EANS-Adhoc: Implementation Of Turnaround Measures As Planned / Half-Year Report of the Precious Woods Group as at 30 June 2011

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Company Information/Sustainable management and use of tropical
forests and plantations

15.09.2011

Zug/Zurich, 15 September 2011 - The Precious Woods Group succeeded in
further improving operating performance in the business segments in
the first half of 2011, and is confident of being able to implement
the turnaround measures as planned during the current financial year.
In view of the divestment plan the Precious Woods Central America
segment has been treated as a "discontinued operation" since 2011.
Therefore, a direct comparison with the previous year is only
possible if the figures for 2010 are reclassified accordingly.
Compared to the first half of 2010, EBITDA is slightly below the
prior-year level, with the CHF/USD exchange rate effect and
exceptional costs at the holding level having prevented any
improvement. Liquidity for the seasonally more difficult first half
of the year was secured by means of convertible loans with a nominal
value of CHF 5.5 million.

New hardwood sawmill commissioned in Gabon Precious Woods
successfully commissioned a new hardwood sawmill in Gabon on 1 July
2011. Market demand, and hence prices, increased both for local trade
in logs and export trade in sawn wood, helping to almost completely
offset the losses suffered since the introduction of the log export
ban in 2010. Earnings are set to increase further via ongoing
improvements in productivity at the sawmill and the moulding plant.
The overall result in Gabon was affected by logistical problems
caused by war conflicts in Côte d´Ivoire, which is why the financial
results for the first half-year were slightly below expectations.
Concrete improvements are anticipated for the second half thanks to
management changes and process optimization in concession areas.

Process optimizations in Central America Precious Woods Central
America carried out various process optimizations in the first half
of 2011, and is confident of meeting expectations for 2011. The sale
of assets in Central America approved by the Annual General Meeting
is well advanced, and the capital released by the sale will be used
primarily to reduce debt, strengthen liquidity and finance operating
investment plans.

New customers in Brazil Unusually heavy rainfall in Brazil made
forest management significantly more difficult in the first half of
2011, in particular the transport of logs out of the forest. This
resulted in inventory and production bottlenecks as well as higher
costs. The acquisition of a major new customer for log deliveries
will positively influence the 2011 annual result. The negotiations
with a potential new customer concerning the sale of biomass from
forest management are well advanced. In addition, Precious Woods is
in the process of acquiring a concession area adjacent to existing
estates with a view to securing its medium-term harvest schedule.

Ongoing trend of rising sales prices in Europe The weather-related
problems in Brazil and the resulting late deliveries influenced the
result of Precious Woods Europe for the first half of 2011. Pending
decisions on the Dutch real estate market represent a further
difficulty, the result for the first half of 2011 is therefore
slightly below expectations. The restructuring process has continued,
with administrative personnel costs being reduced further. The
ongoing trend of rising sales prices is also having a positive effect
on income, and Precious Woods Europe is confident about continuing
business performance in 2011.

"myclimate" gained as strategic partner for Carbon & Energy Energy
production in Brazil was around 20% below its normal level in the
first half of 2011, due to unusually heavy rainfall and the related
drop in wood waste volumes. The result was impacted further by
routine maintenance work being brought forward. It is anticipated
that electricity generation will reach its planned level in the
second half of 2011, and that both sales and operating results will
meet expectations. The sale of the Certified Emission Reductions
(CERs) generated by the power station in 2009 had a positive impact
on income in the first half of the year. Due to changes to the
calculation method for CERs, revenue generated from the 2010 and 2011
harvests cannot be expected to be recognized until the second quarter
of 2012 at the earliest. In addition, Precious Woods has gained the
Swiss "myclimate" foundation as a renowned strategic partner for
future management of CERs´.

Improving capital market viability At the holding level, in order to
help secure liquidity, convertible loans with a nominal value of CHF
5.5 million were issued, the nominal value was reduced from CHF 50 to
CHF 1 per share and conditional capital was increased, thereby
significantly strengthening the capital market viability of Precious
Woods.

Positive outlook for the second half of 2011 thanks to intensive
efforts In view of the operational progress made in the first half of
2011, the Precious Woods Group is confident that the turnaround
measures can be implemented as planned over the year 2011. The
intensive work of the last two years is bearing fruit, and the
success of the measures introduced and implemented in the first half
of the year with a view to increasing sales and operating income will
become apparent in the second half of the year. Under consideration
of the reclassification of the Precious Woods Central America segment
as a "discontinued operation", the original operating result (EBITDA)
target for the 2011 financial year is USD 5.3 million. At the
beginning of the second half of 2011, Precious Woods estimates that
an operating result (EBITDA, excluding one-offs) of USD 2 million to
USD 4 million can be achieved for the 2011 financial year. In
comparison with the prior-year period, measures aimed at structural
optimization generated additional costs of around CHF 2.3 million.
These costs will be significantly lower in the second half of the
year. The increased spending on structural optimization at the
holding level as mentioned above and the CHF/USD exchange rate effect
will most likely prevent the achievement of a better operating result
(EBITDA). Nevertheless, this operating result (EBITDA) - again under
consideration of the reclassification of the Precious Woods Central
America segment - would still correspond to an improvement of over
USD 11 million on the previous year.

The complete Half-Year Report 2011 will be available on our website
at www.preciouswoods.com from 7.00 a.m. on 15 September 2011.

end of ad-hoc-announcement ==========================================
====================================== Precious Woods is one of the
world’s leading companies in the sustainable management and use of
tropical forests and plantations. 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 wood waste
represent further integral elements of the company’s business. Shares
of Precious Woods Holding Ltd. have been listed on the SIX Swiss
Exchange since March 2002. Additional information about Precious
Woods can be found at www.preciouswoods.com

Further inquiry note:
Precious Woods Holding AG
Brunhilde Mauthe
Head of Group Communications & Marketing Services
Tel. +41 44 245 81 20
Fax +41 44 245 81 12
media@preciouswoods.com

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: office@preciouswoods.com
WWW: http://www.preciouswoods.com
sector: Forestry & Timber
ISIN: CH0013283368
indexes: SPI
stockmarkets: Main Standard: SIX Swiss Exchange
language: English