7/2023 – Information on the Decision to Create Asset Impairment Allowances and Preliminary Financial Results of Trakcja S.A. and Trakcja Group for 2022

The Management Board of Trakcja S.A. (the “Company”, “Issuer”) informs that on March 22, 2023, it completed the preliminary analysis of the financial results of the Group’s individual entities and the process of gathering financial data for the preparation of the consolidated annual report of the Trakcja Group for the 12-month period ended December 31, 2022. Based on impairment tests conducted as of December 31, 2022, the Board made the following decisions:

1. Creation of Impairment Allowances for Assets:
   • Goodwill in the consolidated financial statements of the Trakcja Group as of December 31, 2022, allocated to the following Cash Generating Units (CGUs): a. CGU consisting of companies: PEUiM sp. z o.o., Dalba sp. z o.o., PDM S.A. – creation of an impairment allowance of PLN 592 thousand; b. CGU consisting of companies belonging to the AB Kauno Tiltai Group – creation of an impairment allowance of PLN 7,109 thousand.
2. Reversal of Impairment Allowances for Investments in Subsidiaries in the individual financial statements of Trakcja S.A. as of December 31, 2022:
   • Investment in the subsidiary AB Kauno Tiltai – reversal of the allowance of PLN 4,791 thousand;
   • Investment in the subsidiary BTW sp. z o.o. – reversal of the allowance of PLN 12,165 thousand.
3. Creation of Impairment Allowance for Fixed Assets in the subsidiary BTW sp. z o.o. as included in the consolidated financial statements of the Trakcja Group – creation of an impairment allowance of PLN 868 thousand.

The creation of impairment allowances for “goodwill” and fixed assets will negatively affect the consolidated gross result of the Trakcja Group for 2022 and reduce the value of fixed assets presented in the consolidated balance sheet of the Trakcja Group as of December 31, 2022, by PLN 8,569 thousand.

The reversal of impairment allowances for “Investments in Subsidiaries” will reduce the gross loss of Trakcja S.A. for 2022 and increase the value of fixed assets presented in the individual balance sheet of the Company as of December 31, 2022, by PLN 16,956 thousand.

The created and reversed impairment allowances are non-cash items and do not affect the liquidity position of the Company and the Group.

Additionally, the Company has decided to publicly disclose the preliminary estimates of the Trakcja Group’s results for 2022, considering the above-mentioned asset impairments:

• Preliminary Consolidated Financial Results of the Trakcja Group for 2022:
  • Revenue: PLN 1,501,957 thousand
  • Gross Profit (Loss): -PLN 142,875 thousand
  • EBITDA: -PLN 180,629 thousand
  • Gross Profit (Loss): -PLN 326,432 thousand

The estimates previously published by the Company in current report No. 4/2022 have changed mainly due to the impairment tests and the creation of the above impairment allowances. Therefore, the Management Board is updating the public with the revised estimates:

• Preliminary Financial Results of the Company for 2022:
  • Revenue: PLN 823,780 thousand
  • Gross Profit (Loss): -PLN 138,409 thousand
  • EBITDA: -PLN 159,644 thousand
  • Gross Profit (Loss): -PLN 290,571 thousand

The presented data are preliminary and subject to examination by the auditor.

The final financial results of the Company and the Group will be provided in the individual and consolidated annual reports for the 12-month period ended December 31, 2022, which, according to current report No. 1/2023, will be published on April 6, 2023.

Legal Basis: Article 17(1) MAR