Interim report
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 1 Bochnia, May 2025 STALPRODUKT S.A. Abridged Consolidated Financial Report for the 1st Quarter of 2025
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 2 I. Consolidated Financial Report for the 1st quarter of 2025 thousand x PLN thousand x EUR SELECTED FINANCIAL DATA 1st quarter - period from 01- 01-2025 to 31- 03-2025 1st quarter- period from 01-01-2024 to 31-03-2024 1st quarter - period from 01- 01-2025 to 31- 03-2025 1st quarter- period from 01- 01-2024 to 31- 03-2024 I. Net sales of products, goods and materials 1 032 512 897 682 246 729 207 744 II. Operating profit (loss) -21 507 -49 276 -5 139 -11 404 III. Profit (loss) before taxation -15 256 -41 283 -3 646 -9 554 IV. Net profit (loss) -18 686 -41 037 -4 465 -9 497 - attributable to shareholders of the parent company -17 445 -40 405 -4 169 -9 351 - net profit attributed to non-controlling interests -1 241 -632 -297 -146 V. Net cash flow from operating activities -132 201 21 678 -31 591 5 017 VI. Net cash flow from investment activities -25 924 -54 809 -6 195 -12 684 VII. Net cash flow from financial activities 4 456 -7 050 1 065 -1 632 VIII. Total net cash flow -153 669 -40 181 -36 721 -9 299 IX. Total assets 4 817 766 4 907 769 1 151 501 1 148 553 X. Long-term liabilities 420 397 422 112 100 480 98 786 XI. Short-term liabilities 636 767 703 503 152 195 164 639 XII. Shareholders' equity 3 760 602 3 782 154 898 827 885 128 - equity attributable to shareholders of the parent company 3 648 867 3 669 151 872 121 858 683 - equity attributed to non-controlling interests 111 735 113 003 26 706 26 446 XIII. Share capital 10 799 10 799 2 581 2 527 XIV. Number of shares 5 399 598 5 399 598 5 399 598 5 399 598 XV. Profit (loss) for one ordinary share (in PLN) -3,46 -7,60 -0,83 -1,76 XVI. Weighted average number of shares 5 092 633 5 257 415 5 092 633 5 257 415 XVII. Diluted profit (loss) per ordinary share (PLN) -3,67 -7,60 -0,88 -1,76 XVIII. Book value per share (PLN) 696,46 700,45 166,46 163,92 XIX. Diluted book value per share (PLN) 738,44 719,39 176,50 168,36 XX. Declared or paid-out dividend for one share in (PLN/EUR) 6,00 0 1,43 0 1. Comparable financial data (item IX-XIV and XVI, XVIII, XIX) was presented pursuant to the requirements of the International Financial Reporting Standards according to the balance for this 31st December 2024. Other comparable data is presented for the period from 1st January 2024 to 31st March 2024. 2. EUR exchange rates according to the following principles were used for the conversion of the currency into PLN: - the assets and liabilities items of the balance sheet were converted into EUR according to the average rate announced by the National Bank of Poland as of 31th March 2025 and amounting to PLN 4.1839, and PLN 4.273 as of 31th December 2024. - the profit and loss account items and the cash flow items were converted into EUR according to the rate being the simple average of the average EUR rates announced by the National Bank of Poland on the last day of each month included in the report and amounting to PLN 4.1848 for 1st quarter of 2025 and PLN 4.3211 for 1st quarter of 2024. 3. For profit-per-share calculation the number of 5,399,598 shares was adopted. 4. Item XX presents the amount of dividend per share declared to be paid by the Issuer for 2024. In 2024, the Issuer did not pay any dividend for 2023.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 3 CONSOLIDATED BALANCE SHEET (thousand x PLN) 31.03.2025 31.12.2024 31.03.2024 31.12.2023 Assets I. Fixed assets 2 107 596 2 140 886 2 165 276 2 214 571 1. Intangible assets other than goodwill 23 554 35 790 34 367 54 474 2. Goodwill 0 0 0 0 3. Tangible fixed assets 1 879 142 1 901 843 1 925 385 1 960 296 4. Right to use assets (incl. right of perpetual usufruct of land) 110 642 110 070 111 666 105 935 5. Investment real estate 57 519 56 376 57 168 57 434 6. Long-term financial assets 17 571 17 553 16 748 16 733 7. Other long-term financial assets 12 933 12 933 12 933 12 933 8. Long-term receivables 792 798 968 735 9. Deferred tax assets 0 0 0 0 10. Long-term prepayments 5 443 5 523 6 041 6 031 II. Current Assets 2 710 170 2 766 883 2 643 189 2 621 699 Current assets other than assets held for sale 2 710 170 2 766 883 2 643 189 2 621 699 1. Stocks 922 606 949 379 794 761 837 614 2. Receivables due to supplies and services and other receivables 802 273 679 297 744 323 665 141 3. Cash and cash equivalents 959 202 1 112 871 1 071 830 1 112 011 4. Other short-term investments 26 089 25 336 32 275 6 933 Assets held for sale 0 0 0 0 Assets in total 4 817 766 4 907 769 4 808 465 4 836 270 Liabilities Equity capital 3 760 602 3 782 154 3 782 620 3 831 648 I. Equity attributed to shareholders of the parent company 3 648 867 3 669 151 3 673 015 3 721 339 1. Share capital 10 799 10 799 10 799 10 799 2. Capital from the surplus of the issue price above the nominal value / agio / 8 416 8 416 8 416 8 416 3. Provision for cash flow hedges / revaluation reserve / -244 -244 40 372 4. Provision for exchange rate differences resulting from translation -3 353 786 1 218 11 048 5. Retained earnings / including uncovered losses / 3 633 249 3 649 394 3 652 542 3 690 704 II. Non-controlling interests / Equity attributable to minority shareholders / 111 735 113 003 109 605 110 309 I. Long-term liabilities 420 397 422 112 422 766 420 371 1. Provision for deferred income tax 90 737 93 954 89 377 92 211 2. Long-term provisions / including employee benefits / 48 464 48 464 47 160 47 383 3. Other long-term liabilities non-financial 146 146 146 146 4. Long-term provision for the costs of decommissioning, rehabilitation and environmental repair costs 101 817 101 888 106 060 105 984 5. Accruals and deferred income classified as fixed 54 354 54 394 56 867 57 029 6. Credits and loans 0 0 161 1 276
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 4 7. Long-term liabilities due to leasing contracts 124 879 123 266 92 092 116 342 8. Other long-term financial liabilities 0 0 30 903 0 II. Current liabilities 636 767 703 503 603 079 584 251 Short-term liabilities other than those included in groups intended for sale 636 767 703 503 603 079 584 251 1. Short-term provisions for liabilities 60 180 50 680 55 687 51 182 2. Credits and loans 18 453 9 001 4 939 5 492 3. Liabilities due to supplies and services 357 574 434 096 348 626 304 582 4. Current liabilities due to social insurance and taxes other than income tax 39 090 37 926 39 666 38 313 5. Other short-term non-financial liabilities 59 632 62 762 54 211 64 495 6. Short-term reserve for the costs of decommissioning, rehabilitation and environmental repair costs 75 549 78 651 76 288 78 130 7. Liabilities due to income tax 3 110 4 872 167 17 8. Short-term liabilities due to leasing agreements / 3 133 4 353 3 637 5 709 9. Other short-term financial liabilities 1 761 3 067 2 288 1 956 10. Accruals 18 285 18 095 17 570 34 375 Liabilities included in those intended for sale 0 0 0 0 Total Liabilities 1 057 164 1 125 615 1 025 845 1 004 622 Total Assets 4 817 766 4 907 769 4 808 465 4 836 270 Book value 3 760 602 3 782 154 3 782 620 3 831 648 Number of shares 5 399 598 5 399 598 5 399 598 5 399 598 Book value per share (PLN) 696,46 700,45 700,54 709,62 Weighted average number of shares 5 092 633 5 257 415 5 399 598 5 399 598 Diluted book value per share (in PLN) 738,44 719,39 700,54 709,62 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the period thousand x PLN 1st quarter of 2025 period from 01-01- 2025 to 31-03-2025 1st quarter of 2024 period from 01-01- 2024 to 31-03-2024 4th quarter of 2024 - period from 01-10- 2024 to 31-12-2024 I. Net sales of products, goods and materials 1 032 512 897 682 1 003 487 II. Costs of products, merchandise and materials sold 980 892 883 621 857 474 III. Gross profit (loss) on sales 51 620 14 061 146 013 IV. Selling costs 21 879 19 283 21 059 V. General and administrative costs 45 832 43 398 47 677 VII. Other operating incomes 13 561 26 488 66 349 VIII. Other operating costs 18 977 27 144 78 103 IX. Operating profit (loss) -21 507 -49 276 65 523 X. Financial incomes 12 817 10 355 9 353 XI. Financial costs 6 584 2 377 4 108 XII. Profit from shares in associated entities 18 15 -149 XIII. Profit (loss) before taxation -15 256 -41 283 70 619 XIV. Income tax 3 430 -246 13 422 Profit (loss) from continuing operations -18 686 -41 037 57 197 XV. Profit (loss) on discontinued operations 0 0 0 XVI. Net profit (loss) -18 686 -41 037 57 197
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 5 1. Attributable to shareholders of the parent company -17 445 -40 405 55 083 2. Attributed to non-controlling interests -1 241 -632 2 114 Profit (loss) net -18 686 -41 037 57 197 Weighted average number of ordinary shares 5 399 598 5 399 598 5 399 598 Profit (loss) for one ordinary share (in PLN) -3,46 -7,60 10,59 Weighted average number of shares 5 092 633 5 399 598 5 257 415 Diluted profit (loss) per share (in PLN) -3,67 -7,60 10,88 TOTAL COMPREHENSIVE CONSOLIDATED INCOME for the period thousand x PLN 1st quarter of 2025 period from 01-01- 2025 to 31-03-2025 1st quarter of 2024 period from 01-01- 2024 to 31-03-2024 4th quarter of 2024 - period from 01-10- 2024 to 31-12-2024 Net result -18 686 -41 037 57 197 Other comprehensive income that will be reclassified to profit or loss, after tax, including: 0 0 0 The effective part of the cash flow hedging in accordance with IFRS 9 -4 166 -10 234 -443 including the effective portion of cash flow hedge in line with IFRS 9 attributable to minority interest -27 -405 -120 gains and losses on translating items in the financial statements of the foreign operations -27 -66 -44 Gains and losses resulting from the translation of items in the financial statements of an entity operating abroad -4 139 -9 830 -323 Gains and losses on the translation of items in the financial statements of the foreign operation attributable to non-controlling interests -27 -22 -10 Other comprehensive income -4 166 -10 234 -443 Total comprehensive income -22 852 -51 271 56 754 Comprehensive income attributable to equity holders of the parent -21 584 -50 567 54 681 Comprehensive income attributable to minority shareholders -1 268 -704 2 073
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 6 Statement of changes in equity for the period from 1st January to 31st March 2025 and 2024 thousand x PLN Share capital Capital from the surplus of the issue price above the nominal value/Agio/ Reserve for cash flow hedges / capital from revaluation Exchange difference s from translatio n Retained profits Capital of the parent company Minori ty capital Equity TOTAL Balance as of 1.01.2025 (opening balance) 10 799 8 416 -244 786 3 649 394 3 669 151 113 003 3 782 154 Dividend 0 0 Total comprehensive income for period 1.01 - 31.03.2025 -4 139 -17 445 -21 584 -1 268 -22 852 Other changes in equity 1 300 1 300 0 1 300 Change in equity 0 0 0 -4 139 -16 145 -20 284 -1 268 -21 552 Balance as of 31.03.2025 (closing balance) 10 799 8 416 -244 -3 353 3 633 249 3 648 867 111 735 3 760 602 Balance on this 1.01.2024 (opening balance) 10 799 8 416 372 11 048 3 690 704 3 721 339 110 309 3 831 648 Dividend 0 0 Total comprehensive income for period 1.01 - 31.03.2024 -332 -9 830 -40 405 -50 567 -704 -51 271 Other changes in equity 2 243 2 243 0 2 243 Change in equity 0 0 -332 -9 830 -38 162 -48 324 -704 -49 028 Balance as of 31.03.2024 (closing balance) 10 799 8 416 40 1 218 3 652 542 3 673 015 109 605 3 782 620
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7 Abridged Consolidated Financial Report for the 1st Quarter of 2025 CONSOLIDATED CASH FLOW ACCOUNT for the period thousand x PLN 1st quarter of 2025 period from 01-01-2025 to 31-03-2025 1st quarter of 2024 period from 01-01-20243 to 31-03-2024 Cash flow from operating activities Gross profit (loss) -15 256 -41 283 Income tax paid -7 679 -5 038 Adjustments made to reconcile profit (loss) -109 266 67 999 Adjustments for undistributed investment gains accounted for using the equity method -18 -15 Amortization and depreciation adjustments 44 080 45 859 Adjustments due to unrealized gains (losses) on exchange differences -1 190 -1 630 Corrections for interest expense 1 566 1 519 Adjustments resulting from dividend income 0 0 Adjustments for losses (gains) on the sale of fixed assets -1 332 -1 040 Adjustments for provisions 6 328 5 910 Adjustments for the decrease (increase) in the value of inventories 29 018 39 858 Adjustments resulting from a decrease (increase) in receivables -108 222 -54 396 Adjustments for the increase (decrease) in the value of liabilities -82 682 27 985 Other adjustments made to reconcile profit (loss) and deferred tax 118 2 464 Adjustments resulting from deferred tax expense 3 068 1 485 Cash flow from operating activities -132 201 21 678 Proceeds from the sale of property, plant and equipment classified as investment activities 153 1 277 Proceeds from the sale or redemption of financial instruments classified as investment activities 11 729 305 Dividends received classified as investment activities 0 0 Repayment of long-term loans granted 0 0 Cash inflow from interest received classified as investment activities 109 372 Purchase of tangible fixed assets classified as investment activities -27 114 -28 384 Acquisition of financial assets -9 835 -27 647 Loans granted 0 0 Other investment inflows and outflows -966 -732 Net cash flow from investment activities -25 924 -54 809 Acquisition of own shares (shares) -919 0 Proceeds from loans classified as financial activities 10 728 479 Other financial inflows / outflows -315 -1 721 Paid dividends classified as financial activities -14 -63 Repayment of credits and loans -1 276 -2 147 Payment of lease liabilities, classified as financial activity -1 902 -1 482 Interest paid, classified as financial activity -1 846 -2 116
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8 Abridged Consolidated Financial Report for the 1st Quarter of 2025 Net cash flow from financial activities 4 456 -7 050 Net cash flow -153 669 -40 181 The effects of changes in exchange rates on cash and cash equivalents 0 0 Increase (decrease) in cash and cash equivalents -153 669 -40 181 Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 1 112 871 1 112 011 Restricted cash and cash equivalents 959 202 1 071 830 20 825 7 273
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9 Abridged Consolidated Financial Report for the 1st Quarter of 2025 II. Abridged Financial Report for the 1st quarter of 2025 Selected Financial Data thousand x PLN thousand x EUR EUR 1st quarter - period from 01- 01-2025 to 31-03- 2025 1st quarter- period from 01- 01-2024 to 31-03- 2024 1st quarter - period from 01- 01-2025 to 31-03- 2025 1st quarter- period from 01- 01-2024 to 31-03- 2024 I. Net sales of products, goods and materials 420 416 368 067 100 463 85 179 II. Operating profit (loss) -899 -29 069 -215 -6 727 III. Profit (loss) before taxation 2 354 -24 245 563 -5 611 IV. Net profit (loss) 392 -24 245 94 -5 611 V. Net cash flow from operating activities -98 687 50 017 -23 582 11 575 VI. Net cash flow from investment activities -15 867 -5 536 -3 792 -1 281 VII. Net cash flow from financial activities -2 547 -1 439 -609 -333 VIII. Total net cash flow -117 101 43 042 -27 982 9 961 IX. Total assets 2 671 992 2 725 345 638 637 637 806 X. Long-term liabilities 152 168 149 839 36 370 35 066 XI. Short-term liabilities 226 153 281 307 54 053 65 834 XII. Shareholders’ equity 2 293 671 2 294 199 548 214 536 906 XIII. Share capital 10 799 10 799 2 581 2 527 XIV. Number of shares 5 399 598 5 399 598 5 399 598 5 399 598 XV. Profit (loss) per ordinary share (PLN) 0,07 -4,49 0,02 -1,04 XVI. Weighted average number of shares 5 092 633 5 257 415 5 092 633 5 257 415 XVII. Diluted profit (loss) per ordinary share (PLN) 0,08 -4,49 0,02 -1,04 XVIII. Book value per share (PLN) 424,79 424,88 101,53 99,43 XIX. Diluted book value per share (PLN) 450,39 436,37 107,65 102,12 XX. Declared or paid-out dividend for one share in (PLN/EUR) 6,00 0 1,43 0 1. Comparable financial data (item IX-XIV and XVI, XVIII, XIX) was presented pursuant to the requirements of the International Financial Reporting Standards according to the balance for this 31st December 2024. Other comparable data is presented for the period from 1st January 2024 to 31st March 2024. 2. EUR exchange rates according to the following principles were used for the conversion of the currency into PLN: - the assets and liabilities items of the balance sheet were converted into EUR according to the average rate announced by the National Bank of Poland as of 31th March 2025 and amounting to PLN 4.1839, and PLN 4.273 as of 31th December 2024. - the profit and loss account items and the cash flow items were converted into EUR according to the rate being the simple average of the average EUR rates announced by the National Bank of Poland on the last day of each month included in the report and amounting to PLN 4.1848 for 1st quarter of 2025 and PLN 4.3211 for 1st quarter of 2024. 3. For profit-per-share calculation the number of 5,399,598 shares was adopted. 4. Item XX presents the amount of dividend per share declared to be paid by the Issuer for 2024. In 2024, the Issuer did not pay any dividend for 2023.
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10 Abridged Consolidated Financial Report for the 1st Quarter of 2025 BALANCE SHEET (thousand x PLN) 31.03.2025 31.12.2024 31.03.2024 31.12.2023 Assets I. Fixed assets 1 399 238 1 394 393 1 382 834 1 384 362 1. Intangible assets other than goodwill 870 1 013 1 457 1 577 2. Tangible fixed assets 694 715 695 998 679 293 687 319 3. Right to use assets 45 411 44 975 45 386 45 181 4. Investment real estate 123 523 117 688 119 920 113 507 5. Long-term financial assets 521 791 521 791 523 851 523 851 6. Other long-term financial assets 12 928 12 928 12 927 12 927 7. Long-term receivables 0 0 0 0 8. Deferred tax assets 0 0 0 0 9. Long-term prepayments 0 0 0 0 II. Assets 1 272 754 1 330 952 1 348 515 1 320 912 Current assets other than assets held for sale 1 272 754 1 330 952 1 348 515 1 320 912 1. Stocks 363 712 361 877 244 704 273 137 2. Receivables due to supplies and services and other receivables 310 767 253 072 274 398 260 572 3. Cash and cash equivalents 596 118 713 219 827 083 784 041 4. Other short-term investments 2 157 2 784 2 330 3 162 Assets held for sale 0 0 0 0 Total Assets 2 671 992 2 725 345 2 731 349 2 705 274 Liabilities I. Shareholders’ Equity 2 293 671 2 294 199 2 341 330 2 365 575 1. Share capital 10 799 10 799 10 799 10 799 2. Capital from the surplus of the issue price above the nominal value 8 416 8 416 8 416 8 416 3. Other capitals 0 0 0 0 4. Retained earnings (including uncovered losses) 2 274 456 2 274 984 2 322 115 2 346 360 II. Long-term liabilities 152 168 149 839 150 733 143 272 1. Provision for deferred income tax 57 945 57 945 59 120 59 120 2. Long-term reserves 6 548 6 548 6 189 6 189 3. Other long-term non-financial liabilities 0 0 0 0 4. Credits and loans 0 0 0 0 5. Long-term liabilities due to leasing contracts 87 675 85 346 85 424 77 963 III. Current liabilities 226 153 281 307 239 286 196 427 Short-term liabilities other than those included in groups intended for sale 226 153 281 307 239 286 196 427 1. Short-term provisions for liabilities 5 650 5 650 7 004 7 004 2. Credits and loans 0 0 0 0 3. Liabilities due to supplies and services 183 898 241 671 198 360 160 862 4. Current liabilities due to social security and taxes other than income tax 8 985 9 973 12 578 9 719 5. Other short-term non-financial liabilities 17 077 17 264 15 332 16 790 6. Liabilities due to income tax 644 1 902 0 0 7. Liabilities due to leasing 0 0 0 0 8. Other short-term financial liabilities 0 0 0 0 9. Accruals 9 899 4 847 6 012 2 052
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11 Abridged Consolidated Financial Report for the 1st Quarter of 2025 Liabilities included in those intended for sale 0 0 0 0 Total Short and Long liabilities 378 321 431 146 390 019 339 699 Total liabilities 2 671 992 2 725 345 2 731 349 2 705 274 Net profit (loss) 2 293 671 2 294 199 2 341 330 2 365 575 Number of ordinary shares 5 399 598 5 399 598 5 399 598 5 399 598 Profit (loss) per ordinary share (PLN) 424,79 424,88 433,61 438,10 Weighted average predicted number of ordinary shares 5 092 633 5 257 415 5 399 598 5 399 598 Diluted profit (loss) per ordinary share (PLN) 450,39 436,37 433,61 438,10 PROFIT AND LOSS ACCOUNT for the period (thousand x PLN) 1st quarter of 2024 period from 01-01- 2025 to 31-03-2025 1st quarter of 2024 period from 01-01- 2024 to 31-03-2024 4th quarter of 2024 - period from 01-10- 2024 to 31-12-2024 I. Net sales of products, goods and materials, including: 420 416 368 067 363 670 II. Costs of products, goods and materials sold, including: 394 626 375 381 300 778 III. Gross profit (loss) on sales 25 790 -7 314 62 892 IV. Selling costs 12 064 10 079 10 494 V. General and administrative costs 14 923 11 776 13 590 VI. Other operating incomes 392 205 17 197 VII. Other operating costs 94 105 19 475 XIII. Operating profit (loss) -899 -29 069 36 530 IX. Financial incomes 4 811 6 122 5 963 X. Financial costs 1 558 1 298 2 580 XI. Profit (loss) before taxation 2 354 -24 245 39 913 XII. Income tax 1 962 4 523 XIII. Profit (loss) from continuing operations 392 -24 245 35 390 XIV. Profit (loss) on discontinued operations 0 0 0 XV. Net profit (loss) 392 -24 245 35 390 Number of ordinary shares 5 399 598 5 399 598 5 399 598 Profit (loss) per ordinary share (PLN) 0,07 -4,49 6,55 Weighted average predicted number of ordinary shares 5 092 633 5 399 598 5 257 415 Diluted profit (loss) per ordinary share (PLN) 0,08 -4,49 6,73 TOTAL COMPREHENSIVE INCOME for the period (thousand x PLN) 1st quarter of 2024 period from 01-01-2025 to 31-03-2025 1st quarter of 2024 period from 01-01- 2024 to 31-03-2024 4th quarter of 2024 - period from 01-10- 2024 to 31-12-2024 Net result 392 -24 245 35 390 Differences from evaluation 0 0 0 Total Comprehensive Income 392 -24 245 35 390
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Statement of changes in equity for the period from 1st January to 31st March 2025 and 2024 (thousand x PLN) Share capital Capital from the surplus of the issue price above the nominal value Other capitals Retained profits Equity TOTAL Balance after conversion as of 1.01.2025 10 799 8 416 0 2 274 983 2 294 198 Dividend for shareholders 0 Other changes in equity 392 392 Total comprehensive income for period 1.01 - 31.03.2025 -919 -919 Balance as of 31.03.2025 (closing balance) 10 799 8 416 0 2 274 456 2 293 671 Balance as of 01.01.2024 (opening balance) 10 799 8 416 0 2 346 360 2 365 575 Dividend for shareholders 0 Total comprehensive income for period 1.01 - 31.03.2024 -24 245 -24 245 Other changes in equity 0 Balance as of 31.03.2024 (closing balance) 10 799 8 416 0 2 322 115 2 341 330
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CONSOLIDATED CASH FLOW ACCOUNT thousand x PLN 1st quarter of 2025 period from 01-01-2025 to 31-03-2025 1st quarter of 2024 period from 01-01-2024 to 31-03-2024 A. Cash flow from operating activity Profit (loss) from continuing operations before tax 2 354 -24 245 Income tax paid -3 221 -3 556 Total adjustments -97 820 77 818 Depreciation 13 818 13 716 (Gains) losses due to exchange rate differences 0 0 Interest 894 1 055 Shares in profits (dividends) 0 0 Adjustments for losses (gains) on the sale of fixed assets 5 -16 Adjustments for provisions 0 0 Adjustments for the decrease (increase) in the value of inventories -1 477 30 092 Adjustments due to the increase (decrease) due to receivables -67 258 -18 938 Adjustments for the increase (decrease) in the value of other liabilities related to operating activities -44 333 51 526 Other adjustments made to reconcile profit (loss) 531 383 Adjustments due to deferred tax expense 0 0 Net cash flow from operating activities -98 687 50 017 Sale of intangible assets and tangible fixed assets 0 27 Sale of financial assets 0 0 Dividends received classified as investing activities 0 0 Repayment of long-term loans granted 600 600 Cash inflow from interest received classified as investing activity 201 242 Purchase of intangible assets and tangible fixed assets -16 668 -6 370 Acquisition of financial assets 0 0 Loans granted 0 -35 Other investment inflows and outflows 0 0 Net cash flow from investment activities -15 867 -5 536 Repayment of credits and loans 0 0 Payment of lease liabilities, classified as financial activity -505 -116 Interest paid, classified as financial activity 0 0 0 0 -28 -26 Other financial expenses -1 095 -1 297
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 14 Acquisition of own shares -919 0 Net cash flow from financial activities -2 547 -1 439 Net cash flow (before currency exchange effects) -117 101 43 042 The effects of changes in exchange rates on cash and cash equivalents 0 0 Increase (decrease) in cash and cash equivalents -117 101 43 042 Cash and cash equivalents at the beginning of the period 713 219 784 041 Cash and cash equivalents at the end of the period 596 118 827 083 Cash and cash equivalents subject to restrictions 13 925 3 115
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 15 III. Introductory Information 1. The basic data Apart from the parent company, the S talprodukt S.A. Capital Group embraces 8 associated entities accounting for subsidiary companies . Stalprodukt S.A. holds 100 % of shares in the subsidiary companies, except for Zakłady Górniczo -Hutnicze “Bolesław”, where it holds 94.99 % of shares. As the group's parent company, Stalprodukt S.A., provides operating and development guidelines for the associated entities formed within the framework of the Company’s restructuring and expansion of its production, trade and services and organization of its own sales network. The basic objects of operation of the capital group companies are: production of electrical transformer sheets – parent company Stalprodukt S.A., GO Steel a.s. production of cold formed profiles, road safety barriers as well as cut -to-length cold- and hot-rolled sheets and strips – parent company Stalprodukt S.A., non-ferrous metal ores mining and zinc and lead production – ZGH “Bolesław” S.A. along with its subsidiary companies: - Huta Cynku ”Miasteczko Śląskie” S.A. – production of rectifie d zinc, lead and cadmium, - Bol-Therm Sp. z o.o. – power supply-, laboratory-, mechanics and construction - related services, transport -equipment and forwarding services, production of dolomite aggregates, zinc products and zinc alloys, - Gradir Montenegro d.o.o. – zinc ores mining and concentrate production, - Agencja Ochrony Osób i Mienia ”Karo” Sp. z o.o. – bodyguard and property security services. other production- and services-related activities: production of galvanized banding steel and wire, as well as steel strips - Cynk-Mal S.A., production of cold-rolled sheets – GO Steel a.s., spare parts production and regeneration - Stalprodukt-Wamech Sp. z o.o., installation, repair/renovation and maintenance of machines - Stalprodukt- Wamech Sp. z o.o., structural steel production - STP Elbud Sp. z o.o., Stalprodukt-Wamech Sp. z o.o., galvanizing services - STP Elbud Sp. z o.o. and Cynk-Mal S.A., roads and freeways construction and management – Stalprodukt-Wamech Sp. z o.o.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 16 bodyguard and property security – Stalprodukt-Ochrona Sp. z o.o., - Stalprodukt-Zamość Sp. z o.o. - production of construction joinery, designing equipment related to the use of renewable energy sou rces – Anew Institute Sp. z o.o. – in liquidation, electricity storage – STPower Sp. z o.o. (Ho tel Ferreus Sp. z o.o. company suspended until 21.03.2025, resumption of operations from 22.03.2025 under a changed name and with a changed business profile to electricity storage) and ZGH OZE Sp. z o.o. Detailed explanation in point 2 Changes in the structure of the Issuer and the Capital Group. 2. Changes in the Issuer's and Capit al Group's Ownership Structure In relation to the 1st quarter of 202 4, which is a comparable period to the 1st quarter of 2025, the following changes in the structure of the Issuer's Capital Group took place: The Annual General Meeting of Shareholders of Anew Institute Sp. z o.o. with its registered office in Kraków on 31.10.2023 adopted a resolution to dissolve the company. In 2022, the parent company made write -offs on the value of shares, therefore, at the time of adopting the resolution on liquidation, the amount of write - offs constituted 100% of the value of the shares held. On 23 December 2024, the liquidation process was completed and the relevant documents were submitted to the National Court Register in order to delete Anew Institute Sp. z o.o. On 27.01.2025, the Company was deleted from the National Court Register. As a result of the liquidation of Anew Institute Sp. z o.o., Stalprodukt S.A. took over all assets of the Com pany with a total value of PLN 232 thousand by notarial deed No. 5905/2024 dated 23.12.2024. (included in the individual result of Stalprodukt S.A. in 2024). On 21.03.2025, Stalprodukt decided to resume the business activity of Hotel Ferreus Sp. z o.o., and then change: the company name (to STPower Sp. z o.o.), its registered office and the scope of activity. The company's core business is currently electricity storage (PKD 35.16.Z). As of 11.04.2025, these changes were entered into the National Court Reg ister. On 29 April 2025, a loan agreement was signed with Stalprodukt S.A. in the amount of PLN 1,185 thousand, in order to finance the development of comprehensive design documentation for the development of 4 industrial energy storage facilities with a total capacity of 40 MW and a capacity of 160 MW. On 29.04.2025, the company's Extraordinary General Meeting adopted a resolution on an increase in the share capital of STPower Sp. z o.o. from PLN 500 thousand to PLN 20,500 thousand, provided that funding is received from the National Fund for Environmental Protection and Water Management from the program called "Electricity storage facilities and related infrastructure to improve the stability of the Polish power grid". In addition, also on 29.04.2025, the NZW STPower Sp. z o.o. adopted a resolution on granting consent to conclude a long -term loan agreement with Stalprodukt S.A. for the amount of PLN 82,000 thousand. This agreement is also conditional in nature,
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 17 and its signing is dependent on obtaining fu nding from the aforementioned NFOŚiGW Program. These resolutions were adopted after prior corporate consents were obtained. The financing structure results from the fact that Stalprodukt S.A. as a DSO operator cannot implement energy storage facilities. ZGH OZE sp. z o.o. was established by ZGH "Bolesław" S.A. as the sole Shareholder on 15.04.2025. The share capital of this company was set at PLN 50,000 and is divided into 1,000 shares. On 15.05.2025, this company was entered into the National Court Register. The company in question was established for the purpose of building energy storage facilities and then conducting business based on these storage facilities. The establishment of this company and the definition of its scope of activity is the result o f the implementation of the strategy for decarbonization and improvement of energy efficiency by ZGH "Bolesław" S.A. Similarly to STPower Sp. z o.o., ZGH OZE Sp. z o.o. will also apply for funding from the Program "Electricity storage facilities and related infrastructure for improving the stability of the Polish power grid", announced by the Natio nal Fund for Environmental Protection and Water Management. The deadline for submitting applications is May 31, 2025. It is expected that in the first stage, the share capital of this company will be increased to PLN 1.5 million. In the second stage, i.e. after obtaining any funding and in order to meet the condition of the share of own funds at the level of at least 15% of eligible investment costs, the share capital will be increased to PLN 15 million. 3. Fundamental Principles Governing the Preparation of the Abridged Interim Consolidated Financial Report The presented Abridged Consolidated Financial Report was prepared in respect of the period from 1 January 202 5 to 31 March 202 5 with the use of the full consolidation method, considering all the Group's su bsidiaries. The comparable data cover the period from 1 January 20 24 to 31 March 20 24 referring to the profit and loss account and the cash flow statement, the balance sheet values reflect the status as of 31 December 2024. This Abridged Consolidated Fina ncial Report was prepared in line with the International Financial Reporting Standards approved by the European Union and, in particular, with the International Accounting Standard No 34 ”Interim Financial Reporting” and was based on the assumption that the Group will be continuing its activities in the predictable future. As of the Financial Report approval day, the Issuer's Management Board does not find any circumstances likely to threaten the continuation of activities pursued by the Capital Group. The Interim Abridged Consolidated Financial Report does not contain all the information and disclosures required in the consolidated financial report and the additional information sheet mainly contains the explanations of events and changes indispensable f or the understanding of the changes in the Group's financial standing and its performance results to have occurred since the end of the previous reporting year. The Additional Information sheet embraces selected data explaining the facts required by the IAS 34 and the Regulation of the Minister of Finance as of 29.03.2018 r. on current and periodic information to be disclosed by issuers of securities and conditions for recognizing as
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 18 equivalent of information whose disclosure is required under the laws of a non-member state (Journal of Laws 2018, item 757). If the Additional Information does not contain a description of some events, required by the above mentioned regulations, this shall mean that such events have not occurred during the reporting period. 4. Accounting Principl es (Policy) 1. In the quarterly abridged consolidated financial report the accounting principles (policy) used, including the assets and liabilities, income and costs valuation methods as well as calculation methods adopted, were identical with the ones presented in detail in the Consolidated Report 2024. In the reporting period no essential amendments were introduced into the accounting standards (policy), nor any adjustments were made in respect of the fundamental errors and adopted esti mated values which would have significantly affected the Group's property and liquidity standing and its financial result. 2. The changes introduced into the standards and interpretations issued by the International Financial Reporting Standards Council and I nternational Financial Reporting Standards Interpretation Committee, applicable since 1 January 20 24 or later, either do not apply to the Stalprodukt Group, or do not significantly affect the heretofore applied accounting policy and assessment of its ass et position and financial standing. The numerous changes introduced into the existing accounting standards and interpretation changes, referring to the existing standards, have already been adopted by the International Financial Reporting Standards Counci l, but not approved by the EU yet and so the same shall take effect at later dates. The Management Board does not expect the introduction of the above standards and interpretations to significantly affect the accounting principles (policy) applied by the Group, its financial standing and financial result, but the same may still require further additional or amended disclosures to be included in the report. The above mentioned changes were precisely described in the Additional and Explanatory Information she et appended to the published Consolidated Financial Report for 2024. 3. The information contained in the Consolidated Financial Report was compiled in compliance with the principles pertaining to the assets and liabilities valuation and net financial result m easurement, defined as of the balance sheet day, in compliance with IFRS adopted by the European Union and interpretations related thereto, announced in the form of the European Commission Regulations, with the principle of materiality observed. From Janua ry 2019, the Issuer applies IFRS 16 to the recognition and presentation of perpetual usufruct as leasing. The impact of applying IFRS 16 was described in the consolidated and separate financial statements for 2019.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 19 5. Estimated Values Estimated values in the first quarter of 2025: • A write-down on inventories was created in the amount of PLN 6,717 thousand, and PLN 3,423 thousand was released. • A write-down on doubtful receivables was created in the amount of PLN 141 thousand, and PLN 100 thousand was released. • A provision for deferred tax was created in the amount of PLN 3,241 thousand, and PLN 4,329 thousand was released. • A provision for employee benefits was created in the amount of PLN 3,257 thousand, and PLN 2,766 thousand was released. • A provision for certificates of origin of energy (RES) and CO2 emission rights was created in the amount of PLN 4,823 thousand, and released in the same amount /in the zinc segment/. • A provision for the liquidation of mines and sinkholes was released in the amount of PLN 3,102 thousand, /in the zinc segment/. • A provision for repairs settled over time was created in the amount of PLN 22,334 thousand, and was released in the amount of PLN 16,596 thousand /in the zinc segment/. • A provision for land reclamation was created in the amount of PLN 21 thousand /in the zinc segment/. • Other provisions were created in the amount of PLN 4,835 thousand, and was released in the amount of PLN 1,539 thousand (including: Provision for c ertificates and guarantees, Provision for inclusion in costs, Provision for fees for water and sewage disposal, Provision for fixed costs due to standstill, Provision for bonus fund). • The balance of the impairment write -off of the loan granted to the su bsidiary GRADI R decreased by PLN 637.4 thousand (unconsolidated report of ZGH "Bolesław" S.A.). • Other operating revenues and costs include the free CO2 emission rights received in the amount of PLN 10,876 thousand and the free CO2 emission rights redeemed in the amount of PLN 11,399 thousand /in the zinc segment/. • The impairment loss on the loan granted to the subsidiary GRADIR decreased by PLN 216 thousand (separate report of ZGH "Bolesław" S.A.). • In order to make the costs of manufacturing products realisti c in the first quarter of 2025, ZGH "Bolesław" S.A. reduced the costs of purchasing electricity due to compensation for electricity prices by PLN 17,888 thousand. The provision for the liquidation of the Olkusz -Pomorzany mine in the first quarter of 202 5 was used in the amount of PLN 3,101 thousand. As at March 31, 2025, the provision for the liquidation of the “Olkusz-Pomorzony” mine is PLN 116,042 thousand (of which PLN 82,238 thousand is a provision for damages related to floodplains of forest areas). Provisions were presented in the consolidated statement of financial position of the Capital Group in the following items: long -term provision for decommissioning, reclamation and environmental repair costs (PLN 1 01,817 thousand) and short -term provision for decommissioning, reclamation and environmental repair costs (PLN 75,549 thousand).
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 20 Additionally, as at March 31, 2025, in the above -mentioned item: short-term provision for the costs of decommissioning, recultivation and environmental repair costs, a provision was also presented for the amount claimed by PWIK Olkusz Sp. z o. o. in the amount of PLN 55,000 thousand (details related to the claim are described in item 8 of Other Information). Additionally, the provisions for the costs of liquidation, recl amation and environmental repair include the amount of provisions for land reclamation and removal of old sinkholes in the amount of PLN 4, 680 thousand created in Gradir Montenegro d. o.o. and a reserve for the reclamation of dolomite mine areas in the amo unt of PLN 2,000 thousand created in Boltech Sp. z o.o. As at March 31, 2024, the impairment loss on the shares of the subsidiary GRADIR amounts to PLN 130,98 1 thousand (84.8% of the value of shares). In the first quarter of 202 5, the write-down did not ch ange (the write -down is included in the individual reports of ZGH "Bolesław" S.A.). The write-down on the loan granted to the subsidiary GRADIR as at March 31, 202 5 is PLN 1,472 thousand (the write -off is included in the individual report of ZGH "Bolesław" S.A.). The balance of the write-down of the value of fixed assets of the subsidiary GRADIR as at March 31, 202 5 is PLN 12,027 thousand. In the first quarter of 202 5 the balance of the write -down has not changed (consolidated report of the ZGH "Bolesław" Capital Group). IV. Business Segment s The segment -based reporting was based on IFRS 8 ”Operating Segments”. The rules governing the Stalprodukt Capital Group's division into operating segments and accounting principles applied in this kind of reporting were d escribed in detail in the last published Consolidated Financial Report for 2024. In the first quarter of 2025, there were no changes in the basis of segment separation or measurement of segment profit/loss compared to the last annual financial statement. Revenues presented in the breakdown into operating segments include only revenues from external customers. There are no transactions between the 3 operating segments (electrical sheet segment, profiles segment and zinc segment). As part of the accounting po licy (principles), the "other operations" item was separated to balance the results of the Capital Group. The scope of "other activities" includes assembly services, maintenance services, security, galvanizing services, production of cold rolled steel coi ls, etc. These services are carried out by the Capital Group companies for external customers and for the needs of individual segments, which in the Issuer's opinion is not a transaction between operating segments. At the same time, taking into account the consolidation principles, revenues from sales under "other activities" made for the benefit of operating segments as carried out within the Capital Group were excluded from consolidation. Information on Operating Segments for 1st quarter of 2025 (PLN thousand)
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 21 Items Operating Segments Total Electrical Sheets Segment Profiles Segment Zinc Segment Other Activities Segment’s Revenues 268 713 131 403 552 764 79 632 1 032 512 Domestic 13 635 100 135 328 172 66 663 508 605 Export 255 078 31 268 224 592 12 969 523 907 - to EU countries 173 893 30 221 176 746 9 703 390 563 - to other countries 81 185 1 047 47 846 3 266 133 344 Segment’s Costs 234 858 137 631 555 789 74 493 1 002 771 Segment’s Result 33 855 -6 228 -3 025 5 139 29 741 Other Operating and Financial Revenues Non-Attributable to the Segment 26 396 Other General, Operating and Financial Costs Non-Attributable to the Segment 71 393 Gross Profit -15 256 Income Tax 3 430 Net Profit -18 686 Segment’s Assets 1 229 296 904 934 2 109 689 573 847 4 817 766 Assets Non-Attributable to the Segment 0 Total Assets 4 817 766 Liabilities 228 038 180 530 404 718 66 511 879 798 Provision for decommissioning, recultivation and environmental repair costs 177 366 177 366 Total Liabilities 1 057 164 Investment Expenditures 5 493 2 243 3 361 11 676 22 773 Depreciation 9 940 5 082 25 105 3 953 44 080 Creation of an inventory write-down 0 0 5 506 1 211 6 717 Inventory write-down solution 0 0 3 152 271 3 423 The largest sales outside the Capital Group were made in the first quarter of 202 5 to Germany and accounted for 7.52% of the Capital Group's sales (1 4.83% share in export sales) and Italy and accounted for 6.39% of the Capital G roup's sales (1 2.59% share in export sales). In addition, in the case of one customer, sales exceeded 10% of the share in the sales of the Capital Group. The total value of revenues from this customer is PLN 1 29,269 thousand. Sales mainly concerned the zin c segment and other activities.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 22 Information on Operating Segments for 1st quarter of 2024 (PLN thousand) Items Operating Segments Total Electrical Sheets Segment Profiles Segment Zinc Segment Other Activities Segment’s Revenues 245 566 138 844 448 776 64 496 897 682 Domestic 13 185 97 890 245 211 50 691 406 977 Export 232 381 40 954 203 565 13 805 490 705 - to EU countries 184 295 40 349 183 436 11 917 419 997 - to other countries 48 086 605 20 129 1 888 70 708 Segment’s Costs 260 954 137 150 444 228 60 572 902 904 Segment’s Result -15 388 1 694 4 548 3 924 -5 222 Other Operating and Financial Revenues Non-Attributable to the Segment 36 858 Other General, Operating and Financial Costs Non-Attributable to the Segment 72 919 Gross Profit -41 283 Income Tax -246 Net Profit -41 037 Segment’s Assets 1 245 808 946 704 2 090 843 525 111 4 808 465 Assets Non-Attributable to the Segment 0 Total Assets 4 808 465 Liabilities 187 419 148 373 389 171 118 535 843 498 Contingent Liabilities 182 348 182 348 Total Liabilities 1 025 846 Investment Expenditures 2 378 1 731 6 587 4 294 14 990 Depreciation 10 268 5 048 26 129 4 415 45 859 Creation of an inventory write-down 2 513 0 4 036 881 7 430 Inventory write-down solution 17 0 3 073 28 3 118 The largest sales outside the Capital Group were made in the first quarter of 2024 to Germany and accounted for 10.80% of the Capital Group's sales (19.76% share in export sales) and Italy and accounted for 10.56% of the Capital Group's sales (19.32% share in export sales). In addition, in the case of one customer, sales exceeded 10% of the share in the sales of the Capital Group. The total value of revenues from this customer is PLN 118,913 thousand. Sales mainly concerned the zinc segment and other activities. V. Assessment of achieved results and financial situation In the first quarter of 2025, compared to the same period of 2024, Stalprodukt S.A. Capital Group achieved sales reve nues higher by PLN 134,830 thousand, i.e. by 15%. At the level of
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 23 gross profit on sales, a result of PLN 51,620 thousand was recorded, compared to a profit of PLN 14,061 thousand in the first quarter of 2024. At the level of operating result, the loss amounted to PLN 21,507 thousand, compared to a loss of PLN 49,276 thousand in the first quarter of 2024. In the first quarter of 2025, the Group recorded a net loss of PLN 18,686 thousand, compared to a loss of PLN 41,037 thousand in the comparable period of 2024. In the Electrical Sheets Segment, the sales volume of transformer sheets decreased by 4.5% compared to the first quarter of 2024 , with an increase in the Segment's sales revenue compared to the first quarter of 202 4, which amounted to PLN 23,147 tho usand, i.e. 9.4%. The increase in sales revenue was due to achieving higher average prices for segment products at a level of approximately 15%. As a result of improved conditions, the Segment recorded a profit of PLN 33,855 thousand, compared to a loss in the first quarter of 202 4 of PLN 15,388 thousand. However, it should be emphasized that in the Issuer's opinion it is too early to talk about a permanent change in the environment in which the segment operates. The aggressive trade policy of Asian competi tors, in particular from China, who offer their products on European and global markets at lower prices, is still felt. Additionally, the situation of producers in the European Union was still negatively affected by the high CO 2 emission fee and higher en ergy and gas costs. These factors worsen the competitiveness of European production. Additional factors having a negative impact on the situation in the sheet metal segment are: • constantly growing excess production capacity of Chinese producers of transformer sheets, • the Chinese government's policy focused on export -oriented producers (in the face of a weaker domestic market), • cost advantage of Chinese producers, which results in their better competitiveness and the ability to offer products at much lower prices than in the case of EU producers, • asymmetry of the protective policy between the EU market and China, consisting in export duties to the Chinese market for EU producers of 46.3% and the minimum import price (for the lowest grades) in the amount of EUR 1,536/t (and customs duty in the case of the difference between the minimum price and the price of the imported product), • Given the above, there is currently a lack of real market protection in EU policy. The Company constantly analyses th e situation on the sheet metal market and in the event of deterioration of pricing conditions and a reversal of the improving trend observed in the first half of 2025, resulting in a significant decline in the profitability of sheet metal production in 2025, the Management Board assumes the need to implement a restructuring programme in order to reduce the operating costs of the plants in Bochnia and the Czech Republic.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 24 In the fourth quarter of 202 5, the share of HiB sheets in the plant in Bochnia amounted to 24% of the production volume. Throughout the entire period, the segment had the organizational, production and financial capacity to conduct operational activities, both in the plant in Bochnia and in Frydek-Mistek. Extension of the protection period f or the European transformer sheets market for another 5 years On January 14, 2022, the COMMISSION IMPLEMENTING REGULATION (EU) 2022/58 was published, imposing a definitive anti -dumping duty on imports of certain grain -oriented flat- rolled silicon electrical steel products originating in the People's Republic of China, Japan, the Republic of Korea, the Russian Federation and in the United States of America following an expiry review pursuant to Art. 11 sec. 2 of Regulation (EU) 2016/1036 of the European Parliament and of the Council. The above Commission Regulation maintains the mechanism of minimum import prices and the price levels for individual product groups (differing in the level of magnetic core loss), as set out in the original Implementing Regulation, i.e. 2015/1953 of 29 October 2015. The expiry review procedure was carried out at the request of the EUROFER Association, representing 2 European producers of grain oriented sheets, i.e. ThyssenKrupp Electrical Steel and Stalprodukt S.A. Grain oriented electrical sheets are a key component in the production of transformer cores. They are also essential for the maintenance and expansion of the EU energy network and for the further development of the e-mobility sector. According to Axel Eggert, CEO of EURO FER: "The EU's energy security and climate goals can only be achieved by maintaining a viable European GOES industry." He also added that GOES is a strategic top -shelf product, and the European Union cannot be dependent on foreign steel mills located in Asia, Russia or the United States in terms of supplies. The Profiles Segment recorded an increase in sales volume compared to the first quarter of 2024 by 10.5%. At the same time, the segment achieved lower sales revenues by PLN 7,441 thousand, i.e. by 5.3% . In the first quarter , the segment recorded a loss of PLN 6,228 thousand. The main reason was, despite the higher sales volume, a further reduction in prices for the segment's products reaching 14.5% compared to the first quarter of 202 4. At the same time, the Issuer continues to see a negative and difficult macroeconomic situation in the industries in which the segment's customers operate. The production of welded pipes decreased in 2024 by 11%, and apparent consumption by as much as 12%. The low level of production of construction and assembly products, building structures and steel is still noticeable. Representatives of steel pipe producers emphasize the need to review the protection of the market for steel products. In the Issuer's opinion, improvement will only be possible in the event of improvement in the areas of industry that consume the segment's products.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 25 In the first quarter of 2025, the Zinc Segment's net revenues amounted to PLN 552,764 thousand and were 23.2% higher than in the same period o f the previous year, when sales amounted to PLN 448,776 thousand. At the same time, the Segment recorded a loss of PLN 3,025 thousand. When analyzing the dynamics of the profit and loss account items, which allow us to determine the direction and intensi ty of changes in factors influencing the results achieved in the current year, attention should be paid to: - 16% increase in the PLN price of zinc in the first quarter of 2025 from PLN 9,781/t (for Q1 '24) to PLN 11,327/t (for Q1 '25), - a 24% decre ase in the premium on the sale of zinc and galvanizing alloys in ZGH from USD 289/t (in Q1 '24) to USD 221/t (in Q1 '25), - production and consumption in ZGH "Bolesław" of 20,561 MWh of electricity produced in a cogeneration source for the Company's own needs in the first quarter of 2025, - realization of the costs of manufacturing products in ZGH "Bolesław" S.A. In Q1 2025, the Company reduced the costs of purchasing electricity due to compensation for electricity prices by PLN 17,888 thousand (in the first quarter of 2024 it was PLN 24,141 thousand), - excess of negative exchange rate differences over positive differences in financial costs by PLN 7,729 thousand in the consolidated financial statements. SALE OF THE ZGH GROUP. • sales of zinc in Q1'2 5 amounted to 37.8 thousand tonnes and was higher by 2.3 thous. tons (6%) compared to sales recorded in Q1'24; • sales of silver (Dore’s metal) in Q1'2 5 amounted to 144.9 thousand ounces and was higher by 9.5 thousand ounce (+7%) compared to sales recorded in Q1'24; • sales of refined lead in Q1'25 amounted to 2.1 thousand tons and was lower by 0.172 thousand tons (-7%) compared to the same period of 2024; ZINC, LEAD AND SILVER MARKET • In PLN terms, the average annual zinc price was PLN 11,327/t and was 16% higher than in the comparable period of 2024, when it reached PLN 9,781/t. • In PLN terms, the average annual lead price w as PLN 7,864/t and was 5% lower than in the comparable period of 2024, when it reached PLN 8,291/t. • In PLN terms, the average annual silver price was PLN 4,091/kg and was 37% higher than in the comparable period of 2024, when it reached PLN 2,995/kg.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 26 Smelters’ production • zinc production in Q1 25 amounted to 37.2 thousand tons and was lower by 1.3 thousand tons (3.4%) compared to Q1 24. • refined lead production in Q1 25 amounted to 3.6 thousand tons and was lower by 0.4 thousand tons (10.6%) compared to Q1 24. • silver production (Dore's metal) in Q1 25 amounted to 4.012 tons and was lower by 0.547 tons (12.5%) compared to Q1 24. ZGH "Bolesław" S.A. produces concentrates based on zinc -bearing waste. The production volume of these concentrates in the 3 months of 2025 amounted to 20.2 thousand tons of dry weight, and in the comparable period of the previous year it was 18.6 thousand tons. These concentrates constitute the input for both zinc smelters. MACRO ENVIRONMENT In the first quarter of 20 25, the Polish złoty is strengthening; on February 27, the euro exchange rate equaled the minimum from January 2018, falling to just PLN 4.1270. This means a nearly 25 -cent discount compared to the beginning of November 2024. The złoty has not been so stro ng against the common currency for over four years - the last time it was paid for this much was before the pandemic. You also have to pay less for the dollar. The exchange rate of the American currency stabilized in the last days of March between 3.85 an d 3.89 after the biggest drop in 16 years in the first week of March. As of February 28, 2025, one dollar cost over PLN 4.05, a week later the same dollar cost just over PLN 3.81. In mid-January, one dollar cost almost PLN 4.20, which was one of the highe st values since the beginning of November 2023. It is easy to calculate that in just 8 weeks it has fallen by over 38 groszy. According to analysts from leading financial institutions in the world, the American currency will soon record an upward rebound. The most optimistic forecasts predict that the USD/PLN pair may increase its value by as much as 71 groszy in 2025. On the last day of March, the dollar (USD) was valued at PLN 3.8643, while the euro (EUR) cost PLN 4.1839. The highest price per tonne of zinc (LME zinc cash -settlement) on the London Metal Exchange for 3 months of 2025 was USD 2.966 (March 14) and the lowest was USD 2.699 (February 3). At the end of March 2025, zinc stocks in warehouses registered on the LME amounted to 138 thousand tons. As of the last day of March, the price of the metal used for galvanizing steel is $ 2,829 per ton, which means a drop of $ 137 compared to the maximum price.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 27 Situation on the Zn concentrates market The deficit of zinc concentrates on the market is reflected in rising prices. In mid-March, Trafigura-Nyrstar announced a decision to significantly reduce production at the Hobart smelter in Australia until April this year (280 thousand tons/year) due to deteriorating raw material purchasing conditions, negat ive TC, increased production costs and related financial losses. Probably for the same reasons, Glencore extended the shutdown at the PortoVesme smelter (Italy) until the whole of 2025. On the other hand, Boliden announced the successful completion of an investment aimed at increasing the efficiency of the Odda smelter (Norway) from 200 to 350 thousand tons of zinc per year. Spot TC for concentrates has been systematically increasing for the last five months. Market information shows that TC for most spot contracts concluded in March this year fluctuated in the range of USD 15 -35/tonne, which is the highest value since April 2024. In November 2024, TC was negative and amounted to (-40 USD/t to -60 USD/t). The increase in spot prices was contributed to both production restrictions at the Anaconda smelters in Japan, Saekhpo in South Korea and Trail in Canada, as well as the restart of mines (Tara in Ireland - 100 thousand tons of Zn, Aljustrel in Portugal - 100 thousand tons) and increased production in mines (Kipushi in the Democratic Republic of Congo - 250 thousand tons; Buenavista Zinc in Mexico - 100 thousand tons of Zn; Ozernoye in Russia - 300 thousand tons of Zn; Antamina in Peru - 500 thousand tons of Zn). In February 2025, the attractiveness of impo rted concentrates for China decreased due to the equalization of zinc prices on the London and Shanghai exchanges. ZGH "Bolesław" has contracted approximately 108 thousand tons of zinc concentrates for 2025, of which 27% is covered by benchmark conditions. The benchmark for 2025 for zinc concentrates has been set at a historically low level of USD 80/t. Main factors influencing the results achieved by the zinc segment: - concerns about a potential global recession, - zinc price developments, - exchange rate developments, - price developments for electricity, coke and gas, - prices of CO2 emission allowances. V. Financial instruments and risk management assessment The Parent Company is exposed to various types of financial risks - including changes in market prices of debt and equity instruments, fluctuations of currencies and interest rates. The overall financial risk m anagement program of the Issuer focuses on the unpredictability of financial markets and seeks to minimize the potential negative effects on the Parent Company's financial results. The Department of Financial and Risk Management, supervised
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 28 by the Finance Director, manages the risk in the Parent Company. The main objective is to minimize the negative effects of external changes on the results obtained by the Company. Depending on the type and size of risk, the Company complies with the appropriate instruments for the diagnosis, assessment and hedging. As of 31 March 2025, the subsidiary companies belonging to the Zinc Segment were applying cash flow hedge accounting for commodity and currency swaps in accordance with the rules described in the An nual Report. Historical prices and the related volatility in the electricity and gas price markets resulted in the ZGH Group deciding to analyze the further effectiveness and correctness of the current business strategy in the field of market risk management. The significant increase in energy prices and their forecasts made it impossible to reliably plan zinc production costs. This resulted in the difficulty and uncertainty in estimating the so-called sales margin. Currently, ZGH and HCM are in the process of verifying their "Hedging Strategy" and until the new policy is approved, they will not open any hedging transactions. As of 31 March 2025 they held the following hedging measures active: 1) Currency Hedging Type Description of Hedging Instrument Nominal Amount Fair Value of the Hedging Instrument as of the Balance Sheet Day Effective Portion Taken to Capital Revaluation Reserve Nature of the Risk Type Hedged Against Active currency hedging instruments as of 31.03.2025 r. PLN thousand Cash Flow Hedging forward $ 0.00 0 0 risk from USD/PLN exchange rates 2) raw material Hedging Type Description of Hedging Instrument Nominal Amount Fair Value of the Hedging Instrument as of the Balance Sheet Day Effective Portion Taken to Capital Revaluatio n Reserve Nature of the Risk Type Hedged Against Active commodity hedging instruments as of 31.03.2025 (zinc) PLN thousand Cash Flow Hedging swap 0 0 0 Price Change Risk Zn LME PLN Active commodity hedging instruments as of 31.03.2025 (lead) PLN thousand Cash Flow Hedging swap 0 0 0 Price Change Risk Pb LME PLN Active commodity hedging instruments as of 31.03.2025 (silver) PLN thousand Cash Flow Hedging swap 0 0 0 Price Change Risk Ag LMBA
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 29 Explanations Referring to Balance Sheet Items Related to Derivative Instruments Explanation Referring to the Item: Other long- and Short-Term Investments PLN thousand 31.03.2025 31.03.2024 Long-Term investments 0 0 Short-Term Investments 25 731 31 879 TOTAL, including: 25 731 31 879 a) valuation of derivative transactions 1 669 372 b) securities 23 352 31 434 c) other receivables relating to instruments 710 73 Explanation to Item: Liabilities pertaining to hedging instruments PLN thousand 31.03.2025 31.03.2024 Contracts for Hedging Transactions 0 0 Conclusions of Currency Option Transactions 0 101 Other liabilities related to instruments 0 21 Adjustment pertaining to the amount resulting from the closed transactions settlements with brokers 710 0 TOTAL 710 122 Valuation of Derivative Transactions Valuation of Derivative Transactions PLN thousand 31.03.2025 31.03.2024 Financial Assets Financial Liabilities (Payables) Financial Assets Financial Liabilities (Payables) Commodity Transactions - Zinc 888 0 0 0 Commodity Transactions - Lead 0 0 24 0 Currency Transactions - USD/PLN EUR/PLN 781 0 348 101 Commodity Transactions- Silver 0 0 0 0 Receivables from the Bank due to closed and unsettled transactions 710 0 73 21 Total 2 379 0 445 122 Division of Hedging Instruments Division of Hedging Instruments PLN thousand 31.03.2025 31.03.2024 Financial Assets Financial Liabilities (Payables) Financial Assets Financial Liabilities (Payables) Hedging Instruments 0 0 372 101 Commodity Transactions - zinc 0 0 0 0 Commodity Transactions - lead 0 0 24 0 Currency Transactions - USD/PLN, EUR/PLN 0 0 348 101 Commodity Transactions - Silver 0 0 0 0 Trade Instruments 2 379 0 73 21
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 30 Commodity Transactions- zinc 1 598 0 0 0 Commodity Transactions - lead 0 0 0 0 Currency Transactions - USD/PLN, EUR/PLN 781 0 0 0 Commodity Transactions - silver 0 0 0 0 Other due to instruments 0 0 73 21 Total 2 379 0 445 122 Derivative Transactions Presented in the Profit and Loss Account: PLN thousand 31.03.2025 31.03.2024 Sales of Products Adjustment 0 78 Sales of Goods Adjustments 0 0 Revaluation of Investments 1 456 0 Gains/Loss on Sale of Investments 1 770 0 Total 3 226 78 Cash Result from Reconciliation of Derivative Instruments: PLN thousand 31.03.2025 31.03.2024 Commodity Transactions 2 224 1 935 Currency Transactions -826 0 Total 1 398 1 935 Sales of Products Adjustment Related to Application of Hedging Instruments: PLN thousand 31.03.2025 31.03.2024 Sales Increase 0 182 Sales Decrease 0 -104 TOTAL 0 78 Status of Capital from Revaluation Related to Application of Hedge Accounting (excluding Deferred Tax) PLN thousand 31.03.2025 31.03.2024 Valuation of Open Hedging Instruments: 0 271 - Zn 0 0 - Pb 0 24 - USD/PLN 0 247 - Ag 0 0 - EUR/PLN 0 0 Result from the realization of instruments retained in capital until the hedged item is realized: 0 0 - Zn 0 0 - Pb 0 0 - USD/PLN 0 0 TOTAL 0 271 The result of the hedging instruments valuation, in its portion recogni zed as 'effective hedging', is taken to the capital revaluation reserve. Asian options, aimed at hedging the Company against the change of time value, are taken to costs or to financial revenues.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 31 The trade instruments valuation result is taken to costs or financial revenues. The result from the application of hedging instruments is used to adjust the hedged item (sales). The result from the application of trade instruments is taken to costs or financial revenues. Securities Papiery wartościowe w tys. zł 31.03.2025 31.03.2024 Treasury bonds (Coupon) FL 0 0 Treasury bonds (Zero-Coupon) FL 0 0 Bonds (Zero-Coupon) 0 0 Corporate bonds: 9 858 19 863 -PKO Leasing S.A 9 858 19 863 Investment fund participation units: 13 494 11 571 - Quercus Ochrony Kapitału 0 0 - Quercus Obligacje Skarbowe 0 0 - Generali Aktywny Dochodowy 2 365 130 - Quercus Dłużny Krótkoterminowy 0 0 - Generali Korona Obligacje 1 825 5 131 - Generali Korona Dochodowy 8 102 5 187 - Generali Oszczędnościowy 1 202 1 123 TOTAL 23 352 31 434 Fair value hierarchy Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. This category includes the valuation of securities (Generali and PKO) and corporate bonds. Information on the political and economic situation in Ukraine and its potential impact on the activities of the Issuer and its capital group. Stalprodukt S.A. and the companies of the Capital Group do not h ave any assets in Ukraine. The Stalprodukt company conducts very limited commercial activities with customers in Ukraine and Russia. The share of these customers in the Company's sales structure is insignificant. The main source of supplies of input materi als for the Transformer Sheet Segment are steelworks belonging to the ArcelorMittal concern, located in Poland and Western Europe. The Issuer only makes additional purchases of feedstock from steelworks in Ukraine (this applies only to the Profile Segment). The Zinc Segment does not import raw materials for the production of products from the above-mentioned countries, therefore it does not currently identify any risk regarding the inability to obtain raw materials for the production of its products.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 32 At the same time, the Management Board declares that, as of the moment of submitting this report, there are no significant disruptions caused by the war in Ukraine, directly affecting: reduced revenues, loss of customers or shortage of employees (the reasons for the deterioration of results were presented by the Issuer's Management Board: in point V. Assessment of the results obtained and financial situation ). Solvency, liquidity and collectability of receivables also remain unchanged, and price fluctuations in the case of the Zinc Segment are secured in the form of futures transactions. As at the date of this report, these are the only effects of the political and economic situation in Ukraine that may affect the Issuer's operations. Due to the high dynamics of the development of the situation, it is difficult to predict other possible financial effects that may occur in the long term. In the opinion of the Issuer, these values are not material items and do not have a negative impact on the financial situation of the Stalprodukt S.A. Capital Group. The impact of the coronavirus COVID-19 pandemic on the situation of the Company. When assessing the impact of the COVID -19 coronavirus on the Issuer's operations, it should be emphasized that in the first quarter of 2025, no impact on the operations of operating segments was observed. Others Information 1. In the 1st quarter of 202 5, the Capital Group did not experience any seasonality consequences. During the reporting period no other positions were recorded, significantly affecting the assets, liabilities, equity, net profit or cash flow, which would be untypical in terms of their kind, volume/size or frequency. 2. As of the balance sheet day, the Stalprodukt S.A. Capital Group holds the below mentioned off-balance-sheet contingent liabilities: - guarantees of good workmanship concerning the production and assembly of road barriers totaling PLN 27,052 thousand, - guarantees and s ureties (avals) granted by ZGH “Bolesław” amounting to PLN 16,335 thousand, - ZGH "Bolesław" S.A. issued a promissory note in connection with the contract concluded with the National Center for Research and Development for the amount of PLN 60.5 million for co-financing investment projects, - ZGH "Bolesław" S.A. in the IV quarter of 2019 established in the form of bank guarantees a collateral for claims of the waste holder in favour of the Marshal of the Małopolska Province in the total amount of PLN 9, 582,100. The collateral in the amount of PLN 9,111.0 thousand applies to the installation of rotary kilns used for the production of zinc concentrate from waste zinc -bearing materials in a roll down process. The second collateral in the amount of PLN 21.1 thou sand applies to
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 33 installations used for the production of electrolytic zinc and its alloys. The third, in the amount of PLN 450 thousand includes an installation for the processing of waste in the recovery process. - no hedging’s securing the financing ba nks in respect of the signed credit agreements, which were disclosed in the 2024 report, were subject to change. 3. The pending bankruptcy and composition proceedings cover the Group's receivables totaling PLN 8,948 thousand, wherein Stalprodukt's share amou nts to PLN 1,394 thousand and ZGH “Bolesław” - PLN 7,554 thousand. During the reporting period, no other essential proceedings were instituted or pending before the courts or government agencies, concerning any liabilities or receivables, which might exert a significant influence on the Group's future results and its financial standing. 4. As of the Report submission day, the shareholders holding at least 5% of the total number of votes at the General Meeting of Shareholders are: - STP Investment S.A. holding 1,529,319 shares, accounting for a 28.32 %-share in capital and 4,375,691 votes, accounting for 37.94 % of the total number of votes at the General Meeting and through F&R Finanse sp. z o.o. 43,807 shares, accounting for 0.81 %-share in capital and 43,807 votes, accounting for 0.38 % of the total number of votes at the General Meeting, i.e. the total 1,573,126 shares, accounting for a 29.13 %-share in capital and 4,419,498 votes, accounting for 38.32 % of the total number of votes at the General Meeting; - FABIOS S .A. holding 125,010 shares, accounting for 2.32%-share in the capital and 625,050 votes, accounting for 5.42% of the total number of votes at the General Meeting and through FCASE Sp. z o. o. Sp. k. 175,010 shares, accounting for 3.24%- share in the capital and 875,050 votes, accounting for 7.59 of the total number of votes at the General Meeting, i.e. a total of 300,020 shares, accounting for 5.56%- share in the capital and 1,500 100 votes, accounting for 13.01% of the total number of votes at the General Meeting; - Stalprodukt Profil S.A. holding 579, 652 shares, accounting for 10. 74 %-share in capital and 1,095,488 votes, accounting for 9.50 % of the total number of votes at the General Meeting; - ArcelorMittal Sourcing a société en commandite par actions holding 1,066,100 shares, accounting for a 19.74 %-share in capital and 1 ,066,100 votes, accounting for a 9.24 % of the total number of votes at the General Meeting. As of the Report submission day, the ownership statuses of management and supervision officers in respect of the Issuer's shares are as follows: a/ management officers: - Piotr Janeczek 115,053 shares of nominal value: PLN 230,106,
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 34 - Łukasz Mentel 100 shares of nominal value: PLN 200. In the period pending from the date of issuance of the previous periodic report, no changes occurred in respect of the shareholding status of the managing and supervising officers. 5. Apart from the t ypical and routine transactions, concluded in line with market conditions, with the capital group - associated companies, resulting from the on -going operating activities, neither the Stalprodukt Company, nor its subsidiaries concluded any other transactions with associated companies during the reporting period. 6. Issuer's transactions with related entities: a) Transactions that the parent company concluded with sub sidiaries in the period from 01.01.2025 to 31.03. 2025 - these transactions were eliminated in th e consol idated statements - and from 01.01.202 4 to 31.03.2024 are presented in the tables below (these transactions are excluded in the consolidated statements of the Capital Group): Items the 1st quarter of 2025 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Revenues Costs ZGH “Bolesław” S.A. 33 79 Huta Cynku "Miasteczko Śląskie" S.A. 2 4 55 Boltech Sp. z o.o. 1 2 Stalprodukt-Wamech sp. z o.o. 636 8 174 964 6 533 Stalprodukt-Zamość sp. z o.o. 2 594 2 610 25 Stalprodukt-Ochrona sp. z o.o. 31 2 031 82 1 642 STP Elbud sp. z o.o. 506 3 456 865 6 114 Cynk-Mal S.A. 2 621 2 7 299 2 621 GO STEEL a.s. 24 309 6 914 64 382 13 299 STPower sp. z o.o. (Hotel Ferreus sp. z o.o.) 2 4 PTZ Sp. z o.o. Items the 1st quarter of 2024 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Revenues Costs ZGH “Bolesław” S.A. 33 53 Huta Cynku "Miasteczko Śląskie" S.A. 22 54 Boltech Sp. z o.o. Anew Institute sp. z o.o. - in liquidation 3 2 Stalprodukt-Wamech sp. z o.o. 636 8 828 983 7 058
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 35 Stalprodukt-Zamość sp. z o.o. 2 110 6 2 571 91 Stalprodukt-Ochrona sp. z o.o. 30 1 872 83 1 527 STP Elbud sp. z o.o. 583 3 093 843 5 162 Cynk-Mal S.A. 1 525 1 583 2 101 1 646 GO STEEL a.s. 26 679 4 381 32 674 4 382 Hotel Ferreus sp. z o.o. 2 4 PTZ Sp. z o.o. 3 b) The total value of the Issuer's transactions with associated companies in the period from 01.01.2025 to 31.03.2025 and in the comparable period from 01. 01.2024 to 31.03.2024 is presented in the Table below. Associated entities: Items the 1st quarter of 2025 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Receivables Liabilities Stalnet Sp. z o.o. 5 15 13 36 Items the 1st quarter of 2024 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Receivables Liabilities Stalnet Sp. z o.o. 5 15 13 36 c) The total value of the Issuer's transactions with Entities with joint control or significant influence over the entity in the period from 01. 01.2025 to 31. 02.2025 and in the comparable period fr om 01.01.2024 to 31.03.2024 is presented in the Table below. Items the 1st quarter of 2025 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Receivables koszty Stalprodukt-Profil S.A. 1 3 STP Investment S.A. 1 3 Items the 1st quarter of 2024 PLN thousand Mutual settlements Mutual revenues and costs Receivables Liabilities Receivables koszty Stalprodukt-Profil S.A. 1 3 STP Investment S.A. 1 3
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 36 7. In the reporting period the Group m ade investment outlays on the purchase and formation of tangible fixed assets amounting to PLN 14,990 thousand. No significant fixed asset components have been disposed of during the reporting period. 8. An important proceeding in court is a lawsuit filed by Przedsiębiorstwo Wodociągów i Kanalizacji sp. z o.o. in Olkusz against the ZGH "Bolesław" S.A. Company for payment of mining damages in the amount of PLN 64,015,224.00 (file reference number IX GC 99/14). On 25.04.2018, the Regional Court of Kraków, 9 th Economic Department (joint case file No IX GC 543/13) issued judgments in both of the above mentioned cases: a. regarding the suit brought by Przedsiębiorstwo Wodociągów i Kanalizacji sp. z o.o. in Olkusz against the Company for the payment of compensation in the amount of PLN 64,015,224.00 (File No IX GC 99/14) issued a preliminary judgment, recognizing the action of PWiK sp. z o.o. in Olkusz as justified as a matter of principle. The potential amount of the compensation shall be subject to further proceedings and may total the maximum of PLN 64 million. In connection with the referenced lawsuit, already in 2015, the Company formed a provision amounting to PLN 15 million. The company appealed against the judgment. b. regarding the suit brought by the Company agai nst PWiK sp. z o.o. in Olkusz for declaratory action seeking to establish that the Company is not liable for the lack of water supplies resulting from the mine dewatering activities after the mine liquidation and that the Company is not liable for the poll ution of the existing or former water intakes, PWiK sp. z o.o. (File No IX GC 543/13), issued a judgment dismissing the action. The company appealed against the judgment. On 13.03.2020 the Court of Appeal in Kraków issued the judgement in the case with ref.no AGa 527/18, between ZGH "Bolesław" S.A. and Przedsiębiorstwo Wodociągów i Kanalizacji sp. z o. o. in Olkusz, in which it dismissed the appeal of ZGH "Bolesław" S.A. against the judgement of the Regional Court in Krakow of 25.04.2018 to the case with reference number IX GC 543/13, as well as ordered that the ZGH "Bolesław" S.A. shall pay the costs of proceedings at law in the amount of PLN 8,100 for the benefit of Przedsiębiorstwo Wodociągów i Kanalizacji sp. z o.o. Consequently, the ruling of the Regional Court is final and binding. The above status means that at the moment it has been ruled by a legally -binding decision that ZGH "Boleslaw" S.A. is liable for damages to the Przedsiębiorstwo Wodociągów i Kanalizacji for the consequences in terms of wa ter relations, connected to the future exclusion of the Mine Olkusz Pomorzany drainage and due to this, the discontinuation of water supply to their channels and for possible groundwater pollution.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 37 On July 28, 2020, the company ZGH "Bolesław" S.A. filed a cassation appeal against the above judgment. The Supreme Court in Warsaw By a decision of January 27, 2021, refused ZGH "Bolesław" S.A. accepting a cassation appeal for examination. In this state, the case will be reviewed by the District Court, which will determine the amount of compensation. On September 16, 2021, the Order of the District Court, IX Commercial Division in Kraków, of August 30, 2021, was submitted, obliging PWiK Sp. z o.o. to submit a pleading within one month from the delivery of a copy of this ordinance, and ZGH "Bolesław" S.A. to submit, within one month from the date of delivery of the copy of the pleading from PWiK Sp. z o.o. On November 15, 2021 ZGH "Bolesław" S.A. sent a letter to the Court with a request for the obligation of PWiK sp. z o.o. to submit to the Court and to the requesting party documents and information related to the technical operation of the water supply network. District Court, by order of 10/12/2021, granted the application and obliged PWiK sp.z o.o. to submit such information or submit a letter that they will not submit it. From the substantive point of view, it is important that in the letter referred to above, PWiK sp.z o.o. limited the claim by approximately PLN 10 million and is now seeking a com pensation of PLN 54,838,732.96. On December 10, 2021, a pleading from PWiK Sp. z o.o. was received. It does not contain the information requested by ZGH "Bolesław" S.A. in a letter of November 15, 2021. On February 28, 2022, ZGH Bolesław S.A. submitted their position on the matter. In this letter, a motion to dismiss the claim was filed, as well as formal and evidentiary motions were submitted. The basis for filing a motion to dismiss the claim is an indi cation that PWiK sp. z o.o. did not suffer damage in the civil sense, i.e. there was no loss of property. Further, allegations were made that the possible damage cannot be the own outlay incurred for the investment, and there is no damage in the scope of the so-called stage II, where no expenses were incurred, and their incurring is not a foregone conclusion and is not justified. On March 17, 2022, PWiK sp. z o.o. submitted another letter. On April 5, 2022, the District Court in Kraków called on the parties to the dispute to consider mediation in the case. On July 15, 2022, the District Court in Kraków issued a Decision on the admission of evidence from the Institute's opinion on the legitimacy and amount of the damage suffered so far by PWiK Sp. z o.o., as well as future planned expenses. On September 22, 2022 a procedural document was delivered to the District Court in Kraków - an evidentiary request regarding the evidence from the opinion of the ZGH "Bolesław" S.A. institute. In a letter of November 8, 20 22, the District Court called on the parties' representatives to indicate further proposals for the entity that would prepare the opinion. At the request of the Court, ZGH "Bolesław" S.A. in a letter of December 14, 2022, he indicated the Silesian Universi ty of Technology in Gliwice, Faculty of Environmental Engineering and Energy. Department of Water and Wastewater Engineering. In turn, PWiK Sp. z o. o. suggested 3 universities. The information portal of the District Court in Krakow
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 38 shows that a letter fro m the Court was sent to the Silesian University of Technology in Gliwice, Faculty of Environmental Engineering and Energy, Department of Water and Sewage Engineering, requesting the loan of the case files for a period of one month in order to prepare an op inion. Despite the search for an expert who would provide an opinion in this case for about 2 years, subsequent scientific entities (universities or institutes) refuse to allow the court to conduct it. In this state, the District Court issued a decision of June 23, 2023, in which it referred the case to mediation at the Arbitration Court at the Solicitor General of the Republic of Poland, and the court set a mediation duration of 3 months. Both parties to the case did not oppose mediation, but the plaintiff (PWiK) expressed skepticism. On 21.05.2024, the last mediation meeting took place. During the meeting, mediation took place without concluding a mediation agreement. It should be noted that the positions of the parties were very divergent and the mediati on attempts did not lead to their rapprochement. After the mediation was completed, on 28.05.2024, PWiK sp. z o.o. filed a motion for the issuance of a partial judgment and awarding it the amount of PLN 10,629 thousand with interest from the date of filing the lawsuit to the date of payment. The amount stated is the amount of the plaintiff's own contribution to the investment consisting in the constructed water supply system increased by an amount of over PLN 5,000 thousand constituting the VAT settled by t he plaintiff. In the letter, the plaintiff also indicated the candidacies of further potential experts to conduct an expert opinion on the necessity of the so-called Stage II of the water supply system. In response to the above letter from ZGH "Bolesław" S.A. replied in a letter dated June 17, 2024. In this letter, the Plants: a. Expressed interest in a partial judgment. b. In the scope of a possible partial judgment, they accepted the claim of PWiK sp. z o. o., in the amount of PLN 2 million. c. They indicated that the settlement of the currently constructed system constitutes a resolution to the claim for the amount of PLN 23,808.951. This is the amount at which the plaintiff originally valued the scope of work performed. Consequently, they requested the dismissal of the claim for the amount of PLN 21,808,951. d. They challenged the initial date from which interest should be calculated. e. As regards the claim for an award of over PLN 10 million, it was indicated that PWiK sp. z o.o. is not entitled to demand a second payment of VAT by ZGH "Bolesław" S.A., because it has been settled. Next, the value of funds from the sale of redundant assets, i.e. the Water Treatment Plant in Olkusz, should be deducted from the actual net expenditure incurred by the pla intiff in the amount of PLN 5,225,804.61. This value should then be reduced by the value of the investment that was repaid in water prices. The value should then be reduced by the expenditure related not so much to obtaining water, but to water supply technology. f. The previous evidentiary motions were repeated in the scope of the indicated allegations.
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 39 The Court called on the parties to propose an expert to prepare an opinion in the case. In response to the above motion, ZGH “Bolesław” S.A. indicated that the best solution was to appoint separate experts in the field of demography, hydrogeology and in the broadly understood field of water supply and sanitary technology. In turn, PWiK sp. z o.o. proposed experts in the persons of other universities. Ac cording to the information obtained from the Court, the Wrocław University of Science and Technology expressed its interest in preparing an opinion. It can therefore be assumed that she will be tasked with preparing the opinion. By the end of 2024, the exp ert has not made any moves. The Management Board of ZGH “Bolesław” S.A. intends to propose a partial settlement, under which the Plants will cover the value of net expenditures incurred by PWiK sp. z o.o. on the currently functioning water supply system in the amount of PLN 5,225,704.61 with interest. The settlement is to indicate that the remaining issues remain disputed and will be further processed. The case is ongoing. A provision of PLN 55,000 thousand was created for the entire amount of the claim. The provision was presented in the item short -term provision for liquidation costs, reclamation and environmental remediation costs in the consolidated statement of financial position. 10. Neither the Issuer nor its Capital Group's entities issued, redeemed or paid any debt or other capital securities, apart from the ones referred to herein. 11. During the reporting period and within the submission of the present quarterly report, neither the Parent Company, nor its subsidiaries, granted any sureties, loans, credits or guaranties, apart from the ones referred to herein. 12. On March 28, 2025, as a result of the settlement of the transaction of acquisition of shares offered in response to the "Invitation to submit offers for the sale of shares of Stalprodukt Spółka Akcyjna" ("Invitation"), announced on March 5, 2025, the transfer of ownership and settlement of the acquisition by the Company of 3,831 (in words: three thousand eight hundred thirty-one) treasury shares at a fixed price of PLN 240 per share took place. The transfer of ownership of the shares between the shareholders and the Company took place outside the regulated market through Dom Maklerski BDM S.A. with its registered office in Bielsko -Biała and settled within the deposit and settlement system of the Nationa l Depository for Securities S.A. The basis for the acquisition of shares was the authorization granted by the Ordinary General Meeting of Stalprodukt S.A. on 26 June 2024 (Resolution No. XLIII/16/2024 of 26 June 2024 on the acquisition of its own shares fo r the purpose of redemption). The purpose of the buy -back of its own shares is to redeem them and reduce the share capital of the Company. The nominal value of the acquired shares is PLN 7 662, and their share in the Issuer's share capital is 0.07%. The acquired shares entitle their holders to exercise 18,251 votes at the Issuer's general meeting, which constitutes 0.16% of all votes at the general meeting of Stalprodukt S.A. Before settlement of the above -mentioned, transaction, the Company held 306,837 tr easury shares with a nominal value of PLN 613,674, the share in the
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Abridged Consolidated Financial Report for the 1st Quarter of 2025 Strona 40 share capital of which amounted to 5.68%, which entitled to exercise 337,533 votes at the general meeting, which constituted 2.93% of all votes at the general meeting. In total, the Company currently holds 310,668 treasury shares with a nominal value of PLN 621,336, constituting 5.75% of the share capital of the Issuer and entitling to 355,784 votes, which constitutes 3.09% of the total number of votes at the general meeting. 13. In the Issuer' s assessment, the factors likely to affect the Group's results at least in the perspective of the coming quarter, shall be: - fluctuations of charge prices and demand for Stalprodukt's products, especially for transformer sheets, - price developments for zinc concentrate, - fluctuations of the LME zinc and lead prices and LBM silver prices , - fluctuations of currency exchange rates - prices of electricity and energy raw materials, - price formation and gas availability, - prices of CO2 emission allowances. 14. During the r eporting period and following 31.03.20 25 until the preparation of the Abridged Consolidated Report for the 1st quarter 2025 no other important events took place, apart from the ones mentioned herein, which might significantly affect the Group's standing an d its financial results. The Issuer does not possess any other information, which, in his opinion, is essential for the assessment and changes in the Group's staffing level, assets structure and financial standing, or information essential for the assessment of its potential capacity to settle the liabilities incurred. 15. Pursuant to par. 62, subpar. 1 of the Regulation of the Minister of Finance as of 29.03.2018 on current and periodic information to be disclosed by issuers of securities and conditions for recognizing as equivalent of information whose disclosure is required under the laws of a non-member state (Journal of Laws 2018, item 757 with subsequent amendments ), the Issuer does not submit its separate quarterly report. This Report constitutes a supplement to the Abridged Consolidated Report rendered as the “Stalprodukt S.A. Mid-Year Abridged Financial Report for the 1st Quarter of 2025”. 16. No additional information was appended to the Abridged Consolidated Financial Report for the 1st quarter of 202 5 as, during the reporting period, no other events, concerning the separate report, took place, apart from the ones referred to herein. 17. This Abridged Consolidated Financial Report for the 1st quarter of 2 54 was approved for publication by parent Company's Management Board on 20.05.2025. ……………………….. ……………….………… Łukasz Mentel Piotr Janeczek Member of the Management Board President of the Management Board – CEO – Financial Director