Pre-close Trading Update

4 July 2013

POWERFLUTE

PRE CLOSE TRADING UPDATE

Powerflute Oyj ("Powerflute" or the "Group") today provided the following update on trading for the six months ended 30 June 2013.

The Group has performed well during the first half of the year, with volumes, revenues and profits all expected to be ahead of the same period of the prior year. The capital investment projects completed during 2012 are delivering the expected benefits and production of close to 129,000 tonnes in the six months to 30 June 2013 represented an 8% improvement on the prior year. The Group has continued to enjoy broadly favourable conditions in most major markets and average selling prices were higher than the prior year, although the benefit of this was partially offset by higher delivery and raw material expenses.

Succesful diversification into new growing markets in the southern hemisphere has reduced the impact of the normal seasonal slowdown in Europe over the sumer months. Prices have remained firm and the Group currently has a healthy forward order book for the period through to the planned maintenance shutdown in September.

The Group is currently expected to continue to perform well during the second half, is in a strong financial position and is well placed to take advantage of opportunities as they arise.

Dermot Smurfit, Chairman of Powerflute, said:

"The Group has performed well during the first half due to a combination of broadly favourable market conditions and a greatly improved production performance. Prices have remained firm despite the normal seasonal slow down over the summer months and we continue to have a healthy forward order book for much of the third quarter. I am pleased with the progress we have made so far this year and look forward to the Group continuing its momentum in the second half."

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About Powerflute

Powerflute Oyj ("the Company" or "Powerflute") is a paper and packaging group quoted on the AIM market of the London Stock Exchange (Ticker: POWR). Through its subsidiary Savon Sellu Oy, the Group operates a paper mill in Kuopio, Finland which produces a specialised form of semi-chemical fluting made from locally sourced birch. Corrugated boxes manufactured using Nordic semi-chemical fluting demonstrate strength and moisture resistance and are used for transportation of fruit and vegetables, high-value industrial goods such as electrical appliances and automotive components. The Kuopio mill is one of only three suppliers of Nordic semi-chemical fluting in Europe.