ADRIS GRUPA d. d.

Rovinj

ADRIS GRUPA d. d.

CONDENSED NON-AUDITED CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS for the period ended 30 June 2021

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Content

MANAGEMENT REPORT ......................................................................................................... 3

A SET OF CONDENSED NON-AUDITED CONSOLIDATED AND SEPARATE FINANCIAL

STATEMENTS ............................................................................................................................ 7

Consolidated and separate statement of comprehensive income (cumulative) ...................................................... 8

Consolidated and separate statement of comprehensive income (quarter) ............................................................ 9

Consolidated and separate statement of financial position .................................................................................... 10

Consolidated and separate statement of changes in equity .................................................................................... 12

Consolidated and separate statement of cash flows ................................................................................................ 16

SELECTED NOTES TO THE FINANCIAL STATEMENTS ...................................................... 17

  • 1. GENERAL INFORMATION ............................................................................................................................ 17

  • 2. SIGNIFICANT ACCOUNTING POLICIES ...................................................................................................... 18

  • 3. SEASONAL AND CYCLIC CHANGES ............................................................................................................ 18

  • 4. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD ....................................................... 19

  • 5. INFORMATION ON BUSINESS SEGMENTS ............................................................................................... 20

  • 6. EARNING PER SHARE ................................................................................................................................... 21

  • 7. CAPITALIZED COST OF SALARIES .............................................................................................................. 21

  • 8. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ...................................................................... 21

  • 9. SHARE CAPITAL ............................................................................................................................................. 22

  • 10. DEFERRED TAXES .................................................................................................................................... 22

  • 11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES ............................................................................. 23

  • 12. DIVIDEND PAYMENT DURING THE REPORTING PERIOD ................................................................ 24

  • 13. SIGNIFICANT TRANSACTIONS BETWEEN RELATED PARTIES ......................................................... 24

  • 14. EVENTS AFTER THE END OF THE REPORTING PERIOD ................................................................... 24

Declaration by the persons responsible for the preparation of the statements ....................... 25

ADRIS GRUPA d. d.

Rovinj

MANAGEMENT REPORT for the period ended 30 June 2021

1. PRINCIPAL ACTIVITY OF THE COMPANY

The principal activity of the company ADRIS GRUPA d. d. (hereinafter: "Adris" or the "Company") is management and investment. The aim of the Company as a corporate centre is to coordinate investment, management, development and operation of the system as a whole.

Adris (hereinafter: the "Group") comprises three strategic business units: tourism, managed by Maistra d. d., manufacture of healthy food managed by Cromaris d. d., and insurance managed by Croatia osiguranje d. d.

2. SIGNIFICANT EVENTS

The coronavirus pandemic that broke out in early 2020 continues into 2021. The Covid-19 third wave is behind us, but some European countries are at the start of the fourth one. Due to the Covid-19 crisis, restrictions on cross border travel were introduced or a complete travel ban imposed in the first half of this year. Partially or fully closed HORECA segment on the key markets exerts an impact on the structure and the level of consumption. There is an increasing sense of uncertainty, although the vaccination coverage, partially acquired immunity of the population and coming of the warmer season give cause for modest optimism and expected recovery. New variants of the virus are major challenges having significant effect on tourism-dependent economies. Experiences of the Mediterranean competitors, like Portugal and Spain, show that a country could be added to the red list within a very short period of time meaning the tourist season would actually end.

In such circumstances, the consolidated total revenue generated by Adris grupa in the first half-year of 2021 amounted to HRK 2.48 billion, and is 16% higher if compared to the first half-year of 2020. Revenues from sales of goods and services amounted to HRK 2,24 billion, up 17% compared to last year's revenues. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) reached HRK 357 million which represents an increase of 31%. Net profit for the first six months of 2021 amounted to HRK 54 million and is HRK 100 million higher than last year.

Despite a high amount of uncertainty, tourism investment continued and tourism business achieved growth

Activities in the Group's tourism business are still reduced due to the ongoing coronavirus pandemic. Sales generated in the first half of the year amounted to 381 thousand units which represents an increase of 93% if compared to the last year's financial period and/or 50% of the record results achieved in 2019. The Istrian tourism division generated 61% of 2019 sales, Zagreb hotels 29%, and Dubrovnik hotels only 11%. Revenues from sales of goods and services amounted to HRK 283 million, up 138% in comparison with a year before, or 49% of the revenues generated in 2019. Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to HRK 47 million, and EBIT to minus HRK 99 million.

The results for July and the current booking show that many people are interested in visiting Rovinj in the peak season and in the late season as well.

The Group's tourism business started a number of transformation initiatives in all areas: marketing, sales, operations and supporting functions. Special importance is given to user experience improvement and to revenue management supported by advanced analytics and further development of direct sales channels. This year as well, substantial investments have been made in improvement of the existing products, mostly in camping facilities. Investments planned for this year amount to approximately HRK 200 million. Preparations for Zagreb hotels and for the hotel Marjan in Split have continued.

Croatia osiguranje - higher profits in the first half-year

Croatia osiguranje maintains its leading position on the Croatian market with the total share of 28%. The total gross written premium generated by Croatia osiguranje in Croatia amounted to HRK 1,688 million, up 8% in comparison with the same period in the previous year. Consolidated gross written premium, including the regional subsidiaries, amounted to HRK 1,995 million or up 7% from the same period last year. The combined operating ratio of the CO Group was 94.4 or 2.5% higher than last year, primarily due to a series of natural disasters in the Republic of Croatia.

In the first half-year of 2021, Croatia osiguranje reported a consolidated net profit of HRK 209 million which is an increase of 2%. A number of transformation initiatives launched in 2019 and 2020 brought about optimized business processes and improved business efficiency. The preparation phase for a new cycle that started earlier this year is now finalized, implementation of which should cause an increase in premium and more effective cost management by the second half of the year. Since the subsidiaries are also included in this transformation programme, it is expected that positive experiences shall be transferred from the headquarters to the regional subsidiaries.

In the first half-year of 2021, strong support for the introduction of Laqo insurance - the first fully digital insurance solution in the region - continued. Such support, both in marketing and functional terms, resulted in winning an award for best user experience. In confirmation of this, the number of users increased by almost four and a half times within not more than six months.

Cromaris achieved 17% growth in sales volume and 20% growth in exports

The coronavirus crisis caused a number of logistics challenges in fresh fish and fish product distribution throughout the first half of 2021. The closure of catering establishments on the key markets forced the company to shift its sales toward retail chains.

For the first half-year of 2021 Cromaris recorded sales of 5,520 tonnes of whole fish equivalent, up 17% in comparison with the figures reported for the first six months of last year. The volume of exports rose 20% primarily due to strong growth on the Italian, Swiss, French and Polish markets. Export markets still account for a high share of sales - 87% of Cromaris' sales volume, and 88% of its sales revenue. Revenue from differentiated products rose 10%. At this moment, they account for 45% of revenue from total sales. An extremely valuable project of new aquacultured species - greater amberjack and dentex are added to the company's product portfolio. Revenues from sales of goods and services amounted to HRK 272 million, which represents an increase of 16%.

Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to HRK 33 million, up 23%, and net profit amounted to HRK 7.9 million.

3. RESEARCH AND DEVELOPMENT ACTIVITIES

The Company continually monitors events in its environment and invests in market research, in addition to directing and supporting activities of its subsidiaries with the purpose of achieving organic growth and recognizing business opportunities as well as realizing new acquisitions.

4. INFORMATION ON THE ACQUISITION AND RELEASE OF

TREASURY SHARES

From 1 January till 30 June 2021 the Company acquired 4,723 own class ADRS (ADRS-R-A) shares, accounting for 0.0491% of the shares from this class and 0.0287% of the Company's total share capital. During the reporting period, the Company acquired 18,455 own class ADRS2 (ADRS-P-A) shares, accounting for 0.2720% of the shares from this class and 0.1125% of the Company's total share capital.

Detailed information on each individual acquisition transaction was publicly disclosed in accordance with the Companies Act, Capital Market Act and the Rules of the Zagreb Stock Exchange d. d.

At the end of the reporting period, the Company owned a total of 119,633 own class ADRS shares, accounting for 1.24% of the shares from this class, and 555,976 own class ADRS2 shares, accounting for 8.19% of the shares from this class, i.e. total of 675,609 own shares, accounting for 4.11% of the Company's total share capital.

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Adris grupa dd published this content on 21 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2022 09:24:11 UTC.