Vassilico Cement Works Public Company LTD

Quarterly Report • Oct 29, 2018

VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

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

EXECUTE VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

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

VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

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 $\epsilon$ 8.902.000 compared to $\epsilon$ 11.777.000 for the same period of 2017.

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.

EXAMPLE OF STATE SEXUAL STATE OF STATE OF STATE STATE STATE OF STATE STATE STATE STATE STATE STATE STATE STATE

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 Cost of sales	49.603 (35.776)	52.812 (35.114)
Gross profit	13.827	17.698
Other operating income Distribution expenses Administrative expenses	488 (2.133) (1.938)	530 (2.438) (1.660)
Other operating expenses	(772)	(781)
Operating profit before financing costs	9.472	13.349
Financial income Financial expenses	440 (231)	(357) (357)
Net financial income/(expenses)	209
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		11.777
	8.902
Total comprehensive income attributable to: Equity holders of the parent Non-controlling interest	8.648	12.715
	8.648	12.715
Basic and diluted earnings per share (cents)	12,4	16,4

WE VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

Consolidated Statement of Financial Position 30 June 2018

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

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

	Capital Share	premium reserve Share	Revaluation reserve	effective portion of changes in Cash flow fair value hedges-	Retained profits	attributable to holders of Equity parent	Non-controlling interest	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		Ţ	٠	$\mathbf{r}$	8.902	8.902	٠	8.902
Other comprehensive loss for the period		٠	×	(254)	$\bar{\phantom{a}}$	(254)	f,	(254) 8.648
Total comprehensive income for the period	ı.	٠	f,	(254)	8.902	8.648	ı
Dividends		t	ı	ò	(11.510)	(11.510)	×	(11.510)
Balance 30 June 2018	30.932	45.388	42.790	ı	117.007	236.117	ı	236.117
Six months ended 30 June 2017
Balance 1 January 2017	30.932	45.388	44.337	(558)	113.922	234.021	ı	234.021
Profit for the period		¢	I		11.777	11.777	4	11.777
Other comprehensive income for the period		f,	t,	938	j,	938	ï	938
Total comprehensive income for the period	$\begin{array}{c} \end{array}$	$\mathfrak{g}$	$\,$	938	11.777	12.715	$\mathbf{I}$	12.715
Dividends			I		(10.071)	(10.071)	I	(10.071)
Balance 30 June 2017	30.932	45.388	44.337	380	115.628	236.665	$\mathfrak{g}$	236.665

4

WE VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

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 Adjustments for:	8.902	11.777
Depreciation and amortisation charges Interest income	7.350 (440)	6.800
Change in fair value of available for sale financial assets	7	(46)
Interest expense Share of profit of equity-accounted investees Gain on sale of investment property Gain on sale of property, plant and equipment Taxation expense	231 (460) 1.271	297 (392) (104) (47) 1.825
Operating profit before changes in working capital	16.861	20.110
Changes in: Trade and other receivables Inventories Trade and other payables	(499) (2.157) (466)	(830) (1.506) 840
Cash generated from operations Interest paid Taxes paid	13.739 (252) 153	18.614 (318) 13
Net cash inflow from operating activities	13.640	18.309
Cash outflows to investing activities Proceeds from sale of property, plant and equipment Proceeds from sale of investment property Interest received	440	48 560
Dividends received Acquisition of property, plant and equipment Net cash used in investing activities	100 (2.451) (1.911)	50 (5.837) (5.179)
Cash flows from financing activities Repayment of loans	(3.953)	(3.953)
Dividends paid Net cash outflows to financing activities	(11.510) (15.463)	(10.071) (14.024)
Net decrease of cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 30 June	(3.734) (27) (3.761)	(894) 6.335 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	2017	2018	2017
	€000	€000	€000	€000
Hellenic Mining Group	e.		186	151
HeidelbergCement Group	AB	$\sim$	2.380	1.955
KEO PIC	$\qquad \qquad \blacksquare$	$\sim$	3
Cyprus Cement Group	$\sim$		70	60
Enerco - Energy Recovery Ltd	447	905	823	818
	447	905	3.462	2.985

4. Main 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.

WE VASSILIKO CEMENT WORKS PUBLIC COMPANY LTD

Statement of the members of the Board of Directors, the General Manager and the Financial Manager of the Company for the interim financial statements

In accordance with Article 10 of the Transparency Requirements (Securities for Trading on Regulated Market) Law 190(I)/2007 ("Law"), we the members of the Board of Directors, the General Manager and the Financial Manager of Vassiliko Cement Works Public Company Ltd, confirm that to the best of our knowledge:

(a) The interim financial statements for the period from 1 January 2018 to 30 June 2018 that are presented on pages 1 to 6:

i. were prepared in accordance with the International Financial Reporting Standards and in accordance with the provisions of Article 10 (4) of the Law, and

ii. give a true and fair view of the assets and liabilities, the financial position and the profits of Vassiliko Cement Works Public Company Ltd and the businesses that are included in the consolidated financial statements as a total, and

(b) the interim report gives a fair review of the information required under Article 10 (6) of the Law.

Members of the Board of Directors

Antonios Antoniou

George Galatariotis

Costas Galatariotis

Stavros Galatariotis

Costas Koutsos

Charalambos Panaviotou

Maurizio Mansi Montenegro

Antonis Mikellides

Christophe Allouchery

Stelios Anastasiades

Antonios Katsifos

Company Officials

George Savva

27 July 2018