Translation for information purposes only
Individual quarterly report as of 30/09/2024
according to the Financial Supervisory Authority Regulation no. 5/2018
Report date | November 15th, 2024 | |
Name of the issuing entity | VRANCART SA | |
Registered office | Adjud, 17 Ecaterina Teodoroiu | |
Street, Vrancea County | ||
Telephone/fax no.: | 0237-640.800; 0237-641.720 | |
Tax Identification Number | 1454846 | |
Trade Registry registration no.: | J39/239/1991 | |
Subscribed and paid-in share capital | RON 201.011.575 | |
The regulated market onto which | Bucharest Stock Exchange | |
the securities issued are traded | ||
The main characteristics of securities | Standard Category | |
issued by the issuer | ||
1. The economic and financial situation of VRANCART SA |
During the first nine months of 2024, the performance of Vrancart SA ("the Company") was impacted by the lower volumes of sales, as well as by the lower prices in the corrugated cardboard and corrugated cardboard packaging market, which led to lower revenues than in 2023. In the third quarter a 9% increase in sales was observed compared to second quarter, respectively 17% compared to first quarter. This positive trend is expected to continue during fourth quarter.
Packaging demand continued to increase during third quarter, the management is expecting improved results also for the last quarter of 2024. The increase in the minimum wage from October 1st, 2023 and July 1st, 2024 respectively continued to impact personnel-related costs of current year, starting January 1st, 2025 we will have to bear a new increase. Financing costs, although down by 13% compared to the same period of the previous year, still remain at high levels.
EBITDA was RON 32 million (vs. RON 40 million budgeted) in absolute value, and the relative value recorded a level of 11% (vs. 12.5% budgeted). The Company's management has set the target of maintaining until the end of the year the trend recorded in the third quarter, in which it obtained an absolute EBITDA 19% higher than in the second quarter and 57% above that recorded in the first quarter. At the percentage level, EBITDA in the third quarter was 12.5%.
Compared to the same period of the previous year, the net result recorded was RON -7.5 mil. (vs. RON +8,9 mil.). The main causes that negatively impacted the result for 9 months were related to the increase in the minimum wage in the economy, the price increases for raw materials and tariffs for services and utilities, the cost of amortization, but also the still high cost of financing, as well as the application of the minimum tax on turnover. All this eroded our profitability margin in the first 9 months.
The current liquidity was 0.95 (vs. 1.42), being influenced by the reimbursement of the loan from bond issues by the deadline (March 15th, 2024), as well as short term loan drawn for financing the RON 29 million PNRR grant, which we estimate to repay by the end of the year, once the subsidy related to the 20MWh photovoltaic park is collected.
The (simplified, unaudited) interim individual financial statements as of September 30th, 2024, in accordance with the Order of the Minister of Public Finance No. 2844/2016 for the approval of the Accounting Regulations compliant to the International Financial Reporting Standards, applicable to trade companies whose securities are admitted to trading on a regulated market are attached to this report.
The interim individual financial statements for the third quarter of 2024 have not been reviewed by an independent external auditor, as this is not a legal or statutory requirement.
1.1. Balance sheet items
(all items in RON, unless otherwise stated) | September 30th, | December 31st, | |
2024 | 2023 | ||
Non-current assets | 523,768,144 | 464,830,509 | |
Current assets, out of which: | 192,335,034 | 168,699,328 | |
- | Trade receivables | 88,978,866 | 67,913,133 |
Total assets | 716,103,178 | 633,529,837 | |
Total liabilities, out of which: | 328,059,826 | 270,002,131 | |
Current liabilities | 202,102,513 | 158,463,201 | |
Equity, out of which: | 388,043,352 | 363,527,706 | |
- | Reserves | 178,914,329 | 179,304,246 |
- | Retained earnings | 8,117,448 | 15,101,795 |
As of September 30th, 2024 and during the period January 1st - September 30th, 2024, the evolution of the main financial indicators was as follows:
- The Company's non-current assets increased by 13% as a result of tangible assets increase by RON 51.340.992.
- The Company's current assets increased by 14% as of September 30th, 2024 compared to the beginning of the year, mainly due to the increase in trade receivables with 31%, generated by an increased activity level in the third quarter.
- The trade receivables increased by RON 21.065.733 in the first nine months of 2024 compared to the beginning of the year, following the increase in the sales volume, and granting longer collection terms in order to stimulate sales.
- The total liabilities recorded as of September 30th, 2024 amount to RON 328.059.826, up by 22% compared to the amount recorded as at January 1st, 2024, mainly due to the financing of the additional working capital, by using short-term credit lines, but also long-term loans for financing the investment projects approved by the General Shareholders' Assembly in April 2024 and previously.
- The amount of equity as at March 31st, 2024 is RON 358.537.898, down by 1% compared to the beginning of the year, as a result of the loss recorded in the 1st quarter. The Company's
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reserves remained at a constant level from the beginning of the year.
1.2. The individual statement of comprehensive income
(all items in RON, unless otherwise stated) | September 30th, | September 30th, |
2024 | 2023 | |
Operating income, out of which: | 301,488,433 | 342,097,256 |
Sales Income from customers agreements | 295,591,958 | 321,181,850 |
Operating expenses | (301,288,357) | (324,763,593) |
Operating result | 200,076 | 17,333,663 |
EBITDA | 31,678,362 | 44,940,564 |
EBITDA (%) | 11% | 14% |
Financial income | 1,277,112 | 838,938 |
Financial expenses | (7,412,388) | (8,563,484) |
Total income | 302,765,545 | 342,936,194 |
Total expenses | (308,700,745) | (333,327,077) |
Gross profit/loss | (5,935,200) | 9,609,117 |
Net profit/loss | (7,528,238) | 8,884,117 |
The Company's performance in the first nine months of 2024 was influenced by the raw materials price increase of and utility tariffs increase, generated by the trends in the international market and which were also observed in the local market, the tariffs of services provided by third parties, as well as the impact of the implementation of the new minimum wages on the economy starting from 01.10 .2023, and 01.07.2024 respectively and the minimum turnover tax.
Also, during the 9 months of 2024, the Company faced a series of one-off expenses of RON 3 million as a result of the restructuring of unprofitable activities on top of the minimum turnover tax in the absolute amount of RON 2 million, which means that from these two components alone the result would have been higher by RON 5 million.
The results obtained during this period, which are reflected in negative profitability, but balanced financial indicators, confirm the resilience of the Company to adverse changes in the market.
In the first three quarters of 2024, the main indicators of the Individual Statement of Comprehensive Income are as follows:
- The total income during the period under review was RON 302,765,545, down by 12% compared to the same period of the previous year, due to the decrease in sales prices offered by the Company in the attempt to maintain the level of production and sales. However, if we analyze only at the level of the third quarter, the year 2024 was better than 2023 by 7% in terms of third party's sales of finished products.
- The total expenses of the period amounted to RON 308,700,745, down by 7% compared to the same period of the previous year, utilities cost recorded a 34% decrease following the positive impact of optimised acquisitions.
- The Company's operating profit recorded an erosion because of the previously listed effects,
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which particularly affected the first 2 quarters of the year, and which the management was able to identify and start to remedy from the 3rd quarter, when the first positive results were obtained, the net profit of this quarter being RON 1 million.
1.3. Cash flows
(all items in RON, unless otherwise stated) | September 30th, | September 30th, |
2024 | 2023 | |
Cash flows from operating activities | ||
Proceeds from operating activities | 321,374,797 | 394,098,760 |
Payments for operating activities | (289,049,401) | (328,475,740) |
Net cash flows from operating activities | 32,325,396 | 65,623,020 |
Cash flows from investment activities | ||
Proceeds from investment activities | 3,322,780 | 2,366,272 |
Payments for investment activities | (99,757,292) | (45,453,511) |
Net cash flows from investment activities | (96,434,512) | (43,087,239) |
Cash flows from financing activities | ||
Proceeds from financing activities | 149,171,072 | 48,894,047 |
Payments for financing activities | (83,603,145) | (56,309,407) |
Net cash flows from financing activities | 65,567,927 | (7,415,360) |
Cash flows as at the beginning of the period | 2,088,021 | 1,288,888 |
Cash flows as at the end of the period | 3,546,832 | 16,409,309 |
The balance of cash and cash equivalents recorded as of September 30th, 2024 is positive, respectively RON 3.546.832. During this period, the Company was able to manage its cash flows effectively and paid all the amounts owed entirely and on time, also financing its investment activity from operating activities and by accessing bank loans.
2. Analysis of the activity of the company VRANCART SA
2.1. Presentation and analysis of trends, elements, events or uncertainty factors that affect or could affect the liquidity of the issuer, compared to the same period from last year
The Company's management assesses the results obtained on September 30, 2024 as unsatisfactory, as being lower than the previous year, being affected by the negative developments in prices and tariffs, increasing, for raw materials and utilities, as well as the evolution of the minimum wage in the economy, the introduction of the minimum turnover tax and the one-off elements necessary to adapt the business to the new market conditions. The implemented control mechanisms and levers ensure the preservation of the company's financial balance, while the company's development strategy is correlated and adapted to market requirements and its development needs.
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2.2. Presentation and analysis of the effects on the financial situation of the issuer of all capital expenditures, current or anticipated (specifying the purpose and sources of financing of these expenditures) compared to the same period last year
The value of the investments made by the Company in the first nine months of 2024 was RON 86,072,733, compared to the value of RON 29,157,549 from the same period of the previous year. Significant investments were made in the 20MWh photovoltaic park, as well as upgrades and equipment to existing production machinery. They have benefited from adequate funding, including a non-reimbursable component that is expected to be collected by the end of the year.
The company will continue to implement the investment projects related to the year 2024, projects that were approved by the General Meeting of Shareholders in April 2024, the funding sources being both own sources and attracted sources (bank loans for investments).
The Company expects that the investments made during the year 2024 will significantly positively impact on the financial situation of the Company in the medium and long term, starting from 01.01.2025.
The economic and financial indicators on September 30, 2024 are presented as follows:
Indicator's | Calculation Formula | UM | September | September |
name | 30th, 2024 | 30th, 2023 | ||
Current liquidity ratio | Current assets/Current liabilities | ratio | 0.95 | 1.42 |
Quick liquidity ratio | (Current assets - Inventories)/ | ratio | 0.63 | 0.88 |
Current liabilities | ||||
Inventory turnover | Turnover/Inventories/period no. | rot/yr | 6 | 7 |
days*360 | ||||
Days Receivables | Receivables/Turnover*period no. | days | 81 | 65 |
days | ||||
Days Payables | Short-term trade payables/ | days | 51 | 34 |
Turnover*period no. days | ||||
Operating profitability | Operating profit/Turnover | % | 0 | 5 |
Gross profit rate | Gross profit/Turnover | % | -2 | 3 |
Indebtedness ratio | Borrowed capital/Equity x 100 | % | 118 | 39 |
Borrowed capital/Employed | % | 54 | 28 | |
capital x 100 | ||||
Non-current assets | Turnover/Fixed assets | ratio | 0.6 | 0.7 |
turnover | ||||
General and immediate liquidity registered a decrease on September 30, 2024 compared to September 30, 2023, as a result of the investments made, partially covered by long-term bank loans as shown above.
The trade receivables collection period increased due to higher sales in the third quarter by 17% compared to the first quarter and by 9% compared to the second quarter. The number of credit days obtained from suppliers was negotiated better, at an average of 51 days, and the speed of inventory turnover recorded a slight decline due to lower sales in the first two quarters.
The profitability of the operating activity decreased in the first 9 months of 2024 compared to the same period of the previous year. The gross profit rate decreased as of September 30, 2024 compared to the same period in 2023, as a result of the increase in the cost of production and the decrease in selling prices. However, if we analyse only at the level of the third quarter, in 2024 a net accounting profit of RON 908 thousand was obtained (RON 1.6 million without one-off expenses), better than RON 343 thousand in 2023.
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2.3. Presentation and analysis of events, transactions, economic changes that significantly affect the income from the core activity. Specifying the extent to which revenues were affected by each element identified. Comparison with the corresponding period last year.
The company VRANCART SA has no events and transactions to report that could significantly affect the income from the core activity.
3. Changes affecting the issuer's capital and administration
3.1. Description of the cases in which the issuer was unable to meet its financial obligations during the period analysed
The company VRANCART SA was not in any situation unable to meet its financial obligations during the period analysed. The company does not register outstanding debts to public budgets and to its commercial partners.
3.2. Description of any change in the rights of holders of securities issued by the issuer
The company VRANCART SA has no changes to report regarding the rights of the holders of issued securities.
4. Significant Transactions
On April 29, 2024, the Ordinary General Meeting of Shareholders approved the individual and consolidated financial statements as of December 31, 2023, the Income and Expenditure Budget of VRANCART SA for the financial year 2024, together with the Investment Plan for the year 2024.
On July 4, 2024, the increase of the share capital was completed, currently all the legal procedures for registering the new value of the share capital with the competent authorities have been completed. A number of 318,899,098 ordinary registered shares were subscribed, with a nominal value of RON 0.1/share, for a total value of RON 31,956,862.07, of which RON 31,889,909.80 represents the total nominal value, and RON 66,952.27 is the issuance premium.
CIUCIOI Ionel-Marian | COMAN Gabriela |
Chairman of the Board of Directors | Financial Manager |
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Translation for information purposes only
VRANCART SA
INTERIM INDIVIDUAL FINANCIAL STATEMENTS (SIMPLIFIED, UNAUDITED)
AS OF SEPTEMBER 30th, 2024
Issued in accordance with
the Order of the Public Finance Ministry no. 2844/2016
for the approval of the Accounting regulations compliant with the International Financial Reporting Standards,
applicable to trade companies whose securities are admitted to trading on a regulated market
VRANCART SA
INTERIM INDIVIDUAL FINANCIAL STATEMENTS AS OF SEPTEMBER 30th, 2024
Table of contents
Individual statement of financial position | 1 - 2 |
Individual statement of comprehensive income | 3 |
Statement of changes in equity | 4 |
Individual statement of cash flows | 5 |
Notes to the individual financial statements | 6 - 7 |
Vrancart SA
Individual statement of financial position as of September 30th, 2024
(all amounts in RON, unless otherwise stated)
September 30th, | December 31st, | |
ASSETS | 2024 | 2023 |
415,971,574 | 364,630,582 | |
Tangible assets | ||
Prepayments for tangible assets | 12,867,349 | 19,706,483 |
Intangible assets | 684,451 | 775,019 |
Goodwill | 3,380,811 | 3,380,811 |
Financial assets | 62,587,328 | 62,587,328 |
Other non-current assets | 28,276,631 | 13,750,286 |
Total non-current assets | 523,768,144 | 464,830,509 |
Inventories | 64,352,593 | 66,810,661 |
Trade receivables | 88,978,866 | 67,913,133 |
Prepaid expenses | 1,308,139 | 972,024 |
Current profit tax receivable | - | 835,908 |
Other receivables | 14,534,042 | 10,353,820 |
Cash and cash equivalents | 3,546,832 | 2,088,021 |
Assets held for sale | 19,725,761 | 19,725,761 |
Total current assets | 192,335,034 | 168,699,328 |
TOTAL ASSETS | 716,103,178 | 633,529,837 |
EQUITY | ||
Share capital | 201,011,575 | 169,121,665 |
Premiums related to capital | 842,449 | 775,497 |
Revaluation reserves | 103,936,472 | 104,393,341 |
Legal reserves | 13,345,280 | 13,345,280 |
Other reserves | 60,790,128 | 60,790,128 |
Retained earnings | 8,117,448 | 15,101,795 |
Total equity | 388,043,352 | 363,527,706 |
LIABILITIES | ||
Long-term loans | 90,981,143 | 67,826,778 |
Long-term leasing liabilities | 13,667,481 | 21,333,018 |
Subsidies | 7,737,690 | 8,761,341 |
Long-term debts to employees | 444,379 | 444,379 |
Deferred profit tax liabilities | 12,686,563 | 13,160,453 |
Provisions | 440,057 | 12,961 |
Total long-term liabilities | 125,957,313 | 111,538,930 |
1
Vrancart SA
Individual statement of financial position as of September 30th, 2024
(all amounts in RON, unless otherwise stated)
September 30th, | December 31st, | |
Short-term trade payables | 2024 | 2023 |
55,461,246 | 32,527,381 | |
Short-term loans | 125,487,622 | 62,541,116 |
Short-term bond loans | - | 38,250,000 |
Short-term leasing liabilities | 7,916,244 | 9,300,908 |
Subsidies | 1,360,293 | 1,361,714 |
Short-term debts to employees | 5,283,442 | 5,979,709 |
Current profit tax liabilities | 703,577 | - |
Other short-term liabilities | 5,890,089 | 8,502,373 |
Total current liabilities | 202,102,513 | 158,463,201 |
TOTAL LIABILITIES | 328,059,826 | 270,002,131 |
TOTAL EQUITY AND LIABILITIES | 716,103,178 | 633,529,837 |
The interim financial statements were approved by the Board of Directors.
General Manager | Financial Manager |
Nicu Ciprian Fedor | Gabriela Coman |
2