Vassilico Cement Works Public Company LTD

Quarterly Report • Jul 26, 2019

Report and Consolidated Interim Financial Statements Six months ended 30 June 2019

Report and Consolidated Interim Financial Statements Six months ended 30 June 2019

Contents	Page
Report for the Six Months Ended 30 June 2019	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 2019

On July 26th 2019, 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 2019.

Financial results

Revenues for the first half of 2019 reached €53.996.000, compared to €49.603.000 for the respective period of 2018. Revenue increase relate to increases of volumes which compensated for some price reductions.

Energy, fuels and environmental management is on the first line of the management priorities, focusing on process efficiency, utilisation of alternative fuels and renewables sources of energy. Also, following the global trend of cement industry, we will concentrate in promoting a more environmentally friendly cement through marketing and pricing.

In May 2019 the Company disposed off its participation in associated companies operating in aggregates quarrying as part of its strategy to focus on its core activity. The transaction also resulted to a gain of €787.000 as shown on the consolidated profit and loss statement.

The profit for the period reached €10.411.000 compared to €8.902.000 for the same period of 2018.

Transactions with related parties

The transactions with related parties for the first half of 2019 are presented on note 4 of the consolidated interim financial statements.

Μain risks and uncertainties

The main risks and uncertainties faced by the Group are presented on note 5 of the consolidated interim financial statements.

Prospects for the year

Energy costs, i.e. fuels and electricity prices pose an uncertainty and challenge due to the high volatility of their price experienced in the recent past, which in turn affect the Company's cost base together with the increasing cost of carbon emissions rights in Europe. A particular focus is given to these aspects of operation to mitigate such possible negative impact.

Consolidated Statement of Profit or Loss and Other Comprehensive Income Six months ended 30 June 2019

	Six months ended 30 June
	2019 €000	2018 €000
Revenue	53.996	49.603
Cost of sales	(38.742)	(35.776)
Gross profit	15.254	13.827
Other operating income	596	488
Distribution expenses	(2.324)	(2.133)
Administrative expenses	(1.860)	(1.938)
Other operating expenses	(751)	(772)
Operating profit before financing costs	10.915	9.472
Financial income	21	440
Financial expenses	(152)	(231)
Net financial (expenses)/income	(131)	209
Profit from investing activities	-	32
Gain on disposal of equity-accounted investees	787	-
Share of profit from equity-accounted investees	285	460
Profit before tax	11.856	10.173
Taxation expense	(1.445)	(1.271)
Profit for the financial period	10.411	8.902
Other comprehensive income/(loss)
Cash flow hedges – effective portion of changes in fair value	-	(254)
Revaluation gain on financial assets at fair value through οther comprehensive income	9	-
Other comprehensive income/(loss) for the period	9	(254)
Total comprehensive income for the period	10.420	8.648
Profit attributable to: Equity holders of the parent Non-controlling interest	10.411 -	8.902 -
	10.411	8.902
Total comprehensive income attributable to:
Equity holders of the parent	10.420 -	8.648 -
Non-controlling interest	10.420	8.648
Basic and diluted earnings per share (cents)	14,5	12,4

Consolidated Statement of Financial Position

30 June 2019

ASSETS Property, plant and equipment 227.416 228.957 12.385 Intangible assets 12.385 Investment property 8.500 8.499 1.260 Investments in equity-accounted investees 4.423 Financial assets at fair value throught other comprehensive income 186 194 249.755 254.450 Total non-current assets 23.769 Inventories 25.245 Trade and other receivables 7.442 6.362 15.937 Cash and cash equivalents 259 47.148 31.866 Total current assets 296.903 286.316 Total assets EQUITY AND LIABILITIES Equity and reserves Share capital 30.932 30.932 Reserves 212.838 202.417 Total equity attributable to equity holders of the parent 243.770 233.349 - Non-controlling interest - Total equity 243.770 233.349 LIABILITIES 13.314 Interest bearing-loan and borrowings 15.155 Deferred tax liabilities 23.246 22.586 300 Provisions 300 36.860 38.041 Total non-current liabilities 7.907 Interest bearing-loan and borrowings 7.907 Tax payable 749 - 7.617 Trade and other payables 7.019 16.273 14.926 Total current liabilities Total liabilities 53.133 52.967 296.903 286.316 Total equity and liabilities	30/6/19 €000	31/12/18 €000

Consolidated Statement of Changes in Equity Six months ended 30 June 2019

	Share Share premium Capital reserve		Revaluation Fair value reserve reserve		Cash flow hedges – effective portion of changes in Retained fair value profits		Equity attributable to holders of parent	Non-controlling interest	Total equity
	€000	€000	€000	€000	€000	€000	€000	€000	€000
Six months ended 30 June 2019
Balance 1 January 2019	30.932	45.388	38.242	-	-	118.788	233.350	-	233.350
Profit for the period	-	-	-	-	-	10.411	10.411	-	10.411
Other comprehensive income for the period	-	-	-	9	-	-	9	-	9
Total comprehensive income for the period	-	-	-	9	-	10.411	10.420	-	10.420
Balance 30 June 2019	30.932	45.388	38.242	9	-	129.199	243.770	-	243.770
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

Consolidated Statement of Cash Flows

Six months ended 30 June 2019

	Six months ended 30 June
	2019 €000	2018 €000
Cash flows from operating activities
Profit for the period	10.411	8.902
Adjustments for:
Depreciation and amortisation charges	7.520	7.350
Interest income	(21)	(440)
Impairment of available-for-sale financial assets	-	7
Interest expense	153	231
Share of profit of equity-accounted investees	(285)	(460)
Gain on disposal of equity-accounted investees	(787)	-
Taxation expense	1.445	1.271
Operating profit before changes in working capital	18.436	16.861
Changes in:
Trade and other receivables	(1.080)	(499)
Inventories	1.476	(2.157)
Trade and other payables	617	(466)
Cash generated from operations	19.449	13.739
Interest paid	(173)	(252)
Taxes paid	-	153
Net cash inflow from operating activities	19.276	13.640
Cash outflows to investing activities
Proceeds from disposal of equity-accounted investees	4.150	-
Interest received	21	440
Dividends received	50	100
Acquisition of property, plant and equipment	(5.979)	(2.451)
Net cash used in investing activities	(1.758)	(1.911)
Cash flows from financing activities
Proceeds from new loans raised	2.113	-
Repayment of loans	(3.953)	(3.953)
Dividends paid	-	(11.510)
Net cash outflows to financing activities	(1.840)	(15.463)
Net increase/(decrease) of cash and cash equivalents	15.678	(3.734)
Cash and cash equivalents at 1 January	259	(27)
Cash and cash equivalents at 30 June	15.937	(3.761)

Notes to the Consolidated Interim Financial Statements

• 1. The interim financial statements relate to the period from 1 January to 30 June 2019, are not audited by the Company's auditors and were approved by the Board of Directors on 26 July 2019.
• 2 The interim financial statements comply with the International Accounting Standard 34 "Interim Financial Statements".
• 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.

4. Transactions with related companies

The Company entered into various transactions with the Hellenic Mining Group, Heidelberg Cement 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
	2019 €000	2018 €000	2019 €000	2018 €000
Hellenic Mining Group	-	-	104	186
HeidelbergCement Group	-	-	-	2.380
KEO Plc	-	-	3	3
Cyprus Cement Group	-	-	60	70
Enerco - Energy Recovery Ltd	605	447	365	823
	605	447	532	3.462

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 36 of the Annual Report and Financial Statements for 2018.