TIDMAEG
RNS Number : 4645A
Active Energy Group PLC
29 September 2015
ACTIVE ENERGY GROUP PLC
INTERIM REPORT AND UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
30 JUNE 2015
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015
I am pleased to present the Company's Interim Report for the six
months ended 30 June 2015.
RESULTS
The detailed results are set out in full in the accompanying
Financial Statements.
Group revenues increased by over 11% to $12.046M (H1: 2014:
$10.843M) while gross profit increased by over 98% to $1.227M (H1:
2014: $0.618M) as a result of the ongoing focus on sales of
high-margin wood fibre to the Turkish MDF manufacturing sector.
This continues the strong trend demonstrated in H2: 2014, and
reflects the high demand for AEG's core wood fibre product, allied
to improved production efficiencies and the strength of the US
Dollar relative to the Ukrainian Hryvnia.
Finance costs rose significantly to $0.518M (H1: 2014: $0.169M),
largely as a result of the Group's continued reliance on high-cost
debt for working capital introduced in 2014.
The Group reported a loss from its share of the associated
Canadian joint venture of $0.369M (H1: 2014: Nil), which is
expected to reverse on the successful commencement of
operations.
The loss before tax reported was thus $2.050M (H1 2014:
$1.826M), which reflects all the factors above and the increase in
non-cash share based payments attributable to incentive awards of
share options to the management team of $0.594M (H1: 2014:
$0.121M).
In order to reflect these non-cash and other items that may
impact upon a clear understanding of the financial results for the
period under review, a short reconciliation of the Group's adjusted
operating profit is included below:
30 June 2015
=============================== ===============
$'000 $'000
=============================== ======= ======
OPERATING LOSS (Excluding
share-based payments) (569)
================================ ======= ======
Add Non-Cash Items
=============================== ======= ======
Depreciation and amortisation 269
================================ ======= ======
Unrealised foreign exchange
losses 78
================================ ======= ======
Loss on disposal of equipment 13
================================ ======= ======
360
=============================== ======= ======
ADJUSTED OPERATING LOSS (209)
================================ ======= ======
BUSINESS REVIEW
To facilitate a proper understanding of Active Energy Group
Plc's trading activities in the first six months of 2015, I briefly
detail below key developments during the period in each of the
Company's operating divisions:
Wood Fibre for Medium-Density Fibreboard (MDF)
Manufacturing:
The Group's well-established Ukrainian operation, which supplies
processed wood fibre to Turkish MDF manufacturers, delivered
another strong performance. Shipping volumes of 103,733 tonnes in
H1: 2015 showed a rise of 70% over the same period in 2014 (61,185
tonnes).
Q1: 2015 operating margins were broadly in line with those
achieved in H2: 2014. Although Q2: 2015 began in a similar vein,
margins were subsequently impacted by market pressures, which led
to a short-term rise in raw material prices, which have now
returned to previous levels.
Demand for the Group's products remains higher than the Group is
currently able to supply, with further large orders received since
the start of the year for both hardwood and softwood material,
including from Yildiz Entegre, a long-standing customer and one of
the leading MDF manufacturers in Turkey.
Production and shipping volumes to fulfil these orders were
constrained by equipment failures in Q2: 2015, and by delays in
commissioning the new stationary hardwood and softwood processing
equipment at the Group's Yuzhny Port facility. Although these
issues have since been resolved and the Board still expects overall
volumes to be significantly more than the 154,103 tonnes achieved
in 2014 (2013: 68,293 tonnes) they will, as detailed in the RNS
dated 12 August 2015, inevitably impact volumes and results for the
full year.
BUSINESS REVIEW (CONTINUED)
Wood Fibre for Biomass for Energy (BFE) Power Generation:
Due to the low margins and pressure on cash reserves caused by
its previous efforts to supply wood fibre for Biomass for Energy
(BFE) industrial power generation, the Board decided - as detailed
in the 2014 Annual Report - to limit its future activities to
supplying this market sector on an ad hoc opportunistic basis when
raw material quality and profit margins justify the investment.
No such opportunities arose in the first six months of the year
while the Group focussed on its Second Generation Biomass for
Energy fuel activities, which led to it announcing on 12 May 2015
that it had assigned the balance of its sole remaining supply
contract for raw wood fibre, with Biomasse Italia SpA, to an
unrelated third party.
Biomass for Energy (BFE) Fuel Solutions & Systems:
During the period, the AEG management team continued to actively
explore different options for a coal replacement Biomass for Energy
fuel solution, and after extensive evaluation and testing, on 14
September 2015 the Group announced that it had formed a new joint
venture - AEG CoalSwitch Limited (AEG CoalSwitch) - with Biomass
Energy Enhancements LLC (BEE) of Utah, USA.
BEE has devoted seven years to developing a unique clean energy
Biomass fuel manufacturing process, for which sixteen 'greenfield'
patent applications have already been filed. For the first time,
the process enables any plant- or wood-based matter, including
forestry waste and industrial residues, to be converted into
valuable high-energy fuel that can be utilised within coal-fired
power stations without requiring plant owners to invest in costly
retrofitting or reconstruction.
The AEG CoalSwitch joint venture, in which AEG has been granted
a 51% equity interest, will hold the global intellectual property
(IP) rights for the process, and intends to commercialise it via an
innovative 'build-own-operate-toll' business model, which will
complement the Group's other business activities.
Forestry & Natural Resources Development and Management:
Commencement of initial forestry operations at AEG's Canadian
joint venture with three Métis Settlements of Alberta - KAQUO
Forestry & Natural Resources Development Corporation (KAQUO) -
has unfortunately been delayed by the Alberta government inquiry
into the Métis partners handling of their participation in the
joint venture, more of which follows below.
Despite the delay, the Board remains confident in the validity
of and potential for the KAQUO joint venture, which has a broad
remit to commercialise some 256,000 hectares of valuable forestry
and agricultural land owned by the Métis Settlements in an
environmentally sensitive and sustainable manner.
During H1: 2015, the AEG management team succeeded in completing
the majority of the proposed financier's due diligence process for
investing in the estimated 35 million cubic metres of mature
standing timber within the land area, while continuing to research
other natural resources opportunities and refine its overall
business strategy.
There has now been, as detailed below and announced on 17
September 2015, a Ministerial Order which requires the Métis
Partners to carry out certain administrative procedures which, once
complete, the Company expects will enable the first drawdown of
funds.
CURRENT TRADING AND FUTURE PROSPECTS
Wood Fibre for Medium-Density Fibreboard (MDF)
Manufacturing:
At the time of writing, installation and commissioning of new
stationary high-volume handling and processing equipment at the
Group's Yuzhny Port facility, which will facilitate a four-fold
increase in its wood chip production capacity, has been proceeding
according to a slightly delayed timeline and is expected to lead to
production beginning in October 2015.
After some unavoidable delays, the new softwood wood chip
production line, which will enable AEG to expand its product
offering and enter a new market sector to meet the significant
demand from both its existing and prospective Turkish MDF
manufacturing customers, is now scheduled to be operational in Q1:
2016.
Although the full impact of this large-scale capital investment
in its Ukrainian operations will only be evident in the Group's
trading results from 2016 onwards, they represent a long-term
commitment by the Board to expand this profitable and
well-established area of AEG's business, which is now the largest
exporter of processed wood from Ukraine, and the Group has gained
an excellent reputation for quality and reliability within this
market.
CURRENT TRADING AND FUTURE PROSPECTS (CONTINUED)
Wood Fibre for Biomass for Energy (BFE) Power Generation:
Given its strategic focus on higher-value Biomass for Energy
fuel solutions and systems, AEG currently has no plans to actively
seek new contracts to supply wood chip as fuel feedstock to the
power generation industry, but will continue to maintain a watching
brief for profitable commercial opportunities as and when they
arise.
From late-2016 the Group plans to exploit these opportunities by
providing higher-margin second generation CoalSwitch fuel to local
power plants, thus saving on logistics, port and shipping
costs.
Biomass for Energy (BFE) Fuel Solutions & Systems:
The AEG CoalSwitch team has already commenced negotiations with
leading international investment funds to raise the capital
required to implement its business strategy; to secure the global
intellectual property (IP) rights for the process, which will be
held by the new company; and to finalise development of the first
industrial-scale fuel manufacturing plant.
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:01 ET (06:01 GMT)
It is intending to have a market-ready product - a de-mountable
system capable of high volume production of clean energy 'coal
switch' Biomass fuel - by mid-2016.
This major expansion of AEG's future activities - the conclusion
of five years' effort and investment to source a sustainable
Biomass-based fuel solution to directly replace highly-polluting
coal in power stations and industrial plants - is intended to
propel the Group to the forefront of the international renewable
energy industry, whilst simultaneously complementing and increasing
the profitability of its wood fibre processing and forestry
development business divisions.
Forestry & Natural Resources Development and Management:
Initial forestry operations at the Group's Canadian joint
venture with three Métis Settlements of Alberta - KAQUO Forestry
& Natural Resources Development Corporation (KAQUO) - in which
it has made a considerable investment in capital and resources
despite the on-going uncertainty until the recent announcement of a
response from the Alberta government, have been on hold pending the
outcome of the Alberta government investigation into the Métis
partners' handling of the joint venture arrangements.
The findings of the investigation, which were finally revealed
to AEG on 17 September 2015, will not in the opinion of the Board
either prove material or affect the viability of the KAQUO venture.
However, certain conditions will need to be fulfilled before
operations can proceed, and the partners now believe that a start
date of January 2016 should be achievable.
Subject to final sign-off, the availability of the necessary
capital funding to implement the venture's strategic business plan
has been indicated by a leading international investment fund, who
have also expressed interest in supporting the Group's other
commercial activities, which include utilising the timber waste
generated by its Canadian forestry and Ukrainian wood processing
operations to provide feedstock for its new AEG CoalSwitch fuel
division, greatly enhancing the value of the underlying asset and
increasing the Group's overall revenues and margins.
In conclusion, the Group continued to improve the performance of
its existing operations during the period, and is making a
considerable investment into expanding its Ukrainian wood fibre
processing facilities to ensure that it can address the future
market demand for its products.
OTHER BUSINESS DEVELOPMENTS
During the period, the Board of AEG implemented a number of key
measures designed to strengthen its balance sheet, improve its
financial management and enhance its corporate governance and
regulatory compliance procedures.
On 29 June 2015, the Group announced that it had raised GBP1.0
million through the placing of 20 million new Ordinary Shares with
Ruffer LLP, a highly respected financial institution and a
long-term shareholder. The proceeds of the placing, together with
further debt funding of $1.2 million secured in the period, are
primarily being utilised to provide working capital and facilitate
a four-fold increase in production capacity at its Ukrainian wood
fibre processing division.
The new financial reporting structure introduced in 2014 has
greatly streamlined AEG's accounting processes, and the appointment
of a new financial controller in Ukraine in Q2: 2015 has already
enabled better cost control in this area of the Group's
business.
Finally, in addition to my own appointment as Non-Executive
Chairman in January 2015, the Board has been significantly
strengthened by the appointment of Michael Rowan, a qualified
solicitor and experienced corporate financier, as Non-Executive
Director on 10 August 2015. Mr Rowan replaced Joseph Valoroso, who
resigned from the Board on 22 June 2015, and whose contribution to
AEG's development during his tenure has been greatly
appreciated.
GROUP OUTLOOK
The Board believes that during H1: 2015 the Group passed several
key milestones towards achieving the long-term business strategy
outlined by the current executive team when they assumed
responsibility for the business in mid-2012; and that AEG is now
strongly positioned to create additional shareholder value by
developing an international trading operation across a number of
complementary industry sectors.
Despite the geopolitical challenges facing Ukraine, AEG has
continued to expand and invest in its well-established Ukrainian
wood fibre processing division, and the Board remains confident in
its long-term potential.
Demand for the Group's products from the Turkish MDF
manufacturing sector continues to grow, and along with positive
market factors, the impending increase in hardwood wood chip
production capacity and introduction of a new softwood wood chip
product offering is expected to strengthen AEG's market presence
and deliver major new revenue-generating opportunities. The
management team is currently negotiating off-take agreements for
2016, and remains confident of another significant increase in this
division's revenues in 2016.
Furthermore, there have been a number of high-level meetings
with government representatives to advance AEG's proposal,
announced in May 2015, for a Public-Private Partnership (PPP)
'Forestry to Fuel' initiative in Ukraine. The Board intends to
actively pursue this opportunity, especially in light of the new
AEG CoalSwitch project, and will provide an update on developments
in due course.
The Group's recently-announced AEG CoalSwitch Biomass for Energy
joint venture possesses huge commercial potential, as it addresses
a global need - driven both by governmental regulations imposing
reductions in greenhouse gas emissions and public pressure for a
cleaner environment - for a viable renewable energy alternative to
highly-polluting coal-fired power generation.
Once the necessary funding is in place, the new AEG CoalSwitch
management team, led by CEO Chas Fritz, intends to focus on
completing the process of further extending the global IP rights
for the technology, and constructing an industrial-scale
de-mountable coal replacement manufacturing plant for launch in
mid-2016.
In Canada, the Group and its Métis partners intend to commence
forestry operations in their KAQUO joint venture in January 2016;
and I look forward to continuing to update the Group's stakeholders
on the progress of this and the Group's other commercial activities
in the coming months.
F Lewis
Non-Executive Chairman
London: 29 September 2015
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/EXPENSE
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Six months Six months Twelve
to to months
30 June 30 June to
2015 2014 31 December
2014
Note
(Unaudited) (Unaudited) (Audited)
US$ US$ US$
REVENUE 2 12,046,007 10,842,715 23,324,963
Cost of sales (10,818,595) (10,224,712) (20,594,044)
------------- ------------- -------------
GROSS PROFIT 1,227,412 618,003 2,730,919
Other income - - 7,981
Administrative expenses (2,390,622) (2,284,163) (3,999,624)
------------- ------------- -------------
OPERATING LOSS BEFORE SHARE
BASED PAYMENTS (569,304) (1,545,448) (994,167)
Share based payments in
administrative expenses (593,906) (120,712) (266,557)
--------------------------------------- ----- ------------- ------------- -------------
OPERATING LOSS (1,163,210) (1,666,160) (1,260,724)
Finance income - 8,588 5,896
Finance costs (517,869) (168,781) (1,077,420)
Share of loss of associate (369,418) - (372,984)
------------- ------------- -------------
LOSS BEFORE TAXATION (2,050,497) (1,826,353) (2,705,232)
Income tax 29,363 5,872 (78,161)
------------- ------------- -------------
LOSS FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT (2,021,134) (1,820,481) (2,783,393)
OTHER COMPREHENSIVE INCOME/(EXPENSE):
Items that may be subsequently
reclassified to profit or
loss
Exchange differences on
translation of foreign operations (37,572) (22,147) (22,149)
Exchange differences on
translation of associate (13,575) - 21,373
------------- ------------- -------------
Total other comprehensive
income/(expense) (51,147) (22,147) (776)
------------- ------------- -------------
TOTAL COMPREHENSIVE LOSS
FOR THE PERIOD ATTRIBUTABLE
TO OWNERS OF THE PARENT (2,072,281) (1,842,628) (2,784,169)
============= ============= =============
Loss per share (US cent)
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:01 ET (06:01 GMT)
- Basic and diluted 5 (0.37) (0.34) (0.51)
------------- ------------- -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Restated
30 June 30 June 31 December
2015 2014 2014
(Unaudited) (Unaudited) (Audited)
US$ US$ US$
NON-CURRENT ASSETS
Intangible assets 4,121,494 4,415,119 4,268,307
Property, plant and equipment 1,286,562 1,338,590 730,108
Investment in associate 915,008 - 446,156
Available for sale financial
assets 106,316 - 93,191
-------------
6,429,380 5,753,709 5,537,762
------------- ------------- -------------
CURRENT ASSETS
Inventory 929,129 276,580 526,898
Trade and other receivables 4,883,990 2,565,677 2,850,682
Cash and cash equivalents 893,651 4,054,116 3,227,414
------------- ------------- -------------
6,706,770 6,896,373 6,604,994
------------- ------------- -------------
TOTAL ASSETS 13,136,150 12,650,082 12,142,756
============= ============= =============
CURRENT LIABILITIES
Trade and other payables 1,470,742 1,702,850 1,930,578
Loans and borrowings 4,543,804 1,792,982 1,739,130
Income tax liabilities 1,723 - 93,845
------------- ------------- -------------
6,016,269 3,495,832 3,763,553
------------- ------------- -------------
NON-CURRENT LIABILITIES
Deferred income tax liabilities 381,713 440,438 411,075
Loans and borrowings 2,967,315 4,387,529 4,353,462
------------- ------------- -------------
3,349,028 4,827,967 4,764,537
------------- ------------- -------------
TOTAL LIABILITIES 9,365,297 8,323,799 8,528,090
------------- ------------- -------------
NET ASSETS 3,770,853 4,326,283 3,614,666
============= ============= =============
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT
Share capital 10,090,449 9,732,550 9,774,327
Share premium 8,603,568 7,293,118 7,344,264
Merger reserve 2,350,175 2,350,175 2,350,175
Foreign exchange reserve (125,494) (95,718) (74,347)
Own shares held reserve (1,229,630) (1,376,822) (1,229,630)
Convertible debt and warrant
reserve 1,134,437 1,084,145 1,075,301
Retained earnings (17,052,652) (14,661,165) (15,625,424)
------------- ------------- -------------
TOTAL EQUITY 3,770,853 4,326,283 3,614,666
============= ============= =============
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS TO 30 JUNE 2015
Restated
30 June 30 June 31 December
2015 2014 2014
Note (Unaudited) (Unaudited) (Audited)
US$ US$ US$
Cash outflow from operations 3 (3,182,833) (1,616,208) (1,146,722)
Income tax paid (92,122) (7,012) (26,563)
------------ ------------ ------------
Net cash outflow from operating
activities (3,274,955) (1,623,220) (1,173,285)
Cash flows from investing
activities
Contribution to associate (851,841) - (797,767)
Purchase of property, plant
and equipment (680,480) (581,616) (728,396)
Sale of property, plant and
equipment (13,250) - 53,320
Finance income - 8,588 5,896
------------ ------------ ------------
Net cash outflow from investing
activities (1,545,571) (573,028) (1,466,947)
Cash flows from financing
activities
Issue of equity share capital,
net of share issue costs 1,575,426 - 7,619
Unsecured loans raised 1,477,664 4,784,188 4,739,130
Finance expenses (517,869) (75,105) (193,091)
------------ ------------ ------------
Net cash inflow from financing
activities 2,535,221 4,709,083 4,553,658
------------ ------------ ------------
Net increase in cash and
cash equivalents (2,285,306) 2,512,835 1,913,426
Cash and cash equivalents
at beginning of the year 3,227,414 1,563,428 1,563,428
Exchange losses on cash and
cash equivalents (48,457) (22,147) (249,440)
------------ ------------ ------------
Cash and cash equivalents
at end of the year 893,651 4,054,116 3,227,414
============ ============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS TO 30 JUNE 2015
For the six months to 30
June 2015 (Unaudited)
Share Share Merger Foreign Own shares Convertible Retained Total
capital premium reserve exchange held debt earnings equity
reserve reserve and warrant
reserve
US$ US$ US$ US$ US$ US$ US$ US$
At 31 December
2014 9,774,327 7,344,264 2,350,175 (74,347) (1,229,630) 1,075,301 (15,625,424) 3,614,666
Loss for the
year - - - - - - (2,021,134) (2,021,134)
Other
comprehensive
income - - - (51,147) - - - (51,147)
Issue of share
capital 316,122 1,259,304 - - - - - 1,575,426
Issue of
convertible
loan - - - - - 59,136 - 59,136
Share based
payments - - - - - - 593,906 593,906
----------- ---------- ---------- ---------- ------------ ------------ ------------- ------------
At 30 June
2015 10,090,449 8,603,568 2,350,175 (125,494) (1,229,630) 1,134,437 (17,052,652) 3,770,853
=========== ========== ========== ========== ============ ============ ============= ============
For the six months to 30
June 2014 (Unaudited)
At 31 December
2013 9,726,034 7,284,397 2,350,175 (73,571) (1,376,822) 956,348 (12,961,396) 5,905,165
-
Loss for the
year - - - - - - (1,820,481) (1,820,481)
Other
comprehensive
income - - - (22,147) - - - (22,147)
Issue of share
capital 6,516 8,721 - - - - - 15,237
Issue of
convertible
loan - - - - - 127,797 - 127,797
Share based
payments - - - - - - 120,712 120,712
----------- ---------- ---------- ---------- ------------ ------------ ------------- ------------
At 30 June
2014 9,732,550 7,293,118 2,350,175 (95,718) (1,376,822) 1,084,145 (14,661,165) 4,326,283
=========== ========== ========== ========== ============ ============ ============= ============
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:01 ET (06:01 GMT)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE SIX MONTHS TO 30 JUNE 2015
For the twelve months to
31 December 2014 (Audited)
Share Share Merger Foreign Own shares Convertible Retained Total
capital premium reserve exchange held debt earnings equity
reserve reserve and warrant
reserve
US$ US$ US$ US$ US$ US$ US$ US$
At 31 December
2013 9,726,034 7,284,397 2,350,175 (73,571) (1,376,822) 956,348 (12,961,396) 5,905,165
-
Loss for the
year - - - - - - (2,783,393) (2,783,393)
Other
comprehensive
income - - - (776) - - - (776)
Issue of share
capital 48,293 59,867 - - - - - 108,160
Transfer of
own
shares held - - - - 147,192 (147,192) -
Issue of
convertible
loan - - - - - 118,953 - 118,953
Share based
payments - - - - - - 266,557 266,557
---------- ---------- ---------- --------- ------------ ------------ ------------- ------------
At 31 December
2014 9,774,327 7,344,264 2,350,175 (74,347) (1,229,630) 1,075,301 (15,625,424) 3,614,666
========== ========== ========== ========= ============ ============ ============= ============
1. ACCOUNTING POLICIES
Basis of preparation
These interim financial statements have been prepared on a going
concern basis using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively "Adopted IFRS").
The principal accounting policies used in preparing these
interim financial statements are those expected to apply to the
Group's Consolidated Financial Statements for the year ending 31
December 2015 and are unchanged from those disclosed in the Group's
Annual Report for the year ended 31 December 2014. The financial
information for the six months ended 30 June 2015 and 30 June 2014
is unaudited and does not constitute statutory financial statements
for those periods.
The comparative financial information for the full year ended 31
December 2014 has been derived from the audited statutory financial
statements for that period. A copy of those statutory accounts for
that period has been delivered to the Registrar of Companies. The
auditor's report on those accounts was not qualified and did not
contain statements under Chapter 3 of Part 16 of the Companies Act
2006, but did include an emphasis of matter in respect of the
ability to obtain additional funding if expected trading levels are
not achieved. These conditions indicated the existence of material
uncertainties that may have cast doubt on the Group's ability to
continue as a going concern.
Going Concern
Based on the latest trading expectations and associated cash
flow forecasts of the Group headed by Active Energy Group Plc, the
Directors have considered the cash requirement for both the Group
and the Company and have determined that additional funding is
required for working capital and capital expenditure.
The Directors are confident they will be able to raise
additional funding as and when required; however, this cannot be
guaranteed. As such the ability to obtain additional funding is
considered to be a material uncertainty that may cast significant
doubt over the Group's and Company's ability to continue as a going
concern.
Change in presentation currency
As presented in the Group's Consolidated Financial Statements
for the year ending 31 December 2014, the Group has changed its
presentation currency from United Kingdom Pounds Sterling
("Sterling") to United States Dollars ("US Dollar", "US$"), as it
most reliably reflects the global business performance of the Group
as a whole. The comparative information for the six months ended 30
June 2014 has been restated accordingly.
2. SEGMENTAL INFORMATION
The Group reports the following operating segments:
-- 'MDF Wood Fibre' denotes the Group's Medium-Density
Fibreboard (MDF) wood chip processing and supply business
division.
-- 'BFE Wood Fibre' denotes the Group's renewable Biomass for
Energy wood chip processing and supply business division
-- 'Forestry & Natural Resources' denotes the Group's
initiatives to secure ownership of the entire timber supply chain -
from forest to finished product
-- 'BFE Fuel Solutions' denotes the Group's renewable Biomass
for Energy fuel division, which engages in development of
second-generation BFE fuel solutions and systems
For the six months MDF BFE Forestry BFE Total
to 30 June 2015 (Unaudited) Wood Fibre Wood & Natural Fuel
Fibre Resources Solutions
US$ US$ US$ US$ US$
Revenue from external
customers 12,046,007 - - - 12,046,007
Operating segment
profit/(loss) 724,533 - (369,418) - 429,115
Finance costs (517,869) - - - (517,869)
------------ ---------- ----------- ----------- -----------
Segment profit/(loss)
before tax 206,664 - (369,418) - (88,754)
Tax credit 29,363 - - - 29,363
------------ ---------- ----------- ----------- -----------
Segment profit/(loss)
for the period 236,027 - (369,418) - (59,391)
============ ========== =========== =========== ===========
For the six months MDF BFE Forestry BFE Total
to 30 June 2014 (Unaudited) Wood Fibre Wood & Natural Fuel
Fibre Resources Solutions
US$ US$ US$ US$ US$
Revenue from external
customers 6,822,115 4,020,600 - - 10,842,715
Operating segment
profit/(loss) (57,463) (577,530) - - (634,993)
Tax credit - 5,872 - - 5,872
------------ ---------- ----------- ----------- -----------
-
Segment loss for the
period (57,463) (571,658) - - (629,121)
============ ========== =========== =========== ===========
For the twelve months MDF BFE Forestry BFE Total
to Wood Fibre Wood & Natural Fuel
31 December 2014 Fibre Resources Solutions
(Audited)
US$ US$ US$ US$ US$
Revenue from external
customers 17,395,499 5,929,464 - - 23,324,963
Operating segment
profit(loss) 2,058,270 (367,694) (666,609) (300,535) 723,432
Finance income - - - - -
Finance costs (161,965) - - - (161,965)
------------ ---------- ----------- ----------- -----------
Segment profit/(loss)
before tax 1,896,305 (367,694) (666,609) (300,535) 561,467
Tax credit (91,851) (21,545) 35,235 - (78,161)
------------ ---------- ----------- ----------- -----------
-
Segment profit/(loss)
for the period 1,804,454 (389,239) (631,374) (300,535) 483,306
============ ========== =========== =========== ===========
All assets and liabilities and capital expenditure for the
period are inter-changeable between the divisions and therefore no
segmental analysis has been presented.
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