EANS-Adhoc: Precious Woods Holding Ltd. / Positive Impact of Turnaround Measures

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Sustainable Forestmanagement in the tropics

27.02.2012

? Turnaround measures will have a positive impact on the 2012 result
? Significant progress in the resolution of the situation in Brazil
? Product distribution newly coordinated from Switzerland for the entire
Group
? Participation in Central America continues to offer considerable
potential

Zug/Zurich, 27 February 2012 - At today´s Investor´s Conference, the
Precious Woods Group looks with confidence to the future thanks to
the successful implementation of the turnaround measures initiated in
2010. Factors such as the current business outlook for Gabon, the
active participation in Central America and the newly centralized
sales organization in Switzerland all indicate that the success of
the turnaround measures will finalize through 2012. In Brazil,
significant issues from the past were either resolved or considerably
alleviated; the turnaround will be completed in the current year with
efficiency investments and sales strategy optimization. The Board of
Directors and Executive Management are confident about the outlook
for the future. The Group´s annual results will be published on 26
April 2012.

Precious Woods Gabon: solid business performance The activities of
Precious Woods in Gabon/West Africa made a significant contribution
to sales and operating results in 2011. Expansion of production
capacities at the sawmill created a basis for future growth,
facilitating the use of additional wood species. In parallel to this,
measures are being explored to expand the concession base.

Precious Woods Amazon: resolution of situation in Brazil
Strengthening of operations: Ever since 2010, management and the
Board of Directors have devoted their full attention to resolving the
difficult situation in Brazil. Extensive operational progress has
been made here, in particular a significant increase in productivity
in the value chain, and major sales success in the local market.
Further operational improvements have been initiated for 2012 with an
objective to achieving a sustainable positive operating result.

Clarification of disputed land rights: One of the main turnaround
measures was the clarification of land rights in Brazil. The total
area of forest owned by Precious Woods amounts to 467,637 hectares
(not including concessions), and in 2011 the new management succeeded
in resolving several legal disputes, thereby increasing the area of
"harvestable" forest held by Precious Woods Amazon by around 105,000
hectares to almost 300,000 hectares. The aim over the medium term is
to secure further harvestable areas amounting to around 75,000
hectares. Last year Precious Woods additionally succeeded in
converting a purchase agreement dating from December 2007 and
involving 39,000 hectares of land into a concession agreement with a
duration of 50 years. This led the way to the resolution of a
threatened legal dispute involving Precious Woods estates amounting
to around 174,000 hectares, which had been claimed by a third party.
Furthermore it eliminates the risk of potential land losses from the
December 2005 purchase agreement with Reflorestadora Holanda.
Additionally, there are plans to sell three outlying forest areas of
around 45,000 hectares within the next two to three years.

Resolution of further legal cases: In mid-2011, Precious Woods Amazon
succeeded in averting the threat of a tax fine of USD 12.8 million
dating back to 2006. Two additional fines remain to be resolved over
the medium term. One is a USD 8.7 million fine from the Brazilian
environmental protection authorities from 2002, which according to
Precious Woods´ legal counsel can be avoided with a high probability.
The second one is a threatened property tax fine of USD 13.3 million
from 2007, for which Precious Woods anticipates costs of USD 1.6
million. This expected amount has been fully provisioned.

Liquidity neutral debt resolution with minority shareholder of BK
Energia: In autumn 2011, Precious Woods agreed a cash-neutral
solution for all parties concerned in connection with debts
outstanding from 2005 relating to the purchase of the biomass power
plant BK Energia. An agreement was reached with the current minority
shareholder to search a buyer for all outstanding shares of BK
Energia in 2012. If no buyer is found with a defined period, 40% of
the shares of BK Energia will be transferred to the current minority
shareholder to offset the outstanding debts. This would leave
Precious Woods as a minority shareholder with the remaining 40% of
the shares of BK Energia.

The success that has been achieved enables Precious Woods Amazon to
look with confidence to the future; chances are good that the Group
can resolve its outstanding issues from the past over the medium
term.

Sales organization to be run centrally from Switzerland As of the
beginning of 2012, the Precious Woods sales organization is now run
centrally from Switzerland with a view to optimizing the
product/customer portfolio, improving margins and gaining market
share in the emerging markets. The restructured sales organization
will start to have a positive impact on the Group as a whole from
2012.

Active participation in Central America Forestry activities in
Central America, all but 25% of which Precious Woods divested in 2011
in order to secure its liquidity, continued to perform positively
under its original management. Precious Woods will now play a
proportionately active role in promoting a successful future.

Liquidity secured for 2012 The Board of Directors and Executive
Management are confident that in 2012 the operational progress will
translate into a clear improvement in the income statement.
Furthermore, for the first time in several years, the company most
likely does not need to raise new equity or loan capital in 2012. The
annual result and the audit report will be published on 26 April
2012.

end of ad-hoc-announcement ==========================================
====================================== 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 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 79
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