Siderúrgica Venezolana "Sivensa" S A : SIVENSA REPORTS THE RESULTS OF THE THIRD QUARTER OF THE FISCAL YEAR 2022-2023

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FOR ITS IMMEDIATE DISTRIBUTION

SIVENSA REPORTS THE RESULTS OF THE THIRD QUARTER OF THE FISCAL YEAR 2022-2023

CARACAS, JULY 28, 2023

As we have been reporting, on October 31, 2010, the former President of the Republic announced the expropriation of plants and other industrial assets owned by the subsidiary Siderurgica del Turbio, S.A. "Sidetur" ("Sidetur"). On November 3, 2010, Presidential Decree No. 7786 dated November 2, 2010 was published In the Official Gazette No. 39,544 (the "Expropriation Decree").

In late October 2012, as promptly informed, the National Executive adopted the following measures: (i) the appropriation and transfer of available funds in bolivars in Sidetur's bank accounts to the account of the State-owned company "Complejo Siderurgico Nacional, S.A." at Banco de Venezuela; and (ii) the occupation of the industrial assets of said subsidiary by the aforementioned State-owned company. Such measures were taken in violation of the provisions of the Law of Expropriation for Public or Social Purpose (Ley de Expropiacion por Causa de Utilidad Publica o Social, "Expropriation Law") and, in any case, without a court order or any authorization or judicial proceeding.

On November 6, 2012, in the Official Gazette of the Bolivarian Republic of Venezuela No. 40,044 Resolution No. 089 of the Ministry of the People's Power for Industries ("MPPI"), dated October 25, 2012, was published, such resolution appoints the new members of the Temporary Administrative Board for the subsidiary Sidetur, in execution of the Preventive Measure of "Occupancy and Temporary Operability and Appointment of Administrative Board" agreed by the extinct Institute for the Defense of the People´s Access to Goods and Services (Instituto para la Defensa de las Personas en el Acceso a los Bienes y Servicios "INDEPABIS").

On July 26, 2013, Deutsche Bank, acting as Trustee, notified the bondholders as well as Sidetur (i) that there had been a default due to the non-payment of the principal installment due on July 20, 2013, (ii) that there had been a default due to the lack of sufficient funds in the Reserve Account, (iii) that the issuer had defaulted in the payment of interest due on July 20, 2013, which will become a default if such payment does not occur within the following 30 days, and (iv) that, for the moment, it would not take further actions unless certain holders, defined as "Required Note Holders", would require it to do so, noting that in order to act, following any request or instruction, such holders should furnish to the Trustee security or indemnity reasonable satisfactory to it against the cost expenses and liabilities that might be incurred by it. Later, on April 29, 2016, the referred to Bank, through a letter dated April 27, 2016, notified holders of the 2016 Bonds guaranteed by Sidetur (i) that a new event of default had occurred due to the

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nonpayment of the last principal installment corresponding to such bonds, payable on April 20, 2016, and (ii) that, for the moment, it would not take further actions unless certain holders, defined as "Required Note Holders", would require it to do so, noting that in order to act, following any request or instruction, such holders should furnish to the Trustee security or indemnity reasonable satisfactory to it against the cost expenses and liabilities that might be incurred by it. Later, on April 29, 2016, the referred to Bank, through a letter dated April 27, 2016, notified holders of the 2016 Bonds guaranteed by Sidetur (i) that a new event of default had occurred due to the nonpayment of the last principal installment corresponding to such bonds, payable on April 20, 2016, and (ii) that, for the moment, it would not take further actions unless certain holders, defined as "Required Note Holders", would require it to do so, noting that in order to act, following any request or instruction, such holders should furnish to the Trustee security or indemnity reasonable satisfactory to it against the cost expenses and liabilities that might be incurred by it.

On February 11, 2014, the First Contentious Administrative Court issued a ruling stating that it had jurisdiction to review the lawsuit filed on December 17, 2013 by the Office of the Attorney General of the Bolivarian Republic of Venezuela, for the expropriation of the movable assets, real property and improvements of the subsidiary Sidetur. In the referred claim, the Office of the Attorney General, also requested an innominated judicial measure of "Occupation, Possession, Use and Administration" over Sidetur's real property, movable assets, consumable inventories, warehouses, vehicles and improvements, which was granted by the aforementioned Court.

On December 14, 2016, the Political Administrative Chamber of the Supreme Court issued a judgement dismissing the appeal filed by the attorneys of Sidetur against judgement No. 20120039 of January 26, 2012, issued by the Second Court of the Contentious Administrative Jurisdiction, with respect to the annulment lawsuit filed against Administrative Providence No. 422 of November 2, 2010 issued by the extinct INDEPABIS.

At the end of July of this year, Sivensa received information regarding the filing of two (2) lawsuits against Sidetur Finance B.V. and Sidetur before the Supreme Court of the State of New York of the United States of America on July 19, 2019, for the non-payment of the financial obligations derived from the bonds issued in 2006. The sum of the aforementioned claims, as a whole, amounts to nine million two hundred seventy thousand three hundred seventy-five dollars of the United States of America (US $ 9,270,375.00) for unpaid principal; interest and other concepts derived from the Indenture of the aforementioned bonds and/or applicable law are also demanded. Subsequently, Sivensa received information that on December 3, 2019, the Supreme Court of the State of New York issued a judicial

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decision with regards to one of the lawsuits filed, for a total of US$12,101,618.70 (which includes US$7,389,750.00 for unpaid capital and US$ 4,711,218.70 for interest), establishing, in addition, post- judgement interest at the statutory rate of 9% per annum.

ACCOUNTING TREATMENT OF THE OPERATIONS OF SIDETUR

The consolidated financial statements of Siderurgica Venezolana "Sivensa", S.A. referred to in this report, include the accounts of the Sidetur subsidiary and its subsidiary companies on a consolidated basis.

The events occurred at the end of October 2012, specifically the occupation, possession and control by the company Complejo Siderurgico Nacional, S.A., of the industrial assets been utilized by Sidetur in the operations and activities aimed at the production and marketing of the steel products, caused that as of said occupation, the subsidiary Sidetur has not been able to continue performing the same operations and activities with the assets that were occupied. Accordingly, on june 30, 2023 and 2022, Sivensa presents in the consolidated statement of financial position, separated from the rest of assets and liabilities, the assets that were occupied, other assets object of appropriation and the liabilities considered as borne by the state company Complejo Siderurgico Nacional, S.A., which are classified as an available investment for sale and are stated in the account "Net assets in process of expropriation and assets object of appropriation".

The industrial assets of Sidetur that were occupied, other assets object of appropriation and the obligations which had to be assumed by the state company Complejo Siderurgico Nacional, S.A., correspond to Property, Plant and Equipment, inventories, cash in local currency, trade account receivables, net of accounts payable to suppliers and others, advances received from customers, profits, holidays and other accruals and social benefits payable. Likewise, the rest of assets and obligations of Sidetur, including the financial debt, are included in the consolidated statement of financial position of Sidetur which sent opportunely the due communications to its creditors, and official and regulatory bodies, to inform about the events mentioned of late October 2012.

On September 2022, in accordance with the applicable accounting rules, the management obtained an update of the appraisal values (depreciated replacement cost) of the real property, machinery, equipment and facilities of Sidetur, realized in September, 2009. Said update indicates that the total amount of Property, Plant and Equipment at September 30, 2022 is Bs. 2,744,310,598, which is a

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greater amount than the book value of the net assets in process of expropriation and assets object of appropriation, which is Bs. 1,085,933,246 in constant bolivars as of June 30, 2023.

PRESENTATION OF THE FINANCIAL STATEMENTS

On November 06, 2019, the National Superintendence of Securities (SUNAVAL) emitted the Circular No. 01464, whereby it decided to instruct the issuers of securities object of public offer, in accordance with the Capital Market law, to submit their financial statements adjusted for the effects of inflation, based on the indices published by the Central Bank of Venezuela (BCV) on October 2019. Said Circular mentions that if the BCV does not publish the National Consumer Price Index (INPC), the effects of the inflation must be included, according to the methodology provided for in the Newsletter of Application of Financial Information Norms Number 2 (BA VEN-NIF No. 2) "Criteria for the Recognition of the Inflation on the Financial Statements, prepared in accordance with VEN-NIF" in its 4th version. The previously mentioned Circular replaces the Circular No. 0744 of July 27, 2016.

Sivensa's consolidated financial statements as of june 30, 2023, were adjusted for inflation considering the National Consumer Price Indices (INPC) published by the Central Bank of Venezuela (BCV). during the semester ending on said date. For comparative purposes, the Company adjusted the consolidated financial statements as of june 30, 2022 for inflation for the year ended june 30, 2023.

Sivensa's consolidated financial statements as of march 31, 2023, were adjusted for inflation considering the National Consumer Price Index (INPC) published by the Central Bank of Venezuela (BCV) during the month of october 2022 and the rate of monthly inflation determined by an independent expert to estimate the inflation rates corresponding to the months from november 2022 to march 2023, due to the fact that as of the publication date of this Report, the NCPI corresponding to the months indicated above have not been published by the BCV.

In May 2023, the BCV published the INPC from November 2022 to April 2023, and subsequently, in June and July 2023, published the indices corresponding to May and June 2023. The Company prospectively recognized the effects of inflation by applying the INPC published by the BCV from November 2022 to March 2023 in the consolidated results of the quarter ended June 30, 2023.

Considering the exchange agreements in force at the date of elaboration of this report, the transactions and balances in foreign currency of Sivensa and its subsidiaries (whose functional currency is the bolivar), mainly constituted by United States dollar, have been converted into bolivars, utilizing the

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exchange rate at the date of the transaction (monthly average) and the closure exchange rate, respectively, in accordance with the provision of the IAS 21. As of june 30, 2023 and 2022, the closure rate utilized was the exchange rates of the Exchange Market System of 28.02 and of 5.54 bolivars per 1 US$, respectively. The exchange differences mainly resulting from the fluctuations of the bolivar with regard to the dollar, upon translating the balances in foreign currency at june 30 2023 and 2022, are presented in the results of the fiscal years ended on said dates, in the account "Exchange loss, net".

The translation into bolivars of the consolidated financial statements of the subsidiary IBH, elaborated in US dollars, which is its functional currency, has been realized according to the IAS 21, in the applicable to an entity whose functional currency and presentation currency are different, as follows: The assets and the liabilities are translated at the closure exchange rate and the equity at the historic exchange rates. As of june 30, 2023 and 2022, the closure rate utilized was the exchange rates of the Exchange Market System of 28.02 and of 5.54 bolivars per 1 US$, respectively. The exchange rate difference arising from the translation to bolivars of the consolidated financial statements of the subsidiary IBH, elaborated in US dollars as of june 30, 2023 and 2022, minority interest net, are presented in the consolidated statement of financial position, in the account "Income from translation of foreing subsidiaries". The result of translation of the affiliate abroad, as of june 30, 2023 and 2022 was Bs 17,367,922,558 and Bs 17,470,972,211, respectively, which represents an increase in the consolidated equity of the shareholders of Sivensa of Bs 103,049,653, in constant bolivars as of june 30, 2023.

ANALYSIS OF THE QUARTER RESULTS

The Sivensa's consolidated results mainly include the operations of the filial Sidetur and the operations of the filial IBH, corresponding to the three-month periods ended on june 30, 2023 and 2022.

The consolidated results in bolivars for the quarter ended on june 30, 2023 to which this Report refers, were adjusted for inflation as of that date, (except the results of the subsidiary IBH which are presented at historical values due to the fact that its functional currency is the US dollar).

The most significant aspects of the consolidated income statement are described hereunder:

1. OPERATING LOSS:In the April-June period, Sivensa's loss in operations was Bs. 4,279,119, compared to the loss of Bs. 23,234,911 in the same period of 2022. The decrease of Bs. 18,955,792 is mainly due to the positive variation of Bs. 16,964,646 in the "Other operating

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Report of the Board of Directors of Siderurgica Venezolana "Sivensa", S.A. | 2023