TIDMPCGB

RNS Number : 1934P

Power Capital Global Ltd

30 September 2013

30 September 2013

POWER CAPITAL GLOBAL LIMITED

("Power Capital" or "the Company")

Interim Results for the six months ended 30 June 2013

Power Capital Global Limited (AIM:PCGB), the Asia based natural resources trading and logistics group, announces that it has today has today published its unaudited results for the six months ended 30 June 2013. A copy of the interim results will shortly be available for download from the Company's web site: www.powercapitalglobal.com

 
 Further information 
 
 Power Capital Global 
  Limited 
 Simon Dewhurst               Tel: +852 3695 5150 
 
 Northland Capital Partners 
  Limited 
 Luke Cairns/Edward Hutton    Tel: +44 (0)20 7796 8800 
 
 GTH Communications Limited 
 Toby Hall/Suzanne Johnson     Tel: +44 (0)20 7822 7493/7492 
  Walsh 
 

- ends -

Operational Update

We continue to make progress in the development of an Asia based natural resources trading and logistics platform. Our development strategy was unchanged throughout the first six months of this year. We remain focused on building a scaleable physical commodity trading and logistics business and executing a parallel investment program targeting partner companies that offer the Company in-market access to commodity trading opportunities that might otherwise be inaccessible or unknown to us. Your board has also determined that we need to reduce the absolute number of new development opportunities put under review, and focus instead on the projects, commodities and trading partner relationships that have proven to be reliable over the past year against what has been a very challenged back drop for commodity volumes and pricing.

Our commitment to build a scaleable physical commodity trading and logistics business with a commodity sourcing market footprint that is global and which supplies a commercial client base located in the key industrial regions of the People's Republic of China on a direct-to-buyer basis wherever possible remains central to our forward development.

In parallel, we remain focused on executing our investment program targeting partner companies that offer the Company in-market access to commodity trading opportunities that might otherwise be inaccessible or unknown to us. Specifically, this strategy has evolved over the past twelve months to identify partner companies in four off-take supply markets that are at very different stages of development, but which all share the common characteristics of proximity to China and substantial naturally occurring mineral wealth; namely Indonesia, Mongolia, Afghanistan and Myanmar. Partner company investment opportunities are assessed by reference to the following; (i) in-market competitive advantage related to mining licenses and / or mineral off-take opportunities; (ii) our in-market access to senior management; together with (iii) more traditional private equity consideration of the intrinsic valuation of the investment opportunity, the target company's market share (we focus on best in sector companies), quality of management and our investment exit strategy. We believe that this parallel investment strategy will yield successful and accelerated scale into our primary physical commodity trading activities from each of the target commodity supply markets as referenced above over the years to come.

Mongolia

The Company, through its wholly owned subsidiary PCG Mongolia Limited, owns a 1.2% equity stake in Asia Pacific Investment Partners Limited ("APIP"). APIP is currently developing an early stage exploration license targeting an identified major copper-gold porphyry system located in the South Gobi and also operates the country's third largest cement crushing facility which is located in the capital city, Ulaan Baatar. APIP's on-going corporate development towards a stock exchange listing in the near term is on track and Company management continues to monitor this development closely. We remain focussed on using our in-country knowledge and contacts in Mongolia as a fast track for finding and evaluating opportunities in the burgeoning natural resources sector in Mongolia. Political uncertainty has created some headwinds over the more recent trading period in terms of how foreign investment law will develop, and the right strategy has in our view been to step back from making further investments in Mongolia until more clarity is available.

Indonesia

In the period under review, domestic thermal coal sales by our Indonesian joint venture amounted to approximately 10,800 metric tonnes with an aggregate sales value of approximately US$454,000 (GBP289,000). The domestic thermal coal trading business in Indonesia is seasonal and is subject to significant price volatility as small traders step in and out the market affecting the short term demand supply balance. We suspended barge shipments at the start of the period under review into softened market pricing and we will recommence trading activity once market conditions improve. The Company, through its subsidiary, PCG Coal (Indonesia) Limited ("PCI"), entered into an off-take agreement with PT Perdana Maju Utama ("PMU") during the first half of 2013 to acquire up to one million metric tonnes of thermal coal. PMU owns a coal concession totalling approximately 4,700 hectares located in East Kalimantan, Indonesia. PCI's branding and marketing of the coal has commenced to our end buyers and the contracted coal volume is forecast to be delivered by PMU over a twelve-month trading period following completion of the first delivery batch in August 2013.

We continue to explore other coal off-take and supply chain opportunities in the Kalimantan region of Indonesia.

We have put a lot of focus into further developing a vertically integrated tin dredging and smelting operation located in Bangka, Indonesia inside the main Pacific Rim tin zone. Indonesia has proven tin (Sn) reserves of over 800,000 metric tonnes and supplied nearly 40% of all global demand in 2012 according to the International Tin Research Institute. Our business partner in this venture has recently secured rights over two cassiterite placer deposit concessions located in oceanic submerged river channels in the shallow waters surrounding the Indonesian islands of Bangka and Belitung and we expect to be able to announce the commencement of cassiterite dredging operations in the fourth quarter of this year. Cassiterite is by far the most important tin ore and it is found in abundance in large placer deposits.

An in principle agreement reached in 2012 to extend the term of the loan to TSI Holdings Limited ("TSI") and introduce certain penalties in the event of default under the arrangement remains unsigned. The Company continues to seek constructive discussions with TSI in this matter and the Company notes its understanding that TSI has successfully completed a recent restructuring of its business.

Corporate Matters

The Company issued 16,233,765 ordinary shares pursuant to conversion notices from the holders of the US$5 million unsecured convertible loan notes ("CLNs") in late April 2013. This represents full conversion of all CLNs in issue at the end of the year under review and completes the financial restructuring announced by the Company in July 2012. It has added new investors in PCGB and increased the free float in its shares from approximately 21% to 38%. It has also substantially reduced the balance sheet gearing of the Company.

The Company was pleased to welcome Heng-Jui Lin to its Board in March 2013 as a non-executive director. Heng-Jui (or Henry) is the majority shareholder of Kolarmy Technology INC, which is currently providing the Group with financial support in the form of a loan facility. Henry is the brother of Kung-Min Lin, the controlling shareholder of the Company.

Summary

We believe that these important development activities have substantially advanced the Company in its pursuit of a plan to build Power Capital Global into a highly regarded Asian commodity trading business. The Board looks forward to continuing to build out its natural resources trading and logistics operations in Asia.

Simon Dewhurst

Chief Executive Officer

30 September 2013

Consolidated Statement of Comprehensive Income

For The Six Months Ended 30 June 2013

(expressed in thousands GBP sterling)

 
                                       Six months           Six months     Year ended 
                                    to 30/06/2013        to 30/06/2012     31/12/2012 
                                        Unaudited            Unaudited        Audited 
                                           GBP000               GBP000         GBP000 
 Revenue                                      289                    -           1,192 
 Cost of sales                              (269)                    -         (1,286) 
                                  ---------------      ---------------  -------------- 
 Gross profit/(loss)                           20                    -           (94) 
 
 Administrative expenses                    (707)                (666)        (1,565) 
 Operating loss                             (687)                (666)        (1,659) 
 
 Other income                                  16                    1             15 
 Finance costs                               (70)                 (28)           (91) 
                                  ---------------      ---------------   ------------ 
 Loss before taxation                       (741)                (693)        (1,735) 
 Income tax expense                           (1)                    -            (1) 
                                  ---------------      ---------------   ------------ 
 Loss for the period/year after 
  taxation                                  (742)                (693)        (1,736) 
 Other comprehensive income                     -                    -              - 
                                  ---------------      ---------------   ------------ 
 Total comprehensive expenses               (742)                (693)        (1,736) 
                                  ===============      ===============   ============ 
 Attributable to: 
 Owners of the parent                       (745)                (693)        (1,717) 
 Non-controlling interests                      3                    -           (19) 
                                  ---------------      ---------------   ------------ 
 Total comprehensive expenses               (742)                (693)        (1,736) 
                                  ===============      ===============   ============ 
 Loss per share (basic)                (GBP0.012)           (GBP0.012)     (GBP0.030) 
                                  ===============      ===============   ============ 
 Loss per share (diluted)                     N/A                  N/A            N/A 
                                  ===============      ===============   ============ 
 
 

Consolidated Statement of Financial Position

As At 30 June 2013

(expressed in thousands GBP sterling)

 
                                    30/6/2013   30/06/2012   31/12/2012 
                                    Unaudited    Unaudited      Audited 
                                       GBP000       GBP000       GBP000 
 Non-current assets 
 Property, plant and equipment             28           64           36 
 Loans receivable                         637          395          637 
 Available-for-sale investments         1,273        1,273        1,273 
                                   ----------  -----------  ----------- 
                                        1,938        1,732        1,946 
  Current assets 
 Inventories                                -          170            - 
 Trade and other receivables              211          178          191 
 Rental and other deposits              1,643           34           28 
 Cash and cash equivalents                 73          296          202 
                                   ----------  -----------  ----------- 
                                        1,927          678          421 
 Current liabilities 
 Other payables and accruals              669          229          383 
 Deposits from customers                    -          528            - 
 Amount due to a related company        3,232        3,119        1,277 
 Convertible loan notes                     -            -        3,076 
 Provision for current tax                  -            -            1 
                                   ----------  -----------  ----------- 
                                        3,901        3,876        4,737 
                                   ----------  -----------  ----------- 
 Net current liabilities              (1,974)      (3,198)      (4,316) 
                                   ----------  -----------  ----------- 
 Net liabilities                         (36)      (1,466)      (2,370) 
                                   ==========  ===========  =========== 
  Equity 
 Share capital                          6,134        2,983        3,058 
 Reserves                             (6,218)      (4,449)      (5,473) 
                                   ----------  -----------  ----------- 
 Equity attributable to owners 
  of the parent                          (84)      (1,466)      (2,415) 
 Non-controlling interests                 48            -           45 
                                   ----------  -----------  ----------- 
 Capital deficiencies                    (36)      (1,466)      (2,370) 
                                   ==========  ===========  =========== 
 

Consolidated Statement of Changes In Equity

For The Six Months Ended 30 June 2013

(expressed in thousands GBP sterling)

 
                                  Paid-in   Accumulated     Total           Non-      Total 
                                  capital        losses              controlling 
                                                                        interest 
                                   GBP000        GBP000    GBP000         GBP000     GBP000 
  At 1 January 2012                 2,983       (3,756)     (773)              -      (773) 
 Total comprehensive 
  expenses for the six 
  months to 30 June 2012                -         (693)     (693)              -      (693) 
  At 30 June 2012 and 
   1 July 2012                      2,983       (4,449)   (1,466)              -    (1,466) 
 
 Capital contribution 
  from non-controlling 
  interests                             -             -         -             64         64 
  Issue of shares upon 
   equity-settled share-based 
   arrangement                         75             -        75              -         75 
  Total comprehensive 
   expenses for the six 
   months to 31 December 
   2012                                 -       (1,024)   (1,024)           (19)    (1,043) 
                                ---------  ------------  --------  -------------  --------- 
    At 31 December 2012 
     and 
     1 January 2013                 3,058       (5,473)   (2,415)             45    (2,370) 
  Issue of shares upon 
   conversion of convertible 
   loan notes                       3,076             -     3,076              -      3,076 
  Total comprehensive 
   expenses for the six 
   months to 30 June 2013               -         (745)     (745)              3      (742) 
  At 30 June 2013                   6,134       (6,218)      (84)             48       (36) 
                                =========  ============  ========  =============  ========= 
 
 

Consolidated Statement of Cash flows

For The Six Months Ended 30 June 2013

(expressed in thousands GBP sterling)

 
                                                Six months       Six months    Year ended 
                                             to 30/06/2013    to 30/06/2012    31/12/2012 
                                                 Unaudited        Unaudited       Audited 
                                                    GBP000           GBP000        GBP000 
 Cash flows from operating activities 
 Loss before taxation                                (741)            (693)       (1,735) 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                                          8               10            19 
 Loss on disposal of property, 
  plant and equipment                                    -                -            21 
 Provision for bad and doubtful 
  debts                                                  -                -            81 
 Deregistration of a subsidiary                          -                -           (6) 
 Equity-settled share-based payment                     41                -           146 
 Exchange gain on convertible 
  loan notes                                             -                -         (108) 
 Interest income                                      (16)              (1)          (14) 
 Finance costs                                          70               28            91 
                                           ---------------  ---------------  ------------ 
 Operating cash flows before movements 
  in working capital                                 (638)            (656)       (1,505) 
 Increase in inventories                                 -            (170)             - 
 Increase in trade and other receivables              (20)            (161)         (255) 
 (Increase)/Decrease in rental 
  and other deposits                               (1,615)                -             6 
 Increase in deposit from customer                       -              528             - 
 
   Increase /(Decrease) in other 
   payables and accruals                               286              (5)            99 
                                           ---------------                   ------------ 
 Cash used in operations                           (1,987)            (464)       (1,655) 
 Income taxes paid                                     (2)                -             - 
                                           ---------------  ---------------  ------------ 
 Net cash used in operating activities             (1,989)            (464)       (1,655) 
                                           ---------------  ---------------  ------------ 
 
 
  Cash flows from investing activities 
  Additions of property, plant 
   and equipment                                 -           (5)           (7) 
  Loans to a third party                         -         (395)         (637) 
  Acquisition of available-for-sale 
   investments                                   -       (1,273)       (1,273) 
  Interest received                              6             1             1 
                                         ---------      --------      -------- 
 Net cash generated from/(used 
  in) investing activities                       6       (1,672)       (1,916) 
                                         ---------      --------      -------- 
 
  Cash flows from financing activities 
  Loans from a related company               1,854         2,331         3,673 
  Net cash generated from financing 
   activities                                1,854         2,331         3,673 
                                         ---------                    -------- 
 
 (Decrease)/Increase in cash and 
  cash equivalents                           (129)           195           102 
 Cash and cash equivalents at 
  beginning of the financial period            202           101           101 
                                         ---------                    -------- 
  Cash and cash equivalents at 
   end of the financial period                  73           296           202 
                                         =========      ========      ======== 
 
 Cash and cash equivalents consist 
  of: 
 Cash at bank and in hand                       73           296           202 
                                         =========      ========      ======== 
 
 

NOTES TO THE INTERIM FINANCIAL INFORMATION

1. The interim financial information has been prepared under the historical cost convention. The principal accounting policies adopted in the preparation of this interim financial information are consistent with those followed in the Group's annual financial statements for the year ended 31 December 2012.

2. The Group has not early adopted certain new standards, amendments to standards and interpretations that have been issued at the time of preparing the interim financial information but are not yet effective. The directors of the Company (the "Directors") anticipate that all of the pronouncements will be adopted in the Group's accounting policy for the period beginning after the effective date of the pronouncements. The Directors are also currently assessing the impact of these new standards, amendments to standards and interpretation but are not yet in a position to state whether they would have material impact on the results and the financial position of the Group.

3. The interim financial information for the period ended 30 June 2013 does not constitute the Group's statutory accounts for that period. The statutory accounts for the year ended 31 December 2012 have been delivered to the Registrar of Companies.

The interim financial information for the six months ended 30 June 2013 and 30 June 2012 is unaudited.

4. Loss per share has been calculated on the basis of the net loss after taxation of GBP742,000 (Six months ended 30 June 2012: loss GBP693,000, Year ended 31 December 2012: loss GBP1,736,000) and the weighted average number of shares in issue during the six months ended 30 June 2013 of 62,661,793 (Six months ended 30 June 2012: 57,056,501, Year ended 31 December 2012: 57,101,056). Diluted loss per share has not been presented as no dilutive instruments have been issued during each reporting period presented in financial information.

5. The increase in rental deposits in the period under review of GBP1,615,000 is comprised of the off-take deposit of US$2 million paid to PMU under the coal supply agreement entered into in May 2013, and a deposit of US$500,000 paid in relation to the on-going development progress on the tin project.

6. On 29 April 2013, the Company issued 16,233,765 ordinary shares pursuant to conversion notices from the holders of the US$5 million convertible loan notes ("CLN") issued by the Company on 25 July 2012 at a conversion price of 20p per share.

This represented full conversion of the CLN's in issue and completes the restructuring announced by the Company in July 2012. It also substantially reduces the balance sheet gearing of the Company.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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