Ernst Russ : Half-Year Report 2023 (Halbjahresbericht 2023 in engl. Sprache)

ERNST RUSS AG

2023 HALF-YEAR REPORT

TABLE OF CONTENTS

Ernst Russ AG  |  Half-Year Report 2023

CONTENTS

Half-Year Report 2023 | Ernst Russ AG

KEY FIGURES

KEY FIGURES

Introduction by the CEO	6
Share and investor relations	12
1.	INTERIM GROUP MANAGEMENT REPORT	16
1.1.	Foundations of the Group	17
I.	Business operations	17
II.	Financial report	18

EARNINGS

Revenue

Operating earnings*

Earnings before taxes (EBT)

Profit attributable to non-controlling interests

Consolidated net income for the period after non-controlling interests

Earnings per share**

UNIT

EUR million

EUR million

EUR million

EUR million

EUR million

EUR

1/1 - 30/6/2023 96.4 27.6 29.2 11.5 17.6 0.53

1/1 - 30/6/2022

82.7

51.0

46.5

20.8

25.6

0.79

CHANGE IN %

16.6

-45.9

-37.2

-44.7

-31.3

-0.26 EUR

1.2.	Assets, financial position and earnings of the ER Group	21
I.	Assets	21

• Determined in accordance with economic criteria
• The company does not hold any treasury shares

II.	Financial position	23
III.	Earnings	24
1.3.	Opportunities and risks	26
1.4.	Forecast	28

BALANCE SHEET

Total equity and liabilities

Ship assets shown on the balance sheet***

Equity

Equity ratio

Cash at hand and bank balances

UNIT

EUR million

EUR million

EUR million

%

EUR million

30/6/2023

293.9

218.7

229.9

78.2

47.2

31/12/2022

283.3

195.9

207.5

73.2

57.8

CHANGE IN %

3.7

11.6

10.8

5.0 percentage points -18.3

2.	INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF ERNST RUSS AG	30
3.	CONDENSED NOTES TO THE INTERIM CONSOLIDATED STATEMENTS OF ERNST RUSS AG	36

*** Includes down payments made and assets in the course of construction

EMPLOYEES

Average employee capacity (total)

Average employee capacity (shore-based)

Personnel expenses

(not including maritime personnel)

Personnel expense ratio

(not including maritime personnel)

KEY FIGURES SPECIFIC TO VESSELS

Number of fully consolidated vessels

Capacity

Capacity

Average charter rate

Days employed

Technical availability

Employment ratio

UNIT

Full-time equivalent

Full-time equivalent

EUR million

%

UNIT

TEU

DWT

UNIT

USD/day

Days

%

%

1/1 - 30/6/2023

79 (of which 44 maritime personnel)

35

2.3

2.4

30/6/2023

31

51,650

722,083

1/1 - 30/6/2023 19,920 5,034 94.0 94.0

1/1 - 30/6/2022

84(of which 46 maritime personnel)

38

2.4

2.9

31/12/2022

29

49,737

685,575

1/1 - 30/6/2022

17,380

4,929

96.0

95.3

CHANGE IN %

n/a

-7.9

-4.2

-0.5 percentage points

CHANGE

2 vessels

1,913 TEU

36,508 DWT

CHANGE

2,540 USD

105 days

-2.0 percentage points

-1.3 percentage points

3

AT A GLANCE

Ernst Russ AG  | Half-Year Report 2023

Half-Year Report 2023 | Ernst Russ AG

AT A GLANCE

AT A

GLANCE

As an international ship-owner and maritime investment manager, we regularly expand our fleet and secure stable and sustainable earnings and added value for investors and shareholders.

	31					1893			8,200
	vessels (fully consolidated)				Establishment of				shareholders as at 30/6/2023
	30/6/2023					traditional ship-owner Ernst Russ
					2005			33,500,286
19,	USD/
DAY				Listed since 2005			Number of shares as at 30/6/2023
920
	Average charter	rate				(Frankfurt Stock Exchange,
for the ER fleet in the first half of 2023			Hanseatic Stock Exchange Hamburg)

2017

51,650 TEU

Listing in Scale segment of the

Container capacity of the ER fleet

Frankfurt Stock Exchange

30/6/2023

722,083 DWT

78.2 %

Capacity of the ER fleet

Equity ratio as at

30/6/2023

30/6/2023

.4

94.0 %

96

35

EUR

MILLION

Technical availability of the

Revenue

ER fleet in the first half of 2023

Number of employees ashore

First half of 2023

30/6/2023

218.7

16.8 MONTHS

42

EUR

MILLION

Average remaining term

Number of employees at sea

Own ship assets

of charterparties as at 30/6/2023

30/6/2023

(carrying amount) 30/6/2023

4

5

INTRODUCTION BY THE EXECUTIVE BOARD

Ernst Russ AG  | Half-Year Report 2023

Half-Year Report 2023 | Ernst Russ AG

INTRODUCTION BY THE EXECUTIVE BOARD

INTRODUCTION BY THE

EXECUTIVE BOARD

Dear shareholders and valued business partners of Ernst Russ A G,

ROBERT GÄRTNER

CEO

The German economy has experienced several years of crisis from which it is struggling to recover. It took around three years for the Federal Government to officially declare the coronavirus pandemic over in early April 2023. By that time, war had already broken out in Ukraine. Rus- sia's invasion of Ukraine on 24 February 2022 once again caused human tragedies as well as a political and ecological catastrophe for Europe and a severe economic crisis. The Institute for Economic Research has calculated that the coronavirus pandemic and the Ukraine war will have reduced economic output in Germany by around EUR 600 billion by the end of this year. We hope that the German economy will once again prove to be robust and able to cope with these setbacks.

Following the correction in the second half of 2022, the container ship charter market is significantly below the exceptionally high levels seen last year. How- ever, it stabilised again slightly towards the end of the first half of 2023. In this mixed market environment, several opportunities arose in the first half of 2023 for the ER Group to expand its existing fleet. In Q1 2023,

purchase agreements were reached for two container ships with a slot capacity of 1,025 TEU and 2,194 TEU respectively. Both vessels were handed over at the beginning of May 2023. A 13,371 TEU container ship was also acquired at the end of June 2023. The vessel was handed over in mid-July 2023. This acquisition sees the ER Group adding to its ship portfolio once again in terms of the number and size class of vessels in its fleet. In a bid to rejuvenate the fleet, a 20-year-old container ship with a capacity of 2,450 TEU was sold in Q2 2023. The vessel was handed over in mid-July this year.

In recent years, the ER Group has systematically expanded its own fleet of vessels and steadily increased its revenue in line with charter rate growth. In the first half of 2023, revenue was up EUR 13.7 million year-on- year to EUR 96.4 million. The employment ratio was 94.0% (equivalent period in the previous year: 95.3%). The first half of the previous year was characterised by exceptionals, including the sale of three seagoing ves- sels. Consequently, operating earnings were down from EUR 51.0 million to EUR 27.6 million. Consolidated net

income after tax and before non-controlling interests amounted to EUR 29.1 million, of which EUR 11.5 million was attributable to minority interests. The Group's equity ratio increased from around 73.2% to around 78.2%. In light of the continued positive performance and the largely secure employment situation of the ER Group fleet for the 2023 financial year, we have been able to raise our previous forecast to the effect that we are now expecting revenue for whole of 2023 ranging between EUR 190 and EUR 210 million and operating earnings (EBIT) between EUR 70 and 90 million.

We offered our shareholders a share dividend for the 2022 financial year for the first time. Our shareholders had the option of choosing between a full or partial distribution of their dividend in cash or in the form of new shares. Overall, shareholders with around 71% of shares eligible for dividend opted to receive their dividend as shares. This high acceptance rate demonstrates confirmation by the shareholders of the strategic orientation of Ernst Russ AG and underlines their long-term confidence in the company's further development.

At this point in my introduction, I would like to remember our former Supervisory Board Chairman Udo Bandow who passed away on 17 July 2023. We have lost a highly valued mentor and will always remember him with tremendous gratitude.

I would like to thank all ER Group employees for their commitment in these challenging times. I would also like to thank the Supervisory Board for its consistently close and constructive cooperation.

Yours sincerely,

Robert Gärtner

CEO of Ernst Russ AG

Hamburg, August 2023

6

7

FLEET

Ernst Russ AG  | Half-Year Report 2023

Half-Year Report 2023 | Ernst Russ AG

FLEET

POSITIONS OF THE ERNST RUSS FLEET

JULY2023

Louise Auerbach

Key

Ship in port

Polonia

Ship at sea

Container ship

Multi-purpose vessel

Bulker

Skogafoss
Bakkafoss	EF Ava
	Ido
	Solong
Hebe			Rubina
Visitor	Mirror		EF Emira
	EF Eldra
Trouper	Dream
Andante
Meandi	Moveon
	EF Olivia
		Faith
		Winner
Isabella B
			EF Eliza
			EF Elena		Rita
	Venetia		Rome Express	EF Emma	Emirates Wasl
Lodur

Frida Russ

Source: FleetMon

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