Vassilico Cement Works Public Company LTD

Quarterly Report • May 20, 2016

Report and Consolidated Interim Financial Statements Three months ended 31 March 2016

Report and Consolidated Interim Financial Statements Three months ended 31 March 2016

Contents	Page
Report for the Three Months Ended 31 March 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 Three Months Ended 31 March 2016

On May 19th 2016, the Board of Directors of Vassiliko Cement Works Public Company Ltd approved the financial results of the Group for the first three months of the year that ended on 31 March 2016.

Financial results

Revenues for the first three months of 2016 reached €26.314.000, compared to €19.046.000 for the respective three months of 2015, following growing demand in both the domestic market and exports. Further to improvements in revenues, there were also significant improvements in operating margins and financing costs. As a result, operating profit before financing costs increased to €5.614.000 from €1.299.000 and profit for the period increased to €4.697.000 from €853.000.

Prospects for the 2016

The stronger demand seen in the first quarter of the year together with the lower energy costs resulted from the oil crisis indicate positive prospects for the Company.

Consolidated Statement of Comprehensive Income

Three months ended 31 March 2016

	Three months ended 31 March
	2016 €000	2015 €000
Revenue	26.314	19.046
Cost of sales	(18.121)	(15.510)
Gross profit	8.193	3.536
Other operating income	194	100
Distribution expenses	(1.463)	(1.128)
Administrative expenses	(899)	(814)
Other operating expenses	(411)	(395)
Operating profit before financing costs	5.614	1.299
Financial income	13	-
Financial expenses	(199)	(295)
Net financing costs	(186)	(295)
Profit from investing activities	29	38
Share of profit/(loss) from equity-accounted investees	15	(48)
Profit before tax	5.472	994
Taxation expense	(775)	(141)
Profit for the financial period	4.697	853
Other comprehensive income
Cash flow hedges – effective portion of changes in fair value	453	-
Other comprehensive income for the period	453	-
Total comprehensive income for the period	5.150	853
Profit attributable to: Equity holders of the parent	4.697	853
Non-controlling interest	-	-
	4.697	853
Total comprehensive income attributable to:
Equity holders of the parent	5.150	853
Non-controlling interest	-	-
	5.150	853
Basic and diluted earnings per share (cents)	6,5	1,2

Consolidated Statement of Financial Position

31 March 2016

	31/3/16 €000	31/12/15 €000
ASSETS
Property, plant and equipment	238.538	240.548
Intangible assets	12.359	12.355
Investment property	9.027	9.027
Investments in equity-accounted investees	3.359	3.345
Available-for-sale financial assets	129	135
Total non-current assets	263.412	265.410
Inventories	18.856	21.048
Trade and other receivables	6.335	4.914
Assets classified as held for sale	360	360
Cash and cash equivalents	16.148	8.639
Total current assets	41.699	34.961
Total assets	305.111	300.371
EQUITY AND LIABILITIES
Equity and reserves
Share capital	30.932	30.932
Reserves	199.333	194.183
Total equity attributable to equity holders of the parent	230.265	225.115
Non-controlling interest	-	-
Total equity	230.265	225.115
LIABILITIES
Interest bearing-loan and borrowings	45.213	47.189
Deferred tax liabilities	15.926	15.156
Provisions	(118)	400
Total non-current liabilities	61.021	62.745
Interest bearing-loan and borrowings	7.907	7.907
Tax payable	169	221
Trade and other payables	5.749	4.383
Total current liabilities	13.825	12.511
Total liabilities	74.846	75.256
Total equity and liabilities	305.111	300.371

Consolidated Statement of Changes in Equity Three months ended 31 March 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
Three months ended 31 March 2016
Balance 1 January 2016	30.932	45.388	45.260	(75)	103.610	225.115	-	225.115
Profit for the period	-	-	-		4.697	4.697	-	4.697
Other comprehensive income for the period	-	-	-	453	-	453	-	453
Total comprehensive income for the period	-	-	-	453	4.697	5.150	-	5.150
Balance 31 March 2016	30.932	45.388	45.260	378	108.307	230.265	-	230.265
Three months ended 31 March 2015
Balance 1 January 2015	30.932	45.388	46.553	-	97.819	220.692	-	220.692
Profit for the period	-	-	-		853	853	-	853
Total comprehensive income for the period	-	-	-	-	853	853	-	853
Balance 31 March 2015	30.932	45.388	46.553	-	98.672	221.545	-	221.545

Consolidated Statement of Cash Flows

Three months ended 31 March 2016

	Three months ended 31 March
	2016 €000	2015 €000
Cash flows from operating activities
Profit for the period	4.697	853
Adjustments for:
Depreciation and amortisation charges	4.100	4.025
Interest income	(13)	-
Impairment of available-for-sale financial assets	6	14
Interest expense	196	295
Share of (profit)/loss of equity-accounted investees	(15)	48
Gain on sale of property, plant and equipment	-	(1)
Taxation expense	775	141
Operating profit before changes in working capital	9.746	5.375
Changes in:
Trade and other receivables	(1.421)	527
Inventories	3.152	906
Trade and other payables	1.163	998
Cash generated from operations	12.640	7.806
Interest paid	(49)	(328)
Taxes paid	(62)	(19)
Net cash inflow from operating activities	12.529	7.459
Cash outflows to investing activities
Proceeds from sale of property, plant and equipment	-	2
Interest received	13	-
Acquisition of property, plant and equipment	(3.056)	(343)
Net cash used in investing activities	(3.043)	(341)
Cash flows from financing activities
Repayment of loans	(1.977)	(6.804)
Net cash outflows to financing activities	(1.977)	(6.804)
Net increase of cash and cash equivalents	7.509	314
Cash and cash equivalents at 1 January	8.639	2.887
Cash and cash equivalents at 31 March	16.148	3.201

Notes to the Consolidated Interim Financial Statements

• 1 The interim financial statements relate to the period from 1 January to 31 March 2016, are not audited by the Company's auditors and were approved by the Board of Directors on 19 May 2016.
• 2 The interim financial statements comply with the International Accounting Standard 34 "Interim Financial Statements".
• 3 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.
• 4 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	-	-	78	60
Italcementi Group	-	-	17	148
KEO Plc	-	-	1	-
Cyprus Cement Group		-	30	15
Enerco - Energy Recovery Ltd	150	-	198	-
	150	-	324	223

5. 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.