7/26/2007 - News

Kemira Group Interim Report, January-June 2007: KEMIRA'S REVENUE UP BY 16% IN Q2

Kemira Group Interim Report, January-June 2007

KEMIRA’S REVENUE UP BY 16% IN Q2

– Revenue in April-June: EUR 753.0 million (Q2/2006: EUR 647.5 million), up 16%

– Operating profit: EUR 57.6 million (EUR 51.5 million), up 12%; up 32% when excluding the effect of non-recurring items

– Earnings per share: EUR 0.27 (EUR 0.26), up 4%

– Full-year revenue, operating profit and earnings per share are expected to improve from their 2006 levels

KEY FIGURES AND RATIOS

EUR million	4-6/2007	4-6/2006	Change %	1-6/2007	1-6/2006	Change %	1-12/2006**
REVENUE	753.0	647.5	16	1 426.3	1 200.4	19	2 522.5
EBITDA	89.9	81.5	10	172.5	156.4	10	317.2
EBITDA, %	11.9%	12.6%		12.1%	13.0%		12.6%
OPERATING PROFIT	57.6	51.5	12	106.5	97.0	10	193.7
Operating profit, %	7.6%	8.0%		7.5%	8.1%		7.7%
Operating profit, excl. non-recurring items	56.6	42.8	32	104.7	83.0	26	170.5
Financial income and expenses	-12.6	-5.8		-24.8	-12.9		-37.2
PROFIT BEFORE TAX	45.7	45.1	1	83.0	82.6	0	154.2
Profit before tax, %	6.1%	7.0%		5.8%	6.9%		6.1%
NET PROFIT	33.3	32.0	4	60.6	58.6	3	112.2
EPS, EUR	0.27	0.26	4	0.48	0.47	2	0.90
Capital employed*	1,975.5	1,824.1		1,975.5	1,824.1		1,876.6
ROCE, %*	10.3%	10.4%		10.3%	10.4%		10.2%
Cash flow after investments, excluding acquisitions	-6.4	44.0		-124.0	2.5		155.0
Personnel at period-end	10,588	9,695		10,588	9,695		9,327

* 12-month rolling average

** Prior year correction included (see page 8)

REVENUE AND OPERATING PROFIT FOR APRIL-JUNE

Kemira Group’s revenue for April-June 2007 rose by 16% year on year, to EUR 753.0 million (Q2/2006: EUR 647.5 million). In particular, acquisitions contributed around EUR 90.4 million to revenue growth. Divestments depressed revenue by EUR 9.1 million. Organic growth was 6%, excluding the currency effect, which had a 2% negative impact on revenue.

Operating profit grew by 12%, to EUR 57.6 million (51.5), with acquisitions contributing approximately EUR 4.6 million to the figure. Operating profit includes non-recurring items, with their net effect on operating profit amounting to EUR 1.0 million positive compared with EUR +8.7 million reported a year ago. Excluding the effect of non-recurring items, operating profit totaled EUR 56.6 million (42.8), or an increase of 32% year on year.

Non-recurring items included in operating profit:

EUR million	4-6/2007	4-6/2006	1-6/2007	1-6/2006	1-12/2006
Kemira Pulp&Paper	–	3.1	1.3	7.6	11.0
Kemira Water	–	0.2	–	0.2	-0.2
Kemira Specialty	–	2.1	–	2.1	3.6
Kemira Coatings	–	3.3	–	3.3	16.4
Other, including eliminations	1.0	–	0.5	0.8	-7.6
Total	1.0	8.7	1.8	14.0	23.2

Profit before tax came to EUR 45.7 million (45.1) and net profit totaled EUR 33.3 million (32.0).

REVENUE AND OPERATING PROFIT FOR JANUARY-JUNE

In January-June 2007, Kemira Group’s revenue rose by 19% year on year, to EUR 1,426.3 million (1,200.4). Acquisitions contributed around EUR 219.4 million to revenue growth, while divestments depressed revenue by EUR 17.4 million. Organic growth was 4%, excluding the currency effect, which had a 2% negative impact on revenue.

Operating profit grew by 10%, to EUR 106.5 million (97.0). Operating profit for January-June includes non-recurring income, with their net effect on operating profit amounting to EUR 1.8 million, compared with non-recurring income of EUR 14.0 million reported a year ago. Excluding the effect of non-recurring items, operating profit totaled EUR 104.7 million (83.0), or an increase of 26% year on year. During the current year, the Group has particularly invested in the development of purchasing and logistics processes and IT services. The costs due to these investments are included in other operations.

Earnings per share for January-June were EUR 0.48 (0.47).

RESEARCH AND DEVELOPMENT

In January-June, reported research and development expenditure totaled EUR 25.7 million (26.1), accounting for 1.8% of revenue (2.2%).

CAPITAL EXPENDITURE

Gross capital expenditure, excluding acquisitions, amounted to EUR 121.1 million (59.6) in January-June. The largest ongoing investments involve a chemical plant under construction at the site of the Botnia pulp mill in Uruguay (EUR 23.0 million) and a paint factory under construction in the Stockholm area (EUR 8.5 million). Maintenance investments represented around 28% of capital expenditure, excluding acquisitions.

In the January-June period, Group depreciation came to EUR 66.0 million (59.4).

Gross capital expenditure, including acquisitions worth EUR 44.6 million (102.2), totaled EUR 165.7 million (161.8).

FINANCIAL POSITION AND CASH FLOWS

In January-June, the Group reported positive cash flows of EUR 23.1 million from operating activities (EUR 28.3 million). The Group generated negative net cash flows of EUR 191.7 million from investing activities, of which acquisitions accounted for an outflow of EUR 44.6 million. Kemira showed a free cash flow of EUR -168.6 million (EUR -99.7 million). In April, Kemira Oyj paid out EUR 58.2 million in dividends to its shareholders.

On June 30, 2007, the Group’s net liabilities stood at EUR 1,067.4 million (December 31, 2006, EUR 827.4 million), this growth being primarily due to a seasonal increase in working capital and acquisitions carried out during the period.

At the period-end, interest-bearing liabilities stood at EUR 1,129.6 million. The duration of the Group’s interest-bearing loan portfolio on June 30, 2007, was 13 months (December 31, 2006, 16 months).

At the end of June, the equity ratio stood at 37% (December 31, 2006: 39%), while gearing was 98% (December 31, 2006: 76%).

In the January-June period, net financial expenses increased to EUR 24.8 million (12.9), due mainly to higher interest bearing debt.

Cash and cash equivalents on June 30, 2007, totaled EUR 62.2 million (June 30, 2006: EUR 110.2 million).

In July, Kemira signed a 5-year bilateral bank credit agreement of USD 68 million. The loan is used in general financing needs of the Kemira Group.

In October 2006, Kemira signed a credit facility worth EUR 80 million, enabling six Group companies to sell certain account receivables to the finance company. The related credit risk transfers to the finance company and the receivables are derecognized from the Group companies’ balance sheets. The amount of outstanding sold receivables on June 30, 2007, was EUR 47.9 million (December 31, 2006: EUR 15.7 million).

The Group’s most important exchange rate risk arises from the USD denominated exports from the euro area. Approximately 60% of the exchange rate risk, equivalent to EUR 50 million, due to exposure to US dollar, was hedged. In addition, the company is exposed to USD risk when USD denominated items are converted into euro in the financial statements. Revenue for the companies located in the United States accounted for 18% of the Group’s revenue.

HUMAN RESOURCES

The number of Group employees totaled 10,588 on June 30 (December 31, 2006: 9,327).

KEMIRA PULP&PAPER

Kemira Pulp&Paper is the world’s leading supplier of pulp and paper chemicals, its extensive solutions spanning the pulp and paper industry’s value chain from pulp to paper coating.

EUR million	4-6/2007	4-6/2006	Change %	1-6/2007	1-6/2006	Change %	1-12/2006
REVENUE	260.1	257.9	1	515.4	467.4	10	993.3
EBITDA	34.9	31.9	9	70.4	68.9	2	137.1
EBITDA, %	13.4%	12.4%		13.7%	14.7%		13.8%
OPERATING PROFIT	23.4	20.4	15	46.4	46.4	0	90.8
Operating profit, %	9.0%	7.9%		9.0%	9.9%		9.1%
Operating profit, excl. non-recurring items	23.4	17.3	35	45.1	38.8	16	79.8
Capital employed*	813.4	806.9		813.4	806.9		819.5
ROCE, %*	11.2%	11.1%		11.2%	11.1%		11.0%
Capital expenditure, excluding acquisitions	20.8	17.4		43.1	32.0		77.6
Cash flow after investments, excluding acquisitions	-11.1	15.5		-18.8	21.1		65.1
Personnel at period-end	2,401	2,405		2,401	2,405		2,304

* 12-month rolling average

In April-June, Kemira Pulp&Paper reported year-on-year revenue growth of 1%, totaling EUR 260.1 million (257.9). Organic growth stood at 7%, excluding the currency effect, which had a 4% negative impact on revenue. Operating profit was also lowered by the Korean hydrogen peroxide business, divested in 2006.

Operating profit for the period grew by 15%, to EUR 23.4 million (EUR 20.4 million, including EUR 3.1 million in non-recurring income). Excluding the effect of non-recurring items, operating profit increased by 35% year on year. Operating profit was improved by the moderate development of raw material prices, efficient cost management and healthy demand particularly for pulp chemicals. In addition, the integration of acquired companies continued to progress according to plan.

In June, Kemira announced an intent to increase the production of calcium sulfate pigment, used as paper pigment, at Siilinjärvi by 25,000 tons to 175,000 tons. The value of the investment amounts to EUR 4.9 million. Kemira’s paper pigment production plants are located in Siilinjärvi, Finland, and in Besalu, Spain. The calcium sulfate technology has been developed and productized by Kemira in cooperation with the Finnish forest industry and forest research communities. Calcium sulfate pigment is used as filler and coating pigment for paper and cardboard.

In January-June, Kemira Pulp&Paper’s revenue grew by 10%, to EUR 515.4 million (467.4), due largely to the acquisition of the Lanxess paper chemicals business in April 2006. Organic growth stood at 5%, excluding the currency effect, which had a 3% negative impact on revenue. Reported operating profit for January-June 2007 was EUR 46.4 million (46.4), including EUR 1.3 million (7.6) in non-recurring income. Excluding the effect of non-recurring items, operating profit totaled EUR 45.1 million (38.8), or an increase of 16% year on year.

KEMIRA WATER

Kemira Water is the world’s leading supplier of inorganic coagulants, and ranks third in water treatment polymers. Kemira Water offers customized water treatment and sludge treatment solutions to municipal and private water treatment plants and industry.

EUR million	4-6/2007	4-6/2006	Change %	1-6/2007	1-6/2006	Change %	1-12/2006
REVENUE	185.1	102.1	81	355.1	194.4	83	467.6
EBITDA	20.0	13.5	48	38.8	23.8	63	53.4
EBITDA, %	10.8%	13.2%		10.9%	12.2%		11.4%
OPERATING PROFIT	13.0	9.6	35	24.9	16.0	56	35.3
Operating profit, %	7.0%	9.4%		7.0%	8.2%		7.5%
Operating profit, excl. non-recurring items	13.0	9.4	38	24.9	15.8	58	35.5
Capital employed*	371.0	229.4		371.0	229.4		269.2
ROCE, %*	12.1%	13.9%		12.1%	13.9%		13.4%
Capital expenditure, excluding acquisitions	11.1	4.2		18.8	7.0		19.4
Cash flow after investments, excluding acquisitions	16.2	3.1		5.7	1.0		26.7
Personnel at period-end	2,235	1,499		2,235	1,499		1,846

* 12-month rolling average

In April-June, Kemira Water’s revenue improved by 81%, to EUR 185.1 million (102.1), due to the acquisition of Cytec, Galvatek, and Parcon in October 2006. Organic growth stood at 2%, excluding the currency effect, which had a 1% negative impact on revenue.

During the April-June period, operating profit grew by 35%, to EUR 13.0 million (9.6), due to company acquisitions in particular.

In April, Kemira bought an 80% shareholding in Chongqing Lanjie Tap Water Materials Co., Ltd. The company is a producer of inorganic coagulants and organic polymers for water treatment in the municipality of Chongqing located in central China. Its main client base is in the local potable water production. The company’s current revenue, in the range of EUR two million annually, is expected to grow rapidly in the years to come.

Acquisition of two companies owned by the Brazilian company Dalquim Industria e Comercio Ltda was completed in April. With combined annual revenue of around EUR 12 million, these companies manufacture inorganic water-treatment coagulants and their main customers include the paper industry and municipalities. In addition to serving the paper industry’s growing needs, the acquirees focus on the treatment of municipal drinking and wastewater in the southern states of Brazil. The acquisition bolsters Kemira’s goal of intensifying mutual synergy and strengthening its position as the world’s leading supplier of pulp, paper and water treatment chemicals in the emerging market.

In January-June, Kemira Water reported year-on-year revenue growth of 83%, to EUR 355.1 million (194.4). Organic growth stood at 4%, excluding the currency effect, which had a 3% negative impact on revenue. Operating profit grew by 56%, to EUR 24.9 million (EUR 16.0 million, including EUR 0.2 million in non-recurring income).

KEMIRA SPECIALTY

Kemira Specialty is the leading supplier of specialty chemicals in selected customer segments, serving customers in a wide array of industries, such as the cosmetics, printing ink, food, feed and detergent industries, through its customer-driven solutions.

EUR million	4-6/2007	4-6/2006	Change %	1-6/2007	1-6/2006	Change %	1-12/2006
REVENUE	110.6	107.6	3	214.1	226.2	-5	456.2
EBITDA	14.9	19.4	-23	33.0	38.4	-14	77.0
EBITDA, %	13.5%	18.0%		15.4%	17.0%		16.9%
OPERATING PROFIT	7.1	11.7	-39	17.4	23.0	-24	45.8
Operating profit, %	6.4%	10.9%		8.1%	10.2%		10.0%
Operating profit, excl. non-recurring items	7.1	9.6	-26	17.4	20.9	-17	42.2
Capital employed*	443.8	456.1		443.8	456.1		451.6
ROCE, %*	9.1%	11.2%		9.1%	11.2%		10.1%
Capital expenditure, excluding acquisitions	15.1	5.5		24.6	10.3		30.8
Cash flow after investments, excluding acquisitions	-16,9	4.7		-24.4	20.0		53.6
Personnel at period-end	1,182	1,185		1,182	1,185		1,011

* 12-month rolling average

In April-June, Kemira Specialty’s revenue improved by 3%, to EUR 110.6 million (107.6). Organic growth stood at 2%, excluding the currency effect, which had a 3% negative impact on revenue. Competition in the titanium dioxide market remained fierce and the average sales price for titanium dioxide was lower than in the previous year. Due to the development of the US housing market, American companies have increased the export of titanium dioxide to Europe, which has increased the price competition. In addition the development of the US dollar has improved the competitive position of American companies in Europe.

The operating profit in April-June came to EUR 7.1 million (EUR 11.7 million, including EUR 2.1 million in non-recurring income), chiefly due to lower titanium dioxide sales prices. Excluding the effects of non-recurring items, operating profit decreased by 26%.

In May, Kemira announced the initiation of a process to evaluate ownership alternatives for its business units Pigments and Chemidet. This process is estimated to conclude by year end 2007. The ChemSolutions business unit became part of Kemira’s Pulp&Paper business on July 1, 2007, and it will continue its current operations in line with its recently outlined customer segment strategy. The Kemira Specialty business area will cease to exist if Pigments’ and Chemidet’s ownership changes.

Kemira Pigments produces titanium dioxide in Pori, Finland, and operates a technology center in Germany and a cosmetics markets company called TRI-K Industries in the Unites States, acquired in April to expand the company’s cosmetics business, especially in the field of skin care and hair care. Kemira Pigments focuses on high value-added, high growth markets such as the flexible packaging and cosmetics industries, where it holds leading market positions. Pigments’ revenue in 2006 totaled EUR 230 million. Chemidet produces sodium percarbonate for the detergent industry, in Helsingborg, Sweden, its revenue in 2006 being EUR 54 million. ChemSolutions specializes in organic acids and acid derivatives for demanding customer applications, and reported revenue of EUR 170 million in 2006.

In July, Kemira announced it would increase its production capacity of calcium propionate used for feed and food industries by establishing a production site in China. The site’s production capacity will be 15 000 tons, and it will be ready by year end 2008 at Kemira’s site in Yixing, East China. The investment also includes production capacity for feed additives mixtures. Establishment of the production facility strengthens Kemira’s position as the leading producer of calcium propionate, and creates the basis for developing Kemira’s market position as the leading solutions provider for the feed and food industries.

In January-June, Kemira Specialty’s revenue fell by 5%, to EUR 214.1 million (226.2). Operating profit stood at EUR 17.4 million (EUR 23.0 million, including EUR 2.1 million in non-recurring income). Without the effect of non-recurring items, operating profit declined by 17%.

KEMIRA COATINGS

Kemira Coatings is the leading supplier of paints in Northern and Eastern Europe, providing consumers and professionals with branded products. Its products consist of decorative paints and coatings for the woodworking and metal industries.

EUR million	4-6/2007	4-6/2006	Change %	1-6/2007	1-6/2006	Change %	1-12/2006
REVENUE	188.7	170.3	11	324.5	288.9	12	562.8
EBITDA	31.4	29.6	6	48.5	42.8	13	88.9
EBITDA, %	16.6%	17.4%		14.9%	14.8%		15.8%
OPERATING PROFIT	27.3	25.0	9	40.1	34.6	16	72.1
Operating profit, %	14.5%	14.7%		12.4%	12.0%		12.8%
Operating profit, excl. non-recurring items	27.3	21.7	26	40.1	31.3	28	55.7
Capital employed*	312.0	296.6		312.0	296.6		310.5
ROCE, %*	25.4%	21.3%		25.4%	21.3%		23.7%
Capital expenditure, excluding acquisitions	12.4	3.5		22.2	7.3		22.5
Cash flow after investments, excluding acquisitions	15.8	15.7		-23.9	-16.2		71.2
Personnel at period-end	4,218	3,868		4,218	3,868		3,494

* 12-month rolling average

In April-June, Kemira Coatings increased its revenue by 11% year on year, to EUR 188.7 million (170.3). Organic growth stood at 9%.

Operating profit for April-June grew by 9%, to EUR 27.3 million (EUR 25.0 million, including EUR 3.3 million in non-recurring income). Excluding the effect of non-recurring items, operating profit increased by 26% year on year. The rise in operating profit was due to favorable sales performance in all market areas and efficient cost management.

April saw the completion of the acquisition of two Russian industrial coatings companies. Accordingly, Tikkurila bought 70% holdings in OOO “Gamma” and OOO “Ohtinski zavod poroshkovyh krasok” based in St Petersburg. With revenue of roughly EUR 8 million and a staff of 100, Gamma is a major manufacturer of metal-industry coatings in Russia. Ohtinski zavod poroshkovyh krasok, a manufacturer and marketer of powder coatings, has revenue of approximately EUR 3 million and personnel of 50. This acquisition will strengthen Kemira’s position in the Russian metal-industry coatings market.

In May, Kemira Coatings established a new sales company in China. Tikkurila (Beijing) Paints Co., Ltd began its operations on May 22, 2007, in Beijing. At the same time, Tikkurila acquired the sales company CEIEC-Feelings operating in China. CEIEC-Feelings’ business operations and the staff of 50 persons are transferred to the new company. CEIEC-Feelings has been operating since 2002 as the importer of Tikkurila’s decorative paints in China. Revenue for 2007 is estimated at approximately EUR 2 million. The completed acquisition targets at consolidating a basis for a powerful development of Kemira’s market position in the rapidly growing decorative paints market in China.

In January-June, Kemira Coatings’ revenue went up by 12%, to EUR 324.5 million (288.9), with organic growth at 10%. In addition, revenue was boosted by the acquisition in February 2006 of Kraski Teks and the acquisition in April of two Russian industrial coating companies. Operating profit stood at EUR 40.1 million (EUR 34.6 million, including EUR 3.3 million in non-recurring income). Excluding the effect of non-recurring items, operating profit increased by 28% year on year.

OTHER OPERATIONS

Other operations include corporate expenses not charged to the business areas, such as some research and development costs and the costs of the Kemira Corporate Center. During the current year, the Group is particularly investing in harmonizing and enhancing its purchasing and logistics processes and IT services. Investments of several million euro aim at generating cost savings in the forthcoming years as well as increasing the agility and flexibility to respond to the changes in the business environment.

Other operations also include the water-soluble fertilizers unit, which is not part of Kemira’s core business operations. In February, Kemira sold its shareholding (50%) in Kemira Arab Potash Company Ltd (Kemapco), part of Water Soluble, to Arab Potash Company Ltd (APC). Kemira will continue selling potassium nitrate, produced by the Jordanian plant, for a one-year transition period.

During the first quarter of the current year, an error was found and reported in the calculation of the provision recognized in 2006 due to the closure of the Water Soluble unit. This prior year’s error was corrected retrospectively in the last quarter figures of 2006 in accordance with IAS 8. The provision was increased by EUR 8 million, decreasing the result for the last quarter by the same amount. The financial statement section in this interim report provides more detailed information on the correction of this error.

KEMIRA OYJ SHARES AND SHAREHOLDERS

During January-June, Kemira Oyj shares registered a high of EUR 19.20 and a low of EUR 15.26, the share price averaging EUR 17.07. On June 30, 2007, the company’s market capitalization, excluding treasury shares, totaled EUR 2,133 million.

On June 30, 2007, the company’s share capital totaled EUR 221.8 million and the number of registered shares 125,045,000. The April-June period saw subscription of 43,690 new shares using warrants under the 2001 stock option program. The resulting share capital increase, EUR 77,482.27, was registered in the Trade Register on June 27, 2007, with trading with new shares beginning on June 28, 2007. As the 2001 stock option program ended in May, no more outstanding warrants exist for share subscription.

Kemira holds 3,850,868 treasury shares, accounting for 3.1% of outstanding company shares and voting rights.

OUTLOOK

Full-year revenue, operating profit and earnings per share for 2007 are expected to increase from their 2006 levels. Raw material and energy prices, as well as transportation costs, are projected to behave more moderately than in 2006. Operational risks were presented in the Annual Report and no significant changes have occurred.

Since the production-capacity utilization rates of Kemira Pulp&Paper’s customers are expected to be high, the business area’s revenue and operating profit are anticipated to grow from the previous year’s levels. Kemira has successfully integrated companies acquired in 2006 as part of the Group’s global pulp and paper chemicals operations, and their favorable contribution to profit performance will be reflected in the growing Far Eastern and South American markets. A chemical plant under construction at the site of a pulp mill in Uruguay will be phased in as the customer’s pulp production begins during the second half of 2007.

Kemira Water is expected to increase its revenue and operating profit from 2006 levels, due in particular to the previous acquisitions, and demand for its water treatment chemicals is anticipated to remain at a good level. During 2007, Kemira Water will focus on the integration of acquirees in particular.

Kemira Specialty’s revenue and operating profit are anticipated to remain lower than their 2006 levels. Competition is expected to remain tough in the titanium dioxide market. The sales forecast for the remainder of the year is based on stable volumes versus 2006, but continuing negative impact on sales revenue from currency and USD based European imports. The business area’s sales of organic acids and acid derivatives are anticipated to continue favorably in most of the areas. Sales revenue of sodium percarbonate, used in detergents, are forecasted to be slightly lower than prior year, with stable volumes and slightly lower prices.

Process on the evaluation of various ownership alternatives for Pigments and Chemidet is expected to conclude during 2007. If the evaluations progress as anticipated, these businesses will be reported as discontinued businesses as of the third quarter. The ChemSolutions business unit became part of Kemira’s Pulp&Paper business on July 1, 2007, and, as of the third quarter, it will be reported as such.

Kemira Coatings is expected to generate higher revenue due to demand remaining at a good level in all its market areas, with the strongest growth anticipated in Russia and other CIS countries. Operating profit for 2007 is expected to grow year on year (excluding EUR 16.4 million in non-recurring income included in operating profit for 2006), spurred by favorable developments in sales and recent years’ restructuring.

Helsinki, July 26, 2007

Board of Directors

All forward-looking statements in this review are based on the management’s current expectations and beliefs about future events, and actual results may differ materially from the expectations and beliefs such statements contain.

KEMIRA GROUP

The figures are unaudited.

All figures in this financial report have been rounded and consequently the

sum of individual figures can deviate from the presented sum figure.

This Interim Consolidated Financial Statement has been prepared in compliance

with IAS 34. Kemira Group has corrected a previous year error in

accordance with IAS 8. The nature of the error is described in the end

of the report.

Changes to the accounting policies as of January 1, 2007:

– IFRS 7 (Financial Instruments: Disclosures) has been

adopted by the Group in 2007

– Revised IAS 1 (Disclosures about capital) has been

adopted by the Group in 2007

The Group assesses that the adoption of the revised standards will not

have any material effect on its future financial statements. However, the

resulting changes will add disclosures to the Financial Statements.

INCOME STATEMENT   4-6/2007 4-6/2006 1-6/2007 1-6/2006 2006*

EUR million

Revenue 753.0 647.5 1,426.3 1,200.4 2,522.5

Other income from

operations 5.9 13.7 12.7 21.5 59.2

Expenses -669.1 -579.7 -1,266.5 -1,065.5 -2,264.5

Depreciation -32.3 -30.0 -66.0 -59.4 -123.5

Operating profit 57.6 51.5 106.5 97.0 193.7

Financial income and

expenses -12.6 -5.8 -24.8 -12.9 -37.2

Income from associates 0.7 -0.6 1.3 -1.5 -2.3

Profit before tax 45.7 45.1 83.0 82.6 154.2

Income tax -12.4 -13.1 -22.4 -24.0 -42.0

Net profit for the period 33.3 32.0 60.6 58.6 112.2

Attributable to:

Equity holders of the parent 32.3 31.0 58.7 56.8 108.6

Minority interest 1.0 1.0 1.9 1.8 3.6

Net profit for the period 33.3 32.0 60.6 58.6 112.2

BALANCE SHEET

EUR million

ASSETS 30.6.2007 31.12.2006*

Non-current assets

Goodwill 629.2 581.0

Other intangible assets 117.8 108.9

Property, plant and equipment 1,008.1 987.1

Holdings in associates 8.2 8.1

Available-for-sale investments 85.3 84.3

Deferred tax assets 7.6 7.7

Defined benefit pension receivables 24.9 24.6

Other investments 9.4 9.5

Total non-current assets 1,890.5 1,811.2

Current assets

Inventories 303.2 293.2

Receivables

Interest-bearing receivables 2.7 9.1

Interest-free receivables 679.6 565.4

Total receivables 682.3 574.5

Money market investments –

cash equivalents 26.9 35.0

Bank and cash 35.3 41.1

Total current assets 1,047.7 943.8

Non-current assets held for sale 1.9 14.4

Total assets 2,940.1 2,769.4

EQUITY AND LIABILITIES 30.6.2007 31.12.2006*

Equity attributable to equity

holders of the parent 1,073.0 1,069.9

Minority interest 13.1 12.6

Total equity 1,086.1 1,082.5

Non-current liabilities

Interest-bearing non-current liabilities 588.8 395.1

Deferred tax liabilities 114.3 105.9

Pension liabilities 67.1 66.8

Provisions 23.9 63.3

Total non-current liabilities 794.1 631.1

Current liabilities

Interest-bearing current liabilities 540.8 508.5

Interest-free current liabilities 506.0 522.9

Provisions 13.1 15.5

Total current liabilities 1,059.9 1,046.9

Liabilities directly associated with non-current

assets classified as held for sale 8.9

Total liabilities 1,854.0 1,686.9

Total equity and liabilities 2,940.1 2,769.4

Non-current assets held for sale include US- and Canada-based factory sites.

* Prior year correction included

CONSOLIDATED CASH FLOW STATEMENT 1-6/2007 1-6/2006 2006

EUR million

Cash flows from operating activities

Adjusted operating profit 166.1 138.9 232.0

Interests -15.1 -15.2 -30.4

Dividend income 0.1 1.8 2.0

Other financing items 0.5 -1.3

Income taxes paid -19.5 -17.9 -45.1

Total funds from operations 131.6 108.1 157.2

Change in net working capital -108.5 -79.8 59.6

Total cash flows from operating activities 23.1 28.3 216.8

Cash flows from investing activities

Capital expenditure -165.7 -161.8 -462.0

Proceeds from sale of assets -26.0 33.8 102.9

Net cash used in investing activities -191.7 -128.0 -359.1

Cash flow after investing activities -168.6 -99.7 -142.3

Cash flows from financing activities

Change in long-term loans

    (increase +, decrease -) -6.7 43.8 173.4

Change in long-term loan receivables

    (decrease +, increase -) 0.7 0.7 1.5

Short-term financing, net

    (increase +, decrease -) 216.5 139.6 33.8

Dividends paid -59.9 -45.1 -46.3

Other 4.0 14.7 -0.2

Net cash used in financing activities 154.6 153.7 162.2

Net change in cash and cash equivalents -14.0 54.0 19.9

Cash and cash equivalents at end of period 62.2 110.3 76.2

Cash and cash equivalents at

    beginning of period 76.2 56.3 56.3

Net change in cash and cash equivalents -14.0 54.0 19.9

4-6/2007 4-6/2006

Cash flows from operating activities

Adjusted operating profit 84.5 79.4

Interests -9.5 -9.1

Dividend income 0.1 0.9

Other financing items -1.1

Income taxes paid -11.7 -7.3

Total funds from operations 63.4 62.8

Change in net working capital -10.3 -14.2

Total cash flows from operating activities 53.1 48.6

Cash flows from investing activities

Capital expenditure -87.4 -104.3

Proceeds from sale of assets 6.5 27.8

Net cash used in investing activities -80.9 -76.5

Cash flow after investing activities -27.8 -27.9

Cash flows from financing activities

Change in long-term loans

    (increase +, decrease -) -125.6 -4.3

Change in long-term loan receivables

    (decrease +, increase -) -0.7

Short-term financing, net

    (increase +, decrease -) 216.5 65.5

Dividends paid -59.9 -45.1

Other 3.2 14.1

Net cash used in financing activities 33.5 30.2

Net change in cash and cash equivalents 5.7 2.3

Cash and cash equivalents at end of period 62.2 110.3

Cash and cash equivalents at

    beginning of period 56.5 108.0

Net change in cash and cash equivalents 5.7 2.3

STATEMENT OF CHANGES IN EQUITY

Capital

paid-in in

Share Share excess of Other Fair value

capital issue par value reserves reserve

Shareholders’ equity at

January 1, 2006 221.3 0.0 257.8 2.8 64.3

Net profit for the financial year

Dividends paid

Treasury shares issued

to target group

Share-based compensation

Options subscribed for shares   0.2 0.1

Exchange differences

Hedge of net investments

in foreign entities

Cash flow hedging: amount

entered in shareholders’ equity 10.7

Acquired minority interest

Transfer between restricted and

non-restricted equity 0.3

Other changes

Shareholders’ equity at

June 30, 2006 221.5 0.1 257.8 3.1 75.0

Shareholders’ equity at

January 1, 2007 221.6 0.0 257.9 3.1 59.6

Net profit for the financial year

Dividends paid

Treasury shares issued

to target group

Share-based compensation

Options subscribed for shares   0.2

Exchange differences 0.1

Hedge of net investments

in foreign entities

Cash flow hedging: amount

entered in shareholders’ equity -0.3

Acquired minority interest

Transfer between restricted and

non-restricted equity

Other changes 0.3

Shareholders’ equity at

June 30, 2007 221.8 0.0 257.9 3.5 59.3

Exchange Treasury Retained Minority

differences shares earnings interests Total

Shareholders’ equity at

January 1, 2006 -33.9 -27.5 520.7 13.7 1,019.2

Net profit for the financial year 56.8 1.8 58.6

Dividends paid -43.5 -1.5 -45.0

Treasury shares issued

to target group 0.7 -0.7 0.0

Share-based compensation    0.6 0.6

Options subscribed for shares   0.3

Exchange differences -3.8 -0.1 -3.9

Hedge of net investments

in foreign entities 3.8 3.8

Cash flow hedging: amount

entered in shareholders’ equity 10.7

Acquired minority interest -0.5 -0.5

Transfer between restricted and

non-restricted equity -0.3 0.0

Other changes -0.8 -0.1 -0.9

Shareholders’ equity at

June 30, 2006 -33.9 -26.8 532.8 13.3 1,042.9

Shareholders’ equity at

January 1, 2007 -30.8 -26.8 585.3 12.6 1082.5

Net profit for the financial year 58.7 1.9 60.6

Dividends paid -58.2 -1.7 -59.9

Treasury shares issued

to target group 0.9 -0.9 0.0

Share-based compensation    0.8 0.8

Options subscribed for shares   0.2

Exchange differences -1.6 0.2 -1.3

Hedge of net investments

in foreign entities 2.8 2.8

Cash flow hedging: amount

entered in shareholders’ equity -0.3

Acquired minority interest 0.2 0.2

Transfer between restricted and

non-restricted equity 0.0

Other changes 0.4 -0.1 0.6

Shareholders’ equity at

June 30, 2007 -29.6 -25.9 586.1 13.1 1,086.2

At the end of the year 2006 there were 3,979,670 treasury shares.

Of the shares that were granted in connection with the share-based

incentive plan 15,341 were returned to Kemira in 2007. A total of 144,143 shares

were issued to key persons based on the incentive plan on February 23, 2007.

The total equivalent book value of the shares issued amounted to approx.

EUR 255,133. The issue does not materially affect the distribution of ownership

and voting power in the company.

Kemira had in its possession 3,850,868 of its treasury shares at June 30, 2007.

Their average acquisition share price was EUR 6.73 and the treasury shares

represented 3.1% of the share capital and of the aggregate number of votes

conferred by all the shares. The equivalent book value of the treasury

shares is EUR 6.8 million.

KEY FIGURES

1-6/2007

1-6/2006

2006*

Earnings per share, basic and diluted, EUR

0.48

0.47

0.90

Cash flow from operations per share, EUR

0.19

0.23

1.79

Capital expenditure, EUR million

165.7

161.8

462.0

Capital expenditure / revenue, %

11.6

13.5

18.3

Average number of shares (1000), basic *)

121,136

120,817

120,877

Average number of shares (1000), diluted *)

121,195

121,030

121,051

Number of shares at the end of the period

(1000), basic *)

121,194

120,911

120,988

Number of shares at the end of the period

(1000), diluted *)

121,194

121,040

121,204

Equity per share, attributable to

equity holders of the parent, EUR

8.86

8.52

8.85

Equity ratio, %

37.1

39.7

39.2

Gearing, %

98.3

73.9

76.4

Net liabilities, EUR million

1,067.4

770.2

827.4

Personnel (average)

9,826

8,949

9,186

4-6/2007

4-6/2006

Earnings per share, basic and diluted, EUR

0.27

0.26

Cash flow from operations per share, EUR

0.44

0.40

Capital expenditure, EUR million

87.4

104.3

Capital expenditure / revenue, %

11.6

16.1

Average number of shares (1000), basic *)

121,180

120,876

Average number of shares (1000), diluted *)

121,195

121,032

Number of shares at the end of the period

(1000), basic *)

121,194

120,911

Number of shares at the end of the period

(1000), diluted *)

121,194

121,040

*) Number of shares outstanding, adjusted by the number of shares bought back.

REVENUE BY BUSINESS AREA

4-6/2007

4-6/2006

1-6/2007

1-6/2006

2006*

EUR million

Kemira Pulp&Paper

260.1

257.9

515.4

467.4

993.3

Kemira Water

185.1

102.1

355.1

194.4

467.6

Kemira Specialty

110.6

107.6

214.1

226.2

456.2

Kemira Coatings

188.7

170.3

324.5

288.9

562.8

Other and Intra-Group sales

8.5

9.6

17.2

23.5

42.6

Total Group

753.0

647.5

1,426.3

1,200.4

2,522.5

OPERATING PROFIT BY

4-6/2007

4-6/2006

1-6/2007

1-6/2006

2006*

BUSINESS AREA

Kemira Pulp&Paper

23.4

20.4

46.4

46.4

90.8

Kemira Water

13.0

9.6

24.9

16.0

35.3

Kemira Specialty

7.1

11.7

17.4

23.0

45.8

Kemira Coatings

27.3

25.0

40.1

34.6

72.1

Other and eliminations

-13.2

-15.2

-22.3

-23.0

-50.3

Total Group

57.6

51.5

106.5

97.0

193.7

CHANGES IN PROPERTY, PLANT AND EQUIPMENT

1-6/2007

1-6/2006

2006

EUR million

Carrying amount at beginning of year

987.1

865.0

865.0

Acquisitions of subsidiaries

-14.4

27.1

151.9

Increases

105.3

61.1

154.4

Decreases

-3.1

-3.0

-42.0

Depreciation and impairments

-55.7

-51.4

-106.3

Exchange rate differences and other changes

-11.1

-57.6

-35.9

Net carrying amount at end of period

1,008.1

841.2

987.1

CHANGES IN INTANGIBLE ASSETS

1-6/2007

1-6/2006

2006

EUR million

Carrying amount at beginning of year

689.9

629.7

629.7

Acquisitions of subsidiaries

42.2

39.5

71.8

Increases

14.7

6.1

18.1

Decreases

-0.3

0.0

-0.4

Depreciation and impairments

-10.3

-8.0

-17.2

Exchange rate differences and other changes

10.8

-9.2

-12.1

Net carrying amount at end of period

747.0

658.1

689.9

CONTINGENT LIABILITIES

30.6.2007

31.12.2006

EUR million

Mortgages

61.5

64.8

Assets pledged

On behalf of own commitments

17.6

19.5

Guarantees

On behalf of own commitments

12.2

6.4

On behalf of associates

34.3

32.6

On behalf of others

3.4

1.4

Operating leasing liabilities

Maturity within one year

14.4

14.9

Maturity after one year

113.5

118.1

Other obligations

On behalf of own commitments

0.3

0.4

On behalf of associates

2.3

2.3

Major off-balance sheet investment commitments

Major amounts of contractual commitments for the acquisition

of property, plant and equipment on June 30, 2007 were EUR 33 million for

the construction of the chemical plant in Uruguay and EUR 13 million

for the investment of Kemira Coatings in Russia.

Litigation

The Group has extensive international operations and

is involved in a number of legal proceedings incidental to these operations.

The Group does not expect the outcome of any legal proceedings

currently pending to have a materially adverse effect upon the Group’s

consolidated result.

Kemira Chemicals, Inc. has received a grand jury subpoena

to produce documents in connection with an investigation by the United

States Department of Justice’s Antitrust Division, relating to the hydrogen

peroxide business in the US. Kemira Oyj, Kemira Chemicals, Inc. and

Kemira Chemicals Canada, Inc. have recently received claims or

were named in class action lawsuits filed by direct and indirect purchasers

of hydrogen peroxide and persalts in US federal and state courts and in Canada.

In these civil actions it is alleged that the US plaintiffs suffered

damages resulting from a cartel among hydrogen peroxide suppliers.

The existence of the United States Departments of Justice’s Antitrust

Division’s investigations and the European Commission’s ruling in a case

of infringement of competition law in May 2006 are relied upon in support

of the allegations.

RELATED PARTY

Related party transactions have not changed materially after

annual closing 2006.

DERIVATIVE INSTRUMENTS

EUR million

30.6.2007

31.12.2006

Nominal

Nominal

value

Fair value

value

Fair value

Currency instruments

Forward contracts

327.8

3.2

389.4

5.5

of which hedges of net investment

in a foreign operation

19.6

2.2

Currency options

Bought

37.4

-0.1

42.8

Sold

39.5

0.1

45.3

0.2

Currency swaps

150.0

5.4

115.9

8.4

Interest rate instruments

Interest rate swaps

117.6

5.7

109.2

4.7

of which cash flow hedge

92.8

5.2

83.8

4.2

Interest rate options

Bought

Sold

Bond futures

10.0

10.0

-0.2

of which open

10.0

10.0

-0.2

Other instuments

Fair value

Fair value

Electricity forward

contracts

GWh

924.2

8.9

GWh

1,227.0

10.4

of which cash flow

hedge

GWh

924.2

8.9

GWh

1,227.0

10.4

Propane swap

contracts

Tons

Tons

1,000.0

-0.1

The fair values of the instruments which are publicly traded

are based on market valuation on the date of reporting. Other instruments

have been valuated based on net present values of future cash flows.

Valuation models have been used to estimate the fair values of options.

Nominal values of the financial instruments do not necessarily

correspond to the actual cash flows between the counterparties and

do not therefore give a fair view of the risk position of the Group.

BUSINESS COMBINATIONS

The Cytec water treatment business

Kemira acquired the Cytec Industries, Inc.’s water treating

and acryl amide business on October 1, 2006. Cytec’s water treatment

chemicals product line consists of water treatment solutions for industrial

and municipal water treatment plants. The acquisition

includes five production plants of which three are located in the US

(Mobile/Alabama, Longview/Washington, and Fortier/Louisiana), and

two in Europe (Bradford /UK and Botlek/the Netherlands).

The acquisition of Cytec’s water treatment chemicals

business is in line with Kemira’s growth strategy. It also enables

the Group to significantly broaden its current product portfolio and gain

greater geographical presence in key markets and inside key customer

segments. The acquired business’ market regions include the US,

South America, Asia and Europe.

The total price of the acquisition is approx. EUR 197 million

but the amount is subject to the adjustment of net working capital.

Capitalized acquisition costs directly attributed to the combination

were 3.2 million June 30, 2007. The acquisition was financed with

Kemira Group’s own cash assets and through existing financing

agreements.

In addition to the purchase of the business (asset

purchase agreement) which was closed October 1, 2006,

Kemira signed a share purchase agreement to buy the shares

of Cytec Manufacturing BV. The closing and payment of the share

purchase was on January 11, 2007. Kemira has also signed transition

service agreements with nine Cytec companies concerning

certain transition services with respect of the products of the business

(Overseas units). The assets related to these transition service

agreements will be transferred to Kemira and paid gradually

starting on July 1 and ending on September 1, 2007.

The control over the whole Cytec water treatment business

was transferred to Kemira on October 1, 2006. The purchase price

allocation of the Cytec water treatment business has been made

for the June 30, 2007 financial statements. The fair

values of the business combination’s intangible assets consist of

global patents, customer related assets and manufacturing knowhow.

Business combination has been done preliminarily since the

business transfers of the Overseas units are still on-going according

to the plan.

Carrying

Fair values

amounts

recorded on

prior

business

to business

combination

combination

Intangible assets

15.5

Property, plant and equipment

91.0

54.7

Inventories

35.0

33.3

Trade receivables and other receivables

34.9

34.9

Cash and cash equivalents

0.3

0.3

Total assets

176.7

123.2

Interest bearing current liabilities

Other liabilities

12.9

12.8

Deferred tax liabilities

1.8

Total liabilities

14.7

12.8

Net assets

162.0

110.4

Cost of business combination (net)

197.3

Goodwill

35.3

Acquisition cost

197.3

Overseas units

-12.5

Cash and cash equivalents in subsidiary acquired

-0.3

Cash outflow on acquisition

184.5

The revenue of the acquired unit for January 1 – June 30, 2007

totaled EUR 143.9 million and operating profit EUR 5.5 million.

DEFINITIONS OF KEY FIGURES

Earnings per share (EPS):

Equity ratio, %:

Net profit attributable to equity

Shareholders’ equity x 100 /

holders of the parent /

Total assets – prepayments

Average number of shares

received

Cash flow from operations:

Gearing, %:

Cash flow from operations, after

Interest-bearing net liabilities x 100 /

change in net working capital

Shareholders’ equity

and before investing activities

Cash flow from operations per share:

Net liabilities:

Cash flow from operations /

Liabilities – bank and cash –

Average number of shares

money market investments

Equity per share:

Return on capital employed

Equity attributable to equity

(ROCE), %:

holders of the parent at

Operating profit + share

end of quarter /

of associates’

Number of shares at

results x 100 /

end of quarter

(Net working capital +

property, plant and equipment

available for use + intangible

assets + investments in

associates) *)

*) Average

PRIOR PERIOD ERROR

An error was discovered related to the financial statements of

2006 and has been corrected retrospectively according to IAS 8.

The error was related to the calculation of the provision made for the

closure of the Water Soluble business unit and as a result of this

the provision was reported 8 million euro too low. This

has been corrected to the fourth quarter result of 2006. The income

statement of full year 2006 and the balance sheet at December 31,

2006 were changed as follows:

INCOME STATEMENT

Reported

Corrected

EUR million

2006

2 006

Revenue

2,522.5

2,522.5

Other income from operations

59.2

59.2

Expenses

-2,256.5

-2,264.5

Depreciation

-123.5

-123.5

Operating profit

201.7

193.7

Financial income and expenses

-37.2

-37.2

Income from associates

-2.3

-2.3

Profit before tax

162.2

154.2

Income tax

-42.0

-42.0

Net profit for the period

120.2

112.2

Attributable to:

Equity holders of the parent

116.6

108.6

Minority interest

3.6

3.6

Net profit for the period

120.2

112.2

KEY FIGURES

Reported

Corrected

2006

2 006

Earnings per share, basic

and diluted, EUR

0.96

0.90

BALANCE SHEET

Reported

Corrected

EUR million

########

31.12.2006

Equity attributable to equity

holders of the parent

1,077.9

1,069.9

Total equity

1,090.5

1,082.5

Provisions

55.3

63.3

Total non-current liabilities

623.1

631.1

Retrospective restated quarterly figures are presented

as appendix to this interim report.

QUARTERLY EARNINGS PERFORMANCE

2006

(Unaudited figures)

1-3

4-6

7-9

10-12

Total

Revenue

Kemira Pulp&Paper

209.5

257.9

261.9

264.0

993.3

Kemira Water

92.3

102.1

101.7

171.5

467.6

Kemira Speciality

118.6

107.6

112.8

117.2

456.2

Kemira Coatings

118.6

170.3

164.6

109.3

562.8

Other and intra-Group

    sales

13.9

9.6

11.6

7.5

42.6

Total

552.9

647.5

652.6

669.5

2,522.5

Operating profit

Kemira Pulp&Paper

26.0

20.4

24.3

20.1

90.8

Kemira Water

6.4

9.6

9.0

10.3

35.3

Kemira Speciality

11.3

11.7

11.7

11.1

45.8

Kemira Coatings

9.6

25.0

39.0

-1.5

72.1

Other including

   eliminations

-7.8

-15.2

-8.9

-18.4

-50.3

Total

45.5

51.5

75.1

21.6

193.7

Financial income

and expenses

-7.1

-5.8

-11.6

-12.7

-37.2

Share of associates’

results

-0.9

-0.6

0.3

-1.1

-2.3

Profit before tax

37.5

45.1

63.8

7.8

154.2

Income tax

-10.9

-13.1

-17.9

-0.1

-42.0

Net Profit

26.6

32.0

45.9

7.7

112.2

Attributable to

Equity holders

    of the parent

25.8

31.0

45.0

6.8

108.6

Minority interests

0.8

1.0

0.9

0.9

3.6

Net Profit

26.6

32.0

45.9

7.7

112.2

Earnings per share,

diluted, EUR

0.21

0.26

0.37

0.12

0.90

Capital employed, rolling

1,876.6

ROCE, %

10.2 %

For further information, please contact:

Kemira Oyj

Timo Leppä, Executive Vice President, Group Communications

Tel. +358 (0)10 862 1700

Kemira Oyj

Andreas Langhoff, Investor Relations Manager

Tel. +358 (0)10 862 1140

Kemira will hold a press conference on its January-June 2007 results for the media and analysts at its head office (Porkkalankatu 3) today, starting at 10:30am. A conference call in English will be held at 1:00pm. We kindly request that participants call us around 10 minutes before the conference begins, on +44 (0)20 7162 0025.

Kemira is a chemicals group made up of four business areas: Kemira Pulp&Paper, Kemira Water, Kemira Specialty and Kemira Coatings. Kemira is a global group of leading chemical businesses with a unique competitive position and a high degree of mutual synergy.

In 2006, Kemira recorded revenue of around EUR 2.5 billion and had a payroll of 9,000 employees. The company operates in 40 countries.

INCOME STATEMENT	4-6/2007	4-6/2006	1-6/2007	1-6/2006	2006*
EUR million

Revenue	753.0	647.5	1,426.3	1,200.4	2,522.5
Other income from
operations	5.9	13.7	12.7	21.5	59.2
Expenses	-669.1	-579.7	-1,266.5	-1,065.5	-2,264.5
Depreciation	-32.3	-30.0	-66.0	-59.4	-123.5
Operating profit	57.6	51.5	106.5	97.0	193.7
Financial income and
expenses	-12.6	-5.8	-24.8	-12.9	-37.2
Income from associates	0.7	-0.6	1.3	-1.5	-2.3
Profit before tax	45.7	45.1	83.0	82.6	154.2
Income tax	-12.4	-13.1	-22.4	-24.0	-42.0
Net profit for the period	33.3	32.0	60.6	58.6	112.2

Attributable to:
Equity holders of the parent	32.3	31.0	58.7	56.8	108.6
Minority interest	1.0	1.0	1.9	1.8	3.6
Net profit for the period	33.3	32.0	60.6	58.6	112.2


BALANCE SHEET
EUR million

ASSETS			30.6.2007		31.12.2006*

Non-current assets
Goodwill			629.2		581.0
Other intangible assets			117.8		108.9
Property, plant and equipment			1,008.1		987.1
Holdings in associates			8.2		8.1
Available-for-sale investments			85.3		84.3
Deferred tax assets			7.6		7.7
Defined benefit pension receivables			24.9		24.6
Other investments			9.4		9.5
Total non-current assets			1,890.5		1,811.2

Current assets
Inventories			303.2		293.2
Receivables
Interest-bearing receivables			2.7		9.1
Interest-free receivables			679.6		565.4
Total receivables			682.3		574.5
Money market investments –
cash equivalents			26.9		35.0
Bank and cash			35.3		41.1
Total current assets			1,047.7		943.8
Non-current assets held for sale			1.9		14.4
Total assets			2,940.1		2,769.4

EQUITY AND LIABILITIES			30.6.2007		31.12.2006*

Equity attributable to equity
holders of the parent			1,073.0		1,069.9
Minority interest			13.1		12.6
Total equity			1,086.1		1,082.5

Non-current liabilities
Interest-bearing non-current liabilities			588.8		395.1
Deferred tax liabilities			114.3		105.9
Pension liabilities			67.1		66.8
Provisions			23.9		63.3
Total non-current liabilities			794.1		631.1

Current liabilities
Interest-bearing current liabilities			540.8		508.5
Interest-free current liabilities			506.0		522.9
Provisions			13.1		15.5
Total current liabilities			1,059.9		1,046.9
Liabilities directly associated with non-current
assets classified as held for sale					8.9
Total liabilities			1,854.0		1,686.9
Total equity and liabilities			2,940.1		2,769.4

Non-current assets held for sale include US- and Canada-based factory sites.

* Prior year correction included


CONSOLIDATED CASH FLOW STATEMENT			1-6/2007	1-6/2006	2006
EUR million

Cash flows from operating activities
Adjusted operating profit			166.1	138.9	232.0
Interests			-15.1	-15.2	-30.4
Dividend income			0.1	1.8	2.0
Other financing items				0.5	-1.3
Income taxes paid			-19.5	-17.9	-45.1
Total funds from operations			131.6	108.1	157.2

Change in net working capital			-108.5	-79.8	59.6
Total cash flows from operating activities			23.1	28.3	216.8

Cash flows from investing activities
Capital expenditure			-165.7	-161.8	-462.0
Proceeds from sale of assets			-26.0	33.8	102.9
Net cash used in investing activities			-191.7	-128.0	-359.1
Cash flow after investing activities			-168.6	-99.7	-142.3

Cash flows from financing activities
Change in long-term loans
(increase +, decrease -)			-6.7	43.8	173.4
Change in long-term loan receivables
(decrease +, increase -)			0.7	0.7	1.5
Short-term financing, net
(increase +, decrease -)			216.5	139.6	33.8
Dividends paid			-59.9	-45.1	-46.3
Other			4.0	14.7	-0.2
Net cash used in financing activities			154.6	153.7	162.2

Net change in cash and cash equivalents			-14.0	54.0	19.9

Cash and cash equivalents at end of period			62.2	110.3	76.2
Cash and cash equivalents at
beginning of period			76.2	56.3	56.3
Net change in cash and cash equivalents			-14.0	54.0	19.9


			4-6/2007	4-6/2006

Cash flows from operating activities
Adjusted operating profit			84.5	79.4
Interests			-9.5	-9.1
Dividend income			0.1	0.9
Other financing items				-1.1
Income taxes paid			-11.7	-7.3
Total funds from operations			63.4	62.8

Change in net working capital			-10.3	-14.2
Total cash flows from operating activities			53.1	48.6

Cash flows from investing activities
Capital expenditure			-87.4	-104.3
Proceeds from sale of assets			6.5	27.8
Net cash used in investing activities			-80.9	-76.5
Cash flow after investing activities			-27.8	-27.9

Cash flows from financing activities
Change in long-term loans
(increase +, decrease -)			-125.6	-4.3
Change in long-term loan receivables
(decrease +, increase -)			-0.7
Short-term financing, net
(increase +, decrease -)			216.5	65.5
Dividends paid			-59.9	-45.1
Other			3.2	14.1
Net cash used in financing activities			33.5	30.2

Net change in cash and cash equivalents			5.7	2.3

Cash and cash equivalents at end of period			62.2	110.3
Cash and cash equivalents at
beginning of period			56.5	108.0
Net change in cash and cash equivalents			5.7	2.3


STATEMENT OF CHANGES IN EQUITY

			Capital
			paid-in in
	Share	Share	excess of	Other	Fair value
	capital	issue	par value	reserves	reserve

Shareholders’ equity at
January 1, 2006	221.3	0.0	257.8	2.8	64.3
Net profit for the financial year
Dividends paid
Treasury shares issued
to target group
Share-based compensation
Options subscribed for shares	0.2	0.1
Exchange differences
Hedge of net investments
in foreign entities
Cash flow hedging: amount
entered in shareholders’ equity					10.7
Acquired minority interest
Transfer between restricted and
non-restricted equity				0.3
Other changes
Shareholders’ equity at
June 30, 2006	221.5	0.1	257.8	3.1	75.0


Shareholders’ equity at
January 1, 2007	221.6	0.0	257.9	3.1	59.6
Net profit for the financial year
Dividends paid
Treasury shares issued
to target group
Share-based compensation
Options subscribed for shares	0.2
Exchange differences				0.1
Hedge of net investments
in foreign entities
Cash flow hedging: amount
entered in shareholders’ equity					-0.3
Acquired minority interest
Transfer between restricted and
non-restricted equity
Other changes				0.3
Shareholders’ equity at
June 30, 2007	221.8	0.0	257.9	3.5	59.3


	Exchange	Treasury	Retained	Minority
	differences	shares	earnings	interests	Total

Shareholders’ equity at
January 1, 2006	-33.9	-27.5	520.7	13.7	1,019.2
Net profit for the financial year			56.8	1.8	58.6
Dividends paid			-43.5	-1.5	-45.0
Treasury shares issued
to target group		0.7	-0.7		0.0
Share-based compensation			0.6		0.6
Options subscribed for shares					0.3
Exchange differences	-3.8			-0.1	-3.9
Hedge of net investments
in foreign entities	3.8				3.8
Cash flow hedging: amount
entered in shareholders’ equity					10.7
Acquired minority interest				-0.5	-0.5
Transfer between restricted and
non-restricted equity			-0.3		0.0
Other changes			-0.8	-0.1	-0.9
Shareholders’ equity at
June 30, 2006	-33.9	-26.8	532.8	13.3	1,042.9


Shareholders’ equity at
January 1, 2007	-30.8	-26.8	585.3	12.6	1082.5
Net profit for the financial year			58.7	1.9	60.6
Dividends paid			-58.2	-1.7	-59.9
Treasury shares issued
to target group		0.9	-0.9		0.0
Share-based compensation			0.8		0.8
Options subscribed for shares					0.2
Exchange differences	-1.6			0.2	-1.3
Hedge of net investments
in foreign entities	2.8				2.8
Cash flow hedging: amount
entered in shareholders’ equity					-0.3
Acquired minority interest				0.2	0.2
Transfer between restricted and
non-restricted equity					0.0
Other changes			0.4	-0.1	0.6
Shareholders’ equity at
June 30, 2007	-29.6	-25.9	586.1	13.1	1,086.2

Kemira Group Interim Report, January-June 2007: KEMIRA'S REVENUE UP BY 16% IN Q2

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