HADERA, Israel, March 8, 2010 /PRNewswire-FirstCall/ -- Hadera Paper Ltd. (the "Company" or "Hadera Paper") today reported financial results for the year ended December 31, 2009. The Company, its subsidiaries and associated companies are referred to hereinafter as the "Group".

The Consolidated Data set forth below excluding the results of operation of the associated companies: Mondi Hadera Paper Ltd. ("Mondi Hadera")and Hogla-Kimberly Ltd. ("H-K").

Consolidated sales in 2009 amounted to NIS 892.0 million, as compared with NIS 673.5 million in 2008. The increase is primarily attributed to the first-time consolidation of the data of Carmel and Frenkel-CD in the reported period, in the amount of approximately NIS 477.8 million, as compared with their consolidation for only part of last year, in the sum of NIS 160.9 million.

Operating profit totaled NIS 15.6 million in 2009, as compared with NIS 35.4 million in 2008. The decrease in operating profits originated from the erosion of selling prices coupled with the quantitative erosion of packaging paper and recycling, as a result of the imports of packaging paper at dumping prices that was offset by the recording of non-recurring revenues of NIS 16.4 million on account of a unilateral dividend.

The net profit attributed to the Company''s shareholders in 2009 amounted to NIS 91.2 million, as compared with net profit of NIS 69.7 million attributed to the company shareholders in 2008, and was affected by the improvement in operating profitability at some of the groups companies in Israel and in Turkey and by the recording of earnings as a result of the distribution of a unilateral dividend on account of the application of a preferred share by an associated company that generated net revenues of NIS 8.4 million for the company. Moreover, a reduction in the company''s share in the losses on account of the operations in Turkey (KCTR) in relation to last year also contributed to the improved profitability.

The net profit attributed to the shareholders of the company in the fourth quarter this year amounted to NIS 21.1 million, as compared with net profit attributed to the company''s shareholders of NIS 10.2 million in the corresponding quarter last year, representing an increase of 106.8%.

Basic earnings per share amounted to NIS 18.03 per share ($4.78 per share) in 2009, as compared with basic earnings per share of NIS 13.77 per share ($3.62 per share) in 2008.

The US dollar exchange rate was revaluated by 0.7% in 2009, in relation to a revaluation of approximately 1.1% in 2008.

The inflation rate in 2009 amounted to 3.9%, as compared with an inflation rate of 3.8% in 2008.

The weakness in economic activity that characterized the second half of 2008, continued in the first quarter of 2009 as well. Starting in the second quarter of 2009, a certain recovery was observed and then gained momentum in most sectors of the Israeli economy. The prices of traded securities recorded a considerable increase in the Israeli capital market, while in parallel, the corporate debt market began to recover, as the raising of funds by the business sector renewed. Various markets worldwide are experiencing similar developments, as a global trend of recovery in real-term operations is being observed, along with bullish capital markets and an improvement in the stability of financial institutions. The global recovery is largely attributed to a combination of fiscal expansionary plans, along with a continuing expansionary monetary policy, led by the US economy.

The trend of improving paper prices worldwide, that was reflected primarily in the last quarter of the year, is expected to continue throughout 2010

The Group manages a wide and relatively diverse portfolio of companies and businesses. This fact is instrumental in dealing with the local and global crisis. The different Group companies operated in 2009 on the basis of aggressive efficiency and cost-cutting measures across all companies and all sectors of operation. The company''s sectors of operation focus on consumer goods and basic inputs that were affected in a relatively limited manner by the repercussions of the global economic and financial crisis.

In parallel to the ongoing operations, the Company is working to successfully implement the strategic plans that are intended to lead to continued growth in operations and improved profitability over the coming years.

The implementation of the new recycled packaging paper manufacturing network,(an investment of NIS 690 million) is progressing as planned and subsequent to the signing of the central agreements for the acquisition of the principal equipment for production systems last year, the construction of the machine''s building is nearing completion in 2009 at the Hadera site, along with the installation of the equipment.

Financial expenses totaled NIS 18.3 million in 2009, as compared with NIS 15.0 million in 2008.

The company''s share in the earnings of associated companies totaled NIS 87.4 million in 2009, as compared with NIS 51.3 million in 2008.

The following principal changes were recorded in the Company''s share in the earnings of associated companies, in relation to 2008:

- The Company''s share in the net profit of Mondi Hadera Paper (49.9%) rose by NIS 4.5 million. The increase in profit originated primarily from an increase in the operating profit of Mondi, that grew from NIS 34.1 million last year, to NIS 40.5 million this year, despite the erosion of prices as a result of imports at dumping prices, in light of the implementation of an aggressive efficiency program in operations and purchasing and a decrease in input prices. The net profit also grew as a result of recording tax revenues as a result of the change in the tax rate, in the sum of NIS 6.4 million, that was offset as a result of the increase in financial expenses during the reported period, as compared with last year, primarily as a result of the influence of the devaluation of the NIS against the US dollar, as an average between the reported periods. - The company''s share in the net profit of Hogla-Kimberly Israel (49.9%) increased by NIS 21.5 million. Hogla''s operating profit grew from NIS 169.0 million to NIS 210.0 million this year. The improved operating profit originated from a quantitative increase in sales, improved selling prices in some of the sectors of operation, innovating products and empowering the Company''s brands, a decrease in the prices of certain company inputs in view of the erosion of global commodity prices, continuing efficiency measures across the company and growing savings in procurement that also contributed significantly to the improved profit. - The Company''s share in the losses of KCTR Turkey (49.9%) was reduced by NIS 8.1 million. The significant decrease in the loss is attributed primarily to the growth in the volumes of operation that led to the continued reduction in the operating loss, from NIS 33.4 million last year to approximately NIS 16.1 million this year. Moreover, due to the increase in the shareholders'' equity of KCTR through a financial influx from Hogla-Kimberly last year and during the reported period, and bank loans repayment the financial expenses were reduced, thereby leading to an additional reduction in the net loss.

This report contains various forward-looking statements based upon the Board of Directors'' present expectations and estimates regarding the operations and plans of the Group and its business environment. The Company does not guarantee that the future results of operations will coincide with the forward-looking statements and these may in fact differ considerably from the present forecasts as a result of factors that may change in the future, such as changes in costs and market conditions, failure to achieve projected goals, failure to achieve anticipated efficiencies and other factors which lie outside the control of the Company as well as certain other risks detailed from time to time in the Company''s filings with the Securities and Exchange Commission. The Company undertakes no obligation for publicly updating the said forward-looking statements, regardless of whether these updates originate from new information, future events or any other reason.

Hadera PAPER LTD. SUMMARY OF RESULTS (AUDITED) except per share amounts NIS IN THOUSANDS (1) 2009 2008 Net sales 891,995 673,484 Net earnings attributed to 91,230 69,710 the Company''s shareholders Basic net earnings per share attributed to the Company''s shareholders 18.03 13.77 Fully diluted earnings per share attributed to the Company''s shareholders 18.03 13.77

(1) The representative exchange rate at December 31, 2009 was NIS 3.775=$1.00.

Contact: Lea Katz, Adv. Corporate Secretary and Chief of Legal Department Hadera Paper Ltd. Group Tel:+972-4-6349408 Leak@hadera-paper.co.il

Hadera Paper Ltd.

CONTACT: Contact: Lea Katz, Adv., Corporate Secretary and Chief of
Legal Department, Hadera Paper Ltd. Group, Tel:+972-4-6349408,
Leak@hadera-paper.co.il