Viking Malt A/S

Ledelsesberetning

Key activities The purpose of the company is to operate malting plants and related activities. Market overview Barley is the primary raw material in malt production. The quality and yield of the barley harvest in Denmark in 2023 has been poor and this has given rise to production challenges and the need to import some foreign barley to establish and maintain production and quality. By Q4 of 2024 a switch has been made to use barley from crop 2024. The growing season for barley in 2024 has been challenged by a late sowing in the spring, but the rest of the growing season has been good. This has resulted in a normal harvest yield and satisfactory quality. The 2024 grain harvest has been satisfactory overall. The amount of malting barley of acceptable quality is normal in our area. Due to global market conditions, barley prices did increase in the first part of 2024 and then decreased from mid-2024. For the malthouse in Denmark, it is not expected that there will be a need to import foreign barley Development in the year The income statement of the Company for 2024 shows a profit of MDKK 31,6, and at 31 December 2024 the balance sheet of the Company shows a positive equity of MDKK 196. The past year and follow-up on development expectations from last year The financial year 2024 has gone better than expected for Viking Malt A/S, which is due to a decline in energy prices and change in customer segment compared to what was expected. Another reason why things have gone better than expected is due to the company's Combined Heat and Power installation, which has yielded more than the expected income. Operating profit was MDKK 43,3 (2023: MDKK 35,1). Profit before taxes was MDKK 40,5 (2023: MDKK 31,6). Capital resources Viking Malt A/S is participating in the Viking Malt Group’s cash pool arrangement. The total capital expenditure in 2024 was MDKK 7,7 (2023 MDKK 2,3), which covers some minor replacements. Special risks - operating risks and financial risks Operating risks The main business risk for the company relates to the price and availability of barley. The Company has joined in the Group’s Centrally Controlled Sourcing Model from the beginning of the year 2017. The parent company, Viking Malt Oy, takes over the price risk of barley covering availability risk and supplying sourcing services to the group companies. Barley balance is reported and followed monthly based on an approved Group policy. The market price for energy is followed on regular basis and forward contracts are made, when possible to minimize price fluctuations. Foreign exchange risks The currency risks, mainly related to sales, are managed centrally in the Group by financial instruments according to the Group’s financial risk policy. The company does not enter into speculative currency transactions. Interest rate risks As company participates in the Group’s cash pool arrangement all interest rate fluctuations relate to the short-term financing. Credit risks The company has no significant risks concerning individual customers or business partners. The credit risks are monitored and followed according to the Group’s credit policy. The company has adequate insurances to cover its property and business continuity. Strategy and objectives Strategy It is the strategy of Viking malt A/S to produce and sale malt to domestic and export markets. Viking Malt A/S as a part of the Viking Malt Group wants to be the preferred partner with our customers. The malting plants in the Group must continuously bedeveloped to improve the competitiveness by investing in new technology and methods. Targets and expectations for the year ahead The revenue is expected to drop by app. 10% due to lower prices on barley and energy. The income from the Combined Heat and Power Plant is expected to be at the level of 2024 but the area is very volatile. The year 2025 results are expected to be app. 40 % lower than 2024 due to price pressure. Viking Malt A/S is part of the parent company’s supply chain and barley balance and is therefore subject to adjustments according to the customer’s needs. Malt business is price sensitive, and the sales margins are low, so the continuous goal is to raise overall efficiency. The capital expenditure for 2025 is expected to be higher than normal due to installation of own solar panels. Basis of earnings Research and development Research and development activities are only done to a limited extent in Viking Malt A/S and this will primarily include the optimization of existing processes. External environment The company is certified according to ISO 14001 Environmental and ISO 50001 standard for Energy Management. The company is continuously working on lowering resource consumption and environmental impact in the production of malt. Intellectual capital resources The company produces malt in a modern and technically advanced production facilities, which means that it is an advantage that the whole personnel understands both the process and the plant. Subsequent events No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date. Number of FTE divided to primarily tasks The number of employees has been increased by two compared to 2023.Production, 16 personsMaintenance, 7 persons Quality control, 6 personsLogistics, purchase and administration, 11 persons In total 40 persons