Kazakhstan Kagazy PLC
Kazakhstan Kagazy PLC: ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR Q3 2014

23 October 2014

KAZAKHSTAN KAGAZY PLC ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR Q3 2014

Almaty, Kazakhstan – Kazakhstan Kagazy PLC (KAG LI) (the ‘Group’) announces its non-audited consolidated financial results for the 9 months period ended 30 September 2014 (the ‘Period’).

Financial highlights

– Group revenue of US$ 44.6 million (US$ 52.3 million a year ago)

– Gross profit of US$ 17.4 million (US$ 24.1 million a year ago)

– Gross margin of 39.0% (46.1% a year ago)

– EBITDA before exceptional items of US$ 8.4 million (US$ 13.8 million a year ago).

– EBIT before exceptional items of US$ 7.0 million (US$ 11.2 million a year ago)

– Operating Cash Flows of US$ 5.5 million (US$ 13.7 million a year ago)

On February 11 the Kazakh Tenge (‘KZT’) was devalued by 19%. The average exchange rates used for the Period and 2013 are 178.5 and 151.6 KZT per US$, respectively. As a result all financial indicators are 17.7% lower when being converted into US$ (‘the conversion effect’).

The Group’s revenue has dropped by US$ 7.7 million which is attributable entirely to the conversion effect. The Group’s revenue increased by 0.4% in local currency.

The Group’s EBITDA dropped by US$ 5.4 million, out of which US$ 2.4 million are attributable to the conversion effect and the rest are due to higher costs, mainly related to increased purchase costs in hard currency.

Operational highlights

Paper Business

Production of paper for the Period amounted to 40.5 thousand tons compared to 41.2 thousand tons for the same period of 2013.

Production of corrugated packaging for the Period amounted to 63.9 million square meters compared to 72.7 million square meters for the same period of 2013.

Sales of paper to third parties for the Period amounted to 15.7 thousand tons compared to 12.9 thousand tons for the same period of 2013.

Sales of corrugated packaging for the Period amounted to 64.2 million square meters compared to 72.7 million square meters for the same period of 2013.

The average selling price of paper and corrugated packaging increased 8.7%.

Paper Business Revenue increased 0.4% in local currency.

Logistics Business

The revenue of the Logistics business only includes the revenue for our Class B warehouse, as our Class A and Container Terminal were disposed as of January 2014.

The Revenue of our Class B business dropped by US$ 0.4 million due to the conversion effect. Class B business Revenue increased 1.3% in local currency.

Financial statements for previous years are available at http://kazakhstankagazy.com/en/investor-relations/reports.html/

For more information please contact:

Mr. Sadyr Shaguzhayev +7 727 244 02 08
Head of Investor Relations ir@kagazy.kz

The content of this document includes forward-looking statements. These relate to Kazakhstan Kagazy’s future prospects, developments and strategies, including statements regarding target returns. Forward-looking statements are identified by their use of terms and phrases such as ‘believe’, ‘could’, ‘would’, ‘envisage’, ‘estimate’, ‘intend’ ‘seek’, ‘may’, ‘plan’, ‘will’ or the negative of those, variations or comparable expressions, including references to assumptions. These statements are based on Kazakhstan Kagazy’s current beliefs, assumptions and expectations of its future performance, and are subject to risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Accordingly, these beliefs, assumptions and expectations can change as a result of many possible events or factors that may cause Kazakhstan Kagazy’s business, financial condition, liquidity, results of operations and actual returns to vary materially and target returns to be revised from those expressed or implied in the forward-looking statements. None of the data in this statement has been audited and where any reference is made in this statement to the past performance of investments by persons associated with Kazakhstan Kagazy or other investments, you should bear in mind that such information is not necessarily indicative of the future performance of the relevant investments or of Kazakhstan Kagazy’s future performance.