Brooge Energy Limited (“Brooge Energy” or the “Company”)
(NASDAQ: BROG), a midstream oil storage and service provider
strategically located outside the Strait of Hormuz, adjacent to the
Port of Fujairah in the United Arab Emirates (“UAE”) through its
wholly-owned subsidiary Brooge Petroleum and Gas Investment Company
FZE (“BPGIC”), today announced its financial results for the full
year ended December 31, 2019.
Full Year 2019 Financial Highlights:
- Record revenue of $44 million, an increase of 23%
year-over-year
- Gross profit of $34 million, an increase of 29%
year-over-year
Operational Highlights:
- Phase I commenced operations in Jan 2018 and is comprised of 14
oil storage tanks with an aggregate oil storage capacity of 2.5
million barrels.
- Phase II construction commenced in September 2018 and is
expected to be comprised of 8 oil storage tanks with capacity for
3.8 million barrels. It is expected to be completed by the fourth
quarter 2020 and be at 100% utilization of capacity by the end of
2020.
- Brooge Energy expects the refinery to become operational in Q3
2021
- Phase III is expected to provide capacity for an additional 22
million barrels of oil, increasing total storage capacity to
approximately 4.5 million m3 and coming online in late 2022.
“We are pleased to report record financial
results for the full year 2019,” said Nicolaas L. Paardenkooper,
Chief Executive Officer of Brooge Energy. “Our impressive 23%
revenue growth for 2019 was driven by our multi-year agreement with
an offtake customer for our Phase I terminals, which operated at
full capacity throughout the whole year. Furthermore, we have
secured a multi-year contract for 100% of our Phase II storage
facility with the same customer. Phase II is expected to be
operational and in a position to start generating significant
revenues starting in the second half of 2020. The launch of our
Phase II operations will also expand our storage capabilities to
now include crude oil, as well as adding more capacity for fuel oil
and clean products.
“The disruption to oil markets caused by
COVID-19 showed the high strategic value of having well-located
storage assets, and we are pleased that our Phase I facilities
remain fully operational at this time, having experienced limited
impact from the COVID-19 pandemic. We continue to advance our
strategy to build out the largest oil storage facility in the Port
of Fujairah and have made meaningful progress toward this goal in
recent weeks, including signing an agreement to commence a Front
End Engineering Design (FEED) study and advancing negotiations with
a potential customer for the Phase III capacity. Once Phase III is
complete, which is anticipated to be in late 2022, we will have
storage capacity for approximately 4.5 million m3.”
Syed Masood, Chief Financial Officer of Brooge
Energy, commented on the financial results, “Our record revenue for
2019 was generated by fixed storage fees together with ancillary
fees for services that include blending, heating, inter-tank
transfers and throughput transfers. We are poised for significant
revenue growth commencing in late 2020 with the launch of our Phase
II operations, which are already fully contracted and will
significantly expand our total capacity to 6.3 million barrels. The
2019 financial results include several one-time costs that were
incurred when the Company secured a listing on NASDAQ in December
2019, such as additional legal, advisory and accounting fees that
are not expected to re-occur.”
Financial Results for the Full Year Ended December 31,
2019:
|
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2019 |
|
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2018 |
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|
2017 |
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|
|
Notes |
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|
USD |
|
|
USD |
|
|
USD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
3 |
|
|
|
44,085,374 |
|
|
|
35,839,268 |
|
|
|
89,593 |
|
Direct
costs |
|
4 |
|
|
|
(10,202,465 |
) |
|
|
(9,607,360 |
) |
|
|
(2,295,809 |
) |
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|
GROSS
PROFIT / (LOSS) |
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|
33,882,909 |
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|
26,231,908 |
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|
(2,206,216 |
) |
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Listing
expenses |
|
5 |
|
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|
(101,773,877 |
) |
|
|
- |
|
|
|
- |
|
General and
administrative expenses |
|
6 |
|
|
|
(2,608,984 |
) |
|
|
(2,029,260 |
) |
|
|
(574,266 |
) |
Finance
costs |
|
7 |
|
|
|
(5,730,535 |
) |
|
|
(6,951,923 |
) |
|
|
(966,926 |
) |
Changes in
fair value of |
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|
|
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|
|
|
|
|
derivative financial instruments |
|
18 |
|
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|
(328,176 |
) |
|
|
(1,190,073 |
) |
|
|
- |
|
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(LOSS)
PROFIT AND TOTAL COMPREHENSIVE |
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(LOSS) INCOME FOR THE YEAR |
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(76,558,663 |
) |
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16,060,652 |
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|
(3,747,408 |
) |
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|
|
|
|
|
|
|
|
|
|
|
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|
Basic and
diluted (loss) / earnings per share |
|
21 |
|
|
|
(0.95 |
) |
|
|
0.20 |
|
|
|
(0.05 |
) |
Revenue for the full year 2019 increased 23% to $44 million,
compared to $36 million in the full year 2018.
Gross profit for the full year 2019 was $34 million, resulting
in gross margin of 77%, compared to $26 million for the full year
2018.
The Company reported listing expenses of $101
million in 2019. As part of the business combination with Twelve
Seas in 2019, Twelve Seas’ net assets of USD 32.4 million were
assumed by the Company and the issuance of ordinary shares and
warrants by the Company was recognized at fair value of USD 131.0
million, with the resulting difference amounting to USD 98.6
million representing the listing expense recognized on the
transaction. In addition, the Group incurred other listing expenses
such as lawyers and consultants fees of USD 3.1 million, resulting
in a total listing expense of USD 101.9 million as reflected in the
consolidated statement of comprehensive income. These listing
expenses are one-off / non-recurring in nature and pertains only to
the year ended Dec 31, 2019. The acquisition has been accounted for
in terms of IFRS-2, which is aligned to guidance issued by the
IFRIC. The difference between the fair value of the consideration
paid and the fair value of the net assets acquired has been
recognized as listing expense in profit and loss.
Loss and total comprehensive loss for the year 2019 was $77
million compared to a profit of $16 million in the full year
2018.
Basic and diluted loss per share was $(0.95) in 2019, compared
with earnings per share of $0.20 in 2018.
Balance Sheet and Liquidity:The Company had
cash and cash equivalents of $20 million as of December 31,
2019.
Operational Update:
Phase I Update:Phase I commenced operations in Jan 2018 by
entering into an End User Agreement, a five-year lease and service
agreement with an international energy trading company (the
“Customer”). In August of 2019, the Company restructured its
agreement with the End User into a Customer Agreement, a four-year
lease and offtake agreement. To date, all of the Company’s revenues
are comprised of Phase I operations which includes a monthly fixed
fee to lease Phase I storage capacity regardless of whether the
Customer uses any storage capacity, monthly variable fees based on
the Customer’s, or its sublessee’s, usage of ancillary services,
and throughput, blending, heating and
inter-tank transfers.
Phase I is comprised of 14 oil storage tanks with an aggregate
geometric oil storage capacity of approximately 0.399 million
m3 and related infrastructure.
Phase II Update:Phase II expansion will include the construction
of 8 additional oil storage tanks with an aggregate geometric oil
storage capacity of approximately 0.601 million m3, which will
increase BPGIC’s aggregate geometric oil storage capacity to
approximately 1 million m3, or 6.3m barrels. After
operations of Phase II in Q4 2020, Brooge expects to be the second
largest non-captive storage provider in Fujairah. Construction of
Phase II commenced in September 2018. Upon completion of
construction, and similarly to Phase I, operations will commence on
a staggered basis to ensure a safe and efficient start-up of
operations. The Company has contracted phase 2 and anticipates 100%
utilization of capacity by the end of 2020.
Phase II is expected to provide storage and blending of crude
oil, in addition to fuel oil and clean products. As part of Phase
II, BROG is following a similar approach to Phase I by investing in
high-grade, long-life materials for the construction and
development of its facilities.
Refinery Update:The Company has entered into a refinery
agreement with its Phase I off take customer. The Refinery
Agreement provides that the parties will use their best efforts to
finalize the technical and design feasibility studies for a
refinery with a capacity of 25,000 bpd to be located on BPGIC’s
Phase I and II land and operated by Brooge Energy. Brooge Energy
and the Customer further agreed to negotiate a sublease agreement
and a joint venture agreement to govern the terms on which BPGIC
will sublease land to the Customer. BPGIC expects that the refinery
will produce low sulfur fuel oil in compliance with IMO 2020
requirements.
BPGIC expects the refinery to become operational in Q3 2021.
Phase III:The Company has secured a land lease to further expand
its storage capacity in the Port of Fujairah near its existing
facilities to increase from 1 million m3 in Phase I and
II to approximately 4.5 million m3. The Phase III Land is the
subject of ongoing feasibility studies, which, in parallel with
prospective end-user discussions, will enable BPGIC to
determine the optimal layout and product mix.
Phase III is expected to come online in late 2022.
COVID-19 Update and Outlook for Remainder of
2020The Company will continue to carefully monitor any
potential impact of COVID-19 on its operations, including travel
and construction timelines, and will re-evaluate its plans as the
situation evolves. Given the uncertainty surrounding the duration
and magnitude of COVID-19, Brooge’s management team and Board are
not yet willing to provide annual guidance at this time however
will evaluate issuing guidance in the future. The Company’s Phase I
facilities continue to operate at full capacity, with limited
impact from the COVID-19 pandemic.
Conference Call and Webcast Information
Date: |
July 7,
2020 |
Time: |
8:00 a.m.
ET / 4:00pm UAE |
Dial-in
numbers: |
+1
877-425-9470 (U.S.), 800 035 703 290 (UAE), +1-201-389-0878
(International) |
Instructions: |
Request
the “Brooge Energy Call” |
Live webcast: |
http://public.viavid.com/index.php?id=140122 |
About Brooge Energy LimitedBrooge Energy,
formerly Brooge Holdings Limited, conducts all of its business and
operations through its wholly-owned subsidiary Brooge Petroleum and
Gas Investment Company FZE (“BPGIC”), a Fujairah Free Zone Entity.
BPGIC is a midstream oil storage and service provider strategically
located outside the Strait of Hormuz adjacent to the Port of
Fujairah in the United Arab Emirates. BPGIC’s oil storage business
differentiates itself from competitors by providing its customers
with fast order processing times, excellent customer service and
high accuracy blending services with low oil losses. For more
information please visit www.broogeholdings.com.
Forward-Looking StatementsThis press release
contains “forward-looking statements” within the meaning of the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, that involve risks and uncertainties concerning
BPGIC’s and Brooge Energy’ expected financial performance, as well
as their strategic and operational plans. The actual results may
differ materially from expectations, estimates and projections due
to a number of risks and uncertainties and, consequently, you
should not rely on these forward looking statements as predictions
of future events. Words such as “expect,” “estimate,” “project,”
“budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,”
“will,” “could,” “should,” “believes,” “predicts,” “potential,”
“continue,” and similar expressions are intended to identify such
forward-looking statements. These risks and uncertainties include,
but are not limited to: (1) the ultimate geographic spread,
duration and severity of the coronavirus outbreak and the
effectiveness of actions taken, or actions that may be taken, by
governmental authorities to contain the outbreak or ameliorate its
effects; (2) BPGIC’s ability to obtain financing for Phase III on
commercially reasonable terms; (3) BPGIC’s ability to negotiate and
enter into development and offtake agreements on commercially
reasonable terms; (4) the results of technical and design
feasibility studies; (5) the loss of any end-users; (6) changes in
customer demand with respect to ancillary services provided by
BPGIC including throughput, blending, heating, and intertank
transfers; (7) BPGIC’s ability to effectively manage the risks and
expenses associated with the construction of Phase II, Phase III
and other growth and expansion projects; and (8) other risks and
uncertainties indicated from time to time in filings with or
submissions to the SEC by Brooge Energy. Readers are referred to
the most recent reports filed with or furnished to the SEC by
Brooge Energy. Readers are cautioned not to place undue reliance
upon any forward-looking statements, which speak only as of the
date made, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
Investor Contact:KCSA Strategic
CommunicationsValter Pinto / Elizabeth Barker+1 212-896-1254 or +1
212-896-1203BROG@kcsa.com orInvestor.relations@bpgic.com
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
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(Restated) |
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|
2019 |
|
|
2018 |
|
|
|
Notes |
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|
USD |
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|
USD |
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|
|
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|
ASSETS |
|
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|
Non-current assets |
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
8 |
|
|
|
263,228,588 |
|
|
|
197,629,114 |
|
Advances to
contractors |
|
10 |
|
|
|
21,664,764 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
284,893,352 |
|
|
|
197,629,114 |
|
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|
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|
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
9 |
|
|
|
179,644 |
|
|
|
147,090 |
|
Trade and
other receivables |
|
10 |
|
|
|
2,348,693 |
|
|
|
2,123,077 |
|
Bank
balances and cash |
|
11 |
|
|
|
19,830,771 |
|
|
|
37,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,359,108 |
|
|
|
2,307,518 |
|
|
|
|
|
|
|
|
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|
|
|
|
TOTAL
ASSETS |
|
|
|
|
|
307,252,460 |
|
|
|
199,936,632 |
|
|
|
|
|
|
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|
|
|
|
EQUITY
AND LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
12 |
|
|
|
8,804 |
|
|
|
8,000 |
|
Share premium |
|
12 |
|
|
|
101,775,834 |
|
|
|
1,353,285 |
|
Warrants |
|
13 |
|
|
|
16,983,200 |
|
|
|
- |
|
Shareholders’ accounts |
|
20 |
|
|
|
71,017,815 |
|
|
|
47,717,763 |
|
General
reserve |
|
14 |
|
|
|
680,643 |
|
|
|
680,643 |
|
(Accumulated
losses) retained earnings |
|
|
|
|
|
(65,340,421 |
) |
|
|
11,218,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
equity |
|
|
|
|
|
125,125,875 |
|
|
|
60,977,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
Term
loans |
|
15 |
|
|
|
74,160,950 |
|
|
|
- |
|
Lease
liability |
|
16 |
|
|
|
28,624,259 |
|
|
|
28,108,801 |
|
Provisions |
|
17 |
|
|
|
13,941 |
|
|
|
6,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,799,150 |
|
|
|
28,115,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
Bank
overdraft |
|
11 |
|
|
|
- |
|
|
|
3,745,048 |
|
Term
loans |
|
15 |
|
|
|
14,539,187 |
|
|
|
94,792,088 |
|
Accounts
payable, accruals and other payables |
|
19 |
|
|
|
61,115,121 |
|
|
|
9,003,798 |
|
Derivative
financial instruments |
|
18 |
|
|
|
1,518,249 |
|
|
|
1,190,073 |
|
Lease
liability |
|
16 |
|
|
|
2,154,878 |
|
|
|
2,112,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79,327,435 |
|
|
|
110,843,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
|
|
|
|
182,126,585 |
|
|
|
138,958,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY AND LIABILITIES |
|
|
|
|
|
307,252,460 |
|
|
|
199,936,632 |
|
Brooge Energy (NASDAQ:BROG)
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Brooge Energy (NASDAQ:BROG)
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