14/2022 Information on the impact of the war within the territory of Ukraine on the business and performance of the Issuer and its Group

Ever since the beginning of hostilities, the Management Board of Trakcja S.A. (the “Company” or “Issuer”) has been analyzing inquisitively on an ongoing basis the impact of these events on potential risks which may bear a material impact on the business and future financial performance of the Issuer and its Group. Accordingly, as at the date of publication of this report, the following has been done:
1.    Purchase plans concerning contracts performed by the Company have been subjected to analysis, and accordingly, the risk levels of sudden and significant price increases of materials used by the Trakcja Group – have been updated, including those of metallurgical products, rails, steel structures, reinforcing steel, but also the price increase of sleepers, turnouts, aluminium and copper cables, concrete products and asphalt mass, as well as of other materials, including fuels. This risk may bear an impact on the final valuation of construction contracts implemented by the Trakcja Group in 2022.
2.    We have diagnosed the potential risk which may bear an impact on the Company’s contract performance schedule, due to the problems of non-availability or difficult availability of employees, in particular of those who are Ukrainian nationals employed by the Company’s subcontractors, as a result of the general mobilization ordained in the Ukraine. This risk may significantly disrupt the timing of construction and assembly manufacturing at the peak of the construction season in 2022.
3.    The material impact of the weakening of the PLN against the EUR and USD in the context of the magnitude of costs of production factors – which gives rise to the risk of inflationary pressure. Accordingly, the risk of increasing interest rates exists, which will bear an impact on the financial expenses of the Company and Trakcja Group.
4.    No material disturbances have been noted as regards the fuelling limits introduced by PKN ORLEN S.A. Fuel supply schedules are determined on an ongoing basis and the Trakcja Group’s requisition for fuel is monitored on a daily basis- which allows, as at the date hereof, the maintenance of the planned productivity pace of equipment and transport.
5.    The Company monitors the Group’s business on an ongoing basis, in particular, impact on the contractual responsibilities of parties in the context of the situation which has arisen and risks associated therewith.
6.    Risks have been identified (their possible occurrence will have no material impact on the Trakcja Group financial statements) as regards the business of our subsidiary, Trakcja Ukraina Sp. z o.o. with its seat in Kiev, which has not conducted significant operations in 2021. Due to the hostilities, these risks are:
–    Impairments of the value of non-financial assets,
–    Lack of capabilities for conducting operations;
–    Loss of control.
The Issuer is monitoring the political and economic situation in the Ukraine on an ongoing basis, and analyzes the impact of these circumstances for the business and financial performance of the Issuer and its Group. In the event of identifying new circumstances and risks, the Issuer shall inform the public to this effect by means of a current report.

Legal basis:
Article 17 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse