News

Almaty, Kazakhstan – June 30, 2008 – Kazakhstan Kagazy Plc (the "Company” or "Kagazy”), one of the Central Asia’s largest producers of paper, corrugated board and packaging, and a leading industrial real estate development company in the country, today announced its consolidated financial results for the twelve months ended December 31, 2007.

HIGHLIGHTS FOR THE FULL YEAR 2007

• Consolidated revenues up 42% year on year to US$ 78.7 million
• EBITDA up 93% year on year to US$ 16.6 million with EBITDA margin of 21.1%
• EBIT up 83% year on year to US$ 12.5 million with operating margin of 15.9%
• Net profit up more than four times year on year to US$ 12.5 million with net profit margin of 15.9%
• Total assets up 89.8% year on year to US$ 631.4 million

The full annual report is available on http://www.kazakhstankagazy.com/en/accounts/.

Yuriy Bogday, CEO of Kazakhstan Kagazy Plc, commented: "Our full year 2007 results show strong growth in paper business. Following the acquisition of Kazupack, Kagazy has successfully combined its production facilities and expanded its market share for corrugated products to 25%.

Following the end of the reporting period, we have completed the acquisition of Astana Contract, the largest warehouse operator in Kazakhstan. This is an important acquisition which makes us the leader in the industrial real estate market in Kazakhstan. We anticipate continued demand for high quality warehouse space in the region.

We expect our paper revenues to grow at a lower rate than in 2007 as the domestic and international credit crisis has had a dampening effect on the real economy. We expect to capitalise on our market leading position by continuing to drive share increases and efficiency improvements in our paper business to meet the current market demand in our core packaging business."

FINANCIAL SUMMARY

Kazakhstan Kagazy Plc had announced in the Summary preliminary 2007 financial results released on May 8, 2008, that the reported net profit in 2007 totalled US$ 14.0 million. The final net profit is US$ 12.5 million and the difference of US$ 1.5 million is due to a reclassification of internal administrative costs that had previously been treated as issue costs in relation to the IPO and deducted from equity. Although directly attributable to the issue of shares at the IPO, International Financial Reporting Standards do not allow such costs to be taken to share premium and accordingly this has been charged to the income statement.

SIGNIFICANT EVENTS FOLLOWING THE END OF THE REPORTING PERIOD

In April 2008, Kazakhstan Kagazy acquired a 90% stake in Astana Contract JSC, the largest logistics and warehouse operator in Central Asia, for a total consideration of US$ 57.6 million. The remaining 10% stake will be bought by Kagazy for US$ 6.4 million after two years, subject to receiving the approval of the State Development Bank of Kazakhstan. The assets of Astana Contract were subsequently revalued at $170 million and this transaction is expected to give rise to negative goodwill totaling $45 million in the year ending 31 December 2008.

In April 2008, Kazakhstan Kagazy appointed Alessandro Manghi as the Chairman of the Board of Directors of Kazakhstan Kagazy Plc, and Yuriy Bogday has been appointed as Chief Executive Officer of Kazakhstan Kagazy Plc. Baglan Zhunussov and Maksat Arip, who are the Group’s principal shareholders, have stepped down from their respective roles as Chairman and Chief Executive of the Plc Board, in order to focus their time on the strategy and business development of the Group and will continue to perform the same duties as they have to date. Alessandro Manghi has served as the Group’s Corporate Finance and Investor Relations Director since 2005, whilst Yuriy Bogday has served in a number of executive positions with Kagazy, including as Development Director for the Group’s operations, for five years.

For further information, please visit www.kazakhstankagazy.com or contact:

Kazakhstan Kagazy Plc runs Central Asia’s largest producer of paper, corrugated board and packaging products. It also operates one of the leading industrial real estate development companies in the country through Prime Estate Activities Kazakhstan LLP (Peak), which owns approximately 711 hectares of prime land, strategically located in a newly created industrial zone of the main cities of Kazakhstan, for construction of commercial warehousing and logistics infrastructure facilities. The Group reported total assets of approximately US$ 631.4 million as at December 31, 2007 and consolidated revenues of approximately US$ 78.7 million for the full year of 2007. Kazakhstan Kagazy Plc’s securities are listed under the symbol "KAG” on the London Stock Exchange.

This statement contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Kazakhstan Kagazy plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this statement should be construed as a profit forecast.