JSC "Daugavpils Lokomotīvju Remonta Rūpnīca" Audited

Daugavpils, 2017-05-03 07:30 CEST (GLOBE NEWSWIRE) --

Type of operations

Basic activity of AS "DAUGAVPILS LOKOMOTĪVJU REMONTA RŪPNĪCA" is railway rolling stock overhaul repair, maintenance and upgrade, manufacturing and repair of its spare parts. AS "DAUGAVPILS LOKOMOTĪVJU REMONTA RŪPNĪCA" provides repair services of all types of railway rolling stock - diesel locomotives and electric trains.

Performance of the Group during the financial year

In 2015 the Group's consolidated net sales amounted to 13.5 million EUR (decrease of 29.4% in respect of net sales of 2015).

The Group finished the financial year of 2016 with a loss of 2.3 million EUR. In 2016 the Group exported its products to 8 countries, the total export volume amounted to 7.5 million EUR (in 2015 - 12 million EUR). The main directions of export in 2016 were EU countries: Estonia, Poland and Lithuania, and third countries: Russia, Belarus and Uzbekistan. The Group as a member of PS DMU Vilcieni completed works on the modernizations of DR1 trains. In third quarter the Group finished the order by AS Pasažietu vilciens for all the DR1 type trains.

During the reporting period Group's reorganization was carried out, three new subsidiaries were founded (DL metal SIA - metalworking, LokRem SIA - the rolling stock repair, LogKom SIA - transport services) and the sale of shares in existing subsidiaries (DL Metalworking SIA, DL Lokomotive SIA, Loģistika SIA). Reorganization will not leave a material impact on the Group's performance in the future. The new structure came into effect on 01 October 2016.

Group during the reporting period was not fully loaded with projects. To minimize losses, the Group carried out the following measures: cost optimization, staff cuts and the cut of loss-making activities. Significant losses in the reporting period are related to the Group's lack of projects, as well as the negative result of DMU project.

Subsequent events

In the time period between the last day of the financial year and the date of signing the financial statements there have been no significant events that would have a significant effect on the financial results of the year or the financial position of the Company.

Use of going concern assumption

Due to the negative performance of recent years the Group's liquidity ratios has worsen. At the end of the reporting period Group's current liabilities exceeded current assets by 7.7 mil. EUR. On that date the Group's major creditors are the Group's largest shareholder's AS Skinest Rail group companies (8.2 mil. EUR) and AS Swedbank loans outstanding (2.6 mil. EUR).

The capability of the Group to continue its activities depends on the financial results in future periods, the extension of bank's loan repayment terms and the support from shareholders. In 2017 the Group forecasts revenue growth and modest positive cash flow from operating activities. No substantial investments projects and investments in fixed assets are planned for the next year. The Group is negotiating a bank loan's refinancing and rescheduling. Given that the existing bank borrowings are secured by the pledge of all Group's assets, as well as AS Skinest Rail financial guaranty it is reasonably confident that an agreement will be reached.

The Group received a support letter from its biggest shareholder AS Skinest Rail that it will support the Group to continue going concern in 2017. Accordingly, the Group's financial statements have been prepared in accordance with the going concern principle.

Future prospects

During 2017 the Group's priority is further development of the steel industry - attraction of new customers and a large increase in turnover. According to forecasts, in 2017 the Group will be provided with repair objects in larger scale as it was during the reporting period. In the 1st quarter of 2017 for the Group's workload is significantly higher than the same period in 2016. Contracts with the Polish company PKP Linia Hutnicza Szerokotorowa SPOLKA z o.o. on repair of locomotives, as well as other significant transactions have been signed.

STATEMENT OF COMPREHENSIVE INCOME

	Notes	2016	2015
		EUR	EUR

Revenue	(3)	13 555 695	19 213 652
	0
Costs of sale	(3)	(14 983 881)	(20 049 053)
	0
Gross profit or losses	0	(1 428 186)	(835 401)
	0
Distribution expenses	(4)	(288 366)	(229 717)
	0
Administrative expenses	(5)	(1 221 431)	(1 761 571)
	0
Other income	(6)	1 865 305	1 167 107
	0
Other expenses	(7)	(1 259 483)	(489 399)
	0
Interest and similar expenses	(9)	(543 070)	(488 043)

Profit (loss) before tax	0	(2 875 231)	(2 637 024)
	0
Corporate income tax	(10)	596 129	(109 131)
	0
Net profit (loss)	0	(2 279 102)	(2 746 155)

Attributable to:
Equity holders of a parent company		(2 279 102)	(2 746 155)

Earnings per share (in cents)	(11)
Basic		(27.48)	(33.11)
Diluted		(27.48)	(33.11)

Total comprehensive income (expense)		(2 279 102)	(2 746 155)

Attributable to:
Equity holders of a parent company		(2 279 102)	(2 746 155)

Natālija Petrova Member of the Board t. 65404420, petrova@dlrz.lv May 02, 2017

JSC "Daugavpils Lokomotīvju Remonta Rūpnīca" Audited Consolidated Annual Report for the year 2016

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