Quarterly Report • Sep 21, 2020
Quarterly Report
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1.1-30.6.2020
ACCORDING TO THE ARTICLE 5 OF LAW 3556/2007
General Commerce Reg. No. 12512246000
Domicile: Magiko, Municipality of Avdira Xanthi Greece
Offices: 20 Marinou Antypa Str. 17455 Alimos, Attica, Greece
20
Information regarding the preparation of the Semi-Annual Financial Report For the period from 1st January to 30th June 2020
The present Financial Report was approved by the Board of Directors of "THRACE PLASTICS CO S.A." ("Company") on September 18, 2020, and has been posted on the Company's website www.thracegroup.gr where such will remain available to investors for a period of at least (10) ten years from the publication date and includes:
| | I. | STATEMENTS BY REPRESENTATIVES OF THE BOARD OF DIRECTORS | 3 |
|---|---|---|---|
| | II. | SEMI-ANNUAL REPORT BY THE BOARD OF DIRECTORS OF THRACE PLASTICS CO. S.A. FOR THE PERIOD FROM 1-1-2019 TO 30-06-2020 |
4 |
| | IΙΙ. | REVIEW REPORT BY CERTIFIED AUDITOR | 25 |
| | IV. | INTERIM CONDENSED FINANCIAL INFORMATION OF THE PERIOD 1.1.2020 – 30.06.2020 |
27 27 |
| | V. | ONLINE AVAILABILITY OF THE FINANCIAL INFORMATION | 75 |
• Any deviation in the numbers' last digit is due to rounding.
(according to article 5 of L 3556/2007)
We, the representatives of the Board of Directors, hereby state and confirm that to our knowledge:
Xanthi, 18 September 2020
The Chairman of the Board of Directors and Chief Executive Officer The Deputy CEO & Executive Member of the Board of Directors
The Non-Executive Member of the Board of Directors
Konstantinos St. Chalioris Dimitrios P. Malamos Vasileios St. Zairopoulos
The present Semi-Annual Management Report by the Board of Directors (called hereinafter for abbreviation purposes as "Report") was prepared in accordance with the relevant provisions of Law 4548/2018 (Gov. Gaz. 104A/13.06.2018) as well as of Law 3556/2007 (following its amendment by Law 4374/2016), and the relevant decisions issued by the Board of Directors of the Hellenic Capital Market Commission, and especially the decisions with number 1/434/3.7.2007 and 8/754/14.4.2016.
The Report includes the total required information with a concise as well as comprehensive, objective and adequate manner and with the principle of providing the complete and substantial information with regards to the issues included in such.
Given the fact that the Company prepares consolidated and non-consolidated (separate) financial statements, the present Report constitutes a single report referring mainly to the consolidated financial data of the Company. Any reference to non consolidated financial data takes place in certain areas which have deemed as necessary by the Board of Directors of the Company for the better understanding of the contents of the report.
It is noted that the present Report includes, along with the first half 2020 financial statements, the required by law data and statements in the Semi-Annual Financial Report, which concern the particular time period.
The sections of the Report and the contents of such are in particularly as follows:
Macroeconomic Environment and effects of COVID-19
The spread of the COVID-19 pandemic, from the beginning of 2020 until today has caused significant disruptions in global supply and demand, including Greece and other countries in which the Group operates and has therefore created conditions of intense uncertainty, making the global and local macroeconomic environment especially difficult. At the same time, there is still an inability to assess both the duration and intensity of the pandemic, as well as the time point for restarting the recovery, but also its dynamics.
Uncertainty in the macroeconomic and financial front along with the volatile business environment are risk factors, which the Group constantly evaluates. At the same time, the situation that is developing both globally and in Greece in the economy and the wider society, as a result of the pandemic, is an additional risk factor, which may have an impact on the results and the broader trajectory of the Group.
During the given period of time, on a global scale, but also in Greece, the second phase of the pandemic is in progress, as a result of which risk conditions are being reshaped, while restrained optimism prevails regarding the finding of a vaccine for the effective treatment of virus.
The Management of the Group continues to implement a series of actions, which have been applied in all areas of operation, such as: Health and safety, personnel management, production, supply chain, transaction cycle and liquidity among others, to address potential risks in specific operating areas and to ensure conditions of the smooth and uninterrupted activity of all the companies within the Group. More specifically, the sub-teams that have been formed and monitor all relevant developments, assessing the potential impact of COVID-19, continue to support the day-to-day operations of the Group with even greater dedication and commitment, having developed and fully implemented a health and safety plan for the personnel as well as an action plan concerning the business continuity of the Group.
Despite the unfavourable economic environment, the Group has managed to maintain its sales at pre-pandemic levels, as demand remains unaffected with regard to the majority of its products. In addition, there is an increased demand for products related to personal protection and health, an increase that offsets the decline in demand for products related to catering and tourism, the impact of which is in any case limited if compared to the Group's total sales.
In terms of profitability, the Group shows a significant improvement, compared to the first half of last year. The reorganization of the Group's activities, which was implemented consistently and decisively during the previous years, the increase of the demand for products with stronger profit margins (such as personal protection and health products), the development of new products and activities (especially in the technical fabrics sector), as well as the maintenance and further strengthening of the Group's customer base, as its customers in the context of the uncertainty conditions prevailing in the market, have already shown and continue to demonstrate their trust towards the company, and also they continue to recognize the Group's reliability and consistency as a supplier.
Regarding the level of liquidity, the Group has achieved stronger levels of liquidity and at the same time has reduced its Net Debt, a goal which remains key priority and primary objective for the second half of the current year.
The Management constantly and systematically monitors the situation along with the potential repercussions whereas it proceeds with appropriate actions in order to ensure that all necessary and possible measures are taken in time to limit, as much as possible, the potential effects of the crisis due to pandemic on its business activities of the Group. At the same time, the Management ensures the seamless business continuity of the Group. In any case, until the time of the preparation and approval of this Report, the future economic effects associated with the pandemic cannot be estimated reliably and with absolute accuracy.
The Board of Directors of the Company, during its meeting held on 10.01.2020, accepted the resignation of Mr. Georgios Braimis, Executive Member of the Board of Directors, who left the Group. During the same meeting on 10.01.2020, the Board of Directors decided in accordance with article 8 of the Company's Articles of Association and article 82, par. 2 of Law 4548/2018 the non-immediate replacement of above member and the continuation of the management and representation of the Company by the remaining members of the Board of Directors.
By decision of the Board of Directors of March 20th, 2020, Mr. Dimitris Malamos, Executive Member of the Board of Directors, took over the duties of Deputy CEO of the Group (Deputy Group CEO). Mr. Malamos, who has held the position of Group CFO since 2010, has many years of experience in financial analysis and internal restructuring, has demonstrated his administrative and managerial skills and at the same time has gained deep knowledge and experience about the organization, operation and business activities of the Company and the Group.
The position of Group CFO was assumed by
Further implementing the internal restructuring plan within the financial year 2020, the Group decided the following:
• The transfer of the production line of nonwoven fabrics (needle punch) from the 100% subsidiary Thrace Linq Inc. which is headquartered in South Carolina, USA, to the 100% subsidiary Thrace Nonwovens & Geosynthetics, based in Magiko of Xanthi, Greece, in order to strengthen the production capacity of the subsidiary and thus expand its sales growth potential. The transfer of the production line started in April 2020 whereas its installation and commencement of operation will take place within the fourth quarter of 2020. Following the above, the final termination of the operations of Thrace Linq Inc. was approved whereas it was decided that the US geotextiles market would still be served by the Group's facilities in Europe and by Lumite Inc. in the USA, in which the Group participates with 50%. The Management considers that the above action will strongly Mr. Dimitrios Fragkou, Certified Accountant (member of ACCA), who for many years held managerial positions in a well-known auditing company and has significant and valuable expertise in providing financial, auditing and consulting services. This expertise will be further used to improve the organization, efficiency and operation of the relevant Divisions and Departments of the Company and the Group. Mr. Fragkou is a graduate of the Department of Business Administration and holds a Master's degree in Accounting and Finance from the Athens University of Economics and Business.
contribute to the improvement of the Group's profitability.
• The liquidation of Thrace China (already completed) and its parent company Thrace Asia (expected to be completed within the year). The latter company operates as the sales offices Thrace Nonwovens & Geosynthetics in the Chinese market, with extremely limited activity in recent years, as most of the sales in the Asian market are made directly by Thrace Nonwovens & Geosynthetics. Therefore, the Group's Management decided to suspend the operation of this office. The parent company's, SAEPE LTD, participation value in the above companies settled at € 631 and there was also an intra-group receivable of € 30. The participation and the receivable will be impaired by 100%.
It is noted that this impairment charge will not affect the results of the Group but only the results of the subsidiary SAEPE LTD.
The transfer of the privately owned industrial property, which housed Thrace Linq Inc and is located in South Carolina, USA, has taken place.
The total price consideration of the transaction amounted to USD 14.5 million. As a result of the existing agreement, Thrace Linq received the amount of USD 11 million, while an amount of USD 3.5 million will have to be paid by the Buyer at a later time, i.e. within twelve months the latest from the date of the sale of property. However, according to the existing agreements and its special clauses (both with the Buyer and with the Buyer's Bank involved), in case for any reason the Buyer breaches its obligation to repay the remaining amount at the agreed time horizon (up until 15/06/2021 at the latest), the company Thrace Linq has the right to repurchase the property (having first priority and also based on its own discretion), covering the outstanding balance of the loan (and any interest or expenses that will be due) of the buyer as it will have been formed at the time when Thrace Linq will exercise this right, thus permanently canceling the sale or alternatively in case this is deemed unprofitable, has the right to participate in the foreclosure process (having as security the second registered mortgage).
Given the above and as the existence of the aforementioned call option to repurchase the property creates conditions of uncertainty regarding the final completion of the transaction, its accounting recognition will take place when, by 15/06/2021 the latest, unless agreed otherwise the relevant events become certain and final. The amount of USD 11 million received was recorded in the cash and cash equivalents account, respectively increasing the "Other current liabilities" account.
It should be noted that the cash received (USD 11 million) was used to reduce the Group's Net Debt.
The fully owned by 100% subsidiary Don & Low Ltd, based in Forfar, Scotland, has decided to invest in the purchase and installation of mechanical equipment for the production of meltblown material (GBP 4.5 million). The meltblown material will be used for production of all types of masks, from surgical masks to FFP2 and FFP3 masks. The new production line is expected to be operational in the last quar-
Thrace Plastics Group has been active in the production of non-woven polypropylene fabrics, which are used as raw mateter of the year.
To implement the investment, Don & Low agreed with the state-owned institution "Scottish Enterprise" to finance 80% of the investment. Funding will be returned to Scottish Enterprise within the next five years depending on the company's sales volume during that time.
rials by manufacturers of surgical masks and other protective medical products. This activity takes place in the production facilities of the Group's subsidiaries in Xanthi and Forfar in Scotland. Due to the COVID pandemic, the above products are in increased demand. In the context of the corporate social responsibility, the Group has decided each of the above subsidiaries to give priority to the supply of these products to local manufacturers of surgical masks and other protective medical products in the Greek market and that of the UK respectively.
In addition, with the possibility of utilizing its existing production facilities and infrastructure as well as its strong know-how in this field, the Group made an unplanned investment of over 400 Euros in order to add the required mechanical equipment for the production of Type I, Type II and
The Board of Directors of Thrace Plastics Group decided to support our fellow human beings who do not have the financial means to purchase the masks necessary Type IIR surgical masks. The new production lines have already been installed in the production facilities of the Group in Xanthi and their production capacity exceeds 400 thousand masks per day.
The purpose of this decision was, on the one hand, to take advantage of a profitable business opportunity and, on the other hand, to make a significant social contribution.
At the same time, the Group is investing in the purchase and installation of mechanical equipment for the production of surgical masks in the facilities of its subsidiaries in Scotland and Ireland. The daily capacity of these production lines is of the order of 800 thousand and 200 thousand masks per day respectively.
for their protection, donating 50% of the production of surgical masks in May and June to Social Welfare Institutions and other social groups.
The following table depicts the course of the Group's results (from continuing operations) during the first half of 2020 compared to the respective period of the year 2019:
| Results of First Half 2020 (CONTINUING OPERATIONS) |
|||
|---|---|---|---|
| 1st Half 2020 | 1st Half 2019 | Change | |
| Turnover | 155,376 | 155,173 | 0.1% |
| Gross Profit | 42,141 | 32,440 | 29.9% |
| Gross Profit Margin | 27.1% | 20.9% | |
| ΕΒΙΤ* | 17,734 | 9,434 | 88.0% |
| EBIT Margin | 11.4% | 6.1% |
| Results of First Half 2020 (CONTINUING OPERATIONS) |
|||
|---|---|---|---|
| EBITDA* | 26,033 | 16,468 | 58.1% |
| EBITDA Margin | 16.8% | 10.6% | |
| Adjusted EBITDA* | 26,787 | 16,468 | 62.7% |
| Adjusted EBITDA Margin | 17.2% | 10.6% | |
| EBT | 16,855 | 7,487 | 125.1% |
| EBT Margin | 10.8% | 4.8% | |
| Total EAT | 12,830 | 5,255 | 144.1% |
| EAT Margin | 8.3% | 3.4% | |
| Total EATAM | 12,548 | 5,103 | 145.9% |
| EATAM Margin | 8.1% | 3.3% | |
| Earnings per Share (in euro) | 0.2869 | 0.1167 | 145.8% |
* Note: The alternative performance measures are presented and described analytically in the section III of the present Report.
Reduction in the volume of consolidated sales by 1.1% and marginal increase in the consolidated turnover by 0.1%. In particular, the Packaging sector posted an increase of 2.75% and the Technical Fabrics sector showed a decrease of 3.6%, compared to the first half of 2019.
Gross profit margin settled at 27.1% compared to 20.9% in the respective period of the previous year posting an increase of 29.9%.
EBIT margin settled at 11.4% compared to 6.1% in the first half of 2019, posting an increase of 88%.
EBITDA margin stood at 16.8% compared to 10.6% in the first half of 2019, increased by 58.1%.
Adjusted EBITDA margin stood at 17.2% compared to 10.6% in the first half of 2019.
Adjusted EBITDA does not include expenditures of € 744 related to the operational reorganization of Don & Low Ltd. The subsidiary company reduced its presence in woven technical fabrics while increased its production capacity in non-woven technical fabrics. These costs are analyzed below:
EBT margin settled at 10.8% compared to 4.8% in the first half of 2019, more than double compared to the same period last year (+ 125.1%).
EAT margin stood at 8.3% compared to 3.4% in the first half of 2019, recording a significant increase of 144.1%.
EATAM margin settled at 8.1% in the first half of 2020 compared to 3.3% in the corresponding period in 2019, i.e. a significant increase of +145.9%.
Due to the decision to permanently discontinue the production of Thrace Linq, which was decided in order for the Group to focus on profitable activities, this activity is reported in the income statement and other comprehensive income as discontinued operations.
For the completeness of information provided, the following table presents the Group's results as a whole (from Continuing and Discontinued Operations) in the first half of 2020, in relation to the corresponding period of 2019:
| Results of First Half 2020 (CONTINUED & DISCONTINUED OPERATIONS) |
|||||
|---|---|---|---|---|---|
| 1st Half 2020 | 1st Half 2019 | Change | |||
| Turnover | 160,646 | 171,125 | -6.1% | ||
| Gross Profit | 42,393 | 33,649 | 26.0% | ||
| Gross Profit Margin | 26.4% | 19.7% | |||
| ΕΒΙΤ* | 14,927 | 8,541 | 74.8% | ||
| EBIT Margin | 9.3% | 5.0% | |||
| EBITDA* | 23,605 | 16,292 | 44.9% | ||
| EBITDA Margin | 14.7% | 9.5% | |||
| Adjusted EBITDA* | 26,787 | 16,292 | 64.4% | ||
| Adjusted EBITDA* | 16.7% | 9.5% | |||
| Adjusted EBITDA Margin | 14,046 | 6,591 | 113.1% | ||
| EBT | 8.7% | 3.9% | |||
| EBT Margin | 10,021 | 4,353 | 130.2% | ||
| Total EAT | 6.2% | 2.5% | |||
| EAT Margin | 9,739 | 4,201 | 131.8% | ||
| Total EATAM | 6.1% | 2.5% | |||
| EATAM Margin | 0.2227 | 0.0961 | 131.7% |
* Note: The alternative performance measures are presented and described analytically in the section III of the present Report.
The description and financial results of the Group's operating segments (business units) are presented as follows:
Production and trade of technical fabrics for industrial and technical use.
Production and trade of packaging materials, plastic bags, and plastic boxes for the packaging of food and colors and other packaging materials for agricultural use.
Following the absorption of Elastron Agricultural SA from Thrace Greenhouses SA, the Group participates with 50.91% in Thrace Greenhouses SA which is consolidated according to the equity method. Following the above, the Group will not be reporting the Agricultural activity on separate basis.
As result, the sector "Other" includes the agricultural activity as well as the activity of the Parent Company (investment activity and also provision of Administrative, Financial and IT services to the subsidiaries).
The following table summarizes the course of the results from continued activities of the business segments which the Group activates in, for the first half of the current year:
| Sector | Technical Fabrics | Packaging | Other | Eliminations | Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Continued Operations |
1st Half 2020 |
1st Half 2019 |
% Ch. | 1st Half 2020 |
1st Half 2019 |
% Ch. | 1st Half 2020 |
1st Half 2019 |
1st Half 2020 |
1st Half 2019 |
1st Half 2020 |
1st Half 2019 |
| Turnover | 108,061 | 111,912 | -3.4% | 51,073 | 48,227 | 5.9% | 2,569 | 2,619 | -6,327 | -7,585 155,376 | 155,173 | |
| Gross Profit | 27,456 | 22,016 | 24.7% | 14,520 | 10,219 | 42.1% | 485 | 273 | -320 | -69 | 42,141 | 32,440 |
| Gross Profit Margin |
25.4% | 19.7% | 28.4% | 21.2% | 18.9% | 10.4% | - | - | 27.1% | 20.9% | ||
| Total EBITDA | 15,670 | 9,960 | 57.3% | 10,313 | 6,839 | 50.8% | 88 | -299 | -38 | -32 | 26,033 | 16,468 |
| EBITDA Margin |
14.5% | 8.9% | 20.2% | 14.2% | - | - | - | - | 16.8% | 10.6% |
The following table summarizes the basic information of the Group's financial position as of 30.06.2020:
| 30.06.2020 | 31.12.2019 | % Change | |
|---|---|---|---|
| Tangible Fixed Assets | 125,055 | 123,210 | 1.5% |
| Rights-of-use assets | 13,286 | 14,972 | -11.3% |
| Investment Property | 113 | 113 | 0.0% |
| Intangible Assets | 10,719 | 11,350 | -5.6% |
| Interests in Joint Ventures | 14,915 | 14,547 | 2.5% |
| Other Long-term Receivables | 5,083 | 5,091 | -0.2% |
| Deferred Tax Assets | 1,030 | 833 | 23.6% |
| Total Fixed Assets | 170,201 | 170,116 | 0.05% |
| Inventories | 55,659 | 59,158 | -5.9% |
| Income Tax Prepaid | 453 | 588 | -23.0% |
| Trade Receivables | 58,100 | 57,428 | 1.2% |
| Other Receivables | 8,415 | 7,844 | 7.3% |
| Fixed Assets Held for Sale | 6,022 | 6,155 | -2.2% |
| Cash & Cash Equivalents | 40,660 | 22,051 | 84.4% |
| Total Current Assets | 169,309 | 153,224 | 10.50% |
| TOTAL ASSETS | 339,510 | 323,340 | 5.0% |
| TOTAL EQUITY | 151,851 | 146,349 | 3.8% |
| Long-term Loans | 46,377 | 52,871 | -12.3% |
| Liabilities from Leases | 3,001 | 4,439 | -32.4% |
| Provisions for Employee Benefits | 15,630 | 15,252 | 2.5% |
| Other Long-term Liabilities | 3,634 | 2,636 | 37.9% |
| Total Long-term Liabilities | 68,642 | 75,198 | -8.7% |
| Short-term Bank Debt | 34,466 | 43,496 | -20.8% |
| Liabilities from Leases | 3,788 | 4,773 | -20.6% |
| Suppliers | 39,470 | 36,187 | 9.1% |
| Other Short-term Liabilities | 41,293 | 17,337 | 138.2% |
| Total Short-term Liabilities | 119,017 | 101,793 | 16.9% |
| TOTAL EQUITY & LIABILITIES | 339,510 | 323,340 | 5.0% |
| Fixed Assets | € 170,201 (+0.05%) |
|---|---|
| ______________________ |
Total Fixed Assets amounted to € 170,201 remaining at almost the same levels compared to the corresponding period of the previous year.
| Current Assets | ______________________ | € 169,309 (+10.5%) | |
|---|---|---|---|
| ▶ | Trade receivables: | € 58,100 (+1.2%) | |
| ▶ | Inventories: | € 55,659 (-5.9%) |
| Equity | € 151,851 (+3.8%) ______________________ |
|---|---|
The change in Equity derived mainly from the contribution of profits for the period amounting to € 10,021, the actuarial loss resulting from the pension plan of Don & Low Ltd of € 1,186, as well as the negative foreign exchange differences due to conversion of balance sheets amounting to € 3,296.
| Provisions for Employee Benefits | € 15,630 (+2.5%) ______________________ |
|---|---|
The provisions for employee benefits are higher due to the increase of the actuarial deficit of the pension plan of Don & Low LTD.
The total liability of the Don & Low LTD pension plan as depicted in the balance sheet of 30.06.2020 is analyzed as follows:
| Don & Low Ltd | 30.06.2020 | 31.12.2019 |
|---|---|---|
| Present Value of Liabilities | 148,948 | 153,268 |
| Present Value of Fixed Assets | 135,905 | 140,574 |
| Net Liability recognized in the Balance Sheet | 13,043 | 12,694 |
The Asset allocation of the plan is as follows:
| Don & Low Ltd | 30.06.2020 | 31.12.2019 |
|---|---|---|
| Mutual Funds (Stock Market) | 15,892 | 15,615 |
| Mutual Funds (Bond Market) | 73,542 | 71,292 |
| Mutual Funds (Diversified Growth Funds) | 44,279 | 50,752 |
| Other | 2,192 | 2,915 |
| Total | 135,905 | 140,574 |
Net Debt (Long-term Loans + Long-term Liabilities from Leases + Short-term Loans + Short-term Liabilities from Leases – Cash & Cash Equivalents) dropped significantly to € 46,972 compared to € 83,528 on 31.12.2019, while the Net Debt/Equity ratio settled at 0.31x compared to 0.57x on 31.12.2019. The Net Debt / EBITDA ratio stood at 1.30x on 30.06.2020 compared to 2.91 on 31.12.2019 and 3.31 on 30.06.2019.
Short-term liabilities amounted to € 119,017 compared to € 101,793 on 31.12.2019, thus increased by 16.9%.
▶ Suppliers: € 39,470 (+9.1%)
Increase of Suppliers is mainly due to seasonality factors.
Regarding the consolidated cash flows, the Group shows significantly increased cash reserves of € 40,660 compared to € 16,090 in the corresponding period of 2019.
| CASH FLOWS | 30.06.2020 | 30.06.2019 |
|---|---|---|
| EBITDA | 23,605 | 16,292 |
| Non Cash and Non Operating Movements | 2.454 | 1,137 |
| Change in Working Capital | 22,114 | -13,022 |
| Cash from Operating Activities | 48.173 | 4,407 |
| Interest and Income Tax Paid & Other Financial Income | -2.217 | -2.855 |
| Total Inflows / Outflows from Operating Activities | 45.956 | 1.552 |
| Investment Activities | -11,099 | -11,520 |
| Financing Activities | -15,520 | 3,074 |
| Net Increase / (Decrease) in Cash | 19.337 | -6,894 |
| Cash at beginning of period | 22,051 | 22,824 |
| FX changes on cash | -728 | 160 |
| Cash at end of period | 40,660 | 16,090 |
In the context of its decision making concerning the financial, operating and strategic planning as well as the evaluation of its performance, the Group utilizes Alternative Performance Measures (APM). These particular indicators mainly contribute to the better understanding of the financial and operating results of the Group, its financial position as well as its cash flow statement. The Alternative Performance Measures (APM) should be always taken into account in line with the financial statements which have been prepared according to the IFRS and in no case the APM replace the above.
The EBIT serves the better analysis of the Group's operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses, before the financial and investment activities. The EBIT margin (%) is calculated by dividing the EBIT by the turnover.
EBITDA (The indicator of operating earnings before the financial and investment activities as well as the depreciation, amortization, impairment and taxes)
The EBITDA serves the better analysis of the Group's operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses before the depreciation of fixed assets, the amortization of grants and the impairments, as well as before the financial and investment activities. The EBITDA margin (%) is calculated by dividing the EBITDA by the turnover.
Adjusted EBITDA (The adjusted indicator of operating earnings before the financial and investment activities as well as the depreciation, amortization, impairment and taxes).
The Adjusted EBITDA is the EBITDA less any restructuring, acquisition, merger, and other non-recurring expenses that may be incurred during the period / year.
The most significant transactions of the Company with the related parties during the first half of 2020, and following the offsetting of receivables/liabilities, are presented below:
| Sales*-Income | 30.06.2020 |
|---|---|
| Thrace NW & Geosynthetics | 683 |
| Thrace IPOMA | 138 |
| Thrace Plastics Pack | 391 |
| Don & Low LTD | 521 |
| Thrace Polybulk AB | 107 |
| Thrace Linq Inc | 321 |
| Thrace Polyfilms | 152 |
| Total | 2,313 |
| Customers - Receivables | 30.06.2020 |
|---|---|
| Synthetic Packaging Ltd | 253 |
| Total | 253 |
* Sales refer to charges for Administrative Services rendered from the Parent company to the subsidiaries.
TThe Company has granted guarantees to banks against long-term loans for the account of its subsidiaries. On 30.06.2020, the outstanding amount of the loans for which the Company had granted guarantees accounted for € 63,172.
The remuneration of the members of the Management for the first half of the current year amounted to € 2,033 versus € 2,073 in the corresponding period of 2019 for the Group whereas for the parent company settled at € 751 versus € 820 in the first half of the previous year.
The remuneration concerns the Boards of Directors of 21 companies which have 37 participants and include salaries of the executive members of the Boards of Directors, other remuneration and benefits of both the executive and the non-executive directors.
There were no transactions between the Company, the Group and its related parties, which could have significant effects on the financial position and performance of the Company during the 1st Half of 2020.
All transactions described above have taken place under normal market terms.
The financial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable accounts, payable accounts and loans.
al financial risks. Such risks include market risk (foreign exchange risk and risk from changes and raw materials prices), credit risk, liquidity risk and interest rate risk.
In general, the Group's activities face sever-
The Group is exposed to fluctuations of the prices of polypropylene (represents about 55% of the cost of sales). The Group manages such fluctuations via a corresponding change in the selling price of the final product. The likelihood of an incomplete transfer of the price increase of polypropylene into the selling price inevitably causes a contraction of profit margins. For this reason, the Group adjusts as much as possible both its inventory and its commercial policy, so that this risk is in any case manageable.
The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause financial loss to the Group and the Company as a result of the breach of its contractual obligations.
The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the financial statements is the book value of their financial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required.
In order to monitor credit risk, customers are grouped according to the category they belong to, their credit risk characteristics, the maturity of their receivables and any previous problematic incidents concerning the receivables, taking into account future factors as well as the economic environment.
The financial assets of the Group and the Company measured by the new model of expected credit losses, include receivables from customers and other financial assets.
The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all financial assets. The expected credit losses are based on the difference between the estimated cash flows and the entire cash flows which the Group (or the Company) expected to receive, based on contracts or agreements. The difference is discounted by using an estimate concerning the initial effective interest rate of the financial asset.
At each reporting date, IFRS 9 requires the measurement of the loss provision for a financial instrument at an amount equal to the expected credit losses for the entire life of the asset if the financial risk of the financial instrument has increased significantly since the time of initial recognition. Conversely, if, at the reporting date, the credit risk of a financial instrument has not increased significantly since its initial recognition, IFRS 9 requires a loss provision for that financial instrument to be measured at an amount that is equal to the expected 12-month credit losses. The risk parameters taken into account for the calculation of the expected credit losses are the estimated probability of default, the percentage of loss on the due capital given that the customer has defaulted to repay the due amount, and the balance that the company is exposed in case of the customer's default. In certain cases, the Company may assess for specific financial data that there is a credit event when there is internal or external information indicating that the collection of the amounts specified under the relevant contract is not likely to be collected in full. As a general rule, the evaluation of the classification in stages is carried out in each reporting period.
For trade receivables, the Group and the Company applied the simplified standard approach and calculated the expected credit losses over the life of the receivables. For this purpose, a table of credit loss provisions based on the maturity of the balances was used, which calculates the relevant provisions in a way that reflects the experience from past events as well as forecasts of the future financial situation of customers and the financial environment. The balance of the provision for doubtful receivables is adjusted appropriately at each closing date of the financial statements to reflect the potential risks involved. Any write-off of other customers is charged to the existing provision for doubtful receivables. It is the Company's policy not to write off any receivables until all possible legal actions for its collection have been exhausted.
Liquidity risk monitoring focuses on the management of cash inflows and outflows on a permanent basis, so that the Group has the ability to meet its cash obligations and retain the cash reserves required for its operations. Liquidity is managed by maintaining cash and approved bank credit lines. At the date of preparation of the financial statements, unused approved bank credits were available to the Group, which are considered sufficient to handle any possible shortage of cash in the future.
Short-term bank liabilities are renewed at maturity, as they are part of the approved bank credit lines.
The Group is exposed to foreign exchange risks arising from existing or expected cash flows in foreign currency and investments that have been made in countries outside the Euro Zone (for example USA, United Kingdom, etc.). The management of the various risks is made by the use of natural hedge instruments. In order to hedge the foreign exchange risk from customers' receivables in foreign currency, an equal amount of borrowing is agreed in the same currency according to the management's policy and judgment.
The long-term loans of the Group have been granted by Greek and foreign banks and are mainly in Euro. Their repayment time varies, depending on the loan agreement and they are usually linked to Euribor plus margin. The Group's short-term loans have been granted by various banks, with Euribor interest rate plus margin as well as Libor interest rate plus margin.
The Group controls the capital adequacy using the Net Debt to Equity ratio and the Net Debt to EBITDA ratio. The Group's objective in relation to capital management is to ensure the possibility of its smooth operation in the future, in order to provide satisfactory returns to shareholders and benefits to other parties, as well as to maintain the most beneficial capital allocation in order to achieve low cost of capital. For this purpose, it systematically monitors the working capital needs in order to maintain manageable levels of external financing.
| Capital Adequacy Risk Group |
||
|---|---|---|
| 30.06.2020 | 31.12.2019 | |
| Long-term debt | 46,377 | 52,871 |
| Long-term liabilities from leases | 3,001 | 4,439 |
| Short-term debt | 34,466 | 43,496 |
| Short-term liabilities from leases | 3,788 | 4,773 |
| Total debt | 87,632 | 105,579 |
| Minus cash & cash equivalents | 40,660 | 22,051 |
| Net debt | 46,972 | 83,528 |
| EQUITY | 151,851 | 146,349 |
| NET DEBT / EQUITY | 0.31 | 0.57 |
The Net Debt / EBITDA ratio for the period settled at 1.30x (the EBITDA figure refers to the period from 01.07.2019 to 30.06.2020).
It is noted that on 31.12.2019 the ratio stood at 2.91x while on 30.06.2019 at 3.31x.
Regarding the third quarter of the year, demand for most products in the portfolio remains unaffected, while there is an increased demand for existing and new products related to personal protection and health. These events are expected to offset the decline in demand for products related to catering and tourism. These developments are expected to result in the third quarter of the year to show significantly improved profitability, compared to the corresponding period of the previous year, despite the possible negative effects of the pandemic which may occur by the end of the third quarter.
Regarding the prospects for the entire second half of 2020, at the time of preparation of the current report, the Management estimates that the financial performance of the Group will continue to show a significant improvement, compared to the corresponding period of the previous year, both in terms of profitability, as well as in terms of liquidity. However, given the intense uncertainty created by the second phase of the pandemic, it should be reiterated that it is not unlikely the second half of the year to be, on a case-by-case basis, negatively affected by adverse economic conditions, whereas at this point in time no estimate or assessment can be made regarding the degree of such effect.
In conclusion, the Group's Management remains optimistic over the achievement of particularly positive results for the entire financial year 2020. The commitment to the further improvement of profitability as well as to stronger free cash flows creates favorable conditions for even greater improvement of financial performance, despite the uncertain conditions which, as already mentioned, are being created by the course of the pandemic. These conditions, which are carefully monitored and evaluated on a daily basis by the Management, inevitably affect the business environment and potentially the respective projections and estimates.
The Management of the Group believes that within the framework of the safe operation and sound management, the favorable prospects with regard to the financial position and financial stability of the Group formed during the current year, will be on the one hand the cornerstone and on the other hand the trigger point for an even stronger financial position and performance of the Group in the medium-long term horizon.
The Extraordinary General Meeting of the Company's shareholders on February 2, 2017 decided, inter alia, to approve the purchase of own shares through the Athens Stock Exchange under the provisions of the pre-existing article 16 of Codified Law 2190/1920, which expired on 02-02- 2019. Under the aforementioned plan, the Company has acquired 4,324 own shares at the date of preparation of this Report.
The Extraordinary General Meeting of the Company's shareholders on March 19, 2019 decided, inter alia, to approve the acquisition of own shares through the Athens Stock Exchange in accordance with the provisions of article 49 of law 4548/2018 as currently in force and in particular the Meeting approved purchase within a period of twenty-four (24) months from the date of the decision, i.e. no later than 19.03.2021, of a maximum of 4,373,713 common registered shares representing 10% of the total existing today voting shares of the Company, as the latter holds 4,324 treasury shares, with a market price per share of one Euro and fifty cents Euro (€ 1.50) up to three Euros and fifty cents Euro (€ 3.50).
Since the decision of the above stock repurchase plan until 30.06.2020, 12,138 treasury shares have been purchased, therefore the Company possesses, along with the 4,324 treasury shares acquired from the previous plan, a total of 16,462 shares.
At the Ordinary General Meeting of July 15, 2020, among others, the shareholders:
a) voted unanimously the appropriation of results from the financial year 2019 (01.01.2019-31.12.2019) and in particular the distribution (payment) of a total dividend of 2,000,003.25 Euros (gross amount) from the profits of the closing financial year 2019. Beneficiaries of the collection of the above dividend were the shareholders of the Company registered in the records of the Dematerialized Securities System (DSS) on July 20, 2020 (record date). The cut-off date of the dividend for the year 2019 was set on July 17, 2020. The payment of the dividend began on July 23rd, 2020 through Piraeus Bank and in accordance with the procedure provided by the Athens Exchange Regulation.
b) approved by majority the Remuneration Report, which was prepared in accordance with the provisions of article 112 of Law 4548/2018, contains a comprehensive overview of the total remuneration of the members of the Board of Directors (executive and non-executive) and explains the manner by which the Remuneration Policy of the Company was implemented during the immediately preceding financial year.
The Administrative Court of Appeal, according to No. 2826/2020 decision, accepts the appeal of the company Thrace Nonwovens & Geosynthetics SA and cancels the accrued taxes and surcharges from the tax authorities amounting to € 527 for the year 2011. The company had paid the above amount and had formed an equal claim in its accounting books, which is included in the consolidated financial statements. Respectively, for this reason, both in the accounting books of the company and in the consolidated financial statements, a formed provision of € 330 is included.
On July 17, 2020, the Law 4706/2020 was passed, according to which the outstanding claims of the beneficiaries until 31.12.2015 are offset by existing and future claims of the State against them, from the entry into force of the law. The obligations of OAED and the Greek State are exhausted according to the provisions of article 87 par. 2 of Law 4706/2020. The Group has a long-term receivable from OAED amounting to € 4,879 which concerns a subsidy of 12% on the payroll costs of personnel and recruitment of new graduates in the area of Xanthi. The receivable of the Group before the impairments that have been recorded, amounts to € 11,062. At the time of this report is drafted, no relevant guidance and further details have been issued for the specific elements and the timing of application of the Law.
The Chairman of the Board of Directors and Chief Executive Officer
The Deputy CEO & Executive Member of the Board of Directors
The Non-Executive Member of the Board of Directors
Konstantinos St. Chalioris Dimitrios P. Malamos Vasileios St Zairopoulos
[Translation from the original text in Greek]
To the Board of directors of "Thrace Plastics Co S.A."
We have reviewed the accompanying condensed company and consolidated statement of financial position of "Thrace Plastics Co S.A." (the "Company"), as of 30 June 2020 and the related condensed company and consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flow statements for the six-month period then ended, and the selected explanatory notes that comprise the interim condensed financial information and which form an integral part of the six-month financial report as required by L.3556/2007.
Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with International Financial Reporting Standards as they have been adopted by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this interim condensed financial information based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, as they have been transposed into Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information is not prepared, in all material respects, in accordance with IAS 34.
PricewaterhouseCoopers SA, 268 Kifissias Avenue, 15232 Halandri, Greece T: +30 210 6874400, F: +30 210 6874444, www.pwc.gr
260 Kifissias Avenue & Kodrou Str., 15232 Halandri, T: +30 210 6874400, F:+30 210 6874444 Philippos Business Center, Agias Anastasias & Laertou 16, 55535 Pylaia, Thessaloniki, T: +30 2310 488880, F: +30 2310 459487
Our review has not revealed any material inconsistency or misstatement in the statements of the members of the Board of Directors and the information of the six-month Board of Directors Report, as defined in articles 5 and 5a of Law 3556/2007, in relation to the accompanying condensed interim financial information.
18 September 2020
PricewaterhouseCoopers SA 268 Kifissias Avenue, 152 32 Halandri, Greece The Certified Auditor SOEL Reg.No 113 Konstantinos Michalatos
SOEL Reg. No 17701
| INTERIM CONDENSED FINANCIAL | 20 | ||
|---|---|---|---|
| INFORMATION OF THE PERIOD | |||
| 01.01.2020 – 30.06.2020 | |||
| STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME (01.01.2020 – 30.06.2020) |
28 | ||
| STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME | |||
| (01.04.2020 – 30.06.2020) | 30 | ||
| STATEMENT OF FINANCIAL POSITION | 32 | ||
| STATEMENT OF CHANGES IN EQUITY Group STATEMENT OF CHANGES IN EQUITY Company |
33 34 |
||
| STATEMENT OF CASH FLOWS | 35 | ||
| 1. | Information about the Group | 36 | |
| 2. | Basis for the Preparation of the interim condensed | ||
| financial information and Major Accounting Principles | 38 | ||
| 2.1 | Basis of Preparation | 38 | |
| 2.2 | New standards, amendments to standards and interpretations | 39 | |
| 2.3 | Significant Accounting Estimates and Assumptions | 41 | |
| 3. | Notes on the Financial Statements | 42 | |
| 3.1 | Evolution and Performance of the Group | 42 | |
| 3.2 | Discontinued Operations | 43 | |
| 3.3 | Segment Reporting | 44 | |
| 3.4 | Other Operating Income | 48 | |
| 3.5 | Other Gains / Losses | 48 | |
| 3.6 | Number of employees | 48 | |
| 3.7 | Other Operating Expenses | 49 | |
| 3.8 3.9 |
Financial Income /(Expenses) Earnings per Share (Consolidated) |
50 50 |
|
| 3.10 | Income Tax | 51 | |
| 3.11 | Tangible Assets | 52 | |
| 3.12 | Right-of-use assets | 53 | |
| 3.13 | Fixed assets held for sale | 54 | |
| 3.14 | Intangible Assets | 54 | |
| 3.15 | Other Long-Term Receivables | 55 | |
| 3.16 | Trade and other receivables | 55 | |
| 3.17 | Bank Debt | 57 | |
| 3.18 | Employee Benefits | 57 | |
| 3.19 | Suppliers & Other Short-Term Liabilities | 61 | |
| 3.20 | Transactions with Related Parties | 62 | |
| 3.21 | Board of Directors' Fees | 64 | |
| 3.22 | Participations | 64 | |
| 3.23 3.24 |
Commitments and Contingent Liabilities Reclassifications of accounts |
66 66 |
|
| 3.25 | Financial Risk Management | 66 | |
| 3.26 | Significant Events | 69 | |
| 3.27 | Events after the Balance Sheet Date | 74 | |
| Group | Company | |||||
|---|---|---|---|---|---|---|
| Note | 1/1 - 30/06/2020 | 1/1 - 30/06/2019 | 1/1 - 30/06/2020 | 1/1 - 30/06/2019 | ||
| Turnover | 155,376 | 155,173 | 2,569 | 2,602 | ||
| Cost of Sales | (113,235) | (122,733) | (2,084) | (2,402) | ||
| Gross Profit/(loss) - continuing operations | 42,141 | 32,440 | 485 | 200 | ||
| Other Operating Income | 3.4 | 270 | 787 | 75 | 26 | |
| Selling Expenses | (14,766) | (14,875) | - | - | ||
| Administrative Expenses | (7,536) | (7,636) | (522) | (506) | ||
| Research and Development Expenses | (733) | (775) | - | - | ||
| Other Operating Expenses | 3.7 | (1,786) | (632) | (99) | (109) | |
| Other profit / (losses) | 3.5 | 144 | 125 | 4 | (1) | |
| Operating Profit /(loss) before interest and tax - continuing operations | 17,734 | 9,434 | (57) | (390) | ||
| Financial Income | 3.8 | 399 | 344 | - | - | |
| Financial Expenses | 3.8 | (2,230) | (2,734) | (274) | (322) | |
| Income from Dividends | - | - | 5,000 | - | ||
| Profit / (losses) from companies consolidated with the Equity Method | 443 | - | ||||
| Proft / (Losses) from Participations | 3.22 | 952 - |
- | - - |
- | |
| Profit/(loss) before Tax - continuing operations | 16,855 | 7,487 | 4,669 | (712) | ||
| Income Tax | 3.10 | (4,025) | (2,232) | (14) | (4) | |
| Profit/(loss) after tax (Α) - continuing operations | 12,830 | 5,255 | 4,655 | (716) | ||
| Profit/(loss) after tax (Α) - discontinuing operations | 3.2 | (2,809) | (902) | - | - | |
| Profit/(loss) after tax (Α) | 10,021 | 4,353 | 4,655 | (716) | ||
| FX differences from translation of foreign Balance Sheets | (3,206) | (106) | - | - | ||
| Actuarial profit/(loss) | (1,186) | (1,268) | - | - | ||
| Other comprehensive income after taxes (B) - continuing operations | (4,392) | (1,374) | - | - | ||
| FX differences from translation of foreign Balance Sheets | (90) | 13 | - | - | ||
| Actuarial profit/(loss) | - | - | - | - | ||
| Other comprehensive income after taxes (B) - discontinuing operations | (90) | 13 | - | - | ||
| FX differences from translation of foreign Balance Sheets | (3,296) | (93) | - | - | ||
| Actuarial profit/(loss) | (1,186) | (1,268) | - | - | ||
| Other comprehensive income after taxes (B) | (4,482) | (1,361) | - | - | ||
| Total comprehensive income after taxes (A) + (B) - continuing operations | 8,438 | 3,881 | 4,655 | (716) | ||
| Total comprehensive income after taxes (A) + (B) - discontinuing operations |
(2,899) | (889) | - | - | ||
| Total comprehensive income after taxes (A) + (B) | 5,539 | 2,992 | 4,655 | (716) | ||
FX differences from translation of foreign Balance Sheets (3,296) (93) - - Actuarial profit/(loss) (1,186) (1,268) - - Other comprehensive income after taxes (B) (4,482) (1,361) - -
| Group | ||||
|---|---|---|---|---|
| Continuing operations | 1/1 - 30/06/2020 | 1/1 - 30/06/2019 | Company 1/1 - 30/06/2020 |
1/1 - 30/06/2019 |
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | 12,548 | 5,103 | - | - |
| Minority interest | 282 | 152 | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | 8,160 | 3,734 | - | - |
| Minority interest | 278 | 147 | - | - |
| Discontinuing operations | ||||
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | (2,809) | (902) | - | - |
| Minority interest | - | - | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | (2,899) | (889) | - | - |
| Minority interest | - | - | - | - |
| Total Operations | ||||
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | 9,739 | 4,201 | - | - |
| Minority interest | 282 | 152 | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | 5,261 | 2,845 | - | - |
| Minority interest | 278 | 147 | - | - |
| Profit/(loss) allocated to shareholders per share - continuing operations | ||||
| Number of shares | 43,731 | 43,737 | ||
| Earnings/(loss) per share 3.9 |
0.2869 | 0.1167 | ||
| Profit/(loss) allocated to shareholders per share - discontinuing operations | ||||
| Number of shares | 43,731 | 43,737 | ||
| Earnings/(loss) per share 3.9 |
(0.0642) | (0.0206) | ||
| Profit/(loss) allocated to shareholders per share | ||||
| Number of shares | 43,731 | 43,737 | ||
| Earnings/(loss) per share 3.9 |
0.2227 | 0.0961 | ||
| Group | Company | ||||
|---|---|---|---|---|---|
| Note | 1/4 - 30/06/2020 | 1/4 - 30/06/2019 | 1/4 - 30/06/2020 | 1/4 - 30/06/2019 | |
| Turnover | 81,385 | 78,631 | 1,349 | 1,327 | |
| Cost of Sales | (56,386) | (62,438) | (1,007) | (1,321) | |
| Gross Profit/(loss) - continuing operations | 24,999 | 16,193 | 342 | 6 | |
| Other Operating Income | 3.4 | 42 | 505 | 66 | 18 |
| Selling Expenses | (6,941) | (7,497) | - | - | |
| Administrative Expenses | (3,927) | (3,954) | (260) | (267) | |
| Research and Development Expenses | (307) | (409) | - | - | |
| Other Operating Expenses | 3.7 | (1,509) | (385) | (99) | (109) |
| Other profit / (losses) | 3.5 | 67 | (14) | (1) | - |
| Operating Profit /(loss) before interest and tax - continuing operations | 12,424 | 4,439 | 48 | (352) | |
| Financial Income | 3.8 | (80) | 199 | - | - |
| Financial Expenses | 3.8 | (1,082) | (1,293) | (145) | (163) |
| Income from Dividends | - | - | 5,000 | - | |
| Profit / (losses) from companies consolidated with the Equity Method Proft / (Losses) from Participations |
3.22 | 911 - |
635 - |
- - |
- - |
| Profit/(loss) before Tax - continuing operations | 12,173 | 3,980 | 4,903 | (515) | |
| Income Tax | 3.10 | (2,805) | (1,261) | (15) | (4) |
| Profit/(loss) after tax (Α) - continuing operations | 9,368 | 2,719 | 4,888 | (519) | |
| Profit/(loss) after tax (Α) - discontinuing operations | 3.2 | (2,237) | (459) | - | - |
| Profit/(loss) after tax (Α) | 7,131 | 2,260 | 4,888 | (519) | |
| FX differences from translation of foreign Balance Sheets | (695) | (2,023) | - | - | |
| Actuarial profit/(loss) | (5,542) | 4,509 | - | - | |
| Other comprehensive income after taxes (B) - continuing operations | (6,237) | 2,486 | - | - | |
| FX differences from translation of foreign Balance Sheets | (53) | 106 | - | - | |
| Actuarial profit/(loss) | - | - | - | - | |
| Other comprehensive income after taxes (B) - discontinuing operations | (53) | 106 | - | - | |
| (1,917) | - | - | |||
| FX differences from translation of foreign Balance Sheets | (748) | ||||
| Actuarial profit/(loss) | (5,542) | 4,509 | - | - | |
| Other comprehensive income after taxes (B) | (6,290) | 2,592 | - | - | |
| Total comprehensive income after taxes (A) + (B) - continuing operations | 3,131 | 5,205 | 4,888 | (519) | |
| Total comprehensive income after taxes (A) + (B) - discontinuing operations |
(2,290) | (353) | - | - | |
| Total comprehensive income after taxes (A) + (B) | 841 | 4,852 | 4,888 | (519) | |
| Group | Company | |||
|---|---|---|---|---|
| Continuing operations | 1/4 - 30/06/2020 | 1/4 - 30/06/2019 | 1/4 - 30/06/2020 | 1/4 - 30/06/2019 |
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | 9,187 | 2,622 | - | - |
| Minority interest | 181 | 97 | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | 2,952 | 5,108 | - | - |
| Minority interest | 179 | 97 | - | - |
| Discontinuing operations | ||||
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | (2,237) | (459) | - | - |
| Minority interest | - | - | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | (2,290) | (353) | - | - |
| Minority interest | - | - | - | - |
| Total Operations | ||||
| Profit / (loss) after tax | ||||
| Attributed to: | ||||
| Owners of the parent | 6,950 | 2,163 | - | - |
| Minority interest | 181 | 97 | - | - |
| Total comprehensive income after taxes | ||||
| Attributed to: | ||||
| Owners of the parent | 662 | 4,755 | - | - |
| Minority interest | 179 | 97 | - | - |
| Profit/(loss) allocated to shareholders per share - continuing operations Number of shares |
43,731 | 43,737 | ||
| Earnings/(loss) per share | 0.2101 3.9 |
0.0599 | ||
| Profit/(loss) allocated to shareholders per share - discontinuing operations |
||||
| Number of shares | 43,731 | 43,737 | ||
| Earnings/(loss) per share | (0.0512) 3.9 |
(0.0105) | ||
| Profit/(loss) allocated to shareholders per share | ||||
| Number of shares | 43,731 | 43,737 | ||
| Earnings/(loss) per share | 0.1589 3.9 |
0.0495 |
| Group | Company | ||||
|---|---|---|---|---|---|
| Note | 30/6/2020 | 31/12/2019 | 30/6/2020 | 31/12/2019 | |
| ASSETS | |||||
| Non-Current Assets | |||||
| Tangible fixed assets | 3.11 | 125,055 | 123,210 | 376 | 398 |
| Rights-of-use assets | 3.12 | 13,286 | 14,972 | 98 | 176 |
| Investment property | 113 | 113 | - | - | |
| Intangible Assets | 3.14 | 10,719 | 11,350 | 452 | 503 |
| Participation in subsidiaries | - | - | 73,858 | 73,858 | |
| Participation in joint ventures | 3.22 | 14,915 | 14,547 | 3,819 | 3,819 |
| Other long term receivables | 3.15 | 5,083 | 5,091 | 1,167 | 1,168 |
| Deferred tax assets | 1,030 | 833 | 694 | 708 | |
| Total non-Current Assets | 170,201 | 170,116 | 80,464 | 80,630 | |
| Current Assets | |||||
| Inventories | 55,659 | 59,158 | - | - | |
| Income tax prepaid | 453 | 588 | 45 | 32 | |
| Trade receivables | 3.16 | 58,100 | 57,428 | 321 | 2,838 |
| Other debtors | 3.16 | 8,415 | 7,844 | 272 | 4,254 |
| Fixed assets held for sale | 3.13 | 6,022 | 6,155 | - | - |
| Cash and Cash Equivalents | 40,660 | 22,051 | 1,469 | 505 | |
| Total Current Assets | 169,309 | 153,224 | 2,107 | 7,629 | |
| TOTAL ASSETS | 339,510 | 323,340 | 82,571 | 88,259 | |
| EQUITY AND LIABILITIES | |||||
| Equity | |||||
| Share Capital | 28,869 | 28,869 | 28,869 | 28,869 | |
| Share premium | 21,524 | 21,524 | 21,644 | 21,644 | |
| Other reserves | 21,314 | 24,632 | 14,191 | 14,214 | |
| Retained earnings | 76,895 | 68,353 | 10,672 | 6,016 | |
| Total Shareholders' equity | 148,602 | 143,378 | 75,376 | 70,743 | |
| Minority Interest | 3,249 | 2,971 | - | - | |
| Total Equity | 151,851 | 146,349 | 75,376 | 70,743 | |
| Long Term Liabilities | |||||
| Long Term loans | 3.17 | 46,377 | 52,871 | - | 4,000 |
| Liabilities from leases | 3,001 | 4,439 | 15 | 43 | |
| Provisions for Employee Benefits | 3.18 | 15,630 | 15,252 | 188 | 215 |
| Other provisions | 26 | 36 | 352 | 382 | |
| Deferred Tax Liabilities | 2,298 | 2,507 | - | - | |
| Other Long Term Liabilities | 1,310 | 93 | 1 | 1 | |
| Total Long Term Liabilities | 68,642 | 75,198 | 556 | 4,641 | |
| Short Term Liabilities | |||||
| Short Term loans | 3.17 | 34,466 | 43,496 | 5,200 | 11,098 |
| Liabilities from leases | 3,788 | 4,773 | 87 | 156 | |
| 1,076 | 56 | ||||
| Income Tax Suppliers |
4,845 39,470 |
36,187 | 56 356 |
297 | |
| 3.19 | |||||
| Other short-term liabilities | 3.19 | 36,448 | 16,261 | 940 | 1,268 |
| Total Short Term Liabilities | 119,017 | 101,793 | 6,639 | 12,875 | |
| TOTAL LIABILITIES | 187,659 | 176,991 | 7,195 | 17,516 | |
| TOTAL EQUITY & LIABILITIES | 339,510 | 323,340 | 82,571 | 88,259 |
| Share Capital | Share Premium | Other Reserves | Treasury shares reserve |
Reserve of FX differences from translation of subsidiaries |
Retained earnings |
Total before minority interest |
Minority interest |
Total | |
|---|---|---|---|---|---|---|---|---|---|
| Balance as at 01/01/2019 | 28,869 | 21,524 | 31,493 | (10) | (11,189) | 68,248 | 138,935 | 2,680 | 141,615 |
| Profit / (losses) for the period | - | - | - | - | - | 4,201 | 4,201 | 152 | 4,353 |
| Other comprehensive income | - | - | - | - | (88) | (1,268) | (1,356) | (5) | (1,361) |
| Distribution of earnings | - | - | - | - | - | - | - | - | - |
| Dividends | - | - | - | - | - | (1,944) | (1,944) | - | (1,944) |
| Changes in percentages | - | - | - | - | - | - | - | - | - |
| Other changes | - | - | - | - | - | (31) | (31) | - | (31) |
| Purchase of treasury shares | - | - | - | - | - | - | - | - | - |
| Changes during the period | - | - | - | - | (88) | 958 | 870 | 147 | 1,017 |
| Balance as at 30/06/2019 | 28,869 | 21,524 | 31,493 | (10) | (11,277) | 69,206 | 139,805 | 2,827 | 142,632 |
| Balance as at 01/01/2020 | 28,869 | 21,524 | 33,596 | (10) | (8,954) | 68,353 | 143,378 | 2,971 | 146,349 |
| Profit / (losses) for the period | - | - | - | - | - | 9,739 | 9,739 | 282 | 10,021 |
| Other comprehensive income | - | - | - | - | (3,296) | (1,186) | (4,482) | (4) | (4,486) |
| Distribution of earnings | - | - | - | - | - | - | - | - | - |
| Dividends | - | - | - | - | - | - | - | - | - |
| Changes in percentages | - | - | - | - | - | - | - | - | - |
| Other changes | - | - | - | - | 1 | (11) | (10) | - | (10) |
| Purchase of treasury shares | - | - | - | (23) | - | - | (23) | - | (23) |
| Changes during the period | - | - | - | (23) | (3,295) | 8,542 | 5,224 | 278 | 5,502 |
| Balance as at 30/06/2020 | 28,869 | 21,524 | 33,596 | (33) | (12,249) | 76,895 | 148,602 | 3,249 | 151,851 |
| Share Capital | Share Premium | Other Reserves | Treasury shares reserve |
Reserve of FX differences from translation of subsidiaries |
Retained earnings | Total | |
|---|---|---|---|---|---|---|---|
| Balance as at 01/01/2019 | 28,869 | 21,644 | 14,208 | (10) | 16 | 5,720 | 70,447 |
| Profit / (losses) for the period | - | - | - | - | - | (716) | (716) |
| Other comprehensive income | - | - | - | - | - | - | - |
| Distribution of earnings | - | - | - | - | - | - | - |
| Dividends | - | - | - | - | - | (1,944) | (1,944) |
| Other changes | - | - | - | - | - | - | - |
| Purchase of treasury shares | - | - | - | - | - | - | - |
| Changes during the period | - | - | - | - | - | (2,660) | (2,660) |
| Balance as at 30/06/2019 | 28,869 | 21,644 | 14,208 | (10) | 16 | 3,060 | 67,787 |
| Balance as at 01/01/2020 | 28,869 | 21,644 | 14,208 | (10) | 16 | 6,016 | 70,743 |
| Profit / (losses) for the period | - | - | - | - | - | 4,655 | 4,655 |
| Other comprehensive income | - | - | - | - | - | - | - |
| Distribution of earnings | - | - | - | - | - | - | - |
| Dividends | - | - | - | - | - | - | - |
| Other changes | - | - | - | - | - | 1 | 1 |
| Purchase of treasury shares | - | - | - | (23) | - | - | (23) |
| Changes during the period | - | - | - | (23) | - | 4,656 | 4,633 |
| Balance as at 30/06/2020 | 28,869 | 21,644 | 14,208 | (33) | 16 | 10,672 | 75,376 |
| Note | Group | Company | |||
|---|---|---|---|---|---|
| 1/1 - 30/06/2020 | 1/1 - 30/06/2019 | 1/1 - 30/06/2020 | 1/1 - 30/06/2019 | ||
| Cash flows from Operating Activities | |||||
| Profit before Taxes and Minority Interest - continuing operations | 16,855 | 7,487 | 4,669 | (712) | |
| Profit before Taxes and Minority Interest - discontinuing operations | (2,809) | (896) | - | - | |
| Plus / (minus) adjustments for: | |||||
| Depreciation | 8,678 | 7,751 | 145 | 159 | |
| Provisions | 2,348 | 1,262 | 70 | 374 | |
| Subsidies | (9) | - | - | - | |
| FX differences | (410) | (41) | 1 | 1 | |
| (Profit)/loss from sale of fixed assets | 525 | (85) | (5) | - | |
| Dividends | - | - | (5,000) | - | |
| Debit interest and related (income) / expenses | 1,833 | 2,393 | 274 | 322 | |
| (Profit) / losses from companies consolidated with the Equity method | (952) | (442) | - | - | |
| Operating Profit before adjustments in working capital | 26,059 | 17,429 | 154 | 144 | |
| (Increase)/decrease in receivables | (1,381) | (16,995) | 6,487 | (174) | |
| (Increase)/decrease in inventories | 2,229 | 385 | - | - | |
| Increase/(decrease) in liabilities (apart from banks-taxes) | 21,266 | 3,588 | (376) | (590) | |
| Other non cash movements | - | - | - | - | |
| Cash generated from Operating activities | 48,173 | 4,407 | 6,265 | (620) | |
| Interest Paid | (1,668) | (1,945) | (388) | (315) | |
| Other financial income/(expenses) | (254) | (267) | (2) | (5) | |
| Taxes | (295) | (643) | - | - | |
| Cash flows from operating activities (a) | 45,956 | 1,552 | 5,875 | (940) | |
| Investing Activities | |||||
| Receipts from sales of tangible and intangible assets | 283 | 139 | 5 | - | |
| Interest received | 5 | 6 | - | - | |
| Dividends received | 211 | 276 | 5,000 | - | |
| Increase of interests in subsidiaries / associates | - | (815) | - | (815) | |
| Purchase of tangible and intangible assets | (11,598) | (11,126) | (4) | (45) | |
| Cash flow from investing activities (b) | (11,099) | (11,520) | 5,001 | (860) | |
| Financing activities | |||||
| Proceeds from loans | 4,150 | 10,793 | 4,200 | 987 | |
| Purchase of treasury stock | (23) | - | (23) | - | |
| Repayment of Loans | (17,254) | (3,315) | (13,999) | - | |
| Financial leases | (2,393) | (2,643) | (90) | (41) | |
| Dividends paid | - | (1,761) | - | (1,761) | |
| Cash flow from financing activities (c) | (15,520) | 3,074 | (9,912) | (815) | |
| Net increase /(decrease) in Cash and Cash Equivalents | 19,337 | (6,894) | 964 | (2,615) | |
| Cash and Cash Equivalents at beginning of period | 22,051 | 22,824 | 505 | 3,172 | |
| Effect from changes in foreign exchange rates on cash reserves | (728) | 160 | - | - | |
| Cash and Cash Equivalents at end of period | 40,660 | 16,090 | 1,469 | 557 |
The company THRACE PLASTICS CO S.A. as it was renamed following the approval and the alteration of its name on GEMI (hereinafter the "Company") was founded in 1977. It is based in Magiko of municipality of Avdira in Xanthi, Northern Greece and is registered in the Public Companies (S.A.) Register under Reg. No. 11188/06/Β/86/31 and in the General Commercial Register under Reg. No. 12512246000.
The main objective of the Company was altered as result of the spin-off of the business segment of production and trade of industrial packaging products of the Company and the subsequent amendment of the relevant article 3 of the Company's Articles of Association, according to the precise form that was previously announced by the Company, and in line with the clauses of article 27, paragraph 3, case d' of P.L. 2190/1920. The aim of the Company and its main objective is to participate in the capital of companies and to finance companies of any legal form, kind and objective, either listed or non-listed on organized market, as well as the provision of Administrative - Financial - IT Services to its Subsidiaries.
The Company is the parent of Group of companies (hereinafter the "Group"), which activate mainly in two sectors, the technical fabrics sector and the packaging sector.
The Company's shares are listed on the Athens Stock Exchange, Greece, since June 26, 1995.
The company's shareholders, with equity stakes above 5%, as of 30/06/2020 were the following:
| Chalioris Konstantinos | 43.29% |
|---|---|
| Chaliori Eyfimia | 20.85% |
The Group maintains production and trade facilities in Greece, United Kingdom, Ireland, Sweden, Norway, Serbia, Bulgaria, U.S.A. and Romania. On 30th June 2020, the Group employed in total 1,698 employees, from which 1,063 in Greece.
The structure of the Group along with the participation percentages as of 30th June 2020 was as follows:
| Company | Registered Offices | Participation Percentage of Parent Company |
Participation Percentage of Group |
Consolidation Method |
|---|---|---|---|---|
| Thrace Plastics CO S.A. | GREECE-Xanthi | Parent | - | Full |
| Don & Low LTD | SCOTLAND-Forfar | 100.00% | 100.00% | Full |
| Don & Low Australia Pty LTD | AUSTRALIA | - | 100.00% | Full |
| Thrace Nonwovens & Geosynthetics S.A. |
GREECE-Xanthi | 100.00% | 100.00% | Full |
| Saepe Ltd | CYPRUS-Nicosia | - | 100.00% | Full |
| Thrace Asia | HONG KONG | - | 100.00% | Full |
| Thrace Protect S.M.P.C. | GREECE-Xanthi | - | 100.00% | Full |
| Thrace Plastics Pack S.A. | GREECE-Ioannina | 92.94% | 92.94% | Full |
| Thrace Greiner Packaging SRL | ROMANIA - Sibiou | - | 46.47% | Equity |
| Thrace Plastics Packaging D.O.O. | SERBIA-Nova Pazova | - | 92.94% | Full |
| Trierina Trading LTD | CYPRUS-Nicosia | - | 92.94% | Full |
| Thrace Ipoma A.D. | BULGARIA-Sofia | - | 92.83% | Full |
| Synthetic Holdings LTD | N. IRELAND-Belfast | 100.00% | 100.00% | Full |
| Thrace Synthetic Packaging LTD | IRELAND - Clara | - | 100.00% | Full |
| Arno LTD | IRELAND -Dublin | - | 100.00% | Full |
| Synthetic Textiles LTD | N. IRELAND-Belfast | - | 100.00% | Full |
| Thrace Polybulk A.B. | SWEDEN -Köping | - | 100.00% | Full |
| Thrace Polybulk A.S. | NORWAY-Brevik | - | 100.00% | Full |
| Lumite INC. | U.S.A. - Georgia | - | 50.00% | Equity |
| Adfirmate LTD | CYPRUS-Nicosia | - | 100.00% | Full |
| Pareen LTD | CYPRUS-Nicosia | - | 100.00% | Full |
| Thrace Linq INC. | U.S.A. - South Carolina | - | 100.00% | Full |
| Thrace Polyfilms S.A. | GREECE - Xanthi | 100.00% | 100.00% | Full |
| Thrace Greenhouses S.A. | GREECE - Xanthi | 50.91% | 50.91% | Equity |
| Thrace Eurobent S.A. | GREECE - Xanthi | 51.00% | 51.00% | Equity |
The present interim condensed financial information has been prepared according to the International Financial Reporting Standards (I.F.R.S.), including the International Accounting Standards (I.A.S.) and interpretations that have been issued by the International Financial Reporting Interpretations Committee (I.F.R.I.C.), as such have been adopted by the European Union until 30th June 2020. The basic accounting principles that were applied for the preparation of the interim condensed financial information are the same as those applied for the preparation of the Financial Statements for the year ended 31st December 2019.
When deemed necessary, the comparative data have been reclassified in order to conform to possible changes in the presentation of the data of the current period.
Differences that possibly appear between accounts in the interim condensed financial information and the respective accounts in the notes are due to rounding.
The interim condensed financial information has been prepared according to the historic cost principle, as such is disclosed in the Company's accounting principles presented below.
Moreover, the Group's and Company's interim condensed financial information has been prepared according to the "going concern" principle taking into account all the macroeconomic and microeconomic factors and their effect on the smooth operation of the Group and Company.
The interim condensed financial information was approved by the Company's BoD on 18th September 2020..
The interim condensed financial information of the Group THRACE PLASTICS Co. S.A. is posted on the internet, on the website www.thracegroup.gr.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after 1 January 2020. The Group's evaluation of the effect of these new standards, amendments to standards and interpretations is as follows.
STANDARDS AND INTERPRETATIONS EFFECTIVE FOR THE CURRENT FINANCIAL YEAR
The amended definition emphasizes that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others.
The amendments clarify the definition of material and how it should be applied by including in the definition guidance which until now was featured elsewhere in IFRS. In addition, the explanations accompanying the definition have been improved. Finally, the amendments ensure that the definition of material is consistent across all IFRSs.
The amendments modify some specific hedge accounting requirements to provide relief from potential effects of the uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties.
The amendment provides lessees (but not lessors) with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect to account for rent concessions in the same way as they would for changes which are not considered lease modifications. The amendment has not yet been endorsed by the EU.
IFRS 4 (Amendment) 'Extension of the Temporary Exemption from Applying IFRS 9' (effective for annual periods beginning on or after 1 January 2021)
The amendment changes the fixed expiry date for the temporary exemption in IFRS 4 'Insurance Contracts' from applying IFRS 9 'Financial Instruments', so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023. The amendment has not yet been endorsed by the EU.
IAS 1 (Amendment) 'Classification of liabilities as current or non-current' (effective for annual periods beginning on or after 1 January 2022)
The amendment clarifies that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date. The amendment also clarifies what IAS 1 means when it refers to the 'settlement' of a liability. The amendment has not yet been endorsed by the EU.
IAS 16 (Amendment) 'Property, Plant and Equipment – Proceeds before Intended Use' (effective for annual periods beginning on or after 1 January 2022)
The amendment prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also requires entities to separately disclose the amounts of proceeds and costs relating to such items produced that are not an output of the entity's ordinary activities. The amendment has not yet been endorsed by the EU.
The amendment clarifies that 'costs to fulfil a contract' comprise the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The amendment also clarifies that, before a separate provision for an onerous contract is established, an entity recognizes any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract. The amendment has not yet been endorsed by the EU.
IFRS 3 (Amendment) 'Reference to the Conceptual Framework' (effective for annual periods beginning on or after 1 January 2022)
The amendment updated the standard to refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a liability in a business combination. In addition, an exception was added for some types of liabilities and contingent liabilities acquired in a business combination. Finally, it is clarified that the acquirer should not recognize contingent assets, as defined in IAS 37, at the acquisition date. The amendment has not yet been endorsed by the EU.
The amendments set out below include changes to four IFRSs. The amendments have not yet been endorsed by the EU.
The amendment addresses which fees should be included in the 10% test for derecognition of financial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be included in the 10% test.
The amendment removed the illustration of payments from the lessor relating to leasehold improvements in Illustrative Example 13 of the standard in order to remove any potential confusion about the treatment of lease incentives.
The amendment has removed the requirement for entities to exclude cash flows for taxation when measuring fair value under IAS 41.
The preparation of the interim condensed financial information in accordance with International Financial Reporting Standards (IFRS) requires the management to make estimates and assumptions that may affect the accounting balances of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim condensed financial information as well as the amounts of revenues and expenses that have been recognized during the reported period. The use of the available information, which is based in historical data and assumptions and the implementation of subjective evaluation are necessary in order to conduct estimates. The actual future results may differ from the above estimates and these differences may affect the interim condensed financial information. Estimates and relative assumptions are revised constantly. The revisions in accounting estimations are recognized in the period they occur if the revision affects only the specific period or in the revised period and the future periods if the revisions affect the current and the future periods.
For the preparation of the interim condensed financial information, the significant accounting estimates and assumptions by the Management in the application of the accounting policies of the Group and the Company, as well as the main sources for the assessment of uncertainty are the same as those adopted during the preparation of the annual financial statements as of December 31, 2019.
The following table depicts the course of the Group's results from continuing operations during the first half of 2020:
| Results of First Half 2020 (CONTINUING OPERATIONS) |
||||||||
|---|---|---|---|---|---|---|---|---|
| 1st Half 2020 | 1st Half 2019 | Change | ||||||
| Turnover | 155,376 | 155,173 | 0.1% | |||||
| Gross Profit | 42,141 | 32,440 | 29.9% | |||||
| Gross Profit Margin | 27.1% | 20.9% | ||||||
| ΕΒΙΤ* | 17,734 | 9,434 | 88.0% | |||||
| EBIT Margin | 11.4% | 6.1% | ||||||
| EBITDA* | 26,033 | 16,468 | 58.1% | |||||
| EBITDA Margin | 16.8% | 10.6% | ||||||
| Adjusted EBITDA* | 26,787 | 16,468 | 62.7% | |||||
| Adjusted EBITDA Margin | 17.2% | 10.6% | ||||||
| EBT | 16,855 | 7,487 | 125.1% | |||||
| EBT Margin | 10.8% | 4.8% | ||||||
| Total EAT | 12,830 | 5,255 | 144.1% | |||||
| EAT Margin | 8.3% | 3.4% | ||||||
| Total EATAM | 12,548 | 5,103 | 145.9% | |||||
| EATAM Margin | 8.1% | 3.3% | ||||||
| Earnings per Share (in euro) | 0.2869 | 0.1167 | 145.8% | |||||
* * Note: The alternative performance measures are presented and described analytically in the section III of the present Report.
Adjusted EBITDA does not include expenditures of € 744 related to the operational reorganization of Don & Low Ltd. The subsidiary company reduced its presence in woven technical fabrics while increased its production capacity in non-woven technical fabrics. These costs are analyzed below:
For reasons of completeness, the following table is presented, which summarizes the financial results of the Group for the first half of 2020 as a total, from continuing and discontinued operations:
| Results of First Half 2020 | |||||||
|---|---|---|---|---|---|---|---|
| (CONTINUING & DISCONTINUED OPERATIONS) | |||||||
| 1st Half 2020 | 1st Half 2019 | Change | |||||
| Turnover | 160,646 | 171,125 | -6.1% | ||||
| Gross Profit | 42,393 | 33,649 | 26.0% | ||||
| Gross Profit Margin | 26.4% | 19.7% | |||||
| ΕΒΙΤ* | 14,927 | 8,541 | 74.8% | ||||
| EBIT Margin | 9.3% | 5.0% | |||||
| EBITDA* | 23,605 | 16,292 | 44.9% | ||||
| EBITDA Margin | 14.7% | 9.5% | |||||
| Adjusted EBITDA* | 26,787 | 16,292 | 64.4% | ||||
| Adjusted EBITDA* | 16.7% | 9.5% | |||||
| Adjusted EBITDA Margin | 14,046 | 6,591 | 113.1% | ||||
| EBT | 8.7% | 3.9% | |||||
| EBT Margin | 10,021 | 4,353 | 130.2% | ||||
| Total EAT | 6.2% | 2.5% | |||||
| EAT Margin | 9,739 | 4,201 | 131.8% | ||||
| Total EATAM | 6.1% | 2.5% | |||||
| EATAM Margin | 0.2227 | 0.0961 | 131.7% |
* Note: The alternative performance measures are presented and described analytically in the section III of the present Report.
Due to the decision to permanently discontinue the production of Thrace Linq, which was decided in order for the Group to focus on profitable activities, this activity is reported in the income statement and other comprehensive income as discontinued operations.
| Discontinued Operations | Thrace Linq company | |||
|---|---|---|---|---|
| Statement of income and other comprehensive income |
30.06.2020 | 30.06.2019 | ||
| Turnover | 5,270 | 15,952 | ||
| Cost of Goods Sold | (5,018) | (14,743) | ||
| Gross Profit / (Loss) | 252 | 1,209 | ||
| Non operating income / (expenses) | (3,233) | (2,439) | ||
| Profit / (losses) before taxes | (2,981) | (1,230) | ||
| Taxes | - | (6) | ||
| Profit / (losses) after taxes | (2,981) | (1,236) | ||
| Intra-company transactions | 172 | 334 | ||
| Profit / (losses) after taxes | (2,809) | (902) |
| Discontinued Operations Cash Flows |
Thrace Linq company 30.06.2020 |
|---|---|
| Cash from operating activities | 5,024 |
| Cash from investing activities | 2,419 |
| Cash from financing activities | (9,745) |
| Change in cash and cash equivalents | (2,302) |
| Cash and cash equivalents 31.12.2019 | 2,837 |
| Foreign Exchange Differences | 46 |
| Cash and cash equivalents 30.06.2020 | 581 |
The operating segments are based on the different group of products, the structure of the Group's management and the internal reporting system. The Group's activity is distinguished into the three segments: the technical fabrics segment, the packaging segment and the other activities which includes the agricultural segment and the activities of the Parent Company.
The Group's operating segments are the following:
| BALANCE SHEET OF 30.6.2020 |
TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
|---|---|---|---|---|---|
| Total consolidated assets |
217,235 | 114,321 | 82,786 | (74,832) | 339,510 |
| INCOME STATEMENT FOR THE PERIOD FROM 1.1 –30.6.2020 |
TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
|---|---|---|---|---|---|
| Turnover | 108,061 | 51,073 | 2,569 | (6,327) | 155,376 |
| Cost of sales | (80,605) | (36,553) | (2,084) | 6,007 | (113,235) |
| Gross profit | 27,456 | 14,520 | 485 | (320) | 42,141 |
| Other operating income | 218 | 89 | 72 | (109) | 270 |
| Distribution expenses | (10,469) | (4,122) | - | (175) | (14,766) |
| Administrative expenses | (5,544) | (2,033) | (522) | 563 | (7,536) |
| Research and Development Expenses |
(585) | (150) | - | 2 | (733) |
| Other operating expenses | (819) | (872) | (96) | 1 | (1,786) |
| Other Income / (Losses) | 180 | (40) | 4 | - | 144 |
| Operating profit / (loss) | 10,437 | 7,392 | (57) | (38) | 17,734 |
| Interest & other financial (expenses)/income |
(857) | (715) | (274) | 15 | (1,831) |
| Income from dividends | - | - | 5,000 | (5,000) | - |
| (Profit) / loss from companies consolidated with the Equity method |
601 | 318 | 33 | - | 952 |
| Earnings / (losses) before tax (Continuing operations) |
10,181 | 6,995 | 4,702 | (5,023) | 16,855 |
| Earnings / (losses) before tax (Discontinued operations) |
(2,809) | - | - | - | (2,809) |
| Total Earnings / (losses) before tax |
7,373 | 6,995 | 4,702 | (5,024) | 14,046 |
| INCOME STATEMENT FOR THE PERIOD FROM 1.1 –30.6.2020 |
TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
|---|---|---|---|---|---|
| Depreciations of continuing operations |
5,233 | 2,921 | 145 | - | 8,299 |
| Depreciations of discount. operations |
379 | - | - | - | 379 |
| Total depreciation | 5,612 | 2,921 | 145 | - | 8,678 |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) of continuing operations |
15,670 | 10,313 | 88 | (38) | 26,033 |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) of discontinued operations |
(2,428) | - | - | - | (2,428) |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) |
13,242 | 10,313 | 88 | (38) | 23,605 |
| BALANCE SHEET OF 31.12.2019 | TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
| Total consolidated assets | 211,121 | 103,865 | 88,441 | (80,087) | 323,340 |
| INCOME STATEMENT FOR THE PERIOD FROM 1.1 –30.6.2019 |
TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
| Turnover | 111,912 | 48,227 | 2,619 | (7,585) | 155,173 |
| Cost of sales | (89,895) | (38,009) | (2,345) | 7,516 | (122,733) |
| Gross profit | 22,016 | 10,219 | 273 | (69) | 32,440 |
| Other operating income | 613 | 280 | (59) | (47) | 787 |
Distribution expenses (10,849) (3,824) - (202) (14,875) Administrative expenses (5,165) (2,190) (563) 282 (7,636)
Expenses (666) (108) - - (774) Other operating expenses (83) (445) (109) 4 (633) Other Income / (Losses) 82 44 (1) 1 126 Operating profit / (loss) 5,948 3,976 (458) (32) 9,434
Research and Development
| INCOME STATEMENT FOR THE PERIOD FROM 1.1 –30.6.2019 |
TECHNICAL FABRICS |
PACKAGING | OTHER | INTRA SEGMENT ELIMINATIONS |
GROUP |
|---|---|---|---|---|---|
| Interest & other financial (expenses)/income |
(1,278) | (790) | (322) | - | (2,389) |
| (Profit) / losses from participations | - | - | - | - | - |
| Income from dividends | - | - | - | - | - |
| (Profit) / loss from companies consolidated with the Equity method |
79 | 358 | 5 | - | 442 |
| Earnings / (losses) before tax (Continuing operations) |
4,750 | 3,544 | (775) | (32) | 7,487 |
| Earnings / (losses) before tax (Discontinued operations) |
(896) | - | - | - | (896) |
| Total Earnings / (losses) before tax |
3,854 | 3,544 | (775) | (32) | 6,591 |
| Depreciations of continuing operations |
4,011 | 2,864 | 159 | - | 7,034 |
| Depreciations of discount. operations |
717 | - | - | - | 717 |
| Total depreciation | 4,728 | 2,864 | 159 | - | 7,751 |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) of continuing operations |
9,960 | 6,839 | (299) | (32) | 16,468 |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) of discontinued operations |
(176) | - | - | - | (176) |
| Total Earnings / (losses) before interest, tax, depreciation & amortization (EBITDA) |
9,784 | 6,839 | (299) | (32) | 16,292 |
| Group | Company | ||||
|---|---|---|---|---|---|
| Other Operating Income | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | |
| Grants * | 101 | 43 | - | - | |
| Income from rents | 9 | 19 | - | - | |
| Income from provision of services | 6 | 88 | - | - | |
| Income from prototype materials | 29 | 113 | - | - | |
| Reverse entry of not utilized provisions |
34 | 34 | - | 8 | |
| Income from electric energy management programs |
48 | 300 | - | - | |
| Other operating income | 43 | 190 | 75 | 18 | |
| Total | 270 | 787 | 75 | 26 |
* refers to the grants for hiring new graduates as well as to the professional training of the Group's employees.
| Other Gains / (Losses) | Group | Company | |||
|---|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | ||
| Gains / (Losses) from the sale of fixed assets |
(30) | 85 | 5 | 1 | |
| Foreign Exchange Differences | 174 | 40 | (1) | (2) | |
| Total | 144 | 125 | 4 | (1) |
The number of employed staff in the Group and the Company at the end of the present period was as follows:
| Group | Company | |||
|---|---|---|---|---|
| Number of employees | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 |
| Regular & day-wage employees | 1,698 | 1.741 | 20 | 20 |
| Other Operating Expenses | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | |
| Provisions for doubtful receivables | 267 | (6) | - | - |
| Other taxes and duties non incorporated in operating cost |
78 | 82 | - | - |
| Depreciations | 37 | 8 | - | - |
| Staff indemnities | 121 | 195 | 98 | 101 |
| Commissions / other bank expenses | 66 | 68 | - | - |
| Expenses for the purchase of prototype materials (maquettes) |
43 | 169 | - | - |
| Other operating expenses | 460 | 116 | 1 | 8 |
| Sub Total | 1,072 | 632 | 99 | 109 |
| Extraordinary and non-recurrent expenses |
714 | - | - | - |
| Total | 1,786 | 632 | 99 | 109 |
| Analysis of Extraordinary and non-recurrent expenses | Group | ||
|---|---|---|---|
| 30.06.2020 | 30.06.2019 | ||
| Don & Low staff indemnities | 714 | - | |
| Total | 714 | - |
In the context of the restructuring of the Group's participations, the following expenses arose:
They concern the operating reorganization of the subsidiary company Don & Low Ltd. The company reduced its presence in woven technical fabrics while increased its production capacity in non-woven technical fabrics. These costs relate mainly to personnel indemnities.
| Financial Income | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | |
| Interest and related income | 6 | 2 | - | - |
| Foreign exchange differences | 393 | 343 | - | - |
| Total | 399 | 344 | - | - |
| Income from dividends | - | - | 5,000 | - |
| Financial Expenses | Group | Company | |||
|---|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | ||
| Debit interest and similar expenses | (1,729) | (2,146) | (273) | (322) | |
| Foreign exchange differences | (152) | (229) | - | - | |
| Financial result from Pension Plans | (349) | (359) | (1) | - | |
| Total | (2,230) | (2,734) | (274) | (322) |
Earnings after tax, per share, are calculated by dividing net earnings (after tax) allocated to shareholders, by the weighted average number of shares outstanding during the relevant financial year, after the deduction of any treasury shares held.
| Basic earnings per share (Consolidated, continuing operations) |
30.06.2020 | 30.06.2019 |
|---|---|---|
| Earnings allocated to shareholders | 12,548 | 5,103 |
| Number of shares outstanding (weighted) | 43,731 | 43,737 |
| Basic and adjusted earnings per share (Euro in absolute terms) |
0.2869 | 0.1167 |
| Basic earnings per share (Consolidated, discontinued operations) |
30.06.2020 | 30.06.2019 |
|---|---|---|
| Earnings allocated to shareholders | (2,809) | (902) |
| Number of shares outstanding (weighted) | 43,731 | 43,737 |
| Basic and adjusted earnings per share (Euro in absolute terms) |
(0.0642) | (0.0206) |
| Basic earnings per share (Consolidated, total operations) | 30.06.2020 | 30.06.2019 |
| Earnings allocated to shareholders | 9,739 | 4,201 |
| Number of shares outstanding (weighted) | 43,731 | 43,737 |
On June 30th, 2020, the Company held 16,462 treasury shares.
The analysis of tax charged in the year's Results, is as follows:
| Income Tax | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | |
| Income tax | (4,153) | (2,231) | - | - |
| Deferred tax (expense)/income | 128 | (1) | (14) | (4) |
| Total | (4,025) | (2,232) | (14) | (4) |
The income tax for the period is calculated based on the domestically applicable tax rates. Deferred taxes are calculated on temporary differences using the applicable tax rate in the countries where the Group's companies operate on 30.06.2020.
The actual tax rate of the Group differs significantly from the nominal tax rate, as there are tax losses in the companies of the Group for which no deferred tax asset is recognized as well as significant non-deductible tax expenses.
The changes in the tangible fixed assets during the period are analyzed as follows:
| Tangible Fixed Assets | Group | Company |
|---|---|---|
| Balance 01.01.2020 | 123,210 | 398 |
| Additions | 12,440 | 4 |
| Disposals | (3,192) | (5) |
| Transfer from right-of-use assets | 413 | - |
| Depreciation | (7,128) | (26) |
| Depreciation of sold assets | 2,417 | 5 |
| FX differences | (3,105) | - |
| Balance 30.06.2020 | 125,055 | 376 |
| Tangible Fixed Assets | Group | Company |
|---|---|---|
| Balance 01.01.2019 | 135,963 | 412 |
| Change in accounting policy due to IFRS 16 | 24,428 | - |
| Balance 01.01.2019 | 111,535 | 412 |
| Additions | 22,126 | 50 |
| Disposals | (5,989) | - |
| Transfer to held for sale | (6,155) | - |
| Impairments | (1,175) | - |
| Transfer from right-of-use assets | 8,364 | - |
| Depreciation | (13,004) | (64) |
| Depreciation of sold assets | 5,338 | - |
| FX differences | 2,170 | - |
| Other changes | - | - |
| Balance 31.12.2019 | 123,210 | 398 |
There are no liens and guarantees on the Company's tangible fixed assets, while the liens on the Group's tangible assets amount to € 5,064.
The right-of-use assets are analyzed as follows:
| Assets with right of use | Group | Company |
|---|---|---|
| Balance 01.01.2020 | 14,972 | 176 |
| Additions | 331 | 19 |
| Reductions | (212) | (30) |
| Transfer to fixed assets | (413) | - |
| Depreciation | (1,361) | (67) |
| Foreign exchange difference | (31) | - |
| Balance 30.6.2020 | 13,286 | 98 |
| Assets with right of use | Group | Company |
|---|---|---|
| Balance 31.12.2018 | - | - |
| Adjustments due to IFRS 16 | 2,412 | - |
| Reclassifications due to IFRS 16 | 24,429 | - |
| Balance 01.01.2019 | 26,841 | 316 |
| Additions | 644 | - |
| Reductions | (977) | - |
| Transfer to fixed assets | (8,364) | - |
| Depreciation | (3,186) | (140) |
| Foreign exchange difference | 14 | - |
| Balance 31.12.2019 | 14,972 | 176 |
The consolidated and separate statement of financial position includes the following amounts related to lease liabilities:
| Liabilities from Leasing | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Short-term liabilities from leasing | 3,788 | 4,773 | 87 | 156 |
| Long-term liabilities from leasing | 3,001 | 4,439 | 15 | 43 |
| Total Liabilities from Leasing | 6,789 | 9,212 | 102 | 199 |
The above amounts, among others, include leases for buildings, cars, machinery, printers and other equipment that were initially recognized due to the application of IFRS 16. These amounts for the Group amount to € 875 for 2020 and € 1,333 for 2019. For the Company the amounts settled at € 101 and € 199 respectively.
This is the industrial property that housed Thrace Linq Inc., located in South Carolina, USA. The management of the Group decided to sell the particular property. This property is included in the segment of technical fabrics.
During the current period, the transfer of the above property was completed.
The total price consideration of the transaction amounted to USD 14.5 million. As a result of the existing agreement, Thrace Linq received the amount of USD 11 million, while an amount of USD 3.5 million will have to be paid by the Buyer at a later time, i.e. within twelve months the latest from the date of the sale of property. However, according to the existing agreements and its special clauses (both with the Buyer and with the Buyer's Bank involved), in case for any reason the Buyer breaches its obligation to repay the remaining amount at the agreed time horizon (up until 15/06/2021 at the latest), the company Thrace Linq has the right to repurchase the property (having first priority and also based on its own discretion), covering the outstanding balance of the loan (and any interest or expenses that will be due) of the buyer as it will have been formed at the time when Thrace Linq will exercise this right, thus permanently canceling the sale or alternatively in case this is deemed unprofitable, has the right to participate in the foreclosure process (having as security the second registered mortgage).
Given the above and as the existence of the aforementioned call option to repurchase the property creates conditions of uncertainty regarding the final completion of the transaction, its accounting recognition will take place when, by 15/06/2021 the latest, unless agreed otherwise the relevant events become certain and final. The amount of USD 11 million received was recorded in the cash and cash equivalents account, respectively increasing the "Other current liabilities" account.
The changes in the intangible fixed assets during the period are analyzed as follows:
| Intangible Assets | Group | Company |
|---|---|---|
| Balance 01.01.2020 | 11,350 | 503 |
| Additions | - | - |
| Amortization | (175) | (51) |
| Impairments | (359) | - |
| FX differences | (97) | - |
| Balance 30.6.2020 | 10,719 | 452 |
| Intangible Assets | Group | Company |
|---|---|---|
| Balance 01.01.2019 | 11,567 | 611 |
| Additions | 351 | 9 |
| Amortization | (423) | (117) |
| Impairments | (157) | - |
| FX differences | 12 | - |
| Balance 31.12.2019 | 11,350 | 503 |
Intangible assets relate mainly to goodwill accounts which are analyzed in the annual financial statements.
Due to delays observed in the repayment from the Greek State of grants receivable over the last years, the Group reclassified the aggregate Greek State related receivable from the current to the non-current assets and also proceeded with an impairment of the above claims.
The receivable was formed due to a 12% grant on the payroll cost concerning the personnel employed in Xanthi and is to be collected from OAED.
| Group | Company | |||
|---|---|---|---|---|
| Other Long-Term Receivables | 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 |
| Grants receivable | 4,879 | 4,879 | 1,119 | 1,119 |
| Other accounts receivable | 204 | 212 | 48 | 49 |
| Total | 5,083 | 5,091 | 1,167 | 1,168 |
| Trade Receivables | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 31.12.2019 |
30.06.2020 | 31.12.2019 | ||
| Customers | 65,098 | 63,969 | 2,668 | 5,185 |
| Provisions for doubtful debts | (6,998) | (6,541) | (2,347) | (2,347) |
| Total | 58,100 | 57,428 | 321 | 2,838 |
The Group's Customers include promissory notes and overdue checks of € 7,674 for 2020 and € 8,507 for 2019.
Receivables from customers consist of the amounts due from customers from the sale of products that occur during the normal operation of the Group. In general, credit terms range from 30 to 180 days and therefore customer receivables are classified as shortterm. Receivables from customers are initially recognized in the transaction amount if the Group has the unconditional right to receive the transaction price. The Group holds the receivables from customers in order to collect the contractual cash flows and therefore measures them at amortized cost using the effective interest rate method. Details of the Group's impairment policies are given in note 2.9.
The Group's dispersion of sales is deemed satisfactory. There is no concentration of sales in a limited number of clients and as a result there is no increased risk with regard to loss of income, nor is there increased credit risk.
Given their short-term nature, the fair value of receivables approximates book value.
For the accounting policy on impairment of receivables from customers, see note 2.10 in the Financial Statements of the year ended on 31/12/2019. For information on financial risk management, see note 3.25.
| Other receivables | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Debtors | 2,812 | 2,717 | 30 | 4,075 |
| Investment Grant Receivable | 2,257 | 2,257 | - | - |
| Prepaid expenses | 3,346 | 2,870 | 242 | 179 |
| Provisions for doubtful debtors | - | - | - | - |
| Total | 8,415 | 7,844 | 272 | 4,254 |
The investment grant receivable concerns a grant in relation to Law 3299/2004 of the subsidiary company Thrace Plastics Pack concerning a completed investment.
The prepaid expenses mainly concern receivable from grants of the Greek State, other taxes prepayments apart from the income tax, and other prepaid expenses.
The Group's long term loans have been granted from Greek and foreign banks. The repayment time varies, according to the loan contract, while most loans are linked to Euribor plus a margin.
The Group's short term loans have been granted from Greek and foreign banks with interest rates of Euribor plus a margin. The book value of loans approaches their fair value on 30 June 2020.
| Debt | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Long-term loans | 46,377 | 52,871 | - | 4,000 |
| Total long-term loans | 46,377 | 52,871 | - | 4,000 |
| Long-term debt payable in the next year | 9,333 | 9,125 | - | - |
| Short-term loans | 25,133 | 34,371 | 5,200 | 11,098 |
| Total short-term loans | 34,466 | 43,496 | 5,200 | 11,098 |
| Grand Total | 80,843 | 96,367 | 5,200 | 15,098 |
Analytically, the bank debt at the end of the period was as follows:
Short-term loans include an amount of € 2,617 which relates to a Factoring agreement of the subsidiary Thrace Plastics Company with ABC Factors, which has been received by the aforementioned subsidiary and corresponds to non-reinsured customers.
The Company, during the current period, repaid all its bank debt and the remaining balance of the short-term loans relate to an intra-group loan.
Interest rates are linked on a case by case basis with a Euribor or Libor plus a margin ranging from 2.0% to 3.5%.
The liabilities of the Company and the Group towards its employees in providing them with certain future benefits, depending on the length of service is calculated by an actuarial study on annual basis. The accounting depiction is made on the basis of the accrued entitlement, as at the date of the Balance Sheet, that is anticipated to be paid, discounted to its present value by reference to the anticipated time of payment.
The liability for the Company and the Group, as presented in the Balance Sheet, is analyzed as follows:
| Employee Benefits | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Defined contribution plans – Not financed |
2,622 | 2,599 | 188 | 215 |
| Defined contribution plans – Financed |
13,008 | 12,653 | - | - |
| Total provision at the end of the year |
15,630 | 15,252 | 188 | 215 |
The Greek companies of the Group as well as the subsidiary Thrace Ipoma domiciled in Bulgaria participate in the following plan. With regard to the Greek companies, the following liability arises from the relevant legislation and concerns 40% of the required compensation per employee.
| Defined contribution plans – Not | Group | Company | ||
|---|---|---|---|---|
| self financed | 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 |
| Amounts recognized in the balance sheet |
||||
| Present value of liabilities | 2,623 | 2,599 | 188 | 215 |
| Net liability recognized in the balance sheet |
2,623 | 2,599 | 188 | 215 |
| Amounts recognized in the results |
||||
| Cost of current employment | 52 | 93 | 4 | 5 |
| Net interest on the liability / (asset) | 10 | 40 | 1 | 3 |
| Ordinary expense in the results | 62 | 133 | 5 | 8 |
| Recognition of prior service cost | - | - | - | - |
| Curtailment / settlement / service termination cost |
89 | 369 | 66 | 80 |
| Other expense / (income) | - | - | - | - |
| Total expense in the results | 151 | 502 | 71 | 88 |
| Changes in the Net Liability recognized in Balance Sheet |
||||
| Net liability / receivable at the beginning of period |
2,599 | 2,268 | 215 | 195 |
| Defined contribution plans – Not self financed |
Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Benefits paid from the employer - other |
(128) | (476) | (98) | (102) |
| Total expense recognized in the account of results |
151 | 501 | 71 | 88 |
| Total amount recognized in the Net Worth |
- | 306 | - | 34 |
| Net liability at the end of year | 2,622 | 2,599 | 188 | 215 |
The actuarial assumptions are presented in the following table.
| Actuarial Assumptions | Greek Companies | Thrace Ipoma AD | |||
|---|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | ||
| Discount rate | 0.80% | 0.80% | 0.60% | 0.60% | |
| Inflation | 1.16% | 1.16% | 3.80% | 3.80% | |
| Average annual increase of personnel salaries |
1.16% | 1.16% | 5.00% | 5.00% | |
| Duration of liabilities | 15.6 years | 15.6 years | 12.8 years | 12.8 years |
The subsidiaries Don & Low Ltd and Thrace Polybulk AS have formed Defined Benefit Plans which operate as separate entities in the form of trusts. Therefore the assets of the plans are not dependent on the assets of the companies.
The accounting entries of the plans according to the revised IAS 19 are as follows:
| Group | |||
|---|---|---|---|
| Defined Benefit Plans – Self Financed | 30.06.2020 | 31.12.2019 | |
| Amounts recognized in the balance sheet | |||
| Present value of liabilities | 150,426 | 154,901 | |
| Fair value of the plan's assets | (137,418) | (142,248) | |
| Net liability recognized in the balance sheet | 13,008 | 12,653 | |
| Amounts recognized in the results | |||
| Current employment cost | - | 147 | |
| Net interest on the liability / (fixed asset) | 172 | 684 | |
| Ordinary expense in the results | 172 | 831 | |
| Recognition of previous years' cost | - | - | |
| Curtailment / settlement / service termination cost | - | - |
| Other expense / (income) | 172 | - |
|---|---|---|
| Foreign exchange differences | - | - |
| Total expense in the results | 344 | 831 |
| Asset allocation * | ||
| Mutual Funds - Shares | 16,028 | 15,765 |
| Mutual Funds - Bonds | 74,737 | 72,615 |
| Diversified Growth Funds | 44,279 | 50,752 |
| Other | 2,374 | 3,116 |
| Total | 137,418 | 142,248 |
| Changes in the Net Liability recognized in Balance Sheet | ||
| Net liability / (receivable) at the beginning of year | 12,653 | 13,200 |
| Benefits paid from the employer / Other | (457) | (1,134) |
| Total expense recognized in the account of results | 344 | 831 |
| Total amount recognized in the Net Worth | 1,372 | (886) |
| Foreign exchange differences | (904) | 642 |
| Net liability / (receivable) at the end of year | 13,008 | 12,653 |
* The assets of the plan are measured at fair values and include mutual funds of Baillie Gifford.
The category "Other" also includes the plan's cash reserves.
The actuarial assumptions are presented in the following table.
| Actuarial Assumptions | Don & Low LTD | Thrace Polybulk AS | |||
|---|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | ||
| Discount rate | 1.60% | 2.00% | 2.30% | 2.30 % | |
| Inflation | 2.75% | 2.86% | 1.50% | 1.50 % | |
| Average annual increase of personnel salaries |
2.75% | 2.86% | 2.25% | 2.25 % | |
| Duration of liabilities | 17 years | 17 years | 11 years | 11 years |
The suppliers and the other short-term liabilities are analyzed in the following tables.
| Suppliers | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Suppliers | 39,470 | 36,187 | 356 | 297 |
| Total | 39,470 | 36,187 | 356 | 297 |
| Other Short-Term Liabilities | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Sundry creditors * | 13,258 | 2,943 | 99 | 60 |
| Liabilities from taxes and social security organizations |
4,052 | 4,717 | 171 | 387 |
| Dividends payable | 64 | 64 | 62 | 62 |
| Customer advances ** | 8,593 | 1,034 | - | - |
| Personnel fees payable | 2,016 | 2,272 | 144 | 484 |
| Accrued expenses – Other accounts payable |
8,465 | 5,231 | 464 | 274 |
| Total Short-Term Liabilities | 36,448 | 16,261 | 940 | 1,268 |
* Includes the amount of 11 million US dollars that the company Thrace Linq received for the sale of the property. (see note 3.13)
** Customer advance payments refer to a Group's obligation to deliver products to third parties. Revenue will be recognized in the results when the order is delivered.
Revenue accruing to prepaid customer advances has been recognized in the current year.
The Group classifies as related parties the members of the Board of Directors, the directors of the Company's divisions as well as the shareholders who own over 5% of the Company's share capital (their related parties included).
The commercial transactions of the Group with these related parties during the period 1/1/2020–30/06/2020 have been conducted according to market terms and in the context of the ordinary business activities.
The transactions with the Subsidiaries, joint Ventures and Related companies according to the IFRS 24 during the period 1.1.2020 – 30.6.2020 are presented below.
| Income | 1.1 – 30.06.2020 | 1.1 –30.06.2019 | ||
|---|---|---|---|---|
| Group | Company | Group | Company | |
| Subsidiaries | - | 2,580 | - | 2,575 |
| Joint Ventures | 3,405 | 59 | 3,194 | 31 |
| Related Companies | 5 | - | 6 | - |
| Total | 3,410 | 2,639 | 3,200 | 2,606 |
| Expenses | 1.1 – 30.06.2020 | 1.1 –30.06.2019 | ||
|---|---|---|---|---|
| Group | Company | Group | Company | |
| Subsidiaries | - | 10 | - | 33 |
| Joint Ventures | 158 | - | 754 | - |
| Related Companies | 504 | 238 | 445 | 189 |
| Total | 662 | 248 | 1,199 | 222 |
| Trade and other receivables | 30.06.2020 | 31.12.2019 | ||
|---|---|---|---|---|
| Group | Company | Group | Company | |
| Subsidiaries | - | 283 | - | 6,833 |
| Joint Ventures | 2,642 | 32 | 1,980 | 50 |
| Related Companies | 37 | 26 | 27 | 26 |
| Total | 2,679 | 342 | 2,007 | 6,909 |
| Suppliers and Other Liabilities | 30.06.2020 | 31.12.2019 | |||
|---|---|---|---|---|---|
| Group | Company | Group | Company | ||
| Subsidiaries | - | 5,293 | - | 1,173 | |
| Joint Ventures | 21 | 19 | 42 | 19 | |
| Related Companies | 153 | 205 | 44 | 3 | |
| Total | 174 | 5,517 | 86 | 1,195 |
| Long-term Liabilities | 30.06.2020 | 31.12.2019 | ||
|---|---|---|---|---|
| Group | Company | Group | Company | |
| Subsidiaries | - | 339 | - | 359 |
| Joint Ventures | - | 15 | - | 24 |
| Related Companies | - | - | - | - |
| Total | - | 354 | - | 383 |
In the context of the adoption of IFRS 16, the Company's liabilities to Subsidiaries and related companies include lease liabilities.
The Company's lease liabilities with related parties are analyzed as follows:
| Company | ||||||
|---|---|---|---|---|---|---|
| Liabilities from Leases |
Initial Balance 01.01.2020 |
Lease Payments |
New Agreements / Amendment of Agreements |
Interest from Leases |
Final Balance. 30.6.2020 |
|
| Subsidiaries | 5 | (2) | - | - | 3 | |
| Related Companies |
157 | (80) | - | 2 | 79 | |
| Total | 162 | (82) | - | 2 | 82 |
In addition, the depreciation charges of the Company include depreciation for assets with the right of use, relating to lease agreements with related parties, amounting to € 58.
Also, the liabilities of the Group to the companies of related parties include liabilities from leases.
| Group | |||||
|---|---|---|---|---|---|
| Liabilities from Leases |
Initial Balance 01.01.2020 |
Lease Payments |
New Agreements / Amendment of Agreements |
Interest from Leases |
Final Balance. 30.6.2020 |
| Subsidiaries | 164 | (84) | - | 2 | 82 |
| Related Companies |
164 | (84) | - | 2 | 82 |
The Group's lease liabilities with related parties are analyzed as follows:
In addition, the depreciation of the Group includes depreciation for assets with the right of use, relating to lease agreements with related parties, amounting to € 62.
The "Subsidiaries" include all companies consolidated with "Thrace Plastics Group" via the full consolidation method. The "Joint Ventures" include those consolidated with the equity method.
The Company has granted its guarantee in favor of its subsidiaries to banks to secure from the latter long-term loans. As at 30.6.2020, the outstanding amount for which the Company has granted guarantees settled at € 63,172 and is analyzed as follows.
| Guarantees in favor of Subsidiaries | 30.06.2020 |
|---|---|
| Thrace Nonwovens & Geosynthetics S.A. | 22,614 |
| Thrace Greenhouses SA | 1,731 |
| Thrace Plastics Pack SA | 23,207 |
| Thrace Polyfilms | 7,746 |
| Synthetic Holdings | 7,874 |
| Total | 63,172 |
| BoD Fess | Group | Company | |||
|---|---|---|---|---|---|
| 30.06.2020 | 30.6.2019 | 30.06.2020 | 30.6.2019 | ||
| BoD Fees | 2,033 | 2,073 | 751 | 820 |
The remuneration concerns the Boards of Directors of 21 companies which have 37 participants and include salaries of the executive members of the Boards of Directors, other remuneration and benefits of both the executive and the non-executive directors
The value of the Company's participations in the subsidiaries, as of 30 June 2020, is as follows:
| Companies consolidated with the full consolidation method |
30.06.2020 | 31.12.2019 |
|---|---|---|
| DON & LOW LTD | 37,495 | 37,495 |
| THRACE PLASTICS PACK S.A. | 15,507 | 15,507 |
| THRACE NONWOVENS & GEOSYNTHETICS S.A. | 5,710 | 5,710 |
| SYNTHETIC HOLDINGS LTD | 11,728 | 11,728 |
| THRACE POLYFILMS | 3,418 | 3,418 |
| TOTAL | 73,858 | 73,858 |
The following table presents the companies in which the management is jointly controlled with another shareholder with the right to participate in their net assets. The companies are consolidated according to the Equity method in line with the provisions of IFRS 11.
The parent Company holds direct business interest of 50.91% in Thrace Greenhouses SA with a value of € 3,615 and of 51% in Thrace Eurobent SA with a value of € 204 as at 30/06/2020. The company Thrace Greiner Packaging SRL is 50% owned by Thrace Plastics Pack SA whereas Lumite Inc is 50% owned by Synthetic Holdings LTD.
| Company | Country of Activities |
Business Activity | Percentage of Group |
|---|---|---|---|
| Thrace Greiner Packaging |
Romania | The company activates in the production of plastic boxes for food products and paints and belongs to the packaging sector. |
46.47% |
| SRL | The company's shares are not listed. | ||
| Lumite INC | United States | The company activates in the production of agricultural fabrics and belongs to the technical fabrics sector. |
50.00% |
| The company's shares are not listed. | |||
| Thrace Greenhouses |
Greece | The company activates in the production of agricultural products and belongs to the agricultural sector. |
50.91% |
| S.A. | The company's shares are not listed. | ||
| Thrace Eurobent S.A. |
Greece | The company activates in the manufacturing of waterproof products via the use of Geosynthetic Clay Liner – GCL and belongs to the technical fabrics sector. |
51.00% |
| The company's shares are not listed. |
The change of the Group's interests in the companies that are consolidated with the equity method is analyzed as follows
| Interests in companies consolidated with the equity method |
1.1 – 30.06.2020 | 1.1 - 31.12.2019 |
|---|---|---|
| Balance at beginning | 14,547 | 13,356 |
| Share capital increase (Thrace Greenhouses) | - | 815 |
| Participation in profit / (losses) of joint ventures |
952 | 1,166 |
| Dividends | (550) | (809) |
| Foreign exchange differences and other reserves |
(34) | 20 |
| Balance at end | 14,915 | 14,547 |
On 30th June 2020, there are no significant legal issues pending where the final resolution of which may have a material effect on the financial position of the Companies in the Group.
The letters of guarantee issued by the banks for the account of the Company and in favor of third parties (Greek State, suppliers and customers) amount to € 834.
In the present financial statements, there have been reclassifications of not significant accounts for the purpose of comparability with the ones of the present year..
The financial assets used by the Group, mainly consist of bank deposits, bank overdrafts, receivable accounts, payable accounts and loans.
In general, the Group's activities face several financial risks. Such risks include market risk (foreign exchange risk and risk from changes and raw materials prices), credit risk, liquidity risk and interest rate risk.
The Group is exposed to fluctuations of the prices of polypropylene (represents about 55% of the cost of sales). The Group manages such fluctuations via a corresponding change in the selling price of the final product. The likelihood of an incomplete transfer of the price increase of polypropylene into the selling price inevitably causes a contraction of profit margins. For this reason, the Group adjusts as much as possible both its inventory and its commercial policy, so that this risk is in any case manageable.
The credit risk to which the Group and the Company are exposed is the likelihood that a counterparty will cause financial loss to the Group and the Company as a result of the breach of its contractual obligations.
The maximum credit risk to which the Group and the Company are exposed at the date of preparation of the financial statements is the book value of their financial assets. In order to address credit risk, the Group consistently applies a clear credit policy, which is monitored and evaluated on an ongoing basis so that the credit granted does not exceed the credit limit per customer. Client sales insurance policies are also concluded per customer and no tangible guarantees on the assets of clients are required.
In order to monitor credit risk, customers are grouped according to the category they belong to, their credit risk characteristics, the maturity of their receivables and any previous problematic incidents concerning the receivables, taking into account future factors as well as the economic environment
The financial assets of the Group and the Company measured by the new model of expected credit losses, include receivables from customers and other financial assets.
The Group and the Company recognize provisions for impairment with regard to the expected credit losses of all financial assets. The expected credit losses are based on the difference between the estimated cash flows and the entire cash flows which the Group (or the Company) expected to receive, based on contracts or agreements. The difference is discounted by using an estimate concerning the initial effective interest rate of the financial asset.
At each reporting date, IFRS 9 requires the measurement of the loss provision for a financial instrument at an amount equal to the expected credit losses for the entire life of the asset if the financial risk of the financial instrument has increased significantly since the time of initial recognition. Conversely, if, at the reporting date, the credit risk of a financial instrument has not increased significantly since its initial recognition, IFRS 9 requires a loss provision for that financial instrument to be measured at an amount that is equal to the expected 12-month credit losses. The risk parameters taken into account for the calculation of the expected credit losses are the estimated probability of default, the percentage of loss on the due capital given that the customer has defaulted to repay the due amount, and the balance that the company is exposed in case of the customer's default. In certain cases, the Company may assess for specific financial data that there is a credit event when there is internal or external information indicating that the collection of the amounts specified under the relevant contract is not likely to be collected in full. As a general rule, the evaluation of the classification in stages is carried out in each reporting period.
For trade receivables, the Group and the Company applied the simplified standard approach and calculated the expected credit losses over the life of the receivables. For this purpose, a table of credit loss provisions based on the maturity of the balances was used, which calculates the relevant provisions in a way that reflects the experience from past events as well as forecasts of the future financial situation of customers and the financial environment. The balance of the provision for doubtful receivables is adjusted appropriately at each closing date of the financial statements to reflect the potential risks involved. Any write-off of other customers is charged to the existing provision for doubtful receivables. It is the Company's policy not to write off any receivables until all possible legal actions for its collection have been exhausted.
Liquidity risk monitoring focuses on the management of cash inflows and outflows on a permanent basis, so that the Group has the ability to meet its cash obligations and retain the cash reserves required for its operations. Liquidity is managed by maintaining cash and approved bank credit lines. At the date of preparation of the financial statements, unused approved bank credits were available to the Group, which are considered sufficient to handle any possible shortage of cash in the future. Short-term bank liabilities are renewed at maturity, as they are part of the approved bank credit lines.
The Group is exposed to foreign exchange risks arising from existing or expected cash flows in foreign currency and investments that have been made in countries outside the Euro Zone (for example USA, United Kingdom, etc.). The management of the various risks is made by the use of natural hedge instruments. In order to hedge the foreign exchange risk from customers' receivables in foreign currency, an equal amount of borrowing is agreed in the same currency according to the management's policy and judgment.
The long-term loans of the Group have been granted by Greek and foreign banks and are mainly in Euro. Their repayment time varies, depending on the loan agreement and they are usually linked to Euribor plus margin. The Group's short-term loans have been granted by various banks, with Euribor interest rate plus margin as well as Libor interest rate plus margin.
The Group controls the capital adequacy using the Net Debt to Equity ratio and the Net Debt to EBITDA ratio. The Group's objective in relation to capital management is to ensure the possibility of its smooth operation in the future, in order to provide satisfactory returns to shareholders and benefits to other parties, as well as to maintain the most beneficial capital allocation in order to achieve low cost of capital. For this purpose, it systematically monitors the working capital needs in order to maintain manageable levels of external financing.
| Capital Adequacy Risk | Group | Company | ||
|---|---|---|---|---|
| 30.06.2020 | 31.12.2019 | 30.06.2020 | 31.12.2019 | |
| Long-term debt | 46,377 | 52,871 | - | 4,000 |
| Long-term liabilities from leases | 3,001 | 4,439 | 15 | 43 |
| Short-term debt | 34,466 | 43,496 | 5,200* | 11,098 |
| Short-term liabilities from leases | 3,788 | 4,773 | 87 | 156 |
| Total debt | 87,632 | 105,579 | 5,302 | 15,297 |
| Minus cash & cash equivalents | 40,660 | 22,051 | 1,469 | 505 |
| Net debt | 46,972 | 83,528 | 3,833 | 14,792 |
| EQUITY | 151,851 | 146,349 | 75,376 | 70,743 |
| NET DEBT / EQUITY | 0.31 | 0.57 | 0.05 | 0.21 |
* The short-term borrowing of the company concerns an intra-group loan, therefore the Company has zero external financing.
The Net Debt / EBITDA ratio for the period settled at 1.30x (the EBITDA figure refers to the period from 01.07.2019 to 30.06.2020).
It is noted that on 31.12.2019 the ratio stood at 2.91x while on 30.06.2019 at 3.31x.
The spread of the COVID-19 pandemic, from the beginning of 2020 until today has caused significant disruptions in global supply and demand, including Greece and other countries in which the Group operates and has therefore created conditions of intense uncertainty, making the global and local macroeconomic environment especially difficult. At the same time, there is still an inability to assess both the duration and intensity of the pandemic, as well as the time point for restarting the recovery, but also its dynamics.
Uncertainty in the macroeconomic and financial front along with the volatile business environment are risk factors, which the Group constantly evaluates. At the same time, the situation that is developing both globally and in Greece in the economy and the wider society, as a result of the pandemic, is an additional risk factor, which may have an impact on the results and the broader trajectory of the Group.
During the given period of time, on a global scale, but also in Greece, the second phase of the pandemic is in progress, as a result of which risk conditions are being reshaped, while restrained optimism prevails regarding the finding of a vaccine for the effective treatment of virus.
The Management of the Group continues to implement a series of actions, which have been applied in all areas of operation, such as: Health and safety, personnel management, production, supply chain, transaction cycle and liquidity among others, to address potential risks in specific operating areas and to ensure conditions of the smooth and uninterrupted activity of all the companies within the Group. More specifically, the subteams that have been formed and monitor all relevant developments, assessing the potential impact of COVID-19, continue to support the day-to-day operations of the Group with even greater dedication and commitment, having developed and fully implemented a health and safety plan for the personnel as well as an action plan concerning the business continuity of the Group.
Despite the unfavorable economic environment, the Group has managed to maintain its sales at pre-pandemic levels, as demand remains unaffected with regard to the majority of its products. In addition, there is an increased demand for products related to personal protection and health, an increase that offsets the decline in demand for products related to catering and tourism, the impact of which is in any case limited if compared to the Group's total sales.
In terms of profitability, the Group shows a significant improvement, compared to the first half of last year. The reorganization of the Group's activities, which was implemented consistently and decisively during the previous years, the increase of the demand for products with stronger profit margins (such as personal protection and health products), the development of new products and activities (especially in the technical fabrics sector), as well as the maintenance and further strengthening of the Group's customer base, as its customers in the context of the uncertainty conditions prevailing in the market, have already shown and continue to demonstrate their trust towards the company, and also they continue to recognize the Group's reliability and consistency as a supplier.
Regarding the level of liquidity, the Group
has achieved stronger levels of liquidity and at the same time has reduced its Net Debt, a goal which remains key priority and primary objective for the second half of the current year.
The Management constantly and systematically monitors the situation along with the potential repercussions whereas it proceeds with appropriate actions in order to ensure that all necessary and possible measures are taken in time to limit, as much as possible, the potential effects of the crisis due to pandemic on its business activities of the Group. At the same time, the Management ensures the seamless business continuity of the Group. In any case, until the time of the preparation and approval of this Report, the future economic effects associated with the pandemic cannot be estimated reliably and with absolute accuracy.
The Board of Directors of the Company, during its meeting held on 10.01.2020, accepted the resignation of Mr. Georgios Braimis, Executive Member of the Board of Directors, who left the Group. During the same meeting on 10.01.2020, the Board of Directors decided in accordance with article 8 of the Company's Articles of Association and article 82, par. 2 of Law 4548/2018 the non-immediate replacement of above member and the continuation of the management and representation of the Company by the remaining members of the Board of Directors
By decision of the Board of Directors of March 20th, 2020, Mr. Dimitris Malamos, Executive Member of the Board of Directors, took over the duties of Deputy CEO of the Group (Deputy Group CEO). Mr. Malamos, who has held the position of Group CFO since 2010, has many years of experience in financial analysis and internal restructuring, has demonstrated his administrative and managerial skills and at the same time has gained deep knowledge and experience about the organization, operation and business activities of the Company and the Group.
The position of Group CFO was assumed by Mr. Dimitrios Fragkou, Certified Accountant (member of ACCA), who for many years held managerial positions in a well-known auditing company and has significant and valuable expertise in providing financial, auditing and consulting services. This expertise will be further used to improve the organization, efficiency and operation of the relevant Divisions and Departments of the Company and the Group. Mr. Fragkou is a graduate of the Department of Business Administration and holds a Master's degree in Accounting and Finance from the Athens University of Economics and Business.
Further implementing the internal restructuring plan within the financial year 2020, the Group decided the following:
• The transfer of the production line of non-woven fabrics (needle punch) from the 100% subsidiary Thrace Linq Inc. which is headquartered in South Carolina, USA, to the 100% subsidiary Thrace Nonwovens & Geosynthetics, based in Magiko of Xanthi, Greece, in order to strengthen the production capacity of the subsidiary and thus expand its sales growth potential. The transfer of the production line started in April 2020 whereas its installation and commencement of operation will take place within the fourth quarter of 2020. Following the above, the final termination of the operations of Thrace Linq Inc. was approved whereas it was decided that the US geotextiles market would still be served by the Group's facilities in Europe and by Lumite Inc. in the USA, in which the Group participates with 50%. The Management considers that the above action will strongly contribute to the improvement of the Group's profitability.
• The liquidation of Thrace China (already completed) and its parent company Thrace Asia (expected to be completed within the year). The latter company operates as the sales offices Thrace Nonwovens & Geosynthetics in the Chinese market, with extremely limited activity in recent years, as most of the sales in the Asian market are made directly by Thrace Nonwovens & Geosynthetics. Therefore, the Group's Management decided to suspend the operation of this office. The parent company's, SAEPE LTD, participation value in the above companies settled at € 631 and there was also an intra-group receivable of € 30. The participation and the receivable will be impaired by 100%.
It is noted that this impairment charge will not affect the results of the Group but only the results of the subsidiary SAEPE LTD.
The transfer of the privately owned industrial property, which housed Thrace Linq Inc and is located in South Carolina, USA, has taken place.
The total price consideration of the transaction amounted to USD 14.5 million. As a result of the existing agreement, Thrace Linq received the amount of USD 11 million, while an amount of USD 3.5 million will have to be paid by the Buyer at a later time, i.e. within twelve months the latest from the date of the sale of property. However, according to the existing agreements and its special clauses (both with the Buyer and with the Buyer's Bank involved), in case for any reason the Buyer breaches its obligation to repay the remaining amount at the agreed time horizon (up until 15/06/2021 at the latest), the company Thrace Linq has the right to repurchase the property (having first priority and also based on its own discretion), covering the outstanding balance of the loan (and any interest or expenses that will be due) of the buyer as it will have been formed at the time when Thrace Linq will exercise this right, thus permanently canceling the sale or alternatively in case this is deemed unprofitable, has the right to participate in the foreclosure process (having as security the second registered mortgage).
Given the above and as the existence of the aforementioned call option to repurchase the property creates conditions of uncertainty regarding the final completion of the transaction, its accounting recognition will take place when, by 15/06/2021 the latest, unless agreed otherwise the relevant events become certain and final. The amount of USD 11 million received was recorded in the cash and cash equivalents account, respectively increasing the "Other current liabilities" account.
It should be noted that the cash received (USD 11 million) was used to reduce the Group's Net Debt.
The fully owned by 100% subsidiary Don & Low Ltd, based in Forfar, Scotland, has decided to invest in the purchase and installation of mechanical equipment for the production of meltblown material (GBP 4.5 million). The meltblown material will be used for production of all types of masks, from surgical masks to FFP2 and FFP3 masks. The new production line is expected to be operational in the last quarter of the year.
To implement the investment, Don & Low agreed with the state-owned institution "Scottish Enterprise" to finance 80% of the investment. Funding will be returned to Scottish Enterprise within the next five years depending on the company's sales volume during that time.
Thrace Plastics Group has been active in the production of non-woven polypropylene fabrics, which are used as raw materials by manufacturers of surgical masks and other protective medical products. This activity takes place in the production facilities of the Group's subsidiaries in Xanthi and Forfar in Scotland. Due to the COVID pandemic, the above products are in increased demand. In the context of the corporate social responsibility, the Group has decided each of the above subsidiaries to give priority to the supply of these products to local manufacturers of surgical masks and other protective medical products in the Greek market and that of the UK respectively.
its existing production facilities and infrastructure as well as its strong know-how in this field, the Group made an unplanned investment of over 400 Euros in order to add the required mechanical equipment for the production of Type I, Type II and Type IIR surgical masks. The new production lines have already been installed in the production facilities of the Group in Xanthi and their production capacity exceeds 400 thousand masks per day.
The purpose of this decision was, on the one hand, to take advantage of a profitable business opportunity and, on the other hand, to make a significant social contribution.
At the same time, the Group is investing
In addition, with the possibility of utilizing
in the purchase and installation of mechanical equipment for the production of surgical masks in the facilities of its subsidiaries in Scotland and Ireland. The daily capacity of these production lines is of the order of 800 thousand and 200 thousand masks per day respectively.
The Board of Directors of Thrace Plastics Group decided to support our fellow human beings who do not have the financial means to purchase the masks necessary for their protection, donating 50% of the production of surgical masks in May and June to Social Welfare Institutions and other social groups.
Decisions of the Ordinary General Meeting of Shareholders of 15th July 2020
At the Ordinary General Meeting of July 15, 2020, among others, the shareholders:
There are no events subsequent to the date of the balance date, which significantly affect the financial statements of the Group.
Appeal of Thrace Nonwovens & Geosynthetics SA to the Administrative Court of Appeal for taxes charged for the year 2011
The Administrative Court of Appeal, according to No. 2826/2020 decision, accepts the appeal of the company Thrace Nonwovens & Geosynthetics SA and cancels the accrued taxes and surcharges from the tax authorities amounting to € 527 for the year 2011. The company had paid the above amount and had formed an equal claim in its accounting books, which is included in the consolidated financial statements. Respectively, for this reason, both in the accounting books of the company and in the consolidated financial statements, a formed provision of € 330 is included.
On July 17, 2020, the Law 4706/2020 was passed, according to which the outstanding claims of the beneficiaries until 31.12.2015 are offset by existing and future claims of the State against them, from the entry into force of the law. The obligations of OAED and the Greek State are exhausted according to the provisions of article 87 par. 2 of Law 4706/2020. The Group has a long-term receivable from OAED amounting to € 4,879 which concerns a subsidy of 12% on the payroll costs of personnel and recruitment of new graduates in the area of Xanthi. The receivable of the Group before the impairments that have been recorded, amounts to € 11,062. At the time of this report is drafted, no relevant guidance and further details have been issued for the specific elements and the timing of application of the Law..
There are no other events after the Balance Sheet date that have a significant effect on the condensed interim financial information of the Group.
The condensed interim financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, was approved by the Board of Directors on 18 September 2020 and is signed by the representatives of such.
| The Chairman and Chief Executive Officer |
The Deputy CEO | The CFO | The Chief Accountant |
|---|---|---|---|
| KONSTANTINOS ST. | DIMITRIOS P. | DIMITRIOS V. | FOTINI K. |
|---|---|---|---|
| CHALIORIS | MALAMOS | FRAGKOU | KYRLIDOU |
| ID NO. AM 919476 | ID NO. AΟ 000311 | ID NO. AΗ 027548 | ID NO. AΚ 104541 Accountant Lic. |
Reg. No. 34806 A' CLASS
The interim condensed financial information of the company THRACE PLASTICS CO S.A. is available on the internet, on the website www.thracegroup.gr.
Domicile: Magiko, Municipality of Avdira Xanthi Greece Offices: 20 Marinou Antypa Str. 174 55 Alimos, Attica, Greece
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