HMS Bergbau : Half Year Report 2022

Interim report 2022

commodities for the future

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Group Key Figures

	30/06/2022	31/12/2021
BALANCE SHEET FIGURES	EUR thousand EUR thousand
Total assets	138,812	98,834
Non-current assets	22,607	22,914
Current assets	114,233	74,013
Shareholders' equity	24,448	21,128
Provisions	12,101	10,985
Liabilities	102,262	66,720

	30/06/2022	30/06/2021
INCOME STATEMENT FIGURES	EUR thousand EUR thousand
Sales	404,690	164,914
EBITDA	5,420	944
Net profit*	3,034	381

*3,640,527.61 EUR 2022 Halbjahresüberschuss ohne 606,374.16 EUR Pensionsrückstellungen (30/06/2021: 486,374.16 EUR

Financial Calendar

1 January 2023	Start of the financial year
30 June 2023	Annual financial statements 2022
August 2023	Annual General Meeting
30 September 2023	Interim Report 2023
31 December 2023	End of the financial year

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Index

Letter to Shareholders	4
Overall economic development	6
Investor relations	15
Management report	18
Financial statement as of 30 June 2022	24
PROVISIONAL BALANCE SHEET
Financial statement as of 30 June 2022	26
PROVISIONAL INCOME STATEMENT
Imprint	27

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Letter to Shareholders

DEAR LADIES AND GENTLEMEN,

Following positive economic developments and the high demand for commodities in 2021, economic activity in the first half of 2022 was dominated by Russia's attack on Ukraine.

Western sanctions of historic proportion against Russia - which also impacted Russia's supply of raw materials - ongoing supply chain difficulties, and the energy crisis triggered by the sanctions against Russia were the leading drivers of steadily rising raw material prices and, in some cases, double-digit inflation rates.

In order to curb inflation, the US Federal Reserve and the European Central Bank raised key interest rates substantially on several occasions to a level of 2.25 to 2.5 per cent in the USA and 1.25 per cent in the euro area. Despite this, significant rates of inflation are also forecast for 2023, and further interest rate hikes by the central banks are to be expected.

In this negative scenario, leading institutes such as the OECD and the IMF have brought down their global economic forecasts several times. IMF experts are now expecting reduced global economic growth of 3.2 per cent for the current year 2022 and 2.9 per cent for the coming year 2023. These forecasts correspond to a downward revision of 0.4 and 0.7 percentage points, respectively, compared to the already sharply reduced forecasts made in April 2022.

Some commodity prices are seeing substantial increases in this difficult-to-predict market environment. Coal prices, for example, have climbed more than 165 per cent per tonne (API 2) from January to August of 2022, after already increasing more than 75 per cent per tonne in 2021.

As an international commodity trader, HMS Bergbau AG was able to take advantage of opportunities offered in this somewhat erratic global market environment. As part of our in-

ternationalisation strategy, we traded coal as well as other raw materials such as ores (e.g. chrome, lithium and manganese), beryllium, cement and fertilisers. We also succeeded in strengthening our trading business in Asia and Africa. As part of our strategy for further global expansion, we established a subsidiary in Du- bai, one of the world's most important trading hubs for raw materials.

In the first six months of the current 2022 financial year, the results of HMS Bergbau AG almost reached the level achieved in the record year of 2021. As of 30 June 2022, sales of EUR

404.7 million had been generated, correspond- ing to a year-on-year increase of nearly 150 per cent. The sharp rise in sales of EUR 239.8 million resulted primarily from price increases and led to significantly better earnings. EBIT- DA in the first half of 2022 amounted to EUR 5,420 thousand, compared to EUR 944 thou- sand in the first half of 2021. Net profit as of 30 June 2022 amounted to EUR 3,034 thousand, compared to EUR 381 thousand as of 30 June 2021. Liquidity as of the 30 June 2022 report- ing date amounting to approximately EUR 42.7 million (31 December 2021: EUR 26.0 million) provides HMS Bergbau AG additional room for manoeuvre in terms of its continued develop- ment into a responsible international, vertically and horizontally positioned commodity trader.

Accordingly, the HMS Bergbau AG Group has continued to act sustainably and responsibly in the year 2022 to date. As in the previous year, the entire HMS Group offset its administrative and internal operational CO2 emissions by investing in international climate protection projects. The goal of these investments is a sustainable reduction in greenhouse gases in all operating activities. HMS Bergbau AG not only takes the Paris Climate Agreement into ac- count, but will also continue to make an active contribution to climate protection by supporting international climate protection projects.

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With regard to the short-term effects of global developments resulting from Russia's war against Ukraine and the sanctions decided upon by Western-oriented countries against Russia, the assumption must be made that there will be further potentially significant changes in energy and raw material prices as well as in global supply chains. It is not currently possible for the management to make any reliable forecasts with respect to short-term business performance. However, sales and earnings for the 2022 financial year are expected to be significantly above the record levels achieved in 2021.

Despite the global political turmoil, the management of HMS Bergbau AG continues to have a positive assessment of the medium-term operating outlook. This statement is supported by the increase in energy demand worldwide, which will continue to be met by coal-fired power generation, particularly in developing countries, as well as in many industrialised nations. The Group considers itself well positioned in this respect, above all due to its international trade relations and its local representative offices. Accordingly, the Group is also aiming to achieve clearly positive results in the years ahead.

Berlin, September 2022

DENNIS SCHWINDT

CHIEF EXECUTIVE OFFICER

Dennis Schwindt is Chief Executive Officer of HMS Bergbau AG. Mr Schwindt holds a degree in economics from the Humboldt University in Berlin and has been managing several operating projects at HMS Bergbau AG as the Company's authorised representative and in the area of commodity trading since 2012. He gained extensive experience in the oil and gas industry and in plant engineering in his previous positions at both medium-sized German companies and international groups.

JENS MOIR

CHIEF FINANCIAL OFFICER

Jens Moir is Chief Financial Officer of HMS Bergbau AG. Mr Moir has more than 20 years of hands-on experience as a CFO and financial executive in international steel construction, oil and gas, renewable energy and entertainment companies. In his latest role, he oversaw various technology start-ups. Mr Moir is a British and German national with international experience in Germany, Poland, Austria and the USA.

DENNIS SCHWINDT	JENS MOIR		Members of the Supervisory Board
Chief Executive Officer	Chief Financial Officer
	HEINZ SCHERNIKAU
			CHAIRMAN OF THE SUPERVISORY BOARD
			DR. H. C. MICHAEL BÄRLEIN
			DEPUTY CHAIRMAN OF THE SUPERVISORY BOARD
			PATRICK BRANDL
			MEMBER OF THE SUPERVISORY BOARD

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