Pieno Zvaigzdes

Annual / Quarterly Financial Statement • Mar 1, 2023

Vilnius, February 2023 AB "Pieno žvaigždės" confirmation of the Management

Interim financial statements for the 12 months 2022

We, Aleksandr Smagin, Chief Executive Officer and Audrius Statulevičius, Chief Financial Officer, hereby confirm that, to the best of our knowledge, Interim Financial Statements of the 12 months of 2022 prepared in accordance with IFRS, give true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of AB "Pieno žvaigždės".

Chief Executive Officer / Aleksandr Smagin

Chief Financial Officer / Audrius Statulevičius

Interim financial statements

For the 12 months 2022

1. Statement of financial position 4
2. Statement of comprehensive income 5
3. Statement of cash flows 6
4. Statement on change in equity 7
5. Notes to the financial statements 8

1. Statement of financial position (Thousand EUR)

Prepared according to IFRS, not audited

	2022 12 31	2021 12 31
Assets
Property, plant and equipment	45 411	49 367
Intangible assets	51	68
Investments available for sale	22	22
Long-term receivables	411	317
Deferred tax	2 336	1 454
Total non-current assets	48 231	51 228
Inventories	19 651	17 038
Receivables	7 526	6 619
Cash and cash equivalents	272	1 736
Total current assets	27 449	25 393
Total assets	75 680	76 621
Equity
Share capital	13 089	13 089
Share premium	7 891	7 891
Own shares	-	-
Reserves	1 570	1 570
Retained earnings	4 74	5 794
Total equity	23 024	28 344
Liabilities
Government grants	1 342	1 189
Interest-bearing loans and borrowings	11 998	17 361
Deferred tax	1 495	1 212
Total non-current liabilities	14 835	19 762
Provisions
Interest-bearing loans and borrowings	18 186	5 907
Income tax payable	-	-
Trade and other amounts payable	19 635	22 608
Total current liabilities	37 821	28 515
Total liabilities	52 656	48 277
Total equity and liabilities	75 680	76 621

2. Statement of comprehensive income (Thousand EUR)

Prepared according to IFRS, not audited

	2022 01 01 -	2021 01 01 -
	2022 12 31	2021 12 31
Revenue	204 553	176 692
Cost of sales	(175 928)	(144 485)
Gross profit	28 625	32 207
Other operating income, net	1 473	649
Sales and administrative expenses	(35 205)	(30 942)
Operating profit before finance costs	(5 108)	1 914
Finance income	39	73
Finance expenses	(1 135)	(976)
Finance income/expenses, net	(1 095)	(903)
Profit before tax	(6 203)	1 011
Corporate income tax	883	240
Net profit	(5 320)	1 251
Earnings per share (EUR)	(0,12)	0,03
	2022 10 01 -	2021 10 01 -
	2022 12 31	2021 12 31
Revenue	47 387	43 790
Cost of sales	(39 532)	(37 274)
Gross profit	7 854	6 516
Other operating income, net	(410)	129
Sales and administrative expenses	(10 668)	(7 890)
Operating profit before finance costs	(3 225)	(1 245)
Finance income	11	21
Finance expenses	(368)	(249)
Finance income/expenses, net	(357)	(228)
Profit before tax	(3 582)	(1 473)
Corporate income tax	883	240
Net profit	(2 699)	(1 232)

Earnings per share (EUR) (0,06) (0,03)

3. Statement of cash flows (Thousand EUR)

Prepared according to IFRS, not audited

	2022 12 31	2021 12 31
Cash flows from operating activities
Net profit	(6 203)	978
Adjustments:
Depreciation and amortisation	5 786	5 504
Amortisation of government grants	(167)	(159)
Result of disposal of property, plant and equipment	(1 533)	(189)
Change in financial instruments	-	-
Change in vacation reserve	(127)	304
Change in provision	39	(291)
Change in impairment loss of inventories	2944	51
Interest income/expenses, net	915	644
Income tax	-	-
Cash flows from ordinary activities before changes	1 654	6 842
in the working capital
Change in inventories	(5 555)	(3 812)
Change in receivables	(984)	368
Change in trade and other payable amounts	(2 624)	6 665
Cash flows from operating activities	(7 509)	10 063
Interest paid	(952)	(781)
Income tax paid	-	-
Net cash flow from operating activities	(8 461)	9 282
Cash flows from investing activities
Acquisition of property, plant and equipment	(2 033)	(7 044)
Acquisition of intangible assets	(22)	(43)
Proceeds on sale of property, plant and equipment	2 829	577
Acquisition of rental rights	-	-
Granted / recovered loans	6	77
Interest received	37	73
Net cash flow used in investing activities	817	(6 360)
Cash flows from financing activities
Loans received	12 146	16 000
Repayment of borrowings	(4 920)	(13 420)
Dividends paid	(2)	(6 270)
Payment of finance lease liabilities	(1 364)	(1 061)
Government grants received	320	12
Net cash from/(used in) financing activities	6 180	(4 739)
Change in cash and cash equivalents	(1 464)	(1 817)
Beginning cash	1 736	3 553
Ending cash	272	1 736

4. Statement on change in equity

Prepared according to IFRS, not audited

(Thousand EUR)	Share capital	Share premium	Compulsory reserve	Retained earnings	Total equity
As of 1 January 2021	13 089	7 891	1 570	10 890	33 440
Dividends				(6 318)	(6 318)
Net profit for 9 months Of 2021				2 483	2 483
As of 30 September 2021	13 089	7 891	1 570	7 055	29 605
As of 1 October 2021	13 089	7 891	1 570	7 055	29 605
Dividends				(1)	(1)
Net profit for the 4-th quar ter of 2021				(1 260)	(1 260)
As of 31 December 2021	13 089	7 891	1 570	5 794	28 344
As of 1 January 2022	13 089	7 891	1 570	5 794	28 344
Dividends					0
Net profit for 9 months of 2021				(2 621)	(2 621)
As of 30 September 2022	13 089	7 891	1 570	3 173	25 723
As of 1 October 2022	13 089	7 891	1 570	3 173	25 723
Dividends
Net profit for the 4-th quarter of 2021				(2 699)	(2 699)
As of 31 December 2022	13 089	7 891	1 570	474	23 024

5. Notes to the financial statements

AB Pieno Žvaigždės was established by way of merger of stock companies Mažeikių Pieninė, Pasvalio Sūrinė, Kauno Pienas and Panevėžio pienas. The main office of the Company is located in Vilnius and the branches – in Mažeikiai, Pasvalys, Kaunas and Panevėžys.

Ordinary shares of the Company are quoted in the NASDAQ Vilnius Stock Exchange. The Company is engaged in production and sales of milk products to retail stores directly and through distributors.

Statement of compliance

These are the financial statements of a separate company AB Pieno Žvaigždės, which have been prepared in accordance with International Financial Reporting Standards (IFRS).

Main indicators of the Company's' performance

	2022 01 01 -	2021 01 01 -
	2022 12 31	2021 12 31
Sales, Thousand EUR	204 553	176 692
Gross profit, Thousand EUR	28 625	32 207
EBITDA, Thousand EUR	511	7 259
Current ratio (at the end of period)	0,73	0,89
Book value per share (at the end of period), EUR	0,51	0,63
Net profit per share	(0,12)	0,03

	2022 10 01 -	2021 10 01 -
	2022 12 31	2021 12 31
Sales, Thousand EUR	47 387	43 790
Gross profit, Thousand EUR	7 854	6 516
EBITDA, Thousand EUR	(1 886)	133
Current ratio (at the end of period)	0,73	0,89
Book value per share (at the end of period), EUR	0,51	0,63
Net profit per share	(0,06)	(0,03)

8

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Inventories, Thousand EUR	2022 12 31	2021 12 31
Raw materials	8 399	7 556
Stored production	11 232	9 442
Goods for resale	20	40
Total:	19 651	17 038

Segment reporting

A segment is a distinguishable component of the Company that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment, which is subject to risks and rewards that are different from those of other segments. Company sales production mainly in domestic market, and EU.

Sales by geographical markets, Thousand EUR	2022 01 01 -	2021 01 01 -
	2022 12 31	2021 12 31
Lithuania	113 493	107 012
Other EU countries	50 717	35 024
Other non EU countries	40 343	34 656
Total:	204 553	176 692

Sales by products groups, Thousand EUR	2022 01 01 -	2021 01 01 -
	2022 12 31	2021 12 31
Fresh milk products	149 122	128 467
Dry milk products	13 477	8 852
Cheese	25 775	23 098
Other products	16 179	16 276
Total:	204 553	176 692

Sales by geographical markets, Thousand EUR	2022 10 01 -	2021 10 01 -
	2022 12 31	2021 12 31
Lithuania	26 722	26 246
Other EU countries	7 428	8 330
Other non EU countries	13 273	9 214
Total:	47 387	43 790

Sales by products groups, Thousand EUR	2022 10 01 -	2021 10 01 -
	2022 12 31	2021 12 31
Fresh milk products	36 310	32 510
Dry milk products	2 177	2 834
Cheese	7 322	6 873
Other products	1 577	1 573
Total:	47 387	43 790

Post balance sheet events

There were no other significant events after the balance sheet date.