Investor relations

Legal basis: Article 17 section 1 of MAR – confidential information

Subject: Updating information on the impact of the coronavirus on the Company's Capital Group operations

Content of the report:

The Management Board of J.W. Construction Holding S.A. with its registered office in Ząbki "Company", pursuant to the information provided on 16 March 2020, in the report of the Management Board on the activities of the Company's Capital Group attached to the annual report for 2019, publishes updated information on the impact of COVID - 19 on the activities of the Company and its Capital Group.

1) Hotel and aparthotel operations

The Company and its Capital Group companies operate directly across seven hotel and aparthotel facilities ("Hotels"). The hotels' operations in 2019 amounted to PLN 78.5 million in revenue, which accounted for approximately 13 % of the Company's total revenues. Since 16 March 2020, hotels have not provided hotel services. Between January 1, 2020 and the date of suspension of hotel services, hotel revenues amounted to approximately PLN 17 million. Due to the fact that it is unclear:

• when hotel operations can be resumed,

• what impact the economic situation will have on individual customers' travel behaviour,

• what policy will be adopted by economic operators regarding the organisation of business events

at the present time, it is impossible to assess to what extent the COVID-19 epidemic will affect the hotel industry and to what extent it will reduce the revenues from the hotels' operations later this year. The Company remains in touch with business partners who had planned their stays in the hotels. There are attempts to maintain the reservation by postponing the dates to later months of 2020. However, booking new dates does not guarantee that the events will definitely take place or that they will be carried out on the scale previously planned. This depends on the future economic condition of the entities procuring the service, which is impossible to estimate at present.

2) Development operations

It is more difficult to assess the impact of COVID-19 on this area of activity, as it is affected by smaller constraints and the period of constraint is relatively short.

Nevertheless, the Company would like to draw attention to the following areas:

- Timely realization of the conducted investments: The Company has received written warnings from contractors that due to possible employee absences, deadlines for the execution of works may be postponed. However, in the Company's opinion, these were precautionary measures aimed at anticipating such circumstances in the future. As of today, after a period of about a month from the date of submitting the information in the annual report, the Company has not observed a significant decrease in the pace of work on the investments under construction;

- Operation of public administration authorities: When issuing decisions, certificates, decisions in administrative processes, the Company observed extended time due to the lack of possibility of direct contact in the office, lack of possibility of personal submission or receipt of documents, and on duty manner of work of officials. This results in a two to three times longer processing time than in standard procedures;

- Conclusion of new contracts for the construction and sale of premises: Comparing data for February and March 2020. The Company has recorded a decrease in the conclusion of contracts within the Group by approximately 45%, which, in the Company's opinion, is due to the impact of the COVID- 19 epidemic. Conclusion of a development contract requires the buyer to visit a notary's office in person, which means an additional risk of visiting a place with other people. Moreover, in the case of consumers, who constitute the majority of the Company's customers, we are dealing with the fear of violation of the ban on movement introduced by the state authorities. Despite the actions taken to reduce the risk of possible infection, involving an increase in the intervals between the planned dates of signing the deeds, each time the area is disinfected after a client's visit, we observe increased fears of a visit to a notary office. The Company has observed that approximately 30% of the clients who have made an appointment with a notary's office (in order to conclude an agreement transferring the ownership or a development contract) do not appear on the agreed date without providing a reason. The Company attributes the above to the COVID-19 epidemic.

One factor whose impact cannot be assessed today is the impact on the financial capabilities and purchasing behaviour of buyers. In the event that they lose their jobs or threat to their primary source of income, they may have to refrain from their purchasing plans;

- The Company has recorded the receipt of requests from customers who already have concluded agreements for the construction and purchase of premises and do not use bank loans to change or postpone the previously agreed payment dates. The requests are motivated by the liquidity situation of the buyers caused by COVID-19 (revenue disruption). At present, these are requests to change payment schedules, but if the closure of the economy continues in the long term, it cannot be ruled out that withdrawals from already concluded contracts may occur due to the buyers' loss of liquidity.

The above information has been prepared on the basis of events recorded so far and cannot constitute a forecast of the effects that may occur by the end of the year, as these depend on many factors not yet known and impossible to predict. The Company considers the following factors to be of significant influence: the scope and duration of restrictions imposed on the economy, the impact of such restrictions on the situation of the Company's customers, the policy of banks with respect to mortgage loans, the purchasing behaviour of the society with respect to the purchase of premises. The Company informs that it has taken steps to limit the possibility of infection among its employees by: increasing the distance between workstations in offices, equipping employees with workstation and hand disinfectants, gloves and protective masks, significantly limiting the access of outside persons to the Company's offices, introducing, to a greater extent, remote contact with third parties.

At the same time, the Company informs that in connection with fulfilling the conditions set out in the Act of 02 March 2020 on special arrangements for preventing, counteracting and combating COVID-19, other infectious diseases and crisis situations caused by them, as amended, it has decided to apply for the aid measures provided for in Article 15g of the said Act in order to protect workplaces.