Ramada Investimentos e Indústria S A : Indústria, S.A. announces 1H2022 results

RAMADA INVESTIMENTOS E INDÚSTRIA, S.A.

Public Company

Earnings announcement 1st Semester 2022

(unaudited information)

This document is a translation of a document originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards adopted in European Union (IFRS-EU), some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

Head Office: Rua Manuel Pinto de Azevedo, 818 4100-320 Oporto

Share capital: 25,641,459 Euro

INTRODUCTION

Ramada Investimentos is the parent company of a group of companies that together operate within two distinct business segments: i) Industrysegment, which includes the activity of special steels and wire drawing, as well as the activity related to the management of financial investments in which the Group is a minority shareholder; and ii) Real Estatesegment, aimed at the management of real estate assets.

The special steels activity, which develops, especially at the level of the sub-segment of moulds, with a leading position in the domestic market, is developed by three companies: Ramada Aços, Universal Afir and Planfuro Global.

The wire drawing activity is developed by Socitrel, whose main business is the manufacture and commercialization of steel wires, capable of being used in a wide variety of activities, including industry, agriculture and construction.

In the financial investments management activity, among other portfolio investments held by the Group, it should be highlighted the participations held in CEV, S.A. and Fisio Share - Gestão de Clínicas, S.A..

The Real Estate Segment includes the real estate asset management activity (composed by the forest assets and the Real Estate of the Group) and is developed by F. Ramada ll - Imobiliária, S.A..

RAMADA GROUP

INDUSTRY			REAL ESTATE

INDÚSTRIA

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CONSOLIDATED INCOME STATEMENT BY NATURE

The consolidated financial information of Ramada Investimentos was prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards, as adopted by the European Union (IFRS

• EU).

The key information and indicators of Ramada Group's consolidated activity can be presented as follows:

Amounts in thousands of Euros	1H2022	1H2021	Var. %
Total revenues	112 175	66 363	69.0%
Total costs	(96 461)	(56 528)	70.6%
EBITDA	15 714	9 834	59.8%
EBITDA margin	14.0%	14.8%	-0.8 p.p.
Amortization and depreciation	(2 290)	(1 635)	40.1%
EBIT	13 424	8 199	63.7%
EBIT margin	12.0%	12.4%	-0.4 p.p.
Results related to investments	252	120	110.0%
Financial expenses	(565)	(530)	6.6%
Financial income	61	20	197.3%
Profit before income tax	13 172	7 810	68.7%
Income tax	(3 161)	(1 642)	92.6%
Consolidated net profit	10 011	6 168	62.3%
Net profit attributable to shareholders of the parent company	10 011	6 168	62.3%

In the first half of 2022, total revenues of Ramada Group amounted to 112,175 thousand Euro, representing a 69.0% increase over the total revenues recorded in the same period of 2021.

Total costs amounted to 96,461 thousand Euro, recording a 70.6% increase when compared to the same period of the previous year.

EBITDA amounted to 15,714 thousand Euro, representing an increase of 59.8% compared to the same period of 2021. EBITDA margin achieved 14.0%, representing a decrease of 0.8 percentage points when compared to the same period of the previous year.

EBIT, in the amount of 13,424 thousand Euro, recorded an increase of 63.7% when compared to 8,199 thousand Euro in the same period of 2021.

The Financial Results (Financial Income - Financial Expenses), in the amount of 504 thousand Euro, recorded a 1.2% decrease over the same period of the previous year.

The consolidated net profit of the first semester of 2022 amounted to 10,011 thousand Euro, increasing 62.3% compared to the net profit of the same period of the previous year.

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INDUSTRY

Amounts in thousands of Euros	1H2022	1H2021	Var. %
Total revenues	108 134	62 734	72.4%
Total costs	(95 388)	(55 830)	70.9%
EBITDA	12 745	6 904	84.6%
EBITDA margin	11.8%	11.0%	+0.8 p.p.
EBIT	10 627	5 349	98.7%
EBIT margin	9.8%	8.5%	+1.3 p.p.
Results related to investments	252	120	110.0%
Financial results	(289)	(246)	17.5%
Profit before income tax	10 590	5 223	102.8%
Income tax	(2 606)	(1 073)	142.9%
Net profit	7 984	4 150	92.4%

In the first half of 2022, total revenues from the Industry segment amounted to 108,134 thousand Euro, recording an increase of 72.4% compared to the same period of 2021.

EBITDA in the Industry segment amounted to 12,745 thousand Euro, representing a positive variation of 84.6% compared to the 6,904 thousand Euro recorded in the first half of 2021. EBITDA margin reached 11.8%, recording an increase of 0.8 percentage points over the same period of 2021.

EBIT, in the amount of 10,627 thousand Euro, recorded an increase of 98.7% compared to the 5,349 thousand Euro in the same period of 2021.

The net profit of the Industry segment in the first half of 2022, in the amount of 7,984 thousand Euro, represented an increase of 92.4% compared to the net profit of the same period of 2021.

Despite the post-pandemic uncertainty and the scenario of armed conflict between Russia and Ukraine, in the second quarter of 2022 Ramada Group continued the positive trend seen in the first quarter of 2022, reaching significant growth in sales.

The Steel activity recorded a turnover significantly higher than the same period of 2021, being relevant the contribution of the moulds sector, which stood out with sharp growth rates throughout the semester. This acceleration boosted growth in the machining sector, with this sector registering significant increases in the provision of conventional and customized machining services.

In metalworking, demand was more stable and year-on-year growth was mainly a result of price increases. Towards the end of the semester there was a slowdown in consumption and the market's expectation for a price decrease was noticeable.

With the uncertainty caused by the war in Ukraine, the first semester was marked by inflationary pressures, with particular relevance in energy prices. It is expected that this upward trend will continue in the coming months, which lead the Group to increase prices mainly in thermal treatments where energy consumption is relevant.

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In order to partially mitigate the impact of the increase in energy prices and simultaneously contribute to a better environmental performance, a Photovoltaic Plant for self-consumption (Ramada Solar) is being installed, with the start of production of the first Megawatt planned for the second half of 2022.

Due to the rise in prices and the constraints in the supply chain, inventory management was necessarily one of the pillars of action in this semester, requiring constant attention to market movements.

Demand was at high levels, with steel mills' production deadlines increasing by two more months compared to the usual deadlines. The difficulties in the supply of materials are increasing, both due to the crisis in Ukraine and Russia, and to price increases from China. This was a point that focused attention throughout the semester and will certainly be a determining point for the Group's performance throughout this year.

The Group continues to focus on exports and on increasing its customer portfolio to ensure future growth and less dependence on the domestic market. In the first semester of 2022, the sales of the Steel activity to the external market represented 8.7% of the turnover, registering a growth of 70.8% compared to the same period in 2021. The Spanish market continues to be the leader where the steel shortage is generating many opportunities.

In the first half of 2022, the Wire Drawing activity also registered a significant growth in turnover, compared to the same period of the previous year. The Wire Drawing activity operates essentially for the external market, which in the first half of 2022 represented 75.4% of turnover, with the USA and Spain standing out with 34% and 27% respectively. In the same period in 2021, exports represented 66% of turnover.

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