Corporate News from 30 September 2019

HMS Bergbau AG: 1. Half year with positive margin development

- Total output EUR 117 million (previous year: EUR 140 million)

- Slightly improved gross margins

- Adjusted EBITDA: +20% to TEUR 681 thousand (previous year: TEUR 568 thousand)

- Positive outlook for 2019

Berlin, 30 September 2019: The Management Board of HMS Bergbau AG, one of the leading independent raw materials marketing and trading companies in Germany, today published the financial statements for the first six month of the current 2019 financial year.

The first half of the 2019 financial year was marked by trade disputes, fears of global recession and crises in the Middle East. Recessionary worries and repeated downward revisions in the IMF's economic forecasts were key factors that led to a significant decline in coal prices.

Despite the relatively difficult market conditions, HMS Bergbau AG was able to increase its volumes and its gross margins through its international business activities. Total output in the first six months of the current 2019 financial year amounted to EUR 117 million in comparison to EUR 140 million in the same period of the previous year. Despite the decline in sales, a slightly higher operating result was achieved in the first half of 2019 in comparison to the same period in the prior year. In the months from January to June 2019, the operating result amounted to EUR 751 thousand compared to EUR 738 thousand in the same prior-year period. Net profit for the period as at 30 June 2019 also increased slightly to EUR 319 thousand compared to EUR 128 thousand (excluding non-recurring effects from the sale of an investment in the amount of EUR 1,098 thousand) as at 30 June 2018. Total assets decreased sharply from EUR 59.1 million as at 31 December 2018 to EUR 46.5 million as at the 30 June 2019 reporting date. This decline resulted from a reduction in trade receivables on the assets side of the balance sheet combined with a reduction in trade payables on the liabilities side. As at the 30 June 2019 reporting date, equity improved slightly from EUR 9.5 million as at 31 December 2018 to EUR 9.8 million, resulting in an equity ratio as at the reporting date of roughly 21 per cent.

In addition to the steady increase in volumes traded via the logistics structures of HMS Bergbau AG, the consistent expansion of the international network with long-term, profitable business relationships with producers and consumers of the steel, cement and power plant industries is essential. In the current 2019 financial year, we once again have gained new customers in Indonesia, South Africa, China and the United States.

In 2019, HMS Bergbau AG continued its strategy of business expansion to include additional raw materials such as ore, metals and cement products and plans to develop into an international raw material trading company. The focus of its activities remains the coal business. HMS Bergbau AG has spent decades building its widely recognised expertise throughout the entire value chain from mining to logistics to customer deliveries.

The management of HMS Bergbau AG is confident in its strategy, despite the ongoing political discussions in Germany about abolishing coal-fired power generation. Energy markets are continuing to develop favourably given the ongoing steady rise in world energy consumption. The importance of fossil fuel coal, above all, as a primary source of energy is set to continue if not strengthen in the decades to come. China, India and Indonesia will remain major consumers of coal due to the growing industrial demand from the Pacific Rim, global population growth and rising per capita energy consumption. Living standards and economic growth in these countries would be lower, were it not for the flexible power generation of coal. For this reason, China and India alone will be building hundreds of new coal-fired power plants over the next few years featuring state-of-the-art carbon filters and maximum efficiency.

HMS Bergbau AG's international positioning and ever-expanding range of services have fuelled the company's steady development in recent years. Based on these, the aim is to generate higher sales and earnings in the future. To accomplish this, the management will systematically pursue its chosen path in the current financial year and is forecasting a slight increase in volumes in the 2019 financial year. The gross margin and net profit are expected to match the levels achieved in the 2018 financial year. HMS Bergbau AG's planning assumes relatively free markets without any major trade restrictions.

The Management Board

About HMS Bergbau AG:

Berlin-based HMS Bergbau AG is one of the leading independent raw materials marketing and trading companies in Germany, specialising in the international purchase and sale of coal and raw materials such as ore, fertilizers and cement products. Its customers include renowned energy producers and other industrial consumers worldwide, with whom it works closely to provide raw materials. HMS Bergbau AG is active primarily in Asia, Africa and Europe and also develops first-class raw material resources. Through its Polish subsidiary Silesian Coal International Group of Companies S.A., the company also has licences to explore coal reserves in Silesia. HMS Bergbau AG also handled complex transport solutions for its customers. The company was established in 1995 and is listed on Germany's Frankfurt Stock Exchange in the Basic Board segment.