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DIRECTORS’ REPORT Consolidated Accounts 1 st semester of 2012

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DIRECTORS’ REPORT

Consolidated Accounts

1st semester of 2012

RELATÓRIO DO CONSELHO DE ADMINISTRAÇÃO 2010

2

DIRECTORS’ REPORT

1st SEMESTER 2012

INDEX

INTRODUCTION .......................................................................................................................................... 3

STOCK EXCHANGE EVOLUTION ............................................................................................................... 5

GROUP’S ACTIVITY .................................................................................................................................... 7

FINANCIAL REVIEW .................................................................................................................................... 9

SECOND SEMESTER 2012 OUTLOOK .................................................................................................... 12

CORPORATE GOVERNANCE ................................................................................................................... 15

LEGAL MATTERS ...................................................................................................................................... 16

DECLARATION OF RESPONSIBILITY ...................................................................................................... 18

CLOSING REMARKS ................................................................................................................................. 18

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DIRECTORS’ REPORT

1st SEMESTER 2012

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 2012.

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.

Over the past years, Altri invested in Portugal about 465 million euro, mainly on Celbi and Celtejo unities. Currently, Altri owns three pulp mills in Portugal with a total capacity above 850,000 tonnes/year of bleached eucalyptus pulp in 2011. The projects, which are in the conclusion phase of the learning curve, will increase the nominal production capacity of Altri close to 900 000 tonnes/year.

Currently, Altri manages over 85.000 hectares of forest in Portugal. The company obtained certification from the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged 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.

Until June 2008, Altri had another industrial activity through the F. Ramada, which was devoted to retail steel and development of industrial solutions for storage systems. In June 2008 took place the split of the F. Ramada. The strategic rationale of this operation lies in focusing exclusively Altri on their core business, forest management and production of pulp.

Since the beginning of its activity Altri carried out various acquisitions (Celtejo in 2005 and in 2006 Celbi) that allowed Altri to reinforce its position in its operating markets and by the development of a set of expansion activity projects.

For a better valuation of forest resources, Altri acquired in 2005, 50% of EDP Produção - Bioeléctrica, S.A., for, in partnership with EDP, producing electricity from forest biomass. This company is leader in its market segment with a share licenses, to the production of electricity by forest biomass, of 50%.

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DIRECTORS’ REPORT

1st SEMESTER 2012

Altri’s structure as of 30 June 2012 is as follows:

* Joint venture with EDP

EDP Bioeléctrica

Biomass

50%* 99.83%

Celbi Pulp mill

100%

Celtejo Pulp mill

100%

Caima Pulp mill

Altri Florestal Forest

management

100%

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DIRECTORS’ REPORT

1st SEMESTER 2012

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 in 2011 recovering from the deep recession observed in 2009. However, the economic

growth in 2011 was below that recorded in 2010, mainly due to a gradual economic slowdown since the middle of the

second quarter. This slowdown was the result of a combination of factors of persistent nature, particularly the

intensification of financial turbulence associated with sovereign debt crisis in the eurozone

The sovereign debt crisis contributed to weaken the global economic recovery. Domestic demand in major advanced

economies remained relatively weak as the result of the adjustment of balance sheets and debt reduction.

Subsequent to the consolidation of public finances, domestic demand grew at relatively low levels in most

economies.

In early 2012, the world economy showed signs of recovery, supported by calming financial markets due to the

adoption of the second package of financial assistance to Greece, together with the introduction of measures by the

European Central Bank. However, the resurgence of distrust of international investors about the sustainability of

public finances of Spain and Italy and the uncertainty prevailing on the resolution of sovereign debt crisis in the euro

area were reflected in increases in the yields of sovereign debt of some countries in the euro area, particularly Spain

and Italy, from March 2012.

The evolution of equity markets in 2011 was influenced largely by the development of sovereign debt crisis in the

euro area and the progressive deterioration of the outlook for global growth. Thus, after a first half of the year in

which the equity markets remained relatively stable since the end of 2010, the second half of 2011 proved to be

extremely adverse, especially for the banking sector.

In April 2012 the majority of the equity markets in advanced economies recovered from the losses recorded in 2011,

but only partially and with the exception of the European banking sector that continued to be hampered by the

uncertainty surrounding the sovereign debt crisis in the euro area.

Altri’s share price closed the first six months of 2012 at 1.045 Euros per share, representing a depreciation of 13% over the end of 2011. The market capitalization at the end of that period was 214.4 million euros. During the first half of 2012, Altri’s share price reached the maximum of 1.229 Euros per share and the minimum of 0.98 Euros per share, with 14.4 million shares traded.

0,6

0,7

0,8

0,9

1

1,1

1,2

1,3

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Stock Exchange Evolution

Altri

PSI20

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DIRECTORS’ REPORT

1st SEMESTER 2012

The main events that marked the evolution of the shares of the Company during the first half of 2012 can be

described chronologically as follows:

On March 7, the Group announced the financial performance of the year 2011, with a consolidated net

profit around 23 million Euros. The consolidated total revenues exceeded 486 million Euros, representing a

decrease of 2.8% compared to 2010. Consolidated EBITDA amounted to 113.1 million Euros, registering a

decrease of 29.3% compared to 2010. On that date shares’ closing price reached 1.123 Euros per share;

In a statement made on April 26 of 2012, Altri informed the market about the deliberations of the General

Meeting held on that date which approved, among others, the proposed distribution of dividends

corresponding to 0.02 Euros per share;

Through a statement made on May 9, the Group announced the results of the first quarter of 2012. During

this period the consolidated total revenues reached about 123 million Euros, representing a decrease of

about 2% over the same period of 2011. The EBITDA reached about 28.6 million Euros, which means a

decrease of about 12% over the first quarter of 2011.

0,6

0,7

0,8

0,9

1

1,1

1,2

1,3

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Altri's share price

Altri

07-Mar:Earnings announcement 2011

09-May:Earnings announcement1Q12

26-Apr:Dividend announcement

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DIRECTORS’ REPORT

1st SEMESTER 2012

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 fulfil its energetic needs and expand its activity in a strategic sector, the Group holds a

participation of 50% of the share-capital of EDP Bioeléctrica.

Location of the industrial units of the Group Location of the centrals of energy production

Caima

12.8 MW

Celtejo

12.8 MW

Mortágua

8.6 MW

Celbi

27.9 MW

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DIRECTORS’ REPORT

1st SEMESTER 2012

Altri’s complete structure of participation as of 30 June 2012 is as follows:

Pulp market

The first semester of 2012, according to pulp BEKP price´s evolution, was characterized by a ascending behaviour,

which has reach its peak in May after the main world competitors have announced the pulp prices of 800 USD per

ton. Simultaneous, at the end of June 2012, the exchange rate EUR/USD evolution has contributed for pulp prices to

achieve 626 EUR per ton.

On average, the price registered in the first semester of 2012 was 735 USD/ton (567€/ton). In the second quarter of

that year, the average price recorded amounted to 772 USD/ton (600€/ton), corresponding to a growth of 10% and

13%, respectively, comparing to the average prices registered on the first three months of 2012.

Thus, according to data from the "Pulp and Paper Products Council" (PPPC) in the first six months of 2012, the level

of demand for bleached paper pulp increase 1.6%, to 26.7 million ton, while the supply grown about 0.8%, to 29

million ton, which means a shipment to capacity ratio of 92%.

This growth of 1.6% was due, almost exclusively, to the significant growth in demand from China, which registered a

rise of 15.2%.

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DIRECTORS’ REPORT

1st SEMESTER 2012

During the second quarter of 2012, there was as increase in the number of days of stock for the hardwood folders

producers, rising from 38 days in April to 40 days in June 2012. Nevertheless, in June 2011, Altri had 44 days of

stock.

According to the weekly index PIX, currently, the market prices of hardwood pulp is 763USD/ton (610€/ton).

Market price evolution in BEKP pulp in Europe since 1990 to the end of 2nd Q 2012 (EUR)

Source: Hawkins Wright

0

100

200

300

400

500

600

700

800

900

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DIRECTORS’ REPORT

1st SEMESTER 2012

FINANCIAL REVIEW

The consolidated financial information of Altri on the first half of 2012 and comparative information for 2011 have

been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in

accordance with International Accounting Standard 34 - Interim Financial Reporting.

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

The 2nd quarter of 2012 registered a record in sales and exports of pulp

Second quarter 2012 results are characterized by record pulp sales, either in terms of volume (242.8 thousand tons

sold) either in turnover (122.3 million euro) and, simultaneously, by a reinforcement of the operational efficiency,

which resulted in an increase in operating margins.

Total revenues of the second quarter of 2012 reached 143 million euro, representing a 15% increase compared with

total revenues recorded in the same period of 2011. Compared with the first quarter of 2012, total revenues up by

17%.

thousand euros2Q 2011 1Q 2012 2Q 2012

2Q12/2Q11

Var%

2Q12/1Q12

Var%

Sales 121.694 119.897 140.094 15,1% 16,8%

Services rendered 1.430 1.727 1.739 21,6% 0,7%

Other income 1.879 1.176 1.364 -27,4% 16,0%

Total revenues 125.003 122.800 143.197 14,6% 16,6%

Costs of sales 50.992 51.259 57.115 12,0% 11,4%

External supplies and services 31.740 34.952 36.346 14,5% 4,0%

Payroll expenses 8.389 6.974 9.633 14,8% 38,1%

Other expenses 3.130 1.025 2.080 -33,6% 102,9%

Total expenses (a) 94.251 94.210 105.174 11,6% 11,6%

EBITDA (b) 30.752 28.590 38.023 23,6% 33,0%

Margin 24,6% 23,3% 26,6% +2,0 pp +3,3 pp

Amortisation and depreciation 12.960 12.407 12.428 -4,1% 0,2%

EBIT (c) 17.792 16.182 25.595 43,9% 58,2%

Margin 14,2% 13,2% 17,9% -3,6 pp +4,7 pp

Gains and losses in associated companies and joint ventures 608 131 955 57,0% 631,8%

Financial expenses -10.008 -10.173 -9.529 -4,8% -6,3%

Financial income 1.537 1.651 2.009 30,7% 21,7%

Financial profit -7.862,6 -8.391,3 -6.564,5 -16,5% -21,8%

Profit before income tax 9.929 7.791 19.030 91,7% ss

Income tax -1.336 -1.436 -3.182 138,2% ss

Minority interests 3 1 0 ss s.s.

Profit for the period from discountinued operations attributable to

parent company's shareholders8.590 6.354 15.848 84,5% 149,4%

Profit for the period from discountinued operations -9 - - - ss

Consolidated net profit attributable to parent company's

shareholders8.581 6.354 15.848 84,7% 149,4%

(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

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DIRECTORS’ REPORT

1st SEMESTER 2012

In the second quarter of 2012, Altri produced about 229.1 thousand tons of pulp a 5% increase compared to 219.1

thousand tons of pulp produced in the second quarter of 2011.

Evolution of pulp production between 2Q 2011 and 2Q 2012 by industrial unit (thousands tons)

In terms of volumes, during the period under analysis, 243 thousand tons were sold, more than 7% than the pulp

sales made in the first quarter of 2012 and more than 22% than the pulp sales made in the same period of 2011.

In terms of turnover, pulp sales, in the second quarter of 2012, amounted to 122.3 million euro, a rise of 16%

compared to the second quarter of 2011 and of 20% compared to the first quarter of 2012.

In the second quarter of 2012, Altri exported about 224 thousand tons of pulp, which represents 92% of Altri’s total

sales. The amount of these exports reached 113.1 million euro. Both volumes and exported amounts posted a record

in quarterly terms.

Net revenues of energy associated with cogeneration and other forest components amounted to 7.3 million euro, a

20% decrease over this net revenue registered in the second quarter of 2011 (9.1 million euro). This decrease was

mainly motivated by the sharp rise in electric power costs, which were 33% higher compared with the same period of

2011.

Total costs, excluding depreciation, financial and tax amounted to 105.2 million euro, a 12% increase in relation to

the same period of the previous year.

The increase registered in the caption External Supplies and Services can be explained, mostly, by the referred

sharp rise in energy costs.

In Payroll expenses, during the second quarter, was recorded an amount higher than 2 million euro, related to a

restructuring process that was completed in the meanwhile. This amount can be considered as one off of the second

quarter of 2012.

143.741

27.745 30.371

167.305

52.448

23.034

Celbi Celtejo Caima

2Q 11 2Q 12

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DIRECTORS’ REPORT

1st SEMESTER 2012

EBITDA of 38 million euro and margin of 26.6%

EBITDA reached 38 million euro a 24% increase compared to the same period last year and an increase of about

33% compared to the first quarter of 2012.

Operating profit (EBIT) was about 25.6 million euro, which corresponds to a rise of about 44% compared to EBIT of

the second period of 2011 and a 58% increase compared to the EBIT recorded in the first quarter of 2012.

Net income reached 15.8 million euro in the second quarter of 2012, up 149% compared to the current’s year

previous quarter.

Net profit of the first semester of 2012 reaches 22 million euro (+25%)

thousand euros1S 2011 1S 2012

1S12/1S11

Var%

Sales 243.759 259.991 7%

Services rendered 2.471 3.466 40%

Other income 4.508 2.540 -44%

Total revenues 250.737 265.997 6,1%

Costs of sales 103.691 108.375 5%

External supplies and services 61.434 71.298 16%

Payroll expenses 15.929 16.606 4%

Provisions and impairment losses 0 0 -

Other expenses 6.624 3.105 -53%

Total expenses (a) 187.679 199.384 6,2%

EBITDA (b) 63.057 66.613 5,6%

Margin 25,1% 25,0% -0,1 pp

Amortisation and depreciation 26.376 24.836 -5,8%

EBIT (c) 36.681 41.777 13,9%

Margin 14,6% 15,7% +1,1 pp

Gains and losses in associated companies and joint ventures 357 1.086 204,0%

Financial expenses -19.252 -19.702 2,3%

Financial income 3.369 3.660 8,7%

Financial profit -15.525,9 -14.955,8 -3,7%

Profit before income tax 21.155 26.821 26,8%

Income tax -3.369 -4.618 37,1%

Minority interests 1 2 ss

Profit for the period from discountinued operations attributable to

parent company's shareholders17.786 22.202 24,8%

Profit for the period from discountinued operations 11 - -

Consolidated net profit attributable to parent company's

shareholders17.796 22.202 24,8%

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

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

(c) EBIT = Earnings before interest and taxes

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DIRECTORS’ REPORT

1st SEMESTER 2012

In year-half terms, total revenues grew 6.1% amounting to 266 million euro leading to an EBITDA of about 66.6

million euro, an increase of 6% compared to the same period in 2011. The net profit of the first six months of 2012

reached 22.2 million euro (+25%).

This growth pattern was mainly achieved through operating efficiency reinforcement, since that, during the first half of

2012, the average selling prices of pulp were 8% lower on a like for like basis.

Cash flow generated in the second quarter of 2012 of 16.2 million euro

Total investment made between March and June of 2012 amounted to 4.9 million euro. So, in the first six months of

2012, Altri through its forest and industrial units invested about 8 million euro.

The nominal remunerated debt net of cash and investments available for sale in June 30, 2012 amounted to 665.9

million euro, having reduced by 12.4 million compared to December 31, 2011. Regarding the net debt recorded in the

end of the first quarter of 2012 (682.1 million euro), the decrease amounted 16.2 million euro.

Financing needs are fully assured, holding the Group in cash and cash equivalents and investments available for

sale, as of 30 June 2012, 120.7 million euro. Additionally, Altri Group holds 36 million euro in available financing lines

not used.

Key balance sheet indicators

thousand euro 2011 2Q 2012 Var%

Biological assets 103.339,5 105.441,1 2%

Tangible assets 460.118,9 440.867,2 -4%

Goodw ill 265.531,4 265.531,4 0%

Others 33.057,5 43.517,3 32%

Total non current assets 862.047,3 855.357,0 -1%

Inventories 61.728,9 58.142,1 -6%

Customers 66.672,8 97.925,7 47%

Cash and cash equivalentes 112.746,9 106.577,4 -5%

Others 24.527,9 23.051,0 -6%

Total current assets 265.676,5 285.696,2 8%

Total assets 1.127.723,8 1.141.053,2 1%

Shareholders's equity and minority interests140.762,6 145.558,6 3%

Bank loans 11.875,0 10.000,0 -16%

Other loans 499.878,0 488.438,6 -2%

Reimbursable subsidies 38.893,9 33.808,5

Others 23.049,6 22.179,0 -4%

Total non current liabilities 573.696,5 554.426,1 -3%

Bank loans 157.121,7 150.027,0 -5%

Other current loans 127.658,5 134.049,7 5%

Reimbursable subsidies 8.784,0 14.400,2

Suppliers 66.608,8 68.709,2 3%

Others 53.091,6 73.882,4 39%

Total current liabilities 413.264,7 441.068,5 7%

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DIRECTORS’ REPORT

1st SEMESTER 2012

SECOND SEMESTER 2012 OUTLOOK

In September of 2012, the main industrial unit of Altri, Celbi, is going to make its annual stoppage for 10 days, which

will impact production volumes and sales of that month.

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DIRECTORS’ REPORT

1st SEMESTER 2012

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.

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DIRECTORS’ REPORT

1st SEMESTER 2012

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 2012 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 2012, 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) 20,570,091

Laurentina da Silva Martins 0

(a) – 20,570,091 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 2012, 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%

Norges Bank 4,149,572 2,02%

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DIRECTORS’ REPORT

1st SEMESTER 2012

Exceeding 5% of the voting rights

Shares

Held

Direct % of the voting

rights

PROMENDO – SGPS, S.A. (a) 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 (b) 13,463,782 6,56%

Bestinver Gestión S.A., SGIIC 13,382,984 6,52%

(a) 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.

(b) 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.

Exceeding 10% of the voting rights

Shares

Held

Direct % of the voting

rights

CADERNO AZUL – SGPS, S.A. (a) 20,570,091 10,03%

(a) 20,570,091 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.

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DIRECTORS’ REPORT

1st SEMESTER 2012

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 financial

statements 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.

Oporto, August 29, 2012

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

ANNEX 1st SEMESTER 2012

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

Dec 2011 Acquisitions Disposals

Shares held at 30

Jun 2012

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 1.876.771 - 20.570.091

Domingos José Vieira de Matos 13.939.432 - - 13.939.432

Pedro Macedo Pinto de Mendonça 1.705.000 - - 1.705.000

João Manuel Matos Borges de Oliveira (allocation via CADERNO AZUL - SGPS, S.A.)

Date Nature Volume Price (€) Location No. Shares

31-Dec-2011 - - - - 18.693.320

9-Mar-2012 Purchase 91.328 1,124132 NYSE Euronex t Lisbon 18.784.648

12-Mar-2012 Purchase 100.000 1,109161 NYSE Euronex t Lisbon 18.884.648

13-Mar-2012 Purchase 76.800 1,103636 NYSE Euronex t Lisbon 18.961.448

14-Mar-2012 Purchase 73.446 1,105683 NYSE Euronex t Lisbon 19.034.894

15-Mar-2012 Purchase 20.000 1,108810 NYSE Euronex t Lisbon 19.054.894

16-Mar-2012 Purchase 80.000 1,114259 NYSE Euronex t Lisbon 19.134.894

19-Mar-2012 Purchase 61.202 1,107225 NYSE Euronex t Lisbon 19.196.096

20-Mar-2012 Purchase 42.877 1,117968 NYSE Euronex t Lisbon 19.238.973

21-Mar-2012 Purchase 26.650 1,134876 NYSE Euronex t Lisbon 19.265.623

22-Mar-2012 Purchase 30.212 1,151792 NYSE Euronex t Lisbon 19.295.835

23-Mar-2012 Purchase 104.768 1,145910 NYSE Euronex t Lisbon 19.400.603

27-Mar-2012 Purchase 147.410 1,163798 NYSE Euronex t Lisbon 19.548.013

28-Mar-2012 Purchase 200.000 1,161259 NYSE Euronex t Lisbon 19.748.013

29-Mar-2012 Purchase 252.968 1,161726 NYSE Euronex t Lisbon 20.000.981

30-Mar-2012 Purchase 520.000 1,158452 NYSE Euronex t Lisbon 20.520.981

27-Jun-2012 Purchase 16.250 1,018538 NYSE Euronex t Lisbon 20.537.231

28-Jun-2012 Purchase 9.284 1,023616 NYSE Euronex t Lisbon 20.546.515

29-Jun-2012 Purchase 23.576 1,032419 NYSE Euronex t Lisbon 20.570.091

30-Jun-2012 Purchase - - - 20.570.091

RELATÓRIO DO CONSELHO DE ADMINISTRAÇÃO 2010

ANNEX 1st SEMESTER 2012

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.

Oporto, August 29, 2012

____________________________________________

Paulo Jorge dos Santos Fernandes

Chairman of the Board of Directors

____________________________________________

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 2012 AND 31 DECEMBER 2011

(Translation of financial statements originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

ASSETS Notes 30.06.2012 31.12.2011

NON CURRENT ASSETS:

Biological assets 105.441.062 103.339.502

Tangible fixed assets 440.867.221 460.118.883

Investment property 528.817 534.226

Goodwill 265.531.404 265.531.404

Intangible assets 736.752 989.355

Investments in associated companies and joint ventures 4.2 8.121.281 7.034.600

Investments available for sale 4.3 14.144.404 10.093.935

Other non current assets 610.841 706.086

Deferred tax assets 7 19.375.171 13.699.322

Total non current assets 855.356.953 862.047.313

CURRENT ASSETS:

Inventories 58.142.076 61.728.889

Customers 97.925.730 66.672.815

Other debtors 8.070.932 9.087.406

State and other public entities 11.929.668 12.100.688

Other current assets 3.050.392 3.339.769

Cash and cash equivalents 6 106.577.412 112.746.939

Total current assets 285.696.210 265.676.506

Total assets 1.141.053.163 1.127.723.819

SHAREHOLDERS' FUNDS AND LIABILITIES 30.06.2012 31.12.2011

SHAREHOLDERS' FUNDS:

Share capital 8 25.641.459 25.641.459

Legal reserve 2.862.981 2.862.981

Other reserves 94.744.954 89.585.006

Consolidated net profit / (loss) 22.202.129 22.567.762

Total shareholders' funds attributable to the parent company's shareholders 145.451.523 140.657.208

Non controlling interests 107.080 105.421

Total Shareholders' funds 145.558.603 140.762.629

LIABILITIES:

NON CURRENT LIABILITIES:

Bank loans 9 10.000.000 11.875.000

Other loans 9 488.438.595 499.878.011

Reimbursable subsidies 9 33.808.499 38.893.917

Other non current creditors 699.819 699.819

Other non current liabilities 18.889.218 20.755.952

Deferred tax liabilities 7 440.279 444.167

Provisions 10 2.149.668 1.149.668

Total non current liabilities 554.426.078 573.696.534

CURRENT LIABILITIES:

Bank loans 9 150.027.025 157.121.714

Other loans 9 134.049.674 127.658.514

Reimbursable subsidies 9 14.400.165 8.784.029

Suppliers 68.709.223 66.608.803

Other current creditors 8.016.977 8.233.010

State and other public entities 3.077.552 1.736.137

Other current liabilities 30.506.596 28.370.465

Derivatives 11 32.281.270 14.751.984

Total current liabilities 441.068.482 413.264.656

Total shareholders' funds and liabilities 1.141.053.163 1.127.723.819

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

The official chartered of accounts The Board of Directors

SEMESTER ENDED QUARTER ENDED

Notes 30.06.2012 30.06.2011 30.06.2012 30.06.2011

Continuing operations

Sales 259.991.465 243.758.506 140.094.159 121.694.455

Services rendered 3.465.532 2.470.609 1.738.956 1.429.534

Other income 14 2.540.367 4.507.525 1.364.065 1.878.960

Cost of sales (108.374.785) (103.691.380) (57.115.382) (50.992.198)

External supplies and services (71.298.197) (61.434.318) (36.346.046) (31.739.665)

Payroll expenses (16.606.187) (15.929.215) (9.632.566) (8.389.275)

Amortisation and depreciation (24.835.791) (26.376.438) (12.428.368) (12.959.842)

Other expenses 15 (3.105.152) (6.624.265) (2.079.897) (3.130.296)

Gains and losses in associated companies and joint ventures 4.2 1.085.651 357.151 955.138 608.426

Financial expenses 12 (19.701.833) (19.251.636) (9.528.995) (10.008.151)

Financial income 12 3.660.355 3.368.541 2.009.353 1.537.114

Profit before income tax 26.821.425 21.155.081 19.030.417 9.929.061

Income tax (4.617.637) (3.368.702) (3.181.851) (1.335.969)

Net profit 22.203.788 17.786.379 15.848.566 8.593.092

Attributable to:

Parent company's shareholders 13 22.202.129 17.785.817 15.845.697 8.590.227

Non controlling interests 1.659 562 2.869 2.865

Discontinued operations

Profit for the period from discontinued operations 4.4 - 10.546 - (9.262)

Attributable to:

Parent company's shareholders - 10.546 - (9.262)

Non controlling interests - - - -

Consolidated net profit 22.203.788 17.796.925 15.848.566 8.583.830

Attributable to:

Parent company's shareholders 13 22.202.129 17.796.363 15.845.697 8.580.965

Non controlling interests 1.659 562 2.869 2.86522.203.788 17.796.925 15.848.566 8.583.830

Earnings per share:

Continuing operations

Basic 13 0,11 0,09 0,08 0,04

Diluted 13 0,11 0,09 0,08 0,04

Continuing and discontinued operations

Basic 13 0,11 0,09 0,08 0,04

Diluted 13 0,11 0,09 0,08 0,04

The official chartered of accounts The Board of Directors

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS

FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011

(Translation of financial statements originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

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 2012 AND 2011

(Translation of financial statements originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

SEMESTER ENDED QUARTER ENDED

Notes 30.06.2012 30.06.2011 30.06.2012 30.06.2011

Net consolidated profit / (loss) for the period 22.203.788 17.796.925 15.848.566 8.933.830

Change in fair value of cash flow hedging derivatives 7 and 11 (13.324.393) 4.879.879 (4.832.001) 3.838.967

Other comprehensive income (13.324.393) 4.879.879 (4.832.001) 3.838.967

Total comprehensive income for the period 8.879.395 22.676.804 11.016.565 12.772.797

Attributable to:

Shareholders' of the parent company 8.877.736 22.676.242 11.013.696 12.769.932Non controlling interests 1.659 562 2.869 2.865

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

The official chartered of accounts The Board of Directors

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011

(Translation of financial statements originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

Attributable to the parent company's shareholders

Other reserves

Notes Share capital Legal reserve

Hedging

reserves

Others

reserves and

retained

earnings

Total others

reserves Net profit Total

Non

controlling

interests

Total

shareholder's

funds

Balance as of 1 January 2011 25.641.459 2.862.981 (14.855.870) 39.387.315 24.531.445 62.014.069 115.049.954 112.365 115.162.319

Appropriation of the consolidated net profit of 2010 - - - 62.014.069 62.014.069 (62.014.069) - - -

Dividends - - - (4.102.633) (4.102.633) - (4.102.633) - (4.102.633)

Others - - - (21.890) (21.890) - (21.890) (2.995) (24.885)

Total comprehensive income for the period - - 4.879.879 - 4.879.879 17.796.363 22.676.242 562 22.676.804Balance as of 30 June 2011 25.641.459 2.862.981 (9.975.991) 97.276.861 87.300.870 17.796.363 133.601.673 109.932 133.711.605

Balance as of 1 January 2012 25.641.459 2.862.981 (7.685.749) 97.270.755 89.585.006 22.567.762 140.657.208 105.421 140.762.629

Appropriation of the consolidated net profit of 2011 - - - 22.567.762 22.567.762 (22.567.762) - - -

Dividends - - - (4.102.633) (4.102.633) - (4.102.633) - (4.102.633)

Others - - - 19.212 19.212 - 19.212 - 19.212

Total comprehensive income for the period - - (13.324.393) - (13.324.393) 22.202.129 8.877.736 1.659 8.879.395Balance as of 30 June 2012 8 25.641.459 2.862.981 (21.010.142) 115.755.096 94.744.954 22.202.129 145.451.523 107.080 145.558.603

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 2012 AND 2011

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

SEMESTER ENDED QUARTER ENDEDNotes 30.06.2012 30.06.2011 30.06.2012 30.06.2011

Operating activities:

Cash flow from operating activities (1) 36.993.387 21.898.998 25.688.302 7.456.374

Investment activities:

Collections relating to:

Investments 6 200.000 4.495.000 - 1.115.000

Tangible assets 371.476 1.382.380 149.335 -

Interest and similar income 2.019.500 2.089.112 934.079 1.003.084

Investment subsidies 530.718 - 138.931 -

Payments relating to:

Investments 6 (4.050.469) (7.281) (4.041.469) (7.281)

Intangible assets (3.223) (213.772) - (53.291)

Tangible assets (6.436.270) (11.625.045) (3.954.828) (6.011.329)

Cash flow from investment activities (2) (7.368.268) (3.879.606) (6.773.952) (3.953.817)

Financing activities:

Collections relating to:

Loans obtained 15.847.581 19.007.797 6.779.510 180.561

Payments relating to:

Interest and similar costs (29.490.624) (3.000.000) (7.579.806) (2.965.836)

Loans obtained (18.011.256) (18.590.896) (3.897.193) (3.966.716)

Cash flow from financing activities (3) (4.102.633) (4.102.633) (4.102.633) (4.102.633)

(35.756.932) (6.685.732) (8.800.122) (10.854.624)

Cash and cash equivalents at the beginning of the period

Effect of change in the companies consolidated 111.418.007 129.653.370 95.171.966 148.224.025

Variation of cash and cash equivalents: (1)+(2)+(3) - (115.072) - -

Cash and cash equivalents at the end of the period 6 (6.131.813) 11.333.660 10.114.228 (7.352.067)

105.286.194 140.871.958 105.286.194 140.871.958

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

The official chartered of accounts The Board of Directors

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 1 -

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 2012 were prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard and International Accounting Standard 34 – Interim Financial Reporting and includes the statement of financial position, the statement of profit and loss, the statement of comprehensive income, the statement of changes in equity and the condensed statement of cash flows as well as the selected explanatory notes.

The accounting policies used in the preparation of the consolidated financial statements of Altri are consistent

with those used in the year ended 31 December 2011. 3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

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

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 2 -

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 2012 and 31 December 2011, are as follows:

Company Head Office Percentage Held Activity

2012 2011

Mother-Company:

Altri, SGPS, S.A. Oporto Investment management

Group Caima / Celtejo / Celbi:

Celulose do Caima, SGPS, S.A. Figueira da Foz 100% 100% Investment management

Caima Indústria de Celulose, S.A. Constância 100% 100% Production and commercialization of pulp

Altri Florestal, S.A. Figueira da Foz 100% 100% Sylvan exploration

Caima Energia – Empresa de Gestão e Exploração de Energia, S.A. Constância 100% 100% Production of thermal and electrical energy

Invescaima – Investimentos e Participações, SGPS, S.A. Figueira da Foz 100% 100% Investment management

Inflora – Sociedade de Investimentos Florestais, S.A. Figueira da Foz 100% 100% Sylvan exploration

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. Lisboa 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 w ith forests and landscapes

Altri, Participaciones Y Trading, S.L. Madrid, Espanha 100% 100% Investment management and commercialization of pulp

Altri Sales, S.A. Nyon, Suiça 100% 100% Commercialization of pulp

Pedro Frutícola, Sociedade Frutícola, Lda. Constância 100% 100% Agriculture production

Captaraíz Unipessoal, Lda. Figueira da Foz 100% 100% Property buying and selling

All the above companies were included in the Altri Group consolidated financial statements in accordance with the full consolidation method.

4.2 INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES

The associated companies and joint ventures, percentage of capital held and main activity as of 30 June 2012 and 31 December 2011 are as follows:

Company Percentage held Activity

2012 2011

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

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

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 3 -

The book value, net assets, share capital and net profit for the period ended on 30 June 2012 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. 491,377 4,004,458 1,474,128 341,114

Joint ventures:

EDP – Produção Bioeléctrica, S.A. 7,629,904 151,060,789 10,887,861 2,053,341

8,121,281

(a) – includes loans granted.

4.3 INVESTMENTS AVAILABLE FOR SALE As of 30 June 2012 and 31 December 2011 the investments available for sale are as follows:

Company

2012 2011

Rigor Capital - Produção de Energia. Lda. 10.000.000 10.000.000

Others investments 4.144.404 93.935

14.144.404 10.093.935

Book value

The caption “Investments available for sale” includes financial investments under 20%, in companies where Altri Group has no significant influence on its management, which are stated at acquisition cost, reduced by impairment losses.

4.4 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION

During the year ended 31 December 2011 Altri Group sold its subsidiary Socasca – Recolha e Comércio de Recicláveis, S.A. (“Socasca”).

The detail of profits and losses from the operational unit in discontinuation – Sócasca in 30 June 2011 is as follows:

30.06.2012

Sócasca

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 (35,410)

Amortisation and depreciation (154,952)

Provisions and impaiment losses (2,576)

Financial expenses (44,561)

Profit before income tax 14,409

Income tax (3,863)

Net profit 10,546

This financial participation was sold during the year ended 31 December 2011 for an amount of 2,300,000 Euro (Note 6) of which up to 30 June 2012 were received 700,000 Euros, and to that date Altri is to receive the amount of 1.600.000 Euro.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 4 -

5. CHANGES OCCURED IN THE CONSOLIDATION PERIMETER During the period ended 30 June 2012, there were no changes in the consolidation perimeter compared to 31 December 2011.

6. CASH AND CASH EQUIVALENTS As of 30 June 2012 and 2011, the caption “Cash and cash equivalents” can be detailed as follows:

30.06.2012 30.06.2011

Cash 15,136 26,448

Bank deposits 106,562,276 141,759,337

106,577,412 141,785,785

Bank overdrafts (Note 9) (1,291,218) (913,827)

Cash and cash equivalents 105,286,194 140,871,958

During the period ended 30 June 2012, receipts from investments were as follows:

Transaction Amount Amount received Sócasca – Recolha e Comércio de Recicláveis, S.A. (Note 4.4) 2.300.000 200.000 --------------- ---------------- 2.300.000 200.000 ========= =========

During the period ended 30 June 2011, receipts from investments were as follows:

Transaction Amount amount received EDP – Produção Bioeléctrica, S.A. (a) 4.295.000 4.295.000 Sócasca – 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. (Nota 4.4)

During the period ended 30 June 2012, payments from investments were as follows: Transaction Amount

amount paid Other investments available for sale (Note 4.3) 4.050.469 4.050.469 --------------- ---------------- 4.050.469 4.050.469 ========= =========

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 5 -

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 2008 to 30 June 2012 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 2012.

The movements occurred in deferred tax assets and liabilities in the periods ended in 30 June 2012 and 2011 were as follows:

2012

Deferred tax assets Deferred tax liabilities

Opening balance as of 1.1.2012 13.699.322 444.167

Effects on income statement:

Harmonization of depreciation rates 825.262 -

Other effects 29.992 (3.888)

Total effect on income statement 855.254 (3.888)

Effect on shareholders' funds:

Fair values of derivatives (Note 11) 4.820.595 -

Closing balance as of 30.06.2012 19.375.171 440.279

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

8. SHARE CAPITAL

As of 30 June 2012 the Company’s fully subscribed and paid up capital consisted of 205,131,672 shares with a nominal value of 12.5 cents of a Euro each. 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.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 6 -

As of 30 June 2012 there were no entities holding more than 20% of the Company’s subscribed share capital. 9. BANK LOANS AND OTHER LOANS As of 30 June 2012 and 31 December 2011, the captions “Bank loans” and “Other loans” can be detailed as

follows: 30/06/2012

Nominal Value Book Value

Current Non current Total Current Non current Total

Bank loans 148,735,807 10,000,000 158,735,807 148,735,807 10,000,000 158,735,807

Bank overdrafts (Note 6) 1,291,218 - 1,291,218 1,291,218 - 1,291,218

Bank loans 150,027,025 10,000,000 160,027,025 150,027,025 10,000,000 160,027,025

Commercial paper 113,000,000 116,000,000 229,000,000 112,691,047 115,863,110 228,554,157

Bonds - 375,000,000 375,000,000 - 372,575,485 372,575,485

Other loans 22,450,360 - 22,450,360 21,358,627 - 21,358,627

Other loans 135,450,360 491,000,000 626,450,360 134,049,674 488,438,595 622,488,269

Reimbursable incentives 14,400,165 33,808,499 48,208,664 14,400,165 33,808,499 48,208,664

299,877,550 534,808,499 834,686,049 298,476,864 532,247,094 830,723,958

31/12/2011

Nominal Value Book Value

Current Non current Total Current Non current Total

Bank loans 155,806,954 11,875,000 167,681,954 155,792,782 11,875,000 167,667,782

Bank overdrafts 1,328,932 - 1,328,932 1,328,932 - 1,328,932

Bank loans 157,135,886 11,875,000 169,010,886 157,121,714 11,875,000 168,996,714

Commercial paper 111,000,000 128,000,000 239,000,000 110,629,490 127,831,518 238,461,008

Bonds - 375,000,000 375,000,000 - 372,046,493 372,046,493

Other loans 18,086,859 - 18,086,859 17,029,024 - 17,029,024

Other loans 129,086,859 503,000,000 632,086,859 127,658,514 499,878,011 627,536,525

Reimbursable incentives 8,784,029 38,893,917 47,677,946 8,784,029 38,893,917 47,677,946

295,006,774 553,768,917 848,775,691 293,564,257 550,646,928 844,211,185

As of 30 June 2012, there are bank overdrafts amounted to 15,510,000 Euro (8,900,000 Euro as of 30 June 2011), classified in the caption “Bank Loans”. The expenditures with the constitution of the loans were deducted from its nominal value, being these recognized as financial expenses along the loan’s life period (Note 12).

10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses for the periods ended at 30 June 2012 and 2011 can be detailed as follows:

30.06.2012

Provisions

Impairment losses in

accounts receivable Total

Opening balance 1,149,668 6,851,677 8,001,345

Increases 1,000,000 - 1,000,000

Utilizations - - -

Closing balance 2,149,668 6,851,677 9,001,345

30.06.2011

Provisions

Impairment losses in

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

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

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The increase in impairment losses occurred in the period ended 30 June 2012 were recorded against the caption “Payroll expenses” of the consolidates profit and loss statement, according to its purpose. The amount recorded under the caption “Provisions”, at 30 June 2012 and 2011, 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 2012 and 2011 the companies of Altri’s Group had contracts concerning financial derivative instruments to hedge of variations in pulp price and interest rates 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 2012 and 2011 the detail of the financial derivative instruments are as follows:

Pulp price hedging

derivatives

Interest rates

derivatives Total

Opening balance as of 31.12.2011 (302,933) (14,449,051) (14,751,984)

Derivatives fair value variation/cessation

Effects on shareholders' funds (17,709,811) (481,112) (18,190,923)

Effects on the profit and loss statement - 661,637 661,637

Closing balance as of 30.06.2012 (18,012,744) (14,268,526) (32,281,270)

Pulp price hedging

derivatives

Interest 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)

12. FINANCIAL RESULTS

The financial results for the periods ended at 30 June 2012 and 2011 are detailed as follows:

30-06-2012 30-06-2011

Financial expenses:

Interest 14.014.741 13.143.002

Other f inancial expenses 5.687.092 6.108.634

19.701.833 19.251.636

Financial income:

Interest 2.609.491 2.708.065

Other f inancial income 1.050.864 660.476

3.660.355 3.368.541

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 financial derivative instruments (Note 11).

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 8 -

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 periods ended as of 30 June 2012 and 2011 were calculated considering the following amounts:

30-06-2012 30-06-2011

Share number considered for the computation of basic and diluted earning 205.131.672 205.131.672

Net profit considered for the computation of basic and diluted earning for continuing operations 22.202.129 17.785.817

Continuing operations earnings per share

Basic 0,11 0,09

Diluted 0,11 0,09

Net profit considered for the computation of basic and diluted earning for continuing and non-continuing activities 22.202.129 17.796.363

Continuing and non-continuing operations earnings per share

Basic 0,11 0,09

Diluted 0,11 0,09

14. OTHER INCOME As of 30 June 2012 the caption of the statement of profit and loss “Other Income” is detailed as follows:

30/06/2012

Investment and exploration subsidies 1,419,729

Gains obtained from the alienation of f ixed assets 88,397

Other income 1,032,241

2,540,367

15. OTHER EXPENSES

As of 30 June 2012 the caption of the statement of profit and loss “Other expenses” is detailed as follows:

30/06/2012

Direct taxes and charges 746,290

Losses in commodities derivative contracts 1,862,675

Other costs 496,187

3,105,152

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 which implies the split of Altri's two business units that operates 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, and 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.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 9 -

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 at 30 June 2012 and 2011, there were no transactions with the Directors of the Group and were no granted loans. As of 30 June 2012 and 2011 the balances and transactions with related parties are as follow:

Transactions 30.06.2012 30.06.2011 30.06.2012 30.06.2011 30.06.2012 30.06.2011

Associated companies and joint ventures (a) - - 2,372,786 3,237,392 292,441 320,618

Other related parties (b) 4,062,552 4,036,869 - - - -

4,062,552 4,036,869 2,372,786 3,237,392 292,441 320,618

Balances 30.06.2012 30.06.2011 30.06.2012 30.06.2011 30.06.2012 30.06.2011

Associated companies and joint ventures (a) 295,683 - 461,712 735,426 16,807,905 17,372,905

Other related parties (b) 651,646 20,250 81 - - -

947,329 20,250 461,793 735,426 16,807,905 17,372,905

Purchases and services Sales and services Interest income

Accounts payable Accounts receivable Granted Loans

(a) All entities consolidated by the equity method as of 30 June 2012 and 2011 (Note 4.2); (b) Were considered as related parties 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 2012 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. 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.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2012

(Translation of notes originally issued in Portuguese – Note 20)

(Amounts expressed in Euro)

- 10 -

Storax Benelux 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, Lda Web Works – Desenvolvimento de Aplicações para Internet, S.A. Valor Autêntico, SGPS, S.A.

18. APPLICATION OF THE NET INCOME

Relating to the year ended in 2011, the Board of Directors proposed, in its general report, that the individual net loss of Altri, SGPS, S.A. in the amount of 2,913,284.89 Euro will be transferred to returned earnings. The proposal was approved in the General Assembly held on 26 April 2012. The Board of Directors proposed also 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, this proposal was also approved on the General Assembly held on 26 April 2012.

19. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 28 August 2012.

20. 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