Petro Welt Technologies : PeWeTe Half-year report 2023

HY1

2023

Condensed consolidated interim financial statements as of June 30, 2023

FINANCIAL KEY FIGURES1

in EUR million		HY1 2023
Revenue	8.0
Gross profit	1.6
EBIT	(1.1)
EBIT margin		(13.8)%
EBITDA	0.3
EBITDA margin	3.8%
Group result	(16.1)
Balance sheet total2	149.2
Equity2		9.2
Equity ratio2	6.2%
Cash flow from operating activities	(0.3)
Cash flows (used in)/from investing activities	0.2
Cash flow used in financing activities	(0.1)
Cash and cash equivalents	56.4
EUR/KZT exchange rate at the end	495.68
of the reporting period2
EUR/KZT average exchange rate	488.2
for the reporting period
Employees (average)	121

1. Continuining operations
2. As of June 30, 2023 and December 31, 2022 respectively

HY1 2022

5.4

3.2

(1.5)

(27.7)%

(1.1)

(20.4)%

(1.0)

162.8

25.3

15.5%

(1.3)

48.2

(0.1)

58.6

462.65

492.39

98

Change

48.1%

(50.0)%

26.7%

• (100)%
• (100)%

(8.4)%

(63.6)%

(77.0)%

• 100%
  -

(3.8)%

7.1%

(0.9)%

23.5%

2	PETRO WELT TECHNOLOGIES AG | HY1 2023

CONTENT

04 MANAGEMENT REPORT

04 Economic Environment

06 Performance of the PeWeTe Group

08 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2023

1. Consolidated Statement of Financial Position
2. Condensed Consolidated Statement of Profit or Loss
3. Consolidated Statement of Other Comprehensive Income
4. Consolidated Statement of Changes in Equity
5. Consolidated Statement of Cash Flow Statement
6. Notes

28 Legal Notice

PETRO WELT TECHNOLOGIES AG | HY1 2023

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MANAGEMENT REPORT

MANAGEMENT

­REPORT HY1 2023

ECONOMIC ENVIRONMENT

GENERAL ECONOMIC DEVELOPMENT

According to the latest forecast by the International Monetary Fund , global growth is projected to fall from an estimated 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024. While the forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook, it remains weak by historical standards. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.

Although the immediate risk of turbulence in the financial sector has diminished thanks to the measures taken by the U.S. and Swiss authorities, the risks to global growth remain on the downside. Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather -related events, triggering more restrictive monetary policy.

In most economies, the priority remains achieving sustained disinflation while ensuring financial stability. There- fore, central banks continue to focus on restoring price stability and strengthen financial supervision and risk monitoring. Improvements on the supply side of the economy would facilitate fiscal consolidation and a smoother decline in inflation toward target levels.

World trade growth is expected to decline from 5.2 percent in 2022 to 2.0 percent in 2023, before rising to 3.7 percent in 2024, well below the 2000-19 average of 4.9 percent. The decline in 2023 reflects not only the path of global demand, but also shifts in its composition toward domestic services, lagged effects of US dollar appreciation -which slows trade owing to the widespread invoicing of products in US dollars - and rising trade barriers.

Oil prices rose by 39 percent in 2022 and are projected to fall by about 21 percent in 2023, reflecting the slowdown in global economic activity. Assumptions regarding global interest rates have been revised upward, reflecting actual and signaled policy tightening by major central banks since April. The Federal Reserve and Bank of England are now expected to raise rates by more than assumed in the April 2023 WEO - to a peak of about 5.6 percent in the case of the Federal Reserve - before reducing them in 2024. The European Central Bank is assumed to raise its policy rate to a peak of 3.75 percent in 2023 and to ease gradually

in 2024. Moreover, with near-term inflation expectations falling, real interest rates are likely to stay up even after nominal rates start to fall.

KAZAKHSTAN

For the Kazakh economy, the World Bank expects a moderate increase in growth from 3.2% in 2022 to 3.5% in 2023 and to 4% in 2024, led by the hydrocarbons sector as oil production rises thanks to several new projects. Continued foreign direct investments in mining and the government's affordable housing program will sustain investment.

However, growth in household consumption is likely to be dampened by high inflation, rising borrowing costs, and

4	PETRO WELT TECHNOLOGIES AG | HY1 2023

MANAGEMENT REPORT

increased indebtedness. Inflation is expected to decrease but will remain elevated in 2023 due to the prolonged impact of high food prices. A tight monetary policy will contribute to a reduction toward the upper limit of its target range. The rising cost of food and housing will remain a key factor impacting the well-being of the population. Among the downside risks are any further disruptions to the Caspian Pipeline Consortium and persistently high inflation. Access to effective coping mechanisms will be important to protect the poverty reduction gains of the last decade. The continued monetary tightening and tighter control over fiscal spending can make space for higher spending on social protection programs. An additional tightening of global financial conditions and potential capital flow volatility pose risks to the exchange rate. On the upside, global demand and oil prices exceeding expectations would boost growth.

The Central Bank (NBK) tightened its policy rate to 16.75% in February 2023 from 10.25% a year ago. Following a depreciation of 8% against the US dollar in 2022, the tenge has remained stable in 2023.

THE GLOBAL OIL AND GAS MARKET

In its latest Oil Market Report, published in July 2023 , the International Energy Agency (IEA) expects global oil demand to climb by 2.2 mb/d in 2023 to reach 102.1 mb/d, a new record. However, persistent macroeconomic head- winds, apparent in a deepening manufacturing slump, have led the IEA to revise its 2023 growth estimate lower for the first time this year, by 220 kb/d. Buoyed by surging petrochemical use, China will account for 70% of global gains, while OECD consumption remains sluggish. Growth is expected to slow to 1.1 mb/d in 2024. World oil supply rose 480 kb/d to 101.8 mb/d in June but fell sharply in July as Saudi Arabia made a sharp 1 mb/d voluntary output cut. For 2023, global production is forecast to increase by 1.6 mb/d to 101.5 mb/d, as non-OPEC+ expands by

1. mb/d. In 2024, global supply is expected to rise by

1. mb/d to a new record of 102.8 mb/d, with non-OPEC+ accounting for all of the increase.

Refinery crude throughput estimates for 2023 and 2024 have been raised by 130 kb/d and 90 kb/d, respectively, to

82.5 mb/d and 83.5 mb/d. This revision is based on higher Russian crude oil volumes and the commissioning of new refining capacities. Refining margins remain robust, with very strong Atlantic Basin gasoline cracks and rapid gains in diesel, jet fuel and fuel oil more than offsetting weak naphtha cracks.

A substantial 44.2 mb build in non-OECD countries, led by a surge in China, pushed global oil inventories up by

19.4 mb in May to the highest since September 2021. By contrast, OECD oil stocks drew by a marginal 1.8 mb. Oil on water declined by 23 mb as additional OPEC+ output cuts saw seaborne oil exports falling to their lowest since January.

Amid range-bound trading, ICE Brent futures fell by USD 1/ bbl month-on-month in June to USD 75/bbl, as restrictive central bank policies continued to weigh on investor sen- timent. Additional voluntary cuts by some OPEC members and a weaker US dollar failed to dispel the macroeconomic gloom. At the publishing time of the IEA's report, Brent was trading around USD 78/bbl.

OIL AND GAS PRODUCTION IN KAZAKHSTAN

The Kazakh petrochemicals industry continues to produce below its quota in the OPEC+ production agreement. According to the IEA's latest Oil Market Report it produced

1.6 mb/d in the second quarter of 2023, compared to a quota of 1.63 mb/d and a sustainable capacity of 1.67 mb/d. Output in Kazakhstan has been below quota since March 2022 - the month after Russia invaded Ukraine.

As reported by S&P Global Commodity Insights , Kazakh- stan's state-owned oil and gas producer Kazmunaigas (KMG) is diversifying oil export routes as the conflict in Ukraine continues to threaten its main export route via Russia. Currently, most of Kazakhstan's oil passes through Russia, with the Caspian Pipeline Consortium (CPC) accounting for 80% of its exports. The line, which runs to the Russian Black Sea port of Novorossiisk, has suffered several disruptions since Russia invaded Ukraine in February

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