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KAZAKHSTAN KAGAZY PLC
("Kazakhstan Kagazy" or the "Group")

UNAUDITED FINANCIAL RESULTS FOR THE 3 MONTHS ENDED 30 MARCH 2015

Kazakhstan Kagazy PLC (KAG LI) announces its unaudited consolidated financial results for the 3 month period ended 30 March 2015 (the “Period”).

Financial highlights

1. Group revenue of US$ 10.4 million (US$ 13.4 million Q1 2014)
2. Gross profit of US$ 3.6 million (US$ 5.3 million Q1 2014)
3. Gross margin of 35.0% (40.0% Q1 2014)
4. EBITDA before exceptional items of US$ 0.9 million (US$ 2.5 million Q1 2014).
5. EBIT before exceptional items of US$ 0.2 million (US$ 1.7 million Q1 2014)
6. Operating Cash Outflow of US$ 0.5 million (Operating Cash Flow of US$ 3.8 million Q1 2014)

On February 11 2014 the Kazakh Tenge (“KZT”) was devalued by 19%. The average exchange rates used for the 3 months period ended 30 March 2015 and 2014 are 184.6 and 170.2 KZT per US$, respectively. As a result all financial indicators are 8.5% lower when being converted into US$ (the “Conversion Effect”).

As the Company announced on 17 March 2015, the devaluation of the Russian Rouble (the “Rouble”) against the Kazakh Tenge since the last quarter of 2014 has had, and continues to have, a significant adverse effect on the performance of the Kazakh economy and, specifically, on the Group’s business. The Rouble devaluation and deteriorating economic situation over the Period in Russia, which is Kazakhstan’s largest trading partner, has allowed Russian producers to aggressively undercut the pricing of Kazakh production companies. This has caused a sharp decline over the Period in sales and production for the majority of Kazakh producers, which has in turn led to a material fall in sales revenue for the Group.

Additionally over the Period, the Group faced strong competitive pricing pressure from Russian packaging producers who, as a result of the Rouble devaluation, benefited from decreased costs and were able to deeply discount prices for sales into Kazakhstan.

To mitigate this situation management implemented an extensive cost-cutting and savings programme. Management believes it is taking appropriate measures to support the stability and growth of the Group’s operations in the current circumstances. However, the future economic situation may differ from management’s current expectations.

The Group's revenue for the Period dropped by US$ 3.0 million in comparison to the same period in 2014, of which US$ 0.9 million is attributable to the Conversion Effect with the remaining decrease of US$ 2.1 million attributable to the decrease of volumes of corrugated packaging sales by 20%. The Group's Gross Profit dropped by US$ 1.7 million, from which US$ 0.3 million is attributable to the Conversion Effect, US$ 0.8 million is due to a 30% decrease in the sale price of paper, and the remainder is due to a decrease of volumes of corrugated packaging sold.

The Group's EBITDA before exceptional items dropped by US$ 1.6 million, mainly due to the decrease in the Group’s Gross Profit.

The Group's Operating Cash Flow dropped by US$ 3.3 million, largely due to a decrease in the Group’s EBITDA by US$ 1.6 million and an increase in exceptional payments of US$ 1.6 million, including payments for legal expenses incurred during the Period.

Operational highlights

Production of paper for the Period amounted to 12.4 thousand tons compared to 12.9 thousand tons for Q1 2014.

Production of corrugated packaging for the Period amounted to 17.1 million square meters compared to 20.8 million square meters for Q1 2014.

Sales of paper to third parties for the Period amounted to 4.9 thousand tons compared to 3.6 thousand tons for Q1 2014.

Sales of corrugated packaging for the Period amounted to 17.5 million square meters compared to 21.9 million square meters for the same period of 2014. The decrease in sales volume was due to the worsening economic environment in Kazakhstan described above.

The average selling price of paper decreased by 30%. The average selling price of corrugated packaging remained stable.

The Group’s 2014 Annual Report and Consolidated Financial Statements along with earlier 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.