Interim report
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AS AMBER LATVIJAS BALZAMS (Registration number 40003031873) UNAUDITED CONDENSED FINANCIAL STATEMENTS for the first six months of 2026 prepared in accordance with IFRS Accounting Standards as adopted by the EU
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 2 INFORMATION ON THE COMPANY Name of the Company Amber Latvijas balzams Legal status of the Company Joint Stock Company Number, place and date of registration Companies register No. 40003031873 Riga, 2 October 1991 Re-registered on 20 October 1998 Commercial Register Riga, 19 June 2004 Address Aleksandra Caka Street 160 Riga, LV-1012 Latvia Main business activities Production of alcoholic beverages NACE2 11.01 Major shareholder Amber Beverage Group Holding S.à r.l. (89.99%) Names and positions of the Council Members Valizhan Abidov – Chairman of the Council Boriss Ņešatajevs – Vice Chairman of the Council (until 30.04.2026) Velga Celmiņa – Member of the Council Names and positions of the Board Members Andrejs Višņausks – Chairman of the Board
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 3 REPORT OF THE MANAGEMENT Type of operations AS “Amber Latvijas balzams” (hereinafter also referred to as the “Company”) is a leading producer of alcoholic beverages in the Baltic States. The Company was established in 1900 as “Riga State Vodka Warehouse No. 1”. From 1970 to 2022, it operated under the name AS “Latvijas balzams”, and since 2022 it has operated under the name AS “Amber Latvijas balzams”. The Company’s principal shareholder is Amber Beverage Group Holding S.à r.l. (a company registered in Luxembourg), which holds 89.99% of the Company’s shares. The Company operated two alcoholic beverage production facilities in Riga – a spirits production facility and a sparkling wine and low -alcohol beverage production facility. These facilities produced a wide range of alcoholic beverages, including sparkling and fortified wines, ciders, alcoholic cocktails, vodka, liqueurs, brandy, gin and other spirits. Several recipes for products manufactured by AS “Amber Latvijas balzams” have a long history – for example, the origins of the recipe for “Riga Black Balsam®” date back more than 270 years, to 1752. Products manufactured by the Company are sold in almost all regions of the world through Amber Beverage Group and Stoli Group, as well as through direct exports. The Company cooperates with major suppliers of raw materials and other materials within the European Union. The alcohol used in the production of most of the Company’s products is sourced from alcohol producers operating within the European Union. One of t he key raw materials used in the production process – water – is obtained from an artesian well located on the Company’s premises. As a socially responsible and sustainable company, the Company has developed and adheres to corporate social responsibility principles. These principles are aligned with the United Nations Sustainable Development Goals for 2030, the guidelines of the Organ isation for Economic Co -operation and Development (OECD), and the Nasdaq Riga Corporate Governance Principles, and are described on the Company’s website under the “Corporate Social Responsibility” section. To ensure compliance with these principles, the Company has developed and/or applies the following policies and procedures: the Corporate Social Responsibility Policy, the Company’s Procurement Procedure, the Collective Bargaining Agreement, the Quality Management Manual, the Code of Ethical Marketing Communications, the Anti- Corruption Policy, the Data Protection Policy, Risk Management procedures, the Remote Working Policy, and other internal documents. These documents, policies and the procedures contained therein are reviewed regularly through both internal audits conducted in accordance with the Quality Management System and external audits. Audit results and planned corrective actions are reviewed at management meetings. Performance of the Company during the reporting period Financial performance In order to ensure business continuity and protect the interests of creditors, on 30 January 2026 AS “Amber Latvijas balzams” filed an application with the Riga City Court for the initiation of legal protection proceedings (LPP). The Court approved the application on 5 February 2026, thereby commencing the legal protection proceedings, within which the Company continues to work on restructuring its liabilities and stabilising its operations. The decision to file the application for legal protection proceedings was taken following several external challenges that had a significant impact on the Company’s cash flows. After Amber Beverage Group publicly expressed its support for Ukraine and peace in Europe, the Russian authorities took aggressive measures against Group companies. The Russian government designated related entities as “extremist” and confiscated the Talvis distillery owned by the Group. Over the past year, the global spirits market has experienced a significant downturn. Major producers worldwide have reported declining sales volumes, particularly in export markets. Industry analysts have pointed to changes in consumer behaviour, economic pressure on discretionary spending and inventory adjustments across distribution chains. The combination of these factors resulted in significant cash flow difficulties, leading to delays in excise duty payments. Following prolonged discussions with the State Revenue Service (SRS) regarding overdue excise duty liabilities, the SRS froze the Co mpany’s bank accounts. This made it impossible to continue normal business
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 4 operations without legal protection. The legal protection proceedings provide a structured framework for restructuring all liabilities, including tax debts, based on a plan to be approved by the creditors and the Court. The Court initially set 5 June 2026 as the deadline for preparing and agreeing the legal protection proceedings measures plan. This deadline was subsequently extended until 5 October 2026, with the plan to be submitted to the Court for approval no later than the day following the expiry of the agreement period. The filing of the application for legal protection proceedings also automatically triggered an event of default under the bond documentation of Amber Beverage Group Holding S.à r.l. (hereinafter referred to as the “Controlling Shareholder”), which in turn automatically triggered an event of default in respect of the Controlling Shareholder’s obligations towards its banks. Total sales volumes (expressed in 9 -litre cases (9Lcs)) in the first six months of 2026 were 38.2% lower than in the corresponding period of 2025. The decrease was mainly attributable to the following factors: • a decline in export orders from Stoli Group companies, particularly in the U.S. market, where Stoli Group (USA) LLC commenced reorganisation proceedings under Chapter 11 in late 2024. Following a deterioration in the situation in early 2026, sales volumes of the Stoli and Elit brands decreased by 35%; • a decline in spirits consumption in the Baltic States and other markets in which the Company operates, exacerbated by increases in excise duty rates and a decline in consumer purchasing power. Sales volumes in the Baltic markets decreased by 34%; • a 28% decrease in contract manufacturing (third-party) orders. The Company’s unaudited net revenue for the first six months of 2026 amounted to EUR 24.6 million, representing a decrease of 30.4% compared to the corresponding period of 2025. 01.01.2026- 30.06.2026 01.01.2025- 30.06.2025 9Lcs 9Lcs Sales volume, in 9 liter boxes 1 163 398 1 882 538
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 5 REPORT OF THE MANAGEMENT (continued) Gross profit for the first six months of 2026 amounted to EUR 2.9 million, representing a decrease of EUR 3.7 million, or 56.5%, compared to the corresponding period of 2025. The decrease in gross profit was mainly attributable to changes in the product mix and adjustments to the pricing methodology. Although cost reductions were achieved during the reporting period, their positive impact was largely offset by the aforementioned factors. In the first six months of 2026, the Company recorded an operating loss of EUR 1.4 million, compared to an operating profit of EUR 0.7 million in the corresponding period of 2025. The operating profit margin for the first six months of 2026 was -5.6% (corresponding period of 2025: 2.0%). The deterioration in operating results compared to the corresponding period of the previous year was mainly attributable to the decline in production and sales volumes. For the reporting period, the Company recorded an unaudited net loss of EUR 0.95 million, compared to a net profit of EUR 1.2 million in the corresponding period of 2025. In order to maintain its competitiveness under challenging economic and geopolitical conditions while improving its financial performance, the Company continues to implement measures aimed at increasing the efficiency of its production processes and optimi sing costs, including the restructuring of its production facilities and logistics operations, thereby also reducing the excise duty burden.
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 6 REPORT OF THE MANAGEMENT (continued) The Company’s alternative performance indicators relating to previous reporting periods are presented below. The Company’s return on equity (ROE) and return on assets (ROA) indicators as at the reporting date and for the two preceding comparative periods: * ROA = Net profit of the last 12 months / average asset value x 100% ** ROE = Net profit of the last 12 months / average total equity x 100% The Company’s EBIT* and EBITDA** indicators for the reporting period and in the previous two comparative periods: * EBIT = Earnings for the last 12 months before corporate income tax, financial expenses and financial income. * EBITDA = Earnings for the last 12 months before corporate income tax, financial expenses, financial income, depreciation and amortization. The Company’s management uses alternative performance indicators to assess the Company’s performance during the reporting period and to support decision-making. AS “Amber Latvijas balzams” is one of the largest taxpayers in the country. During the reporting period, the Company paid EUR 8.4 million in taxes to the state budget, including excise tax in the amount of EUR 6.4 million. Non-financial indicators and activities during the reporting period In addition to the financial indicators presented in the report, the Company also uses non-financial indicators, such as RFT (Right First Time) and OTIF (On Time In Full), to assess its operational efficiency. The RFT indicator measures the proportion of products manufactured to the required quality standard on the first production run. In the first six months of 2026, RFT reached 99.6%, representing an improvement compared to 97.6% in the corresponding period of 2025. This demonstrates the Company’s ability to maintain high production quality and effective process management. The OTIF (On Time In Full) indicator reflects the Company’s ability to fulfil customer orders on time, in full and to the required quality standards. In the first six months of 2026, the OTIF indicator reached 74.3%, compared to 97.9% in the corresponding period of 2025. The management of AS “Amber Latvijas balzams” continues to regularly assess ongoing investment projects and make decisions regarding their implementation, as well as, where necessary, their postponement or cancellation, taking into account the Company’s operational priorities and market conditions.
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 7 REPORT OF THE MANAGEMENT (continued) Risk assessment and management Having assessed the external and internal environmental factors that may affect the Company’s operations and the products it manufactures, the Company’s management places particular emphasis on the following aspects: • Timely identification of changes in legal and regulatory requirements and ensuring compliance, including prompt communication and training of personnel; • Decisions by U.S. judicial institutions related to Chapter 11 and their impact on the conditions for continued operations of the affiliated group company in the U.S., in order to enable the Company to take timely measures to maintain sales volumes in the U.S. market; • Ensuring continuity of production through timely planning of production capacity and workload; • Creating appropriate workplaces by investing in the development of production, service delivery, and human resources, and providing adequate training. The Company strictly complies with the laws of the Republic of Latvia in its operations. Given the nature of its industry, the Company devotes significant attention to the assessment of transactions and their compliance with applicable laws. Stock and fund market In 2025, the Company’s share price fluctuated between EUR 1.65 and EUR 2.76 per share (Nasdaq Baltic ticker: BAL1R; ISIN: LV0000100808).
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 8 REPORT OF THE MANAGEMENT (continued) The dynamics of share price for the previous three reporting periods is presented as follows: Average price, EUR Minimum price, EUR Maximum price, EUR 6 month 2026 2,07 1,65 2,76 6 month 2025 8,27 7,65 9,30 6 month 2024 9,02 8,30 9,40 6 month 2023 9,86 9,50 10,20 Financial risk management he core operations of AS “Amber Latvijas balzams” are exposed to a number of financial risks, including credit risk, liquidity risk and interest rate risk. The Company’s management continuously assesses and manages these risks in order to mitigate their potential adverse impact on the Company’s financial position and operating results. Financial assets that potentially expose the Company to concentrations of credit risk primarily comprise trade receivables, receivables from related companies and loans granted. The Company has implemented and adheres to a credit policy whereby goods are sold on deferred payment terms only to customers with a good credit history. In international transactions, the Company also complies with applicable sanctions regimes, based on information published on the website of the Ministry of Foreign Affairs of the Republic of Latvia, as well as its internal procedures. The Company follows a prudent approach to liquidity risk management by ensuring that adequate credit facilities are available to meet its obligations as they fall due. The Company’s management manages liquidity and cash flow risk by maintaining adequate ca sh reserves and ensuring sufficient funding through available loans, credit facilities, finance leases and other financing arrangements, as well as by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. In the first six months of 2026, the Company’s current assets exceeded its current liabilities by EUR 18.9 million (2025: EUR 77.7 million). The Company’s current ratio and quick ratio for the last three years were as follows: * Current ratio = The proportion of current assets to current liabilities ** Quick ratio = A total of trade receivables, receivables from related parties and cash and cash equivalents to current liabilities
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 9 REPORT OF THE MANAGEMENT (continued) Future prospects of Company Taking into account the challenging market conditions, the Company’s financial performance and the ongoing legal protection proceedings (LPP), management continues to assess measures that could contribute to the Company’s financial stability, operational efficiency and sustainable development. These include opportunities to enhance the governance structure, optimise internal processes and control systems, and identify additional opportunities for cost reduction and improved operational efficiency. At the same time, in compliance with the measures and obligations established under the legal protection proceedings, the Company plans to continue its efforts to increase production efficiency, optimise costs and improve business performance in order to s trengthen the Company’s financial stability and ensure the sustainability of its operations. ______________________ Andrejs Višņausks Chairman of the Board Riga, 30 September 2026
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 10 STATEMENT OF THE MANAGEMENTS’ RESPONSIBILITY The Company’s management declares that, to the best of the knowledge of the persons responsible, the condensed financial statements have been prepared in accordance with the requirements of the applicable laws and regulations and give a true and fair view of the Company’s assets, liabilities, financial position and profit or loss. The Management Report contains true and accurate information. _______________________________ Andrejs Višņausks Chairman of the Board Riga, 30 September 2026
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 11 INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 12 STATEMENT OF FINANCIAL POSITION _______________________________ Andrejs Višņausks Chairman of the Board Riga, 30 September 2026
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 13 STATEMENT OF CHANGES IN EQUITY
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 14 CASH FLOW STATEMENT
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 15 NOTES (1) GENERAL INFORMATION AS “Amber Latvijas balzams” (the “Company”) is a joint-stock company incorporated and domiciled in Latvia. The Company was established in 1900 as “Riga State Vodka Warehouse No. 1”. From 1970 to 2022, it operated under the name AS “Latvijas balzams”, and s ince May 2022 it has operated under the name AS “Amber Latvijas balzams”. The Company’s registered address is 160 Aleksandra Čaka Street, Riga, LV -1012, Latvia. The shares of AS “Amber Latvijas balzams” are listed on the Baltic Secondary List of Nasdaq Rig a (ISIN: LV0000100808). The Company is the largest producer of alcoholic beverages in the Baltic States. AS “Amber Latvijas balzams” produces more than 100 different alcoholic beverages. In 2026, the principal shareholder, holding 89.99% of the Company’s share capital, is Amber Beverage Group Holding S.à r.l. (a company registered in Luxembourg). (2) ACCOUNTING POLICIES Basis for preparation The unaudited condensed financial statements for 2026 have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”. The condensed financial statements do not include all the information and disclosures required in annual financial statements and should therefore be read in conjunction with the Company’s 2026 financial statements. Functional currency and revaluation The Company’s functional and presentation currency is the official currency of the Republic of Latvia – the euro (EUR). All transactions denominated in foreign currencies during the reporting period are translated into euros using the exchange rate applicable at the beginning of the transaction date, as determined under the exchange rate system of the European Central Bank and other central banks and published on the European Central Bank’s website. At the end of the reporting period, all monetary assets and liabilities denominated in foreign currencies are translated into euros using the official exchange rates published by the European Central Bank at the end of the last day of the reporting period. Where the European Central Bank does not publish an exchange rate for a particular foreign currency, such assets and liabilities are translated using the exchange rate published by the relevant national central bank on the last day of the reporting period or another third -party reference exchange rate. Gains and losses arising from fluctuations in foreign exchange rates are recognised on a net basis in the statement of profit or loss for the respective period. 30.06.2026 30.06.2025 EUR EUR 1 USD 0,8777 0,8532 1 GBP 1,1604 1,1689 Changes in accounting policy and disclosures The accounting policies applied in preparing these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2025. The Company has not early adopted any standards that have been issued but are not yet effective. The Company intends to adopt the above -mentioned standards and interpretations when they become effective and will assess their impact at that time.
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 16 NOTES (continued) (3) NET REVENUE a) Operation and reportable segment The Company’s core business is the production of alcoholic beverages. AS “Amber Latvijas balzams” manufactures more than 100 different brands of alcoholic beverages. Since the Company’s principal business activity is primarily alcoholic beverage production, the Company has only one reportable operating segment. b) Revenue by type c) Revenue by geography (by customer)
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 17 NOTES (continued) (4) COST OF SALES (5) DISTRIBUTION EXPENSES
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 18 NOTES (continued) (6) ADMINISTRATIVE EXPENSES (7) NET FINANCE INCOME/ (COSTS)
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AS Amber Latvijas balzams Unaudited condensed financial statements for the first six months of year 2026 19 NOTES (continued) (8) EARNING PER SHARE Earnings per share are calculated by dividing the net profit of the reporting year by the average number of shares in the reporting year. (9) SUBSEQUENT EVENTS By a judgment of the Luxembourg District Court sitting in commercial matters dated 21 August 2026, the moratorium (sursis) granted by the judgment of 24 April 2026 in connection with the commencement of judicial reorganisation proceedings (réorganisation judiciaire) was extended for a period of four months, commencing on the day following the expiry of the initial moratorium (sursis) and ending on 24 December 2026. The purpose of the proceedings is to provide the Controlling Shareholder with an opportunity (i) primarily to reach a settlement with its principal financial creditors pursuant to Article 11 of the Law and (ii), alternatively, to obtain creditors’ approval of a reorganisation plan pursuant to Articles 38–54 of the Law. In this context, communication with the bondholders will be undertaken. Pursuant to Articles 25–32 of the Law, the moratorium in respect of claims arising prior to the judgment commencing the proceedings suspends enforcement measures, conservatory or enforcement attachments, as well as the enforcement of security interests and guarantees granted in favour of the bondholders. Accordingly, any previously notified event of default in respect of the bonds is suspended for the duration of the moratorium and cannot result in acceleration or enforcement. The Controlling Shareholder has appointed Alvarez & Marsal (London) as its restructuring adviser to assist in the development and implementation of the restructuring plan. On 6 August 2026, pursuant to an assignment agreement, SIA “MBO Beverages” acquired from Luminor Bank AS a claim against AS “Amber Latvijas balzams” in the amount of EUR 18,103,293.13 arising from the Overdraft, Guarantee and Letter of Credit Facility Agreement No. 392KL/18T dated 19 December 2018. Furthermore, pursuant to an assignment agreement dated 9 September 2026, SIA “MBO Beverages” acquired from UBS AG (formerly Credit Suisse AG) a claim against the Company in the amount of EUR 17,276,330.62 arising from the EUR 27,000,000 loan agreement dated 3 December 2019, as amended on 1 September 2021, 26 November 2021, 12 December 2024 and 12 December 2025.