TRACE expects net sales revenue in the amount of 320 million BGN in 2014

The Year 2014 was significant for "Trace Group Hold" PLC in respect of the investments which were made abroad. Two road construction companies from Serbia joined the Group - "Trace PZP Nis" AD (acquired on 29.09.2014) and "Trace PZP Vranje" Ltd. (acquired on 29.01.2015). Those are leading companies in their local construction sector and have built sections of huge Pan-European corridors in the country. The two companies operate in 28 municipalities in Serbia and maintain approximately 3000 km of road network.

In 2014 "Trace Group Hold" PLC started the execution of four contracts awarded in Serbia for the construction of highways having cumulative value of over over 90 mln. EURO. Considerable part of the construction works has been  and is being executed with the holding’s own resources which became possible through the acquisition of the abovementioned two companies.

The Holding has proceeded the expantion of its activities on the Balkans entering on the market in the Republic of Macedonia. In the end of 2014 a contract for "Construction works for renewal with reconstruction of the railway section in Bitola - Kremenica" was signed for a total value  of  22 795 134 EURO.

Another important goal with regard to the holding’s international developement, which has been pursued during the year, is the breakthrough on the market in the Czech Republic where contracts for the construction of two projects were concluded - "Extension of the wastewater treatment plant and treatment plant for polluted waters South - Prague Ruzyně Airport" and "Construction of Group plumbing Benesov", totaling 21 million EURO.

The significant commitment towards the expansion of the holdings activities into international markets required the concentration of significant organizational, managerial and financial resources. The needed organization for execution of international contracts in foreign countries generates higher administrative and management costs, which are reflected in the financial statements for 2014 and will inevitably affect the Group's results. The income generated from them will show and have its financial effect in 2015. For example, the 2014 consolidated results of the holding include, "Trace PZP Nis" AD’s data from the last quarter, while "Trace PZP Vranje" Ltd. will report income as a member of the Group in the beginning of 2015. The expected turnover of the two companies  for the next ear is over 25 million. EURO.

Our companies execute major infrastructure projects financed locally under the operational programs of the European Union. The holding is aiming to participate in the construction of the most significant projects in Bulgaria - subway, railway and highway, road- bypass construction. We maintain nearly 20% of the country's roads. We constantly participate in tenders for construction projects financed by the state or municipalities as well as by international financing institutions and foreign employers. The conclusion of a contract for "Reconstruction of „Knyaz Alexander Dondukov" blvd and "Krakra" str. worth 6 million BGN is forthcoming, as well as a contract for Rehabilitation of "Tsarigradsko Shosse" blvd worth 19 million BGN. "Trace Group Hold" PLC successfully passed the pre-qualification stage and expects to receive an invitation for submission of a bid offer for design and construction of two lots of "Struma" highway with a total indicative value of 350 million BGN. We expect the announcement of the results for awarding the execution of the construction of the third metro diameter in Sofia - depot  “Botevgradsko shose” blvd - “Vladimir Vazov” blvd – Central city part – “Ovcha kupel”, first stage – from km 4+950 to km 11+966,34,  in which there is a good chance for winning an award.

Leading focus of "Trace Group Hold" PLC activity in 2015 will be the redistribution of risk by maintainance of our leading position in the Bulgarian market and further expansion in the internationally.

For 2014 it is expected that the consolidated net sales revenue will exceed 320 million BGN, of which about 300 million BGN amount from construction. According to preliminary information, the estimated net financial result of the Group for 2014 will be about 10 million BGN.  It includes partial impairment of available funds blocked in a commercial bank with a revoked license. The Management assesses the risk of delaying the opportunity of current use of liquid resources. Expectations are that the issue with the bank will be resolved in a favorable for the company way and the losses will be transformed into profits in subsequent reporting periods.

Much of the awarded projects in 2014 will be executed in 2015. At the same time we have won and concluded contracts which will commence in 2015.
Furthermore, we expect participation in numerous tenders in the country and in the countries in which we are interested in sustainable positioning on the market. Based on all of the above, we expect approximately 350 million BGN net sales revenue for 2015. We are expecting that the the generated profit would be hopefully with a higher return than that in 2014, as a result of the above mentioned specifis, as well as the positive impact on profitability of the decrease in oil prices. Fuel forms a significant portion of the cost of raw materials and transportation expenditure the undertaking of the activities of the group. Our prediction is that the decreased levels of oil prices and its derivatives will be maintained at least until the middle of 2015.

The activities of "Trace Group Hold" PLC in 2015 will be in close relation to the public status of the holding. Transparency and public awareness will be an ongoing commitment of the management. We will continue our policy of prudent promotion of the interest of the shareholders through distribution of dividends, in such amount complying with the interests and needs of the structure of investment and financial resources. A resolution in this regard will be proposed by the Board of directors for a vote by the General assembly. We will continue the procedure for redemption of own shares as part of the financial motivation for the distinguished management teams by paying part of their additional remuneration in the form of shares. We hope this will strengthen the confidence of investors in the shares of the holding.

A notable result of the good corporate policy of "Trace Group Hold" PLC is the higher interest of individual and institutional current and potential shareholders to acquire shares in the holding. Although the major shareholder believes that the share price is currently undervalued, he is considering taking action to increase the free float. His decision will be a good will gesture towards the minor shareholders who despite the financial crisis continuously supported the holding and believe in the future of TRACE.