MBF Group
After the memorable perturbations with the publication of the 2022 annual report, we made an ambitious attempt to publish the 2023 annual report by the March 20 deadline. We set ourselves a difficult task, but as it turns out, not an impossible one. With this, we want to prove that we are a predictable, increasingly orderly and, above all, verbal entity. All this would not have been possible if not for the professional help and cooperation of the new accounting office and the auditor. The tremendous knowledge and commitment of these entities and the people associated with them, together with a high level of professional exchange of data and information, has resulted in this Annual Report with its accompanying financial statements, management report and auditor’s opinion.
Just as 2022 was part of building the foundation for future results and commercial contracts, last year has already become a slow harvest of hard work. Due to the need to incur operating costs, prepare and sign contracts for 2024, and prepare a co-branded product range with Chantii Oil – the company’s results are not yet the expected ideal from an individual as well as consolidated perspective.
It is worth noting that the company has also made significant adjustments to its financial assets, eliminating potential risks for the future. Despite the net loss, taking into account these adjustments and write-downs, we can confidently say that we are moving step by step towards improved efficiency and financial stability. In addition, despite the changes in the balance sheet structure, the company maintained its ability to generate net cash flow, although the value deteriorated slightly compared to the previous year.
The above does not preclude the Board of Directors from acting on possible efforts to obtain a permanent line of credit or an investment loan from a commercial bank. In the opinion of the Management Board – in order to increase the scale and efficiency of its operations, the Company should accumulate even more capital resources, so as to be able to order even larger volumes of goods (e.g. sugar, oil or urea), which will result in much more favorable prices, and ultimately margins and profit on sales to the end customer.
Looking ahead, MBF Group SA will continue its growth path. We are confident that our commitment and determination will produce increasingly satisfying results for our Shareholders. At the same time, we are on the threshold of publishing a development strategy update, where you will learn about our plans for 2024 and beyond.
The previous year is now history and a closed chapter, but what we have accomplished will pay off in the years to come. That it was not time wasted – just look back to the revenue item and compare it with previous years. We are still at the stage of cleaning up the past, we are still critically and objectively cautious about historical accounting records. That’s why we make one-time decisions on cuts, write-offs and removal of doubtful items from the balance sheet. On the other hand, since the stock market always prices the future, you can be sure that these decisions will result in the reliability and transparency of the data presented in future years.
Repeating the well-worn, but true, slogan that the stock market is pricing the future: at MBF Group Company, we describe it, in words that will be the key to our success (hopefully for years to come) i.e. projects under the name Nigeria | ORLEN | Chantii Oil | Sugar | Urea | AdBlue. Some of these slogans already account for more than 50% of last year’s revenue, but our goal is to push the market as hard as we can and as the environment allows. But that’s not all, because our appetites are bigger and we have two new major projects on the way.
We will report on all of the above in the development strategy update. We also remain at your full disposal at the upcoming Shareholders’ Meeting, where we are always open to talk and listen to criticism. We especially welcome anyone with advice or comments towards the Company. We will engage in a substantive discussion with anyone who stumps up in person, instead of doing so anonymously on the Internet (unfortunately, often using or reproducing false information).
On a stand-alone basis, the Company closed the 2023 fiscal year with net sales revenues of PLN 5,650,905, compared to PLN 131,511 in the previous year. A huge increase confirming the words from the introduction! Operating expenses amounted to PLN 5,646,713 vs. PLN 730,365 a year earlier, with the largest item here being third-party services: PLN 425,422 vs. PLN 295,725 in 2022 – we note that despite their significant value, they are only twice as high compared to the previous year while revenues increased more than 40 times (!) Finally, the entire year closed with a profit on sales of PLN 4,191 (the previous year was a loss of 598,853). In 2023, operating expenses dropped significantly and even by leaps and bounds, amounting to 186,269 in 2023 compared to 1,205,226 in the previous year. The company also made a final update of financial assets according to strict criteria, so that they will never again weigh on the bottom line. Finally – taking into account the above adjustments – the company for 2023 reported a loss of PLN 522,073 against a loss of PLN 2,580,070 in the year prior to the current report.
Unconsolidated total assets and liabilities closed at PLN 3,681,538 compared to PLN 4,298,928 a year earlier. On the asset side, fixed assets decreased slightly. Current assets also decreased, due to a decrease in short-term receivables from related parties and short-term investments. On the liabilities side, liabilities and provisions for liabilities decreased from PLN 808,127 to PLN 680,646 (with no long-term liabilities at all). Total net cash flow showed a result of -£99,811 compared to -£40,133 in the previous year. At the end of the year, the company had free cash in the amount of PLN 42,924.
At the consolidated level, the Company closed fiscal year 2023 with net sales revenues of PLN 5,652,071, compared to PLN 136,852 in the previous year. Operating expenses amounted to PLN 5,647,547 against PLN 746,523 a year earlier, and the largest item here, besides the value of goods and materials sold, is third-party services: PLN 425,764 against PLN 304,385 in 2022.
Finally, the entire year closed with a consolidated profit on sales of PLN 4,524 (the previous year was a loss of 609,671). In 2023, operating expenses fell significantly and even by leaps and bounds, amounting to 186,348 in 2023 compared to 1,592,547 in the previous year. The company also made a final update of financial assets according to strict criteria, so that they will never again weigh on the bottom line. Finally – taking into account the above adjustments – the company for 2023 showed a loss of PLN 589,305 against a loss of PLN 3,164,862 in the year before the current report.
The consolidated balance sheet total on the assets and liabilities side closed at PLN 3,810,156 compared to PLN 4,951,662 a year earlier. On the asset side, fixed assets decreased slightly. Current assets also decreased, due to a decrease in short-term receivables from related parties and short-term investments. On the liabilities side, liabilities and provisions for liabilities decreased from PLN 1,460,094 to PLN 877,474 (with a complete absence of long-term liabilities). Total consolidated net cash flow showed a result of -£54,922 compared to -£111,722 in the previous year. At the end of the year, the company had free cash in the amount of PLN 109,576.
As expected, and as we have already signaled with our interim reports, the tightening of all costs that passed on to subsequent accounting periods resulted in a realization of the financial result. The peculiarities of trading and clearing supplies do not reflect an ideal picture of the situation at the chosen reporting date for the here and now. In view of the above, together with the professional accounting service and with the substantive support of the auditor, we have decided that we will strive to establish appropriate provisions charged to the result, so that there is no distortion of the data presented.
