Almaty, Kazakhstan - Kazakhstan Kagazy PLC (KAG LI) (the “Group”) announces its audited consolidated financial results for the 12 months period ended 31 December 2013¹ (the “Period”).

Financial highlights

1. Group revenue of US$ 70.5 million (US$ 67.8 million a year ago)
2. Gross profit of US$ 32.3 million (US$ 31.3 million a year ago)
3. Gross margin of 45.8% (46.2% a year ago)
4. EBITDA before exceptional items of US$ 15.7 million (US$ 18.7 million a year ago)
5. EBIT before exceptional items of US$ 12.2 million (US$ 15.1 million a year ago)
6. Total Comprehensive loss of US$ 112.6 million (US$ 35.6 million a year ago)
7. Economic loss of US$ 6.8 million (US$ 13.7 million a year ago)
8. Operating Cash Flows of US$ 18.1 million (US$ 24.3 million a year ago)

The Group’s revenue increased by US$ 2.7 million over the period. This was mainly attributable to the increase in revenues from the paper segment. Gross margins have remained stable.

The Group’s EBITDA has decreased by US$ 3.0 million due to an increase in distribution costs of US$ 1.1 million, increase in staff costs of US$ 1.3 million, and an increase in provision against VAT recoverable of US$ 1.5 million. This was partially compensated by the increase in gross profit of US$ 1.0 million.

The Group’s Total Comprehensive loss has increased by US$ 77.0 million due to a decrease in the Group’s EBITDA of US$ 3.0 million, increase in impairment charges of US$ 22.1 million, increase in finance costs of US$ 29.7 million, increase of income tax expenses of US$ 8.1 million and increase in loss of discontinued operations of US$ 23.2 million.

The Group’s Operating Cash Flows have decreased by US$ 6.2 million, mostly caused by an increase in income tax of USD 1.2 million and legal and professional fees of USD 3.9 million.

Operational highlights

Paper Business

In millions of US$	2013	2012
Revenue	67.2	64.8
Gross Profit	30.5	29.7
Gross Profit Margin	45.4%	45.8%

Production of paper for the Period amounted to 55.1 thousand tons compared to 52.5 thousand tons for the same period of 2012.

Production of corrugated packaging for the Period amounted to 98.3 million square meters compared to 97.1 million square meters for the same period of 2012.

Sales of paper to third parties for the Period amounted to 17.6 thousand tons compared to 16.9 thousand tons for the same period of 2012.

Sales of corrugated packaging for the Period amounted to 98.1 million square meters compared to 96.4 million square meters for the same period of 2012.

The average selling price of paper and corrugated packaging decreased 0.7%.

Logistics Business

In millions of USD	2013	2012
Revenue	3.3	2.9
Gross Profit	1.8	1.6
Gross Profit Margin	54.8%	54.8%

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

Average occupancy of the Class B warehouses stood at 95% compared to 94% for the same period in 2012.

Class B business revenue increased 13.8% which is mainly attributable to the increase in other value added services as terminal handling, rent of open sites and temporary storage.

The full report can be downloaded here.

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
This email address is being protected from spambots. You need JavaScript enabled to view it.

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.

¹ As of October 2014, the Group ceased Class B operations due to the transfer of Class B assets to Alliance Bank.