TIDMPAL
RNS Number : 2662T
Equatorial Palm Oil plc
24 September 2010
Equatorial Palm Oil plc / Index: AIM / Epic: PAL / Sector: Food Producers
24 September 2010
Equatorial Palm Oil plc ('EPO' or 'the Company')
Interim Results
Equatorial Palm Oil plc, the AIM listed Liberian focussed sustainable oil palm
plantation developer, is pleased to announce its interim results for the six
month period ending 30 June 2010.
Highlight
· Strong progress made in achieving objective of becoming a large scale West
African producer of sustainable palm oil
· Successfully admitted to AIM in February raising GBP6.5m
· Reactivation of existing plantations and nurseries developed for new
planting
· Cornerstone investor secured - GBP5 million placing by BioPalm Energy Ltd,
a subsidiary of Indian Conglomerate The Siva Group
· 5 tonne per hour palm oil mill instillation underway and on schedule -
expected palm oil production in Q4 2010
· Out grower programme being established to provide additional feedstock
· Liberia continues to grow as a major new oil palm province where other
operators include leading international palm oil companies Golden Agri-Resources
Ltd and Sime Derby
· Company has strong cash position and no debt to undertake activities
· Post period MOU signed for a US$60 million joint venture, to accelerate the
land development
Chairman's Statement
EPO has made significant strides since listing in February 2010 to become a
large scale West African producer of sustainable palm oil, and with excellent
progress made at our operations in Liberia, we are currently on schedule for
production of crude palm oil ('CPO') by the end of 2010. Importantly, we have
secured a cornerstone investor and recently announced the Company has entered
into a Memorandum of Understanding ('MOU') to form a US$60 million joint venture
('JV') with Biopalm Energy Ltd, a subsidiary of Indian conglomerate the Siva
Group, to accelerate the development of our land position.
We have a large land position of circa 169,000 hectares in Liberia, West Africa,
which covers three areas; 34,398 ha at Palm Bay Oil Palm Plantation ('Palm
Bay'), 54,549 ha at the Butaw Oil Palm Plantation ('Butaw') and 80,000 ha in the
River Cess County ('River Cess'). Our land is close to deep water ports, an
available labour force and established infrastructure suitable for the
development of sustainable palm oil. EPO's development plan is to plant 50,000
hectares of oil palm over the next ten years producing at 250,000 tonnes per
annum ('tpa'), doubling to 100,000 hectares of plantations in the longer term.
We have a strong management team in place, with extensive experience in large
scale plantation development programmes such as ours. Peter Bayliss, our
Managing Director, and Geoff Brown, Plantations Director, are leading oil palm
developers, with Geoff Brown having occupied the roles of Managing Director of
London Sumatra Indonesia and Chairman of New Britain Palm Oil Ltd.
The Palm Bay plantation has been the Company's main priority since listing. As
we advance towards CPO production, our labour force of approximately 560 has
been active in weeding and under brushing the target area and the reactivation
of 3,000 hectares of oil palm plantation is nearing completion.
Installation of our first, and currently Liberia's only, commercial palm oil
processing mill is underway following delivery in July 2010. When construction
is complete, the mill will be a major boost for the Liberian palm oil industry,
and we are excited about forthcoming production. The mill, with a throughput of
five tonnes of fresh fruit bunches per hour, was manufactured, and is being
constructed on site by leading Malaysian producer of palm oil mills, Modipalm
Engineering Sdn. Bhd. ('Modipalm'). Installation is progressing well, and
although lengthy, it is not complex. Modipalm's specialised team of engineers
will remain on site to train our mill operators to ensure that production of CPO
is optimised. Initial revenues will be derived from sales into the domestic
market and although relatively modest, the cash generated will increase to more
significant levels as we develop further. The Company will also seek to buy
fresh fruit bunches from out growers and small farm holders in the region to
generate additional revenue.
Additionally, our new planting programme is underway with nurseries established
at Palm Bay and Butaw. We are taking delivery of seedlings every month in line
with our planting programme, having placed an initial order for 220,000 oil palm
seeds from leading developer Unipalm.
As a member of the Roundtable of Sustainable Palm Oil, we are committed to
developing our plantations in a sustainable manner. The land under our control
was previously logged and will not cause degradation to primary forest in
Liberia.
Liberia has a high level of unemployment so the new jobs our venture is creating
will have a positive social impact on the country. Additionally, our activities
should provide the necessary incentive, opportunity and market for the
out-growers in our areas, creating even more positive impact on the community, a
position we would like to cultivate. In this vein we have also invested in
facilities, such as schools and medical centres, to support and enhance life for
our employees and the local community.
Liberia's investment outlook is encouraging with a notable influx of foreign
investment across a diverse array of sectors including iron ore, oil and gas,
rubber and oil palm. Liberia has an established agricultural sector, with
Firestone Rubber operating in the country for over 80 years. Our early stage
belief in Liberia as a new palm oil province has been strengthened by palm oil
majors, Sime Darby and Golden Agri-Resources Ltd moving into the country
primarily due to climatic conditions and to decreasing land availability in
Malaysia and Indonesia.
Financial Overview
With a major roll-out strategy in place, we have focussed on ensuring our
financial position is robust, particularly in comparison with a number of our
peers. During the period, we successfully listed on AIM raising GBP6.5 million
from a strong institutional shareholder base, which has been built upon since
listing. We also developed a strong relationship with BioPalm Energy, part of
the Siva Group, who have subscribed for GBP5.0 million of new Ordinary Shares in
EPO in May 2010.
This relationship with the Siva Group has culminated in a legally non-binding
memorandum of understanding ('MOU') agreement for a US$60 million Joint Venture,
to accelerate the development of our plantations. Siva seeks to invest in
growth opportunities and has identified the palm oil industry as having high
expansion potential. Under the terms of the MOU, Biopalm Energy will invest an
initial US$22.5 million in cash plus arrange and guarantee a US$30 million loan
facility to the JV, while EPO will contribute US$7.5 million in cash to the JV
which will, on completion, hold all of EPO's current land position in Liberia.
The Board believes the JV, which will be subject to shareholder approval, will
place us in a strong financial position to develop at a faster pace, and we
shall update shareholders on this in due course.
For the six months under review, the Group reported a loss of GBP1,451,000
(2009: GBP515,000), largely attributable to non recurring costs incurred for
fundraising endeavours prior to listing in February 2010. At 30 June 2010, the
Group had a cash position of GBP7,608,000 (2009: GBP5,000) and net assets of
GBP15,830,000.
Outlook
EPO is operating in a highly exciting and expansive sector. We have an active
roll-out programme and an experienced management team who have effectively laid
solid foundations in preparation for our first production and sales of CPO.
Over the coming months the Directors expect a considerable amount of news flow
as we continue to expand the Company's operations and nurseries and drive
momentum in production. Land preparation and investment in our downstream
infrastructure will be continuing and we look forward to updating shareholders
accordingly as we build our position in Liberia.
We believe that EPO offers shareholders an exciting entry point into the palm
oil sector and we are focussed on generating shareholder value. Our potential
JV with the Siva Group provides us with a strong funding position and a
supportive partner with synergistic objectives to advance the scale of our
plantations quickly and responsibly. Siva has recognised the potential of our
project, and our team's capability to realise it, and I look forward to working
with them further in de-risking our project to crystallise value for
shareholders.
I would like to take this opportunity to thank the team and our shareholders for
their support over the period.
Michael Frayne
Chairman
24 September 2010
EQUATORIAL PALM OIL PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2010
+--------------------------+------+-------------+-------------+--------------+
| |Note | Period | Period | Year ended |
| | | ended | ended | 31 December |
| | | 30 June | 30 June | 2009 |
| | | 2010 | 2009 | (audited) |
| | | (unaudited) | (unaudited) | |
+--------------------------+------+-------------+-------------+--------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Administrative expenses | | (1,033) | (407) | (771) |
+--------------------------+------+-------------+-------------+--------------+
| Impairment charge | | - | - | - |
+--------------------------+------+-------------+-------------+--------------+
| Share options expensed | 5 | (309) | - | - |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Operating loss | | (1,342) | (407) | (771) |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Interest receivable | | - | - | - |
+--------------------------+------+-------------+-------------+--------------+
| Interest payable | | (109) | (108) | (172) |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Loss before taxation | | (1,451) | (515) | (943) |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Income tax expense | | - | - | - |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Loss for the financial | | (1,451) | (515) | (943) |
| period | | | | |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Other comprehensive | | | | |
| income | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Currency translation | | 76 | (145) | (273) |
| differences | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Other comprehensive | | 76 | (145) | (273) |
| income for the period | | | | |
| net of taxation | | | | |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Total comprehensive | | (1,375) | (660) | (1,216) |
| income for the period | | | | |
| attributable to equity | | | | |
| holders of the parent | | | | |
+--------------------------+------+-------------+-------------+--------------+
| | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Loss per share (pence) | | | | |
+--------------------------+------+-------------+-------------+--------------+
| Basic | 3 | (2.0)p | (1.6)p | (2.9)p |
+--------------------------+------+-------------+-------------+--------------+
| Diluted | 3 | (2.0)p | (1.6)p | (2.9)p |
+--------------------------+------+-------------+-------------+--------------+
EQUATORIAL PALM OIL PLC
GROUP BALANCE SHEET
AS AT 30 JUNE 2010
+---------------------------+------+-------------+-------------+-------------+
| | | 30 June | 30 June | 31 December |
| | | 2010 | 2009 | 2009 |
| |Note | (unaudited) | (unaudited) | (audited) |
+---------------------------+------+-------------+-------------+-------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Non-current assets | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Intangible assets | | 7,814 | 7,011 | 7,232 |
+---------------------------+------+-------------+-------------+-------------+
| Property, plant and | 6 | 154 | 62 | 58 |
| equipment | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Total non-current assets | | 7,968 | 7,073 | 7,290 |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Current assets | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Trade and other | | 680 | 21 | 347 |
| receivables | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Cash and cash equivalents | | 7,608 | 5 | 63 |
+---------------------------+------+-------------+-------------+-------------+
| Total current assets | | 8,288 | 26 | 410 |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Total Assets | | 16,256 | 7,099 | 7,700 |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Current liabilities | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Trade and other payables | | (426) | (1,669) | (2,009) |
+---------------------------+------+-------------+-------------+-------------+
| Short term borrowings | | - | (1,185) | (2,002) |
+---------------------------+------+-------------+-------------+-------------+
| Total liabilities | | (426) | (2,854) | (4,011) |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Net assets | | 15,830 | 4,245 | 3,689 |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Shareholders' equity | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Share capital | 4 | 1,147 | 320 | 320 |
+---------------------------+------+-------------+-------------+-------------+
| Share premium | | 18,555 | 6,175 | 6,175 |
+---------------------------+------+-------------+-------------+-------------+
| Share based payment | 5 | 330 | 21 | 21 |
| reserve | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Foreign exchange reserve | | 159 | 211 | 83 |
+---------------------------+------+-------------+-------------+-------------+
| Retained loss | | (4,361) | (2,482) | (2,910) |
+---------------------------+------+-------------+-------------+-------------+
| | | | | |
+---------------------------+------+-------------+-------------+-------------+
| Total equity | | 15,830 | 4,245 | 3,689 |
+---------------------------+------+-------------+-------------+-------------+
EQUATORIAL PALM OIL PLC
GROUP CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2010
+--------------------------------+-------------+-------------+--------------+
| | Period | Period | Year ended |
| | ended | ended | 31 December |
| | 30 June | 30 June | 2009 |
| | 2010 | 2009 | (audited) |
| | (unaudited) | (unaudited) | |
+--------------------------------+-------------+-------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
| Cash flows from operating | | | |
| activities | | | |
+--------------------------------+-------------+-------------+--------------+
| Operating loss | (1,342) | (407) | (771) |
| Increase in trade and other | (333) | (7) | (333) |
| receivables | (1,583) | 502 | 918 |
| (Decrease)/increase in trade | - | - | - |
| and other payables | 34 | 11 | 23 |
| Impairment charge | 309 | - | - |
| Depreciation | | | |
| Share options expensed | | | |
+--------------------------------+-------------+-------------+--------------+
| Net cash in/(out)flow from | (2,915) | 99 | (163) |
| operating activities | | | |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
| Cash flows from investing | | | |
| activities | | | |
+--------------------------------+-------------+-------------+--------------+
| Interest received | - | - | - |
+--------------------------------+-------------+-------------+--------------+
| Payments to acquire intangible | (506) | (415) | (839) |
| assets | | | |
+--------------------------------+-------------+-------------+--------------+
| Payments to acquire property, | (130) | - | (9) |
| plant & equipment | | | |
+--------------------------------+-------------+-------------+--------------+
| Net cash outflow from | (636) | (415) | (848) |
| investing activities | | | |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
| Cash flows from financing | | | |
| activities | | | |
+--------------------------------+-------------+-------------+--------------+
| Short term borrowings | (2,002) | 320 | 1,228 |
+--------------------------------+-------------+-------------+--------------+
| Issue of ordinary share | 13,644 | - | - |
| capital | | | |
+--------------------------------+-------------+-------------+--------------+
| Share issue costs | (437) | - | - |
+--------------------------------+-------------+-------------+--------------+
| Interest paid | (109) | (17) | (172) |
+--------------------------------+-------------+-------------+--------------+
| Net cash inflow from financing | 11,096 | 303 | 1,056 |
| activities | | | |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
| Net increase/(decrease) in | 7,545 | (13) | 45 |
| cash and cash equivalents | | | |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
| Cash and cash equivalents at | 63 | 18 | 18 |
| beginning of period | | | |
+--------------------------------+-------------+-------------+--------------+
| Cash and cash equivalents at | 7,608 | 5 | 63 |
| end of period | | | |
+--------------------------------+-------------+-------------+--------------+
| | | | |
+--------------------------------+-------------+-------------+--------------+
EQUATORIAL PALM OIL PLC
GROUP STATEMENT OF CHANGES IN EQUITY (Unaudited)
FOR THE PERIOD ENDED 30 JUNE 2010
+------------------+---------+---------+---------+-------------+----------+---------+
| | Attributable to equity holders of the company |
+------------------+----------------------------------------------------------------+
| | Called | Share | Share | Foreign | Retained | |
| | up | premium | based | currency | earnings | |
| | share | reserve | payment | translation | | Total |
| | capital | | reserve | reserve | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Group | GBP | GBP | GBP | GBP | GBP | GBP |
| | 000's | 000's | 000's | 000's | 000's | 000's |
+------------------+---------+---------+---------+-------------+----------+---------+
| As at 1 January | 320 | 6,175 | 21 | 356 | (1,967) | 4,905 |
| 2009 | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Loss for the | - | - | - | - | (515) | (515) |
| period | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Currency | - | - | - | (145) | - | (145) |
| translation | | | | | | |
| differences | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Total | - | - | - | (145) | (515) | (660) |
| comprehensive | | | | | | |
| income | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share capital | - | - | - | - | - | - |
| issued | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share based | - | - | - | - | - | - |
| payments | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| As at 30 June | 320 | 6,175 | 21 | 211 | (2,482) | 4,245 |
| 2009 | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| As at 1 January | 320 | 6,175 | 21 | 356 | (1,967) | 4,905 |
| 2009 | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Loss for the | - | - | - | - | (943) | (943) |
| period | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Currency | - | - | - | (273) | - | (273) |
| translation | | | | | | |
| differences | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Total | - | - | - | (273) | (943) | (1,216) |
| comprehensive | | | | | | |
| income | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share capital | - | - | - | - | - | - |
| issued | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Cost of share | - | - | - | - | - | - |
| issue | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share based | - | - | - | - | - | - |
| payments | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| As at 31 | 320 | 6,175 | 21 | 83 | (2,910) | 3,689 |
| December 2009 | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Loss for the | - | - | - | - | (1,451) | (1,451) |
| period | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Currency | - | - | - | 76 | - | 76 |
| translation | | | | | | |
| differences | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Total | - | - | - | 76 | (1,451) | (1,375) |
| comprehensive | | | | | | |
| income | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share capital | 827 | 12,817 | - | - | - | 13,644 |
| issued | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Cost of share | - | (437) | - | - | - | (437) |
| issue | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| Share based | - | - | 309 | - | - | 309 |
| payments | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
| As at 30 June | 1,147 | 18,555 | 330 | 159 | (4,361) | 15,830 |
| 2010 | | | | | | |
+------------------+---------+---------+---------+-------------+----------+---------+
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2010
1. Basis of preparation
The consolidated financial statements have been prepared under the historical
cost convention and on a going concern basis and in accordance with
International Financial Reporting Standards and IFRIC interpretations adopted
for use in the European Union ("IFRS") and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The financial information for the period ended 30 June 2010 has not been audited
but has been reviewed in accordance with the International Standard on Review
Engagements 2410 issued by the Auditing Practices Board. The figures were
prepared using applicable accounting policies and practices consistent with
those adopted in the statutory accounts for the period ended 31 December 2009.
The figures for the period ended 31 December 2010 have been extracted from these
accounts, which have been delivered to the Registrar of Companies, and contained
an unqualified audit report.
The financial information contained in this document does not constitute
statutory financial statements. In the opinion of the directors, the financial
information for this period fairly presents the financial position, result of
operations and cash flows for this period.
This Interim Financial Report was approved by the Board of Directors on 24
September 2010 and will shortly be available on the Company's website:
www.epoil.co.uk
Statement of compliance
The interim consolidated financial statements for the six months ended 30 June
2010 have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union with the exception of
International Accounting Standard ('IAS') 34 - Interim Financial Reporting.
Accordingly, the interim financial statements do not include all of the
information or disclosures required in the annual financial statements and
should be read in conjunction with the Group's 2009 annual financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Equatorial Palm Oil Plc and its controlled entities. The financial statements of
controlled entities are included in the consolidated financial statements from
the date control commences until the date control ceases.
The financial statements of subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
All inter-company balances and transactions have been eliminated in full.
Foreign currencies
The functional currency of each entity is determined after consideration of the
primary economic environment of the entity. The Group's presentational currency
is Sterling (GBP).
+--+---------------------------------+----------+----------+-----------+
| 2.| Revenue and Segmental analysis | | | |
+--+---------------------------------+----------+----------+-----------+
| | The Group has not commenced production and had no revenue during |
| | the period. |
| | |
| | The Group operates in the business segment of the evaluation and |
| | development of the cultivation of oil palms. |
| | |
| | The Group has material interests in two geographical segments, |
| | the United Kingdom and Liberia. |
+--+---------------------------------+----------+----------+-----------+
+--------------+---------+---------+---------+
| | United | | |
| By | Kingdom | Liberia | Total |
| geographical | | | |
| area | | | |
+--------------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+---------+
| Loss | (1,431) | (20) | (1,451) |
| for | | | |
| the | | | |
| period | | | |
| ended | | | |
| 30 | | | |
| June | | | |
| 2010 | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Other | | | |
| segment | | | |
| information: | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Segment | 8,244 | 8,012 | 16,256 |
| assets | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Loss | (500) | (15) | (515) |
| for | | | |
| the | | | |
| period | | | |
| ended | | | |
| 30 | | | |
| June | | | |
| 2009 | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Other | | | |
| segment | | | |
| information: | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Segment | 68 | 7,031 | 7,099 |
| assets | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Loss | (935) | (8) | (943) |
| for | | | |
| the | | | |
| year | | | |
| ended | | | |
| 31 | | | |
| December | | | |
| 2009 | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Other | | | |
| segment | | | |
| information: | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
| Segment | 400 | 7,300 | 7,700 |
| assets | | | |
+--------------+---------+---------+---------+
| | | | |
+--------------+---------+---------+---------+
3. Loss per share
The calculation of earnings per share is based on the loss after taxation
divided by the weighted average number of shares in issue during the period:
+-------------+-------------+-------------+-----------+
| | Period | Period | Year |
| | ended | ended | ended |
| | 30 | 30 | 31 |
| | June | June | December |
| | 2010 | 2009 | 2009 |
| | (unaudited) | (unaudited) | (audited) |
+-------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------+-------------+-------------+-----------+
| Net | (1,451) | (515) | (943) |
| loss | | | |
| after | | | |
| taxation | | | |
+-------------+-------------+-------------+-----------+
| | | | |
+-------------+-------------+-------------+-----------+
| Weighted | 70.8 | 32.0 | 32.0 |
| average | million | million | million |
| number | | | |
| of | | | |
| ordinary | | | |
| shares | | | |
| used in | | | |
| calculating | | | |
| basic | | | |
| earnings | | | |
| per share | | | |
+-------------+-------------+-------------+-----------+
| | | | |
+-------------+-------------+-------------+-----------+
| Basic | (2.0) | (1.6) | (2.9) |
| loss | pence | pence | pence |
| per | | | |
| share | | | |
| (expressed | | | |
| in pence) | | | |
+-------------+-------------+-------------+-----------+
As the inclusion of the potential ordinary shares would result in a decrease in
the loss per share they are considered to be anti-dilutive and, as such, a
diluted loss per share is not included.
4. Share capital
The authorised share capital of the Company and the called up and fully paid
amounts at 30 June 2010 were as follows:
Authorised
GBP'000
At 1 January 2010
100,000,000 Ordinary shares of 1p each
1,000
Increase in authorised share capital
1,000
_____
At 30 June 2010
2,000
Called up, allotted, issued and fully paid
Nominal value GBP'000
At 1 January 2010: 32,020,000 Ordinary shares of 1p each 320
Additions in the period ended 30 June 2010:
37,118,000 Ordinary shares of 1p each on Admission to AIM at 17.5p per share
371
11,980,337 Ordinary shares of 1p each on conversion of convertible loan notes at
17.5p 120
300,000 Ordinary shares of 1p each on settlement of creditors at 17.5p
3
33,333,333 Ordinary shares of 1p each at 15p per share in placing to Biopalm
Energy Ltd 333
At 30 June 2010: 114,751,670 Ordinary shares of 1p each
1,147
Warrants
As at 30 June 2010 the following Warrants to subscribe for Ordinary shares at
17.5p per share were outstanding:
Over Number of SharesExpiry Date
1,858,400
26 February 2015
5,990,169
26 February 2013
24,699,168 26
February 2012
Total
32,547,737
Share Options
As at 30 June 2009 and 31 December 2009 300,000 options to subscribe for
Ordinary shares of 1p each existed with an exercise price of 30p and an expiry
date of 14 February 2011.
Options to subscribe for 8,350,000 Ordinary shares at the Placing Price of 17.5p
within 5 years after the date of grant, being 26th February 2010, have been
granted to the Directors, management and others by the Company as follows:
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| | | Number | Number | Number | Number | |
| | | of | of | of | of | |
| | | Options | Options | Options | Options | |
| | | Exercisable | Exercisable | Exercisable | Exercisable | |
| | | on Grant | on | on | on | TOTAL |
| | | | Performance | Performance | Performance | |
| | | | Milestone | Milestone | Milestone | |
| | | | 11 | 22 | 33 | |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Directors and | | | | | | |
| Employees | | | | | | |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Peter Bayliss | | 500,000 | 500,000 | 500,000 | 500,000 | 2,000,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Michael Frayne | | 312,500 | 312,500 | 312,500 | 312,500 | 1,250,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Joe Jaoudi | | 312,500 | 312,500 | 312,500 | 312,500 | 1,250,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Geoff Brown | | 250,000 | 250,000 | 250,000 | 250,000 | 1,000,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Anthony Samaha | | 250,000 | 250,000 | 250,000 | 250,000 | 1,000,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| David Parker | | 100,000 | 100,000 | 100,000 | 100,000 | 400,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Allen Yancy | | 37,500 | 37,500 | 37,500 | 37,500 | 150,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| | | | | | | 7,050,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| | | | | | | |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Others | | 325,000 | 325,000 | 325,000 | 325,000 | 1,300,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
| Total | | | | | | 8,350,000 |
+-----------------+------+-------------+-------------+-------------+-------------+-----------+
1 Performance Milestone 1 is Commission 5 tonne per hour mill at Palm Bay.
2 Performance Milestone 2 is the production of 4,000 tonnes of CPO from mills
owned by the Group.
3 Performance Milestone 3 is the planting of first 2,500 hectares on a new palm
oil plantation.
5. Share based payments
+--------------+-------------------+-------------------+--------------+
| | | | |
+--------------+-------------------+-------------------+--------------+
| Under IFRS 2 'Share Based Payments', the Company determines the |
| fair value of options issued to Directors and Employees as |
| remuneration and recognises the amount as an expense in the income |
| statement with a corresponding increase in equity, with a similar |
| treatment being applied to consultants. |
+--------------+-------------------+-------------------+--------------+
+------------------+------------+-----------------+------------------+
| |
| The fair value of the options granted during the period ended 30 |
| June 2010 amounted to GBP719,000, representing GBP309,000 (3.7p |
| per option) charged for the period and a balance of GBP410,000 |
| (4.9p per option) to be recognised over future accounting periods |
| until the three Milestones referred to in Note 4 are achieved. |
| The assessed fair value at grant date is determined using the |
| Black-Scholes Model that takes into account the exercise price, |
| the term of the option, the share price at grant date, the |
| expected price volatility of the underlying share, the expected |
| dividend yield and the risk-free interest rate for the term of the |
| option. |
+--------------------------------------------------------------------+
| |
| The following inputs to the model were used for the period ended |
| 30 June 2010: |
+--------------------------------------------------------------------+
| | | | |
+------------------+------------+-----------------+------------------+
| Dividend yield | | | Nil |
+------------------+------------+-----------------+------------------+
| Expected | | | 54% |
| volatility | | | |
+------------------+------------+-----------------+------------------+
| Risk-free | | | 2.78% |
| interest rate | | | |
+------------------+------------+-----------------+------------------+
| Share price at | | | 17.5p |
| grant date | | | |
+------------------+------------+-----------------+------------------+
| |
| The expected volatility reflects the assumption that the |
| historical volatility is indicative of future trends, which may |
| not necessarily be the actual outcome. |
+------------------+------------+-----------------+------------------+
6. Property, plant & equipment
+--+--------------------------------------+------------+-----------+
| | | | GBP 000's |
+--+--------------------------------------+------------+-----------+
| | Cost | | |
+--+--------------------------------------+------------+-----------+
| | At 1 January 2009 | | 164 |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustments | | (2) |
+--+--------------------------------------+------------+-----------+
| | At 30 June 2009 | | 162 |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustments | | (1) |
+--+--------------------------------------+------------+-----------+
| | Additions | | 9 |
+--+--------------------------------------+------------+-----------+
| | At 31 December 2009 | | 170 |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustments | | - |
+--+--------------------------------------+------------+-----------+
| | Additions | | 130 |
+--+--------------------------------------+------------+-----------+
| | At 30 June 2010 | | 300 |
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
| | Depreciation | | |
+--+--------------------------------------+------------+-----------+
| | At 1 January 2009 | | (89) |
+--+--------------------------------------+------------+-----------+
| | Charge for period | | (11) |
+--+--------------------------------------+------------+-----------+
| | At 30 June 2009 | | (100) |
+--+--------------------------------------+------------+-----------+
| | Charge for period | | (12) |
+--+--------------------------------------+------------+-----------+
| | At 31 December 2009 | | (112) |
+--+--------------------------------------+------------+-----------+
| | Charge for period | | (34) |
+--+--------------------------------------+------------+-----------+
| | At 30 June 2010 | | (146) |
+--+--------------------------------------+------------+-----------+
| | Net book value | | |
+--+--------------------------------------+------------+-----------+
| | At 30 June 2009 | | 62 |
+--+--------------------------------------+------------+-----------+
| | At 31 December 2009 | | 58 |
| | At 30 June 2010 | | 154 |
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
7. Intangible Assets - Oil Palm Development
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
| | | | GBP 000's |
+--+--------------------------------------+------------+-----------+
| | Net book value as at 1 January 2009 | | 6,663 |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustment | | (143) |
+--+--------------------------------------+------------+-----------+
| | Development expenditure | | 491 |
+--+--------------------------------------+------------+-----------+
| | Amortisation/Impairment | | - |
+--+--------------------------------------+------------+-----------+
| | Net book value as at 30 June 2009 | | 7,011 |
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustment | | (127) |
+--+--------------------------------------+------------+-----------+
| | Development expenditure | | 348 |
+--+--------------------------------------+------------+-----------+
| | Amortisation/Impairment | | - |
+--+--------------------------------------+------------+-----------+
| | Net book value as at 31 December | | 7,232 |
| | 2009 | | |
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
| | Currency translation adjustment | | 76 |
+--+--------------------------------------+------------+-----------+
| | Development expenditure | | 506 |
+--+--------------------------------------+------------+-----------+
| | Amortisation/Impairment | | - |
+--+--------------------------------------+------------+-----------+
| | Net book value as at 30 June 2010 | | 7,814 |
+--+--------------------------------------+------------+-----------+
| | | | |
+--+--------------------------------------+------------+-----------+
The Directors undertook an impairment review as at 30 June 2010 and as a result
of this review no provision was required. The land subject to the concession
licence held by Liberia Forest Products Incorporated contains approximately
4,600 hectares of existing palm plantations which have not been maintained for a
considerable period of time. The Directors have engaged agricultural experts to
assess the possibility of regenerating the plantations and whilst the Directors
are optimistic that the plantations can be regenerated, they consider it prudent
to attribute nil value to the re-existing plantations until a detailed
assessment of its economic potential value has been completed.
8. Post balance sheet events
On 6 September 2010, the Company announced that it had signed a Memorandum of
Understanding ("MOU") with Biopalm Energy Ltd ("Biopalm Energy"), to form a
US$60 million 50:50 Joint Venture company ("JV"). Under the terms of the MOU,
which is legally non-binding, Biopalm Energy will invest an initial US$22.5
million in cash plus arrange and guarantee a US$30 million loan facility to the
JV, while the Company will contribute US$7.5 million in cash to the JV which
will, on completion, hold all of the Company's current land position in Liberia.
The establishment of the JV will be subject to Company shareholder and necessary
regulatory approvals.
On 26 August 2010, the Company announced that the due date for the first part of
the second tranche of subscription shares under the Investment Subscription
Letter (the "ISL", as described in the Company's AIM Admission Document dated 26
February 2010) was deferred for six months to 26 February 2011. The six month
deferral was for the subscription of 1,500,000 new Ordinary Shares in the
Company at a price of 17.5p per share. The consideration for deferral was the
cancellation of 2,014,285 warrants attached to the ISL.
9. Availability of Accounts
Copies of this statement are available to shareholders and members of the
public, free of charge, from the Company's principal place of business at 94
Jermyn St London, SW1Y 6JE.
Alternatively a downloadable version is available from the following web
address: http://www.epoil.co.uk/investors/aim-rule-26.php
For further information please visit www.epoil.co.uk or contact:
+--------------+---------------------------+-------------------+
| Michael | Equatorial Palm Oil plc | Tel: 020 7766 |
| Frayne | | 7555 |
+--------------+---------------------------+-------------------+
| Peter Krens | Mirabaud Securities LLP | Tel: 020 7484 |
| | | 3510 |
+--------------+---------------------------+-------------------+
| Pascal Keane | Shore Capital & Corporate | Tel: 020 7408 |
| | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Edward | Shore Capital & Corporate | Tel: 020 7408 |
| Mansfield | Limited | 4090 |
+--------------+---------------------------+-------------------+
| Hugo de | St Brides Media & Finance | Tel: 020 7236 |
| Salis | Ltd | 1177 |
+--------------+---------------------------+-------------------+
| Elisabeth | St Brides Media & Finance | Tel: 020 7236 |
| Cowell | Ltd | 1177 |
+--------------+---------------------------+-------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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