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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ambrian | LSE:AMBR | London | Ordinary Share | GB0003763140 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.50 | 1.25 | 1.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMAMBR
RNS Number : 5008A
Ambrian PLC
08 June 2016
LONDON, 8 June 2016
AMBRIAN PLC
Preliminary Results for the year ended 31 December 2015
Ambrian plc ("Ambrian" or the "Company" and, together with its subsidiaries, the "Group") today announces its audited consolidated results for the twelve months ended 31 December 2015.
Highlights
-- Completion of business combination with Consolidated General Minerals (Schweiz) AG ("CGM") in March 2015 and commissioning of the cement plant in Mozambique
-- Loss before tax for the period of US $9.36 million (2014: profit before tax of US$ 1.10 million) primarily reflecting the challenging metals' marketing conditions
-- Net asset value at 31 December 2015 of US$ 46.23 million (31 December 2014 : US$ 29.21 million), equivalent to USc 21.7 per share (31 December 2014: USc 29.0) attributable to the purchase of the cement business in Mozambique
-- Total equity at 31 December 2015 of US$ 53.43 million (31 December 2014: US$ 29.15 million)
Commenting on the results, Robert F. Adair, Non-executive Chairman, stated:
"In 2015 we encountered challenging conditions in the commodities sector arising from macro-economic factors that translated into reduced volumes traded in our metals activities combined with a sharp drop in the premiums for most of the products we trade. We have taken steps to ensure that our service-like margin based business model going forward is resilient.
Our cement plant in Mozambique was commissioned in October 2015, leading to commercial sales of cement shortly before year-end and this resulted in a positive contribution to the Group for the year. Our focus will be to secure market share without being disruptive in an increasing competitive environment and the uncertain economic situation currently prevailing in the country."
Enquiries
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Ambrian plc
+ 44 (0)20 7634
Roger Clegg 4700
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plc
+ 44 (0)20 7397
Neil McDonald 8900
Nick Tulloch
Notes to Editors
Ambrian is active is sourcing and marketing a range of industrials metals, minerals and value added products to industrial customers worldwide. Ambrian's services add value at every stage of the supply chain; we plan procurement and logistics to streamline and simplify transportation and deliver on time commodities in the most cost efficient manner from remote locations to wherever they are needed by our customers. We pursue selective strategic acquisitions and ventures that can demonstrate a compelling industrial and commercial justification and ultimately strengthen Ambrian's supply chain and value added activities such as the manufacturing and distribution of branded cement products in Mozambique. Ambrian is quoted on the Alternative Investment Market of the London Stock Exchange under the ticker symbol AMBR.
Further information on the Group is available on the Company's website www.ambrian.com or the website of Cimentos da Beira Lda www.cdb.co.mz.
Chairman's and Chief Executive's statement
Overview
2015 has been one of the most testing years in the natural resources sector. The Bloomberg Commodity Index (a broadly diversified commodity price index) fell more than 25% in 2015, the fifth straight losing year and its worst drop since 2008. This situation has been building up for some time as the world's largest commodity consumers have experienced a sharp drop in GDP growth rates including China, a significant market for Ambrian. Part of the slowdown in China relates to the authorities' attempts to shift the cornerstone of the country's growth from government spending and investment fuelled growth to growing private sector consumption. This, combined with the restructuring of Chinese state-owned enterprises, tighter credit conditions and inventory drawdowns, has negatively affected consumption, depressed prices and created a growing supply surplus in a number of commodities.
Furthermore, the strong performance of the US dollar against most currencies in 2015 contributed generally in reducing the margins of our customers in local currency terms.
Against this backdrop, commodities exporting led economies, particularly in Africa, have been severely affected. Declining export receipts creating significant current account deficits and unsustainable international debt repayment conditions have all contributed to GDP growth forecasts being sharply revised downwards. In Mozambique, the situation is particularly acute as most infrastructure projects, the backbone of the country's efforts to grow its fledging agricultural and manufacturing sectors, have been delayed or even cancelled due to the lack of funding and mismanagement.
Managing our businesses against this depressed macro background has been difficult but there have been some positive events. We completed the merger with CGM early in the year and the cement plant was finally commissioned in October 2015, culminating in first sales of cement by the end of the year. This modern, efficient cement plant is the latest industrial-scale production capacity that has been built in Mozambique. The combination of efficient production capacity and optimal logistics between plant and market will enable us to successfully enter the building materials industry whilst adhering to industry's best practice in terms of emissions and environmental protection. Good quality products and service offering have resulted in demand for our brand in a highly contested market.
The primary focus of the Directors during this period has been liquidity management, inventory control, improving reporting and control systems, and ensuring that our business model going forward is resilient.
Our marketing business certainly has an important role to play as a specialist merchant in a sector in which a number of participants have disappeared, leaving customers with fewer alternatives to transact with qualified partners. The focus in our cement business is to establish our brand and secure market share but also to utilise our expertise in developing a marketing and logistics platform in cement and associated products. We continue to review the strategy of our businesses within the group and believe that the current course is the appropriate one in the present circumstances.
Throughout this period, the support of the Board and our key stakeholders continues to be very strong as evidenced by the successful private placement completed in September and the continued support of our lenders and customers.
Completion of merger
In March 2015, Ambrian and CGM successfully completed the combination of their businesses. The Group's core business of physical trading and logistics is now supplemented by the acquisition of a custom-built cement mill operation in Beira, Mozambique. The acquisition of this 800'000 tonne annual capacity facility was justified by its long-term economic rationale and also by the opportunity to leverage our expertise to source raw materials competitively and develop an additional marketing activity.
Fund raising
During the year the Company completed a fundraising for GBP2.6 million with certain of its existing shareholders, Directors and senior management. This funding was deemed prudent considering the difficult environment in which we have to operate. The net proceeds after satisfying cost overruns in the construction of the cement plant provided the Group with additional headroom for future general working capital requirements.
Board changes
As a result of the acquisition transaction referred to above, we (Robert Adair and Jean-Pierre Conrad) joined the Board of the Company as Non-executive Chairman and Chief Executive Officer respectively, on 27 March 2015. Furthermore, Martin Abbott and Charles Davies joined the Board in October. Martin, the former Chief Executive of the London Metal Exchange, has invaluable experience in the commodity markets and will undoubtedly assist in the Group's future development strategy of its marketing activities whilst emphasizing risk control. Charles, a businessman with a variety of interests including in Mozambique, will contribute his "hands on" experience in the Group's drive to develop its portfolio of operating assets.
During the year, Kevin Lyon stepped down as a Non-executive Director and Chairman of the Company. The Board is grateful to Kevin for his unwavering and professional contribution in driving the merger process to its conclusion.
Outlook
Although most market commentators have predicted an improvement in the business environment for 2016, there are little visible signs that this has yet materialised sustainably, particularly in the markets in which we operate.
In our marketing activities, we have seen a subdued start of the year as the focus remains on macroeconomic developments in China. The first quarter of 2016 saw record highs of copper imports boosted by a favourable arbitrage window, a surge in fixed asset investments and a recovery in seasonal demand. However, questions remain on the efficacy of the government stimulus and whether a recovery in China is sustainable. Whilst copper prices have rallied, premiums remain subdued into the second quarter of 2016 indicating poor industrial demand. As a result, we have developed additional businesses in the Middle East, India and Europe and have increased our business flows with South America and Africa. With a view to ensuring cash flows are insulated in times of weak market fundamentals, a significant portion of our trading with long standing relationships has been contractually arranged at the beginning of the new year for most or all of 2016. Continuous reduction in net working capital and improving our cash generation ability in our marketing activities remain our prime focus. Finally, we have also invested in improving our finance and risk management systems and processes to support our enlarged operations, but more significantly to provide us with the necessary tools to manage risks more efficiently.
In Mozambique, we have been pleased with the technical performance of the cement plant in its first few months of operation and believe that the high quality cement produced is proving attractive both to retail customers and in the construction sector. Cement demand is driven by both infrastructure projects and small and mid-sized private sector initiatives. In Central Mozambique, 2015 was a particularly good year in terms of cement demand despite the first signs of problems to come as cement prices in US dollar equivalent decreased markedly in the second half, in line with the dramatic weakening of the local currency. Since the beginning of 2016, the situation has deteriorated rapidly with the economic situation in the country remaining uncertain as direct foreign investments and foreign support to the country's budget deficits have all but dried up. Given current macroeconomic assumptions and the lack of any visible immediate solution to the predicament the country is going through, we believe that residential construction will suffer as disposable income falls and the banking system is short of foreign currency. The non-residential construction industry is mostly a function of infrastructure projects and incentives rolled out by the oil and gas and mining industries, which have been suspended or postponed. With increased downward pressure on margins expected and a reduction in demand growth anticipated, our focus is to secure market share without being disruptive, improve free cash flows and reduce gearing in Mozambique. We continue to place emphasis on liquidity management and generating cash to reduce gearing.
We would like to thank our colleagues for their hard work and dedication in what has been a challenging year. We look forward to a better year though no doubt not without its difficulties.
Robert F. Adair Jean-Pierre Conrad Chairman Chief Executive Officer
Ambrian plc
Consolidated statement of comprehensive income
for the year ended 31 December 2015
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
Turnover 1,897,528 2,885,069
Cost of sales (1,902,214) (2,877,276)
------------ ---------------------
Net revenue (4,686) 7,793
Investment portfolio gains 676 784
------------ ---------------------
Total (loss)/income (4,010) 8,577
Administrative expenses (5,177) (6,571)
Exceptional items - acquisition
costs - (904)
------------ ---------------------
Total administrative expenses (5, 177) (7,475)
Operating (loss)/profit (9,187) 1,102
Finance income 428 -
Finance costs (601) -
------------ ---------------------
(Loss)/profit before tax (9,360) 1,102
Taxation 2,339 (574)
------------ ---------------------
(Loss)/profit after tax (7,021) 528
------------ ---------------------
Other comprehensive income
Items that may be subsequently
reclassified to profit or
(loss)
Exchange profit/(loss) arising
from translation of foreign
operations 59 (344)
------------ ---------------------
Total other comprehensive
profit/(loss) 59 (344)
------------ ---------------------
Total comprehensive (loss)/profit (6,962) 184
============ =====================
(Loss)/profit attributable
to:
Owners of the parent (7,324) 518
Non-controlling interest 303 10
------------ ---------------------
(7,021) 528
------------ ---------------------
Total comprehensive (loss)/profit
attributable to:
Owners of the parent (7,265) 174
Non-controlling interest 303 10
------------ ---------------------
(6,962) 184
------------ ---------------------
Earnings per share in USD
cents:
Basic earnings per share (3.87) 0.51
Diluted earnings per share (3.87) 0.51
Ambrian plc
Consolidated statement of changes in equity
for the year ended 31 December 2015
Total
equity
attributable
Shares Share to the
Share Capital Merger to Retained based Employee owner
Share premium Redemption relief be Treasury Other earnings/ payments benefit Exchange of the Non-controll-ing Total
capital account reserve reserve issued shares reserve (losses) reserve trust reserve parent interest equity
US $ US $ US US US US US US US US US US $ US US
000's 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's 000's $ 000's $ 000's
Balance at
31 December
2013 17,665 18,044 - - - (1,986) - (16) 8,052 (11,446) (1,282) 29,031 (66) 28,965
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Comprehensive
income
Profit for
the year - - - - - - - 518 - - - 518 10 528
Foreign
currency
adjustments - - - - - - - - - - (344) (344) (2) (346)
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Total
comprehensive
income/(loss)
for the year - - - - - - - 518 - - (344) 174 8 182
Balance at
31 December
2014 17,665 18,044 - - - (1,986) - 502 8,052 (11,446) (1,626) 29,205 (58) 29,147
========= ======== =========== ======== ======== ========= ======== ========== ========= ========= ========= ============= ================== ========
Arising from
the business
combination
of
Consolidated
General
Minerals
(Schweiz)
AG 2,455 - - 26,066 1,477 - (5,066) - - - - 24,932 6,944 31,876
Shares issue
costs (refer
to note 28) - - - (1,296) - - - - - - - (1,296) - (1,296)
Exercise
of options - - - - - - - - - 576 - 576 - 576
Redemption
of Deferred
9p shares (15,898) - 15,898 - - - - - - - - - - -
Stock award - - - - - - 86 - - - - 86 - 86
Comprehensive
income
Profit /
(Loss) for
the year - - - - - - - (7,324) - - - (7,324) 303 (7,021)
Foreign
currency
adjustments - - - - - - - - - - 59 59 - 59
--------- -------- ----------- -------- -------- --------- -------- ---------- --------- --------- --------- ------------- ------------------ --------
Total
comprehensive
income/(loss)
for the year - - - - - - - (7,324) - - 59 (7,265) 303 (6,962)
Balance at
31 December
2015 4,222 18,044 15,898 24,770 1,477 (1,986) (4,980) (6,822) 8,052 (10,870) (1,567) 46,238 7,189 53,427
========= ======== =========== ======== ======== ========= ======== ========== ========= ========= ========= ============= ================== ========
Ambrian plc
Consolidated statement of financial position
at 31 December 2015
As at 31 December As at 31 December
2015 2014
ASSETS US $ 000's US $ 000's
Non-current assets
Property, plant and equipment 76,036 442
Deferred tax asset 2,459 252
----------------------- -----------------------
78,495 694
Current assets
Financial assets at fair
value through profit or loss 7,495 21,933
Inventory 262,541 329,545
Trade and other receivables 60,083 78,505
Current tax receivable 250 -
Cash and cash equivalents 9,823 9,661
----------------------- -----------------------
Total assets 418,687 440,338
LIABILITIES
Non-current liabilities
Long-term borrowings (21,376) -
Deferred tax liability (7,554) -
----------------------- -----------------------
(28,930) -
Current liabilities
Financial liabilities at
fair value through profit
or loss (2,675) -
Short-term borrowings (225,219) (315,065)
Short-term liabilities under
sale and repurchase agreements (43,745) (45,701)
Trade and other payables (64,691) (50,209)
Current tax payable - (216)
----------------------- -----------------------
Total liabilities (365,260) (411,191)
Total net assets 53,427 29,147
======================= =======================
Capital and reserves
Share capital 4,222 17,665
Share premium 18,044 18,044
Capital redemption reserve 15,898 -
Merger relief reserve 24,770 -
Shares to be issued 1,477 -
Treasury shares (1,986) (1,986)
Other reserve (4,980) -
Retained (losses)/earnings (6,822) 502
Employee benefit trust (10,870) (11,446)
Share-based payments reserve 8,052 8,052
Exchange reserve (1,567) (1,626)
Total equity attributable
to the owner of the parent 46,238 29,205
Non-controlling interest 7,189 (58)
Total equity 53,427 29,147
======================= =======================
Ambrian plc
Consolidated statement of cashflows
for the year ended 31 December 2015
Year to Year
31 to 31
December December
2015 2014
US $ 000's US $
000's
(Loss)/profit for the year (7,021) 528
Adjustments for:
Depreciation of property, plant and equipment 435 52
Share-based payment expense 72 -
Foreign exchange gains (825) (533)
Taxation expense (2,339) 574
Realised gain on financial assets designated
at fair value (676) (18)
Decrease/(increase) in inventories 67,004 (120,673)
Decrease/(increase) in trade and other
receivables 22,377 (18,872)
Unrealised losses on financial liabilities
at fair value (428) (2,371)
Unrealised gains/(losses) on financial
assets at fair value 11,115 (19,989)
Increase/(decrease) in trade and other
payables 12,545 (1,471)
Loss on disposal of property, plant and
equipment - 49
----------- ----------
Cash generated/(used) in operations 102,259 (162,724)
Taxation paid (362) -
Net cash flow generated/(used) in operating
activities 101,897 (162,724)
----------- ----------
Investing activities
Net cash from acquisition of subsidiary
undertakings 424 -
Purchase of property, plant and equipment (8,955) (488)
Disposal of property, plant and equipment - 14
Net cash used in investing activities (8,531) (474)
----------- ----------
Financing activities
Share issue costs (1,296) -
Proceeds from issue of convertible loan -
notes 4,121
Proceeds received from the exercise of -
options in Employee Benefit Trust 576
Increase in long-term borrowings (4,793) -
(Decrease)/increase in short-term liabilities
under sale and repurchase agreements (1,956) 12,646
(Decrease)/increase in short-term borrowings (89,846) 138,175
Net cash (used)/generated in financing
activities (93,194) 150,821
----------- ----------
Net increase/(decrease) in cash and cash
equivalents 172 (12,377)
Cash and cash equivalents at the beginning
of the year 9,661 22,075
Effect of foreign exchange rate differences
on cash and cash equivalents (10) (37)
Cash and cash equivalents at the end
of the year 9,823 9,661
=========== ==========
1. Basis of preparation
The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2015 or 2014 but is derived from those accounts. Statutory accounts for the 2014 have been delivered to the Registrar of the Companies, and those for 2015 will be delivered in due course.
The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The results for the year ended 31 December 2015 were approved by the Board of Directors on 7 June 2016 and are audited.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of international Financial Reporting Standards (IFRS's) as endorsed for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRS's. The accounting policies adopted in this announcement have been consistently applied and are consistent with the policies used in the preparation of the statutory accounts for the period ending 31 December 2015.
The consolidated financial statements of the Group have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards (IFRS) as developed and published by the International Accounting Standards Board (IASB) as adopted by the European Union (EU).
Presentational currency
The financial statements have been presented in US Dollars which is the functional currency of the company.
2. Segmental analysis
The Group has four reportable segments attributable to its continuing operations including Head office:
-- Physical metals and minerals trading -- Cement operations -- Investment portfolio - comprises the Group's investment portfolio
-- Head office costs relate to overheads incurred in connection with operating the public limited company, providing support functions to the Group.
The measurement of the segmental revenue, profit before tax, capital expenditure, depreciation, total assets, total liabilities and net assets have been prepared using consistent accounting policies across the segments
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different strategies.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer, Chief Operating Officer and the Finance Director.
Cement Investment Head office
Trading Operations Portfolio costs Total
2015 2015 2015 2015 2015
US $ 000's US $ 000's US $ 000's US $ 000's US $ 000's
Turnover 1,895,451 2,077 - - 1,897,528
Cost of
Sales (1,900,327) (1,887) - - (1,902,214)
Revenue - - 676 - 676
------------ ------------ ----------- ------------ ------------
(4,876) 190 676 - (4,010)
============ ============ =========== ============ ============
Cement Investment Head office
Trading Operations Portfolio costs Total
2014 2014 2014 2014 2014
US $ 000's US $ 000's US $ 000's US $ 000's US $ 000's
Turnover 2,884,979 - - 90 2,885,069
Cost of
Sales (2,877,276) - - - (2,877,276)
Revenue - - 784 - 784
------------ ------------ ----------- ------------ ------------
7,703 - 784 90 8,577
============ ============ =========== ============ ============
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
(Loss)/profit before tax
Trading (8,917) 2,542
Cement operations 669 -
Investment portfolio 676 784
Head office costs (1,788) (1,320)
Exceptional items - (904)
(9,360) 1,102
=========== ===========
Geographical split of Total income for the Group where >
10% per region
Year to 31 Year to 31
December 2015 December 2014
US $ 000's US $ 000's
Turnover Turnover
Eastern Asia 1,035,593 2,042,216
Western Asia 533,706 286,480
Other 328,229 556,373
Major customers of the Group where individually >10% of
Total income
Year to 31 Year to 31
December 2015 December 2014
US $ 000's US $ 000's
Customer Customer
Customer A 302,002 144,293
Customer B* 12,969 432,878
Other 1,582,557 2,307,898
* Customer B is < 10% during for the year ended 2015
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Investment portfolio losses
represents:
Unrealised gains on financial
assets
designated at fair value 676 766
Realised gains on financial
assets designated at fair
value - 18
676 784
=========== ===============
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Total assets
Trading 336,194 436,565
Cement operations 82,170 -
Investment portfolio 179 328
Head office 144 3,445
----------- ---------------
418,687 440,338
=========== ===============
Total liabilities
Trading 322,863 410,951
Cement operations 38,538 -
Investment portfolio - 1
Head office 3,859 239
----------- ---------------
365,260 411,191
=========== ===============
Year to 31 Year to 31
December December 2014
2015
US $ 000's US $ 000's
Depreciation:
Trading 93 52
Cement operations 342 -
Investment portfolio - -
Head office - -
435 52
=========== ===============
3. Earnings per ordinary share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust on 31 December 2015 of 6,259,046 (2014: 6,259,046), Treasury shares on 31 December 2015 of 4,500,058 (2014: 4,500,058) and Non-treasury shares on 31 December 2015 of 28,812,192 (2014: nil).
The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the issue of shares through the share option schemes on the assumed conversion of all dilutive options.
Reconciliations of the earnings and weighted average number of shares in the calculations are set out below. Diluted earnings per share has not been calculated as the Group is loss making.
The (loss)/profit attributable to the owners of the Company for continuing operations used in the calculation below is that presented in the consolidated statement of comprehensive income.
Year to 31 Year to 31
December 2015 December
2014
US $ 000's US $ 000's
Continuing operations
(Loss)/profit attributable
to shareholders (7,324) 518
Diluted (loss)/profit attributable
to shareholders (7,324) 518
Weighted average number of
shares 189,044,366 100,602,104
Dilutive effect of convertible 66,675,000 -
loan notes and warrants
Basic earnings per share US
$ cents (3.87) 0.51
Diluted earnings per share
US $ cents (3.87) 0.51
4. Financial assets and liabilities at fair value through profit or loss
Year to 31 Year to 31
December December
2015 2014
US $ 000's US $ 000's
Financial assets at fair value
through profit and loss - derivatives 7,316 18,669
Investments:
Unlisted investments 179 3,264
----------- -----------
7,495 21,933
=========== ===========
Financial assets at fair value (2,675) -
through profit and loss
- convertible loan derivatives
----------- -----------
During the year, Ambrian Metals Limited and CGM merged pursuant to a "merger by absorption" governed by Swiss law. The unlisted investment in CGM was valued at $3.61 million based upon the transaction with Ambrian plc. As part of the merger, Ambrian plc issued shares to CGM shareholders which resulted in "Non-treasury" shares being recorded by Ambrian plc for shares owned in itself, disclosed as "Other reserves".
All amounts presented in respect of unlisted securities have been determined with reference to financial information available at the time of the original investment updated to reflect all relevant changes to that information at the reporting date. This determination requires significant judgment in determining changes to fair value since the last valuation date. In making this judgment the Board evaluates, among other factors, changes in the business outlook affecting a particular investment, performance of the underlying business against original projections and valuations of similar quoted companies and the most recent fund raise achieved by the investee company.
Financial assets at fair value through profit or loss represent commodity futures. These are used to hedge inventory of metals, and purchases and sales of metals. Hedges take into account both contango and backwardation market conditions and are marked to market at the year-end closing price.
5. Non-controlling interest
The non-controlling interest ("NCI") disclosed in the consolidated statement of comprehensive income and consolidated statement of financial position at 31 December 2015 is represented by
Names of entity with Cimentos da NCI Beira Principal place of business of subsidiary Beira, Mozambique Proportion of ownership held by NCI 20% Proportion of voting rights held by NCI 0% Profit/(loss) attributed to NCI in US $ 000's 252 Accumulated NCI value at in US $ 000's 7,197 Dividends paid to NCI -
The 20% economic interest in Cimentos da Beira ("CdB"), is held by the Industrial Development Corporation of South Africa Limited ("IDC") by means of a convertible loan agreement whereby the IDC has an option to subscribe for 20% of the issued share capital of CdB.
Refer to the Segmental analysis, note 2 above, for the breakdown of assets and liabilities relating to CdB.
A 20% minority interest in Ambrian Resources AG held by shareholders other than Ambrian plc.
6. Business combination of Consolidated General Minerals (Schweiz) AG
On 17 February 2015, Ambrian announced that it had entered into a conditional agreement relating to the merger of Ambrian's Swiss subsidiary, Ambrian Metals Limited, with CGM Schweiz (which owns a newly constructed cement manufacturing plant in the port of Beira, Mozambique), pursuant to a 'merger by absorption' process governed by Swiss law and a subsequent acquisition by Ambrian plc of the shareholding of Consolidated General Minerals Plc (now in liquidation) ("CGM") in the resulting Swiss merged entity, together with all the indebtedness of the CGM Schweiz Group owed to CGM.
On 6 March 2015 the deal was approved by a majority shareholding of both entities, and by 27 March 2015 the deal was declared unconditional with all conditions precedent having been met. This is considered the acquisition date. On the same day two directors of CGM were appointed to the board of Ambrian plc, Robert Adair (now Chairman) and Jean-Pierre Conrad (now Chief Executive Officer).
The merger serves a strategic purpose in diversifying Ambrian's revenue stream. The Group will now have an operating asset, and has further exposure to the fast growing and developing market of Mozambique. Further it helps increase Ambrian's shareholder base, and consequent prospects of additional liquidity in share trading and improving the Group's profile with institutional investors.
We previously announced the details of the transaction with CGM and the combination of our businesses. This is the first reporting period for which we report on the combined businesses including the cement plant in Mozambique, owned by CdB. The directors have considered how this transaction should be accounted for and having reviewed the criteria, have determined that it should be accounted for as a business combination.
Details of the fair value of identifiable assets and liabilities acquired (excluding the holding in Ambrian plc previously held by CGM), and purchase consideration is as follows:
Book value Fair value Fair value
at 31 March uplift at at 31 March
2015 31 March 2015
2015
US $ 000's US $ 000's US $ 000's
Property, plant and
equipment 40,132 26,174 66,306
Land 768 - 768
Trade and other receivables 2,659 - 2,659
Cash and cash equivalents 424 - 424
Loan and overdraft
facilities (25,151) - (25,151)
Trade and other payables (1,938) - (1,938)
Deferred tax liability - (7,582) (7,582)
Non-controlling interest - (6,944) (6,944)
------------- -------------------- -------------
Total net assets 16,894 11,648 28,542
============= ==================== =============
Fair value of consideration
payable
No. of Convertible At 31 March
Securities 2015
US $ 000's
Initial Convertible Securities
(converted) 165,020,739 28,521
Second Tranche Deferred Convertible
Securities 9,707,102 1,678
Total consideration 174,727,841 30,199
------------------------ --------------
Less Investment acquired in Ambrian plc
previously held by CGM (1,657)
28,542
==============
The value applied to the equity to be issued is based on Ambrian plc's closing price (11.62 pence) and USD closing exchange rate (USD/GBP 1.4874) on the day the transaction completed (27 March 2015).
Details of the Convertible Securities in relation to the merger
The 165,020,739 Initial Convertible Securities of GBP0.01 each in Ambrian plc were issued on 8 May 2015, as anticipated and upon their immediate subsequent distribution to CGM shareholders, automatically converted into 165,020,739 Ordinary Shares in Ambrian plc.
The 19,414,205 First Tranche Deferred Convertible Securities of GBP0.01 each in Ambrian plc were also issued on 8 May 2015 but (notwithstanding their immediate subsequent distribution to CGM shareholders) were not converted into Ordinary Shares in Ambrian plc, as the condition for such conversion (mechanical completion of the Beira cement plant) was not satisfied by the long stop date for satisfaction of that condition (15 May 2015) - and so automatically on that date converted into 19,414,205 special deferred shares of GBP0.01 each in Ambrian plc.
The 9,707,102 Second Tranche Deferred Convertible Securities of GBP0.01 each in Ambrian plc were also issued on 8 May 2015 and, in accordance with their terms, will as a result of their immediate distribution to CGM Shareholders convert into 9,707,102 Ordinary Shares in Ambrian plc conditional upon the final dissolution of CGM.
Details of the Non-treasury shares in relation to the merger
As a result of the merger, Ambrian plc now holds $4,980,000 shares in itself, $1,657,000 through shares held directly by CGM (as noted above) and $3,323,000 through Ambrian plc's holding in CGM plc which was acquired through the issue of Ambrian plc shares. These shares are held as non-treasury shares and are required by law to be sold or cancelled in the future.
Refer to note 2 above for the profit contributed by the cement operations segment since acquisition.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFSRREIDIIR
(END) Dow Jones Newswires
June 08, 2016 02:00 ET (06:00 GMT)
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