TIDMAGTA
RNS Number : 7161P
Agriterra Ltd
29 October 2012
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector:
Agriculture
29 October 2012
Agriterra Ltd ('Agriterra' or 'the Company')
Operations Update, Unaudited financial results for the year
ended 31 May 2012 and Notice of Final Results
Agriterra Ltd, the AIM listed pan African agricultural company,
is pleased to announce that the Company's results for the year
ended 31 May 2012 will be released on 12 November 2012.
Agriterra continues to build its African focussed agricultural
and food production businesses in Mozambique and Sierra Leone, and
now has three revenue streams from beef, grain and cocoa. Revenues
are generated from Mozbife Limitada ('Mozbife') which conducts
cattle ranching, feedlot and abattoir operations, Desenvolvimento E
Comercialização Agricola Limitada ('DECA') and Compagri Limitada
('Compagri'), which operate maize farming and processing
businesses, and Tropical Farms Limited ('TFL'), which manages the
Group's cocoa sales, trading and farming activities.
During the year, the Group has invested heavily in expansion of
activities in line with its long term growth strategy. Mozbife's
current herd exceeds 4,800 cattle with 16,000 hectares of land
providing room for expansion. The herd is targeted to reach 6,000
by the end of 2012. The 48 billion litre dam at the Mavonde Stud
Ranch has been completed which has the capacity to irrigate 4,000
hectares and increases the head per hectare ration from 1.5 to 6.
The Group now has an 18 pen feedlot at Vanduzi with rolling
capacity of up to 3,000 head every 90 days, and over 700 hectares
planted for feed. The abattoir, with a 4,000 head per month
processing rate, has been completed and butchers shops are being
established to increase margin and complete the field to fork
model. DECA continues to operate at Chimoio and Tete with storage
capacity of 50,000 tonnes and processing of 60,000 tonnes per
annum. DECA and Compagri sold 21,717 tonnes of maize meal during
the year (2011: 28,822 tonnes), with lower volumes due to a very
strong harvest in 2011, which subsequently reduced demand for the
mealie meal product made by DECA and Compagri. However initial
contributions from the beef and cocoa operations resulted in
turnover for the Group increasing marginally to US$13.8 million
(2011: US$13.6 million). TFL's operations have expanded rapidly,
and there are now three main hubs and 41 satellite stores servicing
a direct buying register of 3,500 farmers. The company traded
approximately 1,250 tonnes of cocoa and 75 tonnes of coffee during
the year ended 31 May 2012. A 15 acre collateral management
facility is being developed in Freetown and plantations are being
secured. The on-ground team has been expanded significantly to
cater from the anticipated rise in revenues, which already exceed
US$3 million.
As a result of the progress and developments which reflect the
Company's investment strategy, the Company's will report an
approximate 55% increase in net asset value to US$38.5 million
(2011: US$24.8 million). During the period, investment in the
capital and operating infrastructure has been significant and the
Board believes it now has the foundation in place from which to
raise profitability and further enhance shareholder value. In
particular, after three years of developing its Mozambique ranching
operations, and the rapid implementation of an infrastructure for
TFL to enable higher volumes for trading and plantation
development, the Board believes that Agriterra is approaching the
point where it will soon be profitable on a sustainable basis. With
this in mind, the Company is reporting a pre-tax loss of
approximately US$6.9 million (2011: US$2.1 million) and turnover of
US$13.8 million (2011: US$13.5 million.). Importantly, and
reflecting the progress being made, trading for the first quarter
of the current financial year has been significantly higher than
the previous corresponding period.
With regards to cash, the Company recently announced that it had
signed an agreement to sell its legacy interest in the South Omo
Block to Marathon Oil Corp ('Marathon Oil'). Under the terms of the
agreement, the Company's 20% legacy interest in the South Omo Block
will be sold to Marathon Oil for a cash consideration of US$40
million on completion and a further US$10 million on Marathon Oil's
participation in a "Commercial Discovery". Additionally, the
Company is due payment of GBPGBP11.3 million, being partial
recompense for work already undertaken and the substantial
investment made by the Company on the Block Ba oil concession area
in South Sudan, during its previous incarnation as White Nile
Limited.
With such significant inflows of cash, the Company will be in a
strong position to accelerate its development programme, achieve
critical mass, invest in new projects and jurisdictions in order to
achieve its objective of becoming a significant pan-African
agricultural company.
Andrew Groves, Agriterra Chief Executive Officer said, "We
continue to make excellent progress building a long term
sustainable agricultural and food production business, and now have
three revenue streams from beef, grain and cocoa sales. Our
investment programme and expansion objectives will increase and
diversify these revenue streams significantly and improve margins
as we target profitability on a corporate level in the
mid-term.
"We also anticipate two significant cash injections in the near
future, firstly on completion of our agreement with Marathon Oil
which will provide the group with an additional US$40 million
before tax, followed by a compensation payment of GBP11.3 million
in relation to work completed at the Block Ba oil concession. The
dramatic cash injections will provide Agriterra with a very healthy
cash position which already underpins the valuation of the Company,
but will also enable the execution of our rapid growth
initiatives."
For further information please visit www.agriterra-ltd.com or
contact:
Andrew Groves Agriterra Ltd Tel: +44 (0) 20 7408
9200
Jonathan Wright Seymour Pierce Ltd Tel: +44 (0) 20 7107
8000
David Foreman Seymour Pierce Ltd Tel: +44 (0) 20 7107
8000
Andy Cuthill MC Peat & Co LLP Tel: +44 (0) 20 7104
2332
Susie Geliher St Brides Media & Finance Tel: +44 (0) 20 7236
Ltd 1177
The financial information for the year ended 31 May 2012 set out
below is unaudited and does not constitute the Company's statutory
accounts for the year ended 31 May 2012.
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the year ended 31 May 2012
Year Year
ended ended
31 May 31 May
2012 2011
Continuing Operations Note $'000 $'000
----- ---------- ----------
Revenue 1 13,826 13,588
Cost of sales (11,913) (10,372)
Gross profit 1,913 3,216
Increase in value of biological
assets 400 214
Operating expenses (8,851) (6,109)
Other (expenses) / income (262) 349
Operating loss (6,800) (2,330)
Finance income 48 159
Finance costs (164) -
Loss before taxation (6,916) (2,171)
Income tax expense (26) (168)
Loss after tax (6,942) (2,339)
Discontinued operations
Profit / (loss) for the year 721 (89)
Loss for the year attributable
to owners of the parent (6,221) (2,428)
========== ==========
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 May 2012
2012 2011
Note $'000 $'000
------ ---------- ----------
ASSETS
Non-current assets
Intangible assets 963 271
Property, plant and equipment 26,243 13,264
Investments 9 -
Biological assets 1,642 631
Total non-current assets 28,857 14,166
---------- ----------
Current assets
Biological assets 1,018 157
Inventories 6,701 2,976
Trade and other receivables 3,628 2,039
Cash and cash equivalents 3,553 8,172
Total current assets 14,900 13,344
---------- ----------
TOTAL ASSETS 43,757 27,510
---------- ----------
LIABILITIES
Current liabilities
Trade and other payables (5,301) (2,678)
NET ASSETS 38,456 24,832
========== ==========
EQUITY
Issued capital 1,957 1,387
Share premium 148,530 131,593
Share based payment reserve 1,620 1,360
Translation reserve 296 (1,782)
Retained earnings (113,947) (107,726)
TOTAL EQUITY ATTRIBUTABLE TO
OWNERS OF THE PARENT 38,456 24,832
========== ==========
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 May 2012
Year ended Year ended
31 May 31 May
2012 2011
$'000 $'000
----------- -----------
Operating activities
Loss before tax (6,916) (2,171)
Adjustments for:
- Depreciation of property, plant
and equipment 1,877 1,228
- Loss on disposal of property, plant
and equipment 12 5
- Share based payment charge 100 -
- Increase in Biological assets (400) (214)
- Foreign exchange 150 (141)
- Net interest expense / (income) 116 (159)
Operating cash flow before movements in
working capital (5,061) (1,452)
Working capital adjustments:
- (Increase) / decrease in inventory (3,505) 1,973
- Increase in receivables (1,545) (547)
- (Decrease / increase in payables (690) 261
----------- -----------
Cash (used in) / from operations (10,801) 235
Finance charges (164) -
Interest received 48 159
Net cash (used in) / from continuing operating
activities (10,917) 394
Net cash from / (used in) discontinued
activities 721 (198)
----------- -----------
Net cash (used in) / from operating
activities (10,196) 196
----------- -----------
Taxation
Corporate tax paid (60) (38)
----------- -----------
Net cash outflow from taxation (60) (38)
----------- -----------
Investing activities
Purchase of intangible asset - (250)
Purchase of subsidiary net of debt (283) -
acquired
Purchase of property, plant and
equipment (7,575) (2,568)
Proceeds on sale of property, plant
and equipment 96 38
Purchase of biological assets (1,428) (255)
Proceeds on sale of investment in financial
assets - 128
----------- -----------
Net cash used in investing activities (9,190) (2,907)
Financing activities
Proceeds from issue of share capital 15,000 6,883
Share issue costs (610) (161)
Draw down of bank loan 123 -
Net cash from financing activities 14,513 6,722
----------- -----------
Net (decrease) / increase in cash and
cash equivalents (4,933) 3,973
Cash and cash equivalents at start
of the year 8,172 3,442
Exchange rate adjustment 314 757
Cash and cash equivalents at end
of the year 3,553 8,172
=========== ===========
1. Segment reporting
The directors consider that the Group's continuing activities
comprise the segments of grain processing, beef production and
cocoa businesses, and other unallocated expenditure in one
geographical segment, Africa.
Revenue represents sales to external customers in the country of
domicile of the group company making the sale.
Year ending 31 May Grain Beef Cocoa Unallocated Total
2012
$'000 $'000 $'000 $'000 $'000
-------- -------- ------ ------------ --------
Revenue 9,681 895 3,250 - 13,826
-------- -------- ------ ------------ --------
Segment results
- Operating loss (1,203) (2,310) (578) (2,709) (6,800)
- Interest (expense)
/ income (138) - - 22 (116)
-------- -------- ------ ------------ --------
Loss before tax (1,341) (2,310) (578) (2,687) (6,916)
-------- -------- ------ ------------ --------
Income tax (26) - - - (26)
-------- -------- ------ ------------ --------
Loss after tax (1,367) (2,310) (578) (2,687) (6,942)
======== ======== ====== ============ ========
Year ending 31 May Grain Beef Cocoa Unallocated Total
2011
============================= ======= ====== ====== ============ ========
$'000 $'000 $'000 $'000 $'000
============================= ------- ------ ------ ------------ --------
Revenue 13,533 55 - - 13,588
============================= ------- ------ ------ ------------ --------
Segment results
============================= ======= ====== ====== ============ ========
- Operating profit
/ (loss) 270 (958) - (1,642) (2,330)
============================= ======= ====== ====== ============ ========
- Interest income/(expense) 141 0 - 18 159
============================= ------- ------ ------ ------------ --------
Profit / (loss) before
tax 411 (958) - (1,624)
============================= ======= ====== ====== ============ ========
Income tax (168) - - - (168)
============================= ------- ------ ------ ------------ --------
Profit / (loss) after
tax 243 (958) - (1,624) (2,339)
============================= ======= ====== ====== ============ ========
The segment assets and liabilities at 31 May 2012 are as
follows:
Grain Beef Cocoa Unallocated Total
$'000 $'000 $'000 $'000 $'000
------- ------- ------ ------------ -------
Assets 17,934 12,410 2,633 10,780 43,757
Liabilities 595 35 154 4,517 5,301
The segment assets and liabilities at 31 May 2011 are as
follows:
Grain Beef Cocoa Unallocated Total
$'000 $'000 $'000 $'000 $'000
------- ------ ------ ------------ -------
Assets 17,648 5,112 - 4,750 27,510
Liabilities 532 124 - 2,022 2,678
**ENDS**
Notes
Agriterra Ltd is an AIM listed agricultural company with four
divisions: beef, maize, cocoa and palm oil. Its cattle ranching
business, Mozbife, has a herd in excess of 4,600 head, a land
holding of over 16,250 hectares, a feedlot and a 4,000 head per
month capacity abattoir. In addition to selling meat from its own
herds, throughput for the feedlot and abattoir will be supplemented
using cattle bought in from local communities.
The Company's maize buying and milling operations, DECA and
Compagri, are located in Chimoio and Tete in central and
north-western Mozambique respectively. These collect maize from
circa 350,000 farmers using the Company's own vehicle fleet,
process it into mealie meal, the African staple, and then sell it
back to the local market, into supermarkets and to the World Food
Programme.
Agriterra's cocoa business is based in Sierra Leone, through its
100% subsidiary Tropical Farms Limited, which is currently a buying
and trading operation, but provides an ideal conduit to branch out
into cocoa production in West Africa. Its strategy is to establish
itself as a secure, sustainable and traceable source of supply to
meet the requirements of the major cocoa consumers who are placing
increased emphasis in this area.
The Company has expanded its portfolio of agricultural products
through the addition of palm oil, and holds a lease over
approximately 45,000 hectares of brownfield agricultural land in an
area suitable for palm oil production in the Pujehun District in
the Southern Province of Sierra Leone. This area of Sierra Leone,
which is close to the Liberian border, receives one the highest
levels of rainfall in Sierra Leone, which in itself, receives some
of the highest rainfall globally. In addition, the lease area is
located on the equatorial belt, which is the most favourable
geographical location for palm oil production.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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