Pieno Zvaigzdes

Quarterly Report • Nov 30, 2022

Vilnius, November 2022 AB "Pieno žvaigždės" confirmation of the Management

Interim financial statements for the 9 months of 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 for the nine months of 2022 prepared in accordance with IFRS, give a 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 9 months of 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)

	2022 09 30	2021 12 31
Assets
Property, plant and equipment	46 803	49 367
Intangible assets	57	68
Investments available for sale	22	22
Long-term receivables	395	317
Deferred tax	1 454	1 454
Total non-current assets	48 731	51 228
Inventories	20 012	17 038
Receivables	11 310	6 619
Cash and cash equivalents	631	1 736
Total current assets	31 953	25 393
Total assets	80 684	76 621
Equity
Share capital	13 089	13 089
Share premium	7 891	7 891
Own shares	-	-
Reserves	1 570	1 570
Retained earnings	3 173	5 794
Total equity	25 723	28 344
Liabilities
Government grants	1 387	1 189
Interest-bearing loans and borrowings	17 743	17 361
Deferred tax	1 212	1 212
Total non-current liabilities	20 342	19 762
Provisions
Interest-bearing loans and borrowings	11 943	5 907
Income tax payable	-	-
Trade and other amounts payable	22 676	22 608
Total current liabilities	34 619	28 515
Total liabilities	54 961	48 277
Total equity and liabilities	80 684	76 621

2. Statement of comprehensive income (Thousand EUR)

	2022 01 01 -	2021 01 01 -
Revenue	2022 09 30 157 166	2021 09 30 132 902
Cost of sales	(136 395)	(107 211)
Gross profit	20 771	25 691
Other operating income, net	1 883	519
Sales and administrative expenses	(24 537)	(23 051)
Operating profit before finance costs	(1 883)	3 159
Finance income	279	51
Finance expenses	(767)	(727)
Finance income/expenses, net	(738)	(676)
Profit before tax	(2 621)	2 483
Corporate income tax	-	-
Profit for the year	(2 621)	2 483
Earnings per share (EUR)	-0,06	0,06
	2022 07 01 -	2021 07 01 -
	2022 09 30	2021 09 30
Revenue	55 430	46 832
Cost of sales	(48 365)	(38 045)
Gross profit	7 066	8 787
Other operating income, net	22	270
Sales and administrative expenses	(8 640)	(7 639)
Operating profit before finance costs	(1 552)	1 418
Finance income	10	23
Finance expenses	(265)	(254)
Finance income/expenses, net	(255)	(231)
Profit before tax	(1 808)	1 188
Corporate income tax	-	-
Profit for the year	(1 808)	1 188
Earnings per share (EUR)	-0,04	0,03

3. Statement of cash flows (Thousand EUR)

	2021 09 30	2021 09 30
Cash flows from operating activities
Net profit	(2 621)	2 483
Adjustments:
Depreciation and amortization	4 402	4 086
Amortisation of government grants	(122)	(119)
Result of disposal of property, plant and equipment	(1 990)	(177)
Change in financial instruments	-	-
Change in vacation reserve	(242)	-
Change in provision	-	-
Change in an impairment loss of inventories	979	-
Interest income/expenses, net	601	526
Income tax	-	-
Cash flows from ordinary activities before changes in the working capital	1 007	6 799
Change in inventories	(3 953)	(1 547)
Change in receivables	(4 841)	(4 968)
Change in trade and other payable amounts	442	3 502
Cash flows from operating activities	(7 345)	3 786
Interest paid	(629)	(578)
Income tax paid	-	-
Net cash flow from operating activities	(7 974)	3 208
Cash flows from investing activities
Acquisition of property, plant and equipment	(1 829)	(3 907)
Acquisition of intangible assets	(20)	(34)
Proceeds on sale of property, plant and equipment	2 822	563
Acquisition of rental rights	-	(291)
Interest received	33	52
Net cash flow used in investing activities	1 006	(3 617)
Cash flows from financing activities
Loans received	10 239	9 000
Repayment of borrowings	(3 690)	(3 190)
Dividends paid	(1)	(6 269)
Payment of finance lease liabilities	(1 005)	(787)
Government grants received	320	-
Net cash from/(used in) financing activities	5 863	(1 246)
Change in cash and cash equivalents	(1 105)	(1 655)
Beginning cash	1 736	3 553
Ending cash	631	1 898

4. Statement on change in equity

(Thousand EUR)	Share capital	Share premium	Own shares	Compulsory reserve	Revaluation reserve	Other reserves	Retained earnings	Total equity
As of 1 January 2021	13 089	7 891	0	1 570	0	0	10 890	33 440
Profit allocation								0
Dividends							(6 318)	(6 318)
Change of share capital								0
Own shares buyback								0
Depreciation of revaluated part Other income								0 0
Net profit for 9 months							2 483	2 483
Of 2021 As of 30 September 2021	13 089	7 891	0	1 570	0	0	7 055	29 605
As of 1 October 2021	13 089	7 891	0	1 570	0	0	7 055	29 605
Profit allocation								0
Dividends							(1)	(1)
Change of share capital								0
Own shares buyback								0
Depreciation of revaluated part Other income								0 0
Net profit for the 4-th							(1 260)	(1 260)
quarter of 2021 As of 31 December 2021	13 089	7 891	0	1 570	0	0	5 794	28 344
As of 1 January 2022	13 089	7 891	0	1 570	0	0	5 794	28 344
Profit allocation								0
Dividends								0
Change of share capital								0
Own shares buyback								0
Depreciation of								0
revaluated part Other income								0
Net profit for 9 months of							(2 621)	(2 621)
2021 As of 30 September 2022	13 089	7 891	0	1 570	0	0	3 173	25 723

5. Notes to the financial statements

AB Pieno Žvaigždės was established by way of the 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 producing and selling 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 09 30	2021 09 30
Sales, Thousand EUR	157 166	132 902
Gross profit, Thousand EUR	20 771	25 691
EBITDA, Thousand EUR	2 397	7 126
Current ratio (at the end of the period)	0,92	1,24
Book value per share (at the end of the period), EUR	0,57	0,66
Net profit per share	-0,06	0,06
	2022 07 01 -	2021 07 01 -
	2022 09 30	2021 09 30
Sales, Thousand EUR	55 430	46 832
Gross profit, Thousand EUR	7 066	8 787
EBITDA, Thousand EUR	(96)	2 757
Current ratio (at the end of the period)	0,92	1,24
Book value per share (at the end of the period), EUR	0,57	0,66

Inventories

Inventories are stated at the lower cost and net realizable value. Net realizable 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 manufacturing inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Inventories, Thousand EUR	2022 09 30	2021 12 31
Raw materials	8 487	7 556
Stored production	11 456	9 475
Goods for resale	69	7
Total:	20 012	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 the domestic market and EU.

Sales by geographical markets, Thousand EUR	2022 01 01 -	2021 01 01 -
Lithuania	2022 09 30 86 771	2021 09 30 80 767
Other EU countries	43 289	26 696
Other non-EU countries	27 106	25 440
Total:	157 166	132 902
Sales by products groups, Thousand EUR	2022 01 01 - 2022 09 30	2021 01 01 - 2021 09 30
Fresh milk products	112 812	95 957
Dry milk products	11 300	6 018
Cheese	18 452	16 224
Other products	14 602	14 703
Total:	157 166	132 902

Sales by geographical markets, Thousand EUR	2022 07 01 -	2021 07 01 -
	2022 09 30	2021 09 30
Lithuania	32 410	28 138
Other EU countries	15 570	8 561
Other non-EU countries	7 450	10 133
Total:	55 430	46 832

	2022 07 01 -	2021 07 01 -
Sales by products groups, Thousand EUR	2022 09 30	2021 09 30
Fresh milk products	38 992	32 680
Dry milk products	2 767	2 801
Cheese	7 448	5 843
Other products	6 223	5 508
Total:	55 430	46 832

Post balance sheet events

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