SUMMARY. Composition of the Board of Directors and Board of Statutory Auditors. Directors report on operations. Consolidated annual financial report

Transcription

1 CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017

2 SUMMARY Composition of the Board of Directors and Board of Statutory Auditors. Directors report on operations Consolidated annual financial report Consolidated financial statements Financial statements Explanatory notes: 1. Accounting standards and reporting criteria adopted in the preparation of the consolidated financial statements 2. Notes on the main items of the consolidated statement of financial position 3. Notes to the main items of the consolidated income statement 4. Financial Instruments - additional information 5. Segment information 6. Other information 7. Subsequent events Moby Group Consolidated financial statements as of December 31,

3 COMPOSITION OF THE BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS. * * * Board of Directors Chairman Vincenzo Onorato Vice Chairman and Managing Director Achille Onorato Vice Chairman Alessandro Onorato Board Members Beniamino Carnevale Giuseppe Savarese Eliana Marino Serena Giovidelli Board of Statutory Auditors: Chairman Franco Carlo Papa Statutory Auditors Luigi Giancaspero Flavia Rotondo Simone Allodi Lorenzo Riposati Massimiliano Di Maria Independent Auditors: EY S.p.A. Moby Group Consolidated financial statements as of December 31,

4 DIRECTORS REPORT ON OPERATIONS * * * Dear Shareholder, We are submitting the consolidated financial statements of the Moby Group showing the financial information as of 31 December 2017 and the economic and cash-flow information for the period 1 January 31 December 2017; the comparative data of the financial information refer to 31 December 2016 while that of the economic and cash-flow information refer to the period 1 January 31 December The Group operates in the maritime transports sector (passengers and freight) from mainland Italy and France to the main Tyrrhenian Sea islands: Sardinia, Corsica, Sicily and the Tuscan Archipelago, to the Tremiti Islands and Malta. The Group also operates in the sector of harbour, offshore and rescue tugboats and manages the Olbia port maritime station. As from the first quarter of 2017, the Group started dealing with freight and passenger disembarkation, boarding, loading and ticket office activities at Livorno and Catania ports. As from the second quarter of 2017, the Group started operating cruises in the Baltic Sea between the ports of St. Petersburg, Stockholm, Helsinki and Tallinn. Revenues for the period amount to Euro 586,164 thousand compared to Euro 538,314 thousand in 2016, the operating income amounts to Euro 70,588 thousand compared to Euro 50,396 thousand in 2016, the EBITDA increased to Euro 131,804 thousand compared to Euro 118,506 thousand in The net result for the year 2017 is Euro 24,495 thousand. The increase in revenues equal to a total of Euro 47,850 thousand is mainly due to the positive performance of the freights and passenger sectors; the EBITDA was up by Euro 13,298 thousand, thanks to the sales of vessels in the period for Euro 21,500 thousand. For an in-depth analysis of the income component, reference is made to the ''Performance analysis". On April 26, 2018 in relation to the results achieved, the Parent Company's Directors approved a Business Plan, of which 2018 represents the budget. Significant events in the 2017 period are shown below: - in January, the company Catania Port Service Service S.r.l. (hereinafter also referred to as CPS) was incorporated, with its registered office in Naples and operating offices at the port of Catania. The company, with a share capital of Euro 100 thousand, is 60% owned by the subsidiary CIN. CPS deals with port activities, disembarkation and embarkation, and the sale of passenger and freight tickets on behalf of CIN; - in January, the Parent Company acquired, through the completion of the purchase transaction of 60% of the shares of Renzo Conti S.p.A., begun in November 2016, ownership of the company Livorno Terminal Marittimo S.r.l. (hereinafter also referred to as LTM), operating at Dock no. 1 of the port of Livorno and specialised in the management of Ro-Ro and Ro/Ro-Pax traffic along the so-called ' Autostrade del Mare ; - in January, the subsidiary Enermar finalised the sale of the m/v "Pace" to the associated company Maddalena Lines for Euro 100 thousand; - in February, the subsidiary CIN exercised the option to purchase the chartered m/v "Dimonios" and at the same time entered into a charter and preliminary sale agreement of the unit; on May 25, 2017 for Euro 42,151 thousand, the subsidiary purchased the m/v from an Italian counterparty and the consequent sales transaction, amounting to Euro 53,615 thousand, was completed on June 12, 2017, with a foreign counterparty; - in March, the Parent Company took over the financial lease contract for the purpose of using the m/v "Rio Marina Bella"; the contract, for a value of Euro 6,173 thousand, provides for monthly payments and a term until The m/v is chartered to the subsidiary Toremar and remains operatively used on the Tuscan Archipelago, on the Piombino - Rio Marina route; - in April the subsidiary Moby SPL started its own operations with the launch of the Baltic Sea cruise between the ports of St. Petersburg, Stockholm, Helsinki and Tallinn; Moby Group Consolidated financial statements as of December 31,

5 - in April, the Temporary Consortium including the Parent Company and its subsidiaries LTM and Sinergest, took part in the privatisation tender of 66% of the company Porto di Livorno 2000 S.r.l., and was provisionally awarded the contract for a total amount of Euro 10,741 thousand. The Group is waiting for the final award, which is expected within the second quarter of 2018, following completion of all checks by the competent authorities. The company is engaged in the management of the terminal and the Livorno seaport; - in May the Parent Company signed two MoAs (Memorandum of Agreement) for the sale of the m/v "Moby Baby" and the m/v "Moby Love", sold respectively during the month of June and September for Euro 500 thousand and Euro 1,000 thousand; - in July, the Parent Company completed a real estate investment in Milan, previously held by the Chairman of the Board of Directors, for Euro 7,641 thousand, including ancillary charges; - in July, the Parent Company completed the acquisition of 100% of the company Agence Maritime Bastaise (hereinafter also AMB), previously known as Colonna D'Istria et Fils S.r.l. for Euro 1,300 thousand. The company, with registered office in Bastia, operates as a shipping agency and ticket sales. In addition, the Parent Company acquired, from the previous partners of the new French subsidiary, a property located in Bastia and used as an office by the subsidiary, for Euro 270 thousand. The premises of the new property are also used by the subsidiary Moby Ferries; - in December the subsidiary CIN finalised the sale of the m/v Puglia for Euro 15,100 thousand. That being stated, the numerical information and comments hereafter are aimed to provide for a vision of the Group economic and financial situation, as well as the significant events that influenced the net result. The analysis of risks and uncertainties is presented in the dedicated paragraph. It has to be highlighted that the operations carried out by the Moby Group have been divided into the following operating Strategic Business Units (SBUs): Moby Ferries Strategic Business Unit; CIN Ferries Strategic Business Unit; Tugboats Strategic Business Unit; Port Operation Strategic Business Unit (1) (formerly Maritime Station); Baltic Strategic Business Unit (operational since April 2017); Definitions Below is a list of the definitions of the main terms used. EBITDA EBITDA is the operating profit before amortisation, depreciation, provisions and write-downs. Thus, EBITDA is a measure used by Management to monitor and evaluate the Group's operating performance. EBITDA is not identified as an accounting measure under the scope of IFRS, and therefore should not be considered as an alternative measure for the evaluation of the Group s Operating Profit. Since the composition of EBITDA is not regulated by the reference accounting principles, the determination criterion applied by the Group may not be standardised with other companies and therefore is not comparable. (1) Includes the results obtained by the Olbia Maritime Station Port division and the results obtained by the Livorno Port division, which were attained in the latter case by the new subsidiaries Renzo Conti, Agemar, LTM and CPS. Moby Group Consolidated financial statements as of December 31,

6 Recurring EBITDA Recurring EBITDA is the operating profit before amortisation, depreciation, provisions and write-downs from which operating income and expenses are deducted and which, although inherent to the activity, has a nonrecurring nature and has significantly influenced the results. Thus, Recurring EBITDA is a measure used by Group Management to monitor and evaluate the Group's operating performance. Recurring EBITDA is not identified as an accounting measure under the scope of IFRS and therefore should not be considered as an alternative measure for the evaluation of the Group s Operating Profit. Since the composition of Recurring EBITDA is not regulated by the reference accounting principles, the determination criterion applied by the Group may not be standardised with other companies and therefore is not comparable. Compared to the Directors' Report on Operations for the year ended December 31, 2016, in consideration of the increase and significance of the Group's acquisition and sale of vessels, in line with the fleet management strategies, the Board of Directors of the Parent Company presents, in the following 'Directors' Report on Operations, the income and expenses deriving from the aforementioned activities as 'Recurring'. Contribution margin The Contribution margin is the operating profit before amortisation, depreciation, provisions and writedowns and before fixed overheads not allocated to the operating segments. Thus, the Contribution margin is a measure used by Management to monitor and evaluate the Group's operating performance. The Contribution margin is not identified as an accounting measure under the scope of IFRS, and therefore should not be considered as an alternative measure for the evaluation of the Group's Operating Profit. Since the composition of the Contribution margin is not regulated by the reference accounting principles, the determination criterion applied by the Group may not be standardised with other companies and therefore is not comparable. Fixed overheads Fixed overheads are operating costs not allocated to the operating segments. Specifically, they are the costs of personnel in the administrative structure and corporate functions, office rental costs and service costs. Net operating working capital Net operating working capital is calculated as the difference between current assets and current liabilities, excluding other current assets and liabilities and excluding current financial assets and liabilities. Net operating working capital is not identified as an accounting measure under the scope of IFRS. The determination criterion applied by the Group may not be standardised with other groups and, therefore, the balance obtained by the Group may not be comparable. Net working capital Net working capital is calculated by adding the various receivables and payables to the net operating working capital, plus the other current assets and liabilities, including derivative financial instruments managed in hedge accounting relating to current assets and liabilities (including, by way of example, hedging derivatives for exchange rates for trade payables and for fuel). Net working capital is not identified as an accounting measure under the scope of IFRS. The determination criterion applied by the Group may not be standardised with other groups and, therefore, the balance obtained by the Group may not be comparable. Net invested capital Net invested capital is calculated as net working capital and fixed assets and other long-term assets net of long-term liabilities. Net invested capital is not identified as an accounting measure under the scope of IFRS. The determination criterion applied by the Group may not be standardised with other groups and, therefore, the balance obtained by the Group may not be comparable. Net financial debt Net financial debt is calculated as the algebraic sum of cash and cash equivalents, current financial assets including stocks available for sale, current and non-current long-term financial liabilities and the fair value of hedging financial instruments with reference to financial payables. This figure does not include liabilities related to assets held for sale. Net financial debt is not identified as an accounting measure under the scope of IFRS. The determination criterion applied by the Group may not be standardised with other groups and, therefore, the balance obtained by the Group may not be comparable. Moby Group Consolidated financial statements as of December 31,

7 Performance analysis for the year ended December 31, 2017 The main income data for the year ended December 31, 2017, compared with the year ended December 31, 2016, are shown in the table below: ( thousands) Period ended December 31, 2017 % of revenue 2016 % of revenue Recurring revenue 586, % 538, % Consumption of raw materials and services (357,900) (61.1%) (300,839) (55.9%) Personnel costs (128,635) (21.9%) (113,769) (21.1%) Other operating income (cost) 31, % (5,200) (1.0%) Provisions and write-downs of current assets (2,104) (0.4%) (1,025) (0.2%) Amortization, depreciation and write-downs of fixed assets (59,112) (10.1%) (67,085) (12.5%) Total recurring operating costs (515,822) (88.0%) (487,918) (90.6%) Recurring operating profit 70, % 50, % Financial income 1, % % Borrowing costs (43,022) (7.3%) (38,820) (7.2%) Recurring pre-tax profit 28, % 12, % Non-recurring pre-tax profit % - - Income taxes (4,519) (0.8%) (4,623) (0.9%) Net income (loss) 24, % 7, % Non-recurring income for the year 2017 includes: - the gain of Euro 8 thousand realised by the subsidiary Toremar following the sale of an engine; - the gain of Euro 238 thousand realised by the subsidiary LTM following the sale of 5 port vehicles. As indicated in the paragraph Definitions, with respect to 31 December 2016, the Management considers the acquisition and sale of vessels as a recurring activity, so that for purposes of comparison the following were reclassified as recurring: i) the capital loss of Euro 3,655 thousand of the Parent Company following the sale of the m/v Luigi Pa and ii) write downs for the m/v Love and the m/v Pace respectively for Euro 1,137 thousand and Euro 394 thousand posted after signing the respective MoAs and deeds of sale. In the financial year 2017, the group attained capital gains on the sale of vessels for a total of Euro 21,500 thousand, as better described in the paragraph Other recurring operating income (costs). Following the detailed technical evaluations conducted in respect of the vessels Moby Aki, Moby Wonder, Moby Tommy, Florio, Rubattino, Janas, Sharden, Bithia, Nuraghes and Athara, during 2017 it was deemed appropriate to extend the useful life by 10 years, thus resulting in a 40-year useful life for ferries from the time they become operational, providing lower depreciation for approximately Euro 10.5 million in total. The main variables useful to analyse the Group financial situation are represented by the revenues performance, mainly divided between passengers and freight streams, and by the raw material and services trend, including the cost for fuels, which represents the most significant item in terms of incidence on the revenue. Refer to paragraph Recurring revenues and Recurring operating costs for an accurate analysis of the results carried out by the Group in the period. 1 Moby Group Consolidated financial statements as of December 31,

8 Below is a restatement of the economic data that shows the performance of the EBITDA operating profitability indicator: ( thousands) Period ended December 31, 2017 % of revenue 2016 % of revenue Recurring operating profit 70, % 50, % Non-recurring item % - - Operating profit (loss) 70, % 50, % + Provisions and write-downs of current assets 2, % 1, % +Amortization, depreciation and write-downs of fixed assets 59, % 67, % EBITDA 131, % 118, % - Non-recurring EBITDA % - -% Recurring EBITDA 131, % 118, % EBITDA and Contribution margin by SBU The following table shows the Contribution margin by Group SBU with reference to the period ended December 31, 2017: ( thousands) Period ended December 31, Ferries Moby Group EBITDA 44,962 51,897 Ferries CIN Contribution EBITDA 72,517 57,014 Tugs Contribution EBITDA 10,742 7,421 Port management EBITDA 6,303 2,174 Baltic EBITDA (2,720) - Total EBITDA 131, ,506 - Non recurring Total recurring EBITDA 131, ,506 With reference to the trends related to EBITDA performance, reference should be made to the information provided by paragraphs 'Recurring revenue' and 'Recurring operating costs'. Recurring revenues The following table provides for a detailed breakdown of the Group Revenues by operating segment for the period ended December 31, 2017 compared with the period ended December 31, Revenues Period ended December 31, ( thousands) 2017 % of revenue 2016 % of revenue 2017 compared with 2016 Ferries 552, % 504, % 47,410 Tugboats 21, % 21, % (937) Port management 11, % 10, % 1,439 Other Co.Tu.Nav. 1, % 1, % (62) Total 586, % 538, % 47,850 Ferries The table below shows the breakdown of the revenue deriving from the Ferries operating segment for the shipping connections service: Ferries Revenues Period ended December 31 ( thousands) 2017 % of revenue 2016 % of revenue 2017 compared with 2016 Sardinia % 285, % 13,301 Tuscan Archipelago 49, % 50, % (1,115) Sicily 66, % 50, % 15,863 Corsica 24, % 20, % 3,911 Tremiti Islands 1, % 1, % (100) Baltic 14, % ,673 Subsidies 86, % 85, % 311 Other (*) 10, % 9, % 564 Total Ferries Revenue 552, % 504, % 47,410 (*) includes rentals and revenue of the Subsidiary MLE Moby Group Consolidated financial statements as of December 31,

9 The table below shows the breakdown of the revenue deriving from the Ferries SBU for the service offered: Ferries Revenues Period ended December 31 ( thousands) 2017 % of revenue 2016 % of revenue 2017 compared with 2016 Income from passengers&vehicle transport 285, % 270, % 15,008 Income from freight transport 145, % 119, % 25,829 Income from on-board services 24, % 18, % 5,724 Income from chartering 10, % 9, % 538 Revenue from subsidies 86, % 85, % 311 Total Ferries Revenue 552, % 504, % 47,410 The Group's revenue performance showed an increase in both passengers and vehicle transport (from Euro 270,766 thousand in the period 2016 to Euro 285,774 thousand in 2017), and in the freight segment (from Euro 119,875 thousand in 2016 to Euro 145,704 thousand in 2017). The positive performance recorded for the freight segment is attributable, overall, to the increase in the linear meters invoiced in the 12 months of 2017 compared to 2016, accompanied by a slight increase in tariffs. With reference to the positive performance of the revenues in the 'passengers' segment, on the other hand, an increase was recorded in the average price per ticket and a slight reduction in sales volumes. The 'Sardinia result is in line with the overall trend: the increase in volumes of the 'freight' segment is accompanied by a slight increase in tariffs; while the positive trend in the 'passengers' segment is due to an increase in the average price per ticket. With reference to the 'Sicilia' area, the 'freight' segment recorded a significant increase in sales volumes, accompanied by an increase in tariffs, and a decrease, both in terms of volumes and prices, for the 'passengers' segment. The 'Tuscan Archipelago result, generated by the Parent Company and the subsidiary Toremar, underwent a slight decrease compared to the positive trend of the last few years: while volumes remained stable, a slight reduction was recorded in tariffs both in the passengers and freight segments. The positive result of 'Corsica' is generated by an increase in volumes both in the 'passengers' and the freight' segments, accompanied by an increase in tariffs applied in the passengers segment. Subsidies are referred to: - the public subsidy accrued for the period received by the subsidiary Toremar pursuant to the Service Contract with the Tuscan Region as a continuity guarantee of the public maritime transportation to and from the Tuscan Archipelago for Euro 13,524 thousand; - the consideration deriving from the subsidy paid to the subsidiary CIN by the Italian State to carry out the public interest maritime transportation with major and minor islands, that is Sardinia, Sicily, and Tremiti Islands for Euro 72,686 thousand. The other revenues not allocated to any geographical area refer mainly to the amount generated by the chartering of vessels, which showed a slight increase compared to the 2016 comparative data. Tugboats The following table shows the breakdown of the Revenue from the Tugboats SBU for the period ended December 31, 2017: Tugboats Revenues Period ended December 31, ( thousands) 2017 % of revenue 2016 % of revenue 2017 compared with 2016 Port services 20, % 21, % (1,084) Towing at sea, salvage and anti-pollution services % % 147 Total Tugboats Revenue 21, % 21, % (937) Revenues from Tugboats division are ascribable to the operations carried out by the Parent Company and the subsidiary San Cataldo fleets in the main Sardinian ports and in the Barletta port respectively. The performance in 2017 reflects the reduction of traffic at Cagliari port in Sardinia. Moby Group Consolidated financial statements as of December 31,

10 Port Management The revenues deriving from the 'Port Management' include revenues generated: - by the subsidiary Sinergest in the management of the Olbia Isola Bianca cruise terminal and connections to the Sardinian port's passenger traffic, for Euro 9,469 thousand; - by port operations at Dock n.. 1 of Livorno, managed by the subsidiary LTM, for Euro 1,102 thousand; - by the commissions deriving from the agency operations of the subsidiaries Renzo Conti, for Euro 869 thousand; Recurring operating costs Consumption of raw materials and recurring services A breakdown of the item Raw materials and recurring services consumption for the period ended December 31, 2017 compared with the period ended December 31, 2016 is provided below: Consumption of raw materials and services Period ended December 31 ( thousands) 2017 % of 2017 compared 2016 % of Revenue Revenue with 2016 Fuel (141,097) (24.0%) (102,567) (19.2%) (38,530) Materials and spare parts (11,753) (2.0%) (11,253) (2.1%) (500) Service costs (205,324) (35.0%) (188,939) (35.1%) (16,385) Change in stock on hand 274 0,0% 1,920 (0.4%) (1,646) Total consumption of raw materials and services (357,900) (61.0%) (300,839) (55.9%) (57,061) The 'Cost for the purchase of raw materials and services' includes for Euro 141,097 thousand the expenses for fuels and diesel, which amounted to Euro 102,567 thousand in the comparative 2016 period. The ferries division generates approximately 95% of the costs related to 'Fuel', compared to 'Revenue' the incidence shows an increase from 19.2% in 2016 to 24% incurred in The trend in the cost of 'Fuel' is increasing following a recovery in prices of the underlying raw material. The current macroeconomic scenario, characterised by an unpredictable trend for prices, has led the Group to structure risk management strategies designed to mitigate any changes in the raw material price by entering into hedging derivative contracts. The costs incurred for the purchase of Materials and spare parts used for fleet maintenance remain substantially in line with the year ended December 31, The slight increase is attributable to the greater number of ships in the fleet. It is recalled that the interventions carried out are aimed at maintaining and improving the quality standards of the vessels. The breakdown of Recurring service costs is detailed below: Service costs Period ended December 31 ( thousands) 2017 % of 2017 compared 2016 % of Revenue Revenue with 2016 Port costs (70,911) (12.1%) (65,729) (12.2%) (5,182) Rentals and operating leases (44,280) (7.5%) (33,692) (6.3%) (10,588) General expenses (20,661) (3.5%) (20,869) (3.9%) 208 Agency fees (20,644) (3.5%) (17,275) (3.2%) (3,369) Maintenance (15,214) (2.6%) (15,415) (2.9%) 201 Fleet insurance (10,944) (1.9%) (11,859) (2.2%) 915 Advertising (9,270) (1.6%) (12,169) (2.3%) 2,899 Corporate bodies (6,855) (1.2%) (6,276) (1.2%) (579) Ancillary maritime costs (4,822) (0.8%) (4,132) (0.8%) (690) Bank charges (1,723) (0.3%) (1,523) (0.3%) (200) Total service costs (205,324) (35.0%) (188,939) (35.1%) (16,385) The first five cost items account for over 80% of the total service costs. The most important are Port costs, originated by the ferries sailing and operating activity. The main items of expenditure which highlight the greatest differences compared to the 2016 comparative period are: Moby Group Consolidated financial statements as of December 31,

11 - 'Rentals and operating leases', up following the rental by the Parent Company for the entire year of the m/v "Moby Dada" (start of rental from November 2016) and of the m/v "Anastasia" (start of rental January 2017). In addition, during the year, the "Wedellsborg" and "Superfast Balears" units were rented, used as to 31 December 2017 by the subsidiary CIN; - 'Port Costs', up as a result of the higher volumes recorded in the 'freight' segment and the new routes of the subsidiary CIN. In addition, the costs for the completion of the operations on the Baltic Sea and the costs deriving from the development of the new port activities acquired during 2017 are reported; - 'Agency Fees', the increase reflects the trend in 'revenues for passengers and cars' and sales relating to activities in the Baltic Sea; - 'Advertising', the decrease is due to a different advertising strategy implemented by the Group with respect to the financial year Recurring personnel costs The table below shows the breakdown of personnel costs for the period ended December 31, 2017 compared with the period ended December 31, 2016: Period ended December 31, Personnel costs ( thousands) 2017 % of Revenue 2016 % of Revenue 2017 compared with 2016 Wages and salaries (128,428) (21.9%) (113,508) (21.1%) (14,920) Social security contributions (12,894) (2.2%) (11,730) (2.2%) (1,164) Individual income tax relief pursuant to Law n. 326/ , % 16, % 1,735 Employees leaving entitlement (5,603) (1.0%) (5,086) (0.9%) (517) Total personnel costs (128,635) (21.9%) (113,769) (21.1%) (14,866) The individual income tax relief pursuant to Law 326/2003 refers to the individual income tax deductions that the companies Moby and CIN, in view of the reliefs granted to sector operators that work with vessels entered in the international register, apply for maritime personnel and are not obliged to pass on to the State. Personnel costs are mainly generated by the Ferries division, which accounts for 83% of the total, with a contribution of the Tugboats division equal to 7%, the Port Management division equal to 5%, general structure equal to 4% and Baltic Sea equal to 1%. The increase compared to the 2016 period derives mainly from the personnel of the new LTM, CPS, Renzo Conti acquisitions and from the new routes undertaken by the Group in 2017, with a consequent greater use of seafarers, including new activities on the Baltic Sea. Other recurring operating income (costs) The table below shows a detailed breakdown of Other operating income (costs) for the period ended December 31, 2017 compared with the financial year ending on December 31, 2016: Other recurring operating income (expenses) Period ended December 31 ( thousands) 2017 % of Revenue 2016 % of Revenue 2017 compared with 2016 Capital gains/ (losses) 21, % (3,645) (0.7%) 24,957 Other operating income (cost) 10, % (1,555) (0.3%) 12,172 Other recurring operating income (costs) 31, % (5,200) (1.0%) 37,129 The item 'Capital gains / (Capital losses)' includes: Moby Group Consolidated financial statements as of December 31,

12 - the gains realised by the subsidiary CIN following the sale of the m/v "Dimonios" and the m/v "Puglia, respectively for Euro 9,868 thousand, including Euro 1,326 thousand of selling costs, and Euro 11,452 thousand, including Euro 302 thousand of selling costs; - the capital loss achieved by the Parent Company as a result of the sale of the m/v "Baby" for Euro 205 thousand, including Euro 10 thousand of selling costs. - the capital loss suffered by the Parent Company as a result of the sale of the m/v "Love" for Euro 25 thousand, including Euro 22 thousand of selling costs. The item 'Other operating income (costs)' mainly includes insurance premiums received for Euro 8,052 thousand, following maintenance costs incurred due to failures and posted under the item 'Consumption of raw materials and services'. Moby Group Consolidated financial statements as of December 31,

13 Analysis of the statement of financial position as of December 31, 2017 The following paragraph provides the information related to the main Group consolidated financial indicators for the periods ended as of December 31, 2017 and The reclassified table of Sources and Applications for the consolidated statement of financial position as of December 31, 2017 and 2016 is provided below: ( thousands) December 31, APPLICATIONS Net working capital (71,018) (62,032) Fixed assets and other long-term assets 739, ,382 Long-term liabilities (18,419) (24,495) Net invested capital 650, ,855 SOURCES Net financial debt (496,397) (507,860) Net equity (153,617) (122,996) Sources of financing (650,014) (630,856) Net working capital A detailed breakdown of Net working capital as of December 31, 2017 and 2016 is set out below: ( thousands) December 31, Trade receivables 60,951 44,060 Inventories 15,773 15,812 Trade payables (129,846) (129,158) Net operating Working Capital (53,122) (69,286) Miscellaneous receivables and payables and other current assets/(liabilities) (17,896) 7,255 Net working capital (71,018) (62,031) 'Net working capital' as at December 31, 2017 shows a negative balance of 71,018 thousand euros, down by Euro 8,986 thousand compared to December 31, The trend is influenced by the Miscellaneous receivables and payables and other current assets/(liabilities) offset by Trade payables, offset only in part by the increase in Trade receivables'. Trade receivables' derive mainly from the turnover generated by the freight division and the trend is in line with the increase achieved by the related turnover. The balance of Miscellaneous receivables and payables and other current assets/(liabilities) is negative and consists mainly of i) the assets/liabilities at fair value of the Swap contracts (for a total negative balance as at December 31, 2017 for Euro 3,720 thousand), ii) the amount invoiced in December, by the subsidiary Toremar, to the Tuscany Region and related to the first 2018 down payment for the completion of the services provided under the 'Service Contract' to guarantee the continuity of the public maritime transport service to the Tuscan Archipelago, for Euro 7,768 thousand and iii) is also influenced by the closing of the advance on the purchase price of 60% of the company Renzo Conti S.r.l. for Euro 3,465 thousand following the payment of the balance and the entry of the acquired company into the Group. 'Trade payables' as at December 31, 2017 are in line with the data as at December 31, Moby Group Consolidated financial statements as of December 31,

14 Fixed assets and other long-term assets The table below details the breakdown of the fixed assets and other long-term assets as of December 31, 2017 and 2016: ( thousands) December 31, Other intangible assets 27,505 29,644 Goodwill 48,483 35,400 Property, plant equipment 32,217 20,698 Fleet 623, ,702 Equity Investments 1,724 1,383 Deferred tax assets 5,831 6,555 Fixed assets and other long-term assets 739, ,382 The following table shows the breakdown of the Fleet by operating segment: ( thousands) December 31, Ferries 616, ,759 Tugboats 7,474 8,943 Total Fleet 623, ,702 During the period the operating activities of fleet management have brought investments for Euro 36,331 thousand, of which mainly: Euro 13,598 thousand are ascribable to cyclical maintenance, Euro 4,324 thousand for the renovation of the passenger common areas, Euro 12,480 thousand for structural maintenance on mechanical parts, engines and compliance to the SOLAS regulations, Euro 2,430 thousand for silicone treatment purposes, Euro 1,196 thousand for structural upgrades to safety equipment and energy saving and Euro 1,424 thousand for the investing activity in the tugboats fleet. In addition, the Parent Company completed the following extraordinary transactions: - initial refitting operations completed on the m/v "Niki for Euro 7,578 thousand; - initial refitting operations completed on the chartered m/v Dada and Anastasia respectively for Euro 6,014 thousand and Euro 1,137 thousand; - acquisition of the "Rio Marina Bella" unit following the takeover in a financial leasing contract for a value of Euro 6,173 thousand. Finally, with reference to the fleet, during the year the following sales are highlighted: - in the month of January the subsidiary Enermar finalised the sale of the m/v Pace, collecting Euro 100 thousand from the associated company Maddalena Lines, equal to the net book value of the transferred unit; - in the month of February the subsidiary CIN exercised the option to purchase the chartered m/v "Dimonios" and at the same time entered into a charter and preliminary sale agreement of the unit; on May 25, 2017, the subsidiary acquired the m/v from an Italian counterparty for Euro 42,151 thousand; the subsequent sale transaction was completed on June 12, 2017, with a foreign counterparty, for Euro 53,615 thousand, resulting in the recognition of a capital gain of Euro 9,868 thousand net of selling costs; - in May the Parent Company signed two MoAs (Memorandum of Agreement) for the sale of the m/v "Moby Baby" and the m/v "Moby Love", for a price of Euro 500 thousand and Euro 1,000 thousand respectively. The m/v "Moby Baby" was sold in June resulting in a capital gain, net of selling costs, of Euro 205 thousand; the sale of the m/v "Moby Love" was completed, however, during the month of September leading to a loss, inclusive of selling costs, of Euro 25 thousand; - in December, the subsidiary CIN finalised the sale of the m/v Puglia for Euro 15,100 thousand, recording a capital gain, net of selling costs, of Euro 11,452 thousand. The other investments for the period were mainly related to: i) the realisation of works on the property located in the municipality of Olbia for Euro 325 thousand and on the property in Arzachena for Euro 417 thousand; ii) the purchase by the Parent Company of a property located in the municipality of Milan for Euro 7,641 thousand, previously held by the Chairman of the Board of Directors; iii) the purchase of a property located in Bastia used as office space for Euro 270; iv) the purchase of port vehicles for a total of Euro 841 thousand by the subsidiary LTM and CPS; v) to incur urbanization costs and contribution to the construction cost paid to Moby Group Consolidated financial statements as of December 31,

15 the municipality of Portoferraio for the building complex located on the Elba Island for Euro 1,083 thousand by the subsidiary Andy. Moreover, amortizations, depreciations and write-downs of the recurring results are presented below: ( thousands) Period ended December 31, 2017 % of Revenue % of compared Revenue with 2016 Amortisation of intangible assets (2,685) (0.5%) (2,793) (0.5%) 108 Depreciation of property, plant and equipment (2,721) (0.5%) (1,944) (0.4%) (777) Depreciation of fleet (53,705) (9.2%) (62,348) (11.6%) 8,643 Total depreciation and amortization (59,112) (10.1%) (67,085) (12.5%) 7,973 Following the detailed technical evaluations conducted in respect of the vessels Moby Aki, Moby Wonder, Moby Tommy, Florio, Rubattino, Janas, Sharden, Bithia, Nuraghes and Athara, during 2017 it was deemed appropriate to extend the useful life by 10 years, thus resulting in a 40-year useful life for ferries from the time they become operational, providing lower depreciation for approximately Euro 10.5 million in total. Long-term liabilities The detailed breakdown of the long-term liabilities as of December 31, 2017 and 2016 is shown below: ( thousands) December 31, Provisions for employee benefits (4,033) (3,918) Provisions for risks and expenses (6,797) (7,763) Deferred tax liabilities (7,589) (8,382) Other non-current liabilities - (4,432) Long-term liabilities (18,419) (24,495) With reference to Provisions, the main movements are summarised below: - the use of Euro 1,386 thousand, by the Parent Company, as a result of the settlement of the tax assessment arising from the dispute by the Italian Revenue Agency on the individual income tax for the tax year 2003; - the provision of Euro 906 thousand following the assessment notice received from the subsidiary CIN with reference to the adjustment of taxable income and the turnover declared in 2012; - the use of Euro 955 thousand of the provision to cover the restructuring plan of the subsidiary CIN and the consequent provision to cover future charges for Euro 950 thousand; - the release of an amount of Euro 941 thousand, for non-use, of the customers supplementary indemnity provision by the subsidiary CIN. The movements of the item Other non-current liabilities reflect the change in the fair value of derivative financial instruments signed by the Parent Company for the hedging on fuel prices for Moby Group Consolidated financial statements as of December 31,

16 Net financial debt A detailed breakdown of net financial indebtedness as of December 31, 2017 and 2016 is set out below: ( thousands) 31 December December 2016 Use of credit lines and other short-term financial liabilities (60,849) (3,942) Current portion of medium-and long term financing (69,160) (38,456) IRS fair value on financing-current share (11) (5) Current portion of financing vs Tirrenia A.S. (55,000) (55,000) Current financial indebtedness (185,020) (97,403) Medium-/long-term financing (423,251) (456,540) IRS fair value on financing non-current share - (10) Non-current portion of financing vs Tirrenia A.S. (125,000) (119,392) Non-current financial indebtedness (548,251) (575,942) Total gross financial indebtedness (733,271) (673,345) Other non-current financial assets 3,110 3,104 Other current financial assets Cash and cash equivalents 233, ,919 Net financial debt (496,398) (507,858) 'Net financial debt' shows a total positive change of Euro 11,460 thousand. For a complete picture of cash flows see the paragraph 'Consideration on the financial structure and risks connected to the financial indebtedness'; the significant changes for the period 2017 are shown below: - the Parent Company took over the leasing contract relating to the use of the m/v "Rio Marina Bella", for an amount financed on the takeover date of Euro 4,298 thousand; with reference to the Senior Facilities Agreement: i) honoured the first maturity of the Term line, paying Euro 10,000 thousand in February; ii) used the residual portion of the revolving credit line for Euro 57,820 thousand; - the subsidiary Enermar: i) following the sale in January 2017 of the m/v "Pace" extinguished the related loan with Unicredit as the counterparty was extinguished for a residual amount of Euro 183 thousand; ii) following the sale in December 2017, of the property (as indicated in Note 2.1 Property, Plant and Equipment), extinguished the related loan with Banca Popolare di Novara as the counterparty was paid, paying the residual amount of Euro 168 thousand in the period; 'Net financial debt' as of December 31, 2017 includes the financial debts of the new subsidiaries Renzo Conti and LTM for a total amount of Euro 566 thousand. As mentioned above, the net financial indebtedness of the Group includes the hedging derivative instruments fair value referred to financial liabilities, in this case specifically represented by Interest Rate Swap contracts. The adjusted net financial indebtedness, purified of the fair value of these contracts, which is included in the net financial indebtedness, at the end of each period did not generate any cash inflow or outflow, is described below: ( thousands) 31 December December 2016 Net financial debt (496,398) (507,858) IRS fair value on borrowings Adjusted net financial indebtedness (496,387) (507,843) Moby Group Consolidated financial statements as of December 31,

17 The breakdown of the item Financial income/expenses for the period ended December 31, 2017 compared with the period ended December 31, 2016 is detailed below: Net financial income and expenses Period ended December 31, ( thousands) 2017 % of Revenue 2016 % of Revenue 2017 compared with 2016 Interest expenses (41,399) (7.1%) (37,750) (7.0%) (3,649) Expenses from derivative instruments (1,464) (0.2%) (262) (0.0%) (1,202) Impairment of financial assets - - (484) (0.1%) 484 Foreign exchange losses (159) (0.0%) (324) (0.1%) 165 Borrowing costs (43,022) (7.3%) (38,820) (7.2%) (4,202) Interest income % % 103 Income from derivative instruments 4 0.0% 5 0.0% (1) Income from equity investments % % 144 Foreign exchange gains % % 456 Financial income 1, % % 702 Total financial income (expenses) (41,574) (7.1%) (38,074) (7.1%) (3,500) The cost of the Group's financial indebtedness showed a slight increase compared to the previous year due to the greater Interest expenses and 'Expenses from derivative instruments' recorded during the year. As regards Interest expenses, in 2017 there will be the burden of releasing the remaining actualization quota from the amount due to Tirrenia in A.S. for the part referred to as Deferred price, not bearing interests, equal to 5,608 thousand. For a more information please see the comments in the paragraph Risks related to regulatory regimes. As regards Expenses from derivative instruments, these expenses derive from the recognition in the income statement of the premium paid on the option of the derivative contract signed in 2015 by the Parent Company for Euro 570 thousand, to cover part of the 2017 fuel requirements, and the ineffectiveness detected with reference to a Swap derivative contract underwritten in 2016 by the Parent Company to cover a portion of the 2018 fuel requirements for Euro 894 thousand. With reference to financial income, the Group benefits from distributed profits, to the subsidiaries CIN and Enermar, from equity investments in Terminal Traghetti Napoli, Saimare and Maddalena Lines. At December 31, 2017, these proceeds are collected. Moby Group Consolidated financial statements as of December 31,

18 Related parties transactions The Group has maintained relationships with related parties during the period. Transactions with related parties are carried out under normal market conditions and are part of the Company's ordinary operating activities. The tables below provide details of the financial and capital transactions with related parties for the year 2017 for more details, please see the information provided by the Explanatory notes to the Financial Statements, 6.29 Relations with Correlated Parties. ( thousands) Period ended December 31, 2017 Consumption of raw Other operating Personnel costs materials and services income (cost) Capitalised costs Board of Directors (3.763) (1,755) - - Suppliers (2,469) Total (6,232) (1,755) - 99 ( thousands) Fixed financial assets Trade receivables 31 December 2017 Other receivables and other current assets Trade payables Other current non-current liabilities Provisions for employee benefits Board of Directors 1, , Suppliers TOTAL 1, , Transactions with subsidiaries are shown in the following detail: ( thousands) Transaction carried out by the group with subsidiaries Revenues Period ended December 31, December 2017 Consumption of raw materials and services Other operating income (cost) Capitalised costs Trade receivables Trade payables Maddalena Lines srl Saradecals srl Terminal Traghetti Napoli srl - (1,929) Total 18 (1,998) Moby Group Consolidated financial statements as of December 31,

19 Risks and uncertainties The main risks and uncertainties to which the Group is exposed, as well as the policies relate to the financial risk management, are discussed below. The Group Management is responsible for the management of the business and financial risks by acting in line with the corporate risk management policies. The Board of Directors is informed of the management policies of each of the risks described below. Consideration on the financial structure and risks connected to the financial indebtedness Net cash flow generated during the period and resulting from the cash flow statement of the consolidated financial statements for 2017 amounts to Euro 71,683 thousand, compared with a net cash flow generated in 2016 equal to Euro 87,563 thousand. This flow originated mainly: - from a positive net cash flow generated by operating activities for Euro 101,821 thousand, down compared to 2016 for Euro 60,096 thousand; this reduction is mainly due to: i) a negative change in the 'Net operating working capital' (CCON), influenced by the increase in trade receivables following the excellent performance in terms of turnover of the freight segment, only partially offset by a positive change in Miscellaneous receivables and payables and other current assets/(liabilities) that are impacted by the collection obtained by the subsidiary Toremar on the consideration invoiced in December 2017 of the first 2018 down payment, as indicated in the paragraph 'Net working capital'; and ii) 'Other Changes' mainly containing the proceeds generated by the Group's sales of vessels for Euro 21,500 thousand, as analysed in the paragraph 'Other recurring operating income (costs)', reversed from operations to be included in the cash flow generated by investment activities; - from a net cash flow absorbed by the negative investment activities for Euro 46,871 thousand, an improvement compared to the 2016 period of Euro 2,298 thousand; the flow is mainly influenced by the trends of investments / divestments on the fleet and on tangible fixed assets. As specified in detail in the section 'Fixed assets and other long-term assets', during the period the following costs were incurred: i) ordinary investments on the fleet for Euro 36,331 thousand, ii) initial refitting operations for Euro 14,729 thousand, iii) the purchase of the "Rio Marina Bella" unit for Euro 6,173 thousand and the purchase of the "Dimonios" unit for Euro 42,151 thousand; iv) the purchase of a property located in Milan for Euro 7,641 thousand, previously owned by the Chairman of the Board of Directors. On the other hand, the following units were sold: i) the Puglia unit for a collection net of selling costs of Euro 15,100 thousand, ii) the "Dimonios" unit for Euro 53,615 thousand, and iii) the "Pace", Moby Baby and "Moby Love units for a total of Euro 1,600 thousand; the net cash flow generated by the investment activities also includes the balance paid in January 2017 for the purchase of the shares of the company Renzo Conti, net of cash and cash equivalents received, for Euro 4,490 thousand (in November 2016 an advance payment was paid for Euro 3,465 thousand referred to as the 'Purchase of company shares') and the price paid for the purchase of the shares of the company AMB, net of cash and cash equivalents received, for Euro 522 thousand; - from a positive net cash flow generated by financing activities for Euro 16,733 thousand, an improvement compared to 2016 for Euro 41,917 thousand mainly due to: i) the use of the residual portion of the revolving credit line for Euro 57,820 thousand ; ii) the takeover of the financial leasing contract for the use of the m/v "Rio Marina Bella" for Euro 4,298 thousand, these incoming inflows are partially offset: i) by the payment of the first instalment of the Senior Facilities Agreement for Euro 10,000 thousand ; and ii) the payment of financial charges, net of financial income, for Euro 31,230 thousand. It should be noted that the financial performance of the previous period was negatively affected by the repayment of the previous loans of the Parent Company and the subsidiary CIN for a total of Euro 305,030 thousand and the distribution of reserves by the Parent Company to the shareholder ALE1 B.V. for Euro 142,850 thousand, partially offset by the new finance, net of costs incurred, for Euro 480,218 thousand. Moby Group Consolidated financial statements as of December 31,