Pieno Zvaigzdes

Quarterly Report • Nov 29, 2019

Vilnius, November 2019 AB "Pieno žvaigždės" confirmation of the Management

Interim financial statements for the 9 monts 2019

We, Aleksandr Smagin, Chief Executive Officer and Audrius Statulevičius, Chief Financial Officer, hereby confirm that, to the best of our knowledge, Interim Financial Statements of the nine months of 2019 prepared in accordance with IFRS, give true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of AB "Pieno žvaigždės".

Chief Executive Officer / Aleksandr Smagin

Chief Financial Officer / Audrius Statulevičius

Interim financial statements

For the 9 monts 2019

1. Statement of financial position4
2. Statement of comprehensive income 5
3. Statement of cash flows 6
4. Statement on change in equity7
5. Notes to the financial statements 8

1. Statement of financial position (Thousand EUR)

Prepared according to IFRS, not audited

	2019 09 30	2018 12 31
Assets
Property, plant and equipment	46 618	42 098
Intangible assets	133	136
Investments available for sale	22	22
Long-term receivables	892	683
Deferred tax	1 147	1 147
Total non-current assets	48 812	44 086
Inventories	11 840	13 423
Receivables	13 294	11 166
Cash and cash equivalents	4 945	4 795
Total current assets	30 079	29 384
Total assets	78 891	73 470
Equity
Share capital	13 089	13 089
Share premium	7 891	7 891
Own shares	-	-
Reserves	1 570	2 200
Retained earnings	6 136	2 950
Total equity	28 686	26 130
Liabilities
Government grants	1 041	1 129
Interest-bearing loans and borrowings	22 540	13 500
Deferred tax	3 282	883
Total non-current liabilities	26 863	15 512
Provisions
Interest-bearing loans and borrowings	6 136	13 217
Income tax payable	-	-
Trade and other amounts payable	17 206	18 611
Total current liabilities	23 342	31 828
Total liabilities	50 205	47 340
Total equity and liabilities	78 891	73 470

2. Statement of comprehensive income (Thousand EUR)

Prepared according to IFRS, not audited

2019 01 01 -	2018 01 01 -
2019 09 30	2018 09 30
128 878	130 842
(103 685)	(106 387)
25 193	24 455
438	383
(21 039)	(20 829)
4 592	4 009
117	137
(800)	(875)
(683)	(738)
3 909	3 271
-	-
3 909	3 271
0,09	0,07

2019 07 01 -	2018 07 01 -
	2018 09 30
44 730	44 346
(35 239)	(35 551)
9 491	8 795
149	127
(6 527)	(6 839)
3 113	2 083
47	53
(275)	(273)
(228)	(220)
2 885	1 863
-	-
2 885	1 863
0,06	0,04
	2019 09 30

3. Statement of cash flows (Thousand EUR)

Prepared according to IFRS, not audited

	2019 09 30	2018 09 30
Cash flows from operating activities
Net profit	3 909	3 271
Adjustments:
Depreciation and amortisation	4 370	5 282
Amortisation of government grants	(130)	(87)
Result of disposal of property, plant and equipment	(112)	(90)
Change in financial instruments	(25)	(38)
Change in vacation reserve	(23)	85
Change in impairment loss of inventories	(234)	1 447
Interest income/expenses, net	582	771
Income tax	-	-
Cash flows from ordinary activities before changes	8 337	10 641
in the working capital
Change in inventories	1 818	1 657
Change in receivables	(2 580)	(2 247)
Change in trade and other payable amounts	(1 315)	(1 829)
Cash flows from operating activities	6 260	8 222
Interest paid	(630)	(806)
Income tax paid	-	-
Net cash flow from operating activities	5 630	7 416
Cash flows from investing activities
Acquisition of property, plant and equipment	(6 341)	(3 494)
Acquisition of intangible assets	(51)	(77)
Proceeds on sale of property, plant and equipment	184	102
Interest received	48	35
Net cash flow used in investing activities	(6 160)	(3 434)
Cash flows from financing activities
Loans received	35 500	3 922
Repayment of borrowings	(33 517)	(7 897)
Dividends paid	(1 345)	-
Government grants received	42	172
Net cash from/(used in) financing activities	680	(3 803)
Change in cash and cash equivalents	150	179
Beginning cash	4 795	256
Ending cash	4 945	435

4. Statement on change in equity

Prepared according to IFRS, not audited

(Thousand EUR)	Share capital	Share premium	Own shares	Compulsory reserve	Revaluation reserve	Other reserves	Retained earnings	Total equity
As at 1 January 2018	13 089	7 891	0	1 570	0	630	752	23 932
Profit allocation								0
Dividends								0
Change of share capital								0
Own shares buyback								0
Depreciation of revaluated part Other income								0 0
Net profit for 2018							3 271	3 271
As at 30 September 2018	13 089	7 891	0	1 570	0	630	4 023	27 203
As at 1 October 2018	13 089	7 891	0	1 570	0	630	4 023	27 203
Profit allocation								0
Dividends								0
Change of share capital								0
Own shares buyback								0
Depreciation of revaluated part Other income								0 0
Net profit for 2018							(1 073)	(1 073)
As at 31 December 2018	13 089	7 891	0	1 570	0	630	2 950	26 130
As at 1 January 2019	13 089	7 891	0	1 570	0	630	2 950	26 130
Profit allocation						(630)	630	0
Dividends							(1 353)	(1 353)
Change of share capital								0
Own shares buyback								0
Depreciation of								0
revaluated part Other income								0
Net profit for 2019							3 909	3 909
As at 30 September	13 089	7 891	0	1 570	0	0	6 136	28 686

5. Notes to the financial statements

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

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

Statement of compliance

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

Main indicators of the Company's' performance

	2019 01 01 -	2018 01 01 -
	2019 09 30	2018 09 30
Sales, Thousand EUR	128 878	130 842
Gross profit, Thousand EUR	25 193	24 455
EBITDA, Thousand EUR	8 832	9 204
Current ratio (at the end of period)	1,29	1,56
Book value per share (at the end of period), EUR	0,63	0,60
Net profit per share	0,09	0,07
	2019 07 01 -	2018 07 01 -
	2019 09 30	2018 09 30
Sales, Thousand EUR	44 730	44 346
Gross profit, Thousand EUR	9 491	8 795
EBITDA, Thousand EUR	4 401	3 760
Current ratio (at the end of period)	1,29	1,56
Book value per share (at the end of period), EUR	0,63	0,60
Net profit per share

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

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

Inventories, Thousand EUR	2019 09 30	2018 12 31
Raw materials	4 915	4 707
Stored production	6 880	8707
Goods for resale	45	9
Total:	11 840	13 423

Segment reporting

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

	2019 01 01 -	2018 01 01 -
Sales by geographical markets, Thousand EUR	2019 09 30	2018 09 30
Lithuania	73 859	71 599
Other EU countries	39 066	42 968
Other non EU countries	15 953	16 275
Total:	128 878	130 842
Sales by products groups, Thousand EUR	2019 01 01 - 2019 09 30	2018 01 01 - 2018 09 30
Fresh milk products	88 700	87 391
Dry milk products	4 552	5 240
Cheese	24 996	29 379
Other products	10 630	8 832
Total:	128 878	130 842

	2019 07 01 -	2018 07 01 -
Sales by geographical markets, Thousand EUR	2019 09 30	2018 09 30
Lithuania	25 224	25 125
Other EU countries	12 912	14 546
Other non EU countries	6 595	4 675
Total:	44 731	44 346

Other products Viso:	4 165 44 731	3 616 44 346
Cheese	7 744	9 931
Dry milk products	2 435	1 561
Fresh milk products	30 387	29 238
Sales by products groups, Thousand EUR	2019 09 30	2018 09 30
	2019 07 01 -	2018 07 01 -

Post balance sheet events

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