Vrancart S A : 1st Quarter Report 2024

Translation for information purposes only

Quarterly report for the 1st quarter of 2024

according to the Financial Supervisory Authority Regulation no. 5/2018

Report date	May 15th, 2024
Name of the issuing entity	VRANCART SA
Registered office	Adjud, 17 Ecaterina Teodoroiu
	Street, Vrancea County
Telephone/fax no.:	0237-640.800;0237-641.720
Tax Identification Number	1454846
Trade Registry registration no.:	J39/239/1991
Subscribed and paid-in share capital	RON 169.121.665
The regulated market onto which
the securities issued are traded	the Bucharest Stock Exchange

1. The economic and financial situation of VRANCART SA

During the first quarter of 2024, the performance of Vrancart SA ("the Company") was impacted by the lower volumes of sales, as well as by the lower prices in the corrugated cardboard and corrugated cardboard packaging market, which led to lower revenues in 2023, but which are expected to be recovered by the end of this year.

Packaging demand started to increase slightly from the second half of the quarter and the management expects improved results starting from the following quarter. The increase in the minimum wage as of October 1st, 2023 continued to impact personnel-related costs. Financing costs, although down by 8% compared to the same period of the previous year, still remain at high levels.

EBITDA was RON 8,2 million (vs. RON 13,5 million budgeted) in absolute value, and the relative value recorded a level of 9% (vs. 12% budgeted). The Company's management has set the target of recovering the gap recorded in the quarter under review by the end of the year.

Compared to the same period of the previous year, the net result recorded was RON -4,99 mil. (vs. RON +3,53 mil.). The current liquidity decreased to 0,82 (vs. 1,02), being influenced by the reimbursement by the deadline (March 15th, 2024) of the loan from bond issues.

In June, the company expects to collect the share capital increase in the amount of RON 32,5 mil. Approved through the Resolution of the Extraordinary General Meeting of the Shareholders no. 1/January 25th, 2024, that will bring an additional cash contribution, thus improving the company's liquidity.

The (simplified, unaudited) interim individual financial statements as at March 31st, 2024, in accordance with the Order of the Minister of Public Finance No. 2844/2016 for the approval of the Accounting Regulations compliant to the International Financial Reporting Standards, applicable to trade companies whose securities are admitted to trading on a regulated market are attached to this report.

The interim individual financial statements for the first 3 months of 2024 have not been reviewed by an independent external auditor, as this is not a legal or statutory requirement.

1.1. Balance sheet items

(all items in RON, unless otherwise stated)	March 31st, 2024	December 31st, 2023
Non-current assets	509.334.675	464.830.509
Current assets, out of which:	178.731.343	168.699.328
-	Trade receivables	72.909.146	67.913.133
Total assets	688.066.018	633.529.837
Total liabilities, out of which:	329.528.120	270.002.131
Current liabilities	216.723.708	158.463.201
Equity, out of which:	358.537.898	363.527.706
-	Reserves	179.295.075	179.304.246
-	Retained earnings	10.121.158	15.101.795

As at March 31st, 2024 and during the period January 1st - March 31st, 2024, the evolution of the main

financial indicators was as follows:

• The Company's non-current assets increased by 9,5% compared to the beginning of 2024.
• The Company's current assets increased by 6% as at March 31st, 2024 compared to the beginning of the year, mainly due to the increase in trade receivables by 7%.
• The trade receivables increased by RON 4.996.013 in the first three months of 2024, following the increase in the sales volume of products with higher added value, that also have a longer term of collection of receivables.
• The total liabilities recorded as at March 31st, 2024 amount to RON 329.528.120, up by 22% compared to the amount recorded as at January 1st, 2024, mainly due to the financing of the additional working capital, by using short-term credit lines.
• The amount of equity as at March 31st, 2024 is RON 358.537.898, down by 1% compared to

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the beginning of the year, as a result of the loss recorded in the 1st quarter. The Company's reserves remained at a constant level from the beginning of the year.

1.2. The profit and loss account

(all items in RON, unless otherwise stated)	March 31st, 2024	March 31st, 2023
Operating income, out of which:	92.391.830	117.868.559
Income from agreements concluded
with customers	92.044.471	114.676.607
Operating expenses	(94.996.407)	(111.354.982)
Operating result	(2.604.577)	6.513.577
Financial income	302.179	243.615
Financial expenses	(2.412.314)	(2.690.022)
Total income	92.694.009	118.144.105
Total expenses	(97.408.721)	(114.076.935)
Gross profit/loss	(4.714.712)	4.067.170
Net profit/loss	(4.991.553)	3.539.131

The Company's performance in the first three months of 2024 was influenced by the volumes of

products manufactured and services provided in the first part of the quarter, but also by the

decreasing sales prices, as costs did not follow this trend. At the same time, salary expenses and

third-party expenses recorded increases.

The Company's management is considering a series of measures to improve profitability in order

to bring the Company's financial indicators back on an ascending trend, to confirm the business

sustainability, as well as the Company's resilience to adverse market changes, which it has faced in

the past 2 years.

In the first three months of 2024 compared to the same period of the previous year, the main

indicators of the Profit and Loss Account are as follows:

• The total income during the period under review amounted to RON 92.694.009, down by 22% compared to the same period of the previous year, mainly due to the decrease in prices on the paper and cardboard market and to the decrease in sales of recyclable waste (waste paper).
• The total expenses of the period amounted to RON 97.408.721, down by 15% compared to the same period of the previous year.
• The Company's operating result is RON -2.604.577 as a result of the previously listed effects.

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1.3. Cash flows

(all items in RON, unless otherwise stated)	March 31st, 2024	March 31st, 2023
Cash flows from operating activities
Amounts collected from operating activities	101.490.962	129.424.047
Payments made from operating activities	(84.880.119)	(124.584.650)
Net cash flows from operating activities	16.610.843	4.839.397
Cash flows from investment activities
Amounts collected from investment activities	719.524	90.632
Payments made from investment activities	(40.886.465)	(5.370.491)
Net cash flows from investment activities	(40.166.941)	(5.279.859)
Cash flows from financing activities
Amounts collected from financing activities	82.172.700	22.113.183
Payments made from financing activities (including	(57.845.236)	(18.708.523)
bonds)
Net cash flows from financing activities	24.327.464	3.404.660
Cash flows as at the beginning of the period	2.088.021	1.288.888
Cash flows as at the end of the period	2.859.387	4.253.086

The balance of cash and cash equivalents recorded as at March 31st, 2024 is positive, namely RON 2.859.387. During this period, the Company was able to manage its cash flows effectively and paid all the amounts owed entirely and on time.

2. Economic and financial indicators as at March 31st, 2024, according to Appendix no. 13/ the Financial Supervisory Authority Regulation no. 5/2018

Indicator's name	Calculation modality	M.U.	Result
Current liquidity indicator	Current assets/Current liabilities	ratio	0,82
Indebtedness degree indicator	Borrowed capital/Equity x 100	%	64*
	Borrowed capital/Employed capital x	%	39*
	100
Debts-clients turnover	Average customers balance/Turnover	days	71
	x 90
Non-current assets turnover	Turnover/Non-current assets	ratio	0,2

• Borrowed capital includes credit lines, short-term and long-term bank loans, as well as short-term and long-term lease liabilities.

CIUCIOI Ionel-Marian	ARSENE Vasilica-Monica
Chairman of the Board of Directors	Financial Manager

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Translation for information purposes only

VRANCART SA

INTERIM INDIVIDUAL FINANCIAL STATEMENTS (SIMPLIFIED, UNAUDITED)

AS AT MARCH 31st, 2024

Drawn up in accordance with

the Order of the Public Finance Ministry no. 2844/2016

for the approval of the Accounting regulations compliant with the International Financial Reporting Standards,

applicable to trade companies whose securities are admitted to trading on a regulated market

VRANCART SA

INTERIM INDIVIDUAL FINANCIAL STATEMENTS AS AT MARCH 31st, 2024

Table of contents

Individual statement of financial position	1 - 2
Individual statement of comprehensive income	3
Statement of changes in equity	4
Individual statement of cash flows	5
Notes to the individual financial statements	6 - 7

Vrancart SA

Individual statement of financial position as at March 31st, 2024

(all amounts in RON, unless otherwise stated)

March 31st,	December 31st,
2024	2023

ASSETS

Tangible assets

Downpayments for tangible assets

Intangible assets

Goodwill

Financial assets

Other non-current assets

Total non-current assets

Inventories Trade receivables Prepaid expenses

Receivables related to current profit tax Other receivables

Cash and cash equivalents

Assets held for sale

Total current assets

TOTAL ASSETS

EQUITY

Share capital

Premiums related to capital

Revaluation reserves

Legal reserves

Other reserves

Retained earnings

Total equity

LIABILITIES Long-termloans

Long-term liabilities under leasing agreements Subsidies

Long-term debts to employees Liabilities related to deferred profit tax Provisions

Total long-term liabilities

406.909.779 364.630.582

16.211.870 19.706.483

744.056775.019

3.380.8113.380.811

62.587.328 62.587.328

19.500.831 13.750.286

509.334.675 464.830.509

64.620.155 66.810.661

72.909.146 67.913.133

885.455972.024

408.211835.908

17.323.228 10.353.820

2.859.3872.088.021

159.005.582 148.973.567

19.725.761 19.725.761

178.731.343 168.699.328

688.066.018 633.529.837

169.121.665 169.121.665

775.497775.497

104.384.170 104.393.341

13.345.280 13.345.280

60.790.128 60.790.128

10.121.158 15.101.795

358.537.898 363.527.706

69.593.802 67.826.778

21.324.506 21.333.018

8.420.9148.761.341

444.379444.379

13.007.850 13.160.453

12.96112.961

112.804.412 111.538.930

1

Vrancart SA

Individual statement of financial position as at March 31st, 2024

(all amounts in RON, unless otherwise stated)

	March 31st,	December 31st,
	2024	2023
Short-term trade liabilities	62.732.641	32.527.381
Short-term loans	129.473.736	62.541.116
Short-term loans from bond issues	-	38.250.000
Short-term lease liabilities	9.292.590	9.300.908
Subsidies	1.361.714	1.361.714
Debts to employees	6.277.609	5.979.709
Other liabilities	7.585.418	8.502.373
Total current liabilities	216.723.708	158.463.201
TOTAL LIABILITIES	329.528.120	270.002.131
TOTAL EQUITY AND LIABILITIES	688.066.018	633.529.837

The interim financial statements were approved by the Board of Directors.

General Manager	Financial Manager
Nicu Ciprian Fedor	Monica Vasilica Arsene

2

Vrancart SA

Individual statement of comprehensive income as at March 31st, 2024

(all amounts in RON, unless otherwise stated)

	March 31st,	March 31st,
	2024	2023
Income from agreements concluded with customers	92.044.471	114.676.607
Income from operating subsidies	1.759.149	500.941
Other income	618.491	1.168.745
Variation in finished product inventories and production in	(2.030.281)	1.554.197
progress
Raw materials and consumables	(46.719.333)	(63.605.669)
out of which, utility expenses	(16.264.593)	(26.292.923)
Expenses related to commodities	(2.819.032)	(2.754.100)
Third-party expenses	(6.953.598)	(9.005.976)
Personnel-related expenses	(25.018.950)	(23.679.243)
Other expenses	(2.725.358)	(2.421.560)
EBITDA	8.155.559	16.433.942
Expenses related to amortisation and depreciation of assets	(10.760.136)	(9.920.365)
Operating result	(2.604.577)	6.513.577
Financial income	302.179	243.615
Financial expenses	(2.412.314)	(2.690.022)
Profit before taxation	(4.714.712)	4.067.170
Profit tax expense	(276.841)	(528.039)
Profit for the year	(4.991.553)	3.539.131
Other comprehensive income items

Changes in the reserve from revaluation of tangible assets, net of deferred tax

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

--

(4.991.553)3.539.131

The interim financial statements were approved by the Board of Directors.

General Manager	Financial Manager
Nicu Ciprian Fedor	Monica Vasilica Arsene

3

Vrancart SA

Statement of changes in equity as at March 31st, 2024

(all amounts in RON, unless otherwise stated)

	Share capital	Revaluation	Premiums	Legal reserves	Other reserves	Retained earnings	Total equity
		reserves
Balance as at January 1st, 2023
120.338.551	106.393.534	664.564	13.037.107	55.469.278	24.754.468	320.657.501
Comprehensive income for the
period
Net profit/loss for the period	-	-	-	-	-	5.629.023	5.629.023
Changes in the reserve from
revaluation of tangible assets, net	-	-	-	-	-	-	-
of deferred tax

Total comprehensive income

Share capital increase Dividends

Distribution of legal reserves and other reserves

Transfer of the revaluation reserve to retained earnings following the sale/cassation of tangible assets

-	-	-	-	-	5.629.023	5.629.023
48.783.114	-	-	-		-	48.783.114
-	-	-	-	-	(12.033.855)	(12.033.855)
-	-	110.933	308.173	5.320.850	(5.248.034)	491.923
-	(2.000.193)	-	-	-	2.000.193	-

Balance as at December 31st,	169.121.665	104.393.341	775.497	13.345.280	60.790.128	15.101.795	363.527.706
2023
Balance as at January 1st, 2024	169.121.665	104.393.341	775.497	13.345.280	60.790.128	15.101.795	363.527.706
Comprehensive income for the
period
Net profit/loss for the period	-	-	-	-	-	(4.991.553)	(4.991.553)
Changes in the reserve from
revaluation of tangible assets, net	-	-	-	-	-	-	-
of deferred tax

Total comprehensive income

Share capital increase Dividends

Distribution of legal reserves and other reserves

Transfer of the revaluation reserve to retained earnings following the sale/cassation of tangible assets

-	-	-	-	-	(4.991.553)	(4.991.553)
-	-	-	-	-	-	-
-	-	-	-	-	-	-
-	-	-	-	-	-	-
-	(9.170)	-	-	-	10.917	1.747

Balance as at March 31st, 2024

169.121.665

104.384.171

775.497

13.345.280

60.790.128

10.121.158

358.537.898

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