Precious Woods Holding Ltd.

euro adhoc: Precious Woods Holding AG, Zug
quarterly or semiannual financial statement
Mixed picture at Precious Woods: turnover up 165%, first-half loss, good solution for the Congo project

-------------------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. -------------------------------------------------------------------------------- 01.09.2006 In the first semester of 2006 the Precious Woods Group increased turnover by 165% from USD 8.3 million to USD 21.9 million, mainly due to acquisitions. In Brazil, further one-off losses in addition to the expected restructuring costs had a negative impact on the half-year result. All other business units performed in line with or exceeded expectations. For the six months ended June 30th Precious Woods reports a USD 2.1 million loss, compared with a prior year profit of USD 1.1 million. A number of external factors are adversely affecting the Brazilian forestry and timber industry. In 2005 it faced a 15% increase in wage costs and a rise in the price of diesel. In the same year, export-orientated businesses experienced a 25% loss in the value of their sales proceeds, owing to the continuous appreciation of the Brazilian real against the US dollar. To some extent these factors have continued to affect Precious Woods in 2006 and so far could be only partially offset by price increases and a switch to the euro as the main sales currency. Internal factors have also had a negative impact. In the spring of 2006 the management of Precious Woods Amazon was replaced. To improve productivity the new management embarked upon a radical course of action, but the implementation of the necessary measures entails higher costs and it will take some time until their effects are reflected in the financial statements. The measures already implemented and those the company plans to take should ensure that by the end of the year Precious Woods Amazon will again break even on a month for month basis. The new management has identified a need for further major write-offs of stocks and certain balance sheet items, and these will also impact the 2006 financial result. The particular combination of external and internal factors which led to the negative half-year result was not foreseeable. Continuing higher prices and the sound performance of all the other Group companies all contributed to the otherwise positive development of the Precious Woods Group. Precious Woods Europe (formerly A. van den Berg), which was acquired at the end of last year, recorded the best half-year results in that company's history. Further milestones were reached in the area of emissions trading. Precious Woods' bio-energy project was registered with the relevant Kyoto authorities, i.e the Clean Development Mechanism Board (CDM), and the reduction in carbon dioxide emissions as a result of this project was officially quantified and certified. As expected, the woodchip-fired power plant performed well. At the Central American operations, initial sales of timber proved to be successful and for the first time it was also possible to sell young pochote roundwood at a good price. In June, the Congo participation project was placed on stand-by due to the uncertainty surrounding the confirmation of concessions. Precious Woods has now reached a consensus with its Congolese partners which takes into account the current uncertainties regarding the confirmation of existing concessions: for the moment Precious Woods' initial investment will be significantly smaller than originally planned but until 2008 the Group reserves in full its important and exclusive option to successively increase the participation at a future date. A smaller project in Gabon is also being evaluated as part of the explicit objective to significantly reduce the Group's dependence on the Brazilian businesses. For the year as a whole, Precious Woods currently expects to achieve sales in excess of USD 40 million and to break even. Precious Woods (SWX: PRWN) is active in the reforestation and sustainable management of tropical forests, downstream wood processing and trading of FSC certified timber and non timber forest products. The shares of Precious Woods have been listed on the SWX Swiss Exchange since March 2002. More information about the Company and its activities may be found on the website www.preciouswoods.com. end of announcement euro adhoc 01.09.2006 17:30:00 -------------------------------------------------------------------------------- ots Originaltext: Precious Woods Holding AG, Zug Im Internet recherchierbar: http://www.presseportal.de Further inquiry note: Kontakt: Precious Woods Holding AG, Zug Dr. Andres Gut, Chairman Tel. 41 1 245 80 10 mailto: office@preciouswoods.ch Branche: Forestry & Timber ISIN: CH0013283368 WKN: 982280 Index: SPI Börsen: SWX Swiss Exchange / official dealing

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