Linda Nektar: The Interim Report for the 12 months of 2023 (unaudited)

Management report

In 2023 AS Linda Nektar (The Company's) unaudited turnover was EUR 2.49m, aligning within the range of updated management guidance of EUR 2.45 - 2.5m announced by the Company on 5 December 2023. Net profitability came in with a loss of EUR 0.13m. This largely reflects a period of consciously-reduced throughput (volumes) and the associated level of fixed costs impacting expenses. Management's reasoning of doing this relates to the strategy of not pursuing volume of certain products at any cost, particularly if there is a perceived risk of a negative operating result due to high volatility of variable costs. At the same time, increased throughput those products at zero or negative profitability unnecessarily decreases the operational efficiency of equipment in the longer term.

Sales activity outside of the Baltic region and Finland have been expanded further via an ongoing diversification strategy (including outside of the EU). Any scaling activity (significantly increased volumes) is dependent on the clients concerned deciding to move ahead with the launch of particular products in various jurisdictions. This provides management sound argumentation to retain sufficient operational capacity for such events even if their timing is somewhat demanding to predict. The aforementioned strategy is shored up by the Company's ability to retain positive operating cash flow as well as net cash balances (including debt).

The Company continues to invest in various sustainable practices such as the previously mentioned solar project to help enable its own efficiencies as well as providing customers with improved carbon footprint initiatives throughout the production and distribution chain.

Financial review

In 2023 AS Linda Nektar (The Company's) unaudited turnover was EUR 2,489,789 (12 months 2022: EUR 3,786,852). This marked a decrease of 34.3% year-on-year. The H2 2023 unaudited revenue decreased by 26.7% compared to H1 2023, amounted up to EUR 1,053,147 (H1 2023: EUR 1,436,642). The 12 months of 2023 ended in a net loss of EUR 130,660 (12 months 2022: net profit EUR 270,903).

As of 31 December 2023, the Company's total assets came to EUR 3,762,147 (31.12.2022: EUR 4,137,806) marking a decrease of 9.1% year-on-year. Current assets amounted to EUR 1,215,241 (31.12.2022: EUR 1,474,446) or 32.3% of total assets. Fixed assets amounted to EUR 2,546,906 (31.12.2022: EUR 2,663,360) or 67.7% of the balance sheet total. Cash and cash equivalents came to EUR 316,256 (31.12.2022: EUR 294,451). The Company retains its conservative financial leverage policy with a surplus net cash position after taking into account bank debt (see below for additional comments). Operating cash flow for the 12 months of 2023 was a positive EUR 342,762 (2022: EUR 552,831).

The liabilities of AS Linda Nektar totalled EUR 282,483 (31.12.2022: EUR 369,467) and equity amounted to EUR 3,479,664 (31.12.2022: EUR 3,768,339). In 2023, the Company signed a renewable energy loan agreement to fund the construction of the solar farm in Kobela. As of 31 December 2023, there were loan commitments of EUR 146,752 for investments.

A total of EUR 353,822 was invested into fixed assets (12 months 2022: EUR 821,626). Depreciation costs for the 12 months of 2023 amounted to EUR 353,883 (12 months 2022: EUR 435,004). Some investments will be implemented through support provided by the Agricultural Registers and Information Board (ARIB) as part of Rural Development Plan measure 4 'Investments into fixed assets'. The subsidy will be paid out if the investment is implemented no later than H2 2024. In 2023, the Company received partial grant in the amount of EUR 116,417. Assets acquired with the help of government grants are recorded in the balance sheet at net acquisition cost, i.e., the acquisition cost, less government grants received for the purpose of acquiring assets.

As of 31 December 2023, the Company had 15 employees, one Management Board Member, and four Supervisory Board Members. Labour costs for the 12 months of 2023 (including taxes) amounted to EUR 514,856 (12 months 2022: EUR 476,525).

In 2023, the Company paid EUR 158,014 in dividends (2022: EUR 158,014). The income tax cost on dividends was EUR 26,654 (12 months 2022: EUR 27,584).

Taking into account the present operating environment management is forecasting a conservative revenue guidance figure of EUR 2.5m, effectively reflecting a flat outcome compared with 2023.

Financial Ratios

		2023	2022
Current Ratio = Current Assets / Current Liabilities	x	4.97	3.99
Quick ratio = (Current Assets - Inventories) / Current Liabilities	x	2.70	2.19
Working Capital = Current Assets - Current Liabilities		970 613	1 104 979
Equity Ratio = Total Equity / Total Assets*100	%	92.49	91.07
Net Profit Margin= Net Profit / Sales Revenue*100	%	-5.25	7.15
Debt to Assets= Total Liabilities / Total Assets	x	0.08	0.09

Statement of financial position

(In Euros)

	31.12.2023	30.06.2023	31.12.2022	30.06.2022
Assets
Current assets
Cash and cash equivalents	316 256	319 198	294 451	694 213
Receivables and prepayments	343 528	496 448	515 099	675 334
Inventories	555 457	643 237	664 896	611 203
Total current assets	1 215 241	1 458 883	1 474 446	1 980 750
Non-current assets
Receivables and prepayments	68	68	45	6
Property, plant and equipment	2 534 034	2 480 150	2 647 768	2 196 030
Intangible assets	12 804	16 391	15 547	5 055
Total non-current assets	2 546 906	2 496 609	2 663 360	2 201 091
Total assets	3 762 147	3 955 492	4 137 806	4 181 841
Liabilities and equity
Liabilities
Current liabilities
Loan liabilities	108 897	25 000	0	0
Payables and prepayments	135 731	258 370	369 467	321 109
Total current liabilities	244 628	283 370	369 467	321 109
Non-current liabilities
Loan liabilities	37 855	21 900	0	0
Total non-current liabilities	37 855	21 900	0	0
Total liabilities	282 483	305 270	369 467	321 109
Equity
Issued capital	1 580 143	1 580 143	1 580 143	1 580 143
Share premium	617 517	617 517	617 517	617 517
Statutory reserve capital	93 629	93 629	80 084	80 084
Retained earnings (loss)	1 319 035	1 319 035	1 219 692	1 219 692
Reporting period profit (loss)	-130 660	39 898	270 903	363 296
Total equity	3 479 664	3 650 222	3 768 339	3 860 732
Total liabilities and equity	3 762 147	3 955 492	4 137 806	4 181 841

Income statement

(In Euros)

	2023	2023 H2	2022	2022 H2
Revenue	2 489 789	1 053 147	3 786 852	1 603 948
Other income	0	0	13 824	13 824
Changes in inventories of finished goods and work in progress	14 068	-21 557	224 182	-12 849
Raw materials and consumables used	-1 495 920	-636 926	-2 528 575	-1 063 424
Other operating expenses	-245 237	-139 171	-284 899	-169 658
Employee expenses	-514 856	-254 813	-476 525	-254 875
Depreciation and impairment loss (reversal)	-353 883	-173 469	-435 004	-208 386
Other expenses	-883	-9	-1 428	-1 000
Operating profit (loss)	-106 922	-172 798	298 427	-92 420
Interest income	3 952	3 276	60	27
Interest expenses	-1 036	-1 036	0	0
Profit (loss) before tax	-104 006	-170 558	298 487	-92 393
Income tax expense	-26 654	0	-27 584	0
Reporting period profit (loss)	-130 660	-170 558	270 903	-92 393

Statement of cash flows

(In Euros)

	2023	2023 H2	2022	2022 H2
Cash flows from operating activities
Operating profit (loss)	-106 922	-172 798	298 427	-92 420
Adjustments
Depreciation and impairment loss (reversal)	353 883	173 469	435 004	208 386
Other adjustments	0	0	-13 790	-13 790
Total adjustments	353 883	173 469	421 214	194 596
Changes in receivables and prepayments related to operating activities	171 548	152 920	53 020	160 196
Changes in inventories	107 883	87 780	-353 268	-55 393
Changes in payables and prepayments related to operating activities	-156 976	-115 546	147 232	-26 419
Income tax refund (paid)	-26 654	0	-27 584	0
Proceeds from government grants	0	0	13 790	13 790
Total cash flows from operating activities	342 762	125 825	552 831	194 350
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets	-429 028	-230 859	-751 561	-594 139
Proceeds from government grants	116 417	0	0	0
Interest received	3 952	3 276	60	27
Total cash flows from investing activities	-308 659	-227 583	-751 501	-594 112
Cash flows from financing activities
Loans received	166 000	119 100	0	0
Repayments of loans received	-19 248	-19 248	0	0
Interest paid	-1 036	-1 036	0	0
Dividends paid	-158 014	0	-158 014	0
Total cash flows from financing activities	-12 298	98 816	-158 014	0
Total cash flows	21 805	-2 942	-356 684	-399 762
Cash and cash equivalents at beginning of period	294 451	319 198	651 135	694 213
Change in cash and cash equivalents	21 805	-2 942	-356 684	-399 762
Cash and cash equivalents at end of period	316 256	316 256	294 451	294 451

Statement of changes in equity

(In Euros)

	Issued capital	Share premium	Statutory reserve capital	Retained earnings (loss)	Total
31.12.2021	1 580 143	617 517	73 948	1 383 842	3 655 450
Reporting period profit (loss)	0	0	0	363 296	363 296
Declared dividends	0	0	0	-158 014	-158 014
Changes in reserves	0	0	6 136	-6 136	0
30.06.2022	1 580 143	617 517	80 084	1 582 988	3 860 732
Reporting period profit (loss)	0	0	0	-92 393	-92 393
31.12.2022	1 580 143	617 517	80 084	1 490 595	3 768 339
Reporting period profit (loss)	0	0	0	39 898	39 898
Declared dividends	0	0	0	-158 014	-158 014
Changes in reserves	0	0	13 545	-13 546	-1
30.06.2023	1 580 143	617 517	93 629	1 358 933	3 650 222
Reporting period profit (loss)	0	0	0	-170 558	-170 558
31.12.2023	1 580 143	617 517	93 629	1 188 375	3 479 664

Additional information:

Kadri Rauba
Member of Management Board

AS Linda Nektar
Address: Kobela, Antsla parish
66407 Võrumaa, Estonia
Telephone: [phone]
E-mail: [e-mail]