EANS-Adhoc: Precious Woods Holding Ltd. / Economic crisis leads to unsatisfactory net result 2009

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ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
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26.04.2010

2009 was a crisis year for the entire tropical hardwood and timber industry
sector. The economic crisis prompted a severe drop in the global demand for
tropical timber by over 35%. Precious Woods was also unable to escape the
negative market trends. In 2009 the Precious Woods Group achieved therefore a
total operating income of USD 87.8 million. The Group posted a 19.8% sales
decline at constant exchange rates for the year covered compared with the
previous year. The operating result amounted to USD -8.5 million. One-offs led
to costs in the amount of USD 12.1 million and consequently had a significant
impact on the operating result (EBIT) of USD -20.6 million. The net loss after
taxes, interest and one-offs amounted to USD 28.1 million. The Board of
Directors and the Group Management responded to the extremely unsatisfactory
business development by taking immediate measures aimed at adjusting costs,
restructuring and strengthening the market presence. These measures will have a
positive effect during the course of 2010 and 2011.

Particularly sharp declines were posted by Precious Woods Amazon. These are
primarily attributable to the collapse in the export markets as well as the
delays by the authorities in granting the harvesting permits. As a result of the
decline in demand in the Netherlands and other primary European markets, the
results posted by Precious Woods Europe were clearly unsatisfactory. The
currency-related effects had an additional negative impact in the amount of USD
5.8 million. Sales from Gabon were maintained at a corresponding level thanks in
particular to the successful turnaround in the veneer plant of TGI which also
successfully obtained full FSC certification for the Chain of Custody (CoC).
This makes the Precious Woods Group one of the first global forestry companies
to obtain full FSC certification. The increase in biological assets in Central
America continued the long-term trend. The Carbon & Energy business segment
which is based in Brazil reported an overall reduction in net revenues in 2009
compared with the previous year as the result of the lower volume of biomass
produced by the sawmill as well as softer wood species with a lower calorific
value.
The financial and economic crisis put great pressure on volumes and revenues in
the tropical timber market. The markets only began to stabilise at the lower
level in the fourth quarter 2009, first still weak signs of an up-turn became
evident towards the end of the year covered by the report and the start of the
year 2010, particularly at Precious Woods Europe. Precious Woods therefore
anticipates a slight recovery in the markets during the course of 2010.

One-offs
During the course of the restructuring existing problems from the past were
rigorously cleaned up and, where necessary, charged to the 2009 result as
one-offs. Brazil incurred significant one-offs (USD 6.1 million). These are
attributable to non-recurring costs as a result of the exit from Pará, which has
now been definitely completed, provisions for lawsuits and redundancy payments
as well as other valuation adjustments at Precious Woods Amazon. One-offs at
Precious Woods Europe totalled USD 2.7 million; these were caused by the
restructuring of the trading company, the reduction in inventories and other
non-recurring one-off costs in connection with the gradual shutdown of Precious
Woods Manufacturing B.V. A provision in the amount of USD 1.3 million was also
made at Precious Woods Gabon as a result of the export ban on logs imposed by
the government at the beginning of 2010. Below the operating result (EBIT) other
significant, non-recurring value adjustments and other costs in the total amount
of USD 6 million are posted.

Measures
In 2009 and in the current fiscal year the Board of Directors and the Group
Management have taken significant and wide-ranging measures mainly in order to
adjust the cost structures to the changes in the markets, to rapidly implement
the necessary restructuring as well as to strengthen the Group´s market
presence. With the combination of these measures Precious Woods is responding
quickly and consistently to the changing developments in the markets. They
create the necessary preconditions to exploit the opportunities of the years
ahead. The strong balance sheet of Precious Woods is a great advantage in this
respect. It remains very strong, the characteristic features of which are a high
equity ratio (58%) and assets based on real values (land, forests, production
sites).

Detailed information on the annual results can be found in the 2009 Annual
Report which is being published today on www.preciouswoods.com.

Direct link:
www.preciouswoods.com/index.php?option=com_content&task=view&id=330&Itemid=277&lang=en_US.ISO8859-1

Conference call for analysts, investors and media - 2009 annual results

The telephone conference will be conducted by Ernst A. Brugger (Chairman of the
Board of Directors, CEO a.i.) and Cornelia Gehrig (CFO). To participate in the
conference please dial in at least 5 minutes before the start of the conference.
The conference will be held in German. Questions can also be asked in English.

Tuesday, 27 April 2010
09:00 a.m. (CET)
Dial-in number. +41 (0)44 580 65 21

end of ad-hoc-announcement
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Precious Woods is an international company active in the sustainable management
and use of tropical forests. The company's core activities include reforestation
and sustainable management of tropical forests, timber processing and the
trading of FSC-certified timber products. The generation of emission rights and
electricity from recovery wood represent further integral elements of the
company’s business. The shares of Precious Woods Holding have been traded on the
SIX Swiss Exchange since March 2002. Further information about Precious Woods is
available at www.preciouswoods.com.

Further inquiry note:
Corporate Communications
Precious Woods Holding Ltd.
Militärstrasse 90
CH-8021 Zürich
Tel.: +41 44 245 81 20
E-Mail: [email protected]
end of announcement euro adhoc
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issuer:   Precious Woods Holding Ltd.
          Baarerstrasse 135
          CH-6301 Zug
phone:     +41 44 245 80 10
FAX:       +41 44 245 80 12
mail:     [email protected]
WWW:      http://www.preciouswoods.com
sector:   Forestry & Timber
ISIN:     CH0013283368
indexes:  SPI

stockmarkets: official dealing: SIX Swiss Exchange
language: English

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