Chimcomplex S A : Half-yearly report Financial Statements 30062023_EN

HALF-YEARLY REPORT

on the standalone interim financial statements of S.C. Chimcomplex S.A. Borzesti prepared in

accordance with the Order of the Minister of Public Finance no. 2844/2016 and prepared in accordance

with Annex 14 of Regulation no. 5/2018 issued by the Financial Supervisory Authority

for the six-month period ending on 30 June 2023

Overview of the nature of the Company's activity

Current report according to

Date of report

Company name

Registered office

Telephone/fax number

Website

Email

Unique registration code with the JRB

Serial No in Reg. of Commerce

Subscribed and paid-in share capital

The main characteristics of securities

The regulated market on which the issued securities are traded

The accounting standard applied:

ASF Regulation. No 5/2018 on issuers of financial instruments and market operations

August 31, 2023

CHIMCOMPLEX SA Borzeşti

Str. Industriilor, nr.3, Oneşti, Bacău county, Romania

0234/302100; 0234/302102

http://www.chimcomplex.com

[e-mail]

RO960322

J04/493/1991

304.907.851 lei

Nominative shares, dematerialized, whose records are kept by the Central Depository SA Bucharest Nominal value, lei/share: 1 leu/share

Number of shares: 304,907,851

BVB, standard category, symbol CRC

Order of the Minister of Public Finance no.2844/2016

The main object of activity is 2013 NACE code - manufacture of basic inorganic chemicals, in accordance with the provisions of the Articles of Association of the Company.

The activity that holds the largest share in the income achieved by the company in January-June 2023, according to NACE coding, is 2014 - manufacture of other basic organic chemicals.

The separate financial statements of S.C. CHIMCOMPLEX S.A. BORZEȘTI (the "Company") on and for the period ended 30 June 2023 were prepared in accordance with IAS 34 Interim Financial Reporting using the going concern principle.

CHIMCOMPLEX S.A. BORZEŞTI
St. Industriilor nr. 3, Oneşti, jud. Bacau, Romania	Reg. J04/493/1991, unique code 960322
Phone [phone]; Fax [phone]	Subscribed and paid-in share capital: 304907851 RON
Email: [e-mail]	Account: RO60BUCU1111215962132
Web: www.chimcomplex.com	ALPHA BANK BUCHAREST
	RO2021.055.061Q RO2021.055.061E RO2018.055.061

Elements of overall evaluation

As of June 30, 2023, the share capital is worth RON 304,907,851, representing 304,907,851 shares (as of December 31, 2022 the same number) with a nominal value of RON 1 per share.

The shareholding structure is as follows:
30 June 2023	Ordinary shares		Percentage holding
Shareholders
CRC Alchemy Holding BV	259.151.301	84,99%
AAAS	27.305.181	8,96%
Legal entities	14.363.583	4,71%
Individuals	4.087.786		1,34%
Total		304.907.851		100%

The condensed separate interim financial statements for the six-month period ended 30 June 2023 are not audited and have not been reviewed by an external auditor.

Key events from January to June 2023

• On 27 April 2023, the Extraordinary General Meeting of Shareholders (AGEA) approved the coverage of the carrying forward accounting loss from 2022 arising from the application of IAS 29, with the full amounts recorded in the account "Share capital adjustments" (account in which the value of RON 886,083,318 arising from hyperinflation was recorded).
• On April 27, 2023, the Extraordinary General Meeting of Shareholders (AGEA) approved the Income and Expenditure Budget of Chimcomplex Borzești for the financial year 2023, with investments estimated at EUR 116.5 million.
• At the General Meeting of Shareholders on June 21, 2023, the shareholders of Chimcomplex SA Borzesti approved the distribution of dividends for the financial year 2022 in a gross amount of RON 27 million (gross dividend per share amounting to RON 0.088551) to be paid starting July 28, 2023.
• At the OGMS of July 31, 2023, the shareholders approve the appointment of 6 statutory members to the Board of Directors of Chimcomplex SA Borzești, starting with 01.08.2023, taking into account the expiration of the mandates of the existing directors and the co-optation of new directors.

CHIMCOMPLEX S.A. BORZEŞTI
St. Industriilor nr. 3, Oneşti, jud. Bacau, Romania	Reg. J04/493/1991, unique code 960322
Phone [phone]; Fax [phone]	Subscribed and paid-in share capital: 304907851 RON
Email: [e-mail]	Account: RO60BUCU1111215962132
Web: www.chimcomplex.com	ALPHA BANK BUCHAREST
	RO2021.055.061Q RO2021.055.061E RO2018.055.061

Financial aspects

The financial results of the company in the period January - June 2023 compared to the period January - June 2022 are presented in the table below:

	Economic and financial			6 MONTHS			6 MONTHS			Differences
			2023			2022					%
	indicators
			thousand lei			thousand lei			thousand lei
	1			2			3			4 = 2-3			5=4/3*100
	Turnover			790,334			1,210,211			-419,877			-34.7
Operating income	757,759	1,318,652	-560,894	-42.5
Operating expenses	678,868	1,129,395	-450,527	-39.9
	Operating result			78,891			189,257			-110,367			-58.3
Financial result	-17,393	-5,572	-11,821	*
Income tax expenses	11,846	31,535	-19,689	-62.4
Deferred tax revenue	0	1,480	-1,480	-100.0
	Net result			49,652			153,630			-103,979			-67.7

Performance analysis

The company managed in the first half of 2023 to achieve an operating profit margin of 10% despite the reduction in turnover compared to the same period of the previous year generated by maintaining the downward trend of consumption started in the second half of 2022, which we will detail below.

The margin was eroded by operating at lower capacity, especially with the sections that consume electricity and natural gas, the company correlating production with the sales trend on the profile market.

The negative net financial result between January and June 2023 was mainly influenced by the increase in interest expenses following the increase in the EURIBOR variable margin and loans contracted in the last 12 months. Exchange differences related to the revaluation of loans also had a significant influence.

We would like to draw attention to the efforts made by the company's management to reduce costs with utilities and main raw materials in H1 2023, as highlighted in the table below.

CHIMCOMPLEX S.A. BORZEŞTI
St. Industriilor nr. 3, Oneşti, jud. Bacau, Romania	Reg. J04/493/1991, unique code 960322
Phone [phone]; Fax [phone]	Subscribed and paid-in share capital: 304907851 RON
Email: [e-mail]	Account: RO60BUCU1111215962132
Web: www.chimcomplex.com	ALPHA BANK BUCHAREST
	RO2021.055.061Q RO2021.055.061E RO2018.055.061

The average purchase prices for the main raw material (propylene), natural gas and electricity decreased in the first 6 months of 2023 compared to 6 months 2022, as shown in the chart below:

	Evoluție preț propilenă / utilități (eur/UM)
		6M (2023 vs 2022)
1,400
1,200
1,000
800
1,274
600
400
747					169
200				104
	55	130
0
Propylene (to)		Methane Gas (eur/Mwh)	Electricity (eur/Mwh)
			6M 2023		6M 2022

The company ended the first semester with a net profit of RON 49.65 million.

Analyzing the physical production by product categories achieved in the first semester of 2023 compared to the first semester of 2022, we find a decrease especially for chlorosodium and polyether polyols. The market for these products was affected in the first 3 months of the year by significant volumes imported from non-European areas, especially China and the Middle East. This phenomenon occurred at the end of 2022 amid rising prices of chlorosodium products in the Mediterranean and has moderated significantly since April 2023 as a result of lower sales prices amid lower production costs.

	Completed		6M 2023	6M 2022	Differences
	productions
						%
		-Tons-	-Tons-	-Tons-
	Chlorosodium	163,151	205,185	-42,034	-20%
	Propenoxide	37,094	50,194	-13,100	-26%
	Polyols	43,408	58,842	-15,434	-26%
	Plasticizers	1,585	9,302	-7,717	-83%
	Inorganic chlorides	4,328	6,565	-2,238	-34%
	Methylamines	684	1,127	-443	-39%
	Total		250,250	331,215	-80,965		-24%

In the first semester of 2023, the company mainly produced and delivered two product categories:

• Polyols - polyethers with a share of 47.6% in total sales;
• Chlorosodium products with a share of 48.6% in total sales.

CHIMCOMPLEX S.A. BORZEŞTI
St. Industriilor nr. 3, Oneşti, jud. Bacau, Romania	Reg. J04/493/1991, unique code 960322
Phone [phone]; Fax [phone]	Subscribed and paid-in share capital: 304907851 RON
Email: [e-mail]	Account: RO60BUCU1111215962132
Web: www.chimcomplex.com	ALPHA BANK BUCHAREST
	RO2021.055.061Q RO2021.055.061E RO2018.055.061

Chimcomplex focused its activity on polyols/polyethers and caustic soda sectors, which are the most profitable.

Sales finished goods structure 6M_2023 %

15%

47%

37%

Sales finished goods structure 6M_2022 %

17%

50%

33%

Polioli Soda Others

Polioli Soda Others

The chlorosodium products marketfaced a tumultuous year in 2022 and was impacted by Russia's invasion of Ukraine. This led to skyrocketing oil and gas prices just as the market was starting to stabilise following the pandemic.

The main lye-consuming industries (alumina, pulp and paper, detergents, water treatment, chemical synthesis) reacted in correlation with demand that depreciated from month to month.

Some alumina producers (customers of chlorosodium products) have closed or reduced their operating rates to levels between 20 and 40 %. Alum Tulcea in Romania closed in July 2022 and did not restart in 2023, Svilocelll in Bulgaria reduced its activity from February 2023 to September 2023, Alumina Zvornik in Bosnia and Herzegovina due to lack of ore reduced its activity to 20%.

The spot price of caustic soda amounted to EUR 1500/dmt in December 2022, after which, from January 2023, the decline began, generated on the one hand by significant volumes imported from China, Egypt, Saudi Arabia, etc., but also due to the reduction of utility costs (and consequently also production costs) in the EU area.

The evolution of caustic soda quotations according to ICIS in 2023 is shown below:

	Caustic Soda	Caustic Soda	Caustic Soda
Da ta	Price FOB MED	Price FOB MED	Price FOB MED
monthly	quaterly	year
	USD/dmt	USD/dmt	USD/dmt
Jan. 2023	604	532	447
Feb. 2023	533
Mar. 2023	459
Apr. 2023	446	409
Mai 2023	415
Jun. 2023	365

CHIMCOMPLEX S.A. BORZEŞTI
St. Industriilor nr. 3, Oneşti, jud. Bacau, Romania	Reg. J04/493/1991, unique code 960322
Phone [phone]; Fax [phone]	Subscribed and paid-in share capital: 304907851 RON
Email: [e-mail]	Account: RO60BUCU1111215962132
Web: www.chimcomplex.com	ALPHA BANK BUCHAREST
	RO2021.055.061Q RO2021.055.061E RO2018.055.061