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

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annual report

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 ==========================================
====================================== 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.

end of announcement euro adhoc
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ots Originaltext: Precious Woods Holding AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Corporate Communications

Precious Woods Holding Ltd.

Militärstrasse 90

CH-8021 Zürich

Tel.: +41 44 245 81 20

E-Mail: media@preciouswoods.com

Branche: Forestry & Timber
ISIN: CH0013283368
WKN: 982280
Index: SPI
Börsen: SIX Swiss Exchange / official dealing