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

  1. Group revenue of US$ 44.6 million (US$ 52.3 million a year ago)
  2. Gross profit of US$ 17.4 million (US$ 24.1 million a year ago)
  3. Gross margin of 39.0% (46.1% a year ago)
  4. EBITDA before exceptional items of US$ 8.4 million (US$ 13.8 million a year ago).
  5. EBIT before exceptional items of US$ 7.0 million (US$ 11.2 million a year ago)
  6. 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

In millions of US$ 9 months of 2014 9 months of 2013
Revenue 42.4 49.7
Gross Profit 16.2 22.6
Gross Profit Margin 38.2% 45.5%

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

In millions of USD 9 months of 2014 9 months of 2013
Revenue 2.2 2.6
Gross Profit 1.2 1.5
Gross Profit Margin 54.5% 57.7%

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.
Notes: Q3 2013 results differ from those announced previously as in January 2014 the Group disposed of its Class A and Container terminal business. As of October 2014, the Group ceased Class B operations due to the transfer of Class B assets to Alliance Bank.

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

For more information please contact:
Mr. Sadyr Shaguzhayev
Head of Investor Relations
+7 727 244 02 08
ir@kagazy.kzThis email address is being protected from spambots. You need JavaScript enabled to view it.

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