ALTRI, SGPS, S.A.

Public Company

Head Office: Rua do General Norton de Matos, 68, r/c - Porto Fiscal number 507 172 086

Share Capital: 25,641,459 Euro

Financial Information - 2nd Quarter of 2017 (Unaudited)

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

Preliminary note regarding the fires occurred in June in Pedrógão Grande

The companies Altri and The Navigator Company ("Navigator") were involved from the first hour in the fight against the fires that devastated the Portuguese territory in the month of June, deploying the specialist firefighting teams operated by Afocelca. The human losses resulting from these fires were dramatic and unparalleled in history, both companies being in solidarity with all those affected by this tragedy.

In this sense, Altri and Navigator decided to contribute one million Euro, of which half a million Euro will be allocated to the special fund to support civil society organizations in the region of Pedrógão Grande, constituted by the Calouste Gulbenkian Foundation. This contribution aims to help minimize the consequences of the fires and the tragedy that affected the municipalities of Pedrógão Grande, Figueiró dos Vinhos and Castanheira de Pêra.

The two forest-based companies also decided to invest in the recovery of slopes, water lines and forest infrastructures in the areas affected by the fires, according to a technical plan with 12 actions, also providing the specialized support of their teams.

The financial information presented was prepared in accordance with the principles of recognition and measurement of International Financial Reporting Standards (IFRS)

Income Statement - 2Q 2017

thousand Euro

2Q 2017

2Q 2016

2Q17/2Q16

Var%

1Q 2017

2Q17/1Q17

Var%

Total Revenues

165,417

142,155

16.4%

159,836

3.5%

Costs os sales

68,700

57,635

19.2%

69,261

-0.8%

External supplies and services

40,049

38,189

4.9%

41,783

-4.2%

Payroll expenses

8,461

8,366

1.1%

7,719

9.6%

Others expenses

826

1,740

-52.6%

950

-13.1%

Provisions and impairment losses

0

-96

ss

0

ss

Total Expenses (a)

118,036

105,835

11.5%

119,714

-1.4%

EBITDA (b)

47,381

36,321

30.5%

40,122

18.1%

Margin

28.6%

25.6%

+3,1 pp

25.1%

+3.5 pp

Amortisation and depreciation

13,918

13,293

4.7%

13,915

0.0%

EBIT (c)

33,463

23,027

45.3%

26,207

27.7%

Margin

20.2%

16.2%

+4,0 pp

16.4%

+3.8 pp

Gains/Losses in associated companies

925

469

97.2%

495

86.8%

Financial Costs

-5,451

-4,996

9.1%

-4,614

18.2%

Net foreign exchange differences

-1,661

813

-468

Financial gains

1,250

1,058

18.1%

448

178.7%

Financial results

-4,937

-2,655

85.9%

-4,138

19.3%

Profit Before Income Tax

28,526

20,372

40.0%

22,069

29.3%

Income tax

-4,098

-5,269

-22.2%

-4,945

-17.1%

Profit for the period attributable to parent company's shareholders

24,428

15,103

61.7%

17,124

42.7%

  1. Operating costs excluding amortisation, f inancial expenses and income tax

  2. EBITDA = Earnings before interests, taxes, depreciation and amortisation

  3. EBIT = Earnings before interest and taxes

The second quarter of 2017 was marked by three facts:

  1. The upward trend in the price of short-fiber pulp, which currently stands at USD 864. In quarterly terms, the average price recorded during the second quarter of 2017 was around USD/ton 783, corresponding to a 15% increase compared to the average price registered in the first quarter of 2017 and a growth of around 13% compared to the average price recorded in the same period of 2016;

  2. The continuation of the ongoing investment projects in the Celbi and Celtejo industrial units, with emphasis on the latter, interventions in the recovery boiler, steam reduction plant and industrial waste water treatment plant, which implies a

    limitation of the factory's operational potential, in particular in terms of the efficiency of production costs. This investment is expected to be completed by the end of the first half of 2018;

  3. Annual stoppage of the Caima industrial unit, which took place for about two weeks in May.

Exports of 129 million Euro in 2Q2017

Total revenues registered in the second quarter of 2017 amounted to 165.4 million Euro, up 16% compared to the same period of last year and up 3.5% compared to the first quarter of 2017.

During the period under analysis, around 264 thousand tons of pulp were produced (+ 12% compared to the second quarter of 2016), of which approximately 23.4 thousand tons of dissolving pulp (-13% compared to the same quarter of 2016, which is explained by the maintenance stop).

In terms of sales, in the second quarter of 2017, approximately 267.3 thousand tons of pulp were sold (+ 11% compared to the same quarter of 2016), of which approximately

24.1 thousand tons of dissolving pulp (-5% compared to the same quarter of the previous year).

In terms of exports, during the period under review, Altri exported around 242.4 thousand tons of pulp, corresponding to an increase of around 9% over the same period of the previous year, which corresponds to about 129 million of Euro.

Total pulp sales amounted to 141.9 million Euro, an increase of around 5% over the previous quarter of 2017 and a growth of 19% over the same period last year.

Altri SGPS SA published this content on 27 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 27 July 2017 16:28:01 UTC.

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