55/2022 – Completion of the cyclical review process of Trakcja S.A.’s long-term contracts for the 6-month period ending on 30 June 2022

Further to Current Report no.  53/2022 of 5 August 2022, the Management Board of  Trakcja S.A. (the „Company”, the “Issuer”) informs that 18 August 2022 marks the completion of the cyclical review process of long-term contracts for the purposes of preparing the Company’s unit financial statements for the first half of the year ending on 30 June 2022. Accordingly, the Company is providing the general public with information as to its impact on the Company’s financial performance for the period in question.

As a result of the conducted cyclical review of contracts, their budgets have been updated in terms of their nature, amounts, temporal distribution and uncertainty as to revenues and cash flows resulting from their performance. During the budget updating, an opportunity and hazard analysis has been conducted, which has identified and taken into account technical, completion and liquidity risks and those associated with the prolongation of project completion.
During the II quarter of 2022, the impact of budget updating of contracts carries a negative result for the Company, amounting to PLN -104,069,000.00.
The primary factors which have had the greatest negative impact on the updated amount were:
1)    taking into account of additional expenses associated with designing and construction as regards railroad contracts;
2)    increase of expenses associated with the expected prolongation of the completion of contracts;
3)    inflationary pressure bearing an adverse impact on the expenses of contract completion.
Furthermore, in the II quarter of 2022, the Issuer was operating under conditions of insufficient liquidity, which had a negative impact on the Company’s operational activities.

The foregoing amount (-104,069,000.00) also includes:
•    changesof accepted estimates of revaluation values within the budgets of certain contracts performed by PKP PLK, as informed by the Company in Current Report no. 53/2022;
•    impact of settling the settlements with PKP PLK, as informed by the Company in Current Reports nos. 45/2022 and 52/2022.

The preliminary estimates of final financial performance shall be made available to the public upon completion of the collection of financial data, including the completion of the testing process for the impairment of assets and revaluation of assets.

The final financial performance of the Company and Group shall be provided in the report for the first half of the year ending on 30 June 2022, which, in accordance with the accepted report publishing calendar, shall be published on 14 September 2022.

Legal basis:
Article 17 (1) MAR