Information on preliminary financial results for the 3 quarters of 2024

The Management Board of Przedsiębiorstwo Przemysłu Spożywczego PEPEES S.A. (the Company, the Issuer) announces that it has decided to publish the preliminary financial results for the aforementioned period.

Preliminary financial results of the Issuer's Capital Group for the 3 quarters of 2024 (data for 3 quarters of 2023 are shown in brackets):
- sales revenue: PLN 174,815 thousand (PLN 175,888 thousand)
- profit (loss) from operating activities: loss PLN 10,245 thousand, (profit PLN 15,315 thousand)
- net profit (loss): profit PLN 16,018 thousand, (profit PLN 5,992 thousand).

Preliminary financial results of Przedsiębiorstwo Przemysłu Spożywczego PEPEES S.A. for the 3 quarters of 2024 (data for 3 quarters of 2023 are shown in brackets):
- sales revenue: PLN 133,125 thousand (PLN 130,902 thousand)
- profit (loss) from operating activities: loss PLN 8,435 thousand, (profit PLN 13,439 thousand)
- net profit (loss): profit PLN 11,470 thousand, (profit PLN 6,998 thousand).

In the opinion of the Issuer's Management Board, the cumulative results for the 3 quarters of 2024 were primarily affected by the low starch production in the 2023 campaign due to a shortage of starch potatoes and a drop in potato starch prices, plus the continued strength of the PLN during that period.

The situation has been different from September 2024 onwards. The average selling price of starch increased and both EUR and USD currencies strengthened; this trend continues to date.

An analysis of the CG's and the Issuer's financial performance over the 3 quarters shows quarter-on-quarter improvement.
At Pepees S.A., in Q3 2024 in relation to Q2 2024, there was a 42% reduction in loss under the operating profit/loss, and a 40% reduction in loss under the net profit/loss.
The Capital Group reported a 21% reduction in the loss from operations in Q3 2024 when compared to Q2 2024, and there was a 24% reduction in the loss under the net profit in Q3 2024 when compared to Q2 2024.
The Management Board forecasts that the favourable trend will also be maintained in the Q4 of 2024, which will allow the year 2024 to be closed with a loss smaller than as at 30 June 2024.

The Management Board expects favourable developments in the starch and foreign exchange markets to continue in Q4 of 2024 and into 2025, which is particularly important in light of the significant share of exports in the Company's sales.

The Issuer's Management Board reports that in the 2024 potato campaign, approximately 40% more potatoes were purchased and processed when compared to 2023, allowing a significant reduction in the unit cost of production and achieving a higher margin on the sale of starch and other products.

Management believes that the situation that occurred last year, in which most starch facilities faced low levels of starch potato cultivation by growers, will not happen again in the foreseeable future. The raw material contracting plans for 2025 provide for increased procurement by a further 40%. Following a drop of approximately 40% in sugar prices in the European Union and the resultant drop in the proposed purchase prices of sugar beet by approximately 30%, in addition to persistently low cereal prices, agricultural producers have been taking steps in order to increase the diversification of agricultural production by increasing the cultivation of starch potatoes.

The Issuer's Management Board reports that a new line for the production of starch modifiers will be launched as soon as the year 2025 begins, which will enable the Issuer to expand to new (both food and pharmaceutical) markets and to achieve the growth of revenues and profits in 2025.

SIGNATURES OF INDIVIDUALS REPRESENTING THE COMPANY
Date Full name Position/Function Signature
2024/11/19 Wojciech Faszczewski President of the Management Board
2024/11/19 Tomasz Rogala Member of the Management Board