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RNS Number : 1676S
Ambrian PLC
29 September 2017
 

LONDON, 29 September 2017

 

AMBRIAN PLC

 

Interim Results for the six months to 30 June 2017

 

Ambrian plc ("Ambrian" or the "Company" and, together with its subsidiaries, the "Group") today announces its unaudited consolidated results for the six months ended 30 June 2017.

 

Highlights

 

·    Group turnover of US $0.23 billion (1H2016: US $0.57 billion), a 60% reduction due to the run-down of the Company's trading and logistics business during the period

·    Group EBITDA loss of US $0.30 million (1H2016: US $1.40 million loss)

·    Turnover of cement business of US $6.18 million (1H2016: US $5.44 million)

·    EBITDA of cement business US $0.22 million (1H 2016: US $0.04 million)

·    EBITDA of trading and logistics business of US $0.17 million (1H 2016: EBITDA loss US $0.91 million)

·    Group loss before tax of US $3.68 million (1H 2016: Loss of US $17.29 million after impairment charge of US 13.70 million)

·    Trading and logistics business has been run-down with a reduction in exposures to the Group

·    Net asset value attributable to owners of the Company as at 30 June 2017 of US $22.58 million (31 December 2016: US $25.73 million) equivalent to US 9.16 cents per share (31 December 2016: US 10.44 cents per share)

·    Cimentos da Beira, the Company's operating subsidiary in Mozambique, is in advanced negotiations with its term loan lender, the Industrial Development Corporation of South Africa Ltd ("IDC") to restructure the terms and conditions of its loans

 

 

 

Commenting on the results, Martin Abbott, non-executive Chairman, stated:

 

"We continue to examine strategic options for the business against the backdrop of improving performance of our cement business in Mozambique. We are heartened by the commercial performance of our cement plant in the first six months of this year and we continue to believe in the long term GDP growth in Mozambique and the likely significant increase in per capita cement consumption driven by the current housing deficit and ambitious infrastructure plans."

 

 

Enquiries

 

Ambrian plc    

Roger Clegg                + 44 (0)20 7634 4785

           

Cenkos Securities plc 

Neil McDonald            + 44 (0)20 7397 8900

Nick Tulloch   

 

 

 

 

 

 

 

Notes to Editors

 

Ambrian is active is the cement business in Mozambique. We pursue selective strategic acquisitions and ventures which can demonstrate a compelling industrial, commercial and financial justification.

 

Ambrian is quoted on the Alternative Investment Market of the London Stock Exchange under the ticker symbol AMBR.  Further information on the Group is available on the Company's website: www.ambrian.com or the website of Cimentos da Beira Lda: www.cdb.co.mz.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chairman's Statement

 

Gross profit for the Group for the six months ended 30 June 2017 was US $2.64 million on a turnover of US $0.23 billion (1H 2016: US $1.80 million on a turnover of US $0.57 billion).

 

For the period under review EBITDA was a loss of US $0.30 million (1H2016: US $1.40 million loss), a function of positive trading and cement sales.

 

The operating loss for the six months ended 30 June 2017 amounted to US $0.94 million (1H 2016: operating loss of US $16.42 million) and the loss before tax amounted to US $3.68 million (1H 2016: loss before tax US $17.29 million).

 

Within the overall loss before tax, the cement business reported a loss before tax of US $2.78 million for the period (1H 2016: loss before tax of US $16.01 million). Trading and logistics, in the run-up to its closure in June 2017, reported a profit before tax of US $0.11 million for the period (1H 2016: loss before tax of US $0.95 million). 

 

Cement

 

The first quarter of the year is typically the latter part of the "wet season", however Q1 2017 experienced higher than average rainfall. In February, Beira had the month's average rainfall in two days, a pattern repeated through March. The unpredictable rainfall patterns led to wide spread flooding which curtailed construction projects and caused logistics difficulties. This down turn in demand together with competitors' strong wholesale discounting tactics led to sales volumes for the first quarter being adversely affected. Despite the continuing rain into February, the latter part of that month saw some record deliveries of bagged cement from the plant. As the weather improved in the second quarter of the year, sales volumes did improve.

 

Ready mix cement has not performed as well as expectations due to the adverse weather and the unavailability of mixer-trucks over the first half of the year.

 

The cement market is influenced by the general economy of the country which is still struggling with the impacts of the debt crisis and suspension of IMF and Donor funding. This has resulted in the postponement or cancellation of a number of public infrastructure projects. In addition, the residential and commercial markets have been negatively affected by a lack of available income, high interest rates and low borrowing capacity. Whilst the downturn in cement sales is national, the impact has been more pronounced in the south of the country and less so in the central region where the plant is located, and also in the northern region.

 

Despite the downturn, the Company continues to develop its sales strategy and we have expanded our distribution network by establishing depots in Chimoio which we believe will achieve increased penetration rates in the area, and in Massinga, where a large proportion of the population has above average purchasing power. Building these centres now will allow us to establish our brand locally and then benefit more quickly from an improving economy.

 

Our brand is increasingly recognised as a premium product and efforts are continuing by the sales team to promote the products' advantages to block makers, concrete product manufacturers and construction companies, comprising a large section of our customer base.

 

Realised prices have improved over the period, helped by the strengthening of the local currency against the US dollar.  The market has begun to stabilize after the reduction of aggressive discounts being offered in the market as industry participants sought to maintain market share in Central Mozambique.

 

Raw material unit costs and usage factors have been stable over the period. However, power costs are above the industry average and so we are actively negotiating with the power utility to align the costs with those of our competitors.

 

Cimentos da Beira Lda ("CDB"), a subsidiary of the Company, has been provided with a US $13.5 million and a US $5.5 million term loan facility from the Industrial Development Corporation of South Africa Ltd ("IDC") to assist in the construction of its cement plant in Mozambique. As at 30 June 2017, both term loans had been fully drawn down. These loans were originally repayable in 60 equal monthly instalments from April 2016 onwards. Given the delay in start-up of the operations and the lower than forecast sales volumes, the Company and the IDC entered into negotiations in June 2016 to amend the terms of the facilities, although, at that time, the IDC did also notify CDB that it was in default under the existing term loan agreements.

 

Negotiations have been ongoing between CDB and the IDC over the past year regarding the deferral of the repayment of the term loans. CDB and IDC have agreed to a tentative restructuring of the term loans with the first quarterly repayments under the term loans starting in March 2018.  Repayments will be in equal quarterly payments and the maturity date of both term loans will be in 2023.  The tentative restructuring of the term loans is subject to certain approvals, final documentation and conditions precedent customary for a transaction of this nature.

 

The challenges that the country faces are not unique for an emerging economy.  We remain confident of the long-term growth prospects in Central Mozambique and more particularly of the Beira corridor which is a natural gateway for the hinterland and landlocked countries such as Zambia, Malawi and Zimbabwe.

 

 

Trading & Logistics

 

Following the announcement by the Company on 14 October 2016 of its intention to withdraw from metals trading and logistics, the activity has been in a winding down phase since then. This has resulted in the execution of contractual obligations with respect to the purchase and sale of metal, the sale of any non-allocated inventory and a reduction in staff. The withdrawal from the business has been made in an orderly manner with the assistance of our financing banks who have supported the business to the end. As at 30 June 2017, there were three transactions outstanding which have been subsequently completed. All capital that had been allocated to this activity has been released and there are no staff involved in the business. Overseas offices related to the activity are in the course of closure.

 

 

Board Changes

 

On 25 August 2017, the executive contract of Mr Conrad, the Chief Executive Officer, was terminated. This was due to the lack of confidence on the part of the majority of the Board in Mr Conrad's ability to lead the Company. Mr Conrad is contesting the validity of his removal. His responsibilities have been reallocated to other Directors and executives.

 

A General Meeting of the Company will be held on 3 October 2017 with a resolution to remove Mr Conrad as a Director of the Company.  The General Meeting has been requisitioned by certain shareholders.

 

 

 

Current Trading and Future Prospects

 

Cement

 

CDB's sales volumes of cement have been at record levels in July and August of this year which is encouraging for the remainder of the year. Sales prices have stabilized and discounting has been less aggressive.

 

The exchange rate of the Mozambiqan Meticals against the US Dollar has moved from approximately 71 in December 2016 to approximately 61 at the current time which has been beneficial to the business as it purchases its raw materials in US Dollars and sells it product in Mozambiqan Meticals.

 

We expect unit costs to further reduce over the remainder of the year as a result of a falling raw material costs, feed optimisation and a ramp up in production volumes.

 

Transport costs are a significant part of the variable costs of the business so we are constantly reviewing our transport options to improve our cement distribution capabilities and refine our pricing strategy. We are also focused on securing transport and pumping capacity for our concrete products.

 

Strategy

 

As announced on 31 July 2017, the Company engaged Verdant Capital, an African corporate finance specialist, to assess strategic options for the Company's cement operations.

 

 

Martin Abbott                         

Chairman                                

 

 

Financial Review

Overview

Gross profit for the Group was US $2.64 million on turnover of US $0.23 billion for the six months ended 30 June 2017 (1H 2016: US $1.80 million gross profit on turnover of US $0.57 billion). 

After administrative expenses and finance income and costs, loss before tax for the six months ended 30 June 2017 was US $3.68 million (1H 2016: US $17.29 million which included an impairment charge of US $13.70 million (1H 2017: nil)).

Cement

Turnover of US $6.18 million for the period under review compares favourably with turnover of US $5.44 million for the six months ended 30 June 2016 and is indicative of the ramping up of production and the stabilisation of cement prices.

The business reported a gross margin of US $1.79 million which resulted in an EBITDA of US $0.22 million after administrative expenses of US $1.56 million. The comparative figures for the six months ended 30 June 2016 were a gross margin of US $0.64 million, administrative expenses of US $0.60 million and an EBITDA of US $0.04 million. The loss before tax for the cement business for the six months ended 30 June 2017 was US $2.78 million (1H 2016: loss before tax US $16.01 million which included an impairment charge of US $13.70 million (no impairment charge in 1H 2017).

Trading and Logistics

This activity was in a run-off phase during the period under review which was reflected in its lower turnover of US $0.22 billion compared to US $0.56 billion for the period to 30 June 2016. EBITDA for the period was US $0.17 million (1H 2016: EBITDA loss US $0.91 million). The profit before tax for trading and logistics for the six months ended 30 June 2017 was US $0.11 million (1H 2017: Loss before tax US $0.95 million).

Expenses 

Group administrative expenses were US $2.94 million for the six months to 30 June 2017 (1H 2016: US $3.20 million), of which US $0.70 million (1H 2016: US $0.53 million) was represented by Group corporate overheads. Total headcount at 30 June 2017 was 107, a reduction of 17 since 31 December 2016 due to the run-off of the trading and logistics business.

Balance Sheet 

Total assets were US $70.18 million at 30 June 2017 compared with US $282 million at 31 December 2016. The majority of the decrease is due to the withdrawal from the trading and logistics business in the first six months of 2017.

As already reported in the Chairman's Statement, there are ongoing negotiations between CDB and the IDC regarding the restructuring of the term loans. Although the negotiations have progressed well, at the date of publication of the Group's condensed consolidated interim financial statements as at 30 June 2017, approvals, final documentation and conditions precedent were still outstanding.  The Group is therefore required to categorise all liabilities with the IDC as Current Liabilities, which would normally be reported as Non-Current Liabilities.

These conditions indicate the existence of a material uncertainty which may cast doubt about the Group's ability to continue as a going concern. The Directors are confident that the revised terms regarding the commencement of the loan repayments to March 2018 will be formally approved by the IDC.

Total equity before non-controlling interests was US $22.58 million at 30 June 2017 compared with US $25.73 million at 31 December 2016.  Net asset value per share which is equity attributable to the owners of the parent was US 9.16 cents per share (31 December 2016: US 10.44 cents). Net asset value per share is based on 246,457,301 ordinary shares outstanding at 30 June 2017, excluding treasury shares, non-treasury shares and shares held by the Ambrian Employee Benefit Trust (31 December 2016: 246,457,301 ordinary shares outstanding). The reduction in net asset per share is attributable to the losses incurred by the Group in the six months to 30 June 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ambrian plc

Condensed Consolidated Statement of Comprehensive Income

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

Six months to 30 June 2017

 

Six months to 30 June 2016

 

Year to 31 December 2016

 

 

 

US $000's

 

US $000's

 

US $000's

 

 

 

 

 

 

 

 

 

 

Turnover

224,505

 

567,689

 

1,047,187

 

 

Cost of Sales

(221,869)

 

(565,889)

 

(1,045,970)

 

 

Total income

2,636

 

1,800

 

1,217

 

 

 

 

 

 

 

 

 

 

Administrative expenses

(2,937)

 

(3,198)

 

(7,256)

 

 

Depreciation

(634)

 

(1,315)

 

(2,204)

 

 

Impairment charge

-

 

(13,703)

 

(21,286)

 

 

Total administrative expenses

(3,571)

 

(18,216)

 

(30,746)

 

 

 

 

 

 

 

 

 

 

Operating loss

(935)

 

(16,416)

 

(29,529)

 

 

Finance income

-

 

530

 

1,479

 

 

Finance costs

(2,743)

 

(1,400)

 

(3,094)

 

 

Loss before tax

(3,678)

 

(17,286)

 

(31,144)

 

 

Taxation

-

 

5,384

 

6,740

 

 

Loss after tax

(3,678)

 

(11,902)

 

(24,404)

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

Items that may be subsequently reclassified to

profit/(loss)

 

 

 

 

 

 

 

Exchange profit arising from translation of

foreign operations

-

 

-

 

-

 

 

Total other comprehensive profit

-

 

-

 

-

 

 

Total comprehensive loss

(3,678)

 

(11,902)

 

(24,404)

 

 

 

 

 

 

 

 

 

 

(Loss)/profit attributable to:

 

 

 

 

 

 

 

Owners of parent

(3,150)

 

(9,723)

 

(20,709)

 

 

Non-controlling interest

(528)

 

(2,179)

 

(3,695)

 

 

 

(3,678)

 

(11,902)

 

(24,404)

 

 

 

 

 

 

 

 

 

 

Total comprehensive (loss)/profit attributable to:

 

 

 

 

 

 

 

Owners of parent

(3,150)

 

(9,723)

 

(20,709)

 

 

Non-controlling interest

(528)

 

(2,179)

 

(3,695)

 

 

 

(3,678)

 

(11,902)

 

(24,404)

 

 

Loss per share in USD cents:

 

 

 

 

 

 

 

Basic and diluted earnings per share

(1.28)

 

(4.11)

 

(8.57)

 

 

 

 

 

 

 

 

 

 

Ambrian plc

Condensed Consolidated Statement of Financial Position

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

As at

30 June 2017

 

As at

30 June 2016

 

As at 31 December 2016

 

 

 

US $000's

 

US $000's

 

US $000's

 

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

53,473

 

62,064

 

54,217

 

 

Deferred tax asset

2,184

 

3,305

 

2,184

 

 

 

55,657

 

65,369

 

56,401

 

 

Current assets

 

 

 

 

 

 

 

Financial assets at fair value through profit or loss

158

 

162

 

150

 

 

Inventory

3,354

 

163,404

 

156,215

 

 

Trade and other receivables

9,593

 

49,132

 

64,107

 

 

Current tax receivable

-

 

44

 

-

 

 

Cash and cash equivalents

1,415

 

3,962

 

6,693

 

 

 

14,520

 

216,704

 

227,165

 

 

 

 

 

 

 

 

 

 

Total assets

70,177

 

282,073

 

283,566

 

 

LIABILITIES

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Long-term borrowings

(1,151)

 

(844)

 

(915)

 

 

Deferred tax liability

(558)

 

(3,001)

 

(558)

 

 

 

(1,709)

 

(3,845)

 

(1,473)

 

 

Current liabilities

 

 

 

 

 

 

 

Financial liabilities at fair value through profit or loss

(844)

 

(5,340)

 

(6,074)

 

 

Short-term borrowings

(31,878)

 

(161,624)

 

(171,448)

 

 

Short-term liabilities under sale and repurchase agreements

-

 

(23,312)

 

(2,667)

 

 

Trade and other payables

(10,204)

 

(46,427)

 

(72,342)

 

 

Provisions

-

 

-

 

(323)

 

 

Current tax payable

-

 

-

 

(19)

 

 

 

(42,926)

 

(236,703)

 

(252,873)

 

 

 

 

 

 

 

 

 

 

Total liabilities

(44,635)

 

(240,548)

 

(254,346)

 

 

 

 

 

 

 

 

 

 

Total net assets

25,542

 

41,525

 

29,220

 

 

Capital and reserves

 

 

 

 

 

 

 

Share capital

4,063

 

4,222

 

4,063

 

 

Share premium

19,578

 

18,044

 

19,578

 

 

Capital redemption reserve

15,898

 

15,898

 

15,898

 

 

Merger relief reserve

24,770

 

24,770

 

24,770

 

 

Shares to be issued

-

 

1,477

 

-

 

 

Treasury shares

(1,986)

 

(1,986)

 

(1,986)

 

 

Other reserve

(4,688)

 

(4,980)

 

(4,688)

 

 

Retained losses

(30,681)

 

(16,545)

 

(27,531)

 

 

Employee benefit trust

(10,863)

 

(10,870)

 

(10,863)

 

 

Share based payment reserve

8,052

 

8,052

 

8,052

 

 

Exchange reserve

(1,567)

 

(1,567)

 

(1,567)

 

 

Total equity attributable to the owner of the parent

22,576

 

36,515

 

25,726

 

 

Non-controlling interest

2,966

 

5,010

 

3,494

 

 

Total equity

25,542

 

41,525

 

29,220

 

 

Ambrian plc

Condensed Consolidated Statement of Changes in Equity

 

Share capital

Share premium account

Capital redemption reserve

Merger relief reserve

Shares to be issued

Treasury shares

Other reserve

Retained losses

Share based payments reserve

Employee benefit trust

Exchange reserve

Total equity attributable to the owner of the parent

 Non-controlling interest

Total equity

 

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

US $000's

Balance at 31 December 2015

4,222

18,044

15,898

24,770

1,477

(1,986)

(4,980)

(6,822)

8,052

(10,870)

(1,567)

46,238

7,189

53,427

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

-

(9,723)

-

-

-

(9,723)

(2,179)

(11,902)

Total comprehensive loss for the period

-

-

-

-

-

-

-

(9,723)

-

-

-

(9,723)

(2,179)

(11,902)

Balance at 30 June 2016 (unaudited)

4,222

18,044

15,898

24,770

1,477

(1,986)

(4,980)

(16,545)

8,052

(10,870)

(1,567)

36,515

5,010

41,525

Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

-

(10,986)

-

-

-

(10,986)

(1,516)

(12,502)

Total comprehensive loss for the period

-

-

 

-

-

-

-

-

(10,986)

-

-

-

(10,986)

(1,516)

(12,502)

Issuance of shares

144

1,534

-

-

(1,477)

-

(201)

-

-

-

-

-

-

-

Share cancellation

(303)

-

-

-

-

-

303

-

-

-

-

-

-

-

Shares awarded to employees

-

-

-

-

-

-

190

-

-

-

-

190

-

190

Exercise of options

 -

 -

 

 -

 -

 -

 -

        -

 -

 7

 -

 7

 -

 7

Balance at 31 December 2016

4,063

19,578

15,898

24,770

-

(1,986)

(4,688)

(27,531)

8,052

(10,863)

(1,567)

25,726

3,494

29,220

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

-

(3,150)

-

-

-

(3,150)

(528)

(3,678)

Total comprehensive loss for the period

-

-

 

-

-

-

-

-

(3,150)

-

-

-

(3,150)

(528)

(3,678)

Balance at 30 June 2017 (unaudited)

4,063

19,578

 

15,898

24,770

-

(1,986)

(4,688)

(30,681)

8,052

(10,863)

(1,567)

22,576

2,966

25,542

 

 

Ambrian plc

Condensed Consolidated Statement of Cashflows

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(audited)

 

 

Six months to 30 June 2017

 

Six months to 30 June 2016

 

 

Year to 31 December 2016

 

US $ 000's

 

US $ 000's

 

US $ 000's

Loss for the period

(3,678)

 

(11,902)

 

(24,404)

Adjustments for:

 

 

 

 

 

Depreciation of property, plant and equipment

634

 

1,315

 

2,204

Loss on disposal of property, plant and equipment

90

 

-

 

-

Impairment of property, plant and equipment

-

 

13,703

 

21,286

Finance costs

2,743

 

1,400

 

3,094

Share-based payment expense

-

 

-

 

190

Foreign exchange losses

-

 

328

 

72

Taxation

-

 

(5,384)

 

(6,740)

Decrease in inventories

152,861

 

99,137

 

106,326

Decrease/(increase) in trade and other receivables

54,514

 

9,840

 

(4,024)

Unrealised gains/(losses) on financial liabilities at fair value

(5,230)  

 

 2,665

 

3,399

Unrealised gains on financial assets at fair value

(8)

 

7,333

 

7,345

Increase/(decrease) in trade and other payables

(62,480)

 

(17,430)

 

7,974

Cash generated in operations

139,446

 

101,005

 

116,722

Taxation received

-

 

191

 

288

Net cash flow generated in operating activities

139,446

 

101,196

 

117,010

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Purchase of property, plant and equipment

-

 

(1,046)

 

(1,671)

Proceeds from disposal of property, plant and equipment

20

 

-

 

-

Net cash used in investing activities

20

 

(1,046)

 

(1,671)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Interest paid

(2,507)

 

(1,400)

 

(2,851)

(Decrease) in short term liabilities under sale and repurchase agreements

(2,667)

 

(20,433)

 

(41,078)

(Repayment) of short term borrowings

(139,570)

 

(84,192)

 

(74,475)

Increase in long term borrowings

-

 

65

 

-

Net cash used in financing activities

(144,744)

 

(105,960)

 

(118,404)

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

(5,278)

 

(5,810)

 

(3,065)

Cash and cash equivalents at the beginning of the year

6,693

 

9,823

 

9,823

Effect of foreign exchange rate differences on cash and cash equivalents

-

 

(51)

 

(65)

Cash and cash equivalents at the end of the year

1,415

 

3,962

 

6,693

                       

 

 

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements

 

1.         Basis of preparation

The condensed interim financial statements are for the six months ended 30 June 2017. The financial information set out in these condensed interim financial statements does not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006. The comparative financial information for the year ended 31 December 2016 in this interim report does not constitute statutory financial statements for that year. The statutory financial statements for 31 December 2016 have been delivered to the Registrar of Companies. The auditor's report on those financial statements was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under s.498(2) or s.498(3) of the Companies Act 2006.

The accounts for the period have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34") and the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2016, unless otherwise stated, and those envisaged for the financial statements for the year ended 31 December 2017.

Cimentos da Beira Lda ("CDB"), a subsidiary of the Company, has been provided with a US $13.5 million and a US $5.5 million term loan from the Industrial Development Corporation of South Africa Ltd ("IDC") to assist in the financing of its cement plant in Mozambique. At the reporting date both term loans had been fully drawn down. These loans are repayable in 60 equal monthly instalments from April 2016 onwards.  No repayments of the loans had been made by the CDB as at the date of publication of the Group's condensed consolidated interim financial statements as at 30 June 2017. As a result, at the reporting date, CDB was in default under the existing term loan agreements with the IDC.

 

Negotiations have been ongoing between CDB and the IDC over the past year as to the deferral of the repayment of the term loans. CDB and IDC have agreed to a tentative restructuring of the term loans with the first quarterly repayment under the term loans starting in March 2018.  Repayments will be in equal quarterly payments over a five year period until the maturity date of both term loans in 2023.  The tentative restructuring of the term loans is subject to certain approvals, final documentation and conditions precedent customary for a transaction of this nature. At the date of publication of the Group's condensed consolidated interim financial statements as at 30 June 2017 approvals, final documentation and conditions precedent were still outstanding.  The Group is therefore required to categorise all liabilities with the IDC as Current Liabilities, which would normally be reported as Non-Current Liabilities.

 

The IDC has also advanced a US $4m junior convertible loan to CDB which is either repayable or convertible into an equity interest in CDB within a six month period following the full amortisation of both term loans.

 

These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. However, the Directors are confident that the revised terms regarding the deferral of the loan repayments to March 2018 will be formally approved by the IDC.

The Directors have a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements and the condensed consolidated interim financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

The interim financial statements were approved by the Directors on 28 September 2017 and copies are available to the public free of charge from the Company at 41 Lothbury, London EC2R 7HG during normal office hours, Saturdays, Sundays and Bank Holidays excepted, for 14 days from today.

 

 

2.   Segmental Analysis

The Group has three reportable segments attributable to its continuing operations including Head office:

Trading & logistics: comprises Ambrian Metals Limited and its subsidiary companies, a physical metals and minerals merchant.

Cement operations: comprises Cimentos da Beira, a cement mill located in Beira, Mozambique.

Head office: principally relates to overheads incurred in operating the public limited company, providing support functions to the operating businesses, and includes the remuneration of the Directors of Ambrian plc.

 

 

 

Six months to 30 June 2017 (unaudited)

Trading

 

Cement

 

Head office costs

 

Total

 

US $000's

 

US $000's

 

US $000's

 

US $000's

Turnover

218,324

 

6,181

 

-

 

224,505

Cost of sales

(217,476)

 

(4,393)

 

-

 

(221,869)

Gross margin

848

 

1,788

 

-

 

2,636

 

 

 

 

 

 

 

 

Administrative expenses

(677)

 

(1,564)

 

(696)

 

(2,937)

EBITDA

171

 

224

 

(696)

 

(301)

 

 

 

 

 

 

 

 

Depreciation and impairment expense

 

 

 

 

 

 

(634)

Finance income

 

 

 

 

 

 

-

Finance cost

 

 

 

 

 

 

(2,743)

Loss before tax

 

 

 

 

 

 

(3,678)

 

 

 

Six months to 30 June 2016 (unaudited)

Trading

 

Cement

 

Head office costs

 

Total

 

US $000's

 

US $000's

 

US $000's

 

US $000's

Turnover

562,246

 

5,443

 

-

 

567,689

Cost of sales

(561,084)

 

(4,805)

 

-

 

(565,889)

Gross margin

1,162

 

638

 

-

 

1,800

 

 

 

 

 

 

 

 

Administrative expenses

(2,067)

 

(598)

 

(533)

 

(3,198)

EBITDA

(905)

 

40

 

(533)

 

(1,398)

 

 

 

 

 

 

 

 

Depreciation and impairment expense

 

 

 

 

 

 

(15,018)

Finance income

 

 

 

 

 

 

530

Finance cost

 

 

 

 

 

 

(1,400)

Loss before tax

 

 

 

 

 

 

(17,286)

 

 

 

 

 

 

 

 

 

 

 

Year to 31 December 2016 (audited)

Trading

 

Cement

 

Head office costs

 

Total

 

US $000's

 

US $000's

 

US $000's

 

US $000's

Turnover

 1,037,175

 

10,012

 

-

 

1,047,187

Cost of sales

(1,036,773)

 

(9,197)

 

-

 

(1,045,970)

Gross margin

402

 

815

 

-

 

1,217

 

 

 

 

 

 

 

 

Administrative expenses

(4,083)

 

(2,075)

 

(1,098)

 

(7,256)

EBITDA

(3,681)

 

(1,260)

 

(1,098)

 

(6,039)

 

 

 

 

 

 

 

 

Depreciation and impairment expense

 

 

 

 

 

 

(23,490)

Finance income

 

 

 

 

 

 

1,479

Finance cost

 

 

 

 

 

 

(3,094)

Loss before tax

 

 

 

 

 

 

31,144

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

As at 30 June 2017

 

As at 30 June 2016

 

Year to 31 December 2016

 

 

US $000's

 

US $000's

 

US $000's

 

Loss before tax

 

 

 

 

 

 

Trading

110

 

(952)

 

(3,977)

 

Cement operations

(2,779)

 

(16,011)

 

(27,024)

 

Head office

(1,009)

 

(323)

 

(143)

 

 

(3,678)

 

(17,286)

 

(31,144)

 

                   

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

As at 30 June 2017

 

As at 30 June 2016

 

Year to 31 December 2016

 

 

US $000's

 

US $000's

 

US $000's

 

Total assets

 

 

 

 

 

 

Trading

6,112

 

212,202

 

219,869

 

Cement operations

63,682

 

69,420

 

63,237

 

Head office

383

 

451

 

460

 

 

70,177

 

282,073

 

283,566

 

Total liabilities

 

 

 

 

 

 

Trading

4,987

 

203,118

 

217,034

 

Cement operations

37,527

 

34,382

 

35,437

 

Head office

2,121

 

3,048

 

1,875

 

 

44,635

 

240,548

 

254,346

 

                   

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

Six months to 30 June 2017

 

Six months to 30 June 2016

 

Year to 31 December 2016

Turnover

US $000's

 

US $ 000's

 

US $000's

Eastern Asia

-

 

           284,344

 

        535,923

Western Asia

-

 

           176,008

 

            313,312

Other

224,505

 

             107,337

 

            197,952

                     

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(audited)

 

 

Six months to 30 June 2017

 

Six months to 30 June 2016

 

Year to 31 December 2016

Customer Turnover

US $000's

 

US $000's

 

US $000's

Customer A

-

 

           73,273

 

97,387  

Customer B

-

 

69,154 

 

-             

Other

224,505

 

           425,262

 

 949,800

                       

 

 

3.       Cash and cash equivalents

Within cash and cash equivalents there is no restricted cash at 30 June 2017. At 30 June 2016 there was restricted cash of US $1,383,633 and at 31 December 2016 there was restricted cash of $3,316,805.

 

4.       Earnings per share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust on 30 June 2017 of 6,259,046 (2016: 6,259,046), Treasury shares on 30 June 2017 of 4,500,058 (2016: 4,500,058) and Non-treasury shares on 30 June 2017 of 8,484,466 (30 June 2016: 28,812,192).

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below. Diluted earnings per share has not been calculated as the Group is loss making.

 

 

Six months to 30 June 2017

 

Six months to 30 June 2016

 

Year to 31 December 2016

 

US $000's

 

US $000's

 

US $000's

 

(unaudited)

 

(unaudited)

 

(audited)

Loss attributable to shareholders

(3,150)

 

(9,723)

 

(20,709)

Diluted loss attributable to shareholders

(3,150)

 

(9,723)

 

(20,709)

 

 

 

 

 

 

Weighted average number of shares

246,457,300

 

236,810,651

 

241,673,620

Dilutive effect of share options

66,675,000

 

66,675,000

 

66,675,000

 

 

 

 

 

 

Basic earnings per share US $ cents

(1.28)

 

(4.11)

 

(8.57)

Diluted earnings per share US $ cents

(1.28)

 

(4.11)

 

(8.57)

 

 

 

 

 

 

 

 

 

 

5.       Financial instruments

 

(unaudited)

 

(unaudited)

 

As at 30 June 2017

 

As at 30 June 2016

 

Loans and Receivables at amortised cost

At fair value through profit or loss

Total

 

Loans and Receivables at amortised cost

At fair value through profit or loss

Total

 

US $000's

US $000's

US $000's

 

US $000's

US $000's

US $000's

Financial assets

 

 

 

 

 

 

 

Cash and cash equivalents

1,415

-

1,415

 

3,962

-

3,962

Trade receivables - current

7,495

-

7,495

 

44,790

-

44,790

Other receivables - current

-

-

-

 

4,342

-

4,342

Financial assets at fair value through profit or loss - equities

-

158

158

 

-

162

162

Total

8,910

158

9,068

 

53,094

162

53,256

 

 

(unaudited)

 

(unaudited)

 

As at 30 June 2017

 

As at 30 June 2016

 

Trade and other payables at amortised cost

At fair value through profit or loss

Total

 

Trade and other payables at amortised cost

At fair value through profit or loss

Total

 

US $000's

US $000's

US $000's

 

US $000's

US $000's

US $000's

Financial liabilities

 

 

 

 

 

 

 

Trade payables

       9,207

-

  9,207

 

       17,958

-

  17,958

Other payables - current

740

-

740

 

65

-

65

Short term borrowings

31,878

-

31,878

 

161,624

-

161,624

Accruals and deferred income

257

-

257

 

525

27,878

28,403

Short term liabilities under sale and repurchase agreements

-

-

-

 

23,312

-

23,312

Financial liabilities at fair value through profit or loss- derivatives

 -

844

844

 

 -

5,340

5,340

Long term borrowings

1,151

-

1,151

 

844

-

844

Total

43,233

844

44,077

 

  204,328

 33,218

237,546

 

 

 

 

 

 

 

Financial assets and financial liabilities are classified in their entirety into only one of three levels.

The fair value hierarchy has the following levels:

·     Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities

·     Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

·     Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

Level 1

 

Level 2

 

Level 3

As at 30 June

2017

 

2016

 

2017

 

2016

 

2017

 

2016

(unaudited)

US $000's

 

US $000's

 

US $000's

 

US $000's

 

US $000's

 

US $000's

Financial assets

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 - 

 

 - 

 

-

 

 - 

 

158

 

162

Derivative financial assets

-  

 

-

 

  -

 

 -

 

 -

 

 -

Total

 

-

 

 -

 

 -

 

158

 

162

 

 

US $000's

 

US $000's

 

US $000's

 

US $000's

 

US $000's

 

US $000's

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

Accruals and deferred income

-

 

27,878

 

 -

 

 -

 

 -

 

 -

Derivative financial liabilities

 844

 

 5,340

 

 -

 

 -

 

 -

 

 -

Total

844

 

33,218

 

 -

 

 -

 

 -

 

 -

 

 

 

6.       Non-controlling interest

The non-controlling interest ("NCI") disclosed in the condensed consolidated statement of comprehensive income and condensed consolidated statement of financial position represents a 20% economic interest in Cimentos da Beira ("CdB"), whose principal asset is in Mozambique. This 20% interest is held by the Industrial Development Corporation of South Africa Limited ("IDC") by means of a convertible loan agreement whereby the IDC has an option to subscribe for 20% of the issued share capital of CdB.

 

7.       Share Capital and Share Premium

 

As at 30 June 2017

 

As at 30 June 2016

 

As at 31 December 2016

Authorised

Number

 

Number

 

Number

Ordinary shares at 1p each

424,727,841

 

424,727,841

 

424,727,841

Deferred shares at 9p

-

 

111,361,208

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Called up, allotted and fully paid

 

 

Number

 

US $000's

Ordinary shares at 1p each

 

 

 

 

At 1 January 2016

 

276,381,948

 

4,222

Shares issued

 

9,707,102

 

144

Shares cancelled

 

(20,388,179)

 

(303)

At 31 December 2016 and 30 June 2017 (unaudited)

 

265,700,871

 

4,063

 

 

 

 

 

Shares to be issued

 

 

 

 

 

Convertible Securities

 

 

 

 

 

At 1 January 2016

 

 

9,707,102

 

144

Shares issued

 

(9,707,102)

 

(144)

At 31 December 2016 and 30 June 2017 (unaudited)

 

 

-

 

-

 


This information is provided by RNS
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