37/2023 – Information on Settlement with PKP PLK and Results of the Review of Contracts for the 9-Month Period Ended September 30, 2023

Zarząd spółki Trakcja S.A. (“Spółka”) informs that today, with the participation of a mediator from the Arbitration Court at the General Prosecutor’s Office of the Republic of Poland, a settlement was reached regarding the contract No. 90/107/0292/18/Z/I dated August 30, 2018, for the “Reconstruction of track layouts along with accompanying infrastructure on the E 59 railway line section Poznań Główny – Rokietnica” as part of the project titled: “Works on the E 59 railway line section Poznań Główny – Szczecin Dąbie” (“Contract”).

The settlement involves mutual concessions and the resolution of mutual claims to amicably conclude the dispute. The Company has mitigated significant risks related to the execution conditions of this contract, including the anticipated project timeline.

The Company will provide updates on other proceedings related to remaining contracts involved in the mediation process, as mentioned in the consolidated periodic report for the first half of 2023, in subsequent reports.

The signing of the settlement with PKP PLK was factored into the periodic review of long-term contracts conducted for the preparation of the Company’s standalone financial statements for the 9-month period ended September 30, 2023. Consequently, the Company’s management has decided to disclose the overall impact of the contract budget updates on the financial result for this period.

In the third quarter of 2023, the total impact of contract budget updates on the Company’s gross profit was positive and amounted to PLN 14,728 thousand.

During the periodic review of contracts, the budgets were updated in terms of their nature, amounts, timing, and uncertainties regarding revenues and cash flows resulting from their execution. Key factors negatively affecting the update amount included increased costs of subcontractors on railway contracts and the need to change the technology for one of the road contracts. Conversely, the update amount was positively impacted by the inclusion of margins from contract indexation and the aforementioned settlement with PKP PLK.

Preliminary financial estimates will be made available after the completion of data collection and preliminary closing of the accounts. The final financial results of the Company and the Group will be presented in the consolidated report for the 9-month period ended September 30, 2023, which will be published on November 22, 2023, according to the periodic report publication calendar.

Legal Basis: Article 17 MAR