PODRAVKA GROUP INTERIM CONSOLIDATED NON-AUDITED FINANCIAL STATEMENTS FOR THE PERIOD JANUARY DECEMBER

Transcription

1 PODRAVKA GROUP INTERIM CONSOLIDATED NON-AUDITED FINANCIAL STATEMENTS FOR THE PERIOD JANUARY DECEMBER 2009

2 2

3 BALANCE SHEET as at in thousands of HRK Item AOP code Last year (net) Current year ASSETS A) RECEIVABLES FOR SUBSCRIBED BUT NOT PAID-IN CAPITAL B) NON-CURRENT ASSTES I. INTANGIBLE ASSETS II. TANGIBLE ASSETS III. NON-CURRENT FINANCIAL ASSETS IV. RECEIVABLES V. DEFERRED TAX ASSETS C) CURRENT ASSETS I. INVENTORIES II. RECEIVABLES III. CURRENT FINANCIAL ASSETS IV. CASH AT BANK AND IN HAND D) PREPAID EXPENSES AND ACCRUED REVENUE E) LOSS BEYOND CAPITAL F) TOTAL ASSETS G) OFF-BALANCE RECORDS LIABILITIES AND SHAREHOLDERS EQUITY 016 A) CAPITAL AND RESERVES I. SUBSCRIBED CAPITAL II. CAPITAL RESERVES III.RESERVES FROM PROFIT IV. REVALUATION RESERVES V. RETAINED EARNINGS VI. LOSS CARRIED FORWARD VII. PROFIT FOR THE BUSINESS YEAR VIII. LOSS FOR THE BUSINESS YEAR IX. MINORITY INTERESTS B) PROVISIONS C) NON-CURRENT LIABILITIES D) CURRENT LIABILITIES E) DEFFERED PAYMENT OF COSTS AND ACCRUED REVENUE F) TOTAL LIABILITIES G) OFF-BALANCE RECORDS 032 APPENDIX to balance sheet(to be filled in by entrepreneur that prepares consolidated annual financial report) CAPITAL AND RESERVES 1. Subscribed to shareholders in mother company Subscribed to minority interest (net) 3

4 CASH FLOW STATEMENT - INDIRECT METHOD for the period to in thousands of HRK 1 CASH FLOW FROM OPERATING ACTIVITIES 1. Profit before tax 2. Depreciation 3. Increase in current liabilities 4. Decrease in current receivables 5. Decrease in inventories 6. Other increase in cash flow I. Total increase in cash flow from operating activities 1. Decrease in current liabilities 2. Increase in current receivables 3. Increase in inventories 4. Other decrease in cash flow II. Total decrease in cash flow from operating activities A1) NET INCREASE IN CASH FLOW FROM OPERATING ACTIVITIES A2) NET DECREASE IN IN CASH FLOW FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTMENT ACTIVITIES 1. Cash inflows from sales of non-current tangible and intangible assets 2. Cash inflows from sales of ownership and debt instruments 3. Interest income 4. Dividend income 5. Other cash inflows from investing activities III. Total cash inflows from investing activities 1. Cash outflow for purchase of non-current tangible and intangible assets 2. Cash outflow for acquisition of ownership and debt financial instruments 3. Other cash outflow for investing activities IV. Total cash outflow for investing activities B1) NET INCREASE IN CASH FLOW FROM INVESTING ACTIVITIES B2) NET DECREASE IN CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCIAL ACTIVITIES 1. Cash inflow from issue of ownership and debt financial instruments 2. Proceeds from the credit principal, promissory notes, borrowings and other loans 3. Other proceeds from financial activities V. Total cash inflows from financial activities 1. Cash outflow for repayment of credit principal and bonds 2. Cash outflow for dividends paid 3. Cash outflow for financial lease 4. Cash outflow for purchase of treasury shares 5. Other cash outflow for financial activities VI. Total cash outflow for financial activities Item C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES Total increase in cash flow Total decrease in cash flow Cash and cash equivalents at the beginning of the period Increase of cash and cash equivalents Decrease of cash and cash equivalents Cash and cash equivalents at the end of the period AOP code Last year Current year

5 PROFIT & LOSS ACCOUNT for the period to in thousands of HRK Item 1 I. OPERATING REVENUE 1. Sales revenue 2. Revenue from use of own products, goods and services 3. Other operating revenues II. OPERATING EXPENSES 1. Impairment of inventories 2. Increase of inventories 3. Material costs 4. Staff costs 5. Depreciation 6. Other costs 7. Value adjustment 8. Provisions 9. Other operating costs III. FINANCIAL REVENUES 1. Interests, currency differences, dividends and other revenues based on relation with related parties 2. Interests, currency differences, dividends and other revenues based on relations with not related parties 3. Portion of revenue from associated parties and participating interests 4. Unrealized gains (revenues) 5. Other financial revenues IV. FINANCIAL EXPENSE 1. Interests, currency differences and other expenses with related parties 2. Interests, currency differences and other expenses with unrelated parties and other entities 3. Unrealized loss (expense) from financial assets 4. Other financial expense V. EXTRA - OTHER REVENUES VI. EXTRA - OTHER EXPENSE VII. TOTAL REVENUES VIII. TOTAL EXPENSE IX. PROFIT BEFORE TAX X. LOSS BEFORE TAX XI. INCOME TAX XII. PROFIT IN THE PERIOD XIII. LOSS IN THE PERIOD AOP code Comulative Quartely Comulative Quartely Last year Current year APPENDIX to P&L account (to be filled in by entrepreneur that prepares consolidated annual financial report) XIV.* PROFIT SUBSCRIBED TO HOLDERS OF CAPITAL IN MOTHER XV.* PROFIT SUBSCRIBED TO MINORITY INTERESTS XVI.* LOSS SUBSCRIBED TO HOLDERS OF CAPITAL IN MOTHER XVII.* LOSS SUBSCRIBED TO MINORITY INTEREST

6 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY from to Item 1 1. Subscribed capital 2. Capital reserves 3. Reserves from profit 4. Retained earnings or loss carried forward 5. Profit or loss for the bussines year 6. Revaluation tangible assets 7. Revaluation intangible assets 8. Revaluation non-current financial assets 9. Other revaluation 10. Effect of changes in foreign exchange rates 11. Deffered taxes 12. Protection of cash flow 13. Change of accounting policy 14. Correction significant mistakes of previous period 15. Other changes of capital 16. Total increase or decrease of equity 16a. Subscribed to shareholders in mother company 16b. Subscribed to minority interest AOP code Last year in thousands of HRK Increase Decrease Current year

7 Main characteristics and events in Podravka Group in period January December Podravka Group net profit is significantly influenced by negative one-off items: HRK million deriving from actions under criminal investigation, and HRK 68.4 million deriving from regular business. 2. Net profit corrected by the fore mentioned negative one-off items, i.e. net profit from regular business, is HRK 55.9 million, which is 35% increase compared to net profit from 2008, while operating profit from regular business is HRK million, which is 10% increase compared to Podravka Group operating costs are reduced by 6% compared to Indeptedness of Podravka Group is reduced by HRK million. 5. Podravka d.d. and Droga Kolinska d.d. signed an agreement according to which Podravka d.d. became the owner of the Belsad brand. 6. Both a licence agreement, giving Podravka d.d. the right to use the brand Gušti, and a service production agreement for the same brand were signed with Improm d.o.o. in liquidation. 7. Podravka d.d. issued the first instalment of commercial bills amounting EUR 18 million and the total value of the issue program was HRK 350 million. 8. Podravka d.d. established a limited liability company in Turkey named Podravka International Gida Sanayi ve Diş Ticaret Ltd. Şti. 9. A new storage distribution centre opened at Dugopolje. 10. Mr.Darko Marinac resigned from the position of the president and member of the Supervisory Board of Podravka d.d. 11. Belupo s health institute Deltis Pharm d.o.o. entered the wholesale drug business thus joining Pharma Net, a network of pharmacies that connects about a hundred pharmacy outlets. 12. In 2009 Podravka d.d. cancelled 257 work contracts for either business or personal reasons, providing severance payments, all with the purpose of rationalizing costs and optimizing business processes. 13. On 14 October 2009 Croatian Privatization Fund passed the statement of recall of the past members to Podravka d.d. Supervisory Board, Mr. Franjo Maletić and Mr. Boris Hmelina. On the same date Croatian Privatization Fund passed the statement on appointment of new members to Podravka d.d. Supervisory Board, Mr. Miljenko Javorović and Mr. Ljubo Jurčić. 14. At its session held on 22 October 2009 the Government reached a decision on listing Podravka d.d. among companies of special interest for the Government. The Government s portfolio currently holds 20.46% of Podravka d.d. shares. 7

8 15. Podravka d.d. Supervisory Board, on its session held on 23 October 2009, concluded to extend of fivemember Management Board to seven members. Next to existing ones, new appointed members are Ms. Lidija Kljajić and Mr. Krunoslav Bešvir. Pursuant to Article 261 of the Company Law, the Supervisory Board also appointed Mr. Branko Vuljak, Supervisory Board member, as Management Board deputy member. 16. Podravka d.d. Supervisory Board, on its session held on 18 November 2009, elected Mr. Ljubo Jurčić as Podravka d.d. Supervisory Board President. Supervisory Board also reached a decision on recall of the current Podravka Management Board President, Mr. Zdravko Šestak and the Board members, Mr. Josip Pavlović and Mr. Saša Romac. Podravka Supervisory Board also reappointed Mr. Branko Vuljak as deputy Board member, and other Management Board members' terms have been confirmed until 31 May Management Board informed the public that potential risks, which came out of operations under investigation, are estimated to HRK 310 million. 18. Podravka d.d. Supervisory Board, on its session held on 21 December 2009, appointed Mr. Miroslav Vitković as Podravka d.d. Management Board President. Podravka d.d. Supervisory Board also agreed with the Management Board's business plan for Both the Supervisory and the Management Boards of Podravka d.d. concluded that Podravka d.d. will try to revive olive oil and olives production under SMS brand. 20. The total value of capital investments in the observed period amounted HRK million. Sales of the Podravka Group Podravka Group achieved sales revenue in the amount of HRK 3,587.8 million and revenue in 2009 is 2% lower compared to the same period of the year before. On Croatian market achieved sales was HRK 1,868.7 million, representing 4% sales drop. Important to mention is that food seasonings stopped their sales drop and Vegeta sales in Croatian market is the same as in Significant 10% growth is recorded by tomato products and 5% by baby food. Meat program also records 1% organic growth. Pharmaceuticals sales in Croatia decreased by 2%, emphasizing here that the negative influence of decreased prices of pharmaceuticals this year also contributed significantly to such result. Croatian market, affected by the crisis, in 2009 records a realistic annual turnover decrease in retail (15,6% 1 ) which also influenced the achieved sales. 1 Source: Central Bureau of Statistics; Monthly Statistical Report, no. 12 (data refers to the period ) 8

9 In foreign markets the sales was HRK 1,719.1 which is 5.9 million increase, but also an increase of foreign markets relative share in total sales. Foreign markets, especially Central Europe, were severely influenced by the negative exchange rates which reduced sales revenues for about HRK 40 million. Foreign markets achieved a mild sales increase resulting from the sales increase on both the markets of South-East Europe (9%) and Western Europe, Overseas Countries and Orient (3%). Sales growth on the markets of South-East Europe was achieved on the markets of Bosnia and Herzegovina (15%), Slovenia (11%) and Montenegro (9%) while on the markets of Western Europe, Overseas Countries and Orient a higher increase of sales was recorded on the markets of the USA (14%), Austria (17%), Australia (6%) and Germany (3%). One-off items included in the financial statements of the Podravka Group for the year 2009 The results of the Podravka Group for the year 2009 are under the strong influence of negative one-off items which have primarily resulted from operations currently under the investigation. Therefore, an adjustment of loans granted and accrued interest in the amount of HRK million has been made in the financial statements of the Podravka Group due to the uncertainty of collection of payments as well as provisions for guarantees issued in the amount of HRK 107 million. The adjustment of loans granted covers the long-term loan granted to the company SMS d.o.o. in the amount of HRK 65 million with accrued interest, short-term loans granted to the Fima Group in the amount of HRK 79.7 million with accrued interest and the short-term loan granted to the company Gradec d.o.o. in the amount of HRK 10.7 million. All the relevant loans except the long-term loan to the company SMS d.o.o. had been granted and paid during A guarantee to the Fima Group in the amount of HRK 107 million was also issued in 2009, therefore provisions had also been made due to the assessment of its realisation, which was confirmed on 26 January Among other negative one-off items we would like to single out expenses occurred from taking care of redundant labour (severance payment in the amount of HRK 28.9 million), matching land registrations in Podravka d.d. records with land registry certificates (HRK 11.8 million), conciliation of securities values of HRK 16.9 million and other adjustments (HRK 10.7 million). The operating profit in the year 2009 after corrections for the above mentioned one-off items amounts to HRK 170 million which is HRK 15 million higher than the operating profit of the year 2008 disclosed in a comparative manner. The increase of operating profit is 10%. Net profit corrected for one-off items amounts HRK 55.9 million and represents increase of 35% compared to adjusted net profit in

10 Operating profit of the Podravka Group without one-off items HRK mn 250 EBIT 2008 without one-off items (50) (100) LAND 11 LOANS GIVEN11 TOTAL 22 (150) 67 (200) EBIT 2009 SMS GRADEC FIMA GROUP PROVISIONS VALUE VALUE SEVERANCE EBIT EBIT FOR ADJUSTMENT ADJUSTMENT PAYMENTS WITHOUT ONE- WITHOUT ONE- GUARANTEES OF ASSETS OF LIABILITIES OFF ITEMS ISSUED TO OFF ITEMS FIMA GROUP PODRAVKA GROUP REPORTED RESULTS RESULTS CORRECTED FOR ONE-OFF ITEMS changes in reported results changes in results corrected for one-off items / / 2008 SALES 3, , , , % -2% EBITDA % 4% EBIT % 10% NET profit % 35% 10

11 Additional comments A reduction of deposit values in the amount of 6.2 million EUR at OTP Bank Nyrt Budapest was not recorded in the disclosed financial statements as documents indicating the recovery or decrease of this amount have been unavailable. Therefore, at this moment taking into consideration the elements of uncertainty, it is not possible to define proper treatment in financial statements and the Management Board has decided to disclose the deposit in its nominal value and when adequate documents are made available the relevant item should be reviewed. We would also like to mention that in the final, audited financial statements of the Podravka Group for 2009 a correction will be made in recording revenue from the sales of the factory Umag (2007) which will effect changes in the currently disclosed unaudited financial statements. Comment on balance sheet items Total assets of the Podravka Group at 31 December 2009 totalled HRK million and have been reduced compared to the balance at the year end of 2008 by HRK 492 million or 11%, respectively. The greatest impact on the reduction of Podravka Group assets was effected by the reduction of current assets in the amount of HRK 358 million (73% of the total reduction of Group assets), while the impact of fixed assets depreciation is significantly lower (HRK 134 million or 27% in the total reduction). The reduction of property, plant and equipment value resulted from less investments from depreciation and a reduction of land values in compliance with the inventory conducted in the year 2009 (HRK 11.8 million). There was also a reduction in the value of intangible assets (depreciation of the brand Warzywko by HRK 28.9 million). Long-term financial assets were reduced due to reclassification of the loan granted to SMS d.o.o. into shortterm debt and also recording the adjusted value of the mentioned loan at the year end. Trade accounts receivable in the amount of HRK 126 million, reduction of deposits and cash had effect on the reduction of current assets. The credit indebtedness of the Podravka Group was reduced compared to 31 December 2008 by HRK million (long-term debt reduced by HRK 69.7 million and short-term loans by HRK million). The average interest rate of the Podravka Group was reduced from 7.1% at 31 December 2008 to 5.4% at 31 December All companies within the Podravka Group settled all their liabilities arising from both principal and interest payment of long-term and short-term loans regularly. In February 2009, a tranche of commercial notes in the amount of HRK 18 million was successfully issued. The commercial note programme was arranged by Raiffeisenbank Zagreb in the total amount of HRK 350 million. In terms of the indebtedness currency structure it is evident that the portion of loans in HRK is being reduced. At 31 December 2009 placements in HRK in the total credit indebtedness participated with a 42% share while placements in EURO had a 51% share. 11

12 During the year 2010 further reduction of indebtedness of the Podravka Group is planned along with regular settlement of all loan liabilities. The increase of deferred payment of expenses also has to be mentioned as a liabilities item where the liability arising from the guarantee issued in the amount of HRK 107 million has been recorded. Main guidelines of the 2010 Business Plan The Management Board of Podravka d.d. has brought and the Supervisory Board accepted the Business Plan for the year The Business Plan anticipates further costs and expense rationalisation, primarily administrative expenses, which should provide for profitability growth. The planned operating margin shall range around 6% contributing to the SBA Food and Beverages profitability growth but also a recovery of profit margins of the SBA Pharmaceuticals under the influence of the consolidation of Farmavita d.o.o. and its sales structure, respectively. The growth of sales revenue is planned at a 2% level. During the year 2010 special attention shall be given to reducing indebtedness so that by the year end of 2010 indebtedness is planned to drop by at least HRK 100 million. 12

13 13