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's activity report 2022

Cronimet Nordic OÜ was established in September 2014. The shareholders of the company are CRONIMET Holding GmbH with 75% and PA Investments with 25%

OÜ.

The consolidation group includes the parent company CRONIMET Nordic OÜ (Estonia) and the 100% subsidiary CRONIMET Latvia SIA (Latvia).

The company deals with the purchase of ferrous and non-ferrous scrap metal from the Baltic States, Finland, Sweden and other European Union countries. The purchased production is mainly exported to Turkey, Asia and other European Union member states.

2022 posed several challenges to the company. Due to the outbreak of war, there was uncertainty in the first half of 2022, which caused major price and market demand changes. Before the war started in Ukraine, the company purchased a large amount of stainless steel from the Russian market.

After the start of the war, the CRONIMET group decided to stop business transactions with Russia, which had a significant impact on the company's stainless steel business volumes.

The fallen volumes from Russia cannot be replaced with local and neighboring countries' volumes. Large price fluctuations caused several sales transactions with negative sales margins in the second half of 2022. Also reflected in the balance sheet of the reporting year is a reduction in inventory due to falling market prices of 1.15 million euros. Due to the described decrease in volumes of stainless steel and also black metal, the company's sales revenue decreased by almost 30% compared to 2021. The company's net profit also decreased significantly to 58 thousand euros compared to 7.89 million euros in 2021.

The main operational guidance in the coming years is to increase profitability through more cost-effective management and more profitable sales activities.

In connection with the growth of operating volumes, the company invested 2,049 thousand euros in fixed assets in 2022 (2021: 1,469 thousand euros). In 2023, it is planned to invest 0.5 million euros in metal processing tools.

In 2022, the company employed an average of 50 employees (2021: 48 employees) and the accounted salary amounted to 1,963 thousand euros (2021: 1,723 thousand euros).

The company's operations are financed by both the parent company and bank loans. Interest rates on loans fixed in euros are linked to Euribor and interest rates on loans fixed in US dollars are linked to Libor. Interest margins are reviewed and agreed with creditors annually. The short-term loan received from the parent company was extended in 2020 and the loan term was extended until 2023.

The company uses futures contracts to hedge risks arising from changes in the euro/dollar exchange rate and changes in the price of stainless steel and copper.

The company complies with all the requirements of the Waste Act in its operations. The collection and recycling of metal waste has a positive effect on both nature and the whole society.

In 2022, dividends of 3,500 thousand euros were paid to shareholders.

The main operating ratios of the consolidation group were as follows:

Ratio 31.12.2022 31.12.2021

General level of solvency (current assets/short-term liabilities) 1.32 1.51

Debt and equity ratio (liabilities/equity) 2.28 1.54

Gross margin ((sales revenue-goods, raw materials, materials, services)/sales revenue) 5.48% 5.23%

Net margin (net profit/sales revenue) 0.03% 2.39%

The main operating ratios of the consolidating unit were as follows:

Ratio 31.12.2022 31.12.2021

General level of solvency (current assets/short-term liabilities) 1.10 1.36

Debt and equity ratio (liabilities/equity) 4.45 1.8

Gross margin ((sales revenue-goods, raw materials, materials, services)/sales revenue) 4.16% 4.45%

Net margin (net profit/sales revenue) -0.82% 1.83%