Corporate News from 30 June 2020

HMS Bergbau AG: An overall successful financial year 2019

- Total output: EUR 215 million (previous year: EUR 255 million)

- EBITDA: EUR 2,091 thousand (previous year: EUR 2,086 thousand)

- Expansion of trading to include other raw materials

- Equity ratio as at 31 December 2019 at 29 per cent

Berlin, 30 June 2020: 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 2019 financial year.

Despite the relatively challenging market conditions caused by persistent trade conflicts and sharply falling raw material prices, HMS Bergbau AG continued its strategy of expanding its business activities in 2019 to include other raw materials such as manganese ore, chrome ore, clinker, metals, fertilisers and cement products. At the same time, the focus of operating activities remained the international coal business, where the company has global expertise in mapping the entire value chain.

Sales in the course of 2019 were marked by strong trading activities in Asia with increased tonnages accompanied by steeply lower coal prices. As a result, total output in the 2019 reporting period equalled EUR 215 million, compared to EUR 255 million in the same prior-year period. As in the previous year, about 90 per cent of the volumes traded by the Group were generated outside Europe. Despite the decline in sales, EBITDA in 2019 was comparable to that of 2018. Earnings before interest, taxes, depreciation and amortisation in the January to December 2019 period amounted to EUR 2,091 thousand compared to EUR 2,086 thousand in the same prior-year period. Net profit for the period amounted to EUR 517 thousand as at 31 December 2019.

As the 31 December 2019 reporting date, total assets had decreased significantly to EUR 51.1 million compared to EUR 59.1 million as at 31 December 2018. This decline resulted primarily from a reporting date-related reduction in trade receivables on the assets side of the balance sheet coupled with a reduction in trade payables on the liabilities side of the balance sheet. Equity improved significantly as at the 31 December 2019 reporting date rising from EUR 9.5 million as at 31 December 2018 to EUR 15.3 million. The equity ratio on the reporting date was approximately 29 per cent.

In view of the company's medium and long-term objectives, the energy markets are developing positively. Due to the steady increase in world energy consumption in the past several years, the importance of coal as a fossil fuel is set to remain at the same level, if not increase, in the decades come. China, India, and South East Asia will continue to be major consumers of coal. In the management's view, coal and raw material prices will tend to reach higher price levels again in the future - despite the current price setbacks - driven by the strong growth in industrial demand from the Pacific region, global population growth and the general increase in per capita energy consumption as well as supply pressure. The reason for this is that without the flexible conversion of coal into electricity, less prosperity and economic growth could be achieved in many countries.

HMS Bergbau AG is therefore focusing its efforts, first and foremost, on improving its market position in regions of strategic importance to the Group, such as South Africa, India and South East Asia. At the same time, the initial activities in China and the USA will open up new business opportunities.

Even though coal as an energy source is increasingly being viewed negatively in Western countries, HMS Bergbau AG is, in its view, making a major contribution to the economic development of many developing countries that were specifically excluded from the global resolutions on CO2 reduction in the Paris Climate Agreement. The reason for the exceptions is the lack of alternatives to the basic energy supply with coal. These countries often lack, financial resources, and sufficiently beneficial environmental coditions, to ramp up relevant wind and solar energy capacities. For this reason, all UN resolutions support developing countries in the use of fossil fuels until viable alternatives are available to them. By supplying these countries, which represent approximately 90 per cent of the trading volume of HMS Bergbau AG, we not only contribute to economic development but also make an active indirect contribution to the implementation of the Paris Climate Agreement.

HMS Bergbau AG continues to actively contribute to environmental protection. The company intends to have its operating activities certified as CO2-neutral within the next 3 years.

With the outbreak of the corona pandemic, many countries have been subjected to curfews and contact bans, which will lead to a deep recession worldwide in the current year.

So far, HMS Bergbau AG has been able to navigate successfully through the difficult market conditions. Furthermore, the management of HMS Bergbau AG considers the medium-term prospects to be promising. Its international positioning and the constantly growing range of services should enable it to generate improved results and increased sales volumes in the future.

The company's 2019 Annual Report is now available for download.

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.