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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bateman Lit | LSE:BNLN | London | Ordinary Share | NL0000683829 | EUR0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.90 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMBNLN
RNS Number : 7645P
Bateman Litwin N.V.
30 March 2009
BATEMAN LITWIN N.V.
("Bateman Litwin" or "the Company" or "the Group")
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
Amsterdam, the Netherlands, 31 March 2009 - Bateman Litwin (AIM: BNLN) today
announces its half year results for the six month period ended 31 December 2008.
Bateman Litwin is a supplier of technology, engineering, procurement and project
management services to the world's energy and resource industries.
Financial Summary
* Revenue of US$342.0 million (1H 2007/08: US$444.3 million)
* Normalised1 EBITDA of US$3.4 million (1H 2007/08: US$24.6 million)
* Normalised1 profit before tax of US$3.7 million (1H 2007/08: US$18.1 million)
* Pre-tax exceptional operating charges of US$13.6 million (1H 2007/08: nil):
* US$8.5 million provision for a Delta-T legacy project
* US$5.1 million provision for a terminated European waste to energy project
* Pre-tax exceptional non-operating (and non-cash) exceptional charges of US$20.9
million (1H2007/08: US$7.2 million gain):
*
* US$12.5 million hedging loss (1H2007/08: US$7.2 million gain)
* US$8.3 million Delta-T goodwill impairment charge
* Reported2 loss before tax of US$30.8 million (1H 2007/08: US$25.3 million profit
before tax)
* Normalised1 EPS (diluted) of 0.8 US cents (1H 2007/08: 15.0 US cents)
* Reported2 loss per share (diluted) of 26.7 US cents (1H 2007/08: EPS US 20.0 US
cents)
* Backlog as at 31 December 2008 US$1.0 billion (FY2007/08: US$1.3 billion)
1Normalised figures are calculated before exceptional items
2Reported figures are calculated after exceptional items
Operational Developments
* The Group's workforce was reduced by 5.0 per cent over the period. Since 31
December 2008, the workforce has been decreased by a further 4.6 per cent, and
this process is ongoing
* An additional eleven Delta-T legacy projects were completed during the period.
The final two legacy projects are expected to complete imminently
* After period end, the Group received contract awards in excess of US$100 million
Funding Developments
* The Company has agreed revised banking covenants that were previously in breach
following the announcement of its 2007/08 financial results
* In the context of current trading and the global banking crisis, management is
taking steps to prevent a breach of the revised covenants and to secure further
banking facilities
* After the period end, BSG Resources provided a US$7 million loan, bringing the
total loan provided by BSG Resources to US$17 million
Commenting on the results, David Lamont, CEO of Bateman Litwin, said:
"The new executive team continues to address the considerable challenges of the
inherited contracts whilst operating in a deteriorating economic environment.
We are committed to establishing a culture of operational discipline leading to
the successful execution of all projects. Consequently, there have been a number
of changes to the executive team during and after the period under review.
Our priority is to close out legacy issues across the Group, which I believe we
have begun to demonstrate. We are pleased to announce the completion of nearly
all Delta-T inherited projects. We have withdrawn from a legacy contract in
Europe that would have failed to create adequate returns to shareholders.
Finally, we have re-negotiated the banking covenants that were previously in
breach following the publication of our 2007/08 results, although we recognise
the challenges of securing additional facilities in the current environment.
The Group continues to benefit from a backlog of over US$1 billion. The markets
in which we operate, however, remain challenging and addressing legacy issues
has come at a higher cost than originally expected. As a result, the Board is
targeting the Group to break even at the EBITDA level for the year ending 30
June 2009. We are, however, encouraged by recent contract awards in all our
business units, including three technology awards, totaling over US$100 million.
Furthermore, we have reasonable expectations of significant follow on work from
projects currently underway. We therefore look to the medium and long term with
a continued sense of optimism."
Enquiries:
+---------------------------------------------+---------------------------+
| Bateman Litwin | Tel: + 44 (0)20 7799 8307 |
| David Lamont, Chief Executive Officer | |
| Davis Larssen, Chief Financial Officer | |
| Ingrid Boon, Investor Relations Manager | |
| | |
+---------------------------------------------+---------------------------+
| Credit Suisse Securities (Europe) Limited | Tel: +44 (0)20 7888 8888 |
| Nominated advisor and joint broker | |
| Jon Grussing | |
| Will MacLaren | |
| | |
+---------------------------------------------+---------------------------+
| Oriel Securities Limited | Tel: +44 (0)20 7710 7600 |
| Joint broker | |
| Richard Crawley | |
| Pelham Public Relations | |
+---------------------------------------------+---------------------------+
| Archie Berens | Tel: +44 (0)20 7337 1509 |
+---------------------------------------------+---------------------------+
| | |
+---------------------------------------------+---------------------------+
Chairman's Statement
Introduction
The Board is committed to improving operational performance and financial
accountability. Cash generation, cost management, robust customer negotiations
and disciplined execution of our US$1bn backlog remain our priority,
notwithstanding the current economic environment.
Financial Performance
In the six months ended 31 December 2008, the Group reported revenue of US$342.0
million (1H 2007/08: US$444.3 million). Normalised EBITDA was US$3.4 million (1H
2007/08: US$24.6 million). Pre-tax operating exceptional charges for the period
were US$13.6 million (1H 2007/08: nil). These consisted of a US$8.5 million
provision for a Delta-T legacy project and a US$5.1 million provision for a
European waste to energy project. There were pre-tax non-operating (and
non-cash) exceptional charges totaling US$20.9 million (1H 2007/08: US$7.2
million gain) for a US$8.3 million Delta-T impairment charge (1H 2007/08: nil)
and a US$12.5 million hedging loss (1H 2007/08: US$7.2 million hedging
gain). The normalised profit before tax was US$3.7 million, compared to US$18.1
million for the comparable period. The reported loss before tax was US$30.8
million compared to US$25.3 million profit before tax for the comparable period.
The was a tax credit for the six months ended 31 December 2008 of US$2.0 million
(1H 2007/08: US$3.3 million tax expense). Reported loss after tax for the
period was US$28.8 million versus US$22.0 million profit after tax in the
comparable period. Normalised diluted earnings per share for the six months
ended 31 December 2008 were 0.8 US cents (1H 2007/08:15.0 US cents per
share). Reported diluted loss per share for the six months ended 31 December
2008 was 26.7 US cents (1H 2007/08:20.0 US cents earnings per share). No
dividend was declared for the half year (1H 2007/08: 3.5 US cents per share).
The Group backlog as at 31 December 2008 was approximately US$1.0 billion
(FY2007/08: US$1.3 billion).
Board and Management Changes
During the period, we were pleased to ratify the appointment of Davis Larssen as
the Group Chief Financial Officer effective as of 19 December 2008.
Max Abitbol, formerly the Chief Executive Officer of Litwin, Eyal Cohen,
formerly Chief Financial Officer of Bateman Litwin and Steve Major, formerly
Bateman Litwin Chief Operating Officer, each stepped down as executive directors
and left the Company during the period.
In addition to the appointment of Davis Larssen as Chief Financial Officer,
Thomas (Mac) McDaniel was appointed as the Managing Director of Delta-T and the
Americas, effective as of 15 September 2008, whilst Paul Grogan joined the
Company as the Group Human Resources Director, effective as of 1 September 2008.
Operational Update
We are actively addressing the underperforming areas of the business. Most
notably, we are pleased to report progress on the following legacy issues.
Energy Project in Europe
The Company has withdrawn from a waste to energy project in Europe. Following a
thorough review of the project's risk profile it was concluded that the project
would have failed to create adequate returns for our shareholders. A negotiated
settlement with the client was agreed to terminate the contract.
Delta-T
Legacy Projects
During the period, an additional eleven Delta-T legacy projects were completed.
In total, the seventeen legacy projects completed to date are performing at or
above nameplate capacity. The final two projects are expected to conclude in the
near future, dramatically reducing the division's operational and financial risk
profile.
A provision of US$8.5 million for a Delta-T legacy project was taken during the
period. The charge related to rework on several tanks and the total rebuild of
one tank, following their failure despite the tanks having previously been
approved by tank inspectors. Whilst the issue is subject to a claim, a provision
has been made.
In line with IFRS requirements, the Company conducted a half-yearly review of
the value of its goodwill and intangibles. In light of the continued uncertainty
in the bio-ethanol market, the Board considered a US$8.3 million Delta-T
goodwill impairment charge was appropriate.
The bio-ethanol market, however, continues to be volatile. Recent statements by
the new US administration suggest that the Renewable Fuels Standard, which
mandates the volume of renewable fuel required to be blended with gasoline, may
be increased from 10 per cent to 15 per cent. This should directly strengthen
demand for bio-ethanol.
Reduction in cost base
The Group initiated a review to right size the organisation. During the first
half, the Group's workforce was reduced by 5.0 per cent to 1,943.
Rationalisation is continuing and, since the period end, the workforce has been
reduced by a further 4.6 per cent to 1,853.
Strength of Backlog
As the new management team closes out legacy issues, I am confident that their
focus on managing contracting exposure and ensuring diligent and controlled
execution of our US$1 billion backlog will increase shareholder value. After the
period end, the Group secured over US$100 million of contract awards. Details
are given in the operational review.
Funding Developments
The Company is pleased to have agreed revised banking covenants that were
previously in breach following the announcement of its 2007/08 financial
results. Management is very focused on operating within the Group's covenants
although, given current trading and the economic background, we acknowledge this
will be challenging. Furthermore, in the context of the global banking crisis,
additional banking facilities are proving harder to secure. After the period
end, BSG Resources provided a US$7 million loan as part of the US$10 million
credit facility negotiated in October 2008. Following a previous US$10 million
loan granted in October 2008 this brings the total loan provided by BSG
Resources to US$17 million.
Outlook
Our core proposition to re-build sustainable shareholder value is firstly, to
resolve outstanding legacy issues; secondly, to instill a sense of operational
discipline and rigour that suffered historically as the Company focused on top
line growth; and finally, once the business has been stabilised, which I believe
we are well on the way to achieving, to focus on extracting the maximum possible
value from the Group's technology expertise.
Roy A Franklin, Chairman
CEO Review
We are prioritising disciplined project execution as well as urgently reducing
business risk. This entails focusing on our core Engineering and Technology
capabilities while ensuring an acceptable risk profile in relation to our
contracting exposure. In the first half of this financial year, we have remained
cash focused and cost conscious.
Our progress largely revolves around internal Group improvements specifically on
the following key elements:
*
* Developing a senior management team with appropriate ability and a co-ordinated
structure
* Being more selective with regards to projects
* Prioritising the successful execution of the backlog
* Frequent and detailed review of project performance
* Regular detailed senior management engagement across the Group
* Identifying potential issues early and resolving them quickly
* Imposing strict discipline and common procedures
* Simplifying the Group structure to facilitate internal communications and
co-ordination of business activities across business units
Strength of Backlog
Of our US$1 billion backlog, circa 75 per cent represents large infrastructure
type projects with secured funding. We have reasonable expectations of
meaningful follow on work in this category. The largest such contract is our
project to develop a fertilizer grade phosphoric acid plant in Saudi Arabia for
the Ma'aden Phosphate Company - Government owned organization. The Group has
recently received two additional awards for this project together worth over
US$76 million. Other projects include power contracts with a backlog of
approximately US$130 million as well as an oil and gas project in the FSU and a
project to develop storage tanks in North Africa.
The remaining 25 per cent of the backlog focuses on the completion of technology
and other smaller engineering contracts. This element of the backlog has not
expanded as fast as anticipated as customers are deferring further investment
decisions given the marked change in the world economy.
There is an increasing quantity of pending bids and contract awards in the
global market. This has arisen for a number of reasons including: a severe
reduction in project financing availability, declining commodity prices, project
postponements due to an expected fall in capital expenditure costs and customers
choosing to preserve cash. Furthermore, customers are slowing progress on
ongoing projects for many of the same reasons. Whilst this has decreased demand
for our services in the short term, the medium to long term can be viewed with a
degree of optimism, reinforcing the value of our current focus on execution
excellence and efficiency.
HSE
During the first half, the Group accumulated over four million hours of work
incurring only four very minor injuries. Furthermore, as at 31 December 2008 the
total hours worked on the Kashagan project reached just under 9 million hours
without a single lost time injury. We are proud of these achievements, however,
we are not complacent and we are endeavouring to improve our HSE performance in
the second half of the financial year.
Strategy
Our immediate focus is to stabilise the Group by closing out legacy issues and
establishing a disciplined execution culture. This has naturally resulted in a
reduction of new business activity, especially given the current market
slowdown.
We continue to bid selectively, however, for valued projects. In line with our
renewed strategy, projects must be based on our core Technology and/or
Engineering capability and must not expose the Group to inequitable risk. With
this in mind, the Company continues to undertake new engineering, procurement
and construction ("EPC") projects but with great attention to contracting
strategy, active partnering and appropriate risk distribution.
Our Technology and Engineering elements create a richer revenue stream than that
of high volume pass through procurement and construction, without the inherent
risk and exposure. Improved profit and cash generation will position the Group
to reinvest in many of the exciting applications and extensions of our existing
Technology and Engineering bases.
Operations Overview
Bateman Litwin provides solutions for complex industrial projects in seven
industry segments. These segments are:
*
* Oil and gas
* Power
* Waste to energy
* Chemical technologies
* Solvent extraction and electro-winning technologies
* Coal tar technology
* Ethanol technology
The Group consists of three business units that deliver engineering and
technology expertise to clients around the world.
TEM
Bateman Litwin's Technologies, Eastern Europe and Middle Eastern ("TEM")
division provides proprietary solvent extraction, electrowinning and chemical
technology solutions to customers in the mineral and metals industries
worldwide. In addition, it provides engineering management services for a wide
range of industrial projects to clients in Eastern Europe and the Middle East.
TEM was restructured into its current format during the period following several
top management departures. Rafi Kleinberger who was formally head of Bateman
Litwin's Solvent Extraction business unit now heads the division. Rafi has vast
experience in operations management as well as an in-depth understanding of the
Company's technology know-how.
The division contributed 30 per cent to the Group's revenue during the period.
This arose largely from an ongoing oil and gas project in the FSU as projects in
the minerals and metals industries experienced delays due to clients assessing
the extent of the current economic downturn before committing to new
investments. During the period, TEM focused sharply on costs and reduced
employee numbers by 18 per cent.
In the first half, TEM completed a solvent extraction demonstration plant for
the extraction of metals for Japanese Pacific Metal Corporation ("Pamco"),
allowing the business unit to enter the fast growing Japanese market. Pamco is
one of the largest metal producers in the world. Our research and development
team formulated the specific solvent extraction process. This completes the
first stage of the project which started in January 2008 under a very tight
schedule.
After the period end the division was pleased to have been awarded two new
projects. The Solvent Extraction Business Unit signed a memorandum of
understanding ("MOU") for US$36.8 million with Vale, Chile to provide an 18,500
tonne per annum copper solvent extraction and electrowinning plant on an EPC
basis. The scope and the budget for the EPC portion of the contract has been
agreed under the MOU.
TEM has also recently been awarded a EUR60 million EPC contract for the provision
of infrastructure and civil works and associated equipment and materials for
an industrial plant located in Nalanda, 90 kilometers from Patna, the Indian
state capital of Bihar. The contract will start in April 2009 and is expected to
be completed in 30 months.
Delta-T
In September 2008, the Group was pleased to announce the appointment of Thomas
(Mac) McDaniel as Managing Director of Delta-T and Bateman Litwin North and
South America. Mac's initial focus was to ensure the successful completion of
all existing Delta-T contracts adding necessary execution discipline and rigour.
An additional eleven legacy projects were completed during the period,
contributing 13 per cent to Group revenue. This brings the total concluded
legacy projects to seventeen out of nineteen all of which are operating at or
above nameplate capacity. The two remaining projects are currently undergoing
performance testing and should finish in their entirety shortly. One of these
projects resulted in a provision of US$8.5 million. The charge related to rework
on several tanks and the total rebuild of one tank, following their failure,
despite the tanks having previously been approved by tank inspectors. Whilst the
issue is subject to a claim, a provision has been made.
During the period and subsequently, the division has reduced its workforce by 54
per cent.
Delta-T is pleased to announce it has been awarded an engineering, procurement
and technology contract by Tate & Lyle to supply molecular sieve dehydration
equipment for its corn wet milling operations in the United States. This follows
collaboration with Tate & Lyle on a project in Szabadegyhaza, Hungary. We are
delighted that Delta-T's technology has received further endorsement from a blue
chip company such as Tate & Lyle.
Looking forward, Delta-T's 15 per cent U.S. market share, based on its
technology licensing agreements, provides a ready market. Furthermore, despite
unfavourable economics limiting the new build environment for ethanol plants,
the industry is focused on improving installed plant throughput and
efficiencies. Many of these plants were developed with older technology
providing considerable opportunities to apply Delta-T's well regarded and tested
technologies and practices to the existing population. Thus, Delta-T has, and
continues to, develop a portfolio of products and services to modernise and
improve plant efficiencies by up to 20 per cent through increased ethanol
production as well as reduced energy and water consumption.
With approximately 9 billion gallons of ethanol capacity currently in use, U.S.
ethanol is the third largest contributor to the gasoline market in America
behind oil imports from Canada and Saudi Arabia (source: Ethanol Across America;
8 August 2008) This clearly demonstrates that ethanol is an established
mainstream product and an important element of fuel transport supply. Current
legislation mandates 15 billion gallons of corn ethanol capacity by 2015.
President Obama has stated an overall goal of 60 billion barrels of bio-fuels a
year by 2030 (source: barackobama.com). The Board believes that renewed
underlying political support, through the Obama administration, will underpin
the long-term development of the bio-ethanol market, despite current market
conditions.
Litwin
The Litwin division provides a complete range of services in the oil and gas,
power, waste-to-energy and process industries in Europe, the Middle East and
Africa. In addition, its coal tar distillation unit provides technology that
allows for the separation and distillation of coal tar for downstream chemical
applications.
Litwin contributed approximately 55 per cent to Group revenue during the period.
France, Saudi Arabia, Morocco and China were the largest contributing markets.
The total workforce for the division has remained stable as additional manning
requirements on the phosphate project in Saudi Arabia have offset a reduction of
7 per cent in Litwin France.
The division withdrew from a waste to energy project in Europe during the
period. Following a thorough review of the project's risk profile it was
concluded that the project would have failed to create adequate returns for our
shareholders. A negotiated settlement with the client was agreed to terminate
the contract.
The division is currently executing four projects on behalf of Gaz de France,
with whom it enjoys a strong and continuing relationship. Of these, three are in
oil and gas, namely the Oscar 1 and Oscar 2 projects, for the reconstruction of
gas storage facilities, awarded in December 2006 and in June 2008 respectively
and the Beynes contract for the re-development of an underground gas storage
facility, awarded in June 2008. The fourth project is to supply a 200 MW power
station in St-Brieuc, France awarded in June 2007.
The unit continues to work on the storage and distribution facility for Horizon
Tangiers Terminal SA in Morocco, awarded in January 2008. The foundations for
four of the tanks have now been laid and the procurement process is progressing
well.
Three projects are being executed for the Ma'aden Phosphate Company, a
state-owned mining company in Saudi Arabia. The projects are for the development
of a 1.5 million tonne per annum fertilizer grade phosphoric acid plant awarded
in June 2007 and two related material handling systems awarded in July and
November 2008. All three projects are making good progress.
With regards to our PROABD coal tar distillation unit, we are currently
completing three projects in China: for Angang Steel Limited, a large steel
producer in the Liaoning Province; for Laigang Steel Group Limited, a steel
producer in the Shandong Province; and for Seastar Chemical, located in Henan
Province. Furthermore, after the period end, the division was awarded a EUR4
million contract by the Chinese group Anyang Baoshuo Tar Chemical Co. Ltd for a
100,000 tonnes per year pitch reforming and granulation plant. The division will
supply the basic engineering for the whole plant as well as the detailed
engineering for the proprietary equipment.
During the period, Litwin successfully completed commissioning of the first line
for a US$96 million waste to energy project in France. The second line is
expected to be operational by 2010.
The division also completed one of two projects for the OCP Group in Morocco.
The 32 MW Jorf Lasfar thermal power plant is part of the largest integrated
phosphoric acid and fertilizer complex in the world. The project was delivered
on time and according to contract specifications. The remaining power project
for the OCP Group, awarded in April 2008, is proceeding according to schedule.
Also in Morocco, the 40 MW cogeneration power plant for Samir is expected to
complete in the second half of the financial year.
Finally, the Noel-Pons 180 MW combined heat and power plant for Enertherm was
successfully completed with timely delivery and commissioning in November 2008.
Moreover, the maintenance costs for the plant have been reduced due to remote
control functionality. The gas turbine power plant is producing power used to
heat the business district of La Defense outside Paris.
David T Lamont, Chief Executive Officer
Financial Review
Summary of Major Financial Developments
Revenue
Group revenue for the period was US$342.0 million, down 23 per cent (1H 2007/08:
US$444.3 million). This principally reflects a 52 per cent decline to US$18.2
million (1H 2007/08: US$37.9 million) in the Advanced Technologies division over
the comparable period. This is due to mining houses postponing capital
expenditure in light of significantly lower commodity prices affecting our
solvent extraction and chemical technologies businesses.
Revenue in the Energy division declined to US$323.8 million versus US$406.4
million in the comparable half-year period. The decline was not as dramatic as
that in the Advanced Technologies division as several regions experienced strong
growth. In Saudi Arabia revenue increased approximately six times versus the
comparable period reflecting our phosphate project for Ma'aden while in Morocco
revenue increased 44 per cent versus the comparable period demonstrating our
strong power business. Finally, in China revenue increased to circa US$14
million compared to US$1.5 million reported for the period ended 31 December
2007 reflecting the application of our coal tar distillation technologies.
Revenue, however, declined significantly at Delta-T and to a lesser extent in
the FSU and France. With regards to Delta-T, the division is focused on
completion of all legacy projects and smaller technology projects moving away
from higher risk EPC type projects. Revenue declines in the FSU were due to
ongoing delays and execution difficulties while revenue decreased 14 per cent in
France mostly reflecting a slowdown in new projects awarded.
Gross Profit
Normalised1 gross profit margin was 13.1 per cent versus 13.6 per cent reported
in 1H 2007/08. On a reported2 basis, the gross profit margin declined to 9.1 per
cent compared to 13.6 per cent in 1H 2007/08. In comparison, however, to the
gross profit margin reported at the end of the June 2008 financial year the
margin has improved significantly on a normalised and reported basis. The
normalised1 gross profit margin of 13.1 per cent for 1H 2008/09 compares to 9.3
per cent for the year ended 30 June 2008. The reported2 gross profit margin of
9.1 per cent for 1H 2008/09 compares to 1.7 per cent for the year ended 30 June
2008. This is a result of improved operational risk management and closure of
legacy issues.
+-----------+------------+-----------+------------+-----------+------------+-----------+
| | For the six months ended | For the year ended |
+-----------+-------------------------------------------------+------------------------+
| | 31 December 2008 | 31 December 2007 | 30 June 2008 |
+-----------+------------------------+------------------------+------------------------+
| US$M | Normalised | Reported | Normalised | Reported | Normalised | Reported |
+-----------+------------+-----------+------------+-----------+------------+-----------+
| Revenue | 342.0 | 342.0 | 444.3 | 444.3 | 863.7 | 816.1 |
+-----------+------------+-----------+------------+-----------+------------+-----------+
| Cost of | (297.3) | (310.9) | (384.1) | (384.1) | (783.2) | (802.4) |
| Sales | | | | | | |
+-----------+------------+-----------+------------+-----------+------------+-----------+
| Gross | 44.7 | 31.1 | 60.2 | 60.2 | 80.5 | 13.7 |
| Profit | | | | | | |
+-----------+------------+-----------+------------+-----------+------------+-----------+
| % | 13.1% | 9.1% | 13.6% | 13.6% | 9.3% | 1.7% |
+-----------+------------+-----------+------------+-----------+------------+-----------+
Operating Exceptional Items
Pre-tax exceptional operating charges amounted to US$13.6 million for the period
(1H 2007/08: nil) comprising:
* Ethanol project in North America US$8.5 million
* Waste to energy project in Europe US$5.1 million
The ethanol provision relates to a legacy project which required rework on
several tanks and the total rebuild of one tank, following their failure despite
the tanks having previously been approved by tank inspectors. Whilst the issue
is subject to a claim a provision has been made. This legacy project, as well
as one other, is expected to complete shortly bringing to a closure the 19
projects inherited through the Delta-T acquisition.
The provision for a European waste to energy project is a result of a review of
the contract under the Group's new operational risk criteria which the project
failed to satisfy. The Group has subsequently agreed a settlement with the
client in order to exit the project.
The goodwill impairment charge relates to the Delta-T acquisition reflecting the
volatile nature of the bio-ethanol market.
EBITDA
Normalised1 EBITDA for the period was US$3.4 million compared to US$24.6 million
for the half year ended 31 December 2007. The normalised1 EBITDA margin was 1.0
per cent versus 5.5 per cent in 1H 2007/08 reflecting a 16 per cent increase in
SG&A costs and the lower revenue contribution.
EBIT
The normalised1 EBIT loss for the 2008/09 half year was US$5.4 million compared
to a profit of US$18.4 million for the six month period ended 31 December 2007.
Normalised1 EBIT margin was (1.6) per cent in 2008/09 (2007/08: 4.1 per cent).
Along with the decrease in EBITDA the fall in the EBIT margin was largely due to
an 17 per cent increase in amortization to US$5.1 million. The increase is
mainly a result of amortization for the full six month period compared to just
over four months for the comparable given Delta-T was acquired 22 August 2007.
Non-operating Exceptional Items
Pre-tax non-operating and non-cash exceptional charges amounted to US$20.9
million for the period (1H 2007/08: US$7.2 million hedging gain) comprising:
* Goodwill impairment charge US$8.3 million
* Hedging loss US$12.5 million
The goodwill impairment charge (1H 2007/08: nil) relates to the Delta-T
acquisition.
The hedging loss (1H 2007/08: US$7.2 million gain) is discussed below under
Finance Income and Expenses.
Finance Income and Expenses
+------------------------------+-------------+-------------+
| | For the six months |
| | ended |
+------------------------------+---------------------------+
| | 31 December |
+------------------------------+---------------------------+
| | 2008 | 2007 |
+------------------------------+-------------+-------------+
| |(unaudited) |(unaudited) |
+------------------------------+-------------+-------------+
| Finance income | 12.3 | 3.2 |
+------------------------------+-------------+-------------+
| Finance expense | (3.1) | (3.4) |
+------------------------------+-------------+-------------+
| Normalised net finance | 9.2 | (0.3) |
| expense/income | | |
+------------------------------+-------------+-------------+
| Exceptional hedging | (12.5) | 7.2 |
| loss/gain | | |
+------------------------------+-------------+-------------+
| Reported net finance expense | (3.3) | 7.0 |
| / income | | |
+------------------------------+-------------+-------------+
Normalised1 finance income for the period of US$12.3 million (1H 2007/08: US$3.2
million) was composed of approximately US$4.8 million of interest income and a
reclassification US$6.4 million of foreign exchange gains on an energy project
previously accounted for in cost of sales as well as circa US$1.1 million of
other foreign exchange gains. Normalised1 finance expense for the period of
US$3.0 million (1H 2007/08: US$3.4 million) comprised mainly of interest
expenses on loans.
For the period ending 31 December 2007 there was an exceptional non-cash US$7.2
million hedging gain from the mark to market of the Euro to the US$ at 31
December 2007. This was a result of a hedge implemented in July 2007 for a
phosphate project in Saudi Arabia to ensure that the project costs of Euro's
were predictable while receiving US$ revenue. Whilst commercially effective,
this particular hedge was not effective from an IFRS standpoint. Since then the
US$ has strengthened considerably against the Euro resulting in a US$12.5
million exceptional non-cash hedging loss at 31 December 2008. The hedging
contract will expire in November 2010 at which point a commercially effective
and an IFRS effective hedge will be implemented, if required, in line with the
Group accounting policy for new hedges. This policy requires new hedges to meet
the requirements for an IFRS effective hedge which will result in the mark to
market of any hedged exchange gain or loss to be reflected through the balance
sheet, with any future change in the economic value offset in a timely manner
through project results rather than as a financial income or expense.
Result before Tax
Normalised1 profit before tax was US$3.7 million compared to US$18.1 million in
2007/08. The reported2 loss before tax after exceptional items was US$30.8
million compared to a profit of US$25.3 million in 2007/08.
Taxation
The reported2 tax credit for the period was US$2.0 million compared to a tax
expense of US$3.3 million in 1H 2007/08. The table below outlines the tax
related to exceptional charges:
Exceptional Items
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| | For the six months ended 31 | | For the six months ended |
| | December 2008 | | 31 December 2007 |
+------------+-------------------------------------------+------------+---------------------------------+
| US$M | Normalised | EU | Hedging | Reported | US$M | Normalised | Hedging | Reported |
| | | Project | | | | | | |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| | | | | | | | | |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| Result | 3.7 | (5.1) | (12.5) | (30.8) | Result | 18.1 | 7.2 | 25.3 |
| before tax | | | | | before tax | | | |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| Tax | (2.9) | 1.8 | 3.2 | 2.0 | Tax | (1.5) | (1.8) | (3.3) |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| Result | 0.8 | (3.3) | (9.3) | (28.8) | Result | 16.6 | 5.4 | 22.0 |
| after tax | | | | | after tax | | | |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
| | | | | | | | | |
+------------+------------+---------+---------+----------+------------+------------+---------+----------+
Earnings per Share
Normalised1 basic earnings per share for the period were 0.8 US cents (1H
2007/08: 16.1 US cents). This was calculated on a basic weighted average number
of shares of 107,328,719 (1H 2007/08: 100,634,711). The diluted weighted average
number of shares in issue for the period was 113,149,025 (1H 2007/08:
108,127,793) resulting in a normalised1 earnings per share of 0.8 US cents (1H
2007/08: 15.0 US cents).
Balance Sheet
Working Capital
There was a working capital deficit of US$107.2 million (FY 2007/08: US$136.3
million deficit). The improvement in working capital was due to a significant
decrease in construction contract liabilities largely due to the timing of
payments and receipts on large EPC projects. In addition, current liabilities
included US$22.1 million of long term loans re-classed as short term loans due
to IFRS IAS74 and IAS69 - see accounting notes 8.1 and 8.2.
Net Cash and Equivalents
The total cash and cash equivalents, including long-term deposits, at 31
December 2008 was US$132.9 million (30 June 2008: US$160.1 million). Of the
total cash, US$82.6 million (30 June 2008: US$90.3million) represented cash
deposits against guarantees resulting in free cash at 31 December 2008 of
US$50.3 million (30 June 2008: US$69.8 million).
The net cash and cash equivalents after deducting short and long term loans of
US$77.2 million (30 June 2008: US$46.7 million) was US$55.7 million (30 June
2008: US$113 .4 million).
Cash Flow
Cash Flow used in Operations
Cash flow used in operations for the period was US$53.5 million (1H 2007/08:
inflow of US$0.5 million). The principal reasons for the decline was the
decrease in construction contract liabilities reflecting increased supplier
payments as the Group executed a large number of EPC projects during the period
and the loss of US$27.4 million reported from operating activities.
Cash Flow from Investing Activities
Cash flow from investing activities was US$18.4 million (1H 2007/08: US$49.8
million outflow). The primary reason for the inflow was a reduction in long-term
cash deposits held as collateral against guarantees, which are now reported as
short term deposits as the Group neared completion on several projects.
Cash flow From Financing Activities
Cash flow from financing activities decreased to US$30.6 million (1H 2007/08:
US$75.1 million). The inflow reflects a loan US$25 million from Discount Bank
and a US$10 million loan from BSG Resources.
Covenants
The Company is pleased to have agreed revised banking covenants that were
previously in breach following the announcement of its 2007/08 financial
results. Management is very focused on operating within the Group's covenants
although, given current trading and the economic background, we acknowledge this
will be challenging. Furthermore, in the context of the global banking crisis
the securing of additional banking facilities is an ongoing impediment to the
Group's development.
Guarantees
A guarantee is a financial obligation given to the customer to protect it
against supplier non-performance. The financial obligation is provided through
the supplier's banks in the form of bonds, to which the supplier secures the
bond with a cash deposit. Total outstanding guarantees at the end of the period
were US$337 million, compared to US$373.5 million at 30 June 2008. As noted in
Net Cash and Equivalents above, US$82.6 million represented cash deposits
against these guarantees (30 June 2008: US$90.3million).
Post Balance Sheet Events
In March 2009, BSG Resources provided a US$7 million loan as part of the US$10
million credit facility negotiated in October 2008. Following a previous US$10
million loan granted in October 2008 this brings the total loan provided by BSG
Resources to US$17 million.
Backlog
Backlog for the end of the reported period was approximately US$1 billion. This
represents over one and a quarter years of operations in terms of 2007/08
revenue.
+---------+-----------+-----------+------------+
| US$M | 1H | 1H | 1H 2006/07 |
| | 2008/09 | 2007/08 | |
+---------+-----------+-----------+------------+
| Backlog | 1,020 | 1,270 | 734 |
+---------+-----------+-----------+------------+
1Normalised figures are calculated before exceptional items
2Reported figures are calculated after exceptional items
Davis M Larssen, Chief Financial Officer
Consolidated Balance Sheet
Amounts in US$'000
+---------------------------+------+----------------+---------------+--------------+
| | | As at 31 December | As at 30 |
| | | | June |
+---------------------------+------+--------------------------------+--------------+
| |Note | 2008 | 2007 | 2008 |
+---------------------------+------+----------------+---------------+--------------+
| | | (unaudited) | (unaudited) | |
+---------------------------+------+----------------+---------------+--------------+
| ASSETS | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Intangible assets | | 82,290 | 92,421 | 87,340 |
+---------------------------+------+----------------+---------------+--------------+
| Goodwill | | 31,277 | 56,755 | 40,504 |
+---------------------------+------+----------------+---------------+--------------+
| Property, plant and | 5 | 24,715 | 17,904 | 26,185 |
| equipment | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Long term Deposits | | 48,992 | 59,969(*) | 71,644 |
+---------------------------+------+----------------+---------------+--------------+
| Other financial assets | | 2,389 | 2,845 | 18,188 |
+---------------------------+------+----------------+---------------+--------------+
| Deferred taxation | | 15,152 | 5,317 | 11,979 |
+---------------------------+------+----------------+---------------+--------------+
| Non-current assets | | 204,815 | 235,211 | 255,840 |
+---------------------------+------+----------------+---------------+--------------+
| Construction contracts in | | 35,140 | 64,088 | 88,775 |
| progress | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Trade and other | | 260,903 | 255,990 | 220,211 |
| receivables | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Income tax receivable | | 282 | 494 | 194 |
+---------------------------+------+----------------+---------------+--------------+
| Cash and cash equivalents | | 83,882 | 155,581(*) | 88,408 |
+---------------------------+------+----------------+---------------+--------------+
| Current assets | | 380,207 | 476,153 | 397,588 |
+---------------------------+------+----------------+---------------+--------------+
| Total assets | | 585,022 | 711,364 | 653,428 |
+---------------------------+------+----------------+---------------+--------------+
| EQUITY AND LIABILITIES | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Issued capital | | 15,622 | 16,385 | 17,720 |
+---------------------------+------+----------------+---------------+--------------+
| Capital reserves | 7.1 | 100,154 | 100,457 | 100,346 |
+---------------------------+------+----------------+---------------+--------------+
| Hedging and foreign | 7.2 | 2,778 | 4,216 | 11,042 |
| currency translation | | | | |
| reserve | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Accumulated | | (81,148) | 38,820 | (52,456) |
| (losses)/profits | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Equity attributable to | | 37,406 | 159,878 | 76,652 |
| equity holders of the | | | | |
| parent | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Minority interest | | 1,695 | 1,574 | 1,771 |
+---------------------------+------+----------------+---------------+--------------+
| Total equity | | 39,101 | 161,452 | 78,423 |
+---------------------------+------+----------------+---------------+--------------+
| Borrowings | 8 | 30,626 | 33,165 | 16,695(*) |
+---------------------------+------+----------------+---------------+--------------+
| Loan from shareholder | | 10,000 | - | - |
+---------------------------+------+----------------+---------------+--------------+
| Non-current provisions | | 4,822 | 3,221 | 4,308 |
+---------------------------+------+----------------+---------------+--------------+
| Investment in associates | | 142 | - | 43 |
+---------------------------+------+----------------+---------------+--------------+
| Other financial | | 11,844 | - | - |
| liabilities | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Deferred tax liability | | 1,040 | 1,287 | 2,686 |
+---------------------------+------+----------------+---------------+--------------+
| Non-current liabilities | | 58,474 | 37,673 | 23,732 |
+---------------------------+------+----------------+---------------+--------------+
| Construction contract | | 138,106 | 193,990 | 218,696 |
| liabilities | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Trade, other payables and | | 299,787 | 284,167(*) | 284,490 |
| accruals | | | | |
+---------------------------+------+----------------+---------------+--------------+
| Current provisions | | 6,739 | 7,637 | 10,331 |
+---------------------------+------+----------------+---------------+--------------+
| Income tax payable | | 6,287 | 6,975 | 7,730 |
+---------------------------+------+----------------+---------------+--------------+
| Borrowings | 8 | 36,528 | 19,470(*) | 30,026(*) |
+---------------------------+------+----------------+---------------+--------------+
| Current liabilities | | 487,447 | 512,239 | 551,273 |
+---------------------------+------+----------------+---------------+--------------+
| Total liabilities | | 545,921 | 549,912 | 575,005 |
+---------------------------+------+----------------+---------------+--------------+
| Total equity and | | 585,022 | 711,364 | 653,428 |
| liabilities | | | | |
+---------------------------+------+----------------+---------------+--------------+
(*) Reclassified (see note 2(d))
Consolidated Income Statement
Amounts in US$'000
+------------------------------+------+-------------+-------------+--------------+
| | |For the six months ended |For the year |
| | | 31 December | ended 30 |
| | | | June |
+------------------------------+------+---------------------------+--------------+
| |Note | 2008 | 2007 | 2008 |
+------------------------------+------+-------------+-------------+--------------+
| | |(unaudited) |(unaudited) | |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Revenue | | 342,023 | 444,290 | 816,081 |
+------------------------------+------+-------------+-------------+--------------+
| Cost of sales | | (310,903) | (384,081) | (802,396) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Gross profit | | 31,120 | 60,209 | 13,685 |
+------------------------------+------+-------------+-------------+--------------+
| % | | 9.1% | 13.6% | 1.7% |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Other income | | - | 4 | 3,198 |
+------------------------------+------+-------------+-------------+--------------+
| Selling, general and | | (41,313) | (35,611) | (50,126) |
| administrative expenses | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Other expenses | | (46) | (19) | (1,795) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| EBITDA | | (10,239) | 24,583 | (35,038) |
+------------------------------+------+-------------+-------------+--------------+
| % | | (3.0%) | 4.1% | (4.3%) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Amortisation and | | (13,466) | (4,376) | (30,012) |
| impairment of | | | | |
| intangible Assets | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Depreciation | | (3,684) | (1,829) | (4,475) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| EBIT | | (27,389) | 18,378 | (69,525) |
+------------------------------+------+-------------+-------------+--------------+
| % | | (8.0%) | 4.1% | (8.5%) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Finance income | | 12,261 | 10,392 | 18,339 |
+------------------------------+------+-------------+-------------+--------------+
| Finance expenses | | (15,548) | (3,432) | (11,851) |
+------------------------------+------+-------------+-------------+--------------+
| Share of profit /(loss) of | | (99) | - | (160) |
| associates | | | | |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Result before tax | | (30,775) | 25,338 | (63,197) |
+------------------------------+------+-------------+-------------+--------------+
| % | | (9.0 %) | 5.7% | (7.7%) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Income tax | 9 | 2,007 | (3,315) | (2,433) |
+------------------------------+------+-------------+-------------+--------------+
| Effective Tax Rate | | 6.5% | 13.1% | (3.8%) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Result after tax | | (28,768) | 22,023 | (65,630) |
+------------------------------+------+-------------+-------------+--------------+
| % | | (8.4%) | 5.0% | (8.0%) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Attributable to: | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Equity holders of the parent | | (28,692) | 21,586 | (66,355) |
+------------------------------+------+-------------+-------------+--------------+
| Minority interest | | (76) | 437 | 725 |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Earnings per share (US$ | 12 | | | |
| cents) | | | | |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Basic | | (26.7) | 21.4 | (64.3) |
+------------------------------+------+-------------+-------------+--------------+
| | | | | |
+------------------------------+------+-------------+-------------+--------------+
| Diluted | | (26.7) | 20.0 | (64.3) |
+------------------------------+------+-------------+-------------+--------------+
Consolidated Cash Flow Statement
Amounts in US$'000
+---------------------------------+------+--------------+-------------+------------+
| | | For the six months ended | For the |
| | | 31 December |year ended |
| | | | 30 June |
+---------------------------------+------+----------------------------+------------+
| |Note | 2008 | 2007 | 2008 |
+---------------------------------+------+--------------+-------------+------------+
| | | (unaudited) |(unaudited) | |
+---------------------------------+------+--------------+-------------+------------+
| | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Cash flows from operating | | | | |
| activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Profit/(loss) from operating | | (27,389) | 18,378 | (69,525) |
| activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Non-cash adjustments | 10.1 | 32,864 | 1,373(*) | 33,398 |
+---------------------------------+------+--------------+-------------+------------+
| Changes in operating assets | 10.2 | 12,943 | (59,488)(*) | (65,704) |
+---------------------------------+------+--------------+-------------+------------+
| Changes in operating | 10.3 | (67,588) | 42,868(*) | 76,063 |
| liabilities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Interest paid | | (2,045) | (1,354)(*) | (3,205) |
+---------------------------------+------+--------------+-------------+------------+
| Income tax paid | 10.4 | (2,330) | (1,309) | (5,672) |
+---------------------------------+------+--------------+-------------+------------+
| Net cash (used in)/from | | (53,545) | 468 | (34,645) |
| operating activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Cash flows from investing | | | | |
| activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Property, plant and equipment | | (5,389) | (3,004) | (13,147) |
| purchased at cost | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Property, plant and equipment | | 131 | 192 | 280 |
| proceeds on disposal | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Disposal of subsidiary | 11.2 | - | (5) | 847 |
+---------------------------------+------+--------------+-------------+------------+
| Acquisition of a subsidiaries, | 11.1 | - | (4,568) | (5,332) |
| net cash acquired | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Interest received | | 943 | 2,387(*) | 5,528 |
+---------------------------------+------+--------------+-------------+------------+
| Investment in long-term | | 22,652 | (42,247)(*) | (53,922) |
| deposits | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Increase in investment in | | - | - | (207) |
| associate companies | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Long-term loan | | 35 | (2,524) | (1,971) |
+---------------------------------+------+--------------+-------------+------------+
| Net cash (used in)/from | | 18,372 | (49,769) | (67,924) |
| investing activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Cash flows from financing | | | | |
| activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Dividends paid | | - | - | (6,871) |
+---------------------------------+------+--------------+-------------+------------+
| Repayment of long-term | | (4,838) | (2,722) | (8,218) |
| borrowings | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Loan from shareholder | | 10,000 | - | - |
+---------------------------------+------+--------------+-------------+------------+
| Increase in long-term | | 25,000 | 42,208 | 47,473 |
| borrowings | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Proceeds on issue of shares | | - | 25,690 | 25,784 |
+---------------------------------+------+--------------+-------------+------------+
| Increase/(decrease) in | | 485 | 9,882 | 2,985 |
| short-term borrowings | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Net cash from financing | | 30,647 | 75,058 | 61,153 |
| activities | | | | |
+---------------------------------+------+--------------+-------------+------------+
| | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Increase/(decrease) in cash and | | (4,526) | 25,757 | (41,416) |
| cash equivalents | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Cash and cash equivalents at | | 88,408 | 129,824 | 129,824 |
| the beginning of the period | | | | |
+---------------------------------+------+--------------+-------------+------------+
| Net cash and cash equivalents | 10.5 | 83,882 | 155,581 | 88,408 |
| at end of the period | | | | |
+---------------------------------+------+--------------+-------------+------------+
(*) Reclassified (see note 2(d)).
Consolidated Statement of Changes in
Equity
Amounts in US$'000
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| | Attributable to equity holders of the parent | | |
+---------------------------+-------------------------------------------------------------+----------+----------+
| For the six months ended | Issued | Capital | Hedging | Retained | Total |Minority | Total |
| 31 December | capital |reserves | and | earnings/ | |interest | equity |
| | | |translation |(accumulated | | | |
| | | | reserves | losses) | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 1 July 2008 | 17,720 | 100,346 | 11,042 | (52,456) | 76,652 | 1,771 | 78,423 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Foreign currency exchange | (2,098) | - | 599 | - | (1,499) | - | (1,499) |
| translation | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Gain/(loss) on cash flow | - | - | (8,863) | - | (8,863) | - | (8,863) |
| hedge | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Net income recognized | 15,622 | 100,346 | 2,778 | (52,456) | 66,290 | 1,771 | 68,061 |
| directly in equity | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Result for the period | - | - | - | (28,692) | (28,692) | (76) | (28,768) |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Total recognized income | 15,622 | 100,346 | 2,778 | (81,148) | 37,598 | 1,695 | 39,293 |
| and expense | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Recognition of | - | 426 | - | - | 426 | - | 426 |
| share-based payments | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Share buy-back costs | - | (618) | - | - | (618) | - | (618) |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 31 December | 15,622 | 100,154 | 2,778 | (81,148) | 37,406 | 1,695 | 39,101 |
| 2008 (unaudited) | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 1 July 2007 | 11,901 | 78,180 | 1,638 | 20,782 | 112,501 | - | 112,501 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Minority interest arising | - | - | - | - | - | 1,137 | 1,137 |
| from acquisition of | | | | | | | |
| subsidiary | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Adjustments of other | - | (316) | - | 316 | - | - | - |
| reserve | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Foreign currency exchange | 1,183 | - | 2,578 | - | 3,761 | - | 3,761 |
| translation | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Net income recognized | 13,084 | 77,864 | 4,216 | 21,098 | 116,262 | 1,137 | 117,399 |
| directly in equity | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Result for the period | - | - | - | 21,586 | 21,586 | 437 | 22,023 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Total recognized income | 13,084 | 77,864 | 4,216 | 42,684 | 137,848 | 1,574 | 139,422 |
| and expense | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Issue of share capital | 3,301 | 22,483 | - | - | 25,784 | - | 25,784 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Dividend | - | - | - | (3,864) | (3,864) | - | (3,864) |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Recognition of | - | 110 | - | - | 110 | - | 110 |
| share-based payments | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 31 December | 16,385 | 100,457 | 4,216 | 38,820 | 159,878 | 1,574 | 161,452 |
| 2007 (unaudited) | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
Consolidated Statement of Changes in Equity
Amounts in US$'000
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| | Attributable to equity holders of the parent | | |
+---------------------------+-------------------------------------------------------------+----------+----------+
| For the year ended 30 | Issued | Capital | Hedging | Retained | Total |Minority | Total |
| June 2008 | capital |reserves | and | earnings/ | |interest | equity |
| | | |translation |(accumulated | | | |
| | | | reserves | losses) | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 1 July 2007 | 11,901 | 78,180 | 1,638 | 20,782 | 112,501 | - | 112,501 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Minority interest arising | - | - | - | - | - | 1,137 | 1,137 |
| from acquisition of | | | | | | | |
| subsidiary | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Adjustments of other | - | (710) | - | 710 | - | - | - |
| reserve | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Foreign currency exchange | 2,518 | - | 2,425 | - | 4,943 | - | 4,943 |
| translation | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Gain/(loss) on cash flow | - | - | 6,343 | - | 6,343 | - | 6,343 |
| hedge | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Decrease in holdings of | - | - | - | - | - | (91) | (91) |
| subsidiary | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Net income recognized | 14,419 | 77,470 | 10,406 | 21,492 | 123,787 | 1,046 | 124,833 |
| directly in equity | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Transfer to profit and | - | - | 636 | - | 636 | - | 636 |
| loss on cash flow hedge | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Result for the period | - | - | - | (66,355) | (66,355) | 725 | (65,630) |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Total recognized income | 14,419 | 77,470 | 11,042 | (44,863) | 58,068 | 1,771 | 59,839 |
| and expense | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Issue of share capital | 3,301 | 22,483 | - | - | 25,784 | - | 25,784 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Dividend | - | - | - | (7,593) | (7,593) | - | (7,593) |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Recognition of | - | 393 | - | - | 393 | - | 393 |
| share-based payments | | | | | | | |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
| Balance at 30 June 2008 | 17,720 | 100,346 | 11,042 | (52,456) | 76,652 | 1,771 | 78,423 |
+---------------------------+----------+----------+-------------+--------------+----------+----------+----------+
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
1.Corporate information
The condensed consolidated interim financial statements of Bateman Litwin N.V.
("the Company") for the six-month period ended 31 December 2008 were authorised
for issue in accordance with a resolution of the board of directors on 30 March
2008. The Company is domiciled in the Netherlands at Haaksbergweg 59, Amsterdam.
The address of the registered office and the principal places of business are
disclosed on the last page.
The main activities of the Company and its subsidiaries are set out in Note 3 -
Segment information.
2.Summary of significant accounting policies
(a) Statement of compliance
The half year condensed consolidated financial statements of the Company and all
its subsidiaries were prepared in accordance with International Financial
Reporting Standards (IFRS), IAS 34 'Interim Financial Reporting'. They do not
include all of the information required in the full annual financial statements,
and should be read in conjunction with the consolidated financial statements of
the Group as at and for the year ended 30 June 2008.
(b) Basis of preparation
(i) The condensed consolidated financial statements are presented in US dollars,
rounded to the nearest thousand, as the majority of the Group's contracts are
denominated in US dollars. The statements are prepared on the historical cost
basis except for derivative financial instruments and available-for-sale
investments, which are stated at fair value.
(ii) Going concern - The Company has re-negotiated its banking covenants that
were previously in breach following the announcement of its 2007/08 results. In
the context of current and 12 months forecasted trading, coupled with the global
banking crisis, management is taking steps to prevent a breach of the revised
covenants and to secure further banking facilities. Management concludes that
there is a reasonable expectation that the Group has alternative resources to
continue in operational existence for the foreseeable future. For this reason,
management continues to adopt the going concern basis in preparing the accounts.
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
2.Summary of significant accounting policies (continued)
(c) Accounting policies
The accounting policies and methods of computation adopted in the preparation of
these condensed consolidated financial statements are consistent with those
followed in the preparation of the Group's financial statements for the year
ended 30 June 2008.
(d) Reclassification
Some of the balances which were disclosed in the financial statements for the
year ended 30 June 2008 and for the six month period ended 31 December 2007 were
reclassified.
The reason for the reclassification was to align the previous period with the
current period classification.
For the year ended 30 June 2008:
The reclassification in the balance sheet was:
* Certain long term loans were reclassified from noncurrent borrowings to current
borrowings. The reason for the reclassification was having a standard repayable
on demand clause and breach of covenants (see note 8)
For the six month period ended 31 December 2007:
The reclassifications in the balance sheet were:
* Deposits, cash and short term investments: part of the balance was reclassified
to long term deposits.
* Current portion of long term loans were reclassified from trade and other
payables to borrowings.
The reclassifications in the cash flow statement were:
* Long term deposits were reclassified as cash flows from investing activities
having previously been classified as cash and cash equivalents.
* Interest paid and interest received were reclassified and presented in operating
activities and investing activities instead of net interest income presented
in operating activities.
* Changes in mark to market derivative assets were classified as non cash
adjustments instead of changes in operating assets.
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
3. Segment information
The core activities of the Group are international process-orientated
engineering, contracting and project management. These activities operate in two
primary divisions, namely Energy and Advanced Technologies. Although activities
in these sectors are diverse, they are in principle subject to similar risks and
return.
The Energy Division includes gas and power compression, crude oil refinery,
environmental protection, effluent treatment and engineering.
The Advanced Technologies Division provides unique technology solutions
(principally in solvent extraction) for the conversion of natural resources into
marketable products in the phosphates, food, pharmaceutical, petrochemical,
fertilizer and mineral industries.
The business segment table presents revenue and profit information and certain
asset and liability information regarding business segments for the six months
ended 31 December 2007 and 2008 as well as for the year ended 30 June 2008.
Notes to the Condensed Consolidated Financial Statements
for the six months
ended 31 December 2008
Business segments
Amounts in US$'000
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| | Advanced Technologies | Energy | Total |
+---------------------------+----------------------------------------+----------------------------------------+---------------------------------------+
| | For the six months | For the | For the six months | For the | For the six months | For the |
| | ended |year ended | ended |year ended | ended | year |
| | 31 December | 30 June | 31 December | 30 June | 31 December | ended |
| | | | | | | 30 June |
+---------------------------+---------------------------+------------+---------------------------+------------+---------------------------+-----------+
| | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| |(unaudited) |(unaudited) | |(unaudited) |(unaudited) | |(unaudited) |(unaudited) | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Revenue | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Sales to external | 18,224 | 37,888 | 69,681 | 323,799 | 406,402 | 746,400 | 342,023 | 444,290 | 816,081 |
| customers | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Inter-segment sales | 16 | 51 | 110 | - | 206 | 320 | 16 | 257 | 430 |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Total revenue | 18,240 | 37,939 | 69,791 | 323,799 | 406,608 | 746,720 | 342,039 | 444,547 | 816,511 |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Result | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Segment result | 906 | 2,498 | 1,914 | (28,295) | 15,880 | (71,438) | (27,389) | 18,378 | (69,524) |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Net finance | 2,535 | (487) | (1,286) | (5,822) | 7,447 | 7,773 | (3,287) | 6,960 | 6,487 |
| income/(expenses) | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Share of loss of | - | - | - | (99) | - | (160) | (99) | - | (160) |
| associates | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Result before income tax | 3,441 | 2,011 | 628 | (34,216) | 23,327 | (63,825) | (30,775) | 25,338 | (63,197) |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Income tax (expense) | (611) | 60 | 141 | 2,618 | (3,375) | (2,574) | 2,007 | (3,315) | (2,433) |
| /benefit | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| | | | | | | | | | |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
| Net profit | 2,830 | 2,071 | 769 | (31,598) | 19,952 | (66,399) | (28,768) | 22,023 | (65,630) |
+---------------------------+-------------+-------------+------------+-------------+-------------+------------+-------------+-------------+-----------+
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
4. Exceptional Items
The Group presents certain items as "exceptional". These are items which, in
management's judgment, need to be disclosed by virtue of their size or incidence
in order to obtain a proper understanding of the financial information.
This disclosure is based on management internal information and it is a non-IFRS
disclosure.
For the period ended December 2008, the following exceptional items were
reported:
Legacy projects
There was a pre tax exceptional charge of US$8.5 million relating to increased
costs to complete an Ethanol project in North America.
In addition, there was a pre tax exceptional charge of US$5.1 million relating
to a waste-to-energy project in Europe. Following a thorough review of Bateman
Litwin's internal risk management, the risk profile of the project was
considered unacceptable. A negotiated settlement with the client was agreed to
terminate the contract.
In the year ended June 30, 2008 the Group recognized a US$20.0 million loss with
regard to a 'lump sum' legacy oil and gas project in the FSU. Due to the nature
of the project, potential exists for further significant cost overruns in the
future. To minimize this exposure for both the Group and the client, discussions
are well underway with the client to amend the contract to an 'at cost'
arrangement which would be similar to a reimbursable arrangement. Management
expects that under such an arrangement it will be able to work with the client
to minimize the cost overruns and remove the risk of needing to incur further
losses. Although the arrangements with the client have not yet been formalized,
management has accounted for the project accordingly.
Impairment charges
There was a pre tax US$8.3 million impairment charge for the period which
relates to goodwill impairment arising from the Delta-T acquisition in North
America.
Ineffective hedging loss/gain
The marking to market of an ineffective hedge resulted in a US$12.5 million
exceptional non-cash loss at 31 December 2008. This particular hedge was
implemented in July 2007 for a phosphate project in Saudi Arabia to ensure the
Euro project costs were predictable while receiving US dollar revenue. The
hedging contract will expire in November 2010 at which point management will
replace with an effective hedging instrument in line with the Group's revised
hedging strategy. This policy requires the mark to market of any hedged
exchange gain or loss to be reflected through the balance sheet with any future
change in the economic value offset through project results rather than as a
financial income or expense.
Exceptional items for the six months period ended 31 December 2007:
Ineffective hedging loss/gain
In the first half of 2007/08, an exceptional non-cash US$7.2 million ineffective
hedging gain was recognised due to the mark to market of the US dollar against
the Euro at 31 December 2007. This hedging gain relates to the same hedge
discussed above for a project in Saudi Arabia.
Notes to the
Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+------------+-------+---------+----------+
| | Pro-forma | Pro-forma | | | Pro-forma | Pro-forma | | | Pro-forma | Pro-forma | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+------------+-----------------+----------+
| | Normalised | Exceptional | Reported | | Normalised | Exceptional | Reported | | Normalised | Exceptional | Reported |
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+------------+-----------------+----------+
| US$'000 | For the six months ended | | For the six months ended | | For the year ended 30 June 2008 |
| | 31 December 2008 | | 31 December 2007 | | |
+----------------+-------------------------------------+--+-------------------------------------+--+-----------------------------------------+
| Revenue | 342,023 | - | 342,023 | | 444,290 | - | 444,290 | | 863,725 | -47,644 | 816,081 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Cost of | -297,263 | -13,640 | -310,903 | | -384,081 | | -384,081 | | -783,160 | -19,236 | -802,396 |
| sales | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Gross | 44,760 | -13,640 | 31,120 | | 60,209 | - | 60,209 | | 80,565 | -66,880 | 13,685 |
| profit | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| % | 13.1% | | 9.1% | | 13.6% | | 13.6% | | 9.3% | n/a | 1.7% |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Other | - | | - | | 4 | | 4 | | 3,198 | - | 3,198 |
| income | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Selling, | -41,313 | | -41,313 | | -35,611 | | -35,611 | | -48,156 | -1,970 | -50,126 |
| general | | | | | | | | | | | |
| and | | | | | | | | | | | |
| administrative | | | | | | | | | | | |
| expenses | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Other | -46 | | -46 | | -19 | | -19 | | -1,795 | - | -1,795 |
| expenses | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| EBITDA | 3,401 | -13,640 | -10,239 | | 24,583 | - | 24,583 | | 33,812 | -68,850 | -35,038 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| % | 1.0% | | -3.0% | | 5.5% | | 5.5% | | 3.9% | n/a | -4.3% |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Amortisation | -5,131 | -8,335 | -13,466 | | -4,376 | | -4,376 | | -10,625 | -19,387 | -30,012 |
| of | | | | | | | | | | | |
| Intangible | | | | | | | | | | | |
| Assets | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Depreciation | -3,684 | | -3,684 | | -1,829 | | -1,829 | | -4,475 | - | -4,475 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| EBIT | -5,414 | -21,975 | -27,389 | | 18,378 | - | 18,378 | | 18,712 | -88,237 | -69,525 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| % | -1.6% | | -8.0% | | 4.1% | | 4.1% | | 2.2% | n/a | -8.5% |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Finance | 12,261 | | 12,261 | | 3,150 | 7,242 | 10,392 | | 11,774 | 6,565 | 18,339 |
| income | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Finance | -3,026 | -12,522 | -15,548 | | -3,432 | | -3,432 | | -11,851 | - | -11,851 |
| expenses | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Share of | -99 | | -99 | | - | | - | | -160 | - | -160 |
| profit/ | | | | | | | | | | | |
| (loss) of | | | | | | | | | | | |
| associates | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Result | 3,722 | -34,497 | -30,775 | | 18,096 | 7,242 | 25,338 | | 18,475 | -81,672 | -63,197 |
| before | | | | | | | | | | | |
| tax | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| % | 1.1% | | -9.0% | | 4.1% | | 5.7% | | 2.1% | n/a | -7.7% |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Income | -2,939 | 4,946 | 2,007 | | -1,468 | -1,847 | -3,315 | | -4,348 | 1,915 | -2,433 |
| tax | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Effective | 79.0% | 14.3% | 6.5% | | 8.1% | 25.5% | 13.1% | | 23.5% | 2.3% | -3.8% |
| Tax Rate | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Result | 783 | -29,551 | -28,768 | | 16,627 | 5,396 | 22,023 | | 19,087 | -79,757 | -65,630 |
| after tax | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| % | 0.2% | | -8.4% | | 3.7% | | 5.0% | | 2.2% | n/a | -8.0% |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Attributable | | | | | | | | | | | |
| to: | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Equity | 859 | -29,551 | -28,692 | | 16,190 | 5,396 | 21,586 | | 18,362 | -79,757 | -66,355 |
| holders | | | | | | | | | | | |
| of the | | | | | | | | | | | |
| parent | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Minority | -76 | - | -76 | | 437 | - | 437 | | 725 | - | 725 |
| interest | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Earnings | | | | | | | | | | | |
| per share | | | | | | | | | | | |
| (in US$ | | | | | | | | | | | |
| cents) | | | | | | | | | | | |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Basic | 0.8 | | -26.7 | | 16.1 | | 21.4 | | 17.8 | | -64.3 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+--------------------+---------+----------+
| Diluted | 0.8 | | -26.7 | | 15.0 | | 20.0 | | 16.7 | | -64.3 |
+----------------+------------+-------------+----------+--+------------+-------------+----------+--+------------+-------+---------+----------+
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
5. Property, plant and equipment
During the period, the Group spent US$5.1 million on capital investments. This
included leasehold improvement costs on a previously committed office relocation
for a subsidiary as well as purchase of vehicles and computers.
6. Dividends
The Company did not declare or pay dividends during the period. (1H 2007/08: the
Company declared dividends of US$3.9 million which were paid after the balance
sheet date).
7.Share capital and capital reserves
7.1 Capital Reserves
Amounts in US$'000
+---------------------------------+----------+----------+----------+----------+
| | Share | Other | Share | Total |
| | premium |reserves | options | |
| | | | reserve | |
+---------------------------------+----------+----------+----------+----------+
| Balance at 1 July 2008 | 99,384 | - | 962 | 100,346 |
+---------------------------------+----------+----------+----------+----------+
| Recognition of share based | - | - | 426 | 426 |
| payments | | | | |
+---------------------------------+----------+----------+----------+----------+
| Share buy-back costs | (618) | - | - | (618) |
+---------------------------------+----------+----------+----------+----------+
| Balance at 31 December 2008 | 98,766 | - | 1,388 | 100,154 |
| (unaudited) | | | | |
+---------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------+----------+----------+----------+----------+
| Balance at 1 July 2007 | 76,901 | 710 | 569 | 78,180 |
+---------------------------------+----------+----------+----------+----------+
| Shares issued at premium | 22,483 | - | - | 22,483 |
+---------------------------------+----------+----------+----------+----------+
| Other reserve adjustments | - | (316) | - | (316) |
+---------------------------------+----------+----------+----------+----------+
| Recognition of share based | - | - | 110 | 110 |
| payments | | | | |
+---------------------------------+----------+----------+----------+----------+
| Balance at 31 December 2007 | 99,384 | 394 | 679 | 100,457 |
| (unaudited) | | | | |
+---------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------+----------+----------+----------+----------+
| Balance at 1 July 2007 | 76,901 | 710 | 569 | 78,180 |
+---------------------------------+----------+----------+----------+----------+
| Recognition of share-based | - | - | 393 | 393 |
| payments | | | | |
+---------------------------------+----------+----------+----------+----------+
| Shares issued at premium | 22,483 | - | - | 22,483 |
+---------------------------------+----------+----------+----------+----------+
| Other reserve adjustments | - | (710) | - | (710) |
+---------------------------------+----------+----------+----------+----------+
| Balance at 30 June 2008 | 99,384 | - | 962 | 100,346 |
+---------------------------------+----------+----------+----------+----------+
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
7.2 Hedging and foreign currency translation reserves
Amounts in US$'000
+-------------------------------------------+----------+-------------+------------+
| | Hedging | Foreign | Total |
| | reserve | currency | |
| | | translation | |
| | | reserve | |
+-------------------------------------------+----------+-------------+------------+
| | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 1 July | 6,343 | 4,699 | 11,042 |
| 2008 | | | |
+-------------------------------------------+----------+-------------+------------+
| Unrecognized | (8,863) | - | (8,863) |
| losses on cash | | | |
| flow hedge | | | |
+-------------------------------------------+----------+-------------+------------+
| Foreign currency | - | 599 | 599 |
| exchange | | | |
| translation | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 31 | (2,520) | 5,298 | 2,778 |
| December 2008 | | | |
| (unaudited) | | | |
+-------------------------------------------+----------+-------------+------------+
| | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 1 July | (636) | 2,274 | 1,638 |
| 2007 | | | |
+-------------------------------------------+----------+-------------+------------+
| Foreign currency | - | 2,578 | 2,578 |
| exchange | | | |
| translation | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 31 | (636) | 4,852 | 4,216 |
| December 2007 | | | |
| (unaudited) | | | |
+-------------------------------------------+----------+-------------+------------+
| | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 1 July | (636) | 2,274 | 1,638 |
| 2007 | | | |
+-------------------------------------------+----------+-------------+------------+
| Transfer to profit | 636 | - | 636 |
| and loss on cash | | | |
| flow hedge | | | |
+-------------------------------------------+----------+-------------+------------+
| Unrecognized gains | 6,343 | - | 6,343 |
| on cash flow hedge | | | |
+-------------------------------------------+----------+-------------+------------+
| Foreign currency | - | 2,425 | 2,425 |
| exchange | | | |
| translation | | | |
+-------------------------------------------+----------+-------------+------------+
| Balance at 30 June | 6,343 | 4,699 | 11,042 |
| 2008 | | | |
+-------------------------------------------+----------+-------------+------------+
8.Long term loans classification
8.1Breach of covenants
The Company was in breach of certain loan covenants at its balance sheet date of
31 December 2008. Consequently, certain loans could have been recalled. The
Company has since re-negotiated its banking covenants and received a waiver for
the covenants that were previously in breach.
According to IFRS, IAS 1.74, however, when an entity breaches a provision of a
long-term loan arrangement, on or before the end of a reporting period, such
that the liability becomes payable on demand, the liability must be classified
as a current liability. This is the case even if the lenders agreed after the
reporting period and before the authorization of the financial statements for
issue, not to demand payment as a result of the breach.
Management is taking steps to prevent any breach of the revised covenants and
expects the loan re-payment schedules to be according to that of the original
loan agreements.
Due to the above breach of covenants, however, at 31 December 2008, US$14.7
million of long -term loans have been classified as current liabilities.
8.2Repayment on demand clause
One of the Company's long term loans includes a standard repayable on demand
clause. Although this clause has not been activated, and there have been no
discussions with the bank concerning this, according to IFRS, IAS 1. 69, this
loan should be classified as a current liability as the entity does not have an
unconditional right to defer settlement of the liability for at least twelve
months after the reporting period.
Due to this classification, US$ 7.4 million of long term loans have been
classified as current liabilities.
9. Income tax
The tax income benefit for the six months ended 31 December 2008 was
US$2,007,000. This represents 6.5 per cent of the result before tax (H1 2007/08:
13 per cent). The tax benefit for the six months ended
31 December 2008 was
calculated by applying the estimated annual average effective tax rate to the
pretax results for that period. The net tax benefit for the period is derived
from deferred tax assets recognized on losses for tax purpose for which the
probability of utilizing them is more likely than not, offset by tax expenses of
profitable entities.
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
10. Notes to the consolidated cash flow statement
Amounts in US$'000
+---------------------------------------------------+--------------+-------------+------+-----------+
| | For the six months ended | For the year |
| | 31 December | ended |
| | | 30 June |
+---------------------------------------------------+----------------------------+------------------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------+--------------+-------------+------------------+
| | (unaudited) | (unaudited) | |
+---------------------------------------------------+--------------+-------------+------------------+
| 10.1 | | | |
| Non-cash | | | |
| adjustments | | | |
+---------------------------------------------------+--------------+-------------+------------------+
| Depreciation | 3,684 | 1,829 | 4,475 |
| of property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Amortisation | 5,211 | 4,376 | 10,625 |
| of | | | |
| intangibles | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Impairment | 8,335 | - | 19,387 |
| of | | | |
| goodwill | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Loss/(Surplus) | 24 | 14 | 9 |
| on disposal of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Loss | - | - | 1,135 |
| /(Surplus) | | | |
| on | | | |
| disposal | | | |
| of | | | |
| subsidiary | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Share | 99 | | 160 |
| in | | | |
| loss | | | |
| /(profit) | | | |
| of | | | |
| associates | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Foreign | 5,431 | 1,953 | 1,574 |
| currency | | | |
| adjustments | | | |
| to | | | |
| non-current | | | |
| assets and | | | |
| liabilities | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Share-based | 426 | 110 | 393 |
| payment | | | |
| expenses | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Mark | 12,522 | (7,242)(*) | (7,266) |
| to | | | |
| market | | | |
| derivative | | | |
| assets | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Revaluation | 182 | 115 | - |
| of | | | |
| available-for-sale | | | |
| financial assets | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Provisions | (3,050) | 218 | 2,906 |
| and | | | |
| accruals | | | |
| raised and | | | |
| utilised | | | |
| during the | | | |
| year | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| | 32,864 | 1,373 | 33,398 |
+---------------------------------------------------+--------------+--------------------+-----------+
| | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| 10.2 | | | |
| Changes | | | |
| in | | | |
| operating | | | |
| assets | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Construction | 53,635 | 13,803 | (10,884) |
| contracts in | | | |
| progress | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Trade | (40,692) | (73,291)(*) | (54,820) |
| and | | | |
| other | | | |
| receivables | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| | 12,943 | (59,488) | (65,704) |
+---------------------------------------------------+--------------+--------------------+-----------+
| | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| 10.3 | | | |
| Changes | | | |
| in | | | |
| operating | | | |
| liabilities | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Construction | (80,590) | (28,608) | (3,902) |
| contract | | | |
| liabilities | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Trade, | 13,002 | 71,476(*) | 79,965 |
| other | | | |
| payables | | | |
| and | | | |
| accruals | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| | (67,588) | 42,868 | 76,063 |
+---------------------------------------------------+--------------+--------------------+-----------+
| | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| 10.4 | | | |
| Income | | | |
| tax | | | |
| paid | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Payable | (7,536) | (2,409) | (2,409) |
| at | | | |
| beginning | | | |
| of the | | | |
| year | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Current | (799) | (4,899) | (10,317) |
| taxation | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Acquisition | - | (482) | (482) |
| of | | | |
| subsidiary | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| Payable | 6,005 | 6,481 | 7,536 |
| at year | | | |
| end | | | |
| (**) | | | |
+---------------------------------------------------+--------------+--------------------+-----------+
| | (2,330) | (1,309) | (5,672) |
+---------------------------------------------------+--------------+--------------------+-----------+
| | | | |
+---------------------------------------------------+--------------+-------------+------+-----------+
(*) Reclassified (see note 2(d)).
(**) Relates to net income tax payable and receivable
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
Amounts in US$'000
+-------------------------------------------------------+-------------+-------------+-----------+
| | At 31 December | At 30 |
| | | June |
+-------------------------------------------------------+---------------------------+-----------+
| | 2008 | 2007 | 2008 |
+-------------------------------------------------------+-------------+-------------+-----------+
| |(unaudited) |(unaudited) | |
+-------------------------------------------------------+-------------+-------------+-----------+
| 10.5 | | | |
| Net cash | | | |
| and cash | | | |
| equivalents | | | |
| (*) | | | |
+-------------------------------------------------------+-------------+-------------+-----------+
| For the purposes of the consolidated | | | |
| cash flow statement, cash and cash | | | |
| equivalents comprise the following: | | | |
+-------------------------------------------------------+-------------+-------------+-----------+
| Cash | 5,317 | 6,404 | 11,954 |
| at | | | |
| bank | | | |
| and | | | |
| in | | | |
| hand | | | |
+-------------------------------------------------------+-------------+-------------+-----------+
| Short-term | 78,565 | 149,177 | 76,454 |
| deposits | | | |
+-------------------------------------------------------+-------------+-------------+-----------+
| | 83,882 | 155,581 | 88,408 |
+-------------------------------------------------------+-------------+-------------+-----------+
(*) At 31 December 2008 an amount of US$82,573,000 (31 December 2007:
US$75,777,000) was held on short and long term deposit as security for the
issuing of bank guarantees by various financial institutions.
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
11. Business combinations
11.1 Delta-T Corporation ("Delta-T")
On 22 August 2007 Bateman Litwin completed the acquisition of 100 per cent of
Delta-T, a leading US-based bio ethanol technology provider, for a total
consideration of US$45 million in cash and 11.8 million new ordinary shares in
Bateman Litwin. In addition US$ 1.2 million of expenses were incurred during the
acquisition process. The 11.8 million shares were conditional upon Delta-T's
financial performance during 2007. Subsequently, Bateman Litwin now anticipates
the return of the 11.8 million shares, in line with the agreed formula in the
sale and purchase agreement.
Amounts in US$'000
+---------------------------+--------------+------------+----------------+
| | Book value |Fair value | Fair value on |
| | |adjustment | acquisition |
+---------------------------+--------------+------------+----------------+
| Net assets acquired: | | | |
+---------------------------+--------------+------------+----------------+
| Technology | - | 75,801 | 75,801 |
+---------------------------+--------------+------------+----------------+
| Brand name | - | 7,370 | 7,370 |
+---------------------------+--------------+------------+----------------+
| Contractual rights | - | 7,100 | 7,100 |
+---------------------------+--------------+------------+----------------+
| Other intangible assets | 344 | 987 | 1,331 |
+---------------------------+--------------+------------+----------------+
| Property, plant and | 2,591 | - | 2,591 |
| equipment | | | |
+---------------------------+--------------+------------+----------------+
| Construction contracts in | 30,373 | - | 30,373 |
| progress | | | |
+---------------------------+--------------+------------+----------------+
| Trade and other | 69,607 | - | 69,607 |
| receivables | | | |
+---------------------------+--------------+------------+----------------+
| Bank and cash balances | 41,979 | - | 41,979 |
+---------------------------+--------------+------------+----------------+
| Trade and other payables | (110,191) | - | (110,191) |
+---------------------------+--------------+------------+----------------+
| Construction contract | (119,522) | 4,818 | (114,704) |
| liabilities | | | |
+---------------------------+--------------+------------+----------------+
| Long-term loans | (399) | - | (399) |
+---------------------------+--------------+------------+----------------+
| Deferred tax liability | - | (1,927) | (1,927) |
+---------------------------+--------------+------------+----------------+
| Minority interest | (1,137) | - | (1,137) |
+---------------------------+--------------+------------+----------------+
| | (86,355) | 94,149 | 7,794 |
+---------------------------+--------------+------------+----------------+
| | | | |
+---------------------------+--------------+------------+----------------+
| Goodwill | | | 38,406 |
+---------------------------+--------------+------------+----------------+
| Total consideration, | | | 46,200 |
| satisfied by cash | | | |
+---------------------------+--------------+------------+----------------+
| | | | |
+---------------------------+--------------+------------+----------------+
| | | | |
+---------------------------+--------------+------------+----------------+
| Net cash outflow arising | | | |
| on acquisition: | | | |
+---------------------------+--------------+------------+----------------+
| Cash consideration paid | | | 46,200 |
+---------------------------+--------------+------------+----------------+
| Cash and cash equivalents | | | (41,979) |
| acquired | | | |
+---------------------------+--------------+------------+----------------+
| | | | 4,221 |
+---------------------------+--------------+------------+----------------+
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 December 2008
11.2 Disposal of subsidiary
In September 2007, the Company sold all of its investment in Overseas
International Constructors GmbH ("OIC") and North Caspian Constructors B.V.
("NCC"), two joint ventures involved in the construction of the Main Works
Construction of the Kashagan oil field in Kazakhstan.
The net assets of the subsidiaries at the date of disposal were as follows:
+---------------------------------------+------------------+
| | Amounts in |
| | US$'000 |
+---------------------------------------+------------------+
| Property, plant and equipment | 108 |
+---------------------------------------+------------------+
| Construction contracts in progress | 5,489 |
+---------------------------------------+------------------+
| Trade receivables | 7,633 |
+---------------------------------------+------------------+
| Bank balances and cash | 1,802 |
+---------------------------------------+------------------+
| Trade payables | (11,668) |
+---------------------------------------+------------------+
| | 3,127 |
+---------------------------------------+------------------+
| Gain/(loss) on disposal | 420 |
+---------------------------------------+------------------+
| Total consideration | 3,547 |
+---------------------------------------+------------------+
| | |
+---------------------------------------+------------------+
| Cash consideration received | 2,956 |
+---------------------------------------+------------------+
| Deferred sales proceeds (*) | 591 |
+---------------------------------------+------------------+
| | 3,457 |
+---------------------------------------+------------------+
| | |
+---------------------------------------+------------------+
| Net cash inflow arising on disposal: | |
+---------------------------------------+------------------+
| Consideration paid in cash and cash | 2,956 |
| equivalents | |
+---------------------------------------+------------------+
| Less: cash and cash equivalent | (1,862) |
| balances disposed of | |
+---------------------------------------+------------------+
| | 1,094 |
+---------------------------------------+------------------+
(*) The deferred sales proceeds is pending resolution of tax settlements with
the Kazakh tax authorities.
Notes to the Condensed Consolidated Financial Statements
for the six
months ended 31 December 2008
12. Earnings per share
The calculation of the basic and diluted earnings per share attributable to the
ordinary equity shareholders is based on the following data:
Amounts in US$'000
+---------------------------------------+-------------+-------------+--------------+
| | For the six months ended |For the year |
| | | ended 30 |
| | 31 December | June |
+---------------------------------------+---------------------------+--------------+
| | 2008 | 2007 | 2008 |
+---------------------------------------+-------------+-------------+--------------+
| Earnings | (unaudited) | (unaudited) | |
+---------------------------------------+-------------+-------------+--------------+
| Earnings/(loss) for the purposes of | (28,692) | 21,586 | (66,355) |
| basic earnings per share (profit | | | |
| /(loss) for the year attributable to | | | |
| equity holders of the parent) | | | |
+---------------------------------------+-------------+-------------+--------------+
| | | | |
+---------------------------------------+-------------+-------------+--------------+
| | For the six months ended |For the year |
| | | ended 30 |
| | 31 December | June |
+---------------------------------------+---------------------------+--------------+
| | 2008 | 2007 | 2008 |
+---------------------------------------+-------------+-------------+--------------+
| Number of shares | (unaudited) | (unaudited) | |
+---------------------------------------+-------------+-------------+--------------+
| Weighted average number of ordinary | 107,328,716 | 100,634,711 | 103,175,840 |
| shares for the purpose of basic | | | |
| earnings per share | | | |
+---------------------------------------+-------------+-------------+--------------+
| Effect of dilutive potential | 5,820,309 | 7,493,082 | 6,960,334 |
| ordinary shares: | | | |
| Share options | | | |
+---------------------------------------+-------------+-------------+--------------+
| Weighted average number of ordinary | 113,149,025 | 108,127,793 | 110,136,174 |
| shares for the purposes of diluted | | | |
| earnings per share | | | |
+---------------------------------------+-------------+-------------+--------------+
| | | | |
+---------------------------------------+-------------+-------------+--------------+
| Earnings per share (US$ | | | |
| cents) | | | |
+---------------------------------------+-------------+-------------+--------------+
| Basic: | (26.7) | 21.4 | (64.3) |
+---------------------------------------+-------------+-------------+--------------+
| Diluted: | (26.7) | 20.0 | (64.3) |
+---------------------------------------+-------------+-------------+--------------+
13. Related party disclosures
The parent company of Bateman Litwin N.V. is Bateman B.V. (54.9 per cent
ownership at 31 December 2008). The ultimate parent company is Balda Foundation;
a private company organized under the law of Liechtenstein, whose registered
office address is at 6 Heilig Kreuz 9490, Vaduz, Liechtenstein.
The transactions between subsidiaries of the Company have been eliminated on
consolidation. This includes the sale of services and the provision of loans
between various company entities.
Shareholder related party transactions
The Group has previously entered into projects in which the Bateman B.V.
shareholder has an interest. There were no such transactions during the period
ended 31 December 2008.
In October 2008, BSG Resources (a related company to the parent company)
provided a US$10 million loan and a guaranteed credit line of up to US$10
million to the Group. In March 2009, after the balance sheet date, BSG Resources
provided a US$7 million loan as part of the US$10 million credit line facility.
Notes to the Condensed Consolidated Financial Statements
for the six months
ended 31 December 2008
14.Contingencies
Mantova project - Litwin France SA ("Litwin") and Bateman B.V. were involved in
legal claims against Stolt, the former owner of Litwin, concerning a claim with
an Italian client. The parties agreed to arbitration which concluded, due to
technical reasons, in favour of Stolt for approximately EUR700,000. An
indemnification agreement is in place between Litwin and Bateman B.V.,
indemnifying Litwin for this liability. There is no impact on the Company's
income statement.
In June 2008, a contract was signed between Litwin France SA and a client for
the construction of a waste-to-energy plant in Europe. Following attempts to
renegotiate the contract due to a change in circumstances, Bateman Litwin has
subsequently reached a negotiated settlement with the client. An adequate
provision was recorded in the six month period ended 31 December 2008.
15. Events after the balance sheet date
In March 2009, BSG Resources provided a US$7 million loan as part of a US$10
million credit line agreed in October 2008 (see note 13).
Besides the above, no other events have occurred subsequent to the
balance sheet date that require any adjustments to the financial results of the
Group.
Bateman Litwin N.V.
Incorporated and registered in the Netherlands
No. 33164026
Street and postal address
Haaksbergweg 59
1101 BR Amsterdam
The Netherlands
Auditors
Deloitte Accountants B.V.
Orlyplein 10
1043 DP Amsterdam
PO Box 58110
1040 HC Amsterdam
The Netherlands
Legal counsel
Buren van Velzen Guelen Berwin Leighton Paisner
Johan de Wittlann 15 Adelaide House
2517 JR The Hague London Bridge
PO Box 18511 London EC4R 9HA
2502 EM The HagueUnited Kingdom
The Netherlands
Nominated adviser and joint broker
Credit Suisse Securities (Europe) Limited
One Cabot Square
London E14 AQJ
United Kingdom
Joint broker
Oriel Securities Limited
125 Wood Street
London EC2V 7AN
United Kingdom
Public relations
Pelham Public Relations
12 Arthur Street
London EC4R 9AB
Shares traded on the Alternative Investment Market (AIM) of the London
Stock Exchange
Trading symbol: BNLN
Global offices
Netherlands (Amsterdam) +31-20-5640491
France (Paris) + 33-1-72255252
USA (Williamsburg) +1-757-9410188
Kazakhstan (Atyrau) +7-7122-586606
Chile (Santiago) +56-2-6949331
Switzerland (Altendorf) +41-55-451-2730
United Kingdom (London) +44-20-77998300
Website: www.Bateman-Litwin.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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