ALTRI, S.G.P.S., S.A. (OPEN CAPITAL COMPANY)

Transcription

1 June 30, 2009 ALTRI, S.G.P.S., S.A. (OPEN CAPITAL COMPANY) Altri, S.G.P.S., S.A. (Open capital company) Directors Report Consolidated Accounts Rua General Norton de Matos, Porto Share Capital:

2 DIRECTORS REPORT INDEX Introduction 2 Stock exchange evolution 4 Group s activity 6 Financial review 10 Second semester 2009 outlook 11 Corporate Governance 12 Legal matters 12 Declaration of responsibility 14 Closing remarks 14 1 st Semester

3 DIRECTORS REPORT To the Shareholders Pursuant to the legal requirements, the Board of Directors of Altri, S.G.P.S., S.A. (Open Capital Company) hereby presents its Directors Report for the first semester of Informação financeira 1º semestre 2008 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 public listed company included in 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 and biomass. As of June 2008 Altri materialized a reorganization that implied the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and warehousing systems sector. Thus, Altri maintains the management of pulp and paper business unit, while the new company created in the demerger process (F. Ramada Investimentos, SGPS, S.A.) stays with the management of the steel and warehousing systems business activity. Nowadays, Altri major assets are three pulp production mills, with a capacity higher than 500 thousand tonnes/year of bleached eucalyptus pulp. The company has investment projects in conclusion that will increase its production capacity to more than 900 thousand tonnes/year in Altri runs more than 80 thousand ha of forests in Portugal, fully certificated by Forest Stewardship Council (FSC), one of the world s most known certification entities. 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 that allowed Altri to reinforce its position in its operating markets and by the development of a set of expansion activity projects. 1 st Semester

4 DIRECTORS REPORT The most significant events in Altri s activity in the first half of 2009 are as follows: - Celbi s expansion capacity project: the Celbi s project double its pulp production capacity - is in the conclusion stage at the end of the 1st half of The mill is in an intermediate stage of the learning curve. The final installation of the cogeneration turbine is expected to occur in the first quarter of 2010; - Celtejo s bleaching line project: After the temporary stoppage ended in 15 April 2009 at Celtejo (in which was performed production optimizations), this mill practically completed BEKP production learning curve; - Over 82,000 ha of forest area under management: at the end of the 1st half of 2009, Altri has 81.9 thousand ha of forest under management in Portugal; and - Biomass: Figueira da Foz (Celbi industrial unit) power plant entered into operation and Constância (Caima industrial unit) power plant is in the conclusion stage, with approximately, 32 MWh and 13 MWh of capacity, respectively. At the end of the 1st half of 2009, EDP Bioeléctrica (50% participation held by Altri) had already 42 MWh electric energy produced from forestry biomass. EDP Bioeléctrica holds licenses to produce over 120 MWh electric energy produced from biomass is the major player in this market, with a market share of, approximately, 50% of the total licensed by the Portuguese State. Currently, Altri s investments can be resumed as follows: Silvicaima Forest Management 99.82% 50%* Celbi Pulp mill Celtejo Pulp mill Caima Pulp mill EDP Bioeléctrica Biomassa * Joint venture com EDP 1 st Semester

5 DIRECTORS REPORT 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.) PSI 20 recovered in a remarkably way in the first half of 2009, following the international trend. Nevertheless, there are two distinct periods to be considered in the first semester of 2009: until the beginning of March, during which this index reached the lowest point on the 9th, and the period forward, which showed a consistent recovery. During four months, the Portuguese stock market presented a 22% recovery, as has happened in the rest of Europe and in United States of America. Altri, as the other listed companies, also followed Portuguese stock market s trend, recording a decline in share price until March 2009 and a recover from that date on. Altri s shares price recovered 6.1% in the first semester of 2009 and closed the period bearing at 2.23 Euro per share, with a market capitalization amounting to 229 million Euro. During the first semester of 2009, 43 million shares of Altri were transacted in the stock market. 1 st Semester

6 DIRECTORS REPORT The main events that distinguished the stock evolution during the first semester of 2009 may chronologically be described as follows: Stock exchange evolution 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 9 Jan 25 Mar 27May Altri 9 January 2009 Altri informed the permanently shutdown of its subsidiary CPK Papel Kraft, S.A. (kraft sack paper unit). This strategic decision was taken due to the negative environment currently felt in kraft sack business and the negligible current impact of CPK to Altri s profit. This fact allowed Altri to reinforce its strategic position in its core business: forest management and pulp production; 25 March Altri announced the financial performance for the year 2008, with a net profit (attributable to company shareholders) of 4.67 million Euro. Operating income amounted to 280 million Euro, a 3% decrease when compared with EBITDA amounted to, approximately, 69 million Euro, recording a 16% decrease in comparison with The company recorded an impairment loss of approximately 5.8 Million Euro, which is essentially related to Celtejo stocks. Note that CPK (unit closed in December 2008) was fully supplied by Celtejo pulp; 27 May 2009 Altri communicated the results of the 1st quarter of Operating income amounted, approximately, 62.8 million Euro which represents a 18% decrease comparing with the 1 st quarter of EBITDA exceeded 9.5 million Euro, a 52% decrease compared with the 1 st quarter of 2008 (20 million Euro). 1 st Semester

7 DIRECTORS REPORT 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 accounting impacts. The planned reorganization implies the splitting 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 is part of a focusing and business transparency strategy, aiming at giving greater visibility to each area and increasing market perception of value. In January 2009 Altri announced the shutdown of its kraft sack paper unit (CPK Papel Kraft, S.A.). This fact allowed Altri to reinforce its strategic position in its core business: forest management and pulp production. Silvicaima Forest Management 99.82% 50%* Celbi Pulp mill Celtejo Pulp mill Caima Pulp mill EDP Bioeléctrica Biomassa * Joint venture com EDP Paper and Pulp The Group currently operates in this sector through Celulose do Caima, S.G.P.S., S.A., which, in its turn, holds participations in: - 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; - Silvicaima Sociedade Silvícola do Caima, S.A. (Constância), owner and manager of the Group s forestry resources; - EDP Produção Bioeléctrica, S.A. support in the Group energetic needs and expansion of its activity in a strategic sector. 1 st Semester

8 DIRECTORS REPORT Altri SGPS Caima SGPS Inflora Altri, SL Celbi Altri Sales Invescaima Viveiros do Furadouro Unipessoal Celbinave 33% 40% Silvicaima Caima Indústria Sócasca Captaraíz Operfoz 60% 5% Pedro Frutícola Celtejo 99.82% Caima Energia 45% EDP Bioeléctrica CPK Altri Energias Renováveis, SA Sosapel During the 1st half of 2009 occurred a renewal in the demand and a decline in the pulp market price, reaching an historic minimum in April. A reduction in the offer was materialized by the announce of temporary stoppages and the permanent retirement of inefficient producers. Therefore, in the 1st quarter of 2009 were publicly announced the closure of about 1.5 million tonnes (mainly in Scandinavia) of pulp production similar to that produced by Altri, totalizing 2.7 million tonnes in the period May March These actions contributed to the European ports pulp stocks reduction, allowing the announce in late April of an increase in pulp price (from 480 USD/ton to 500 USD/ton). It was announced two additional 30 USD/ton increases in June and July (to 530 USD/ton and to 560 USD/ton). In late August BEKP pulp price was increased again (increase of 40 USD/ton to 600 USD/ton, effective from 1 September 2009). Pulp price evolution clearly illustrates the verified demand recovery. The pulp stock level in European ports (indicator to determine the evolution in demand) reached in July the lower value since 2000 (according to Europulp 21 August 2009). 1 st Semester

9 DIRECTORS REPORT Moreover, in consequence of the financial crisis, capacity expansion and new units projects were postponed or abandoned. The market price of pulp BEKP (according to PIX) at the end of the 1st half of 2009 stood at 506 USD/ton, corresponding to 356 EUR/ton. The BEKP average price was around 513 USD/ton, which corresponds to an average price of pulp BEKP of 385 EUR/ton. Euro Evolution of the pulp prices in the international market Amounts per ton USD , , ,00 520,00 500,00 480,00 "BHKP PIX (Euros)" "BHKP PIX (USD) , Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun ,00 CELBI GROUP Celbi reached during the 1 st semester of 2009 sales amounting to thousand tons of pulp, volume 0.4% above the same period of The pulp production reached thousand tons, 2.6% below the amount in homologous period in CAIMA GROUP In the first semester of 2009, the sales volume amounted to 56.7 thousand tons, representing a 1.3% decrease compared to the first semester of During the first semester of 2009, Caima Group produced 58.5 thousand tons of pulp, volume 0.4% above the preceding year and that configures an optimal exploration of the mill s production capacity. Silvicaima developed an important role as supplier of other Group companies, being able to Group achieve, jointly with other outside suppliers, comfortable stock levels by the end of the first semester. 1 st Semester

10 DIRECTORS REPORT CELTEJO GROUP In the first semester of 2009 the sales volume amounted to 71.2 thousand tons of pulp, corresponding to an increase of 81.8%, when compared to the homologous period of With CPK shutdown the Group ceased kraft sack paper production. In the first semester, the pulp production amounted to 56.3 thousand tons, 22.7% above to the one recorded in the first semester of Thus, in the 1st half of 2009, Altri produced, approximately, thousand tonnes of pulp (270.5 thousand tonnes of pulp were produced in the same period in 2008). The Group foresee to increase its production capacity in his units, with particular emphasis on Celtejo and Celbi. Altri estimated that in 2010 will reach a total production capacity of 910 thousand tons of pulp, which puts the company among the 10 largest in the world in the area of eucalyptus pulp. During the semester, all Group mills scrupulously complied with the environmental legislation, namely regarding the parameters of liquid and gas emissions, as well as the management and recycling of solid waste. 1 st Semester

11 DIRECTORS REPORT FINANCIAL REVIEW The consolidated financial information of Altri for the first semester of 2009 and its comparison with the same period of 2008, was prepared in accordance with the recognition and measurement principles defined by the International Financial Reporting Standards as adopted by the European Union. Actually, Altri define the forest management and pulp production as its core business. However, in the 1st half of 2008, Altri developed its activity also in the steel (FRamada) and paper industrial business (CPK). FRamada demerger process took place (June 2008) and CPK unit was closed (December 2008). Therefore, FRamada and CPK activities in 2008 are recorded under the caption Profit for the period from discontinued operations. Despite CPK closure in December 2008, there were results in the 1st half of 2009 related to assets outflow. These results were also recorded under the caption Profit for the period from discontinued operations. Therefore, the key data and consolidated activity Group indicators can be summarized as follows: 1H09 1H08 1H09/1H08 Operating income % Cost of sales % External supplies and services % Payroll expenses % Provisions and impairment losses % Other operating expenses % Total operating expenses (a) % EBITDA (b) % Margin 9.7% 25.6% pp Amortization and depreciation % EBIT (c) % Margin -1.2% 16.2% pp Profits related with assets classified as held for sale Gains and losses in associated companies % Gains and losses in other investments % Financial expenses % Financial income % Financial profit % Profit before income tax Income tax Minority interests Profit after income tax Profit for the period from discontinued operations % Consolidated net profit (amounts in thousand Euros) (a) Operating costs excluding amortization (b) EBITDA = Operating profit + Amortization and depreciation (c) EBIT = Operating profit 1 st Semester

12 DIRECTORS REPORT In the 1st half of 2009 the operating income was million Euro, which represents a decrease of 8% in comparison with the same period in This decrease was related with the international market price of pulp BEKP decrease. During the 1st half of 2009 were sold, approximately, 300 thousand tonnes of pulp (13% increase in comparison with the 265 thousand tonnes in the 1st half of 2008). This fact is explained by the global recovery of the pulp demand and by production expansion capacity (related with bleaching and expansion capacity projects at Celtejo). This increase in sales capacity implied an increase in variable costs. Moreover, Celtejo s start up costs (that occurred in April) contributed to an increase in fixed costs. Thus, 1st half of 2009 total operation expenses, excluding amortizations, amounted million Euro, corresponding to a 12% increase comparing with the same period in The decrease in BEKP pulp price was greater than the manufacturing costs reduction in the 2nd quarter of 2009, affecting EBITDA margin. It should be stressed that BEKP pulp price reached an historic minimum in April 2009 (480 USD/ton). EBITDA for the first six months of 2009 was, approximately, 13.8 million Euro, compared with approximately 39.2 million Euro in 2008 (less 65%). EBITDA margin was 9.7%. Operating profit (EBIT) reached, approximately, -1.6 million Euro. Amortization amounted 15.5 million Euro (7% increase in comparison with the same period in 2008). The net loss from continued operations after minority interests, of forestry and pulp production areas was, approximately, million Euro. Total investment (CAPEX) reached 59.7 million Euro. The main responsible for the investment made was Celbi with, approximately, 55 million Euro. The Celbi s project double its pulp production capacity is on time and on budget and in conclusion stage. Currently, the mill is able to produce 600 thousand tonnes/year of bleached eucalyptus pulp. The mill is in an intermediate stage of the learning curve and the conclusion is expected to occur in the last quarter of Altri s nominal net debt as of June 30, 2009 was million Euro. It should be stressed that all the financing needs are totally assured. As of June 30, 2009 Altri have million Euro in cash and equivalents and, approximately, 68.9 million Euro of financing plafond not in use. SECOND SEMESTER 2009 OUTLOOK It is expected that in the 2nd semester of 2009, pulp price evolution clearly illustrates the demand recovery, following on the last days positive evolution. Additionally, shall also contribute positively to Group s performance, the investment in industrial units of Celbi and Celtejo, allowing to achieve in 2010 a total production capacity of 910 thousand tons of pulp. 1 st Semester

13 DIRECTORS REPORT CORPORATE GOVERNANCE In compliance with the legal guidelines, the Company is exempted from presenting information related with Corporate Governance, as the presentation of this information is only mandatory jointly with the annual Directors Report. LEGAL MATTERS Treasury stock Pursuant to the requirements of article 66 of the Commercial Company Code ( Código das Sociedades Comerciais ), the Directors inform that as of 30 June 2009 Altri and its subsidiaries had no treasury stock and did not acquire or sell any treasury stock 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 30 June 2009, the held shares were as follows: Shares held Name Paulo Jorge dos Santos Fernandes Pedro Macedo Pinto de Mendonça Domingos José Vieira de Matos João Manuel Matos Borges de Oliveira (a) Laurentina da Silva Martins 0 (a) 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 2009, the Statutory Auditor, the members of the Statutory Audit Board and of the Shareholders General Meeting held no shares of the Company. 1 st Semester

14 DIRECTORS REPORT 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: Shares Direct % of the Exceeding 2% of the voting rights held voting rights Pedro Miguel Matos Borges de Oliveira % Shares Direct % of the Exceeding 5% of the voting rights held voting rights UBS AG ZURIQUE % CADERNO AZUL SGPS, S.A. (a) % PROMENDO SGPS, S.A. (b) % Domingos José Vieira de Matos % Paulo Jorge dos Santos Fernandes % Ana Rebelo Mendonça Fernandes (c) % Bestinver Gestión, SGIIC, S.A % (a) 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) 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 7,000,000 shares of Altri - SGPS, SA held by the company Promendo - SGPS, SA mentioned in (b) also 1,162,000 shares of Altri - SGPS, SA held by the company Promendo Promoções Empresariais SA, for which she is manager and shareholder, holder of 68% of their capital. Thus, in legal terms, are considered attributable to Ana Rebelo Fernandes Mendonça, a total of 14,893,891 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. 1 st Semester

15 DIRECTORS REPORT 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, 26th August 2009 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 1 st Semester

16 Statement Under the terms of Article 246, paragraph 1, c) of the Securities Code The signatories individually declare that, to their knowledge, the Management Report, the Individual Financial Statements prepared in accordance with generally accepted accounting principles in Portugal and the Consolidated Financial Statements prepared meeting 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 ) at 30 June 2009 and that the semi-annual Management Report faithfully describes the business evolution and position of Altri and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties for the following six months. Porto, 26 August 2009 Paulo Jorge dos Santos Fernandes President of the Board of Directors João Manuel Matos Borges de Oliveira Member of the Board of Directors Pedro Macedo Pinto de Mendonça Member of the Board of Directors Domingos José Vieira de Matos Member of the Board of Directors Laurentina da Silva Martins Member of the Board of Directors

17 ALTRI, SGPS, S.A. CONSOLIDATED BALANCE SHEETS AS OF 30 JUNE 2009 AND 31 DECEMBER 2008 (Translation of financial statements originally issued in Portuguese Note 19) ASSETS Notes NON CURRENT ASSETS: Biological assets Tangible assets Goodwill Intangible assets Investments in associated companies Investments available for sale Other non current assets Deferred tax assets Total non current assets CURRENT ASSETS: Inventories Customers Other debtors State and other public entities Other current assets Derivatives Investments recorded at fair value through profit and loss Cash and cash equivalents Assets classified as held for sale or in discontinuation Total current assets Total assets SHAREHOLDERS' FUNDS AND LIABILITIES SHAREHOLDERS' FUNDS: Share capital Legal reserve Other reserves Consolidated net profit ( ) Total shareholders' funds attributable to the parent company's shareholders Minority interests Total Shareholders' funds LIABILITIES: NON CURRENT LIABILITIES: Bank loans Other loans Other non current creditors Other non current liabilities Deferred tax liabilities Provisions Total non current liabilities CURRENT LIABILITIES: Bank loans Other loans - short term Suppliers Other current creditors State and other public entities Other current liabilities Derivatives Liabilities associated with assets classified as held for sale or in discontinuation Total current liabilities Total shareholders' funds and liabilities The accompanying notes form an integral part of the consolidated financial statements. The Board of Directors

18 ALTRI, SGPS, S.A. CONSOLIDATED STATEMENTS OF PROFIT AND LOSS BY NATURE FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2009 AND 30 JUNE 2008 (Translation of financial statements originally issued in Portuguese - Note 19) SEMESTER ENDED QUARTER ENDED Notes Continuing operations Operating income Sales Services rendered Other operating income Total operating income Operating expenses Cost of sales External supplies and services Payroll expenses Amortisation and depreciation Provisions and impairment losses Other operating expenses Total operating expenses Operating profit ( ) ( ) Profits related with assets classified as held for sale - ( ) - (14.359) Gains and losses in associated companies 12 ( ) ( ) ( ) Gains and losses in other investments ( ) (31.047) Financial expenses 12 ( ) ( ) ( ) ( ) Financial income Profit before income tax ( ) ( ) Income tax ( ) ( ) Profit after income tax ( ) ( ) Attributable to: Parent company's shareholders ( ) ( ) Minority interests 8 (32.040) (2.863) Discontinued operations Profit for the period from discontinued operations Attributable to: Parent company's shareholders Minority interests Consolidated net profit ( ) ( ) Attributable to: Parent company's shareholders ( ) ( ) Minority interests 8 (32.040) (2.863) ( ) ( ) Earnings per share Continuing operations Basic 13 (0,13) 0,05 (0,08) 0,02 Diluted 13 (0,13) 0,05 (0,08) 0,02 Continuing and discontinued operations Basic 13 (0,12) 0,09 (0,06) 0,03 Diluted 13 (0,12) 0,09 (0,06) 0,03 The accompanying notes form an integral part of the consolidated financial statements. The Board of Directors

19 ALTRI, S.G.P.S., S.A. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2009 AND 30 JUNE 2008 (Translation of financial statements originally issued in Portuguese - Note 19) SEMESTER ENDED QUARTER ENDED Notes Consolidated net profit ( ) ( ) Conversion reserves - ( ) - ( ) Hedging reserves 11 ( ) ( ) Other comprehensive income ( ) ( ) Total comprehensive income for the period ( ) ( ) Attributable to: Parent company's shareholders ( ) ( ) Minority interests 8 (32.040) (2.863) The accompanying notes form an integral part of the consolidated financial statements. The Board of Directors

20 ALTRI, S.G.P.S., S.A. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2009 AND 30 JUNE 2008 (Translation of financial statements originally issued in Portuguese Note 19) Notes Attributable to the parent company's shareholders Share capital Legal reserve Other reserves Net profit Total Hedging Conversion reserves reserves Other Minority interests Total shareholders' funds Balance as of 1 January ( ) ( ) Appropriation of the consolidated net profit of 2007: Transfer to legal reserves and retained earnings ( ) Distributed dividends ( ) ( ) - ( ) Demerger of F. Ramada - Aços e Indústrias, S.A ( ) - ( ) - ( ) Change in reserves: Conversion reserves ( ) - - ( ) - ( ) Hedging reserves Others (2.361) - (2.361) - (2.361) Acquisition of share capital of Sosapel - Soc. Comercial de Sacos de Papel, Lda (28.877) (28.877) Net consolidated profit for the period ended 30 June Balance as of 30 June Balance as of 1 January Appropriation of the consolidated net profit of 2008: Transfer to legal reserves and retained earnings ( ) Change in reserves: Hedging reserves ( ) ( ) - ( ) Others (13.838) - (13.838) - (13.838) Acquisition of additional share capital of Celtejo - Empresa de Celulose do Tejo, S.A ( ) ( ) Net consolidated profit for the period ended 30 June ( ) ( ) (32.040) ( ) Balance as of 30 June ( ) The accompanying notes form an integral part of the consolidated financial statements. The Board of Directors

21 ALTRI, SGPS, S.A. CONDENSED CONSOLIDATED CASH-FLOW STATEMENT FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2009 AND 30 JUNE 2008 (Translation of financial statements originally issued in Portuguese - Note 19) SEMESTER ENDED QUARTER ENDED Notes Operating activities: Cash flow from operating activities (1) Investment activities: Collections relating to: Investments Tangible assets Interest and similar income Investment subsidies Payments relating to: Investments 1 ( ) ( ) ( ) Intangible assets (47.671) (56.437) (45.595) (50.222) Tangible assets ( ) ( ) ( ) ( ) Biological assets ( ) ( ) ( ) ( ) Cash flow from investment activities (2) ( ) ( ) ( ) ( ) Financing activities: Collections relating to: Loans obtained Loans granted Payments relating to: Lease contracts (30.666) ( ) (13.206) (55.198) Interest and similar costs ( ) ( ) ( ) ( ) Dividends - ( ) - ( ) Loans obtained ( ) ( ) ( ) ( ) Cash flow from financing activities (3) ( ) Cash and cash equivalents at the beginning of the period Effect of change in consolidation perimeter - ( ) - ( ) Variation of cash and cash equivalents: (1)+(2)+(3) ( ) Cash and cash equivalents at the end of the period The accompanying notes form an integral part of the consolidated financial statements. The Board of Directors

22 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED STATEMENT OF CASH-FLOWS FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) 1. PAYMENTS/COLLECTIONS RELATING TO INVESTMENTS During the period ended 30 June 2009 the payments relating to investments were as follows: Acquisitions Transaction amount Amount paid/collected EDP Produção Bioeléctrica, S.A. (a) 4,720,000 4,720,000 Socasca Recolha e Comércio de Recicláveis, S.A. (b) 5,118, ,000 Celtejo Empresa de Celulose do Tejo, S.A. (c) 91,819 91, ,930,743 4,961,819 ======== ======== (a) Increase of loans granted; (b) It was paid until 31 December 2008 the amount of 4,808,924 Euro; (c) Acquisition of an additional part representing 0.229% of the share capital. 2. BREAKDOWN OF CASH AND ITS EQUIVALENTS Cash and its equivalents presented in the condensed consolidated statement of cash flows for the period and the reconciliation between that amount and the amounts shown in the balance sheet, are as follows: Cash 30,962 31,727 Bank deposits repayable on demand 102,760, ,213, ,791, ,245,489 Bank overdrafts (3,640,871) (2,169,721) Cash and its equivalents 99,150, ,075,768 The Board of Directors

23 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) 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 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. 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 ). The relevant date for the production of juridical and accounting effects of this operation was 1 March In the year ended at 31 December 2008, it was materialized a business reorganization, which involved the demerger process of the equity share held at F. Ramada - Aços e Indústrias, S.A., representative of the voting rights of the mentioned company. The restructuring involved a simple demerger operation predicted on item 1.a), article 118, of the Commercial Companies Code ( Código das Sociedades Comerciais ), for the constitution of a new company F. Ramada Investimentos, SGPS, S.A. ( Ramada Investimentos ). Due to this process, the company s patrimonial share related to the equity holdings management business unit for the sector of steel and storage systems was demerged to Ramada Investimentos, including all other resources (such as human resources, assets and liabilities) related to those companies activities. Demerger public deed was signed at 16 April 2008 and the relevant date for the production of effects of this operation was 1 June Altri is the parent company of a group of companies listed in Note 4 known as Altri Group, and its main activity is the management of investments mainly in the industrial sector. The Group focus its operations in the production of pulp and paper through the Celbi, Celtejo and Caima Groups. With the demerging operation of F. Ramada 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) for which the segmental information mentioned in Note 15 is limited by this. The financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting. It was adopted for the first time the IAS 1 Presentation of financial statements reviewed version (effective in periods beginning on or after 1 January 2009). This adoption led to a change of some disclosures without impact in Altri financial position and profit. 2. BASIS OF PRESENTATION AND MAIN ACCOUNTING POLICIES The financial statements as of 30 June 2009 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 balance sheet, statements of profit and loss by nature, statement of comprehensive income, statement of changes in shareholders funds and statement of cash flows as well as 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 2008, except for the IAS 1 reviewed version first time application above mentioned

24 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) 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 periods. 4. INVESTMENTS 4.1 INVESTMENTS IN GROUP COMPANIES The companies included in the consolidated financial statements by the full consolidation method, their headquarters, percentage participation held and activity developed as of 30 June 2009 and 31 December 2008 are as follows: Company Head Office Percentage Held Activity Parent-Company: Altri, SGPS, S.A. Oporto Investment management Caima / Celtejo / Celbi Group Celulose do Caima, SGPS, S.A. Lisbon Investment management Caima Indústria de Celulose, S.A. Lisbon Production and commercialisation of pulp Silvicaima Sociedade Silvícola do Caima, S.A. Lisbon Sylvan exploration Caima Energia Empresa de Gestão e Exploração de Energia, S.A. Lisbon Production of energy Invescaima Investimentos e Participações, SGPS, S.A. Lisbon Investment management Inflora Sociedade de Investimentos Florestais, S.A. Lisbon Sylvan exploration Sócasca Recolha e Comércio de Recicláveis, S.A. Águeda Commercialisation of recycled products Celtejo Empresa de Celulose do Tejo, S.A. Vila Velha de Ródão 99.82% 99.59% Production and commercialisation of pulp CPK Companhia Produtora de Papel Kraftsack, S.A. (b) Vila Velha de Ródão 99.82% 99.59% Production and commercialisation of paper Altri - Energias Renováveis, SGPS, S.A. Lisbon 99.82% 99.59% Investment management Sosapel Sociedade Comercial de Sacos de Papel, Lda. Vila Velha de Ródão 99.82% 99.59% Commercialisation of pulp Celbi Celulose da Beira Industrial, S.A. Figueira da Foz Production and commercialisation of pulp Celbinave Tráfego e Estiva SGPS, Unipessoal, Lda. Figueira da Foz Freightage of ships Viveiros do Furadouro Unipessoal, Lda. Óbidos Production of plants in nurseries and services related with forests and landscapes Altri, Participaciones Y Trading, S.L. Madrid, Spain Investment management Altri Sales, S.A. Nyon, Switzerland Commercialisation of pulp Pedro Frutícola, Sociedade Frutícola, Lda. Constância Agriculture production Captaraíz Unipessoal, Lda. Lisbon Property bying and selling Ramada Group F. Ramada Aços e Indústrias, S.A. Ovar - (a) Steel commercialisation F. Ramada Produção e Comercialização de Estruturas Metálicas de Armazenagem, S.A. Ovar - (a) Production and commercialisation of storage systems F. Ramada II, Imobiliária, S.A. Ovar - (a) Real Estate F. Ramada, Serviços de Gestão, Lda. Ovar - (a) Administration and management services Universal Afir - Aços, Máquinas e Ferramentas, S.A. Oporto - (a) Steel commercialisation BPS Equipements, S.A. Paris, France - (a) Commercialisation of storage systems Storax Racking Systems, Ltd. Bromsgrove, United Kingdom - (a) Commercialisation of storage systems Storax Benelux, S.A. Belgium - (a) Commercialisation of storage systems (a) company demerged in 2008 (Note 5); (b) company whose assets and liabilities were classified in 2008 as "in discontinuation (Note 4.5). The above companies were included in the consolidated financial statements in accordance with the full consolidation method

25 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) 4.2 INVESTMENTS IN ASSOCIATED COMPANIES The associated companies, included in the consolidated financial statements in accordance with the equity method, the percentage participation held and the activity developed as of 30 June 2009 and 31 December 2008, can be detailed as follows: Company Percentage held Activity EDP Produção Bioeléctrica, S.A. 50% 50% Energy production and trading Operfoz Operadores do Porto da Figueira da Foz, Lda % 33.33% Harbor operations Ródão Power - Energia e Biomassa do Ródão, S.A. (a) 50% 50% Energy production and trading (a) company sold to the associated company EDP Produção Bioeléctrica, S.A. during 2008 The book value, share capital and net profit for the year ended on 30 June 2009 for these associated companies were as follows: Company Book value (a) Asset Equity Net profit EDP Produção Bioeléctrica, S.A. 21,729, ,557,455 4,017,051 (973,232) Operfoz Operadores do Porto da Figueira da Foz, Lda. 272,349 3,730, ,039 81,756 Ródão Power - Energia e Biomassa do Ródão, S.A. - 22,531,344 (296,808) (336,449) 22,002,024 (a) including loans granted. 4.3 INVESTIMENTS AVAILABLE FOR SALE The caption Investments available for sale as of 30 June 2009 and 31 December 2008 can be detailed as follows: Book value Buildings 726, ,522 Others 42,808 42, , , INVESTMENTS RECORDED AT FAIR VALUE TROUGH PROFIT AND LOSSES The amount included in the caption Investments recorded at fair value through profit and loss as of 30 June 2009 refers to shares of companies listed in stock exchange markets and are recorded in accordance with its market value as of that date (Note 12). 4.5 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION In the end of December 2008 the industrial paper unit of CPK - Companhia Produtora de Papel Kraftsack, S.A, was closed so its assets and liabilities were classified as in discontinuation (net from intragroup operations)

26 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) The detail of assets and liabilities from CPK in discontinuation as of 30 June 2009 and 31 December 2008 are as follow: Tangible assets - 2,516,063 Intangible assets - 3,194 Inventories 639,218 5,827,543 Customers 1,874,721 4,419,345 Other debtors 463, ,842 Other current assets 1,578,497 1,542 Cash and cahs equivalents - 1,500 Assets classified as in discontinuation 4,555,928 13,576,029 Provisions (49,500) (3,400,000) Suppliers (178,824) (1,728,199) Other payables (178,850) (101,799) Other current liabilities (12,571) (628,216) Liabilities associated with assets classified as in discontinuation (419,745) (5,858,214) Assets net from liabilities in discontinuation 4,136,183 7,717,815 During the period ended 30 June 2009 the net loss of CPK Companhia Produtora de Papel Kraftsack, S.A. (net from intragroup operations) amounted to 1,076,768 Euro ((752,764) Euro in 31 December 2008), which is presented in the Income Statement caption Profit for the period from discontinued operations. 5. CHANGES IN THE GROUP COMPANIES At 16 April 2008 was signed the F. Ramada Aços e Indústrias, S.A. demerger public deed. 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. The demerger process originated the constitution of a new company, F. Ramada Investimentos, SGPS, S.A. ( Ramada Investimentos ) and the relevant date for the production of effects of this operation was 1 June 2008, the date when F. Ramada Aços e Indústrias, S.A. ( F. Ramada - Aços ) and its subsidiaries were no longer included in the consolidated financial statements of Altri, SGPS, S.A. As a consequence of the demerger process, F. Ramada Aços and its subsidiaries contributes during five months to the consolidated income statement of Altri, SGPS, S.A., have been classified as Discontinued Operations, according to IFRS 5 Non Current Assets Held For Sale and Discontinued Operations. The impacts of the Ramada Aços and its subsidiaries net assets demerger process on the consolidated balance sheet on the 1st of June 2008 (Demerger date) were as follows: Demerger date Tangible and intangible assets 84,899,532 Goodwill 2,199,238 Deferred tax assets 2,681,528 Inventories (b) 42,408,422 Derivatives 626,696 Cash and cash equivalents 39,668,476 Other assets (a) 94,587,310 Loans (110,070,311) Provisions (137,084) Deferred tax liabilities (401,714) Other liabilities (116,987,460) Total demerged 39,474,

27 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) (a) The amount of the caption Other assets is net of impairment losses in investments of 85,886 Euro and impairment losses in other current assets of 17,071,176 Euro. (b) The net amount of the caption Inventories corresponds to a gross amount of 42,781,708 Euro and to impairment losses in inventories of 373,286 Euro. The impacts of the demerger process on the consolidated income statement were as follows: Demerger date Sales and services rendered 49,278,067 Other operating income 521,685 Cost of sales (26,972,174) Other operating expenses (19,489,828) Financial loss (1,556,007) Income before tax 1,781,743 Income tax (470,208) Net profit 1,311,535 Additionally, during the period ended in 30 June 2009 the Group acquired an additional percentage of 0.229% of Celtejo Group share capital for 91,819 Euro which was fully payed. 6. CURRENT AND DEFERRED INCOME 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), except when there has been tax losses, 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 tax returns of Altri and its subsidiary and associated companies for the years 2005 to 30 June 2009 are still subject to review. The Board of Directors of Altri believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 30 June The movement occurred in deferred tax assets and liabilities in the period ended in 30 June 2009 were as follows: 2009 Deferred tax assets Deferred tax liabilities Opening balance as of 1 January ,983,234 3,914,691 Effect on the profit and loss statement: Tax losses carried forward 4,045,954 - Other effects (1,840,859) (16,639) Effect on shareholders' funds: Fair values of derivatives (Note 11) 409,973 (2,217,815) Closing balance as of 30 June ,598,302 1,680,

28 ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2009 (Translation of notes originally issued in Portuguese Note 19) Deferred tax assets 2008 Deferred tax liabilities Opening balance as of 1 January ,925,730 1,884,051 Effect on the profit and loss statement: Harmonization of depreciation rates 670,696 - Other effects 316,172 (12,076) Effect on shareholders' funds: Fair values of derivatives (Note 11) (249,898) 1,028,678 Demerger (Note 5) (2,681,528) (401,714) Closing balance as of 30 June ,981,172 2,498, SHARE CAPITAL As of 30 June 2009 the Company s fully subscribed and paid up capital consisted of 102,565,836 shares with a nominal value of 25 cents of Euro each. As of 30 June 2009 there were no entities holding more than 20% of the subscribed share capital. 8. MINORITY INTERESTS The movements occurred under this caption during the periods ended 30 June 2009 and 2008 were as follows: Opening balance 283, ,494 Acquisition of 20% of Sosapel - Sociedade Comercial de Sacos de Papel, Lda. - (28,877) Acquisition of 0.23% of Celtejo - Empresa de Celulose do Tejo, S.A. (Note 5) (140,931) - Net profit attributable to minority interests (32,040) 93,631 Closing balance 111, ,