Vassilico Cement Works Public Company LTD

Quarterly Report • Jul 28, 2017

Report and Consolidated Interim Financial Statements Six months ended 30 June 2017

Report and Consolidated Interim Financial Statements Six months ended 30 June 2017

Contents	Page
Report for the Six Months Ended 30 June 2017	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 2017

On July 27th 2017, 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 2017.

Financial results

Revenues for the first half of 2017 reached €52.812.000, compared to €49.027.000 for the respective period of 2016. Revenue increases were driven by the acceleration of demand in the domestic market, which has grown steadily for the second year in a row. The increase in the domestic demand made up for the cost of pricing reductions in between the periods.

On the production front, there was a negative impact from energy costs and primarily electricity negatively affecting the operating margins compared to the previous year.

Profits from investing activities and associated companies contributed positively towards the overall profitability with an improvement of €454.000.

As a result, the profit for the period reached €11.777.000 compared to €11.895.000 for the same period of 2016.

Prospects for the year

The strong revenues seen during the first half of the year continue, but energy costs will also continue to stay high compared to 2016.

Consolidated Statement of Profit or Loss and Other Comprehensive Income Six months ended 30 June 2017

	Six months ended 30 June
	2017 €000	2016 €000
Revenue	52.812	49.027
Cost of sales	(35.114)	(30.384)
Gross profit	17.698	18.643
Other operating income	530	440
Distribution expenses	(2.438)	(2.745)
Administrative expenses	(1.660)	(1.661)
Other operating expenses	(781)	(686)
Operating profit before financing costs	13.349	13.991
Financial income	-	13
Financial expenses	(357)	(358)
Net financial expenses	(357)	(345)
Profit from investing activities	218	22
Share of profit from equity-accounted investees	392	134
Profit before tax	13.602	13.802
Taxation expense	(1.825)	(1.907)
Profit for the financial period	11.777	11.895
Other comprehensive income
Cash flow hedges – effective portion of changes in fair value	938	165
Other comprehensive income for the period	938	165
Total comprehensive income for the period	12.715	12.060
Profit attributable to:
Equity holders of the parent	11.777	11.895
Non-controlling interest	- 11.777	- 11.895
Total comprehensive income attributable to:
Equity holders of the parent	12.715	12.060
Non-controlling interest	-	-
	12.715	12.060
Basic and diluted earnings per share (cents)	16,4	16,5

Consolidated Statement of Financial Position

30 June 2017

	30/6/17 €000	31/12/16 €000
ASSETS
Property, plant and equipment	236.877	237.839
Intangible assets	12.369	12.369
Investment property	9.253	9.259
Investments in equity-accounted investees	3.958	3.616
Available-for-sale financial assets	190	144
Total non-current assets	262.647	263.227
Inventories	22.065	20.559
Trade and other receivables	8.110	7.280
Assets classified as held for sale	-	450
Cash and cash equivalents	5.441	6.335
Total current assets	35.616	34.624
Total assets	298.263	297.851
EQUITY AND LIABILITIES
Equity and reserves
Share capital	30.932	30.932
Reserves	205.733	203.089
Total equity attributable to equity holders of the parent	236.665	234.021
Non-controlling interest	-	-
Total equity	236.665	234.021
LIABILITIES
Interest bearing-loan and borrowings	27.015	30.969
Deferred tax liabilities	18.555	17.943
Provisions	400	400
Total non-current liabilities	45.970	49.312
	7.907
Interest bearing-loan and borrowings	1.226	7.907
Tax payable Trade and other payables	6.495	- 6.611
Total current liabilities	15.628	14.518
Total liabilities	61.598	63.830
Total equity and liabilities	298.263	297.851

Consolidated Statement of Changes in Equity Six months ended 30 June 2017

	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
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
Six months ended 30 June 2016
Balance 1 January 2016	30.932	45.388	45.260	(75)	103.610	225.115	-	225.115
Profit for the period	-	-	-		11.895	11.895	-	11.895
Other comprehensive income for the period	-	-	-	165	-	165	-	165
Total comprehensive income for the period	-	-	-	165	11.895	12.060	-	12.060
Balance 30 June 2016	30.932	45.388	45.260	90	115.505	237.175	-	237.175

Consolidated Statement of Cash Flows

Six months ended 30 June 2017

2017 2016 €000 €000 Cash flows from operating activities Profit for the period 11.777 11.895 Adjustments for: Depreciation and amortisation charges 6.800 7.300 Interest income - (13) (Impairment reversal)/impairment of available-for-sale financial assets (46) 43 Impairment reversal of Αssets classified as held for sale - (46) Interest expense 297 355 Share of profit of equity-accounted investees (392) (134) Gain on sale of investment property (104) - Gain on sale of property, plant and equipment (47) - Taxation expense 1.825 1.907 Operating profit before changes in working capital 20.110 21.307 Changes in: Trade and other receivables (830) (701) Inventories (1.506) 1.076 Trade and other payables 840 702 Cash generated from operations 18.614 22.384 Interest paid (318) (166) Taxes paid 13 (379) Net cash inflow from operating activities 18.309 21.839 Cash outflows to investing activities Proceeds from sale of property, plant and equipment 48 - Proceeds from sale of investment property 560 - Interest received - 13 Dividends received 50 128 Acquisition of property, plant and equipment (5.837) (4.073) Acquisition of share in associate company - (250) Net cash used in investing activities (5.179) (4.182) Cash flows from financing activities Repayment of loans (3.953) (12.267) Dividends paid (10.071) - Net cash outflows to financing activities (14.024) (12.267) Net (decrease)/increase of cash and cash equivalents (894) 5.390 Cash and cash equivalents at 1 January 6.335 8.639 Cash and cash equivalents at 30 June 5.441 14.029	Six months ended 30 June

Notes to the Consolidated Interim Financial Statements

• 1. The interim financial statements relate to the period from 1 January to 30 June 2017, are not audited by the Company's auditors and were approved by the Board of Directors on 27 July 2017.
• 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
	2017 €000	2016 €000	2017 €000	2016 €000
Hellenic Mining Group	-	-	151	142
HeidelbergCement Group	-	-	1.955	24
KEO Plc	-	-	1	1
Cyprus Cement Group	-	-	60	60
Enerco - Energy Recovery Ltd	905	311	818	383
	905	311	2.985	610

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 2016.