HMS Bergbau : Corporate News from 27 June 2019

HMS Bergbau AG: Successful 2018 financial year overall

▲ Total output +14% to EUR 254 million (previous year: EUR 222 million)
▲ EBITDA: EUR 2,086 thousand (previous year: EUR 2,007 thousand)
▲ Expansion of trading activities to include other commodities
▲ Positive outlook for 2019

Berlin, 27 June 2019: The Management Board of HMS Bergbau AG, one of the leading independent raw materials marketing and trading companies in Germany, today published the 2018 financial statements.

HMS Bergbau AG looks back on a successful 2018 financial year overall. The expansion of its global business activities, the steadily increasing development of world energy consumption, with the fossil fuel coal as a primary energy source and higher commodity prices, provided a favourable environment for HMS Bergbau AG's development.

Once again, the Company was able to exceed its sales forecast for the 2018 financial year. Sales of the HMS Bergbau Group rose 14 per cent to EUR 254,204 thousand in 2018 compared to EUR 220,971 thousand in 2017. At the same time, EBITDA improved slightly to EUR 2,086 thousand in the 2018 financial year. Net profit for the period even more than doubled as at 31 December 2018 and amounted to EUR 1,453 thousand compared to EUR 720 thousand as at 31 December 2017. Following an increase in total assets of around EUR 13 million to EUR 59.1 million as at the 31 December 2018 reporting date, the equity ratio improved significantly year-on-year by roughly 9.8 per cent to a total of 18.3 per cent. An important factor driving HMS Bergbau AG's stronger capital base and improved balance sheet structure was the capital increase carried out in autumn 2018. Shareholders' equity as at 31 December 2018 came to a total of EUR 9,500 thousand compared to EUR 4,528 thousand as at 31 December 2017.

The management of HMS Bergbau AG expects coal and raw material prices to trend higher in the future, driven by rapidly growing industrial demand from the Pacific Rim, the growth in the global population and the general increase in per capita energy consumption. As a result, securing our own resources and the accompanying expansion of the value chain will continue to play an essential role in HMS Bergbau AG's strategic activities.

In addition to our focus on coal trading, our efforts are directed at increasing our trade in other raw materials such as ores, fertilisers and cement products. The ore trading business, in particular, has recently shown promising developments. In addition to expanding its business in established markets and improving its market position in regions that are strategically important for the Group, such as South Africa, India and Indonesia, the Group is also striving to expand its business in China and the United States. Especially new business partners in the US were impressed with HMS Bergbau AG's position as an international commodities trading group with expertise that maps the entire value chain.

Alongside the aforementioned activities, HMS Bergbau AG is working on developing coal resources with its most promising project being the Silesian Coal International Group of Companies S.A. in Poland. It was not until the end of May 2019 that the local environmental authority in Katowice, Poland, issued a favourable environmental decision in the course of the application for a mining license. A positive environmental decision is considered the last milestone on the road to receiving the final mining license and outlines the framework conditions for the environmental compatibility of the mining process. As a result, the mining license can be applied for in a timely manner.

The drilling in Orzesze, carried out by HMS and based on an exclusive exploration license, indicated potential coal reserves of 2.2 billion tonnes in-situ, of which approximately 672 million tonnes were identified as high-grade, recoverable coal according to the JORC standard. The plan is to grow production to roughly 3 million tonnes of coal annually within two and a half years of receiving the mining licence.

The international positioning and consistent growth in HMS Bergbau AG's range of services have fuelled the company's steady development in recent years and are expected to lead to stronger results and higher sales volumes in the future. For the current 2019 financial year, management is therefore forecasting slightly higher volumes at attractive gross margins accompanied by a positive annual result similar to the level reported in the 2018 financial year.

The 2018 Annual Report is now available online.

The Management Board