TIDMAMED
RNS Number : 4352S
Amedeo Resources PLC
24 September 2014
24 September 2014
Amedeo Resources plc
("Amedeo" or the "Company")
Interim Results for the six months ended 30 June 2014
Highlights
-- YZJ Offshore New Yard operational
-- Explorer 1 keel laid and build continuing to quality, on schedule and at New Yard
-- Third parties are visiting, inspecting and satisfied with the New Yard and build quality
-- MGR profitable, and with longer term and lower risk contracts
-- Equity fundraising of US$8,554,000
-- Reporting is now in USD and on a calendar year basis
Glen Lau, CEO of Amedeo, commented:
"The New Yard is now operational and steady progress on Explorer
1 continues. Importantly the client is impressed with the build
quality. Third parties are also visiting, inspecting and are
satisfied with the New Yard and build quality, which compares
favourably with other Chinese yards. Building reputation is key in
developing a successful yard, and YZJ Offshore is making headway in
establishing its reputation. MGR has continued to be profitable,
despite difficult trading conditions. Importantly, it is moving
from short-term contracts to longer-term, lower risk contracts. We
look forward to continuing to build Amedeo."
**ENDS**
For further information please contact:
Amedeo Resources plc Glen Lau/Zafar Karim Tel: + 44 (0) 20 7583
8304
Daniel Stewart & Company Paul Shackleton Tel: + 44 (0) 20 7776
Plc (Nominated Adviser) 6550
Daniel Stewart & Company Martin Lampshire Tel: + 44 (0) 20 7776
Plc (Joint Broker) 6550
Beaufort Securities Limited Saif Janjua Tel: +44 (0) 20 7382
(Joint Broker) 8300
Notes
Amedeo Resources plc is an investment company whose policy is to
invest principally, but not exclusively, in the resources and
resources infrastructure and asset sectors. Amedeo has a deep and
broad global network and wide contact base in these sectors,
including in East and South East Asia and the Middle East which it
leverages to source and make investments. These sectors exhibit
high growth and are strategically important. Amedeo is a proactive
investor which assists its investee companies to grow by providing
investment, expertise and contacts.
Introduction
Progress continues at both Jiangsu Yangzijiang Offshore
Engineering Co. Ltd. ("YZJ Offshore") and MGR Resources PTE Ltd.
("MGR").
YZJ Offshore
YZJ Offshore's marine vessel yard (the "New Yard") is now
operational. The build of its first order, a Le Tourneau Super 116E
Class design self-elevating mobile offshore jack-up ("Explorer 1")
is continuing at the New Yard, with the keel having been laid in
April. The build is progressing to quality and to schedule, with
the customer being impressed with the build quality. Explorer 1 is
expected to be delivered in the second half of next year. In
addition, the New Yard is ready to absorb overspill from
Yangzijiang Shipbuilding (Holdings) Pte Ltd's yard, Amedeo's joint
venture partner.
As a new fabricator, YZJ Offshore needs to develop its
reputation and brand. With the build of Explorer 1 now taking place
at the New Yard, third parties are able to inspect the New Yard and
build quality and are doing so. Indications are that they are
satisfied with the New Yard and build quality, and indeed both
compare favourably to other Chinese yards. Several discussions are
taking place with respect to placing orders, some of which are
advanced. The New Yard is capable of building a wide range of
offshore vessels. YZJ Offshore's management are confident that they
will obtain further orders. Though there can be no certainty that
such orders will be obtained.
Amedeo has an indirect 19.0% stake in YZJ Offshore which it
holds through its 47.5% (see below) stake in the joint venture
company, YZJ Offshore Engineering Pte Ltd ("YZJ JV").
MGR
In the period under review, MGR continued to build and improve
the quality of its business, despite a difficult market. Demand for
ferrous ore into China softened and the "Free On Board" price fell
from approximately US$115 per tonne to less than US$65 per tonne.
Consequently, brokering margins decreased. Nonetheless, against
this difficult environment, MGR managed to remain profitable (after
interest of US$146,000 payable on the loans that Amedeo has made to
it). In addition, MGR managed to move from short-term contracts
with many customers to longer-term contracts with higher quality
customers. Moreover, the new contracts are indexed to price,
thereby reducing the risks that MGR bears. These contracts became
effective post the period end.
With its operations in ferrous ore being established and
profitable, MGR continues to seek new opportunities in other
metals, including chromium, nickel and copper.
Fundraising
In March 2014, Amedeo raised US$8,554,000 via an equity
fundraising, which resulted in the issue of 521,764,569 ordinary
shares at 1.0 pence per share. Following the fundraising, the
Company's enlarged issued ordinary share capital comprises
3,265,384,202 ordinary shares.
Of the funds raised, US$5,059,000 was utilised to pay up fully
Amedeo's stake in YZJ JV and to increase Amedeo's stake in YZJ JV
from 46.5% to 47.5%, thereby raising Amedeo's stake in YZJ Offshore
from 18.6% to 19.0%.
In June 2014, US$2,040,000 of the funds raised were utilised to
make a working capital loan to MGR to enable it to continue its
expansion. The loan has a five year maturity and carries a 15%
coupon.
Financial Review
As stated in Amedeo's last full year results, Amedeo changed its
accounting reference date to 31 December and its reporting currency
to US$. This is more normal in the sectors in which Amedeo invests.
Further, the change to reporting in US$ eliminates the currency
gains/losses which resulted from reporting in GBP Sterling (but
were non-cash and had little bearing on the underlying
business).
Revenue for the six months ended 30 June 2014 rose to US$36,000
(prior period: US$2,000). Amedeo provides various business
development and marketing services to MGR. During the period under
review, Amedeo entered into a business development and services
retainer contract with MGR, which during the period, resulted in
revenue of US$36,000.
Administrative expenses were US$453,000 (prior period:
US$320,000). The increase included a number of one-off items (fees
related to the increase in capital for YZJ JV and items related to
a now settled VAT dispute) amounting in total to US$144,000.
Excluding the one-off items, administrative expenses were
US$309,000 (prior period excluding one-off items: US$292,000).
Amedeo's share of loss in associates was US$624,000 (prior
period: US$206,000). This was made up of a loss of US$674,000
(prior period: US$206,000) at YZJ JV and a profit of US$50,000
(prior period: nil) at MGR. The increased losses reflected
increased activity at YZJ Offshore as the New Yard is now fully
operational and Explorer 1 is being assembled at the New Yard. The
losses/profits of the associates are non-cash items.
Foreign exchange gains amount to US$80,000 (prior period:
US$706,000). These were due to the cumulative differences in
translating historic profit and loss numbers from GBP Sterling into
US$. This is a non-cash item.
Finance income rose to US$146,000 (prior period: nil) due to the
interest on loans to MGR.
Overall loss on ordinary activities before taxation was
US$815,000 (prior period: profit of US$181,000). Basic and fully
diluted loss per share for the period was US$0.03 (prior period:
profit US$0.01).
Excluding non-cash items, loss on ordinary activities before
taxation was reduced to US$271,000 (prior period: loss of
US$319,000). Moreover, after removing one-off items, loss on
ordinary activities before taxation was further reduced to
US$127,000 (prior period: loss of US$291,000).
Foreign exchange translation differences of US$10,000 arose
(prior period: minus US$2,176,000). These relate to the translation
of historic balance sheet items from GBP Sterling into US$. This is
a non-cash, one-off item.
Taking the balance sheet foreign exchange translation
differences into account, overall, total comprehensive loss for the
period was US$805,000 (prior period loss of: US$1,940,000).
As at the period end, the carrying value on the balance sheet of
investments in associates rose to US$19,656,000 (30 June 2013:
US$14,938,000), primarily as a result of the US$5,059,000
investment to pay up fully Amedeo's stake in YZJ JV. Current assets
rose to US$5,923,000 (30 June 2013: US$2,623,000) primarily as a
result of the US$2,040,000 loan made to MGR. Cash as at 30 June
2014 was US$1,707,000 (30 June 2013: US$620,000).
Trade payables fell to US$155,000 (30 June 2013: US$352,000) as
they were reduced to more normal levels.
Overall, at the period end, net and total assets were
US$25,424,000 (30 June 2013: US$17,223,000) and US$25,579,000 (30
June 2013: US$17,575,000), respectively.
Outlook
Steady progress has been made in the six months to 30 June 2014.
Explorer 1's build continues to quality and on schedule. Third
parties are visiting the New Yard and inspecting the build quality
of Explorer 1. Discussions are underway with several parties for
further orders. The management of YZJ Offshore are confident of
obtaining further orders. There can, however, be no certainty that
such orders will be obtained. MGR has built and consolidated its
business against a difficult background and continues to be
profitable. It is actively exploring opportunities to continue to
grow its business.
In addition, Amedeo continues to explore opportunities in the
resource and resource infrastructure and asset sectors, in line
with its long-term strategic goal of having several holdings in its
chosen sectors.
AMEDEO RESOURCES PLC
Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2014 (unaudited)
Unaudited Unaudited Unaudited
Note 6 months 6 months 12 months
ended ended ended 31.1.14
30.6.14 30.6.13 $'000
$'000 $'000
Revenue 36 2 127
Cost of Sales - (1) (1)
______ ______ ______
Gross profit 36 1 126
Administrative expenses (453) (320) (699)
Share of loss of associates 2 (624) (206) (1,024)
Foreign exchange gains (losses) 80 706 (703)
____ ____ ____
(Loss)/profit from operations (997) 181 (2,300)
Gain on purchase of associate - - 519
Dividend Income - - 107
Finance Income 146 - 154
______ ______ ______
(Loss)/profit on ordinary activities
before taxation 3 (815) 181 (1,520)
Taxation - - -
______ ______ ______
(Loss)/profit for the period (815) 181 (1,520)
Other Comprehensive Income
Foreign exchange translation difference 10 (2,176) 517
______ ______ ______
Total Comprehensive loss for the
period (805) (1,940) (1,003)
______ ______ ______
Basic and fully diluted (Loss)/profit
per share (US$ cents) 3 (0.03c) 0.01c (0.06c)
AMEDEO RESOURCES PLC
Consolidated unaudited statement of financial position
As at 30 June 2014 (unaudited)
Unaudited Unaudited Unaudited
As at As at As at
30.6.14 30.6.13 31.1.14
$'000 $'000 $'000
Assets:
Non-current Assets
Investment in associates 19,656 14,938 15,133
Current Assets
Loans Receivable 3,991 1,950 1,950
Investments in quoted shares 6 6 6
Investment in unquoted preference
shares 33 33 33
Other receivables 185 28 52
Cash and cash equivalents 1,707 620 582
_____ _____ _____
5,923 2,637 2,623
_____ _____ _____
Total Assets 25,579 17,575 17,756
Liabilities:
Current Liabilities
Trade and other payables (155) (352) (200)
_____ _____ _____
Total Liabilities (155) (352) (200)
_____ _____ _____
Net Assets 25,424 17,223 17,556
Capital and Reserves
Called up equity share capital 6,063 5,180 5,180
Share premium account 29,972 22,305 22,305
Share warrant reserve 298 244 289
Foreign exchange reserve 10 (2,176) 517
Retained earnings (10,919) (8,330) (10,735)
_____ _____ _____
Total Equity 25,424 17,223 17,556
Consolidated unaudited cash flow statement
for the six months ended 30 June 2014 (unaudited)
Unaudited Unaudited Unaudited
6 months 6 months 12 months
ended 30.6.14 ended 30.6.13 ended
$'000
$'000 31.1.14
$'000
Reconciliation of operating profit
to net cash flow from operating activities
(Loss)/ profit for the period / year
before tax (815) 181 (1,520)
Adjustments for:
Share based payments - 16 39
Share of loss of associates 624 206 1,024
Gain on purchase of associate - - (519)
Foreign exchange difference 109 (416) 681
Change in receivables 7 (7) (42)
Change in payables (133) (239) 58
Interest income - - (154)
Dividend income - - (107)
____ ____ ____
Cash flows from operating activities (208) (259) (540)
Investing activities
Investment in associates (5,059) (50) (50)
Loans made to associate (2,040) (1,950) (1,950)
Dividends received from associate - - 209
Interest income received - - 154
_____ _____ _____
Net cash used in investing activities (7,099) (2,000) (1,637)
Financing activities
Issue of share capital 8,554 - -
_____ _____ _____
Net cash used in financing activities
Net increase/(decrease) in cash and
equivalents 1,247 (2,259) (2,177)
Cash and equivalents at beginning
of period/year 460 2,879 2,759
Cash and equivalents at end of period/year 1,707 620 582
NOTES TO THE INTERIM ACCOUNTS
1. Basis of preparation
Apart from the change in presentation currency, the accounting
policies adopted are consistent with those of the previous
financial year.
This interim consolidated financial information for the six
months ended 30 June 2014 has been prepared in accordance with AIM
rule 18, 'Half-yearly reports'. This interim consolidated financial
information is not the group's statutory financial statements
within the meaning of section 434 of the Companies Act 2006 (and
information as required by section 435 of the Companies Act 2006)
and should be read in conjunction with the annual financial
statements for the year ended 31 January 2014, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) and have been delivered to the Registrar of
Companies. The auditors have reported on those accounts; their
report was unqualified, did not include references to any matters
to which the auditors drew attention by way of emphasis of matter
without qualifying their report and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The interim consolidated financial information for the six
months ended 30 June 2014 is unaudited. Comparative numbers for the
six months ended 30 June 2013 are unaudited. The full year
Comparatives numbers for the twelve months ended 31 January 2014,
are unaudited in US Dollars ($) having been re-translated from GBP
sterling, the currency used in the audited financial statements for
that year.
This interim consolidated financial information is presented in
US Dollars ($), rounded to the nearest dollar.
2. Share of loss of associates
6 months 6 months 12 months
ended 30/6/14 ended 30/6/13 ended 31/1/14
$'000 $'000 $'000
Share of loss of YZJ JV (674) (206) (929)
Share of profit/(loss) of MGR 50 - (95)
____ ____ ____
(624) (206) (1,024)
The Company holds a 47.5% stake in YZJ Offshore and 49.0% of
MGR. YZJ JV reported an unaudited loss for the 6 months to 30 June
2014 of $1,418,000 and $674,000 represents Amedeo's share of YZJ
Offshore's loss
MGR reported a profit of $102,000 for the period to 30 June
2014, of which $50,000 represented Amedeo's share of MGR's
profit.
3. Loss per share
The basic and diluted loss per share for the period ended 30
June 2014 was 0.03c (prior period: profit 0.01c). The calculation
of loss per share is based on the loss of $815,000 for the period
ended 30 June 2014 (prior period: profit $181,000) and the weighted
average number of shares in issue during the period for calculating
the basic profit per share is 3,085,470,372 shares (prior period:
2,738,619,633).
4. Preparation of interim report
This report was approved by the Directors on 23 September
2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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