ENEFI Vagyonkezelo : Asset Management Plc. - Half-yearly Report

First half-year report of ENEFI Asset

Management Plc.

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30.06.2023

Published on: 28.09.2023

INTRODUCTION

The ENEFI Asset Management Plc. Board of Directors' evaluation on the group-wide unaudited performance for the first half of 2023:

"We respectfully welcome all Shareholders, Readers and Interested Parties!

The ENEFI group has closed the first half of 2023 with loss. The consolidated comprehensive income for the period is a loss in thousand of HUF 332,890, EBITDA is HUF -158,393.

The total value of ENEFI Plc's claims in litigation proceedings is significant. The value of receivables supported by a final court judgement is recorded in the accounts at their fair value; in the absence of a court judgement, receivables are recorded at zero forints.

As part of our business, we continually evaluate the acquisition of new potential assets to be included in the Company. Our goal is to grow the Group essentially organically. We want to deliver significant results for our shareholders in the medium term.

The Board of Directors of ENEFI Asset Management Plc.

SELECTED FINANCIAL INFORMATION (Consolidated)

SELECTED FINANCIAL INFORMATION	30.06.2023	31.12.2022.
in thousand HUF
Total capital and reserves	3,315,782	3,712,111
Attributable capital to company's shareholders	2,690,405	3,022,659
Total non-current liabilities	840	840

SELECTED PROFITABILITY INFORMATION (Consolidated)

SELECTED PROFITABILITY INFORMATION

30.06.2023

06.30.2022

in thousand HUF

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Sales revenues	230,150	560,467
Pre-tax profit	(226,427)	(189,893)
Total periodic comprehensive invome	(332,890)	(193,935)

The Company notes that as a publicly listed company, all significant events relating to ENEFI will be disclosed in the form of a statement, which can be found on its website (www.e-star.hu, www.enefi.hu), and on the Budapest Stock Exchange's website (www.bet.hu) and also on the website operated by the National Bank of Hungary (www.kozzetetelek.hu).

ACTIVITY

The ENEFI Asset Management Plc presents below its unaudited financial results for the period.

The report presents the Company's operations for the period based on the unauditedfinancial data of the Company and its consolidated companies.

The ENEFI Asset Management Plc., seated in Budapest is the parent company of a group of companies present in Hungary and Romania, whose member companies were mainly engaged in heat production and services in certain well-defined geographical areas of these two countries, and from 2019-2020 onwards its activities were divided into strategic pillars and complemented as follows:

BASIC STRATEGY (A, B, C PILLARS)

A. BASIC PILARS

1. Litigations

In the Company's books, the value of the litigation is recorded at HUF 0 in the auditor's valuation according to the principle of "utmost prudence". Conversely, the Company's management considers the litigation to be fully justified and, in its opinion, has a strong chance of success. In 2023 the Company has continued its litigation, the conduct (events) of which it has disclosed in its publications.

2. Energy efficiency

a.) Energy efficiency (Heat supply with heating modernisation)

Commencement of activity: 2000.

Introduction

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Municipalities and public institutions often use outdated and wasteful heating systems. In addition, it is becoming increasingly difficult to maintain aging systems at ever-increasing maintenance costs, and any equipment failure can result in significant - and unplanned - capital expenditure. As a result of the tightness of local government finances, the investment may have to be financed by borrowing, which is a further deterioration in borrowing capacity. Following an individual survey of the customer's buildings and a preliminary needs assessment with the customer, the company prepares a package of offers in this business area, including a proposal for a long-term solution for the provision of heating services at a higher level. Once the contract has been signed, the Company will carry out the energy upgrades identified in the impact study prepared during the appraisal, through its own investments, without using the customer's own resources, and will then provide long-term(10-25 years) heating services on the basis of the modern energy system, including operation and maintenance. Depending on individual needs, modernisation can include boiler replacement, making heat consumption controllable and measurable (multi-circuit heating systems, installation of thermostats, heat pumps, etc.). The Company purchases some of the ancillary factors required to provide heat (e.g. renting boiler houses, electricity, water, etc.) from customers. The equipment is mostly purchased by the Company from domestic representatives of global companies (e.g. in the case of boilers, these companies are typically Viessmann, Buderus, Hoval, etc.), who usually also carry out the installation. The Company also enters into long-term contracts with local subcontractors for the maintenance of the assets. The modernization - under the same conditions - will result in significant energy cost - savings up to 40-50%. The company's heat supply is generally gas- fired. Instead of the current direct relationship "gas supplier - municipality", the relationship "gas supplier (gas trader) - company" will be used for the purchase of gas and the supply of heat to customers. The customer gets heat at a lower cost while the heating system is modernized. The customer pays a basic or service charge, plus an additional charge proportional to consumption according to a pre-determined formula. The company will adjust the unit price for heat supply to the gas price charged by the local gas supplier.

The Company has not concluded any new heat supply contracts over the last few years. The practical timing of the termination of existing contracts depends on the continuation or termination of the contractual relationship and the behaviour of the parties in relation to the termination, continuation or formalisation of contracts.

The Company's associated company (RFV Józsefváros Kft.) is currently involved in a legal dispute with the Municipality of Józsefváros, which has a contractual relationship with the

Company, and with the Inner Pest School District. The dispute arises from the fact that the parties have different legal positions regarding the expiry date of the contract. In addition, customers fail to meet their contractual obligations to pay. Having regard to the above, there is a risk that, in the absence of an agreement, the dispute between the parties will force the Company to commence legal proceedings to enforce its legitimate claims.

Key markets for energy efficiency (ENEFI's geographical scope)

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• Initially, ENEFI Plc. successfully carried out projects in the heating, lighting and kitchen technology sectors in Hungary, mainly in the municipal sector.
• The changing economic and social expectations in our region have led to an increasing demand for the solutions offered by the company, which has allowed it to expand in the region, gaining strength and references in our country.
• As the municipalities in our region are even more underfunded and the heating technology of public institutions is even more outdated, and thus more significant savings can be made, ENEFI has increasingly turned its attention to neighboring countries, starting with Romania in 2010 and then Poland in 2011.

The Company sold its operations in Poland in 2016 and the issuer no longer has any operating projects in Romania, so its operations are limited to Hungary.

As of 01.01.2017, the Issuer's revenues are generated exclusively in Hungary, from the heat supply business, and it currently has no street lighting and kitchen technology businesses.

Key energy efficiency services across the Group

Key energy efficiency services across the Group are the following:

• efficient heat and district heating based on sustainable primary energy sources
• modernization and efficient use of energy supply and conversion facilities

c.) MAHART project

Date of acquisition: 20.12.2019

Introduction

On 08.12.2019. the Issuer informed its Honourable Investors that the Issuer won an accelerated open public procurement tender (EKR001321472019) for the 'Procurement of Fixed LNG - CNG Fueling Facilities' an open accelerated public procurement procedure worth HUF 1.5 billion.

Under the terms of the contract, ENEFI will be responsible for a complex charging station that is unique in Europe

• its concept plan
• licensee in principle,
• licensee and
• preparation of working drawings,
• the submission of plans to the authorising authorities,
• conducting the authorization procedures
• procurement of specific equipment on the basis of designs
• or manufacture/production and

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