TIDMAMED
RNS Number : 2878A
Amedeo Resources PLC
28 September 2015
28 September 2015
Amedeo Resources plc
("Amedeo" or the "Company")
Interim Results for the six months ended 30 June 2015
Highlights
-- First order of a Le Tourneau Super 116E Class design
self-elevating mobile offshore jack up drilling rig ("Explorer 1"),
continues to quality and is on schedule to be completed by the end
of this year
-- Cash administrative costs reduced to US$248,000 from US$453,000
-- Cash net loss reduced to US$15,000 from US$271,000
-- US$3,281,000 cash on balance sheet as at 30 June 2015
**ENDS**
Enquiries:
Glen Lau Zafar Karim
Chief Executive Officer Executive Director
Amedeo Resources Plc Amedeo Resources Plc
Tel office: +44 20 7583 8304 Tel office: +44 20 7583 8304
Paul Shackleton Zoe Alexander
Nominated Adviser & Broker Joint Broker
WH Ireland Beaufort Securities Limited
Tel office: +44 207 220 1666 Tel office: +44 20 7382 8300
Notes
Amedeo Resources plc is an investment company whose policy is to
invest principally, but not exclusively, in the resources and
resources infrastructure and asset sectors. Amedeo has a deep and
broad global network and wide contact base in these sectors,
including in East and South East Asia and the Middle East which it
leverages to source and make investments. These sectors are
strategically important. Amedeo is a proactive investor which
assists its investee companies to grow by providing investment,
expertise and contacts.
Introduction
Progress at Jiangsu Yangzijiang Offshore Engineering Co. Ltd's
("YZJ Offshore") marine vessel yard on its first order, a Le
Tourneau Super 116E Class design self-elevating mobile offshore
jack up drilling rig ("Explorer 1"), continues to quality and
schedule with the rig due for completion by the end of this year.
With the fall in the oil price, the rig market remains difficult
and while discussions with several potential purchasers are
on-going, no new orders have been obtained. While this is
disappointing, YZJ offshore has the capability to build many
different vessels and blocks. In addition, we do not expect the
weakness in the rig market to continue in the medium term.
With the iron ore price depressed, MGR Resources PTE Ltd ("MGR")
has had a difficult first half and cut back on its activities. It
is exploring opportunities in a range of commodities, both soft and
hard.
Despite the above difficulties, Amedeo continues to pursue its
long term strategy of building a vertically integrated business in
the resource and energy and related infrastructure sectors. Ongoing
cash costs are down to less than US$250,000 per half year and with
the repayment by MGR of a loan, cash is up to over
US$3,000,000.
YZJ Offshore
YZJ Offshore's first order, Explorer 1, is on schedule and to
quality for completion by the end of this year. Following
completion, commissioning will commence, a process which takes
several months, and then the rig will be delivered. Reputation is
key in obtaining further orders and as a new yard, YZJ Offshore
needs to develop a reputation as a reliable and quality rig
builder. With the build of Explorer 1, it is achieving this.
However, with the decline in the oil price since the middle of last
year, conditions in the rig market remain difficult, and thus far
no new orders have been secured. As mentioned in our annual report,
however, we do not expect these conditions to continue in the
medium term.
Importantly, YZJ Offshore has the ability to build advanced and
specialised (by locality) rigs for shallow and mid waters and to
build various other vessels including semi submersibles and
accommodation units. The New Yard is also able to fabricate blocks
for container ships and gas carrier vessels, and as such the New
Yard is absorbing container block overspill from Yangzijiang
Shipbuilding (Holdings) Pte Ltd's principal yards. Along with
completing the order for Explorer 1, these activities keep the New
Yard busy.
Amedeo has an indirect 19.0% stake in YZJ Offshore which it
holds through its 47.5% stake in the joint venture company, YZJ
Offshore Engineering Pte Ltd ("YZJ JV").
MGR
With the reduced demand for iron ore and depressed iron ore
prices, MGR scaled back its iron ore operations, and focused on
monitoring that market and exploring opportunities for broking
other, including soft, commodities, along the East and South East
Asia, South Asia, Middle East and Africa corridors. Actual broking
activities were minimal, and in January 2015, MGR paid US$1,950,100
to Amedeo as repayment of its convertible loan that was granted in
April 2013. MGR still has a loan of US$1,868,000 outstanding to
Amedeo.
Amedeo has a 49.0% stake in MGR.
Financial Review
Revenue for the six months rose to US$65,000 (prior period:
US$36,000). Amedeo provides to MGR various business development and
marketing services. In the prior period, MGR was charged for these
services for only half of the period.
Administrative costs were significantly reduced to US$338,000
(prior period: US$453,000). Moreover, excluding the non-cash share
based payments of US$90,000 (prior period: US$Nil), cash
administrative costs were US$248,000 (prior period: US$453,000).
This substantial reduction was due to the absence of one off cost
of US$101,000 relating to the investment in YZJ JV and also due to
the elimination of non-recoverable VAT.
Amedeo's share of loss in associates was US$582,000 (prior
period: US$624,000). This was made up of a loss of US$518,000
(prior period: US$674,000) at YZJ JV and a loss of US$64,000 (prior
period: profit of US$ 50,000) at MGR. The reduction in the losses
reflected increased activity at YZJ Offshore in the period since
the new yard was completed. The loss at MGR is discussed above. The
losses of the associate companies are non-cash items.
Foreign exchange gains amounted to US$4,000 (prior period:
US$80,000). These were predominately due to translating GBP
denominated loans into US$. This is a non-cash item. A quoted
legacy investment was sold for US$3,000. Finance income rose to
US$165,000 (prior period: USD 146,000) due to the interest on loans
to MGR.
Overall loss on ordinary activities before taxation was reduced
to US$683,000 (prior period: US$815,000). Basic and fully diluted
loss per share for the period was US$2.09c (prior period: US$2.65).
Excluding non-cash items, Amedeo was close to break-even with a
loss on ordinary activities before taxation of US$15,000 (prior
period: US$271,000).
Foreign exchange translation differences of US$66,000 arose due
to Amedeo's indirect investment in YZJ Offshore (prior period: gain
US$10,000). Taking the balance sheet foreign exchange translation
differences into account, overall, total comprehensive loss for the
period was US$749,000 (prior period: US$805,000).
As at the period end, the carrying value on the balance sheet of
investments in associates fell to US$18,557,000 (30 June 2014:
US$19,656,000) due to the losses incurred at the associates
companies.
Current assets fell to US$5,468,000 (30 June 2014:
US$5,923,000), predominately due to a decrease in net cash/loan
receivable to US$5,149,000 (30 June 2014: US$5,698,000). Cash as at
30 June 2015 rose to US$3,281,000 (30 June 2014: US$1,707,000)
primarily as a result of the repayment of a convertible loan of
US$1,950,100 from MGR.
Trade and other payables rose to US$247,000 (30 June 3014:
US$155,000) mainly due to accrued expenses which were settled after
the period end.
Overall, at the period end, net and total assets were
US$23,778,000 (30 June 2014: US$25,424,000) and US$24,025,000 (30
June 2014: US$25,579,000), respectively.
Outlook
With the current difficulties with the rig market, winning new
orders at YZJ Offshore has been difficult. We do not expect this
situation to continue in the medium term, and when the recovery
does come, YZJ Offshore, having proved itself with Explorer 1 and
with its capability to produce advanced, specialised and localised
rigs as well as a range of other vessels, is well placed to take
advantage of it. Depressed iron ore prices have not helped MGR. It
is, however, exploring other opportunities.
Amedeo remains focused on long term strategy of building a
vertically integrated business in the resource and energy and
related infrastructure sectors.
AMEDEO RESOURCES PLC
Consolidated unaudited statement of comprehensive income
for the six months ended 30 June 2015 (unaudited)
Unaudited Unaudited Audited
Note 6 months 6 months 11 months
ended ended ended
30.6.15 30.6.14 31.12.14
$'000 $'000 $'000
Revenue 65 36 91
Cost of Sales - - -
______ ______ ______
Gross profit 65 36 91
Administrative expenses (338) (453) (827)
Share of loss of associates 2 (582) (624) (922)
Foreign exchange gains
(losses) 4 80 (197)
____ ____ ____
Loss from operations (851) (961) (1,855)
Profit on sale of quoted 3 - -
shares
Finance Income 165 146 444
______ ______ ______
Loss on ordinary activities
before taxation 3 (683) (815) (1,411)
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