Kazakhstan Kagazy PLC (the “Group”) announces its unaudited consolidated financial results prepared in accordance with IFRS for the 9 month period ended 30 September 2011 (the “Period”).

Financial highlights

• Group revenue increased by USD$ 9 million (18%);
• Gross profit increased by USD $10 million (67%);
• Gross profit margin increased from 31% to 43%;
• EBITDA before exceptional items and revaluation for the period amounted to USD$ 15.3 million (9 months 2010 - USD 2.4 million);

Taisiya Kogutyuk, CEO, commented:

"For the 9 months of 2011 the Group showed a positive trend. Operating profit for the period reached USD$ 11.3 million, EBITDA increased by more than 6 times. At a USD$ 9.8 million loss for the period, net cash flows from operating activities increased by 3.5 times. The occupancy of class "A" and "B" warehouses increased by 69% and 78% respectively, compared with 9 months of 2010. These results stand as testament to the strategy  adopted by the Group’s management."

Operating Highlights

Logistics Business

Revenue and gross profit
In USD millions                                               9m 2011               9m 2010
Revenues from the logistics business 10.56                     5.98
Gross profit                                                      5.39                       2.63
Gross profit margin                                       51%                       44%

Company’s operations performance has significantly improved for the period. Compared to 2010 average occupancy of class "A" warehouses has increased from 34% to 69%, and average occupancy of class "B" warehouses has increased from 49% to 78%, the number of containers handled at the terminal has increased by 70% or by 10 017 containers.

Gross margin in the logistics business increased by 7% following the increase of number of clients and fixed costs reduction.

In order to reduce costs and increase productivity the company began to develop and implement ISO 9001procedures and quality management system.

The company continues to provide technical equipment for the warehouses in order to improve the quality of services provided to clients.

Paper Business
Revenue and gross profit

In USD millions                                                               9m 2011               9m 2010*                            9m 2010
(without                             (with
Kagazy Trading)                            Kagazy Trading)
Revenues from the paper business       48.21                     36.60                                    43.64
Gross profit                                                      20.18                     11.70                                    12.71
Gross profit margin                                       42%                       29%                                       29%

* does not include result of Kagazy Trading. Kagazy Trading was liquidated in August 2010 due to  unprofitableness
The Paper segment showed stable results for the period and still holds a leading position in the market.

82% of the Group’s revenue is from the Paper business segment. The gross margin share from paper business accounted for 79% of the gross profits of the Group. For the period the Gross margin in the paper segment rose from 29% to 42%.

The Company is compliant with international standards of ISO 9001 and ISO 14001 OHSAS 18001 of the TUV SUD international certification body.

tatement of comprehensive income

** does not include result of Kagazy Trading
*** EBITDA before exceptional items is defined as profit before interest, taxation, depreciation and amortization adjusted for exceptional items

Extract from statement of cash flows

Further details are available on the Group’s web-site

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.

For information:

Mr. Sadyr Shaguzhayev                                                               +7 727 244 02 08
Head of Investor Relations                                                       This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

                                                     
Ms. Nellya Kim                                                                                +7 727 244 87 96
Press Service                                                                                   This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Elena Dobson,                                                                                + 44 207 861 31 47

Pelham Bell Pottinger                                                                 This e-mail address is being protected from spambots. You need JavaScript enabled to view it.