Luka Koper d d : Annual and sustainability report 2023 (the report does not meet the requirements of the transparency directive and is not considered compliant with the ESEF regulation)

EUROPEAN

GREEN

WINDOW

Luka Koper Group

and Luka Koper, d. d.

Annual Report 2023

The report does not meet the requirements of the transparency directive and is not considered compliant with the ESEF regulation

Statement of Management's Responsibility1

Gorazd Jamnik

Nevenka Kržan

Gregor Belič

Vojko Rotar

The Management Board of Luka Koper, d. d., is responsible for the preparation of the Annual Report hereof, including the financial statements and notes thereto, that give a true and fair view of the financial position of Luka Koper, d. d., and the Luka Koper Group as of 31 December 2023 and of their financial performance for the year then ended.

The Management Board confirms that the Annual Report for the Luka Koper Group and Luka Koper, d. d., for 2023 with all its component parts: Management Report, Sustainability Report, Accounting Report, including the Corporate Governance Statement, has been devised and published pursuant to the legislation in force and International Financial Reporting Standards.

The Management Board confirms that accounting policies were consistently applied and that the accounting judgements were made under the principle of prudence and due diligence of a good manager.

The Management Board further confirms that the financial statements of the Company and the Group have been compiled under the assumption of a going concern of the parent and its subsidiaries and in accordance with the applicable legislation and International Financial Reporting Standards as adopted by the EU.

The Tax Authorities may, at any time within a period of

5 years after the end of the year for which tax assessment was due, carry out an audit of the Company operations, which may lead to assessment of additional tax liabilities, default interest, and penalties with regards to corporate income tax or other taxes and duties. The Management Board is not aware of any circumstances that could give rise to any significant liability on this account.

The Management Board is responsible for adopting measures to secure the assets of Luka Koper, d. d., and the Luka Koper Group, and to prevent and detect fraud and other irregularities or illegal acts.

Members of the Management Board:

1	Business performance highlights of the Luka Koper Group in 2023	Gorazd Jamnik	Vojko Rotar
Nevenka Kržan	Gregor Belič
President of the	Member of the	Member of the	Member of the
Management	Management	Management	Management Board -
Board	Board	Board	Worker Director
					Koper, 9 April 2024
1	GRI 2-12,2-14

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TABLE OF CONTENTS

Statement of Management's Responsibility	3
BUSINESS REPORT	5
1 Business performance highlights of the Luka Koper Group in 2023	6
2 Letter of the President of the Management Board	16
3 Report of the Supervisory Board for 2023	19
4 Corporate Governance Statement	25
5 Survey of relevant events, novelties and achievements in 2023	42
6 Relevant events after the end of the financial year	46
7 Presentation of the Luka Koper Group and a description of the business model	47
8 Business development strategy	51
9 Economic environment and market position	54
10 Performance of the Luka Koper Group in 2023	56
11 Investments in non-financial assets	63
12 European projects	65
13 A look ahead	67
14 Managing risks and opportunities	69
15 The LKPG Share	75
SUSTAINABILITY REPORT	79
16 On the Sustainability Report	81
17 Process to determine material topics	84
18 Luka Koper Group and sustainable development guidelines	91
Managing the Environmental Impacts of Sustainable Development	95
19 Long-term sustainability of the natural environment	97
Managing Social Impacts of Sustainable Development	174
20 Safe and healthy port environment	176
21 Care for employees	183
22 Social responsibility	197
23 Sustainable relationship with customers	199
24 Digital transformation	201
Managing Governance Impacts of Sustainable Development	202
25 Stability and business performance	203
26 Sustainable relationship with suppliers	209
27 Corporate Integrity and Compliance, Protection of Personal Data and Human Rights	212
28 Information Systems Security	221
29 GRI content index (according to 2021 standards)	223
FINANCIAL STATEMENT	231
30 Financial statements of Luka Koper, d. d. and Luka Koper Group	232
31 Notes to Financial Statements	238
32 Summary of significant information on accounting policies	241
33 Additional Notes to the Income Statement	252
34 Additional Notes to the Statement of Financial Position	259
35 Statement of Accumulated Profit	309
36 Relevant events after the end of the financial year	310
37 Independent Auditor's Report	311

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BUSINESS REPORT

1 Business performance highlights of the Luka Koper Group in 2023

The Luka Koper Group concluded another very successful year. Business results exceeded expectations, with new milestones reached in cargo throughput and records set in several segments.

Net sales in 2023 amounted to EUR 312.8 million, which was on a par with the level of revenue achieved in 2022. Within net sales, revenue increased by EUR 20 million due to greater container and car transhipment, greater volume of loading and unloading of containers, greater volume of other additional services on goods and higher service prices. Compared to the previous year, due to the normalisation of the situation on the global logistics market and the shortening of the storage time of containers in the storage facility, revenues from storage fees decreased by EUR 21 million.

In 2023, earnings before interest and taxes (EBIT) amounted to EUR 60.9 million, which was a decrease of 27 percent or EUR 22.2 million when compared to 2022. The main contributor to the lower earnings before interest and taxes (EBIT) in 2023 was lower storage fees, while higher operating costs of EUR 23.3 million, which were due to inflationary pressures and higher number of employees and agency

workers, were mostly offset by the Luka Koper Group with revenues from other services.

Record throughput volumes were achieved in 2023 in both strategic commodity groups, containers and cars, as well as in the passenger terminal, the reefer terminal and the liquid cargo terminal. In the container segment, 1,066,093 container TEUs were handled in 2023, an increase of 5 percent compared to 2022. Car transhipment in 2023 amounted to 916,728 cars (in pieces), an increase of 14 percent compared to 2022. Luka Koper, d. d., has thus consolidated its position and confirmed its primacy among ports in the northern Adriatic (containers) and the Mediterranean (cars). The passenger terminal welcomed 120,553 passengers to the port in 2023, surpassing the 2019 figure of 115,581. The total maritime throughput, measured in tons, was 4 percent lower than that achieved in 2022, mainly due to a 15 percent lower throughput of general cargo and a 15 percent lower throughput of the dry bulk and bulk cargoes commodity group. In the general cargo group, there was lower throughput of steel products and rubber, and in the dry bulk and bulk cargoes group, lower throughput of soya beans,

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alumina, phosphates, coal and iron ore. In 2023, 48 percent of freight was transported by road, and 52 percent by rail. In 2023, the ratio changed by 2 percentage points compared to 2022, with an increase in road transport.

In 2023, most of the planned financial indicators were ex- ceeded. Net sales revenues were higher than planned by 8 percent, or by EUR 22.7 million. The main contributor to the higher net sales was storage fee income, which exceeded the planned figure by EUR 19 million, as the business plan had foreseen a reduction in the dwell time of containers due to the calming market conditions. Earnings before interest and taxes (EBIT) were higher than planned by 76 percent, or by EUR 26.4 million. In addition to the higher net sales revenue, the higher earnings before interest and taxes (EBIT) were positively impacted by lower material, labour and depreciation costs, while the higher cost of services was due to an increase in the cost of port services linked to the higher throughput on the car commodity group and the cost of labour placement agencies. According to the plan, the throughput of the cars commodity group (in pieces) was higher by 21 percent, while the throughput of the of containers commodity group (in TEUs) lagged behind the plan by two percent. The total maritime throughput, measured in tons, was 5 percent less than the planned quantities.

The year 2023 began optimistically, indicating the recovery of the global economy. The situation on the energy markets calmed down, energy prices fell, and global GDP growth was stronger than expected. However, global econom-

ic growth moderated later in the year. Towards the end of 2023, the impact of the tight financial situation, weak trade growth and lower business and consumer confidence was felt increasingly. Heightened geopolitical tensions have again been fuelling uncertainty about the short-term out- look.

The situation in logistics and supply chains has been further worsened with the start of the Red Sea attacks, affecting all stakeholders in logistics, including the final customers of goods in industrial production who depend on maritime transport through the Suez Canal. Due to the rerouting of ships around Africa, some of the Far Eastern shipping services of Luka Koper d. d., are experiencing delays in the arrival of ships, as transit times have been extended by an average of 10 to 14 days. Indirectly, the delay also affects ships transporting cargo across the Mediterranean via tran- shipment (hub) ports. In December 2023, there were no significant impacts on business operations. However, due to the above-mentioned uneven distribution of cargo arrivals, delays in the arrival of ships or cargo will be reflected in the realisation of monthly transhipment plans in the first three months of 2024. If the situation does not normalise in the coming months, this could also have an impact on decisions by shipowners/customers to change established transport routes from the Far East to Europe, which could be reflected in smaller volumes of transhipment on arrival.

In 2023, several major investments for the Luka Koper Group were completed, namely the redevelopment of the storage areas in the area of the 5A cassette, the construction of new plugs for reefer containers, the construction of a new external truck terminal at the Sermin entrance, the modernisation of the cooling and extinguishing system at the methanol tanks, and the construction of a transformer substation to power the new galleries. Among the most important investment projects underway are the construction of the 12th berth and the installation of solar power plants, the execution of a public contract for warehouse No 54 and the preparation of documentation and obtaining the relevant permits for the extension of the northern part of Pier I and the development of other areas for the container terminal.

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2023 in numbers

1,066,093TEU

containers unloaded from and loaded on ships

22.3million tons	916,728cars	20,609 trains
unloaded from and	unloaded from and	arrived in and
loaded on ships	loaded on ships	departed from the port

262,583	422,811	1,642
wagons unloaded	trucks arrived	ships moored
and loaded	in the port

%	48%
52	share of road
share of railway
transhipment	transhipment

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Net sales	Maritime throughput
EUR 312.8 million	22.3 million TON
+8% 2023/plan 2023	-5%	2023/plan 2023
0% 2023/2022	-4%	2023/2022

in million EUR		313.5	312.8
350		in million tons
300	228.4				23.2	22.3
			20.8
250			25
200				20
150				15
100				10
50				5
0				0
	2021	2022	2023		2021	2022	2023

Container throughput	Car throughput
1.1 million TEU	916.7 thousand pieces
-2% 2023/plan 2023	+21% 2023/plan 2023
+5% 2023/2022	+14% 2023/2022

containers in thousand TEUs and cars in thousand pieces

1,200	997.6	1017, 8.	0661, 1.		801.0	916.7
1,000	656.5
800
600
400
200
0

Containers - TEU

Cars - pieces

2021 2022 2023

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Earnings before interest	Earnings before interest,
and taxes (EBIT)	taxes, depreciation and
EUR 60.9 million	amortisation (EBITDA)
+76% 2023/plan 2023	EUR 93.7 million
-27% 2023/2022	+37% 2023/plan 2023
	-18% 2023/2022

Return on sales (ROS)	EBITDA margin
19.5%	30.0%
+64% 2023/plan 2023	+27% 2023/plan 2023
-27% 2023/2022	-18% 2023/2022

in million EUR
100
				26.5
80		13.7				19.5
60
40
20							60.9
		31.3
0			83.1
			2021	2022		2023

Earnings before interest, taxes, depreciation and amortisation (EBIT) in million EUR

Return on sales (ROS) in %

	in million EUR			%
	140		36.6		40
%	120	26.8		30.0	35
30	100		30
35	80				35
20	60				20
15	40				15
10	20	60.2	83.1	93.7	10
0	0	0
		2021	2022	2023

Earnings before interest, taxes, depreciation and amortisation (EBITDA) in million EUR

EBITDA margin in %

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