Sociedade Comercial Orey Antunes : Orey informa sobre os Resultados Consolidados do 1º Semestre de 2017 - Versão Inglesa

PRESS RELEASE | 1H 2017

1

PRESS RELEASE 1H 2017

(Non-Audited accounts)

25 July 2017

1. EXECUTIVE SUMMARY

   Sociedade Comercial Orey Antunes, S.A. ("SCOA", "Orey" or "Grupo Orey") reached in the first half of 2017 ("1H17") a positive net income amounting to Euro 148 thousand.

   This net income, when compared to the same period of the previous year ("1H16"), reflects the results of the profound reorganisation carried out in 2016 with the objectives of (i) de-leveraging the balance sheet by selling non-core assets and reducing debt and cost of debt, and (ii) improve operational results through a strong cost reduction on the one hand and increase operating revenues on the other.

   Against this backdrop, when comparing 1H17 with the same period of 2016, operational revenues grew to Euro 39.67 million, up +4.2% y.o.o.y from Euro 38.07 million in 1H16. Gross margin grew by 9.1% y.o.y to Euro 12.26 million, up from Euro 11.24 million. Operating expenses declined 13.5% from Euro 10.34 million in 1H16 to Euro 8.94 million in 1H17. As such, operating income grew by 3.7x up from Euro 898 thousand to Euro 3.32 million in 1H17. Non-operating income declined by 163.1% from Euro 1.06 million to negative Euro 0.67 million. In this context, EBITDA grew by +35.1% to Euro 2.65 million in 1H17, up from Euro 1.96 million in 1H16.

   It should also be underlined:

2. In 1H17 the solid improvement of operating results already observed in 1Q17 continued, leveraging on revenue growth and significant cost cutting;

3. The decline in non-operating results is primarily due to the booking in 1H16 of the non-recurrent gain on the sale of CMA-CGM, amounting to Euro 1.1 million and also to the equity income related to Orey's position in Banco Inversis, amounting to circa Euro 0.5 million, which was sold in July 2016;

4. Strong EBITDA growth, notwithstanding the declined registered in non-operational results;

5. A circa 50% y.o.y decline in interest costs, from Euro 2.36 million to Euro 1.18 million in 1H17, as a result of the significant reduction in financial debt and also in the context of the renegotiation of the cost of debt of the OTLI and Orey best of bond issues, and

6. The Euro 2.6 million improvement in income before taxes, having grown from negative Euro 1.98 million to Euro 0.61 million.

7. At the balance sheet level, in 1H17 it should be highlighted that, when compared to December 2016, financial debt declined by 5.5% to Euro 60.44 million. In 1H17, banking debt was reduced to Euro 20.09 million, having declined by 10.5% in the semester.

   Note: These accounts, similarly to those of the end of 2016, have a consolidation perimeter that include the non-financial. For comparison purposes, the 1H16 accounts were adjusted.

8. BUSINESS REVIEW

9. The initial results of the restructuring and transformation process have already started to be felt in 1H17. This process impacted the revenue performance and its drivers as well as the operating and financial costs. In effect, the operating revenues of Orey Group, including the full consolidation of the non- financial companies, reached Euro 39.67 million in 1H17, having increased 4.2% y.o.y. This performance was underpinned by revenues of the non-financial companies: +5.2% y.o.y in 1H17 to Euro 37.11 million. The contribution of the net financial margin and commissions generated by Orey Financial to the consolidated revenues reached Euro 0.87 million in 1H17, having declined 31.3% y.o.y.

   During 2016 and early 2017 Orey executed a reorganizational plan aimed at (1) significantly reducing costs in order to rebalance operational income; (2) repositioning its commercial offering and (3) implementing a new balance sheet structure through asset sales and renegotiated terms and conditions of the most important debt facilities, including bonds and bank debt, aimed at increasing maturities and reducing cost of debt. The reorganisation plan also covered other areas, namely extensive contact with Orey Financial customers aimed at re-establishing the commercial relationship and a special focus on initiatives to rejuvenate the commercial team and increase its motivation. Whereas this cost cutting and reorganisation plan is now mostly executed, the focus is now investing on organic growth.

   2.1 Orey Financial

   At Orey Financial level, it should be noted that assets under management and custody ("AuC") reached Euro 143.61 million (-7.0% y.o.y.), having grown 1.6% when compared to 31 December 2016. The performance compared to 30 june 2016 reflects primarily the deconsolidation of the management of distressed assets / liability management. In 1H17, AuC of the online brokerage segment reached Euro

   49.87 million (+ 3.5% in 1H17 as compared to Euro 48.17 million at the end of 2016 and +12.4% y.o.y). Customer growth should also be highlighted. In effect, both Portugal (+3.0% y.o.y to 4,359 customers) and Spain (+ 6.1% y.o.y to 3,301 customers) showed resilient growth, demonstrating Orey Financial's ability to retain its customer base while simultaneously attracting new customers. This performance also underlines that the strategy of further investing in the development of the financial activity in Spain is a success. The Group continues to consider Spain as a market with high growth potential.

   In terms of Orey Financial's perimeter, net commissions in the 1H17 reached Euro 0.99 million (-26.0% y.o.y.). This decrease in revenues was mainly due to the activity in Portugal, which continued to decline in 1H17, as a result of the loss of some important customers during 2016.

   Total Orey Financial

   1H17

   1H16

   y.o.y

   Assets under Management / Custody

   1H17

   1H16

   y.o.y

   Thousand Euros

   Assets under Management / Custody	143 608	154 490	(7.0%)
   Orey Financial Net Commissions*	992	1 340	(26.0%)

   Online brokerage	49 870	44 352	12.4%
   Investment consulting and discretionary management	58 657	57 600	1.8%
   Real estate investment funds	10 879	12 095	(10.0%)
   Private equity funds	24 202	24 302	(0.4%)
   Liability management	0	16 141	(100.0%)
   Total	143 608	154 490	(7,0%)

   Assets under Custody	17 078	16 376	4.3%
   Transaction volumes - CFD e FX	1 910 229	1 723 682	10.8%
   Net commissions	370	579	(36.1%)
   # clients	4 359	4 230	3.0%

   Assets under Custody	32 793	27 973	17.2%
   Transaction volumes - CFD e FX	1 664 987	888 611	87.4%
   Net commissions	336	385	(12.8%)
   # clients	3 301	3 110	6.1%

   Online brokerage PT

   1H17

   1H16

   y.o.y

   Online brokerage SP

   1H17

   1H16

   y.o.y

   * Total commissions, including those no directly linked to assets under management / custody

   2.2 Industrial assets

   At industrial company's level, it should be underlined the recovery of revenues from logistic and shipping activities in Portugal and Spain and in Angola and the corresponding growth in gross margin and results generated by these divisions. This performance was pivotal for the growth of sales and services, as mentioned above. The performance in Portugal and Spain was enhanced by the growth in the consignment, operations and charter segments and by the growth of transits. On the other hand, growth in Angola was mainly driven by the project forwarding segment.

   Gross Margin

   1H17

   1H16

   y.o.y

   Gross Margin %

   1H17

   1H16

   y.o.y

   Thousand Euros

   Transport and Logistics PT / ES	3 302	2 953	11.8%
   Transport and Logistics Angola	5 306	3 997	32.7%
   Industrial and Naval Representations	1 287	1 811	(29.0%)
   Total	9 895	8 761	12,9%

   Transport and Logistics PT / ES	12.4%	12.0%	3.5%
   Transport and Logistics Angola	68.1%	65.9%	3.4%
   Industrial and Naval Representations	46.1%	38.8%	18.7%
   Total	26.7%	24.8%	7.4%