Vassilico Cement Works Public Company LTD

Quarterly Report • Nov 18, 2016

Report and Consolidated Interim Financial Statements Nine months ended 30 September 2016

Report and Consolidated Interim Financial Statements Nine months ended 30 September 2016

Contents	Page
Report for the Nine Months Ended 30 September 2016	1
Consolidated Statement of 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 Nine Months Ended 30 September 2016

On November 17th 2016, the Board of Directors of Vassiliko Cement Works Public Company Ltd approved the financial results of the Group for the first nine months of the year that ended on 30 September 2016.

Financial results

Revenues for the first nine months of 2016 reached €71.025.000, compared to €66.270.000 for the respective period of 2015 and operating profit before financing costs improved further, increasing to €20.086.000 versus €9.650.000.

Financial expenses decreased to €523.000, versus €777.000 in the corresponding period of 2015, while the associated companies had a positive contribution with €304.000 compared to a loss of €315.000 in the same period of 2015.

As a result, the profit for the nine month period in 2016 increased to €17.395.000 relative to €7.168.000 in the comparative period of 2015.

Prospects for the 2016

The stronger revenues, seen during the first nine months of the year, continue, however energy costs are now increasing, after a period of lower prices. The Company continues to pursue its strategy to develop further alternative sources of energy, replacing fossil fuels to reduce the impact of increasing fuel prices, as well as improve its overall environmental performance.

Consolidated Statement of Comprehensive Income

Nine months ended 30 September 2016

	Three months ended 30 September		Nine months ended 30 September
	2016 €000	2015 €000	2016 €000	2015 €000
Revenue	21.998	21.078	71.025	66.270
Cost of sales	(13.673)	(15.251)	(44.057)	(49.541)
Gross profit	8.325	5.827	26.968	16.729
Other operating income	262	-	702	342
Distribution expenses	(1.276)	(1.062)	(4.021)	(3.741)
Administrative expenses	(912)	(733)	(2.573)	(2.304)
Other operating expenses	(304)	(519)	(990)	(1.376)
Operating profit before financing costs	6.095	3.513	20.086	9.650
Financial income	209	4	225	188
Financial expenses	(162)	(94)	(523)	(777)
Net financial income/(expenses)	47	(90)	(298)	(589)
Profit/(loss) from investing activities	73	(175)	95	(99)
Share of profit/(loss) from equity-accounted investees	170	(120)	304	(315)
Profit before tax	6.385	3.128	20.187	8.647
Taxation expense	(885)	(636)	(2.792)	(1.479)
Profit for the financial period	5.500	2.492	17.395	7.168
Other comprehensive (loss)/income
Cash flow hedges – effective portion of changes in fair value	(56)	-	109	-
Other comprehensive (loss)/income for the period	(56)	-	109	-
Total comprehensive income for the period	5.444	2.492	17.504	7.168
Profit attributable to:
Equity holders of the parent	5.500	2.492	17.395	7.168
Non-controlling interest	-	-	-	-
	5.500	2.492	17.395	7.168
Total comprehensive income attributable to:
Equity holders of the parent	5.444	2.492	17.504	7.168
Non-controlling interest	-	-	-	-
	5.444	2.492	17.504	7.168
Basic and diluted earnings per share (cents)	7,6	3,5	24,2	10,0

Consolidated Statement of Financial Position

30 September 2016

	30/9/16	31/12/15
ASSETS	€000	€000
Property, plant and equipment	238.141	240.548
Intangible assets	12.359	12.355
Investment property	9.027	9.027
Investments in equity-accounted investees	3.770	3.345
Available-for-sale financial assets	130	135
Total non-current assets	263.427	265.410
Inventories	23.114	21.048
Trade and other receivables	5.025	4.914
Assets classified as held for sale	624	360
Cash and cash equivalents	3.471	8.639
Total current assets	32.234	34.961
Total assets	295.661	300.371
EQUITY AND LIABILITIES
Equity and reserves
Share capital	30.932	30.932
Reserves	200.177	194.183
Total equity attributable to equity holders of the parent	231.109	225.115
Non-controlling interest	-	-
Total equity	231.109	225.115
LIABILITIES
Interest bearing-loan and borrowings	32.946	47.189
Deferred tax liabilities	17.546	15.156
Provisions	170	400
Total non-current liabilities	50.662	62.745
Interest bearing-loan and borrowings	7.907	7.907
Tax payable	308	221
Trade and other payables	5.675	4.383
Total current liabilities	13.890	12.511
Total liabilities	64.552	75.256
Total equity and liabilities	295.661	300.371

Consolidated Statement of Changes in Equity Nine months ended 30 September 2016

Share Capital	Share premium reserve	Revaluation reserve	Cash flow hedges – effective portion of changes in fair value	Retained profits	Equity attributable to holders of parent	Non-controlling interest	Total equity
€000	€000	€000	€000	€000	€000	€000	€000
30.932	45.388	45.260	(75)	103.610	225.115	-	225.115
							17.395
							109
-	-	-	109	17.395	17.504	-	17.504
-	-	-	-	(11.510)	(11.510)	-	(11.510)
30.932	45.388	45.260	34	109.495	231.109	-	231.109
30.932	45.388	46.553	-	97.819	220.692	-	220.692
							7.168
-	-	-	-	7.168	7.168	-	7.168
-	-	-	-	(4.316)	(4.316)	-	(4.316)
30.932	45.388	46.553	-	100.671	223.544	-	223.544
	- - -	- - -	- - -	- 109	17.395 - 7.168	17.395 109 7.168	- - -

Consolidated Statement of Cash Flows

Nine months ended 30 September 2016

	Nine months ended 30 September
	2016 €000	2015 €000
Cash flows from operating activities
Profit for the period	17.395	7.168
Adjustments for:
Depreciation and amortisation charges	10.300	11.600
Change in fair value of investment property	-	225
Interest income	(225)	(4)
Impairment of available-for-sale financial assets	6	39
Interest expense	523	743
Share of (profit)/loss of equity-accounted investees	(304)	315
Gain on sale of property, plant and equipment	-	(9)
Taxation expense	2.792	1.479
Operating profit before changes in working capital	30.223	21.556
Changes in:
Trade and other receivables	(111)	235
Inventories	(1.106)	396
Trade and other payables	1.083	(2.626)
Cash generated from operations	30.089	19.561
Interest paid	(441)	(860)
Taxes paid	(306)	(21)
Net cash inflow from operating activities	29.342	18.680
Cash outflows to investing activities
Proceeds from sale of property, plant and equipment	-	11
Interest received	225	4
Dividends received	128	-
Acquisition of property, plant and equipment	(8.859)	(2.369)
Acquisition of share in associate company	(250)	(199)
Net cash used in investing activities	(8.756)	(2.553)
Cash flows from financing activities
Repayment of loans	(14.244)	(11.127)
Dividends paid	(11.510)	(4.316)
Net cash outflows to financing activities	(25.754)	(15.443)
Net (decrease)/increase of cash and cash equivalents	(5.168)	684
Cash and cash equivalents at 1 January	8.639	2.887
Cash and cash equivalents at 30 September	3.471	3.571

Notes to the Consolidated Interim Financial Statements

• 1. The interim financial statements relate to the period from 1 January to 30 September 2016, are not audited by the Company's auditors and were approved by the Board of Directors on 17 November 2016.
• 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, Italcementi 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
	2016 €000	2015 €000	2016 €000	2015 €000
Hellenic Mining Group	-	-	227	271
Italcementi Group	-	-	29	402
KEO Plc	-	-	2	1
Cyprus Cement Group	-	-	90	50
Enerco - Energy Recovery Ltd	525	299	791	227
	525	299	1.139	951

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 35 of the Annual Report and Financial Statements for 2015.