Interim Results

31 August 2010

POWERFLUTE OYJ

INTERIM REPORT
for the six months ended 30 June 2010

Powerflute Oyj (the "Company" or “Powerflute”), the packaging group with
positions in Nordic semi-chemical fluting and coated woodfree papers, today
announced results for the six months ended 30 June, 2010.  Powerflute is quoted
on the AIM market of the London Stock Exchange (Ticker: POWR) and on the First
North list, the alternative market of the OMX Nordic Exchange Stockholm AB
(Ticker POW1V) 

Financial Highlights

•Revenue increased 23% to €148.1m (2009: €120.4m)
•EBITDA reduced to €3.3m (2009: €5.6m)
•Operating loss of €2.2m (2009: underlying operating loss of €1.0m)
•Loss before tax of €5.0m (2009: €29.6m profit, but included €33.0m gain on
acquisition) 
•Basic loss per share of 2.4 cents (2009: 21.0 cents profit per share)
•Underlying loss per share of 2.4 cents (2009: 1.8 cents loss per share)
•Net cash inflow from operating activities of €9.8m (2009: €1.7m)
•Net debt reduced to €47.4m (€52.0m at 31 December 2009)
•Net asset value per share of €0.37 (2009: €0.39)

Operating Highlights

•Both business areas experienced robust demand and upward trends in pricing
throughout the period and momentum is expected to continue into the second
half. 
•Packaging Papers performed strongly as sales increased by 42% and EBITDA
improved by €4.8m to a profit of €4.3m (2009: €0.5m loss). 
•In contrast, Graphic Papers encountered challenging conditions. Volume
increases largely offset lower average prices, but higher pulp costs severely
impacted EBITDA which was €6.9m lower at €1.1m (2009: €8.0m). 
•Marco Casiraghi joined the Group as Chief Executive with effect from 1 January
2010. 
•The Board has identified a number of projects and development opportunities
which offer the potential for attractive returns and is currently evaluating
funding alternatives. 

Powerflute Chairman, Dermot Smurfit commented:

“Trading conditions during the first half were mixed. We experienced robust
demand and upward pricing trends in both of our businesses and were
particularly pleased with the strong recovery in Packaging Papers where profits
improved considerably. Unfortunately, the benefits of this were more than
offset by the impact of higher pulp costs on the performance of Graphic Papers. 

The outlook for Packaging Papers remains positive as price recovery continues
and demand remains strong. The outlook for Graphic Papers is more uncertain.
Further price increases have been announced for our products, while pulp costs
appear to have stabilised and are reducing in some markets. Together, these
factors should lead to improved performance during the second half of the year. 

Subject to the positive trends outlined above continuing, we expect performance
for the full year to represent an improvement on the prior year.” 

Contacts
For additional information please contact:

Powerflute OYJ
Dermot Smurfit (Chairman)
Marco Casiraghi (Chief Executive Officer)
David Walton (Chief Financial Officer)
c/o Billy Clegg, Financial Dynamics
+44 (0)20 7269 7157

Collins Stewart Europe Ltd:
Piers Coombs
+44 (0)20 7523 8350

E.Öhman J:or Fondkommission AB:
Ms Arja Väyrynen
+358 9 8866 6029

Financial Dynamics:
Billy Clegg
Georgina Bonham
+44 (0)20 7831 3113

K Capital Source
Mark Kenny
Jonathan Neilan		
+353 (1) 631 5500

About Powerflute

Powerflute Oyj (“the Company” or “Powerflute”) is a packaging group with
established positions in Nordic semi-chemical fluting and coated woodfree
papers. 

Through its subsidiary Savon Sellu, the Group operates a paper mill in Kuopio,
Finland which produces a specialised form of semi-chemical fluting made from
birchwood sourced principally in Finland and Russia. Corrugated boxes
manufactured using Nordic semi-chemical fluting demonstrate exceptional
strength and moisture resistance and are extensively used for transportation of
fruit and vegetables, high-value industrial goods such as electrical appliances
and automotive components. The Kuopio mill has the capacity to produce up to
300,000 tonnes per annum and is one of three suppliers of Nordic semi-chemical
fluting in Europe. 

Through its subsidiary Papierfabrik Scheufelen, the Group operates a paper mill
in Lenningen, Germany which produces a range of coated woodfree papers from
mixed hardwood and softwood pulps. Coated woodfree papers are used in the
production of printed promotional material such as brochures, leaflets and
other point of sale materials for producers and distributors of premium branded
goods. The Lenningen mill has the capacity to produce up to 300,000 tonnes per
annum and supplies the majority of its products into the European market where
total demand has historically been in excess of 7.7 million tonnes per annum.