Newsletter Q2 2026

Dear WelMac Circle,

To mark Welmac’s 10th anniversary for our staff and shareholders, we have created an ‘Old Dutch’ commemorative tile. This is because the first documents we have regarding Welgevonden date back to April 1, 1873, when the Welgevonden farm was registered in the name of a Dutch family.

It was a beautiful moment for the staff at Welgevonden to look back on the past period, but also for my wife Ines and me to place a memorial rock and plant a mahogany tree for Nicolas. Welgevonden was his favorite place on earth, and in this way, we also have a place somewhere to be ‘with him’.

We are all too aware that WelMac required a long run-up, but given the momentum the company is currently showing, expectations are becoming increasingly concrete and the moment of profitability is now undeniably drawing closer. Naturally, we remain dependent on prices on the international market and all normal agricultural risks, but with our move into processing activities, an entirely new cash flow is being generated, alongside that of the ever-growing orchard and nursery, which significantly reduces these risks.

I would also like to take this opportunity to express my sincere gratitude and respect to all WelMac employees, both in the Netherlands and South Africa. There have been major challenges at times over the past few years, but our employees have faced them head-on. They have all demonstrated admirable perseverance and ingenuity, and ultimately emerged victorious through all setbacks and problems.

As shareholders and certificate holders, we can only be happy and grateful for that.

Nick

2026 - The turnaround

This year WelMac has hit the ground running again. It was very clear to see that progress has been made on all fronts and that various recent measures are already starting to bear fruit.

First of all, there is of course this year's harvest. The natural growth of the trees was already visible in the large quantity of nuts hanging in the trees, but it is of course always difficult to estimate what the actual volume will be.

At the time of writing this newsletter, July 1, 2026, the harvest is already well above that of last year, and we are hitting 300,000 kilos. And we are still harvesting for the next 3 weeks! The quality of our harvest is also higher than before and, with 16% larger kernels, stands far above the regional average. To give an idea of ​​what we are achieving on 225 hectares, another grower would need over 260 hectares with proportionally higher costs.

Furthermore, significant efficiency gains have been made regarding costs. Through the reorganization of operations during the harvest and improved cost control across the board, operational cost savings of approximately 21% have already been realized compared to the previous year.

On the financial side, we have also achieved successes. For instance, financing from FNB Bank and Invest International was successfully renegotiated, new long-term financing agreements were made, and the balance sheet was significantly strengthened.

In addition, thanks to a successful campaign to attract growth capital, more than €2.1 million was raised in approximately 8 months through the sale of certificates and the issuance of bond loans.

This was used to purchase several machines for Welgevonden, including a lime spreader, a spray cart, a tractor, and a new sorting station. Sufficient capital was also committed for the construction of a fully equipped pump house, electronics, and irrigation system in August/September on the final 42 hectares on the north side of the farm. For this reason alone, the expectation is that the harvest on this block will increase by approximately 30,000 kilos next year.

From August 1st, we expect to be able to raise the necessary capital for the co-financing of the processing plant and further strengthening of the balance sheet and working capital through the issuance of a WelMac bond with an annual interest rate of 8% and a maturity of 4 years. Currently, 33% of the maximum target amount of €1,500,000 has already been pledged through pre-subscription by existing shareholders and certificate holders.

Unqualified Opinion Vallei Accountants

Finally, following a thorough audit, including an on-site visit to South Africa, Vallei, our accountant, has established the annual figures and issued an unqualified opinion. Much excellent work was done in this regard by Adelé du Toit, for whom this is the first year as Manager Finance & Accounting that she has assumed full responsibility for the entire WelMac Group.

NPEX Listing

In our previous newsletter, we indicated that the start of tradability via NPEX could temporarily cause additional pressure on the price. This expectation has materialized. A limited number of certificate holders chose to sell (part of) their position to free up liquidity or reallocate the investment.

This concerned only a very small portion of the total number of outstanding certificates. At the same time, there was immediate interest from investors, who seized the lower price to invest in Welmac or expand their stake. This underscores that interest exists on both sides of the market.

We therefore view this initial trading period primarily as a first phase in which supply and demand have found each other in the market. As liquidity and trading volume develop further and Welmac continues to realize its strategic plans, we expect the share price to increasingly develop based on the underlying performance and prospects of the company.

Welmac Processing & Marketing

As part of WelMac's continued growth as a company, we have made progress on plans for a joint venture with McNuts/Rand Agri. During my visit to Welgevonden in May 2026, we further concretized the plans, and a proposal including a business plan was ultimately sent to McNuts.

Now that the harvest is gradually winding down, there is more time to focus on the progress of the joint venture. A good first concrete step has since been taken, whereby, thanks to Trichard's efforts, not the intended 50,000 kilos of nuts from other growers arrived, but well over 300,000 kilos to date. This was such a great success that processing had to be scaled up to an almost continuous service with evening and weekend shifts to dry and sort the nuts on time. Our entire staff worked extremely hard with tremendous enthusiasm to handle this peak load.

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As a result, McNuts has also scaled up the plans for the plant at Welgevonden, and the intention is now to extract oil for sale on the international market, in addition to Nut in Shell and Kernel. We are already receiving demand for this from the Netherlands as well.

For Phase 1, to be operational for nut in shell processing in 2027, a new floor plan is being designed for the existing warehouse to accommodate more drying capacity so that we can dry to less than 2% MC (moisture content). A sorting machine is also being installed so that we can sort by size directly on-site and decide whether a specific stock is sold as nut in shell or proceeds to Nelspruit before 2027 for cracking into kernel and packaging. Additionally, a compact laboratory will be installed for taking samples.

Given the large volumes that may come in from other growers, a small cracking machine is also being installed for the rejected nuts, and these are being pressed into oil.

And another 30,000 kilos on their way to consumers in Europe and the Far East.      

South Africa update

Via this link, you can view the PowerPoint presentation by COO Herman Claassens, which he presented during the shareholders' meeting.

WelMac Board

In February 2026, it was reported that Cantora BV had joined as a director of WelMac. However, this appointment was annulled because the correct procedure was not followed during the shareholders' vote on the matter. WelMac has acknowledged the annulment, and the appointment of Cantora BV has been retroactively reversed, a change which has also been processed by the Chamber of Commerce. Cantora BV contested the annulment of the appointment decision, as a result of which the shareholders of WelMac voted for the sake of clarity during the shareholders' meeting on the dismissal of Cantora BV as a director of WelMac. The shareholders present, whether or not represented by proxy, approved the dismissal of Cantora BV with a majority of 97%. Consequently, Nick Grooss is currently the sole director of WelMac with independent authority. The board and shareholders have since decided to initiate the succession procedure for the CEO position.

2025 Annual Report

During the recent shareholders' meeting, management presented the 2025 annual report and provided an overview of the Group's financial performance, strategic progress, and future outlook. The 2025 financial statements have been adopted by the shareholders' meeting and can be viewed here.

Although revenue fell to €467 thousand as a result of challenging market conditions and the continued maturation of the orchards, the company achieved a significant improvement in operational performance. Through disciplined cost management and operational efficiency, operating costs were reduced by 21%, resulting in a 24% improvement in the operating loss compared to the previous year.

A key achievement during the year was the strengthening of the Group's financial position. Equity increased from €1.47 million to €2.58 million following the conversion of €2.49 million in major shareholder (Berkshire Holding BV) financing into equity, together with additional capital contributions. In addition, the successful restructuring of the First National Bank facilities and the revised Invest International/DGGF repayment terms have significantly improved the Group's liquidity profile and reduced pressure on short-term financing.

The shareholders' meeting also noted the continued development of the Group's orchards, with approximately 225 hectares of planted orchards to date. As these orchards continue to mature, management expects production volumes to increase steadily in the coming years, which will support future revenue growth and improve profitability. The Group remains committed to regenerative farming practices, with an emphasis on improved soil health, efficient water management, and sustainable production methods that will increase productivity in the long term.

Management confirmed that, although the Group remains dependent on external financing as long as the orchards mature, the strengthened balance sheet, improved financing arrangements, and continued shareholder support provide a suitable basis for preparing the financial statements on a going concern basis. Looking ahead, management remains focused on increasing production, maintaining financial discipline, and executing the next phase of the Group’s long-term growth strategy. Financing has now been secured to complete the fertigation infrastructure on the remaining 42 hectares, thereby completing the development of the northern section of Welgevonden Farm. In addition, management is working on a comprehensive strategic plan for the next 10 years for the phased development of the remaining 350 hectares of the farm that have not yet been brought into production. These initiatives will position the Group for further expansion, increased production capacity, and sustainable long-term value creation.

The shareholders' meeting acknowledged the significant progress initiated in 2025 and expressed its appreciation for the dedication and commitment of management and all employees. Although the company is still in a development phase, investments in orchard expansion, financial restructuring, and operational improvements have laid a stronger foundation for future growth and support management’s confidence in the Group’s long-term prospects.

A. Du Toit

Manager Finance & Accounting
WelMac Group

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