RESBUD SE published its financial results for the third quarter of 2023.

RESBUD SE published its financial results for the third quarter of 2023.

RESBUD SE published the consolidated condensed financial statements of the Group for the third quarter of 2023. In this reporting period, the RESBUD Group reported consolidated revenues of PLN 10,5 million, operating profit of PLN 762 thousand. PLN and a net loss of PLN 3,9 million. After the first nine months of this year The group records consolidated revenues of PLN 15,8 million, an operating loss of PLN 39,9 million and a net loss of PLN 43,9 million. The net loss and decline in revenues compared to last year are primarily caused by the sale of the Group's Russian assets - Energokomplekt OOO - and the acquisition of a controlling stake in the Uzbek company Elektrqishloqqurilish JSC, one of the leading contractors of power grid facilities in Central Asia. This transaction not only marks the finalization of the transformation of the Group's portfolio after the outbreak of the war in Ukraine, but also enables RESBUD SE to expand on the dynamically growing market of Central Asia.

• Sales revenues of the RESBUD Group after the first nine months of this year. amounted to PLN 15,8 million and are lower compared to the same period last year. The decline in revenues on an annual basis was mainly due to the sale of the Russian asset - Energokomplekt OOO - and the acquisition of Grid Solutions LLC and United Grid Solutions LLC, which hold a controlling interest in Elektrqishloqqurilish JSC.
• After the first nine months of this year The RESBUD Group has an operating loss of PLN 39,5 million. This result was primarily influenced by the accrued interest on loans received, exchange rate differences and the loss on the sale of shares of the Russian company Energokomplekt OOO based in Yekaterinburg.
• EBITDA result, understood as the operating result increased by depreciation, after the first nine months of this year. amounted to PLN -38,9 million and is caused by write-offs made on the sold Russian asset and the results of the purchased two companies with a controlling interest in Elektrqishloqqurilish JSC.
• After the first nine months of this year The RESBUUD Group recorded a net loss of PLN 39,5 million, while in the corresponding period of the previous year it generated a profit of PLN 11,8 million. The significant decrease in net profit y/y is caused by the factors listed above.

- Our results in the third quarter of this year, as well as in the previous two quarters, were primarily influenced by the sale of Russian assets in exchange for 100 percent. shares in two companies with a controlling interest in the Uzbek company Elektrqishloqqurilish JSC. In recent years, the company was subject to the privatization and transformation process, generating lower sales results than in previous years. We are currently focusing on its restructuring and development. We expect that the first financial effects of our activities will be visible soon, and Elektrqishloqqurilish JSC's sales result at the end of this year will be several dozen percent higher than in 2022. – says Krzysztof Długosz, President of the Management Board of RESBUD SE.

In the third quarter of this year there were significant changes in the organization and structure of the RESBUD Group, which had a significant impact on the results achieved. On September 6, 2023, RESBUD SE and its subsidiary - Conpol sp. z o. o. - concluded an agreement under which they purchased 100% of shares in Grid Solutions LLC and United Grid Solutions LLC, which own a controlling stake in Elektrqishloqqurilish JSC based in Tashkent (Republic of Uzbekistan), i.e. 95 shares representing 144% in the share capital of Elektrqishloqqurilish JSC. The shares in these companies were acquired upon signing the agreement.

In order to pay the price for the purchased shares, RESBUD SE and Conpol sp. z o. o. transferred 100% of the shares in Energokomplekt OOO, previously part of the RESBUD Group, to the seller. All companies belonging to the RESBUD Group as of September 30, 2023 were included in the shortened consolidated report for the third quarter of 2023 and are subject to full consolidation.

- The energy sector of the Republic of Uzbekistan is developing intensively and actively financing. One of the key local players on the construction market in the energy sector is Elektrqishloqqurilish JSC. Almost a century of construction experience, the company's expert staff and its technical resources guarantee a wide range of works performed by it - from low-voltage lines to 500 kV lines or the construction and reconstruction of power substations. We intend to fully use this potential, using our know-how and experience to build a strong position of the RESBUD Group on the dynamically developing Uzbek market – says Krzysztof Długosz, President of the Management Board of RESBUD SE.

Due to the fact that Elektrqishloqqurilish JSC has two subsidiaries specializing in production - metal structures in Namangan and finished products in Kuvasay - it is possible to conclude turnkey construction contracts. Moreover, the branch system allows the company to cover the entire Republic of Uzbekistan - mechanical construction columns are located from Nukus in the west to Andijan in the east, and the company's developed internal logistics ensures efficient functioning of all company departments and optimal use of its capabilities and resources.

The dynamic development of Elektrqishloqqurilish JSC under the new management is confirmed by the agreements signed in September this year. new contracts - the first one, worth approx. PLN 5,8 million, with the Chinese company "HEX Solar" LLC for the performance of works under the project "Construction of a 220 kV overhead line Substation "Sherabad-2" - Substation "Surkhan-500"" and the second , worth approximately PLN 1,9 million, from China Nuclear Industry 22 ND Construction for the supply of materials under the project titled "Construction of a 110 kV/10 kV transmission line for the new AVVAL-LAGON sewage pumping station."

However, in October this year Elektrqishloqqurilish JSC signed two more contracts for a total value of nearly USD 6 million. The first contract concluded covers the performance of works under the project titled: "Construction of 500 kV overhead lines from the Koltsevaya substation to the Tashkient substation and from GES-20 to the Koltsevaya substation." The ordering party is the Chinese company Xian Electric Engineering CO LTD - one of the largest Chinese contractors for engineering works on transmission and distribution networks in foreign markets. The subject of the second contract is the supply of reinforced concrete structures, 110kV transmission towers with accessories and the construction of a 110kV electricity transmission line for the new Avval-Lagoh pumping station, commissioned by China Nuclear Industry 22ND Construction CO LTD.

Analyzing the results of Polish companies from the RESBUD Group, in the period from July to September 2023, Conpol Sp. z o. o. achieved a weaker sales result than in the corresponding period of 2022, while Uniwersim Sp. z o. o. by the end of September 2023 achieved 42% more sales compared to the same period in 2022.

In the period in question, the Management Board of RESBUD SE also continued work on changing the parent deposit for all the company's shares. As a result, from October 12, 2023, the parent depository for RESBUD SE, instead of the current NASDAQ CSD branch in Estonia, is the National Depository for Securities SA based in Warsaw. All shares of RESBUD SE, i.e. both listed shares and shares not traded on the regulated market, will be subject to registration with the National Depository for Securities in Warsaw.

The Management Board of RESBUD SE also continued the procedure of admitting 78 shares issued by way of a bonus issue to trading on the Warsaw Stock Exchange on the basis of Resolution No. 873 of the Extraordinary General Meeting of Shareholders of May 421, 3. As a result of these works, RESBUD SE, among others, published on November 23 this year. new Information Document.

- The shares are covered by funds accumulated in supplementary capital, which, in accordance with legal regulations, cannot be used to pay dividends to shareholders. In order to enable shareholders to participate in the indirect distribution of funds from supplementary capital and in response to the expectations expressed by some shareholders, the Management Board decided to propose to the General Meeting the possibility of increasing the share capital from own funds, i.e. carrying out the so-called bonus issue – says Joanna Dyja, Member of the Management Board of RESBUD SE.

About the company Elektrqishloqqurilish JSC

Elektrqishloqqurilish JSC is a company operating in the electricity sector, engaged in the production, construction, installation and modernization of power lines and the construction of power substations in the Republic of Uzbekistan, as well as the production of steel and reinforced concrete products. The company employs approximately 900 people and has 430 machines, including: trucks, bulldozers, truck cranes, hydraulic machines, excavators and mobile power stations. The company's developed internal logistics ensures efficient functioning of all company departments and optimal use of its capabilities and resources.

Elektrqishloqqurilish JSC is considered one of the leading contractors of power grid facilities in Central Asia - it has performed power electrical works for such manufacturing companies as: Hyundai Engineering, Eriell, Hengyuan Group Co. Ltd. or Lukoil. The company's assets include the Namangan Iron Structures Plant, the Kuvasoy Concrete Products Plant, the Tashkent Technological Devices Production Plant and other assets.

RESBUD SE

RESBUD SE is a modern, dynamically developing European holding, operating in the construction, power and civil engineering markets as well as supplies of materials for the construction and energy sectors, listed on the Warsaw Stock Exchange since 2007. It combines a modern approach to business with 70 years of experience in the construction industry. The companies included in his investment portfolio (Conpol Sp. z o. o., Uniwersim Sp. z o. o. and Elektrqishloqqurilish JSC based in Tashkent - through the companies: Grid Solutions Sp. z o. o. and United Grid Solutions Sp. z o. o.), deal primarily with : construction of civil engineering facilities on road and railway routes, erection of reinforced concrete structures, construction works, civil engineering, production of bitumen and concrete, production, construction, installation and modernization of power lines and construction of energy substations, as well as delivery of materials and equipment for large investments infrastructure.

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