Vassilico Cement Works Public Company LTD

Interim / Quarterly Report • Jul 30, 2018

Report and Consolidated Interim Financial Statements Six months ended 30 June 2018

Report and Consolidated Interim Financial Statements Six months ended 30 June 2018

Contents	Page
Report for the Six Months Ended 30 June 2018	1
Consolidated Statement of Profit or Loss and Other Comprehensive Income	2
Consolidated Statement of Financial Position	3
Consolidated Statement of Changes in Equity	4
Consolidated Statement of Cash Flows	5
Notes to the Consolidated Interim Financial Statements	6
Statement of the members of the Board of Directors and other responsible persons of the Company for the interim financial statements	7

Report for the Six Months Ended 30 June 2018

On July 27th 2018, the Board of Directors of Vassiliko Cement Works Public Company Ltd approved the financial results of the Group for the first half of the year that ended 30 June 2018.

Financial results

Revenues for the first half of 2018 reached €49.603.000, compared to €52.812.000 for the respective period of 2017. Revenues were negatively affected by a drop in income from exports, as well as price decreases effective throughout the first half of 2018 for the domestic market. This is despite the increase of demand in the domestic market, which has grown steadily for a third consecutive year.

On the production front, there was a negative impact from fuel and electricity costs, negatively affecting the operating margins as compared to the previous year. The impact of the rising cost of traditional fuels was mitigated to some extend with the use of alternative non-fossil fuels.

The profits for the first half of 2018 were positively affected from financial income that relates to realised exchange differences of €440.000.

As a result, the profit for the period reached €8.902.000 compared to €11.777.000 for the same period of 2017.

Transactions with related parties

The transactions with related parties for the first half of 2018 are presented on note 3 of the consolidated interim financial statements.

Prospects for the year

Second half revenues are expected to remain at similar level, fuel prices remain high, while there is an increasing trend in the cost of electricity, both due to the high fuels costs, as well as to the peak-season tariff between June to September. Another important factor affecting performance this year is the rising cost of CO² emission rights. The main risks and uncertainties that may affect the results are presented on note 4 of the consolidated interim financial statements.

Consolidated Statement of Profit or Loss and Other Comprehensive Income Six months ended 30 June 2018

	Six months ended 30 June
	2018 €000	2017 €000
Revenue	49.603	52.812
Cost of sales	(35.776)	(35.114)
Gross profit	13.827	17.698
Other operating income	488	530
Distribution expenses	(2.133)	(2.438)
Administrative expenses	(1.938)	(1.660)
Other operating expenses	(772)	(781)
Operating profit before financing costs	9.472	13.349
Financial income	440	-
Financial expenses	(231)	(357)
Net financial income/(expenses)	209	(357)
Profit from investing activities	32	218
Share of profit from equity-accounted investees	460	392
Profit before tax	10.173	13.602
Taxation expense	(1.271)	(1.825)
Profit for the financial period	8.902	11.777
Other comprehensive (loss)/income
Cash flow hedges – effective portion of changes in fair value	(254)	938
Other comprehensive (loss)/income for the period	(254)	938
Total comprehensive income for the period	8.648	12.715
Profit attributable to:
Equity holders of the parent	8.902	11.777
Non-controlling interest	-	-
	8.902	11.777
Total comprehensive income attributable to:
Equity holders of the parent	8.648	12.715
Non-controlling interest	-	-
	8.648	12.715
Basic and diluted earnings per share (cents)	12,4	16,4

Consolidated Statement of Financial Position

30 June 2018

	30/6/18 €000	31/12/17 €000
ASSETS
Property, plant and equipment	235.193	240.092
Intangible assets	12.413	12.413
Investment property	9.965	9.964
Investments in equity-accounted investees	4.189	3.828
Available-for-sale financial assets	193	200
Total non-current assets	261.953	266.497
Inventories	26.153	23.996
Trade and other receivables	6.899	6.400
Total current assets	33.052	30.396
Total assets	295.005	296.893
EQUITY AND LIABILITIES
Equity and reserves
Share capital	30.932	30.932
Reserves	205.185	208.047
Total equity attributable to equity holders of the parent	236.117	238.979
Non-controlling interest	-	-
Total equity	236.117	238.979
LIABILITIES
Interest bearing-loan and borrowings	19.109	23.062
Deferred taxation	20.250	19.630
Provisions for liabilities and charges	300	300
Total non-current liabilities	39.659	42.992
Bank overdraft	3.761	27
Interest bearing-loan and borrowings	7.907	7.907
Tax payable	749	(50)
Trade and other payables	6.812	7.038
Total current liabilities	19.229	14.922
Total liabilities	58.888	57.914
Total equity and liabilities	295.005	296.893

Consolidated Statement of Changes in Equity Six months ended 30 June 2018

	Share Capital	Share premium reserve		Cash flow hedges – effective portion Revaluation of changes in reserve fair value		Equity attributable to Retained holders of profits parent		Total equity
	€000	€000	€000	€000	€000	€000	€000	€000
Six months ended 30 June 2018
Balance 1 January 2018	30.932	45.388	42.790	254	119.615	238.979	-	238.979
Profit for the period	-	-	-	-	8.902	8.902	-	8.902
Other comprehensive loss for the period	-	-	-	(254)	-	(254)	-	(254)
Total comprehensive income for the period	-	-	-	(254)	8.902	8.648	-	8.648
Dividends	-	-	-	-	(11.510)	(11.510)	-	(11.510)
Balance 30 June 2018	30.932	45.388	42.790	-	117.007	236.117	-	236.117
Six months ended 30 June 2017
Balance 1 January 2017	30.932	45.388	44.337	(558)	113.922	234.021	-	234.021
Profit for the period	-	-	-		11.777	11.777	-	11.777
Other comprehensive income for the period	-	-	-	938	-	938	-	938
Total comprehensive income for the period	-	-	-	938	11.777	12.715	-	12.715
Dividends	-	-	-	-	(10.071)	(10.071)	-	(10.071)
Balance 30 June 2017	30.932	45.388	44.337	380	115.628	236.665	-	236.665

Consolidated Statement of Cash Flows

Six months ended 30 June 2018

	Six months ended 30 June
	2018 €000	2017 €000
Cash flows from operating activities
Profit for the period	8.902	11.777
Adjustments for: Depreciation and amortisation charges	7.350	6.800
Interest income	(440)	-
Change in fair value of available for sale financial assets	7	(46)
Interest expense Share of profit of equity-accounted investees	231 (460)	297 (392)
Gain on sale of investment property	-	(104)
Gain on sale of property, plant and equipment	-	(47)
Taxation expense	1.271	1.825
Operating profit before changes in working capital	16.861	20.110
Changes in:
Trade and other receivables	(499)	(830)
Inventories	(2.157)	(1.506)
Trade and other payables	(466)	840
Cash generated from operations	13.739	18.614
Interest paid	(252)	(318)
Taxes paid	153	13
Net cash inflow from operating activities	13.640	18.309
Cash outflows to investing activities
Proceeds from sale of property, plant and equipment	-	48
Proceeds from sale of investment property	-	560
Interest received	440	-
Dividends received	100	50
Acquisition of property, plant and equipment	(2.451)	(5.837)
Net cash used in investing activities	(1.911)	(5.179)
Cash flows from financing activities
Repayment of loans	(3.953)	(3.953)
Dividends paid	(11.510)	(10.071)
Net cash outflows to financing activities	(15.463)	(14.024)
Net decrease of cash and cash equivalents	(3.734)	(894)
Cash and cash equivalents at 1 January	(27)	6.335
Cash and cash equivalents at 30 June	(3.761)	5.441

Notes to the Consolidated Interim Financial Statements

• 1. The interim financial statements relate to the period from 1 January to 30 June 2018, are not audited by the Company's auditors and were approved by the Board of Directors on 27 July 2018.
• 1. The same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements. The interim financial statements are expressed in thousands of Euro.

3. Transactions with related companies

The Company enters into various transactions with the Hellenic Mining Group, HeidelbergCement Group, Cyprus Cement Group, associated and related companies. These transactions include the rendering of technical, administrative, commercial and other services to the Group as well as the purchase and sale of raw materials, spare parts and other goods and services at mutually agreed prices. During the period the transactions with the above were as follows:

		Sales		Purchases
	2018 €000	2017 €000	2018 €000	2017 €000
Hellenic Mining Group	-	-	186	151
HeidelbergCement Group	-	-	2.380	1.955
KEO Plc	-	-	3	1
Cyprus Cement Group	-	-	70	60
Enerco - Energy Recovery Ltd	447	905	823	818
	447	905	3.462	2.985

4. Μain risks and uncertainties

The uncertain economic conditions, the limited availability of financing for individuals and businesses by the banking system in general, energy prices and exchange rates, could affect:

• (1) the Group's income and operating costs,
• (2) the ability of the Group's trade and other debtors to repay the amounts due to the Group, and

(3) the cash flow forecasts of the Group and the assessment of impairment of other financial and non financial assets.

The uncertainty regarding the course of developments in the markets does not allow a safe prediction for the remaining of the current year, which may affect negatively the future financial performance, cash flows and financial position of the Group. Considering the above uncertainties the Group's Management is taking measures to limit exposure to certain risks and mitigate any possible negative consequences.

Other risks and uncertainties faced by the Group are detailed on note 36 of the Annual Report and Financial Statements for 2017.