TIDMCORO
RNS Number : 4399N
Coro Energy PLC
25 September 2023
25 September 2023
Coro Energy Plc
("Coro" or the "Company" and together with its subsidiaries the
"Group")
Half Year Report
Coro Energy PLC, the South East Asian energy company with a
natural gas and clean energy portfolio, announces its unaudited
interim results for the six-month period ended 30 June 2023.
Highlights
Results
-- Reduced loss after tax from continuing operations of $2.5m
(restated H1 2022: $3.8m) mainly due to the contribution of gross
profit from Vietnam operations and a reduction in net finance
expense. Total loss further reduced to $2.3m (restated H1 2022:
$3.0m) if gain for the period from discontinued Italy operations of
$0.2m is included.
-- Coro has a strong funding position from a combination of its
cash position of approximately US$0.7m (as at 30 June 2023), and
more recently supported by the post balance sheet events of the
sale of shares in ion Ventures Holding Ltd and a further advance of
Italy sale proceeds.
Operational
Gas
Italy
-- Coro signed a Sale and Purchase Agreement ("SPA") for the
disposal of its Italian natural gas assets (the "Italian
Portfolio") to Zodiac Energy plc ("Zodiac" or the "buyer") by way
of the sale of the entire issued share capital of Coro Europe
Limited for a total consideration of up to EUR 7.5M, including
contingent payments of up to an aggregate of EUR 1.5M through a 10%
net profit interest ("NPI") in the Italian Portfolio over the three
years from the date of completion of any disposal of the Italian
Portfolio. An initial cash payment of EUR 1.5M was received.
Following the interim period an Addendum to the Sale and Purchase
Agreement ("SPA") of the Italian Portfolio whereby Zodiac agreed to
make a further cash advance of EUR 0.7M. Coro has agreed to reduce
the sum due at completion by the further cash advance and an
additional EUR 0.14m. The total potential consideration for the
transaction is now therefore EUR 7.4M from the previous EUR
7.5M.
Indonesia
-- The operator of the Duyung PSC continues to make steady
progress commercially derisking the Mako gas field and preparing
for Final Investment Decision ("FID"). During the period t he
Operator Conrad advised of negotiation of key terms of the Mako gas
sales agreement between a Singaporean buyer and the Indonesian
regulator (SKKMigas).
-- In addition Conrad engaged a global investment bank to lead a
farm-down process for the divestment of a portion of its interest
in the Duyung Production Sharing Contract. Coro, which holds a
15.0% interest in the Duyung PSC, may participate pro rata in the
farm-down process as various drag and tag-along clauses exist in
the Joint Operating Agreement. Coro may also entertain a full exit,
depending on the terms offered.
Renewables
Vietnam
-- The 3MW solar rooftop project has been operational since
October 2022 and generated revenue of US$116,000 during the first
six months of 2023.
-- Coro announced the acquisition of a 2.39MW rooftop solar
portfolio from the shareholders of KIMY Trading and Service JSC
("KIMY"). The total acquisition price is US$1.3 million (US$543/MW)
with Coro assuming US$600,000 of existing specialist renewables
debt with a Vietnamese bank and the remainder of the consideration
in cash and shares.
-- Following the interim period Coro reported advanced talks
with Capton Energy regarding possible co-investment solutions for
Coro's 50MW pipeline of Vietnamese rooftop solar projects. Capton
Energy, based in Dubai, is a joint venture between Siemens
Financial Services and Desert Technologies.
Philippines
-- Coro has two development stage renewables projects in the
Oslob onshore area of Cebu in the Philippines, a 100MW solar
project and a 100MW wind project. The Company is currently focused
on securing land access alongside regulatory permits and approvals,
securing offtake arrangements, and data gathering at the proposed
sites.
-- Coro originally had a right to 80% of the dividends from the
Philippines projects and this was restructured to achieve 88% of
dividends.
-- The application for the Philippines Department of Energy's
Wind Energy Service Contract ("WESC") in respect of the wind
project was approved and a WESC was formally awarded.
Corporate
-- Coro announced on 24 August 2023 the sale of its 18.76%
shareholding in ion Ventures Holdings Ltd ("ion") to SLT1 LLC a
privately owned entity based in the USA for a cash consideration of
GBP1.25 million ($1.59 million), of which GBP1 million was paid
immediately, and the remaining GBP250,000 will be paid by the 31
March 2024.
-- Naheed Memon and Tom Richardson were appointed as independent
non-executive directors of the Company.
For further information please contact:
Coro Energy plc Via Vigo Consulting Ltd
James Parsons, Executive Chairman
Ewen Ainsworth, Chief Financial Officer
Cavendish Securities plc (Nominated Tel: 44 (0)20 7220 0500
Adviser)
Adrian Hadden
Ben Jeynes
Vigo Consulting (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Finlay Thomson
WH Ireland (Broker) Tel: 44 (0)20 7220 1670 / 44
Harry Ansell (0)113 946 618
Katy Mitchell
Gneiss Energy Limited (Financial Advisor) Tel: 44 (0)20 3983 9263
Jon Fitzpatrick
Doug Rycroft
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation 596/2014 which is
part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
STATEMENT FROM THE CHAIRPERSON
Coro's strategy remains to monetise the Duyung PSC through the
operator's farm-out process, repay or restructure our corporate
debt, complete the sale of our Italian assets, and then
strategically invest to grow our South East Asian renewables
business. The Company is also seeking to secure new opportunities
in South East Asia, which will assist the regional transition away
from its over-reliance on coal while meeting its significant and
growing energy demand.
Consistent with this strategy, Coro continues to make
operational progress across all aspects of the business. Recently,
this has included securing a Gas Sales Agreement Heads at the
Company's flagship Indonesian gas asset, securing a Wind Energy
Services Contract and ordering a Met Mast in the Philippines
renewables business, commencing detailed negotiations following
receipt of an indicative offer to fund our Vietnamese rooftop solar
business and providing additional near term funding with both the
sale of our Italian gas assets and our interest in IoN Ventures
Limited. The IoN Ventures investment was sold at a 2.5 times
premium to the original investment, some two years prior.
We see the Company's renewables portfolio, spanning Utility
Scale wind and solar in the Philippines and Commercial and
Industrial (C&I) rooftop solar in Vietnam, as both the future
of our business and an important part of the energy mix in South
East Asia. The opportunities to accelerate growth in both countries
are significant and we believe the window to position Coro as one
of the first movers in this space remains open.
It is in this context that we are delighted to present our
interim report to shareholders.
Gas
Italy
As announced on 27 March 2023 Coro signed a Sale and Purchase
Agreement ("SPA") for the disposal of its Italian natural gas
assets to Zodiac Energy plc by way of the sale of the entire issued
share capital of Coro Europe Limited for a total consideration of
up to EUR 7.5M, including contingent payments of up to an aggregate
of EUR 1.5M through a 10% net profit interest ("NPI") in the
Italian Portfolio over the three years from the date of completion
of any disposal of the Italian Portfolio. To date, Coro has
received a cash advance on the total consideration of EUR 2.5M
subject to confirmation of the normal regulatory approvals for the
transaction.
Indonesia
The Mako gas field is one of the largest gas discoveries (437
Bcf gross, full field) 2C (contingent recoverable resources) in the
West Natuna Basin and, the Directors believe, the largest confirmed
undeveloped resource in the area.
The Operator of the Duyung PSC is West Natuna Exploration Ltd
("WNEL"), a 100%-owned subsidiary of Conrad Asia Energy Ltd, and
has continued to technically mature the development of the Mako gas
field alongside negotiations of a GSA, both in preparation for
FID.
Coro announced on 12 September 2023 that the operator of the
Duyung PSC had signed a non-binding Term Sheet with Sembcorp Gas
Pte. Ltd. for a long-term gas sales agreement for the Mako gas
field. Critically, the Term Sheet has been endorsed by the
Indonesian petroleum upstream regulator, SKK Migas. The Operator
has indicated finalisation of a GSA and FID before the end of Q4
2023.
During 2023 the Operator has engaged a global investment bank to
lead a farm-down process for the divestment of a portion of its
interest in the Duyung Production Sharing Contract. Coro, which
holds a 15.0% interest in the Duyung PSC, may participate pro rata
in the farm-down process as various drag and tag along clauses
exist in the Joint Operating Agreement. Coro may also entertain a
full exit, depending on the terms offered.
Renewables
Vietnam
On 11 April 2022, Coro announced the entry into a 25-year PPA
for its first rooftop solar project in Vietnam.
The PPA was entered into by Coro Renewables Vietnam (85% owned
by Coro and 15% owned by Coro's local partner Vinh Phuc Energy JSC)
and Phong Phu, a listed Vietnamese high volume manufacturer of
textiles, who will purchase up to 3MW of electricity annually.
The 3MW solar rooftop project has been operational since October
2022 and generated revenue of US$116,000 during the first six
months of 2023.
On 15 June 2023, Coro announced the acquisition of a 2.39MW
rooftop solar portfolio from the shareholders of KIMY Trading and
Service JSC ("KIMY"). The total acquisition price is US$1.3 million
(US$543/MW) with Coro assuming US$600,000 of existing specialist
renewables debt with a Vietnamese bank and the remainder of the
consideration in cash and shares.
Coro continues to evaluate further solar projects in
Vietnam.
Philippines
Coro has two development stage renewables projects in the Oslob
onshore area of Cebu in the Philippines, a 100MW solar project and
a 100MW wind project. The Company is currently focused on securing
land access alongside regulatory permits and approvals, securing
offtake arrangements, and data gathering at the proposed sites.
Coro originally had a right to 80% of the dividends from the
Philippines projects and this was restructured to achieve 88% of
dividends.
The application for the Philippines Department of Energy's Wind
Energy Service Contract ("WESC") in respect of the wind project was
approved and a WESC was formally awarded.
Coro continues to evaluate further wind and solar projects in
the Philippines.
Corporate
Coro has a strong funding position from a combination of its
cash position of approximately US$0.7m (as at 30 June 2023), and
more recently supported by the post balance sheet events of the
sale of shares in ion Ventures Holding Ltd (receipt of GBP1m in
cash) and a further advance of Italy sale proceeds (receipt of EUR
0.7M in cash).
Naheed Memon was appointed as an independent non-executive
director of the Company.
Post Reporting Period
Indonesia
As already mentioned Coro announced on 12 September 2023 that
the operator of the Duyung PSC had signed a non-binding Term Sheet
with Sembcorp Gas Pte. Ltd. for a long-term gas sales agreement for
the Mako gas field. Critically, the Term Sheet has been endorsed by
the Indonesian petroleum upstream regulator, SKK Migas. The
Operator has indicated finalisation of a GSA and FID before the end
of Q4 2023.
Italy
An Addendum to the Sale and Purchase Agreement ("SPA") of the
Italian Portfolio whereby Zodiac agreed to make a further cash
advance of EUR 0.7M which was subsequently received was announced
on 10 August 2023. The total cash advance received to date is now
EUR 2.5M. Coro has agreed to reduce the sum due at completion by
the further cash advance and an additional EUR 0.14m. The total
potential consideration for the transaction is now therefore EUR
7.4M from the previous EUR 7.5M.
Vietnam
Advanced talks with Capton Energy regarding possible
co-investment solutions for Coro's 50MW pipeline of Vietnamese
rooftop solar projects. Capton Energy, based in Dubai, is a joint
venture between Siemens Financial Services and Desert
Technologies.
Corporate
As announced on 24 August 2023 Coro agreed to sell its 18.76%
shareholding in ion Ventures Holdings Ltd ("ion") to SLT1 LLC a
privately owned entity based in the USA for a cash consideration of
GBP1.25 million ($1.59 million), of which GBP1 million was paid
immediately, and the remaining GBP250,000 will be paid by the 31
March 2024.
Tom Richardson was appointed as an independent non-executive
director of the Company.
James Parsons
Executive Chair
FINANCIAL REVIEW
Results from continuing operations
The Group made a loss after tax from continuing operations of
$2.5m (restated H1 2022: $3.8m). The overall reduction in loss
after tax compared to the first half of 2022 was primarily due to
the decrease in net finance expense of $1.2m, which comprised
mainly of an increase in unrealised foreign exchanges gains related
to the translation of the Eurobond debt and the gross profit
contribution from Vietnam operations.
In aggregate, general and administrative expenses of $1.6m
(restated H1 2022: $1.6m) was unchanged from the comparative
period. As shown in more detail in note 4, an increase of $109k in
business development expenses and an increase in Duyung related
general and administrative expenses of $57k was offset by cost
savings of $291k in other areas, notably investor and public
relations costs (reduction of 93k) and corporate costs (reduction
of $75k) as management focussed on cost control. The increase in
share based payments of $121k is a non-cash expense.
Results from discontinued operations
A sale and purchase agreement with respect to the disposal of
the Italian gas portfolio was executed on 27 March 2023, and an
initial cash payment of EUR1.5m was received during the reporting
period. The sale remains dependent only on customary regulatory
consents.
The accounting profit after tax from discontinued operations for
the period was $0.2m, lower than $0.8m (restated) reported in the
comparative period. This was primarily due to a reduction in gross
profit due to a combination of lower gas prices achieved in
comparison with the same comparative period and higher associated
production costs. However focus remained on cost control.
Going concern
The interim financial statements have been prepared under the
going concern assumption, which presumes that the Group will be
able to meet its obligations as they fall due for the foreseeable
future.
The Group ended the period with cash of $0.65m. During the
reporting period the Group increased its available cash resources
through an advance of US $1.6m of the consideration for the sale of
the Italian gas portfolio. Subsequent to the reporting date the
Group announced the sale of its entire investment in ion Ventures
Holdings Limited for a cash consideration of GBP1.25m, of which
GBP1m was paid immediately, as well as receiving a further advance
of EUR0.7m of the consideration for the sale of the Italian gas
portfolio.
Management have prepared a consolidated cash flow forecast for
the period to 30 September 2024 which shows that the Group has
sufficient cash headroom to meet its obligations during this
period. However, this conclusion is conditional on the Group
successfully repaying or restructuring its Eurobond obligations.
Currently, the bonds are scheduled to mature in April 2024 when
principal of EUR22.5m ($24.5m) will become repayable in full along
with accrued and not paid interest of EUR6.8m ($7.4m).
The directors have a reasonable expectation that repayment or a
debt restructuring can be achieved prior to maturity.
Negotiations with bondholders have not yet commenced, and the
ability of the Company to successfully restructure the bonds is not
guaranteed. However, based on the above, the Directors consider it
appropriate to continue to adopt the going concern basis of
accounting in preparing the Group financial statements for the
period ended 30 June 2023. Should the Group be unable to continue
trading, adjustments would have to be made to reduce the value of
the assets to their recoverable amounts, to provide for further
liabilities which might arise and to classify fixed assets as
current.
Ewen Ainsworth
Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended 30 June 2023
30 June 2023 30 June 2022
Restated
Notes $'000 $'000
-------------------------------------------------- ----- ------------ ------------
Revenue 116 -
Depreciation and amortisation expense (41) -
-------------------------------------------------- ----- ------------ ------------
Gross profit 75 -
General and administrative expenses 4 (1,633) (1,637)
Depreciation expense (6) (9)
Share of loss of associates (48) (47)
-------------------------------------------------- ----- ------------ ------------
Loss from operating activities (1,612) (1,693)
Finance income 1,273 404
Finance expense (2,203) (2,528)
-------------------------------------------------- ----- ------------ ------------
Net finance expense 4 (930) (2,124)
-------------------------------------------------- ----- ------------ ------------
Loss before income tax (2,542) (3,817)
Income tax benefit / (expense) - -
-------------------------------------------------- ----- ------------ ------------
Loss for the period from continuing operations (2,542) (3,817)
Discontinued operations
Gain for the period from discontinued operations 232 803
-------------------------------------------------- ----- ------------ ------------
Total loss for the period (2,310) (3,014)
-------------------------------------------------- ----- ------------ ------------
Other comprehensive income/loss
Items that may be reclassified to profit
and loss
Exchange differences on translation of foreign
operations (1,496) 2,124
Total comprehensive loss for the period (3,806) (890)
Loss attributable to:
Owners of the company (2,296) (3,011)
Non-controlling interests (14) (3)
Total comprehensive loss attributable to:
Owners of the company (3,792) (887)
Non-controlling interests (14) (3)
Basic loss per share from continuing operations
($) 5 (0.001) (0.002)
Diluted loss per share from continuing operations
($) 5 (0.001) (0.002)
Basic profit per share from discontinued
operations ($) 5 0.0001 0.0004
Diluted profit per share from discontinued
operations ($) 5 0.0001 0.0004
The above condensed consolidated statement of comprehensive
income should be read in conjunction with the accompanying
notes.
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2023
31 December
30 June 2023 2022
Notes $'000 $'000
--------------------------------------- ----- ------------ -----------
Non-current assets
Property, plant and equipment 6 1,802 1,854
Intangible assets 7 19,553 18,896
Investment in associates 245 259
--------------------------------------- ----- ------------ -----------
Total non-current assets 21,600 21,009
--------------------------------------- ----- ------------ -----------
Current assets
Cash and cash equivalents 651 166
Trade and other receivables 204 213
Inventory 34 34
Total current assets 889 413
--------------------------------------- ----- ------------ -----------
Assets of disposal group held for sale 8,826 9,710
--------------------------------------- ----- ------------ -----------
Total assets 31,315 31,132
--------------------------------------- ----- ------------ -----------
Liabilities and equity
Current liabilities
Trade and other payables 2,531 819
Borrowings 8 29,125 -
--------------------------------------- ----- ------------ -----------
Total current liabilities 31,656 819
--------------------------------------- ----- ------------ -----------
Non-current liabilities
Borrowings 8 - 28,183
--------------------------------------- ----- ------------ -----------
Total non-current liabilities - 28,183
--------------------------------------- ----- ------------ -----------
Liabilities of disposal group held for
sale 9,024 9,443
--------------------------------------- ----- ------------ -----------
Total liabilities 40,680 38,445
--------------------------------------- ----- ------------ -----------
Equity
Share capital 9 3,826 3,184
Share premium 9 51,762 50,862
Merger reserve 9,708 9,708
Other reserves 10 5,983 7,267
Non-controlling interests (80) (66)
Accumulated losses (80,564) (78,268)
--------------------------------------- ----- ------------ -----------
Total equity (9,365) (7,313)
--------------------------------------- ----- ------------ -----------
Total equity and liabilities 31,315 31,132
--------------------------------------- ----- ------------ -----------
The above condensed consolidated balance sheet should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2022
Share Share Merger Other Accumulated Non-controlling
capital premium Reserve Reserves Losses interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Balance at 1 January
2022 2,943 50,461 9,708 4,181 (72,823) - (5,531)
Total comprehensive
loss for the period:
Loss for the period - - - - (3,011) (3) (3,014)
Other comprehensive
income - - - 2,124 - - 2,124
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Total comprehensive
loss for the period - - - 2,124 (3,011) (3) (890)
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Transactions with
owners recorded directly
in equity:
Share based payments
for services rendered - - - 90 - - 90
Balance at 30 June
2022 2,943 50,461 9,708 6,395 (75,834) (3) (6,330)
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2023
Share Share Merger Other Accumulated Non-controlling
capital premium Reserve Reserves Losses interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Balance at 1 January
2023 3,184 50,862 9,708 7,267 (78,268) (66) (7,313)
Total comprehensive
loss for the period:
Loss for the period - - - - (2,296) (14) (2,310)
Other comprehensive
loss - - - (1,496) - - (1,496)
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Total comprehensive
loss for the period - - - (1,496) (2,296) (14) (3,806)
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
Transactions with
owners recorded directly
in equity:
Issue of share capital 642 900 - - - - 1,542
Share based payments
for services rendered - - - 212 - - 212
Balance at 30 June
2023 3,826 51,762 9,708 5,983 (80,564) (80) (9,365)
-------------------------- -------- -------- -------- --------- ----------------- --------------- -------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended 30 June 2023
30 June 2023 30 June 2022
Restated
$'000 $'000
------------------------------------------------------ ------------ ------------
Cash flows from operating activities
Receipts from customers 2,168 2,425
Payments to suppliers and employees (3,761) (3,461)
Interest paid - -
------------------------------------------------------ ------------ ------------
Net cash used in operating activities (1,593) (1,036)
------------------------------------------------------ ------------ ------------
Cash flow from investing activities
Payments for property, plant & equipment (5) (465)
Payments for intangible assets (507) (446)
Refunds related to development intangible assets 4 -
Advance receipt from sale of Italian operations 1,639 -
------------------------------------------------------ ------------ ------------
Net cash provided by / (used in) investing activities 1,131 (911)
------------------------------------------------------ ------------ ------------
Cash flows from financing activities
Net cash provided by / (used in) financing activities - -
------------------------------------------------------ ------------ ------------
Net decrease in cash and cash equivalents (462) (1,947)
------------------------------------------------------ ------------ ------------
Cash and cash equivalents brought forward 1,616 3,551
------------------------------------------------------ ------------ ------------
Effects of exchange rate changes on cash
and cash equivalents (30) 12
------------------------------------------------------ ------------ ------------
Cash and cash equivalents carried forward 1,124 1,616
------------------------------------------------------ ------------ ------------
Cash and cash equivalents carried forward at 30 June 2023
includes $473k relating to discontinued operations (2022: $1.45m)
and $651k relating to continuing operations (2022: $166k).
The above condensed consolidated statement of cash flows should
be read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 1: Basis of preparation of the interim financial
statements
The condensed consolidated interim financial statements of Coro
Energy plc (the "Group") for the six month period ended 30 June
2023 have been prepared in accordance with Accounting Standard IAS
34 Interim Financial Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 December 2022, which was prepared under International
Financial Reporting Standards (IFRS) in conformity with the
requirements of the Companies Act 2006, and any public
announcements made by Coro Energy plc during the interim reporting
period.
These condensed consolidated interim financial statements do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2022 prepared under IFRS have been filed
with the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been
audited.
The condensed consolidated interim financial statements of the
Group are presented in United States Dollars ("USD" or "$"),
rounded to the nearest $1,000.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period,
except as set out below.
Basis of preparation - going concern
The interim financial statements have been prepared under the
going concern assumption, which presumes that the Group will be
able to meet its obligations as they fall due for the foreseeable
future.
The Group ended the period with cash of $0.65m. During the
reporting period the Group increased its available cash resources
through an advance of US $1.6m of the consideration for the sale of
the Italian gas portfolio. Subsequent to the reporting date the
Group announced the sale of its entire investment in ion Ventures
Holdings Limited for a cash consideration of GBP1.25m, of which
GBP1m was paid immediately, as well as receiving a further advance
of EUR0.7m of the consideration for the sale of the Italian gas
portfolio.
Management have prepared a consolidated cash flow forecast for
the period to 30 September 2024 which shows that the Group has
sufficient cash headroom to meet its obligations during this
period. However, this conclusion is conditional on the Group
successfully repaying or restructuring its Eurobond obligations.
Currently, the bonds are scheduled to mature in April 2024 when
principal of EUR22.5m ($24.5m) will become repayable in full along
with accrued and not paid interest of EUR6.8m ($7.4m).
The directors have a reasonable expectation that repayment or a
debt restructuring can be achieved prior to maturity.
Negotiations with bondholders have not yet commenced, and the
ability of the Company to successfully restructure the bonds is not
guaranteed. However, based on the above, the Directors consider it
appropriate to continue to adopt the going concern basis of
accounting in preparing the Group financial statements for the
period ended 30 June 2023. Should the Group be unable to continue
trading, adjustments would have to be made to reduce the value of
the assets to their recoverable amounts, to provide for further
liabilities which might arise and to classify fixed assets as
current.
a) New and amended standards adopted by the Group
New and amended standards which became applicable on 1 January
2023 do not have a material impact on the Group, and the Group did
not have to change its accounting policies or make retrospective
adjustments as a result of adopting these standards/amendments.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
a) New accounting policies adopted by the Group
There were no new accounting policies adopted by the Group
during the period, nor any amendments to existing accounting
policies.
Note 2: Significant changes
There have been no significant changes affecting the financial
position and performance of the Group during the six months to 30
June 2023. The results of the Group for the comparative period to
30 June 2022 have been restated to classify the results of the
Italian gas portfolio as a discontinued operation. Refer to note
11.
For further discussion of the Group's performance and financial
position refer to the Chairman and CEO's Statement.
The Group's results are not materially impacted by
seasonality.
Note 3: Segment information
The Group's reportable segments as described below are based on
the Group's geographic business units. This includes the Group's
upstream gas operations in Italy, upstream gas operations and
renewable energy operations in South East Asia, along with the
corporate head office in the United Kingdom. This reflects the way
information is presented to the Group's Chief Operating Decision
Maker, which is the Executive Chair.
Italy Asia UK Total
--------------
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2023 2022 Restated 2023 2022 Restated 2023 2022 Restated 2023 2022 Restated
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------- -------- -------------- -------- -------------- -------- -------------- -------- --------------
Depreciation
and
amortisation - - (41) - (6) (9) (47) (9)
Finance
expense - - - - (1,718) (2,528) (1,718) (2,528)
Share of loss
of
associates - - - - (48) (47) (48) (47)
Segment loss
before
tax from
continuing
operations - - (286) (237) (2,256) (3,580) (2,542) (3,817)
Segment profit
before
tax from
discontinued
operations
(2022
restated) 232 803 - - - - 232 803
-------------- -------- -------------- -------- -------------- -------- -------------- -------- --------------
Italy Asia UK Total
--------------
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2023 2022 Restated 2023 2022 Restated 2023 2022 Restated 2023 2022 Restated
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------- -------- -------------- -------- -------------- -------- -------------- -------- --------------
Segment assets 8,826 9,710 21,133 20,129 1,356 1,293 31,315 31,132
Segment
liabilities (9,024) (9,548) (352) (182) (31,304) (28,715) (40,680) (38,445)
-------------- -------- -------------- -------- -------------- -------- -------------- -------- --------------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 4: Profit and loss information
a) General and administrative expenses
General and administrative expenses in the income statement
includes the following significant items of expenditure:
30 June 30 June
2023 2022
Restated
$'000 $'000
------------------------------------ ------- ---------
Employee benefits expense 514 592
Business development 418 309
Corporate and compliance costs 222 297
Investor and public relations 42 135
Other G&A 158 101
G&A - non-operated joint operations 67 112
Share based payments (note 9) 212 91
1,633 1,637
------------------------------------ ------- ---------
b) Finance income / expense
30 June 30 June
2023 2022
Restated
$'000 $'000
------------------------------------ ------- ---------
Finance income
Foreign exchange gains 1,273 404
Finance expense
Interest on borrowings 1,718 1,982
Other finance charges 3 -
Unrealised loss on foreign exchange - 34
Foreign exchange losses 482 512
Net finance income / (expense) (930) (2,124)
------------------------------------ ------- ---------
Note 5: Loss per share
30 June
30 June 2022
2023 Restated
------------------------------------------------------ ------- ---------
Basic loss per share from continuing operations
($) (0.001) (0.002)
Diluted loss per share from continuing operations
($) (0.001) (0.002)
Basic profit per share from discontinued operations
($) 0.0001 0.0004
Diluted profit per share from discontinued operations
($) 0.0001 0.0004
------------------------------------------------------ ------- ---------
The calculation of basic loss per share from continuing
operations was based on the loss attributable to shareholders of
$2.5m (2022: $3.8m) and a weighted average number of ordinary
shares outstanding during the half year of 2,348,242,699 (2022:
2,124,035,967).
Diluted loss per share from continuing operations for the
current and comparative periods is equivalent to basic loss per
share since the effect of all dilutive potential ordinary shares is
anti-dilutive.
Basic profit per share from discontinued operations was based on
the profit attributable to shareholders from discontinued
operations of $0.2m (2022: $0.8m).
Diluted profit per share from discontinued operations for the
current and comparative periods include the potential dilutive
effect of all share options and warrants that were "in the money"
as at the reporting date. The potential dilutive shares includes
options issued to Directors and management.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 6: Property, plant and equipment
30 June 31 December
2023 2022
$'000 $'000
------------------------------- -------- -----------
Office furniture and equipment 7 3
Solar assets 1,795 1,851
1,802 1,854
------------------------------- -------- -----------
Reconciliation of the carrying amounts for each material class
of intangible assets for the six months ended 30 June 2023 are set
out below:
Solar assets:
30 June
2023
$'000
Carrying amount at beginning of period 1,851
Depreciation and amortisation (41)
Retranslation differences (15)
----------------------------------------
Carrying amount at end of period 1,795
---------------------------------------- ---------
Solar assets comprise of the Group's 3-megawatt pilot rooftop
solar project in Vietnam.
Note 7: Intangible assets
30 June 31 December
2023 2022
$'000 $'000
---------------------------------- -------- -----------
Exploration and evaluation assets 18,214 17,707
Intangible development assets 436 428
Software 4 7
Goodwill 899 754
---------------------------------- -------- -----------
19,553 18,896
---------------------------------- -------- -----------
Reconciliation of the carrying amounts for each material class
of intangible assets for the six months ended 30 June 2023 are set
out below:
Exploration and evaluation assets :
30 June
2023
$'000
Carrying amount at beginning of period 17,707
Additions 507
Carrying amount at end of period 18,214
---------------------------------------- ---------
Exploration and evaluation assets relate to the Group's interest
in the Duyung PSC. No indicators of impairment of these assets were
noted.
Intangible development assets comprise expenditure directly
attributable to the design and development of identifiable and
unique renewables projects controlled by the Group in the
Philippines. No indicators of impairment of these assets were
noted.
Goodwill was initially recognised following the acquisition of
the renewables projects in the Philippines. During the six months
ended 30 June 2023, the Group acquired an additional entitlement to
dividends from its partners in these projects for a consideration
of $145k, which was paid by issuing new ordinary shares in the
Company (note 9). The Group's dividend entitlement increased from
80% to 88%. No impairment of goodwill was noted following testing
performed at 31 December 2022.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 8: Borrowings
30 June 31 December
2023 2022
$'000 $'000
------------ -------- -----------
Current
Eurobond 29,125 -
------------ -------- -----------
29,125 -
------------ -------- -----------
Non-current
Eurobond - 28,183
------------ -------- -----------
- 28,183
------------ -------- -----------
Borrowings relates to EUR22.5m Eurobonds with attached warrants
which were issued in 2019 to institutional investors. The bonds
were issued in two equal tranches A and B, ranking pari passu, with
Tranche A paying an annual 5% cash coupon and Tranche B accruing
interest at 5% payable on redemption. The bonds were scheduled to
mature on 12 April 2022 at 100% of par value plus any accrued and
unpaid coupon. However, in April 2022 the Group completed a
restructuring of the Eurobonds which extended the maturity date by
two years to 12 April 2024, removed all cash interest payment
obligations prior to the maturity date, and increased the coupon
interest rate from 5% to 10%. In the event of a sale of the Group's
interest in the Duyung PSC, the net cash proceeds of such
disposal(s) will be utilised to first repay the capital and rolled
up interest on the Eurobonds and thereafter to distribute 20% of
remaining net proceed(s) to holders of the Eurobonds. The remaining
net proceeds of any sales will be retained and/or distributed to
shareholders by the Company.
The restructured bonds were initially recognised at fair value
and subsequently are recorded at amortised cost, with an average
effective interest rate of 12.10%. The contingent payment upon the
sale of the Company's interest in the Duyung PSC has not been
considered in the estimate of the effective interest rate as it
meets the definition of a contingent liability.
Loan interest for quarters ended 12 October 2022, 12 January
2023 and 12 April 2023 were settled by newly issued ordinary shares
of the Company (note 9).
Note 9 : Share capital and share premium
30 June 30 June
2023 Nominal 2023
Number value Share Premium Total
000's $'000 $'000 $'000
---------------------------------- ---------- ------- ------------- -------
As at 1 January 2023 2,339,977 3,184 50,862 54,046
---------------------------------- ---------- ------- ------------- -------
Shares issued during the period:
Proceeds from share issuance for
Eurobond interest 486,882 594 804 1,398
Consideration for increase in
Philippines dividend entitlement
(note 7) 40,000 48 96 144
---------------------------------- ---------- ------- ------------- -------
Closing balance at 30 June 2023 2,866,859 3,826 51,762 55,588
---------------------------------- ---------- ------- ------------- -------
31 December 31 December
2022 Nominal Share 2022
Number value Premium Total
000's $'000 $'000 $'000
--------------------------------- ----------- ------- -------- -----------
As at 1 January 2022 2,124,036 2,943 50,461 53,404
--------------------------------- ----------- ------- -------- -----------
Shares issued during the period:
Proceeds from share issuance for
Eurobond interest 215,941 241 401 642
--------------------------------- ----------- ------- -------- -----------
Closing balance - 31 December
2022 2,339,977 3,184 50,862 54,046
--------------------------------- ----------- ------- -------- -----------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 10: Reserves
a) Other reserves
Share based payments reserve
The Group issued 70,000,000 options as a standalone award during
the period to directors and management. The options vest on the
third anniversary of the grant date and are subject to the
achievement of certain performance criteria, being a final
investment decision being taken by the partners to the Duyung PSC
or the successful sale of the Company's interest in the Duyung PSC.
Should the performance criteria not be met as it is no longer
relevant, the Remuneration Committee may permit the options to vest
it is deemed appropriate to do so. Vested options will be
exercisable at 0.255 British pence per ordinary share.
The options have been valued on the grant date using a Black
Scholes model, resulting in a valuation of GBP0.0013 per award. The
total value of the awards will be expensed over the vesting period
in line with the requirements of IFRS 2.
Functional currency translation reserve
The translation reserve comprises all foreign currency
differences arising from translation of the financial position and
performance of the parent company and certain subsidiaries which
have a functional currency different to the Group's presentation
currency of USD. The total loss on foreign exchange recorded in
other reserves for the period was $1.5m (2022: $2.1m gain).
Note 11: Restatement of comparative period in relation to
Italy
On 7 March 2022 the Group announced that having completed a full
review of the Italian assets it was decided that, despite the Group
remaining focused on South East Asia, to maximise shareholder
value, the Italian assets would no longer be marketed for sale and
would instead be managed for value and cash flow. As such the
Italian business temporarily did not qualify as a disposal group or
discontinued operation under IFRS 5 from this date and at 30 June
2022 and for the six months then ended.
The Group, in common with other European gas producers,
experienced a significant increase in wholesale gas prices since
March 2022, which resulted in a materially positive impact on the
value of the Italian operations. In August 2022, following
unsolicited approaches, the Group entered into an option agreement
with Zodiac Energy plc ("Zodiac") whereby Zodiac acquired the right
to acquire 100% of the issued share capital of Coro Energy Europe
Ltd, the wholly owned subsidiary holding the Groups Italian gas
portfolio, for a total consideration of up to EUR7.5m (the "Option
Agreement"). As announced by the Company on 24 August 2022, Zodiac
paid a non-refundable deposit of EUR0.3m with a further EUR5.7m to
be paid in cash on completion and further contingent payments up to
an aggregate of EUR1.5m through a net profit interest. A definitive
Sale and Purchase Agreement ("SPA") was executed on 27 March 2023
and an initial cash payment of EUR1.5m was received on 4 April
2023. The shareholders of the Company approved the disposal on 25
April 2023 and the disposal remains dependent only on customary
regulatory consents. The Group expects the disposal to complete
during Q4, 2023.
The Board of Directors are committed to the disposal of the
Italian operation under the terms of the SPA, and resultantly the
Group classified the assets and liabilities of its Italian business
as a disposal group held for sale, as well as a discontinued
operation, as at 31 December 2022 and as at 20 June 2023.
The comparative figures in these condensed consolidated
financial statements have been restated to show the Italian
business as discontinued operations. The table below set out the
impact of this restatement on the comparative figures.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 11: Restatement of comparative period in relation to Italy
(continued)
Effect on the condensed consolidated statement of comprehensive
income for the six months ended 30 June 2022:
Figure
previously
reported Adjustment Restated
$'000 $'000 $'000
Revenue 2,639 (2,639) -
Operating Costs (1,133) 1,133 -
Depreciation and amortisation expense (212) 212 -
========================================= ============ =========== =========
Gross profit loss 1,294 (1,294) -
General and administrative expenses (2,059) 422 (1,637)
Depreciation expense (20) 11 (9)
Impairment losses (1) 1 -
Share of loss of associates (47) - (47)
=========================================
Loss from operating activities (833) (860) (1,693)
Finance income 404 - 404
Finance expense (2,585) 57 (2,528)
----------------------------------------- ------------ ----------- ---------
Net finance income expense (2,181) 57 (2,124)
Loss before income tax expense (3,014) (803) (3,817)
Income tax benefit/(expense) - - -
----------------------------------------- ------------ ----------- ---------
Loss for the period from continuing
operations (3,014) (803) (3,817)
Loss for the period from discontinued
operations - 803 803
Total loss for the period (3,014) - (3,014)
Other comprehensive income/loss
Exchange differences on translation of
foreign operations 2,124 - 2,124
Total comprehensive loss for the period (890) - (890)
Loss attributable to:
Owners of the company (3,011) - (3,011)
Non-controlling interests (3) - (3)
Total comprehensive loss attributable
to:
Owners of the company (887) - (887)
Non-controlling interests (3) - (3)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 12: Interests in other entities
Asia
The Group's wholly owned subsidiary, Coro Energy Duyung
(Singapore) Pte Ltd, is the owner of a 15% interest in the Duyung
Production Sharing Contract ("PSC").
The Duyung PSC partners have entered into a Joint Operating
Agreement ("JOA"), which governs the arrangement. Through the JOA,
the Group has a direct right to the assets of the venture, and
direct obligation for its liabilities. Accordingly, Coro accounts
for its share of assets, liabilities and expenses of the venture in
accordance with the IFRSs applicable to the particular assets,
liabilities and expenses.
The operator of the venture is West Natuna Exploration Ltd
("WNEL"). WNEL is a company incorporated in the British Virgin
Islands and its principal place of business is Indonesia.
The Group's wholly owned subsidiary Coro Asia Renewables Ltd,
has a 88% economic interest in the Philippines company, Coro Clean
Energy Vietnam Inc, which owns 100% of three Philippines
incorporated subsidiaries that hold the Group's intangible
development assets in this country.
The Group's wholly owned subsidiary Coro Clean Energy Vietnam
Ltd, is the owner of a 85% interest in the Vietnamese company, Coro
Renewables VN1 Joint Stock Company, which owns 100% of Coro
Renewables VN2 Company Limited, which in tun owns 100% of Coro
Renewables Vietnam Company Limited ("CRVCL"). CRVCL is the operator
of a 3-megawatt pilot rooftop solar development in Vietnam.
Italy
The Group's Italian subsidiary, Apennine Energy SpA, is the
owner of the Group's Italian gas portfolio which is in the process
of being sold (note 11).
ion Ventures
In 2020, the Company acquired a 20.3% interest in ion Ventures
Holdings Limited which is treated as an associate and accounted for
under the equity method. The Group disposed of its entire
shareholding in August 2023 (note 14).
The Group's share of loss of associates for the 6 months ended
30 June 2023 was $48k (2022: loss $47k). There were no dividends
declared or paid by associates during the period.
Note 13: Contingencies and commitments
Commitments
Coro's share of the 2023 Duyung Work Programme and Budget is
estimated at $1.2m, which will be allocated between items of
capital expenditure and joint venture G&A. The Group had no
capital committed work programmes in its Philippine or Vietnam
operations.
Contingencies
The Company undertook to the Noteholders that in the event of a
sale of the Company's interest in the Duyung PSC to utilise the net
cash proceeds of such disposal(s) to first repay the capital and
rolled up interest on the Notes and thereafter to distribute 20% of
remaining net proceed(s) to Noteholders. The remaining net proceeds
of any sales would be retained and/or distributed to shareholders
by the Company. Due to its nature, it is not possible to quantify
the financial impact of this contingent liability.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2023
Note 14: Subsequent events
On 3 August 2023, the Company received an indicative funding
proposal from and is in advanced talks with Capton Energy regarding
possible co-investment solutions for the Company's Vietnamese
rooftop solar projects. Capton Energy, based in Dubai, is a joint
venture between Siemens Financial Services and Desert Technologies.
The funding proposal received is for Capton to buy into the
Company's current Vietnamese solar projects and provide investment
in the project pipeline of up to 50 megawatts. The Company has
committed to a four-month period of exclusivity for the parties to
conclude the transaction.
On 10 August 2023 the Company announced that it had signed an
Addendum to the Sale and Purchase Agreement ("SPA") in relation to
the Group's Italian gas portfolio, as previously announced on 27
March 2023. The buyer, Zodiac Energy plc ("Zodiac") has made a
further cash advance of EUR0.7m (the "Additional Advance") which
will bring the total advanced to Coro to date to EUR2.5m. The
Company has agreed to reduce the sum due at completion by the
Additional Advance and an additional EUR0.14m. Furthermore the
longstop date under the SPA has been extended to the 31 December
2023, and the requirement for the Company to settle the EUR1.86m
intercompany loan from Apennine Energy SpA has been replaced with
an assignment of the loan directly to Zodiac. Consequently the
residual amount expected to be received on completion is now
EUR1.36m with a further EUR0.14m to be received as soon as
practicable after completion.
On 24 August 2023 the Company announced that it has agreed to
sell its entire shareholding in ion Ventures Holdings Ltd ("ion")
to SLT1 LLC, a privately owned entity based in the USA, for a cash
consideration of GBP1.25m ($1.59m), of which GBP1m will be paid
immediately, and the remaining GBP250k will be paid by 31 March
2024. The shareholding was acquired by Coro for GBP500k ($662k) in
2020.
On 12 September 2023 the Company announced that the operator of
the Duyung PSC had signed a non-binding Term Sheet with Sembcorp
Gas Pte. Ltd. for a long-term gas sales agreement for the Mako gas
field. The Term Sheet has been endorsed by the Indonesian petroleum
upstream regulator (SKK Migas). The Operator has indicated
finalisation of a GSA and FID before the end of Q4 2023.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR USUWROVUKUAR
(END) Dow Jones Newswires
September 25, 2023 02:00 ET (06:00 GMT)
Coro Energy (LSE:CORO)
Historical Stock Chart
From Apr 2024 to May 2024
Coro Energy (LSE:CORO)
Historical Stock Chart
From May 2023 to May 2024
