TIDMPMEA

RNS Number : 0281B

PME African Infrastructure Opps PLC

18 September 2018

18 September 2018

PME African Infrastructure Opportunities plc

("PME" or the "Company")

(AIM: PMEA.L)

Interim Results for the six months ended 30 June 2018

PME African Infrastructure Opportunities plc announces its unaudited interim results for the six months ended 30 June 2018.

Financial Highlights

    --      Net Asset Value of US$4.9 million (31 December 2017: US$5.2 million) 
   --      Net Asset Value per share of US$0.20 (31 December 2017: US$0.21 per share) 

-- Loss for the six months ended 30 June 2018 was US$0.26 million (H1 2017:loss of US$0.33 million)

   --      Basic and diluted loss per share of US$0.0104 (H1 2017: loss per share of US$0.0081) 

Certain of the information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information please contact:

 
 
   Smith & Williamson Corporate Finance Limited 
   Nominated Adviser 
   Azhic Basirov / Ben Jeynes                        +44 20 7131 4000 
 Stifel Nicolaus Europe Limited 
  Broker 
  Neil Winward / Tom Yeadon                        +44 20 7710 7600 
 

Chairman's Statement

On behalf of the Board of Directors (the "Board"), I am pleased to present the unaudited interim results for PME African Infrastructure Opportunities plc ("PME" or the "Company" and together with its subsidiaries the "Group") for the six months ended 30 June 2018.

The remit of the Company's directors (the "Directors") under the Company's investing policy is to seek to realise the remaining assets of the Company and to return both existing cash reserves and the net proceeds of realisation of the remaining assets to shareholders.

Investments

The Company has one asset, a building in Dar-es-Salaam, Tanzania (the "Dar-es-Salaam Property").

The Dar-es-Salaam Property, which is managed by a local managing agent, is currently 80% let. The investment continues to trade profitably. In 2010 PME Properties Limited acquired the property from Dovetel (T) Limited ("Dovetel"), the Company's former telecommunication investee company in Tanzania.

Dovetel was also a tenant of part of the Dar-es-Salaam Property but was in default on the payment of rent. On 3 December 2017 Dovetel was evicted from the premises. First Seal Ltd, Dovetel's parent company raised complaints with local authorities that the eviction was incorrectly carried out. The local police's enquiries are continuing at the time of writing with the Group having responded to local police in respect of these allegations through the lawyers appointed by the Group to execute the eviction. In its response, the Group highlighted the background to the Dovetel eviction, confirmed that the eviction was conducted by the landlord through the Court Broker who is legally authorised and provided the police with documentation providing the Group's ownership of the Dar-es-Salaam building and that Dovetel were merely a tenant of the Dar-es-Salaam property. As previously stated, the Company considers the allegations to have no foundation and will continue to strongly defend itself and its ownership of the building. No provision has been made for the Dovetel action. The directors consider it without merit.

A planned visit to Tanzania has been postponed until the police enquiries are concluded. This is unfortunately delaying the sale of the building.

The Dar-es-Salaam Property has three tenants. One tenant has a five year lease agreement for 628 square metres ending in May 2021. The second tenant rents 809 square metres and the contract runs to October 2019. The third tenant leases 1,206 square metres and has a contract ending in February 2020. The managing agent is attempting to let two areas that remain empty.

The Directors have maintained the value of the Dar-es-Salaam Property at US$4.66m. This valuation is in line with the value assessed by the local expert and takes into account both current vacancy levels and the current economic climate.

There is still uncertainty about the economic position of Tanzania and the market for high end office accommodation has not improved. The prospect of selling the building in the short term for a reasonable price remains uncertain.

In 2016 the Tanzanian Revenue Authority ("TRA") performed a tax audit for the years 2013 to 2015. The Board accepted their assessment for withholding tax and VAT but is appealing the income tax assessment of approximately $320k. The Tanzanian subsidiary applied to use tax credits for the payment of the withholding tax and VAT liabilities and for the cost of the appeal which equates to 30% of the assessed amount. The TRA have still not confirmed their acceptance of tax credits for settling the agreed assessment and for the cost of the appeal. The appeal on the income tax assessments has also not yet been concluded. The Board discussed with its local advisers the likely outcome of the appeal and concluded that no provision was required. The Board continues to work with its local advisers to finalise the tax position of the Tanzanian company with the local tax authorities.

Financial Results

The loss for the six months ended 30 June 2018 was US$0.26 million (2017: loss of US$0.33 million), representing US$0.0104 loss per Ordinary Share (2017: loss per Ordinary Share US$0.0081). The loss for the period was made up of the net gain in the fair value of assets less ongoing operating and administrative costs. The Directors are working on reducing the operational costs which for the six months to June 2018 were US$0.29 million compared to US$0.49 million for the same period last year.

The Directors, having considered the latest valuation of the Dar-es-Salaam Property, are of the opinion that the Dar-es-Salaam Property is reflected in the balance sheet at a realistic fair value.

As at 30 June 2018, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$4.9 million (US$0.20 per share), compared to the US$5.2 million (US$0.21 per share) that was reported as at 31 December 2017.

Return of Cash and Outlook

The marketing process for the sale of the Dar-es-Salaam Property has been postponed due to the ongoing police investigation and the tax negotiations. The sale process will begin once the police investigation is concluded and the tax position is clarified, the local economic uncertainty has receded and the vacant space has been let.

A further and final tender will be proposed once the building has been sold.

Paul Macdonald

Chairman

17 September 2018

Statement of Comprehensive Income

 
                                                               (Unaudited)                                 (Unaudited) 
                                                     Period from 1 January       Period from 1 January 2017 to 30 June 
                                                      2018 to 30 June 2018                                        2017 
                                             Note                  US$'000                                     US$'000 
------------------------------------------  -----  -----------------------  ------------------------------------------ 
 
 Net gains/(losses) on financial assets at 
  fair value through profit or loss           3                         43                                        (68) 
 Dividend income                                                         -                                         226 
 Operating and administration expenses        9                      (290)                                       (490) 
 Foreign exchange (loss)/gain                                          (8)                                           2 
------------------------------------------  -----  -----------------------  ------------------------------------------ 
 Loss before income tax                                              (255)                                       (330) 
 
 Income tax                                   14                         -                                           - 
------------------------------------------  -----  -----------------------  ------------------------------------------ 
 Loss and total comprehensive expense for 
  the period                                                         (255)                                       (330) 
 
 Basic and diluted loss per share (cents) 
  attributable to the equity holders of 
  the Company 
  during the period                           5                     (1.04)                                      (0.81) 
------------------------------------------  -----  -----------------------  ------------------------------------------ 
 

The accompanying notes form an integral part of these interim financial statements

Balance Sheet

 
                                                                         (Unaudited)                 (Audited) 
                                                                  As at 30 June 2018    As at 31 December 2017 
                                                          Note               US$'000                   US$'000 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Assets 
 Current assets 
 Financial assets at fair value through profit or loss     3                   4,758                     4,687 
 Trade and other receivables                                                      19                        26 
 Cash and cash equivalents                                                       218                       554 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total current assets                                                          4,995                     5,267 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total assets                                                                  4,995                     5,267 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 
 Equity and liabilities 
 Equity 
 Issued share capital                                      6                     246                       246 
 Capital redemption reserve                                7                   1,559                     1,559 
 Retained earnings                                                             3,110                     3,365 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total equity                                                                  4,915                     5,170 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 
 Current liabilities 
 Trade and other payables                                  8                      80                        97 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total current liabilities                                                        80                        97 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total liabilities                                                                80                        97 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 Total equity and liabilities                                                  4,995                     5,267 
-------------------------------------------------------  -----  --------------------  ------------------------ 
 

The accompanying notes form an integral part of these interim financial statements

Statement of Changes in Equity

 
                                Share capital     Capital redemption reserve   Retained earnings     Total 
                                      US$'000                        US$'000             US$'000   US$'000 
 --------------------------------------------  -----------------------------  ------------------  -------- 
 Balance at 1 January 2017                             410             1,395               7,682     9,487 
---------------------------------------------  -----------  ----------------  ------------------  -------- 
 Comprehensive expense 
 Loss for the period                                     -                 -               (330)     (330) 
---------------------------------------------  -----------  ----------------  ------------------  -------- 
 Total comprehensive expense for the period              -                 -               (330)     (330) 
---------------------------------------------  -----------  ----------------  ------------------  -------- 
 Balance at 30 June 2017                               410             1,395               7,352     9,157 
---------------------------------------------  -----------  ----------------  ------------------  -------- 
 
 
 
 Balance at 1 January 2018                     246   1,559   3,365   5,170 
--------------------------------------------  ----  ------  ------  ------ 
 Comprehensive expense 
 Loss for the period                             -       -   (255)   (255) 
--------------------------------------------  ----  ------  ------  ------ 
 Total comprehensive expense for the period      -       -   (255)   (255) 
--------------------------------------------  ----  ------  ------  ------ 
 Balance at 30 June 2018                       246   1,559   3,110   4,915 
--------------------------------------------  ----  ------  ------  ------ 
 

The accompanying notes on pages 8 to 15 form an integral part of these interim financial statements

 
 Cash Flow Statement                                                 (Unaudited)                           (Unaudited) 
                                                Period from 1 January 2018 to 30      Period from 1 January 2017 to 30 
                                                                       June 2018                             June 2017 
                                       Note                              US$'000                               US$'000 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Cash flows from operating 
 activities 
 Purchase of financial assets - 
  loans to investee companies           3                                   (26)                                  (47) 
 Dividends received                                                            -                                   226 
 Operating and administrative 
  expenses paid                                                            (310)                                 (413) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Net cash used in operating 
  activities                                                               (336)                                 (234) 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 
 Net decrease in cash and cash 
  equivalents                                                              (336)                                 (234) 
 Cash and cash equivalents at 
  beginning of period                                                        554                                   261 
 Foreign exchange gains on cash and 
  cash equivalents                                                             -                                     1 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 Cash and cash equivalents at end of 
  period                                                                     218                                    28 
------------------------------------  -----  -----------------------------------  ------------------------------------ 
 

The accompanying notes form an integral part of these interim financial statements

Notes to the Interim Financial Statements

   1              General Information 

PME African Infrastructure Opportunities plc (the "Company") was incorporated and is registered and domiciled in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 19 June 2007 as a public limited company with registered number 120060C. The investment objective of PME African Infrastructure Opportunities plc and its subsidiaries (the "Group") was to achieve significant total return to investors through investing in various infrastructure projects and related opportunities across a range of countries in sub-Saharan Africa. On 19 October 2012 the shareholders approved the revision of the Company's Investing Policy which is now to realise the remaining assets of the Company and to return both existing cash reserves and the proceeds of realisation of the remaining assets to shareholders.

The Company's investment activities were managed by PME Infrastructure Managers Limited (the "Investment Manager") to 6 July 2012. No alternate has been appointed therefore the Board of Directors has assumed responsibility for the management of the Company's remaining assets. The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to its AIM admission document dated 6 July 2007, there was an original placing of up to 180,450,000 Ordinary Shares with Warrants attached on the basis of 1 Warrant for every 5 Ordinary Shares. Following the close of the placing on 12 July 2007, 180,450,000 Shares and 36,090,000 Warrants were issued. The Warrants lapsed in July 2012. The Shares of the Company were admitted to trading on AIM, a market of the London Stock Exchange, on 12 July 2007 when dealings also commenced.

Financial Year End

The financial year end for the Company is 31 December in each year.

Going concern

In assessing the going concern basis of preparation of the interim financial statements for the period ended 30 June 2018, the Directors have taken into account the status of current negotiations on the realisation of the remaining assets. The Directors consider that the Group has sufficient funds for its ongoing operations and therefore have continued to adopt the going concern basis in preparing these interim financial statements.

   2              Summary of Significant Accounting Policies 
   2.1           Basis of preparation 

The accounting policies applied by the Company in the preparation of these condensed financial statements are the same as those applied by the Company in its financial statements for the year ended 31 December 2017, except for the adoption of new and amended standards and interpretations as set out below.

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Company as at and for the year ended 31 December 2017, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

In accordance with IFRS 10, 'Consolidated financial statements', the Directors have concluded that the Company meets the definition of an investment entity and therefore no longer consolidates its subsidiaries, instead it is required to account for these subsidiaries at fair value through profit or loss in accordance with IAS 39, 'Financial instruments: recognition and measurement' and prepares separate company financial statements only.

The interim financial statements for the six months ended 30 June 2018 are unaudited. The comparative interim figures for the six months ended 30 June 2017 are also unaudited.

New and amended standards and interpretations adopted by the Company

IFRS 9, 'Financial instruments', final version issued July 2014. This standard replaces the guidance in IAS 39, 'Financial instruments: recognition and measurement' that relate to the recognition, derecognition, classification, measurement and impairment of financial assets and financial liabilities.

The standard became applicable and was adopted by the Company from 1 January 2018. The adoption of the revised standard resulted in changes in accounting policies, but these had no material impact on the amounts recognised in the financial statements and did not require any retrospective adjustment.

The Company classifies its financial assets in the following categories: at fair value through profit or loss, and at amortised cost. The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows.

Assets that are debt instruments held for collection of contractual cash flows where those cash flows represent solely payment of principal and interest are measured at amortised cost. The Company's financial assets at amortised cost comprise 'trade and other receivables' and 'cash at bank' in the balance sheet.

The Company designates its equity investments as at fair value through profit or loss. Related loans and similar debt instruments are also measured at fair value through profit or loss if they do not meet the criteria for amortised cost and the business model for holding the financial assets does not include the collection of contractual cash flows. The business model is for selling the financial assets in accordance with the Company's investing policy.

There has been no change to the Company's measurement policies for financial assets or financial liabilities. However from 1 January 2018, a provision for impairment is established by the Company assessing, on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

   3              Financial Assets at Fair Value through Profit or Loss 

The following subsidiaries of the Company are held at fair value in accordance with IFRS 10:

 
                                         Country of incorporation   Percentage of shares held 
-------------------------------------  --------------------------  -------------------------- 
 PME Locomotives (Mauritius) Limited                    Mauritius                        100% 
 PME TZ Property (Mauritius) Limited                    Mauritius                        100% 
-------------------------------------  --------------------------  -------------------------- 
 

The following company is an indirect investment of the Company and is included within the fair value of the direct investments:

 
                          Country of incorporation   Percentage of shares held                        Parent company 
-----------------------  -------------------------  --------------------------  ------------------------------------ 
 PME Properties Limited                   Tanzania                        100%   PME TZ Property (Mauritius) Limited 
-----------------------  -------------------------  --------------------------  ------------------------------------ 
 

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements:

 
                                                   30 June 2018   31 December 2017 
                                                        US$'000            US$'000 
------------------------------------------------  -------------  ----------------- 
 Start of the period/year                                 4,687              9,260 
 Increase in loans to investee companies                     26                 14 
 Subsidiary expenses to be paid by the Company*               2                 17 
 Return of capital**                                          -            (4,400) 
 Movement in fair value of financial assets                  43              (204) 
 End of the period/year                                   4,758              4,687 
------------------------------------------------  -------------  ----------------- 
 

*The bank account for PME Locomotives (Mauritius) Limited was closed during 2017 and all money transferred to the Company's bank account. The Company is therefore responsible for its subsidiary's creditors at the period end (note 8).

Assets carried at amounts based on fair value are defined as follows:

   --      Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). 

-- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

-- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The fair values of all financial assets at fair value through profit or loss are determined using valuation techniques using significant unobservable inputs. Accordingly, the fair values are classified as level 3. There were no transfers between levels during the current period or prior year. The key inputs and most significant unobservable inputs are shown below.

 
                      Fair value as at   Fair value as at   Valuation           Significant        Sensitivity to 
                          30 June 2018   31 December 2017   techniques and      unobservable       significant 
                                                  US$'000   inputs              inputs             unobservable inputs 
                               US$'000 
------------------  ------------------  -----------------  ------------------  -----------------  -------------------- 
 Rail assets (PME 
  Locomotives 
  (Mauritius)                                                Value of net 
  Limited)                           9                  4    assets             N/A                N/A 
 Real estate                     4,749              4,683   Discounted cash     Discount rate      If the discount 
 investments (PME                                           flow property                          rate were 1% 
 TZ Property                                                valuation (inputs                      higher/lower the 
 (Mauritius)                                                including rental                       estimated fair 
 Limited)                                                   income, operating                      value would 
                                                            costs,                                 (decrease)/increase 
                                                            vacancy and                            by US$40,000 
                                                            discount rate) 
                                                            plus value of                          N/A 
                                                            other net assets 
------------------  ------------------  -----------------  ------------------  -----------------  -------------------- 
 Total                           4,758              4,687 
------------------  ------------------  -----------------  ------------------  -----------------  -------------------- 
 
   4              Net Asset Value per Share 
 
                                                                      As at 30 June 2018        As at 31 December 2017 
-----------------------------------------------------  ---------------------------------  ---------------------------- 
 Net assets attributable to equity holders of the 
  Company (US$'000)                                                                4,915                         5,170 
 Shares in issue (thousands)                                                      24,584             24,584 
-----------------------------------------------------  ---------------------------------  ---------------------------- 
 NAV per share (US$)                                                                0.20                          0.21 
-----------------------------------------------------  ---------------------------------  ---------------------------- 
 

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Company by the number of Ordinary Shares in issue.

   5              Basic and Diluted Loss per Share 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.

 
 
                                                                      Period ended     Period ended 
                                                                      30 June 2018     30 June 2017 
-----------------------------------------------------------------  ---------------  --------------- 
 Loss attributable to equity holders of the Company (US$'000)                (255)            (330) 
 Weighted average number of Ordinary Shares in issue (thousands)            24,584           40,973 
-----------------------------------------------------------------  ---------------  --------------- 
 Basic loss per share (cents) from loss for the period                      (1.04)           (0.81) 
-----------------------------------------------------------------  ---------------  --------------- 
 

There is no difference between basic and diluted Ordinary Shares as there are no potential dilutive Ordinary Shares.

   6              Share Capital 
 
 Ordinary Shares of US$0.01 each    31 December 2017 and   31 December 2017 and 
                                            30 June 2018           30 June 2018 
                                                  Number                US$'000 
---------------------------------  ---------------------  --------------------- 
 Authorised                                  500,000,000                  5,000 
---------------------------------  ---------------------  --------------------- 
 
 
 C Shares of US$1 each    31 December 2017 and   31 December 2017 and 
                                  30 June 2018           30 June 2018 
                                        Number                US$'000 
-----------------------  ---------------------  --------------------- 
 Authorised                          5,000,000                  5,000 
 Issued                                      -                      - 
-----------------------  ---------------------  --------------------- 
 
 
 Ordinary Shares of US$0.01 each                              30 June 2018   31 December 2017 
                                                                   US$'000            US$'000 
-----------------------------------------------------------  -------------  ----------------- 
 24,583,942 (31 December 2017: 24,583,942) Ordinary Shares 
  in issue, with full voting rights                                    246                246 
-----------------------------------------------------------  -------------  ----------------- 
 

At incorporation the authorised share capital of the Company was US$10,000,000 divided into 500,000,000 Ordinary Shares of US$0.01 each and 5,000,000 C Shares of US$1.00 each. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The holders of C Shares would be entitled to one vote per share at the meetings of the Company. The C Shares can be converted into Ordinary Shares on the approval of the Directors. On conversion each C share would be sub-divided into 100 C Shares of US$0.01 each and will be automatically converted into New Ordinary Shares of US$0.01 each.

Dividends and tender offers are recognised as a liability in the period in which they are declared and approved.

   7              Capital Redemption Reserve 

The capital redemption reserve is created on the cancellation of shares equal to the par value of shares cancelled. This reserve is not distributable.

   8              Trade and Other Payables 
 
                                                  30 June 2018   31 December 2017 
                                                       US$'000            US$'000 
-----------------------------------------------  -------------  ----------------- 
 Administration fees payable                                14                 19 
 Audit fee payable                                          21                 42 
 CREST service provider fee payable                          7                  6 
 Directors' fees and expenses payable                        6                  - 
 Subsidiary expenses to be paid by the Company              19                 17 
 Other sundry creditors                                     13                 13 
                                                            80                 97 
-----------------------------------------------  -------------  ----------------- 
 

The fair value of the above financial liabilities approximates their carrying amounts.

   9              Operating and Administration Expenses 
 
                                            Period ended    Period ended 
                                            30 June 2018    30 June 2017 
                                                 US$'000         US$'000 
---------------------------------------  ---------------  -------------- 
 Administration expenses                              59              72 
 Administrator and Registrar fees                     30              41 
 Audit fees                                           21              28 
 Directors' fees                                     112             115 
 Professional fees                                    48             214 
 Other                                                20              20 
---------------------------------------  ---------------  -------------- 
 Operating and administration expenses               290             490 
---------------------------------------  ---------------  -------------- 
 

Administrator and Registrar fees

The Administrator receives a fee on a time spent basis, subject to a minimum monthly fee of GBP2,750, payable quarterly in arrears.

Administration fees expensed by the Company for the period ended 30 June 2018 amounted to US$26,160 (30 June 2017: US$37,451).

The Administrator provides general secretarial services to the Company, for which it receives a minimum annual fee of GBP5,000. Additional fees, based on time and charges, apply where the number of Board meetings exceeds four per annum. For attendance at meetings not held in the Isle of Man, an attendance fee of GBP1,000 per day or part thereof is charged. The fees payable by the Company for general secretarial services for the period ended 30 June 2018 amounted to US$3,964 (30 June 2017: US$3,901).

Administration fees of the Mauritian subsidiaries for the period ended 30 June 2018 amounted to US$7,066 (30 June 2017: US$8,625).

Administration fees of PME Properties Limited for the period ended 30 June 2018 amounted to US$21,525 (30 June 2017: US$34,897).

Directors' Remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Directors permitted under the Articles of Association is GBP200,000 per annum. The Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The Executive Directors are entitled to receive annual basic salaries of GBP75,000.

Directors' Remuneration (continued)

Total fees and basic remuneration (including VAT where applicable) and expenses payable by the Company for the period ended 30 June 2018 amounted to US$111,633 (30 June 2017: US$114,758) and was split as below. Directors' insurance cover payable amounted to US$14,877 (30 June 2017: US$14,877).

 
                           Period ended    Period ended 
                           30 June 2018    30 June 2017 
                                US$'000         US$'000 
-----------------------  --------------  -------------- 
 Paul Macdonald                      50              49 
 Lawrence Kearns                     55              54 
 Expense reimbursement                7              12 
                                    112             115 
-----------------------  --------------  -------------- 
 
   10            Operating Segments 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The chief operating decision-makers have been identified as the Board of Directors.

The Board reviews the Company's internal reporting in order to assess performance and allocate resources. It has determined the operating segments based on these reports. The Board considers the business on a project by project basis by type of business. The type of business is transport (railway) and leasehold property.

 
 Six months ended 30 June 2018                                       Transport   Leasehold    Other*     Total 
                                                                                  Property 
                                                               PME Locomotives      PME TZ 
                                                                                  Property 
                                                                       US$'000     US$'000   US$'000     US$'000 
------------------------------------------------------------  ----------------  ----------  --------  ---------- 
 Net gains/(losses) on financial assets at fair value 
  through profit or loss                                                  (16)          59         -          43 
 Profit/(loss) for the period                                             (16)          59     (298)       (255) 
------------------------------------------------------------  ----------------  ----------  --------  ---------- 
 
 

* Other refers to income and expenses of the Company not specific to any specific sector such as income on un-invested funds and corporate expenses.

 
 Six months ended 30 June 2017                                         Transport   Leasehold   Other**     Total 
                                                                                    Property 
                                                                 PME Locomotives      PME TZ 
                                                                                    Property 
                                                                         US$'000     US$'000   US$'000     US$'000 
--------------------------------------------------------------  ----------------  ----------  --------  ---------- 
 Net losses on financial assets at fair value through profit 
  or loss                                                                    128       (196)         -        (68) 
 Dividend income                                                               -         226         -         226 
 Loss for the period                                                         128          30     (488)       (330) 
--------------------------------------------------------------  ----------------  ----------  --------  ---------- 
 
 

** Other refers to income and expenses of the Company not specific to any specific sector such as income on un-invested funds and corporate expenses.

 
 30 June 2018                 Transport   Leasehold    Other*     Total 
                                           Property 
                        PME Locomotives      PME TZ 
                                           Property 
                                US$'000     US$'000   US$'000     US$'000 
---------------------  ----------------  ----------  --------  ---------- 
 Segment assets                       9       4,749       237       4,995 
 Segment liabilities                  -           -      (80)        (80) 
---------------------  ----------------  ----------  --------  ---------- 
 
 

* Other assets comprise cash and cash equivalents US$217,664 and other assets US$19,297.

 
 31 December 2017             Transport         Leasehold   Other**     Total 
                                                 Property 
                        PME Locomotives   PME TZ Property 
                                US$'000           US$'000   US$'000     US$'000 
---------------------  ----------------  ----------------  --------  ---------- 
 Segment assets                       4             4,683       580       5,267 
 Segment liabilities                  -                 -      (97)        (97) 
---------------------  ----------------  ----------------  --------  ---------- 
 
 

** Other assets comprise cash and cash equivalents US$554,414 and other assets US$26,460.

   11            Risk Management 

The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The financial risks relate to the following financial instruments: financial assets at fair value through profit or loss, loans and receivables, cash and cash equivalents, secured loan and trade and other payables. There has been no material change in the market, credit or liquidity risk profile since the year ended 31 December 2017.

There have been no changes in risk management policies or responsibilities since the year end. The risk management is carried out by the Executive Directors.

These interim financial statements do not include all financial risk management information and disclosures required for full annual financial statements and should be read in conjunction with the financial statements of the Company as at and for the year ended 31 December 2017.

   12            Contingent Liabilities and Commitments 

The Company has no contingent liability. In relation with its financial asset at fair value through profit or loss, PME Properties Limited has entered into a number of operating lease agreements in respect of property. The lease terms are between one and ten years and the majority of the lease agreements are renewable at the end of the lease period at market rates.

The Group's future aggregate minimum lease payments, by virtue of its indirect investment in PME Properties Limited, under operating leases are as follows:

 
                                            30 June 2018   31 December 2017 
                                                 US$'000            US$'000 
-----------------------------------------  -------------  ----------------- 
 Amounts payable under operating leases: 
 Within one year                                      85                 19 
 In the second to fifth years inclusive              277                277 
 Beyond five years                                 1,100              1,160 
-----------------------------------------  -------------  ----------------- 
                                                   1,462              1,456 
-----------------------------------------  -------------  ----------------- 
 
   13            Related Party Transactions 

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions. Key management is made up of the Board of Directors.

The Directors of the Company are considered to be related parties by virtue of their influence over making operational decisions. Directors' remuneration is disclosed in note 9.

   14            Income Tax Expense 

The Company is resident for taxation purposes in the Isle of Man and is subject to income tax at a rate of zero per cent (2017: zero per cent).

    15           Post Balance Sheet Events 

In September 2018, the Company received net cash of US$188,442 from PME Locomotives (Mauritius) Limited by way of a dividend. This was funded by an intercompany loan repayment from PME Properties Limited and surplus cash from PME Locomotives (Mauritius) Limited.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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