Trading Statement

1 November 2012

POWERFLUTE

TRADING STATEMENT

Powerflute Oyj ("Powerflute" or the "Group"), the packaging and paper group, today provides the following update on trading and on the outlook for the remainder of the financial year.

During the annual maintenance shutdown at the Kuopio mill in early September, work was carried out by third party contractors to upgrade the capabilities of the paper machine in a number of areas. The majority of this work was completed on time and without incident. However, there were serious delays to the completion of a project to upgrade the capabilities of the winder station at the end of the paper machine and also, modifications made to the vacuum system which extracts water from pulp in the wire and press-sections have not performed in-line with the specifications agreed with the supplier. Together, these problems resulted in significant production difficulties leading to lower volumes and higher than normal operating costs throughout September and early October.

While the suppliers responsible for the projects have addressed the majority of the issues and daily production volumes have now recovered to close to normal levels, the loss of volume and additional expenditure on raw materials and energy were such that the Group now expects EBITDA for the year ending 31 December 2012 to be between €2.0 million and €3.0 million below current market expectations.

Notwithstanding the challenges outlined above, we expect the Group to perform well in the final quarter of FY2012, as market conditions remain strong, order intake is robust and recently announced price increases have been accepted in all major markets. Powerflute continues to be profitable and cash generative, with a strong balance sheet and considerable cash resources.

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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.