Information on the impact of war in Ukraine on the current operations of the STALPROFIL SA Capital Group

In connection with Russia's invasion of Ukraine, the Management Board of STALPROFIL SA analyzed the direct and indirect impact of this situation on the current operations of the Company and the Capital Group.
The Capital Group operates in two main segments: the steel segment and the gas transmission infrastructure segment.
The Polish steel market is largely related to all three countries involved in the armed conflict (Ukraine, Russia, Belarus). The import of steel products to Poland in 2021 from these areas amounted to approximately 3 million tonnes, which accounts for over 25% of all imports. Broken supply chains from these directions cause a shortage of steel on the market and increase their prices.
Entities from the STALPROFIL SA Capital Group last year participated in direct trade, mainly in the field of trade in metallurgical products, with Ukraine, Belarus and Russia, however, their activity and total exposure in these directions, both on the side of purchases and sales, did not exceed 1% Group turnover. With the outbreak of the armed conflict, business contacts with contractors from the above-mentioned countries were suspended, without any negative impact on the Group's sales settlements.
On the market of gas transmission network infrastructure, the performance of contracts is timely. There are no disruptions in the Group's delivery of insulated steel pipes and no significant problems with meeting schedules on the gas pipeline construction market.
The Management Board monitors the situation in the Capital Group and in its environment on an ongoing basis and takes a number of remedial measures in response to the dynamically changing situation. As a result, the Group implements its internal plans without noticing any significant negative consequences of the situation in Ukraine. As at the date of publication of this report, the Management Board has not identified any factors that could materially adversely affect the results of the first quarter of 2022.
At the moment, it is not possible to present precise figures on the potential impact of hostilities on the Group in the medium and long term. There is a risk that prolonged hostilities may result in: a decline in investments, and thus a decline in demand and sales, deterioration in the inflow of receivables, shortages in supplies, weakening of the Polish currency, fluctuations in the prices of goods and raw materials for metallurgical production, which may consequently have a negative impact on impact on the results of the STALPROFIL SA Capital Group in the subsequent quarters of 2022.