CONDENSED CONSOLIDATED CASH-FLOW STATEMENTS FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2011 AND 2010

(Translation of financial statements originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

30.06.2011 47,305,524 7,456,374	30.06.2010 25,593,327
	1,175,000
	76,956
	585,229
	-
	-
	(8,433,201)
	(6,596,016)
	3,075,000
	(6,107,095)
	(53,497)
	(2,962,624)
	-
	(6,048,216)
	63,939,093
	-
	12,949,095
	76,888,188
	1,175,000 1,115,000 258,553 - 2,142,277 1,003,084 (7,281) (53,291) (16,771,890) (6,011,329) (13,196,060) (3,953,817) 13,175,000 180,561 (34,662,867) (2,965,836) (106,993) - (13,259,216) (3,966,716) (4,102,633) (34,854,076) (10,854,624) 77,632,800 148,224,025 - (744,612) (7,352,067) 76,888,188 140,871,958

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

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

1. INTRODUCTORY NOTE

Altri, SGPS, S.A. ("Altri" or "Company") was incorporated as of 1 March 2005, has its head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and its shares are listed in the NYSE Lisbon Euronext Stock Exchange. Its main activity is the management of investments.

Altri was incorporated as a result of the reorganization process of Cofina, SGPS, S.A. occurred in 2005, through the demerger of the investment previously held by this group in Celulose do Caima, SGPS, S.A. (representing 97.23% of this company's share capital), under a simple demerger operation predicted in item 1.a), article 118 of the Commercial Companies Code ("Código das Sociedades Comerciais").

Altri is the parent company of a group of companies listed in Note 4 known as Altri Group. The current activity of Altri Group focuses on the production of bleached paper pulp of eucalyptus through three production units (Celbi in Figueira da Foz, Caima in Constância do Ribatejo and Celtejo in Vila Velha de Ródão).

Due to this new reality of Altri Group, the Board of Directors 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 June 2011 were prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the 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 2010, being the accounting policies relating to joint ventures, as well as for investment property, as follows:

(i) Joint ventures

Investments in joint ventures (Altri has joint control of a company when it has shared participation in the financial and operating decisions of that company - usually investments representing 50% of the company's share capital) are recorded under the equity method.

Under the equity method, financial investments in joint ventures are initially recorded at acquisition cost, which is increased or decreased by the amount corresponding to the proportion of the equity of these companies, reported at the date of acquisition or at the first application of the equity method. Investments are then adjusted annually, recording as profits or losses the amount corresponding to the net profits of the jointly controlled companies. Dividends from these companies are recorded as a reduction of investment value, and the proportional changes in equity is recorded as a variation of the equity of the Group.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

Any excess of the cost of acquisition over the Group's share in the fair value of the identifiable net assets of the joint venture acquired is recognized as goodwill, which is included in the caption "Investments in associated companies and joint ventures". If that difference is negative it is recorded as a gain in the caption "Gains and losses in associated companies and joint ventures" after reassessment of the fair value of the identifiable assets and liabilities acquired.

An evaluation of investments held in joint ventures is performed whenever there are signs of impairment in those investments. Impairment losses are recorded in the statement of profit and loss for the period. When those losses recorded in previous periods vanish, they are reverted in the statement of profit and losses for the period.

Unrealized gains arising from transactions with joint ventures are eliminated to the extent of the group's interest in the joint venture share capital against the investment held. Unrealized losses are eliminated but only to the extent that there is no evidence of impairment of the asset transferred.

(ii) Investment property

Investment property represents Altri's property which is not related to the activity of Altri Group, not intended for use in the production or supply of goods or services, or for administrative purposes, or for sale in the ordinary course of business.

Investment property is initially measured at cost (which includes transaction costs) and, subsequently, maintained at cost of acquisition or production, deducted from any accumulated impairment losses.

3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

During the semester there were no changes in accounting policies and were identified no material mistakes related to previous years.

Additionally, considering the specific nature of each item, some reclassifications and redenominations were made at the consolidated financial statement as at 31 December 2010, which, although not distorting in a material way such consolidated financial statements, contribute to a better understanding of them, as follows:

• (i) The caption "Investments in associated companies" was renamed to "Investments in associated companies and joint ventures";
• (ii) The caption "Consolidation differences" was renamed to "Goodwill";
• (iii) Other reclassifications:

		31-12-2010
	Initial version	Reclassifications	Final version
Tangible fixed assets	500.152.206	334.349	500.486.555
Investment property	-	214.213	214.213
Investments available for sale	10.650.046	(548.562)	10.101.484

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011 (Translation of notes originally issued in Portuguese – Note 21) (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 June 2011 and 31 December 2010, are as follows:

Company	Head Office		Percentage Held	Activity
Mother-Company: Altri, SGPS, S.A.	Oporto	2011	2010	Investment management
Group Caima / Celtejo / Celbi:
Celulose do Caima, SGPS, S.A.	Lisbon	100%	100%	Investment management
Caima Indústria de Celulose, S.A.	Lisbon	100%	100%	Production and commercialization of pulp
Altri Florestal, S.A.	Lisbon	100%	100%	Sylvan exploration
Caima Energia – Empresa de Gestão e Exploração de Energia, S.A.	Lisbon	100%	100%	Production of thermal and electrical energy
Invescaima – Investimentos e Participações, SGPS, S.A.	Lisbon	100%	100%	Investment management
Inflora – Sociedade de Investimentos Florestais, S.A.	Lisbon	100%	100%	Sylvan exploration
Sócasca – Recolha e Comércio de Recicláveis, S.A. (a)	Águeda	100%	100%	Commercialization of recycled products
Celtejo – Empresa de Celulose do Tejo, S.A.	Vila Velha de Ródão	99,83%	99,83%	Production and Commercialization of pulp
Altri - Energias Renováveis, SGPS, S.A.	Lisbon	99,83%	99,83%	Investment management
Celulose Beira Industrial (Celbi), S.A.	Figueira da Foz	100%	100%	Production and Commercialization of pulp
Celbinave – Tráfego e Estiva SGPS, Unipessoal, Lda.	Figueira da Foz	100%	100%	Freightage of ships
Viveiros do Furadouro Unipessoal, Lda.	Óbidos	100%	100%	Production of plants in nurseries and services related with forests and landscapes
Altri, Participaciones Y Trading, S.L.	Madrid, Spain	100%	100%	Investment management and commercialization of pulp
Altri Sales, S.A.	Nyon, Switzerland	100%	100%	Commercialization of pulp
Pedro Frutícola, Sociedade Frutícola, Lda.	Constância	100%	100%	Agriculture production
Captaraíz Unipessoal, Lda.	Lisbon	100%	100%	Property buying and selling

(a) – company whose assets and liabilities were classified since 2011 as "in discontinuation" (Note 4.4);

All the above companies were included in the 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, included in the Altri Group consolidation in accordance with equity method, percentage of capital held and main activity as of 30 June 2011 and 31 December 2010 are as follows:

Company	Percentage held		Activity
	2011	2010
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

The book value, share capital and net profit for the period ended on 30 June 2011 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.	398.484	3.752.022	1.278.917	301.280
Joint ventures:
EDP – Produção Bioeléctrica, S.A.	6.353.474	155.285.656	7.192.998	418.500
	6.751.958

(a) – includes loans granted.

4.3 INVESTMENTS AVAILABLE FOR SALE

As of 30 June 2011 and 31 December 2010 the investments available for sale and their book value as of that date, are as follows:

Company	Book value
	2011	2010
Rigor Capital - Produção de Energia. Lda.	10.000.000	10.000.000
Others investments	89.935	101.484
	10.089.935	10.101.484

The caption "Investments available for sale" includes financial investments under 20%, in companies where Altri Group has no significant influence on its management.

4.4 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION

During the period ended 30 June 2011 Altri Group started negotiations aiming to alienate in the short term its subsidiary Socasca – Recolha e Comércio de Recicláveis, S.A., Altri's Board of Administration estimates this process to be concluded during the year ended 31 December 2011, therefore the assets and liabilities of this subsidiary were classified as in discontinuation.

The detail of assets and liabilities from Socasca in discontinuation in 30 June 2011 is as follows:

	30.06.2011
Goodwill associated to the acquisition of Socasca	4.062.482
Non current assets:
Tangible fixed assets	2.068.673
Other non current assets	81.814
Current assets:
Inventories	590.261
Customers	1.412.435
Other debtors	57.826
Cash and cash equivalents	42.464
Assets classified as in discontinuation	8.315.956
Non current liabilities:
Bank loans	(716.981)
Current liabilities:
Bank loans	(941.368)
Suppliers	(1.600.086)
Other current liabilities	(134.078)
Liabilities associated with assets classified as in discontinuation	(3.392.513)
Net assets in discontinuation	4.923.443

During the period ended 30 June 2011, the net profit of Sócasca – Recolha e Comércio de Recicláveis, S.A. (net from group operations) reached 10,546 Euros (negative 5,070 Euros in 30 June 2010) which is presented in the Income Statement caption "Profit for the period from discontinued operations".

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011 (Translation of notes originally issued in Portuguese – Note 21) (Amounts expressed in Euro)

The detail of profits and losses from Socasca – Recolha e Comércio de Recicláveis, S.A. in 30 June 2011 is as follows:

	30.06.2011
Sales and services rendered	2.160.333
Other income	261.406
Cost of sales	(912.544)
External supplies and services	(1.083.871)
Payroll expenses	(173.416)
Other expenses	(37.985)
Amortisation and depreciation	(154.952)
Financial expenses	(44.561)
Profit before income tax	14.410
Income tax	(3.864)
Net profit	10.546

The detail of the cash flows attributed to Sócasca – Recolha e Comércio de Recicláveis, S.A. during the period ended 30 June 2011 is as follows:

	30.06.2011
Cash flow from operating activities (1)	(15.414)
Cash flow from investment activities (2)	370.856
Cash flow from financing activities (3)	(428.050)
Cash and cash equivalents at the beginning of the period	115.072
Variation of cash and cash equivalents: (1)+(2)+(3)	(72.608)
Cash and cash equivalents at the end of the period	42.464

In addition, during the period ended 30 June 2010, the net loss from CPK – Companhia Produtora de Papel Kraftsack, S.A., which was dissolved with effects at 30 November 2010, (net from group operations), reached 73,411 Euro, which is presented in the consolidated statement of profit and loss in the caption "Profit for the year from discontinued operations".

5. CHANGES OCCURED IN THE CONSOLIDATION PERIMETER

During the period ended 30 June 2011, there were no changes in the consolidation perimeter beyond the one referred in Note 4.4.

During the year ended 31 December 2010, the companies Sosapel – Sociedade Comercial de Sacos de Papel, Lda. and CPK – Companhia Produtora de Papel Kraftsack, S.A., were dissolved without significant impacts to the Group's financial statements.

6. CASH AND CASH EQUIVALENTS

As of 30 June 2011 and 2010, the caption "Cash and cash equivalents" can be detailed as follows:

	30.06.2011	30.06.2010
Cash	26.448	28.035
Bank deposits	141.759.337	76.860.153
	141.785.785	76.888.188
Bank overdrafts (Note 9)	(913.827)	-
Cash and cash equivalents	140.871.958	76.888.188

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 for the years 2007 to 30 June 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 June 2011.

The movements occurred in deferred tax assets and liabilities in the periods ended in 30 June 2011 and 2010 were as follows:

	2011
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2011	14.712.478	777.344
Effects on income statement:
Harmonization of depreciation rates	850.994	-
Other effects	195.998	(3.471)
Total effect on income statement	1.046.992	(3.471)
Effect on shareholders' funds:
Fair values of derivatives (Note 11)	(1.759.412)	-
Closing balance as of 30.06.2011	14.000.058	773.873

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

	2010
	Deferred tax assets	Deferred tax liabilities
Opening balance as of 1.1.2010	18.063.845	981.007
Effects on income statement:
Increases/ (Decreases) of tax losses carried forward	(6.369.888)	-
Other effects	964.192	(8.772)
Total effect on income statement	(5.405.696)	(8.772)
Effect on shareholders' funds:
Fair values of derivatives (Note 11)	7.175.044	-
Closing balance as of 30.06.2010	19.833.193	972.235

8. SHARE CAPITAL

As of 30 June 2011 the company's fully subscribed and paid up capital consisted of 205,131,672 shares with a nominal value of 0.125 cents of a Euro each.

At 9 February 2011 Altri, SGPS, S.A. was notified that pursuant to decision of the President of the Notaries and Registrars Institute (Instituto dos Registos e Notariado) the appeal brought by Altri against the decision of the Commercial Registry Office of Oporto, which on account of alleged doubts registered as provisional the corporate change approved at the General Shareholders Meeting of Altri held on 17 May 2010, specifically changing the nominal value of the shares in the company's capital (Altri shares) from 0.25 Euro to 0.125 Euro, as result of which the share capital of Altri, in the amount of 25,641,459.00 Euro was represented by 205,131,672 shares. On 22 February 2011, the shares began trading on NYSE Euronext Lisbon with the new nominal value, having the restatement operationally achieved by diving each share in two, on 25 February 2011.

As of 30 June 2011 there were no entities holding more than 10% of the Company's subscribed share capital.

9. BANK LOANS AND OTHER LOANS

As of 30 June 2011 and 31 December 2010, the captions "Bank loans" and "Other loans" can be detailed as follows:

			30-06-2011
		Nominal Value		Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	33.920.000	128.219.999	162.139.999	33.920.000	127.867.989	161.787.989
Bank overdrafts (Note 6)	913.827	-	913.827	913.827	-	913.827
Bank loans	34.833.827	128.219.999	163.053.826	34.833.827	127.867.989	162.701.816
Commercial paper	136.000.001	149.000.000	285.000.001	135.421.537	148.789.400	284.210.937
Bonds	20.008.508	375.000.000	395.008.508	19.991.492	370.459.519	390.451.011
Other loans	5.501.001	41.565.637	47.066.638	5.501.001	41.565.637	47.066.638
Other loans	161.509.510	565.565.637	727.075.147	160.914.030	560.814.556	721.728.586
	196.343.337	693.785.636	890.128.973	195.747.857	688.682.545	884.430.402
			31-12-2010
		Nominal Value			Book Value
	Current	Non current	Total	Current	Non current	Total
Bank loans	26.968.039	139.420.756	166.388.795	26.745.119	139.152.447	165.897.566
Bank overdrafts	214.265	-	214.265	214.265	-	214.265
Bank loans	27.182.304	139.420.756	166.603.060	26.959.384	139.152.447	166.111.831
Commercial paper	130.500.000	144.000.000	274.500.000	130.267.617	143.764.128	274.031.745
Bonds	20.000.000	375.000.000	395.000.000	19.940.429	369.930.527	389.870.956
Other loans	4.460.257	34.786.631	39.246.888	4.460.257	34.786.631	39.246.888
Other loans	154.960.257	553.786.631	708.746.888	154.668.303	548.481.286	703.149.589
	182.142.561	693.207.387	875.349.948	181.627.687	687.633.733	869.261.420

As of 30 June 2011, there are bank overdrafts amounted to 8,900,000 Euro (16,393,292 Euro as of 30 June 2010), classified in the caption "Bank Loans".

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

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses for the periods ended 30 June 2011 and 2010 can be detailed as follows:

	30.06.2011
	Impairment losses in
	Provisions	accounts receivable	Total
Opening balance	1.980.728	6.791.109	8.771.837
Increases	-	-	-
Utilizations	-	(6.695)	(6.695)
Closing balance	1.980.728	6.784.414	8.765.142

		30.06.2010
		Impairment losses in
	Provisions	accounts receivable	Total
Opening balance	2.424.509	6.703.074	9.127.583
Increases	100.000	-	100.000
Utilizations	(308.123)	(383.872)	(691.995)
Closing balance	2.216.386	6.319.202	8.535.588

The increases in impairment losses occurred in the period ended 30 June 2010 were recorded against the caption "Provisions and impairment losses" of the consolidated profit and loss statement.

The amount recorded under the caption "Provisions", at 30 June 2011 and 2010, is the best estimate of the Administration in order to face all the losses that may be supported due to the general risks from the activity of Altri's Group.

11. DERIVATIVE FINANCIAL INSTRUMENTS

As of 30 June 2011 and 2010 the companies of Altri's Group had contracts concerning financial derivative instruments to hedge of variations in pulp price, interest rates and exchange rates (these only in 30 June 2010), being these instruments registered according to its fair value.

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

As of 30 June 2011 and 2010 the detail of the financial derivative instruments are as follows:

	Pulp price hedging derivatives	Interest rates derivatives	Exchange rates derivatives	Total
Opening balance as of 31.12.2010	(8.735.277)	(14.721.501)	-	(23.456.778)
Derivatives fair value variation/cessation
Effects on shareholders' funds	1.877.816	4.761.475	-	6.639.291
Effects on the profit and loss statement	-	263.559	-	263.559
Closing balance as of 30.06.2011	(6.857.461)	(9.696.467)	-	(16.553.928)
	Pulp price hedging derivatives	Interest rates derivatives	Exchange rates derivatives	Total
Opening balance as of 31.12.2009	(5.603.720)	(10.060.728)	(2.548.666)	(18.213.114)
Derivatives fair value variation/cessation
Effects on shareholders' funds	(13.933.404)	(7.455.573)	(5.686.660)	(27.075.637)
Effects on the profit and loss statement	-	(1.186.034)	-	(1.186.034)
Closing balance as of 30.06.2010	(19.537.124)	(18.702.335)	(8.235.326)	(46.474.785)

12. FINANCIAL RESULTS

The financial results as of 30 June 2011 and 2010 are detailed as follows:

	30-06-2011	30-06-2010
Financial expenses:
Interest	13.143.002	9.693.306
Other financial expenses	6.108.634	7.689.205
	19.251.636	17.382.511
Financial income:
Interest	2.708.065	919.083
Other financial income	660.476	303.587
	3.368.541	1.222.670

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

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).

13. EARNINGS PER SHARE

Earnings per share in the six months period ended as of 30 June 2011 and 2010, were calculated considering the following amounts:

	30-06-2011	30-06-2010*	30-06-2010
Share number considered for the computation of basic and diluted earning	205.131.672	205.131.672	102.565.836
Net profit considered for the computation of basic and diluted earning for continuing operations	17.785.817	26.624.796	26.624.796
Continuing operations earnings per share Basic Diluted	0,09 0,09	0,13 0,13	0,26 0,26
Net profit considered for the computation of basic and diluted earning for continuing and non-continuing activities	17.796.363	26.693.137	26.693.137
Continuing and non-continuing operations earnings per share Basic Diluted	0,09 0,09	0,13 0,13	0,26 0,26

* Pro-form simulating that Altri SGPS, S.A. number of shares as of 30 June 2010 was already 205.131.672.

14. OTHER INCOME

As of 30 June 2011 and 2010 this caption respects mainly to income obtained with the alienation of tangible fixed assets and investment subsidies.

15. OTHER COSTS

As of 30 June 2011 and 2010 this caption corresponds mainly to losses with derivative contracts (Note 11).

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

16. SEGMENTAL INFORMATION

On 16 April 2008, the Board of Administration of Altri, S.G.P.S., S.A. approved a simple reorganization project of this society. Under the terms of the 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 decision allows Altri Group to focus its activity on its core business, production and commercialization of bleached paper pulp form eucalyptus, so the Board of Directors believe that there is only one business segment and the management information is reported and analyzed on this basis.

17. RELATED PARTIES

The participated companies of the Group realize between them and at market prices, transactions that classifies as transactions with related parties.

In the consolidation procedures the transactions between the companies included in consolidation by the full consolidation method are eliminated, once the consolidated financial statements present the owner and its subsidiaries information as one single company, therefore they are not disclosed in this note.

During the periods ended 30 June 2011 and 2010, there were no transactions with the Directors of the Group and were no granted loans.

As of 30 June 2011 and 2010 the balances and transactions with related parties are as follow:

		Purchases and services obtained	Sales and services rendered		Interest income
Transactions	30.06.2011	30.06.2010	30.06.2011	30.06.2010	30.06.2011	30.06.2010
Associated companies and joint ventures (a)	-	378.988	3.237.392	2.437.430	320.618	322.072
Other related parties (b)	4.036.869	2.823.750	-	38.796	-	-
	4.036.869	3.202.738	3.237.392	2.476.226	320.618	322.072
		Accounts payable	Accounts receivable		Granted Loans
Balances	30.06.2011	30.06.2010	30.06.2011	30.06.2010	30.06.2011	30.06.2010
Associated companies and joint ventures (a)	-	165.555	735.426	281.899	17.372.905	21.667.905
Other related parties (b)	20.250	5.943.983	-	4.626.161	-	-
	20.250	6.109.538	735.426	4.908.060	17.372.905	21.667.905

(a) All entities consolidated by the equity method as of 30 June 2011 and 2010 (Note 4.2);

(b) Were considered as related parties CPK – Papel Kraft, S.A. (Note 4.4) and the companies of Ramada 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 June 2011 can be detailed as follow:

Adcom Media Anúncios e Publicidade, S.A. Alteria, S.G.P.S., S.A. Storax Equipements, S.A. Caderno Azul, S.G.P.S., S.A. Caminho Aberto, S.G.P.S., S.A. Cofihold, S.G.P.S., S.A. Cofina, SGPS, S.A. Cofina B.V. Cofina Media, SGPS, S.A. Cofina Eventos e Comunicação, S.A. Destak Brasil – Editora de Publicações, S.A. Destak Brasil – Empreendimentos e Participações, S.A. Edisport – Sociedade de Publicações, S.A. Edirevistas – Sociedade Editorial, S.A. Efe Erre Participações, S.G.P.S., S.A. Elege Valor, S.G.P.S., S.A. F. Ramada – Investimentos, SGPS, S.A.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

F. Ramada – Aços e Indústrias, S.A. F. Ramada – Produção e Comercialização de Estruturas Metálicas de Armazenagem, S.A. F. Ramada II, Imobiliária, S.A. F. Ramada Serviços de Gestão, Lda. Grafedisport – Impressão e Artes Gráficas, S.A. Livre Fluxo, S.G.P.S., S.A. Malva – Gestão Imobiliária, S.A. Mediafin, SGPS, S.A. Metronews – Publicações S.A. Mercados Globais – Publicação de Conteúdos, Lda. Presselivre – Imprensa Livre, S.A. Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. Storax Racking Systems, Ltd. Storax Benelux, S.A. Transjornal – Edição de Publicações, S.A. Torres da Luz – Investimentos Imobiliários, S.A. Universal Afir – Aços, Máquinas e Ferramentas, S.A. VASP – Sociedade de Transportes e Distribuições, S.A. Web Works – Desenvolvimento de Aplicações para Internet, S.A. Valor Autêntico, SGPS, S.A.

18. PAYMENTS AND RECEIPTS RELATED TO FINANCIAL INVESTMENTS

During the period ended at 30 June 2011, payments and receipts related to financial investments can be detailed as follows:

	Transaction amount	Paid amount
EDP – Produção Bioeléctrica, S.A. (a)	4.295.000	4.295.000
Socasca – Recolha e Comércio de Recicláveis, S.A. (b)	200.000 ---------------	200.000 ----------------
	4.495.000 =========	4.495.000 =========

(a) – Repayment of loans granted;

(b) – Advances received due to the sale of Socasca – Recolha e Comércio de Recicláveis, S.A. (Note 4.4).

During the period ended 30 June 2010, the receipts related to financial investments can be detailed as follows:

	Transaction amount	Paid amount
EDP – Produção Bioeléctrica, S.A. (a)	1.175.000 ---------------	1.175.000 ----------------
	1.175.000 =========	1.175.000 =========
(a) – Repayment of loans granted.

ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2011

(Translation of notes originally issued in Portuguese – Note 21)

(Amounts expressed in Euro)

19. APPLICATION OF THE NET INCOME

Relating to the year ended in 2010, the Board of Directors proposed, in its general report, that the individual net loss of Altri, SGPS, S.A. in the amount of 2,000,082.96 Euro will be transferred to returned earnings. The proposal was approved in the General Assembly held on 26 May 2011.

The General Assembly also approved the proposal of the Board of Directors regarding the distribution of free reserves in the amount of 4,102,633.44 Euro, as dividends, corresponding to a dividend of 0.02 Euro by share.

20. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 23 August 2011.

21. EXPLANATION ADDED FOR TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards and with accordance with the International Accounting Standard 34 – Interim Financial Reporting, some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

The Board of Directors, Paulo Jorge dos Santos Fernandes – President João Manuel Matos Borges de Oliveira Pedro Macedo Pinto de Mendonça Domingos José Vieira de Matos Laurentina da Silva Martins