TIDMPAL
RNS Number : 2704N
Equatorial Palm Oil plc
27 September 2012
27 September 2012
EQUATORIAL PALM OIL PLC
("EPO" or the "Company")
Interim Results for six months ended 30 June 2012
Equatorial Palm Oil plc (AIM: PAL)the AIM listed palm oil
productioncompany with operations in Liberia, West Africa,
announces its unaudited interim results for the six months ended 30
June 2012 ("the Period").
Highlights for the Period:
-- First international sales of crude palm oil ("CPO")
-- Oil palm mill fully commissioned at Palm Bay
-- Enlargement of nurseries at Palm Bay and Butaw Estates with
over 1.7m of young palms in nurseries for planting in 2012 and
2013
-- On track to plant 1,400 hectares of oil palms at Palm Bay and
the first 300 hectares at Butaw by the end of 2012
-- Coastal & Environmental Services ("CES") appointed to
conduct Environmental and Social Impact Assessment ("ESIA")
studies
-- Praetorian Resources became a significant new shareholder in July 2012
Michael Frayne, Executive Chairman of Equatorial Palm Oil
commented:
"The first half of 2012 has been anothersolid period for the
Company which saw emphasis placed on expanding our nurseriesand
land preparation. We also achieved the first shipment of CPO to
international customers. We remain on track to plant over 1,700
hectares of palmsin total for this year at both Palm Bay and Butaw
Estates.
"We have built up a strong operational team on the ground in
Liberia which will significantly enhance our planting rate in 2013.
The remainder of 2012 and 2013 remains an exciting time for the
Company and I look forward to updating shareholders as we continue
to work towards our long term strategic goals."
Equatorial Palm Oil plc
Michael Frayne (Executive Chairman) +44 (0) 20 7766
www.epoil.co.uk 7555
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409
James Harris / Paul Cocker 3494
Mirabaud Securities LLP (Broker) +44 (0) 20 7484
Peter Krens 3510
Pelham Bell Pottinger (Financial/ Corporate
PR) +44 (0) 20 7861
Archie Berens / Joanna Boon 3232
Chairman's Statement
The start of 2012 continued to be a period of steady progress as
we continue to develop ouroilpalmestates in Liberia.
The main focus of activity for the Company has been on the
support for our large scale planting programme.
Operational Review
Palm Bay
The Palm Bay Estate is located 160 kilometres south east of the
Liberian capital of Monrovia and 25 kilometres from the deep-water
port of Buchanan. During the first six months of 2012, land
clearing has continued at the Palm Bay Estate with 1,400 hectares
of new planting due to be completed by December 2012. The planting
capacity of seedlings on hand at mid-year stood at 5,800 hectares.
This profile is in line with our on-going growth plans and
demonstrates the development that has taken place in 2012.
Palm Oil Mill
Completion of the only commercial scale oil palm mill in Liberia
took place in January 2012 at Palm Bay, marking a key milestone in
EPO's long term plans to become a significant regional palm oil
producer. Crude palm oil ("CPO") is to be sold both domestically
and in international markets, with the first export sales into the
Portuguese market having taken place during the first six months of
2012, together with continued sales into the local Liberian
market.
Export sales are currently handled through container based
loading.When volumes increase, our plan is to develop the full port
infrastructure at Buchanan, which will rapidly increase our ability
to sell into the export markets.
The mill is capable of running at full capacity, processing five
tonnes of fresh fruit bunches per hour at approximately an 18 per
cent extraction rate from the rehabilitated palms of Palm Bay. As
the quality of the palms increases with new plantations, the
extraction rate will increase to 20 per cent, highlighting the
efficiency of this state of the art mill which will form the basis
for building larger mills. The site for a new mill, which will be
capable of processing 60MT of fresh fruit bunches per hour, has
already been selected. We hope to provide shareholders with further
information regarding the possible construction of this mill in due
course.
Butaw Estate
Activity at the Butaw Estate remained focused on the nursery,
with preliminary land preparation work having commenced in Q1 2012.
Butaw Estate is approximately 12 months behindin development terms
when compared with the Palm Bay Estate. This substantial nursery at
Butaw, which has a capacity to plant 5,000 hectares, is a similar
size to the Palm Bay nursery and remains on target to plant 300
hectares in the remainder of 2012. The planting in 2013 will
significantly increase to 3,000 hectares and a suitable location
has already been identified for a 60MT per hour processing
mill.
River Cess
In 2010, a Memorandum of Understanding ("MOU") was signed with
the elected representatives of the people of River Cess County in
order to work with them to develop a significant palm oil
concession. With an expansion potential of up to 80,000 hectares
and an optimum location between our two existing estates, River
Cess remains a key development for the Company. Negotiations are
ongoing with local officials in order to convert the MOU into a
full concession with the Liberian Government, which is anticipated
to be finalised by the end of Q1 2013.
Praetorian Resources
In addition to the progress described above, and subsequent to
the end of the Period, we announced an agreement whereby Praetorian
ResourcesLimited became a significant new shareholder in EPO. The
strong track record of Praetorian's management team, their deep
understanding of the palm oil industry and their investment
strategy will provide significant support in the implementation of
our growth plans. Their shareholding in EPO provides the support of
a new, long term and strategic shareholder and validates EPO's
commercial plans and growth strategy.
The Community
Social responsibility remains a key commitment for us, and we
continue to invest in the social and economic development of the
local communities in which we operate. The skills of the local
workforce are imperative to the efficiency of production and
through our operating mill we are able to provide an excellent
training platform. As production and mill size increases, the
current workforce will be well placed to progress with the Company
building on the technical, operational and engineering skills they
have developed. To aid this development, we have recruited a number
of experts from Indonesia and Malaysia who are working on the
Estates and bring with them their considerable knowledge and
expertise of palm oil operations.
The wider local community is of equal importance and we continue
to support the schools at Palm Bay and Butaw Estates, which,
following consultations with the Ministry of Education, are
currently undergoing an enlargement project. The schools will have
the capacity for 950 students.
In February 2012, we appointed Coastal & Environmental
Services ("CES") to conduct its Environmental and Social Impact
Assessment ("ESIA") studies, as part of the Company's strategy to
source development bank funding for the next stage of expansion.
The studies will take place at Palm Bay Estate and will contribute
to the social and environmental assessments that the Company has
already made in relation to the large scale development of
sustainable palm oil estates in line with international
guidelines.The continuation of these social and environmental
studies is an important process in the growth of our business.
Outlook
The growth in the palm oil market continues to be underpinned by
compelling demographic and macro-economic trends. Despite the
challenging market conditions over the Period, we remain confident
that palm oil prices will improve as a result of limited supply and
continuing strong demand.Liberia remains politically stable under
democratic rule, following President Ellen Johnson Sirleaf having
secured a further six year term in 2011.
We are proud to be playing a part in the continuing programme of
redevelopment in Liberia and look forward to a successful 2012,
delivering on our strategic objectives and creating shareholder
value.
Michael Frayne
Executive Chairman
27 September 2012
EQUATORIAL PALM OIL PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2012
Period ended Period ended Year ended
30 June 2012 30 June 2011 31 December
2011
Note (unaudited) (unaudited) (audited)
$'000 $'000 $'000
Revenue 210 175 385
Administrative expenses (1,306) (1,306) (2,279)
Share options expense 5 - (125) (15)
Operating loss (1,096) (1,256) (1,909)
--------------- --------------- --------------
Share of operating loss
of joint venture 3 (474) (189) (1,010)
Profit on disposal of assets
to joint venture 3 - 752 752
Loss for the Period before
and after taxation (1,570) (693) (2,167)
--------------- --------------- --------------
Other comprehensive income
Exchange gains/(losses)
arising on translation
of foreign operations 63 194 60
--------------- --------------- --------------
Total comprehensive income
for the period (1,507) (499) (2,107)
--------------- --------------- --------------
Loss per share expressed
in cents per share
- Basic & diluted 2 (1.2) cents (0.6) cents (1.7) cents
EQUATORIAL PALM OIL PLC
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012
30 June 2012 30 June 2011 31 December
2011
(unaudited) (unaudited) (audited)
Note
$'000 $'000 $'000
ASSETS
Non-current assets
Investment in joint venture 3 20,508 21,803 20,982
Property, plant and equipment - - -
20,508 21,803 20,982
-------------- -------------- -------------
Current assets
Receivables 248 2,170 602
Cash & cash equivalents 1,734 575 1,329
-------------- -------------- -------------
1,982 2,745 1,931
-------------- -------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 291 92 175
291 92 175
-------------- -------------- -------------
Net current assets 1,691 2,653 1,756
-------------- -------------- -------------
NET ASSETS 22,199 24,456 22,738
============== ============== =============
SHAREHOLDERS' EQUITY
Share capital 4 1,969 1,914 1,914
Share premium 30,402 29,619 29,489
Warrant and option reserve 5 1,030 2,202 2,092
Foreign exchange reserve 37 108 (26)
Retained loss (11,239) (9,387) (10,731)
Total equity 22,199 24,456 22,738
============== ============== =============
EQUATORIAL PALM OIL PLC
GROUP CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2012
Period ended Period ended Year ended
30 June 2012 30 June 2011 31 December
2011
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Cash flows from operating activities
Loss for the year before and
after taxation (1,570) (1,256) (2,167)
Decrease/(increase) in receivables 354 (1,875) (111)
Increase/(decrease)in payables 129 (57) (370)
Depreciation - 2 2
Share options expensed - 125 15
Share of operating loss of joint
venture 474 189 1,010
Profit on disposal of assets
to joint venture - (752) (752)
--------------- --------------- --------------
Net cash outflow from operating
activities (613) (3,624) (2,373)
--------------- --------------- --------------
Cash flows from investing activities
Investment in joint venture - (4,658) (4,658)
Net cash outflow from investing
activities - (4,658) (4,658)
--------------- --------------- --------------
Cash flows from financing activities
Issue of ordinary share capital
(net of expenses) 968 2,063 2,063
Net cash inflow from financing
activities 968 2,063 2,063
--------------- --------------- --------------
Net increase/(decrease) in cash
and cash equivalents 355 (6,219) (4,968)
Cash and cash equivalents at
beginning of period 1,329 6,760 6,760
Exchange gains/(losses) on cash
and cash equivalents 50 34 (463)
Cash and cash equivalents at
end of period 1,734 575 1,329
--------------- --------------- --------------
EQUATORIAL PALM OIL PLC
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2012
Called Foreign Warrant
up share Share premium exchange and option Retained Total equity
capital reserve reserve reserve earnings
$ 000's $ 000's $ 000's $ 000's $ 000's $ 000's
As at 1 January
2011 1,796 27,544 (86) 2,237 (8,724) 22,767
Share capital issued 118 1,945 - - - 2,063
Exercise of warrants
and options - 130 - (160) 30 -
Share-based payments - - - 125 - 125
Total comprehensive
income for the period - - 194 - (693) (499)
As at 30 June 2011 1,914 29,619 108 2,202 (9,387) 24,456
----------- --------------- ----------- -------------- ----------- ----------------
As at 1 January
2011 1,796 27,544 (86) 2,237 (8,724) 22,767
Share capital issued 118 1,945 - - - 2,063
Exercise of warrants
and options - - - (160) 160 -
Share-based payments - - - 15 - 15
Total comprehensive
income for the period - - 60 - (2,167) (2,107)
As at 31 December
2011 1,914 29,489 (26) 2,092 (10,731) 22,738
----------- --------------- ----------- -------------- ----------- ----------------
Exercise of warrants
and options 55 913 - - - 968
Share-based payments - - - (1,062) 1,062 -
Total comprehensive
income for the period - - 63 - (1,570) (1,507)
As at 30 June 2012 1,969 30,402 37 1,030 (11,239) 22,199
----------- --------------- ----------- -------------- ----------- ----------------
EQUATORIAL PALM OIL PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2012
1. Basis of preparation
These consolidated financial statements have been prepared using
policies based on International Financial Reporting Standards (IFRS
and IFRIC interpretations) issued by the International Accounting
Standards Board ("IASB") as adopted for use in the EU. They do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the 2011 Annual Report. The financial information
for the half years ended 30 June 2012 and 30 June 2011 does not
constitute statutory accounts within the meaning of Section 434(3)
of the Companies Act 2006 and is unaudited.
The annual financial statements of Equatorial Palm Oil plc are
prepared in accordance with IFRSs as adopted by the European Union.
The comparative financial information for the year ended 31
December 2011 included within this report does not constitute the
full statutory accounts for that period. The statutory Annual
Report and Financial Statements for 2011 have been filed with the
Registrar of Companies. The Independent Auditors' Report on that
Annual Report and Financial Statement for 2011 was unqualified, did
not draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the half-yearly consolidated financial statements.
The same accounting policies, presentation and methods of
computation are followed in these condensed consolidated financial
statements as were applied in the Group's latest annual audited
financial statements.
In addition, the IASB has issued a number of IFRS and IFRIC
amendments or interpretations since the last annual report was
published. It is not expected that any of these will have a
material impact on the Group.
2. Loss per share
The basic loss per share is derived by dividing the loss for the
Period attributable to ordinary shareholders by the weighted
average number of shares in issue.
As inclusion of the potential Ordinary shares would result in a
decrease in the loss per share they are considered to be
anti-dilutive, as such, a diluted earnings per share is not
included.
Period ended Period ended Year ended
30 June 2012 30 June 2011 31 December 2011
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Loss for the period (1,570) (693) (2,167)
Weighted average number of Ordinary
shares of 1p in issue 127.3 million 123.3 million 124.1 million
Loss per share - basic (1.2) cents (0.6) cents (1.7) cents
3. Investment in joint venture
The results of the joint venture for the period of six months to
30 June 2012 were as follows:
30 June 31 December
30 June 2012 2011 2011
$'000 $'000 $'000
Non-current assets 27,412 18,680 22,083
Current assets 14,270 27,420 20,989
Non-current liabilities - - -
Current liabilities (664) (2,494) (1,106)
TOTAL NET ASSETS 41,018 43,606 41,966
Income 574 10 229
Expenses (1,522) (388) (2,249)
Loss after tax (948) (378) (2,020)
The Company, through its investment in Equatorial Biofuels
(Guernsey) Limited, owns a 50% interest in Liberian Palm
Developments Limited. The Company's interest in Liberian Palm
Developments Limited is as follows:
$'000
Interest in joint venture at 1 January
2011 -
Transfer of assets to joint venture 21,992
Share of losses of joint venture (189)
Dividend received from Liberian Palm
Developments Limited -
Interest in joint venture at 30 June
2011 21,803
Interest in joint venture at 1 January
2011 -
Transfer of assets to joint venture 21,992
Share of losses of joint venture (1,010)
Dividend received from Liberian Palm
Developments Limited -
Interest in joint venture at 31 December
2011 20,982
Interest in joint venture at 1 January
2012 20,982
Transfer of assets to joint venture -
Share of losses of joint venture (474)
Dividend received from Liberian Palm
Developments Limited -
Interest in joint venture at 30 June
2012 20,508
4. Called up share capital
Period ended Period ended Period ended
30 June 30 June 31 December
2012 2011 2011
Allotted, called up and fully paid $'000 $'000 $'000
-------------------------------------- -------------- -------------- --------------
128,316,434Ordinary shares of 1p
each (2011: 124,808,188) 1,969 1,914 1,914
-------------------------------------- -------------- -------------- --------------
During the Period the Group issued 3,508,246 shares at an
average price of 17.5 pence per share ($0.28 cents).
5. Share based payments
Warrants
Details of the warrants outstanding during the Period are as
follows:
Weighted
Number of average exercise
warrants price
Outstanding at 1 January 2012 26,722,498 17.5p
Issued during the year 3,955,012 17.5p
Expired during the year (18,980,336) 17.5p
Exercised during the year (3,508,246) 17.5p
Outstanding at 30 June 2012 8,188,928 17.5p
Exercisable at 30 June 2012 8,188,928 17.5p
As at 30 June 2012 the following warrants to subscribe for
Ordinary shares were outstanding:
Category Over Number of Shares Expiry Date
5yr Warrants, exercisable 2,198,757 26 February 2015
at 17.5p
3yr Warrants, exercisable 5,990,171 26 February 2013
at 17.5p
2yr Warrants, exercisable - 26 February 2012
at 17.5p
Total 8,188,928
Share options
Details of the options outstanding during the Period are as
follows:
Outstanding Issued Exercised Outstanding Exercisable
at during during the at at
1 January the period period 30 June 2012 30 June
2012 2012
---------------------- ------------- ------------- ------------- --------------- -------------
Options exercisable
at 17.5p 7,550,000 2,020,200 - 9,570,200 3,775,000
6. Events after the reporting period
Through a transfer of shares from existing shareholders,
Praetorian Resources ("Praetorian") became a significant
shareholder in the Company. Praetorian holds 9,947,950 shares in
EPO, which equates to 7.75% of the Issued Share Capital
Praetorian is a newly formed natural resource focused investment
holding company incorporated in Guernsey which was admitted to AIM
on 9 July 2012. Praetorian's strategy is to invest in natural
resources stocks that provide exposure to long term growth in
demand for commodities such as palm oil.
Praetorian will utilise the contacts and skills of its board of
directors and international advisors to attract appropriate
companies for its portfolio of investments. The Praetorian board is
led by Richard Lockwood who has extensive experience in natural
resources fund management.
INDEPENDENT REVIEW REPORT TO EQUATORIAL PALM OIL PLC
Introduction
We have been engaged by the Company to review the set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2012 which comprises the group statement
of comprehensive income, the group statement of financial position,
the group cash flow statement, the group statement of changes in
equity and the related explanatory notes.We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the set of
financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the set of financial statements in the half-yearly financial report
based on our review.Our report has been prepared in accordance with
the terms of our engagement to assist the Company in meeting the
requirements of the rules of the London Stock Exchange for
companies trading securities on AIM and for no other purpose. No
person is entitled to rely on this report unless such a person is a
person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised
to do so by our prior written consent. Save as above, we do not
accept responsibility for this report to any other person or for
any other purpose and we hereby expressly disclaim any and all such
liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the set of financial statements in the
half-yearly financial report for the six months ended 30 June
2012is not prepared, in all material respects, in accordance with
the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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