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KAZAKHSTAN KAGAZY PLC
("Kazakhstan Kagazy", the “Company” or the "Group")
UNAUDITED FINANCIAL RESULTS FOR THE 9 MONTHS ENDED 30 SEPTEMBER 2015¹

Kazakhstan Kagazy PLC (KAG LI) announces its unaudited consolidated financial results for the 9 month period ended 30 September 2015 (“Q3” or the “Period”).

Financial highlights

• Group revenue of US$ 31.5 million (US$ 42.4 million Q3 2014)
• Gross profit of US$ 9.1 million (US$ 16.2 million Q3 2014)
• Gross margin of 28.8% (38.2% Q3 2014)
• EBITDA before exceptional items of US$ 1.3 million (US$ 7.6 million Q3 2014)
• EBIT before exceptional items of US$ (0.8) million (US$ 6.2 million Q3 2014)
• Operating Cash Flow of US$ (0.1) million (US$ 5.5 million Q3 2014).

On February 11 2014 the Kazakh Tenge (“KZT”) was devalued by 19%. On August 20 2015 the Kazakh National Bank decided to allow the KZT to free float. As a result the KZT depreciated from about 185 to 270 KZT per US$, that is approximately 46%.

The average exchange rates used for the 9 months period ended 30 September 2015 and 2014 are 195.6 and 178.5 KZT per US$, respectively. As a result, all financial indicators are 10% lower when being converted into US$ (the “Conversion Effect”).

The Group's revenue for the Period dropped by US$ 10.9 million in comparison to the same period in 2014, of which US$ 3.0 million is attributable to the Conversion Effect with the remaining decrease of US$ 7.9 million attributable to the decrease of the sales price of paper and corrugated packaging. Although production and sales volumes of both paper and corrugated packaging remained stable, average prices decreased by 26% and 11% respectively, due to the competitive pressures that our clients have been facing following the devaluation of the Russian Ruble, as the Company reported in detail on March 17 2015.

The Group's Gross Profit dropped by US$ 7.1 million, from which US$ 0.9 million is attributable to the Conversion Effect, US$ 6.2 million is due to the decrease of the sales price of paper and corrugated packaging.

The Group's EBITDA before exceptional items dropped by US$ 6.3 million, mainly due to the decrease in the Group’s Gross Profit.

The Group's Operating Cash Flow dropped by US$ 5.6 million, largely due to a decrease in the Group’s EBITDA by US$ 6.3 million.

Operational highlights

Production of paper for the Period amounted to 40.0 thousand tons compared to 40.5 thousand tons for Q3 2014.

Production of corrugated packaging for the Period amounted to 63.1 million square meters compared to 63.9 million square meters for Q3 2014.

Sales of paper to third parties for the Period amounted to 14.0 thousand tons compared to 15.7 thousand tons for Q3 2014.

Sales of corrugated packaging for the Period amounted to 63.0 million square meters compared to 64.2 million square meters for Q3 2014.

The average selling price of paper decreased by 26%. The average selling price of corrugated packaging decreased by 11%.

The Group’s financial reports are available at http://kazakhstankagazy.com/en/investor-relations/reports.html.

For more information please contact:

Kazakhstan Kagazy PLC
Hugh McGregor General Counsel and Company Secretary + 7 (727) 244 87 87

Daniel Stewart & Company PLC
David Coffman / Liz Kirchner (Financial Adviser) / Martin Lampshire (Broker)
Tel +44 (0) 20 7776 6550

About Kazakhstan Kagazy PLC
London Stock Exchange listed Kazakhstan Kagazy PLC is the largest paper, packaging and recycling group in Kazakhstan and Central Asia.

¹ Note: Q3 2014 results have been restated to reflect the deconsolidation of Class B warehouses.