Board of Directors Address

Dear Shareholders and Investors,

During the passing year of 2023, our country, Europe and the world were strongly influenced by the effects of the dynamic global changes and the superimposed crises one after another. The military conflicts in Ukraine and the Middle East, weakening global demand amid tight monetary policy in many countries and worsening terms of trade led to the sharpest contraction in industrial production in about three years and continue affecting economy with a trend for a negative development and even decline. Seven countries of the European Union are already officially in recession and a total of thirteen reported a decline in the economy in the third quarter of the year.

On a national level, the business activities during the year were conditioned by the unceasing political instability that continues being assessed as a main reason, negatively affecting economic activity and business environment in Bulgaria. Our country continuously needs consistent state policies, ambitious reforms and a clear strategic vision to stimulate economic growth.

Against this background, the companies in the Group of Stara Planina Hold Plc achieved impressively high levels of sales and results ahead of the pace of recovery and growth of the European economy for another year.

The consolidated sales revenues of the Group for the first half of 2023 reached BGN 211.61 million and reported a 15.4 % growth compared to the sales for the same period of 2022 and almost an 61 % increase compared to the sales for the first half of 2021. The total consolidated profit of the Group after tax for the first half of 2023 reached BGN 26.66 million thus reporting a growth by 17.02% compared to the consolidated profit of the Group after tax for the same period of the previous year and an increase by 60.99 % compared to profit for the first half of 2021. With the estimated revenues for the second half of 2023, we expect to report a decrease by approximately 15 % compared to the same period of the previous year and an increase by approximately 10 % compared to the second half of 2021. On an annual basis, we expect the consolidated sales revenues of Stara Planina Hold Plc to reached BGN 374 million which is at the level of the previous year and a growth by approximately 34 % compared to sales in 2021.

Investments of our companies reached BGN 35.5 million, with a 37 % growth on an annual basis, mainly focused on improving the product range, introduction of highly profitable products and productions, acquisition of businesses and assets, innovations for the green and digital transition, increasing labor productivity and sustainable development. In 2024, in the context of the great uncertainty on national and global level, we plan to reduce investments by 23 % to BGN 27.3 million, again to be aimed at modernization and sustainable technological renewal, green and digital transition and sustainable development.

A leading priority for us for another consecutive year was to retain key specialists and attract new professionals to the companies. Having a workforce with in-demand skills contributes to sustainable growth, leads to more innovation and improves the competitiveness of the companies. In 2024 we foresee to reduce the number of employees by approximately 5 % with an expected decline in labor productivity by 7% and preserving the average monthly salary. 

In the beginning of December, the market capitalization of the public companies in the group exceeded BGN 792 million. In 2023 again, Stara Planina Hold Plc continues being the only public holding company in Bulgaria that has distributed dividends for every year of its existence.





As a result of consistently applied management policies in our companies, pursuant to the financial, economic and business processes at European and national level, we anticipate the 2023 financial results of the group of Stara Planina Hold Plc to deviate minimally from the levels achieved in 2022. The 2023 net profit of Stara Planina Hold Plc will exceed BGN 9.2 million which gives us confidence that for the 27th consecutive year part of the profit will be distributed in the form of dividends to the shareholders of the holding.

This forecast is based on the results achieved in 2023, the 2024 business plans of the enterprises and the expectations for our main markets. It is directly dependent on the European economic prospects that continue being accompanied by great uncertainty and on the expectations of the Bulgarian business that decline in sales will continue in the next year. The European Commission's forecast as of November 2023 indicates that economic activity in Europe will remain weak with GDP growth expected to reach 0.6 % in 2023 overall, both in the European Union and the euro area, and in 2024 GDP growth is expected to increase to 1.3 %. For Bulgaria, economic growth is expected to slow down in 2023 (2%) and 2024 (1.8%) and then to increase to 2.6% in 2025. At the same time, the latest polls of analysts indicate that the euro area’s economy shrank for a second straight quarter in the last three months of the year, making recession inevitable, contrary to the European Commission's expectations for an imminent recovery. The worsening business environment in the European Union, expressed in high energy price levels, imposition of numerous regulations that significantly increase the administrative burden for business, demotivates entrepreneurial activity and leads to an outflow of capital from Europe, lowering competitiveness and hindering economic growth.

The forecasts of our partners in the country, Europe and the world remain reserved and even pessimistic, at least until the middle of the next year, which gives us reason to expect results with lower values for the next financial year. The Board of Directors of Stara Planina Hold Plc expects sales revenues in the group in 2024 of BGN 330 million thus achieving approximately 12% decline on an annual basis. Factors that will continue influencing the operations of companies in the coming year are the market prices of raw materials and materials for production, the transport of supplies and production, the regional market price of labor, the prices of energy resources and the security of their supplies. The development of the military conflictя in Ukraine and the Middle East and the effect of the measures taken will also continue having an impact and may lead to adjustments of the expected business results.

The history of the group of Stara Planina Hold Plc shows that we have experience in overcoming crises and reducing the risks arising from them. Therefore, in 2024 again we will be led by the purpose of achieving European and world level of quality, productivity and profitability and thus to retain the major markets and widen our presence in the new markets. Sustainable achievement of good financial results with the expected sales volumes will continue being the main task for ensuring the shareholders’ investments and their profitability.

Our success will continue being shared with all those involved in its achievement.


Sofia, December 15, 2023
Stara Planina Hold Plc
Board of Directors

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