TIDMCORO
RNS Number : 1884L
Coro Energy PLC
09 September 2021
9 September 2021
Coro Energy plc
("Coro", the "Company" or the "Group")
Interim Results
Coro Energy plc , the South East Asian energy company focused on
leading the regional transition to a low carbon economy , announces
its unaudited interim results for the six month period ended 30
June 2021.
Highlights
Operational
-- Acquired Global Energy Partnership Ltd, an originator and
developer of renewable energy projects in South East Asia with a
portfolio of early stage, utility scale projects and an initial
focus on the Philippines
-- Operating infrastructure established in the Philippines;
planning and permitting activities for priority 100 MW solar and
100 MW onshore wind projects underway
-- Continued progress toward commercialising the Mako gas field
(Duyung PSC, Coro 15% interest), with the operator focused on key
commercial workstreams including preparation of an updated Plan of
Development and continuing Gas Sales Agreement negotiations
Corporate
-- Appointed Mark Hood, an experienced clean energy executive
and co-founder of GEPL, as Coro's Chief Executive Officer
-- Announced execution of binding, conditional Sale and Purchase
Agreement with Dubai Energy Partners Inc to dispose of the Group's
Italian portfolio for cash consideration of EUR0.3 million
-- Raised net proceeds of approximately $5.5m through a placing
and open offer to fund the Group's low carbon energy
investments
Post Balance Sheet Events
-- Announced a new partnership in Vietnam to develop a 150 MW
pipeline of rooftop solar projects together with a local partner,
Vinh Phuc Energy ("VPE"), commencing with 5 MW pilot project
Certain information communicated within this announcement is
deemed to constitute inside information as stipulated under the
Market Abuse Regulations (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:
Coro Energy plc Via Vigo Communications
Mark Hood, Chief Executive Officer Ltd
Cenkos Securities plc (Nominated Adviser) Tel: 44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Vigo Consulting Ltd (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Chris McMahon
WH Ireland (Broker) Tel: 44 (0)20 7220 1670
Harry Ansell /
Katy Mitchell 44 (0)113 394 6618
STATEMENT FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Twelve months ago we announced that the Company was embarking on
a strategic pivot, which transitioned the Company from a
hydrocarbon-led strategy to one centred on low carbon energy
investments. The Board is pleased to report that we have made
strong progress in the first half of 2021 towards building a
leading regional low carbon energy company.
As an initial step on that transition, the Company made its
maiden clean energy investment in ion Ventures Holdings Ltd ("ion"
or "ion Ventures") in November 2020, acquiring 20.3% of ion
Ventures, a developer of energy storage and flexible energy assets,
for GBP500k. Only six months later this investment was validated
when ion announced a new partnership with GLIL Infrastructure Fund
LLP ("GLIL") which could see GLIL commit up to GBP150m of capital
to develop ion's portfolio of grid scale energy storage assets in
the UK, which have now been vended in to a newly formed entity,
Flexion Energy Holdings UK Limited, in which ion currently holds a
carried 5% interest. GLIL is an infrastructure investment fund with
GBP2.5bn funds under management, backed by Local Pensions
Partnership and Northern LGPS. We also expect significant value to
be added through the continuing development of ion's South East
Asian pipeline, which is still wholly owned by ion and where Coro
retains a right of first refusal to invest.
Following our strategic investment in ion Ventures, in March
2021 we completed the acquisition of Global Energy Partnership
Limited ("GEPL"), a South East Asia centric developer of clean
energy projects. With this acquisition, we secured a pipeline of
operated renewable energy projects across the region, with an
initial focus on the Philippines. We also welcomed Mark Hood,
co-founder of GEPL and an experienced clean energy executive, to
the Board of Directors as the Group's new Chief Executive
Officer.
Post-acquisition of GEPL, our focus has been on establishing the
Group's operating infrastructure in the Philippines and progressing
two priority projects, a 100 MW solar project and 100 MW onshore
wind project, both located in the Visayas region of the
Philippines.
We added to our clean energy portfolio, post-period, entering
into a new partnership in Vietnam to develop rooftop solar projects
together with a local partner, Vinh Phuc Energy ("VPE"). VPE are a
leading Vietnamese solar asset owner and Engineering, Procurement
and Construction contractor, with an experienced team of over 90
operational staff and extensive experience deploying solar
photovoltaic ("PV") systems in Vietnam. The parties entered into
binding Heads of Terms to jointly develop VPE's existing 150 MW
portfolio of commercial and industrial rooftop solar PV
installations. Upon completion Coro will own 85% of the new venture
in exchange for providing up to $4.0m of funding for the first 5MW
pilot project. The deal represents a low-cost entry for Coro into
the fast-growing Vietnamese energy sector. Both parties are working
toward signature of binding, definitive agreements in the coming
weeks and we expect to reach financial close on the 5 MW pilot
project by the end of the year.
These transactions represent Coro's strategy at work:
identifying opportunities for low-cost entry into countries with
fast growing economies and forecasted strong energy demand growth.
In this geography, value accretion occurs during the early planning
and permitting stages of projects and by providing the early-stage
capital for these projects, we will create opportunities to deliver
outsized returns relative to initial development risk. Risk can be
mitigated through adopting a portfolio approach with disciplined
allocation of capital and strong local knowledge.
Alongside the GEPL acquisition, the Company successfully raised
net proceeds of $5.5m through a placing and open offer with new and
existing investors. These funds will be utilised for investment in
the Philippines and Vietnam clean energy portfolios, as well as to
fund the Group's share of expenditures from its high value gas
asset, the Mako gas field.
The Mako gas field, contained within the Duyung PSC area
(operated by Conrad Petroleum Ltd), remains a high value asset in
our portfolio, with focus during the period on the strategic
commercial workstreams. This included preparation by the operator
of an updated Plan of Development for submission to the Indonesian
authorities and gas sales agreement negotiations with various
counterparties. Achievement of these commercial milestones will be
key to upgrading contingent resources at Duyung to reserves, and
ultimately to enabling the partners to take a Final Investment
Decision ("FID").
Finally, we were pleased to execute a binding, conditional
agreement with Dubai Energy Partners, Inc ("DEPI") during the
period to dispose of the Company's non-core Italian gas portfolio
in exchange for cash consideration of EUR300k (c.$350k). Completion
of the disposal of the Italian gas portfolio is conditional on,
inter alia, approval by the Italian Ministry of Economic
Development. Both parties are working toward securing this approval
in Q4 2021. In the meantime, DEPI is responsible for funding any
operational costs relating to the Italian portfolio until
completion.
Outlook
Having secured an exciting portfolio of clean energy projects
across the South East Asian region, the Company is well placed to
continue this momentum through the remainder of 2021 and into next
year. Planning and permitting activities will continue for our
priority projects in the Philippines, with the first major
milestone being awarded by the Department of Energy.
We also look forward to completing our transaction with VPE in
Vietnam in the coming weeks and focusing on our 5 MW pilot project,
with the intention of reaching financial close by the end of
2021.
Positive progress is also expected on key commercial milestones
for Mako, along with completion of our disposal of the Italian
portfolio, which will ensure our footprint and focus are solely on
the South East Asian market.
Our Eurobond obligations remain at the forefront of our mind and
we intend to seek a restructuring of those obligations to enable
the Company to continue to pursue its clean energy growth led
strategy.
We thank our shareholders for their support and look forward to
updating them on our progress in the coming months.
James Parsons Mark Hood
Chairman Chief Executive Officer
FINANCIAL REVIEW
Results from continuing operations
The Group made a loss after tax from continuing operations of
$2.8m (H1 2020: $4.9m). The overall reduction in loss after tax
compared to the first half of 2020 was primarily due to a large,
unrealised foreign exchange gain recorded on the Group's Eurobond,
due to the appreciation of the British Pound Sterling ("GBP")
during the period compared to the Euro. This resulted in an
unrealised foreign exchange gain in the parent company, which uses
GBP as its functional currency. This compared to a large foreign
exchange loss in the comparative period when the GBP devalued
against the Euro.
General and administrative expenses were $217k lower than the
comparative period. Within G&A expenses, and as shown in more
detail in note 4 below, we achieved cost reductions in most expense
categories compared to the first half of 2020, with the exception
of business development costs and other G&A. Business
development costs were higher in the first half of 2021 as a result
of transactional activity during the period, including the
acquisition of GEPL and the divestment of Coro Europe. We expect
these costs to moderate in the second half of the year, though they
will remain activity driven. Other G&A increased due to higher
prevailing insurance costs in 2021.
Results from discontinued operations
As noted in the Chairman and CEO's Statement, we have agreed to
dispose of our Italian operations to DEPI. Completion of the
disposal is conditional on, inter alia, receipt of required
regulatory approvals from the Italian authorities. The disposal has
an economic effective date of 26 May 2021, being the date the SPA
was signed. However, until all conditions precedent for the
disposal have been met, principally the receipt of all regulatory
approvals, Coro continues to control Coro Europe Ltd ("CEL") and
its Italian subsidiary, Apennine Energy SpA ("AES"), which holds
all Italian gas licences. As a result, we have continued to
consolidate the results of CEL and AES for the full 6-month period,
in line with the requirements of IFRS.
Activity remained subdued in our Italian operations during the
period, following suspension of production from three fields in the
first half of 2020 due to a significant fall in gas prices. Our
focus has remained on cost control which saw the net cash outflow
from operations reduced to $142k for the period, compared to $278k
in the comparative period. This was despite a 58% drop in revenues
compared to H1 2020, with only Rapagnano on production for the
first half of this year.
The accounting loss after tax from discontinued operations for
the period was $456k, significantly lower than $1.8m reported in
the comparative period. This was primarily due to a large deferred
tax asset write-off in H1 2020 ($848k) which did not recur this
year, along with lower impairment charges ($379k lower than H1
2020).
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 $4.7m (excluding cash
recorded within assets of the Italian disposal group held for
sale). However, the Group balance sheet records net current
liabilities of $20.9m due to the classification of the Group's
Eurobond within current liabilities. The bonds are scheduled to
mature on 12 April 2022 when the outstanding principal of EUR22.5m
(undiscounted, $26.7m at period end exchange rates) and accrued,
unpaid interest of EUR2.3m ($2.7m) will fall due.
The Directors have a reasonable expectation that the Group can
restructure its balance sheet to enable the Group to remain in
operation for at least 12 months from the date of publication of
these interim financial statements. This may include a
restructuring of its bond obligations in part or in full and/or a
sale of assets, where the Directors' believe that the value of the
Group's assets exceeds its debt exposure.
However, the ability of the Group to successfully manage its
capital structure over the next 12 months is not guaranteed and
represents a material uncertainty concerning the appropriate use of
the going concern assumption in these interim financial statements.
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 that might
arise and to classify fixed assets as current.
Peter Christie
Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended 30 June 2021
30 June 2021 30 June 2020
Notes $'000 $'000
-------------------------------------------------- ----- ------------ ------------
Continuing operations
General and administrative expenses 4 (1,686) (1,903)
Depreciation expense (9) (73)
Share of loss of associates (65) -
-------------------------------------------------- ----- ------------ ------------
Loss from operating activities (1,760) (1,976)
Finance income 1,223 25
Finance expense (2,218) (2,966)
-------------------------------------------------- ----- ------------ ------------
Net finance expense 4 (995) (2,941)
-------------------------------------------------- ----- ------------ ------------
Loss before income tax expense (2,755) (4,917)
Income tax benefit/(expense) - -
-------------------------------------------------- ----- ------------ ------------
Loss for the period from continuing operations (2,755) (4,917)
Discontinued operations
Loss for the period from discontinued operations 11 (456) (1,795)
-------------------------------------------------- ----- ------------ ------------
Total loss for the period (3,211) (6,712)
-------------------------------------------------- ----- ------------ ------------
Other comprehensive income/loss
Items that may be reclassified to profit
and loss
Exchange differences on translation of foreign
operations (412) 1,042
-------------------------------------------------- ----- ------------ ------------
Total comprehensive loss for the period (3,623 (5,670)
-------------------------------------------------- ----- ------------ ------------
Loss attributable to:
Owners of the company (3,211) (6,712)
-------------------------------------------------- ----- ------------ ------------
Total comprehensive loss attributable to:
Owners of the company (412) (5,670)
-------------------------------------------------- ----- ------------ ------------
Basic loss per share from continuing operations
($) 5 (0.0018) (0.006)
Diluted loss per share from continuing operations
($) 5 (0.0018) (0.006)
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 2021
31 December
30 June 2021 2020
Notes $'000 $'000
--------------------------------------- ----- ------------ -----------
Non-current assets
Property, plant and equipment 14 16
Intangible assets 6 18,114 17,274
Investment in associates 610 666
--------------------------------------- ----- ------------ -----------
Total non-current assets 18,738 17,956
--------------------------------------- ----- ------------ -----------
Current assets
Cash and cash equivalents 4,712 1,706
Trade and other receivables 293 118
Inventory 37 37
Derivative financial instruments - 10
Total current assets 5,042 1,871
--------------------------------------- ----- ------------ -----------
Assets of disposal group held for sale 11 10,432 11,417
--------------------------------------- ----- ------------ -----------
Total assets 34,212 31,244
--------------------------------------- ----- ------------ -----------
Liabilities and equity
Current liabilities
Trade and other payables 245 209
Borrowings 7 25,728 689
--------------------------------------- ----- ------------ -----------
Total current liabilities 25,973 898
--------------------------------------- ----- ------------ -----------
Non-current liabilities
Borrowings 7 - 24,360
--------------------------------------- ----- ------------ -----------
Total non-current liabilities - 24,360
--------------------------------------- ----- ------------ -----------
Liabilities of disposal group held for
sale 11 10,017 10,921
--------------------------------------- ----- ------------ -----------
Total liabilities 35,990 36,179
--------------------------------------- ----- ------------ -----------
Equity
Share capital 8 2,927 1,103
Share premium 8 50,430 45,786
Merger reserve 9,708 9,708
Other reserves 9 3,205 3,305
Accumulated losses (68,048) (64,837)
--------------------------------------- ----- ------------ -----------
Total equity (1,778) (4,935)
--------------------------------------- ----- ------------ -----------
Total equity and liabilities 34,212 31,244
--------------------------------------- ----- ------------ -----------
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 2020
Merger Accumulated
Share capital Share premium Reserve Other Reserves Losses Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------------- ------------- ------------- -------- -------------- ----------- --------
Balance at 1 January
2020 1,080 45,679 9,708 3,978 (55,263) 5,182
Total comprehensive loss
for the period:
Loss for the period - - - - (6,712) (6,712)
Other comprehensive income - - - 1,042 - 1,042
--------------------------- ------------- ------------- -------- -------------- ----------- --------
Total comprehensive loss
for the period - - - 1,042 (6,712) (5,670)
--------------------------- ------------- ------------- -------- -------------- ----------- --------
Transactions with owners
recorded directly in
equity:
Issue of share capital 5 76 - - - 81
Share based payments
for services rendered - - - 530 - 530
Lapsed share options - - - (593) 593 -
--------------------------- ------------- ------------- -------- -------------- ----------- --------
Balance at 30 June 2020 1,085 45,755 9,708 4,957 (61,382) 123
--------------------------- ------------- ------------- -------- -------------- ----------- --------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2021
Merger Accumulated
Share capital Share premium Reserve Other Reserves Losses Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------------- ------------- ------------- -------- -------------- ----------- -------
Balance at 1 January
2021 1,103 45,786 9,708 3,305 (64,837) (4,935)
Total comprehensive loss
for the period:
Loss for the period - - - - (3,211) (3,211)
Other comprehensive loss - - - (412) - (412)
--------------------------- ------------- ------------- -------- -------------- ----------- -------
Total comprehensive loss
for the period - - - (412) (3,211) (3,623)
--------------------------- ------------- ------------- -------- -------------- ----------- -------
Transactions with owners
recorded directly in
equity:
Issue of share capital 1,504 4,513 - - - 6,017
Share issue costs - (826) - - - (826)
Shares issued for business
combination 198 590 - - - 788
Share based payments
for services rendered 122 367 - 171 - 660
Issue of warrants - - - 141 - 141
Balance at 30 June 2021 2,927 50,430 9,708 3,205 (68,048) (1,778)
--------------------------- ------------- ------------- -------- -------------- ----------- -------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended 30 June 2021
30 June 2021 30 June 2020
$'000 $'000
------------------------------------------------------- ------------ ------------
Cash flows from operating activities
Receipts from customers 410 756
Payments to suppliers and employees (2,157) (3,265)
Interest received - 28
Interest paid (661) (622)
------------------------------------------------------- ------------ ------------
Net cash used in operating activities (2,408) (3,103)
------------------------------------------------------- ------------ ------------
Cash flow from investing activities
Receipts for property, plant & equipment 3 -
Payments for exploration & evaluation assets (71) (16)
Net receipts from / (payments for) rehabilitation
activities 102 (43)
------------------------------------------------------- ------------ ------------
Net cash provided by / (used in) investing activities 34 (59)
------------------------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 6,017 -
Share issue costs paid in cash (528) -
Principal element of lease payments (36) (120)
------------------------------------------------------- ------------ ------------
Net cash provided by / (used in) financing activities 5,453 (120)
------------------------------------------------------- ------------ ------------
Net increase / (decrease) in cash and cash equivalents 3,079 (3,282)
------------------------------------------------------- ------------ ------------
Cash and cash equivalents brought forward 1,761 6,526
------------------------------------------------------- ------------ ------------
Effects of exchange rate changes on cash
and cash equivalents (22) 195
------------------------------------------------------- ------------ ------------
Cash and cash equivalents carried forward 4,818 3,439
------------------------------------------------------- ------------ ------------
Cash and cash equivalents carried forward at 30 June 2021 in the
condensed consolidated statement of cash flows includes $106k
relating to discontinued operations (30 June 2020: $190k). Refer to
note 11.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2021
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
2021 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 2020, 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 2020 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 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 $4.7m (excluding cash
recorded within assets of the Italian disposal group held for
sale). However, the Group balance sheet records net current
liabilities of $20.9m due to the classification of the Group's
Eurobond within current liabilities. The bonds are scheduled to
mature on 12 April 2022 when outstanding principal of EUR22.5m
(undiscounted, $26.7m at period end exchange rates) and accrued,
unpaid interest of EUR2.3m ($2.7m) will fall due.
The Directors have a reasonable expectation that the Group can
restructure its balance sheet to enable the Group to remain in
operation for at least 12 months from the date of publication of
these interim financial statements. This may include a
restructuring of its bond obligations in part or in full and/or a
sale of assets, where the Directors' believe that the value of the
Group's assets exceeds its debt exposure.
However, the ability of the Group to successfully manage its
capital structure over the next 12 months is not guaranteed and
represents a material uncertainty concerning the appropriate use of
the going concern assumption in these interim financial statements.
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 that 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
2021 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.
b) 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
The financial position and performance of the Group was
particularly affected by the following events and transactions
during the six months to 30 June 2021:
- Acquisition of Global Energy Partnership Limited, an
originator and developer of renewable energy projects in South East
Asia, with an initial focus on the Philippines, for share
consideration of $788k. The acquisition has been treated as a
business combination, with goodwill recognised on the Group balance
sheet representing the excess of consideration paid over the fair
value of net assets acquired. Refer to note 10;
- Issue of shares to new and existing investors to raise gross
proceeds of $6.0m (net proceeds $5.5m) following a placing and open
offer. Proceeds from the fund raise will be used for development of
the Group's renewable energy projects, fund the Group's share of
Duyung PSC expenditures, as well as general working capital
purposes.
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 and 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 Chief Executive Officer. Results from
the Group's Italian business are classified as a discontinued
operation in the income statement, and reflected as such in the
table below. Refer to further disclosure in note 11.
Italy Asia UK Total
-----------------------
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2021 2020 2021 2020 2021 2020 2021 2020
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
----------------------- ------- ------- ------- ------- ------- ------- ------- -------
Depreciation and
amortisation - - - - (9) (73) (9) (73)
Interest expense - - - - (2,218) (1,798) (2,218) (1,798)
Share of loss of
associates - - (65) - (65) -
Segment loss before
tax from continuing
operations - - (80) (169) (2,675) (4,748) (2,755) (4,917)
Segment loss before
tax from discontinued
operations (456) (947) - - - - (456) (947)
----------------------- ------- ------- ------- ------- ------- ------- ------- -------
Italy Asia UK Total
--------------------
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2021 2020 2021 2020 2021 2020 2021 2020
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------- -------- -------- ------- ------ -------- --------- --------- ---------
Segment assets 10,432 11,417 18,227 17,511 5,553 2,316 34,212 31,244
Segment liabilities (10,017) (10,921) (10) (9) (25,963) (25,249) (35,9910) (36,179)
-------------------- -------- -------- ------- ------ -------- --------- --------- ---------
Assets and liabilities of the Italian segment are classified as
a disposal group held for sale in the Group balance sheet
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
2021 2020
$'000 $'000
------------------------------------ ------- -------
Employee benefits expense 409 577
Business development 530 182
Corporate and compliance costs 217 303
Investor and public relations 128 169
Other G&A 153 96
G&A - non-operated joint operations 79 92
Share based payments (note 9) 170 484
1,686 1,903
------------------------------------ ------- -------
b) Finance income / expense
30 June 30 June
2021 2020
$'000 $'000
------------------------------------------------------ ------- -------
Finance income
Foreign exchange gains 1,223 -
Interest income - 25
Finance expense
Interest on borrowings (2,218) (1,798)
Finance charge on lease liabilities - (5)
Foreign exchange losses - (1,139)
Unrealised loss on foreign exchange forward contracts - (24)
------------------------------------------------------ ------- -------
Net finance income / (expense) (995) (2,941)
------------------------------------------------------ ------- -------
Note 5: Loss per share
30 June 30 June
2021 2020
---------------------------------------------------- -------- -------
Basic loss per share from continuing operations
($) (0.0018) (0.006)
Diluted loss per share from continuing operations
($) (0.0018) (0.006)
Basic loss per share from discontinued operations
($) (0.0003) (0.002)
Diluted loss per share from discontinued operations
($) (0.0003) (0.002)
---------------------------------------------------- -------- -------
The calculation of basic loss per share from continuing
operations was based on the loss attributable to shareholders of
$2.8m (30 June 2020: $4.9m) and a weighted average number of
ordinary shares outstanding during the half year of 1,567,991,076
(30 June 2020: 792,641,298).
Basic loss per share from discontinued operations was based on
the loss attributable to shareholders from discontinued operations
of $456k (30 June 2020: $1.8m).
Diluted loss per share from continuing and discontinued
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.
Note 6: Intangible assets
30 June 31 December
2021 2020
$'000 $'000
---------------------------------- ------- -----------
Exploration and evaluation assets 17,307 17,251
Software 19 23
Goodwill 788 -
---------------------------------- ------- -----------
18,114 17,274
---------------------------------- ------- -----------
Reconciliation of the carrying amounts for each material class
of intangible assets are set out below:
Exploration and evaluation assets:
Carrying amount at beginning of period 17,251 17,247
Additions 56 4
Carrying amount at end of period 17,307 17,251
--------------------------------------- ------ -------
Exploration and evaluation assets relates to the Group's 15%
interest in the Duyung PSC, which contains the Mako gas field.
There were no indicators of impairment noted at 30 June 2021.
As explained further in note 10, goodwill was recognised
following the acquisition of GEPL. No impairment of goodwill was
noted following testing performed at 30 June 2021.
Note 7: Borrowings
30 June 31 December
2021 2020
$'000 $'000
------------ ------- -----------
Current
Eurobond 25,728 689
------------ ------- -----------
25,728 689
------------ ------- -----------
Non-current
Eurobond - 24,360
------------ ------- -----------
- 24,360
------------ ------- -----------
Borrowings relates to EUR22.5m three year Eurobonds with
attached warrants which were issued 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 are
scheduled to mature on 12 April 2022 at 100% of par value plus any
accrued and unpaid coupon.
Note 8 : Share capital and share premium
30 June 30 June
2021 Nominal 2021
Number value Share Premium Total
000's $'000 $'000 $'000
--------------------------------------- --------- ------- ------------- -------
As at 1 January 2021 806,908 1,103 45,786 46,889
--------------------------------------- --------- ------- ------------- -------
Shares issued during the period:
Fund raise 1,074,715 1,504 3,687 5,191
Consideration for business combination 142,500 198 590 788
Services rendered 87,500 122 367 489
--------------------------------------- --------- ------- ------------- -------
Closing balance - 30 June 2021 2,111,623 2,927 50,430 53,357
--------------------------------------- --------- ------- ------------- -------
31 December 31 December
2020 Nominal Share 2020
Number value Premium Total
000's $'000 $'000 $'000
--------------------------------- ----------- ------- -------- -----------
As at 1 January 2020 789,586 1,080 45,679 46,759
Shares issued during the period:
Issued for services rendered 17,322 23 107 130
Closing balance - 31 December
2020 806,908 1,103 45,786 46,889
--------------------------------- ----------- ------- -------- -----------
Note 9: Reserves
a) Other reserves
Share based payments reserve
The Company implemented a new Long Term Incentive Plan ("LTIP")
during the period. Under the Plan, 22.5m options were issued on 22
February 2021 and 57.2m on 17 March 2021 to directors and
management. The options vest on 22 February 2024 provided the
awardees remain employed by the Company and the mid-market closing
price per Coro ordinary share on the last day of the vesting period
is equal to or higher than 0.46 pence per ordinary share. Assuming
those conditions are met, the number of options which ultimately
vest depends on the Company's Total Shareholder Return ("TSR") over
the vesting period compared to a peer group of 20 companies. Vested
options will be exerciseable at 0.1p per ordinary share.
The options have been valued on their respective grant dates
using a Monte Carlo simulation model, resulting in a valuation of
GBP0.0044 per award for the 22 February grants and GBP0.0026 for
the 17 March awards. 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 $412k (30 June 2020: $1.0m
gain).
Note 10: Business combination
Summary of acquisition
On 17 March 2021, the Company completed the acquisition of 100%
of the issued capital of Global Energy Partnership Limited ("GEPL")
in exchange for 142.5 million new ordinary shares in the Company.
GEPL is incorporated in the United Kingdom and involved in the
origination and development of renewable energy projects in South
East Asia. On the same date, GEPL co-founders Mark Hood and Michael
Carrington joined the Company in the roles of CEO and COO
respectively, with Mark Hood also appointed as a director of the
Company.
Background to the acquisition
Since inception, GEPL has screened over 25GW of renewable energy
projects and has identified a short list of priority pipeline
projects for investment across the Philippines, Vietnam and
Indonesia, with an initial focus on the Philippines.
For the financial period ended 31 January 2021, GEPL generated
no revenues, incurred a trivial net loss and had net liabilities of
GBP3k (approx. $4k).
The acquisition met a number of key strategic objectives for the
Group, including:
-- Acquiring GEPL's pipeline of early-stage renewable energy
projects in South East Asia, with an initial focus on the
Philippines;
-- Securing an experienced executive team with a proven record
of originating and executing energy projects; and
-- Building on the Company's investment in ion Ventures in 2020,
acquiring a complementary business with opportunities for project
co-development in future.
Consideration for the acquisition
In exchange for acquiring 100% of the issued capital of GEPL,
the Company issued 142.5 million new ordinary shares to the former
GEPL shareholders at 0.4p per share, being the same price as the
fundraise completed concurrently with the acquisition, resulting in
a total value of consideration of GBP570k ($788k).
Transaction costs totalling $383k have been expensed within
General and Administrative expenses as business development
costs.
Fair value of assets and liabilities acquired
At acquisition, GEPL's projects were at an early stage, with the
initial focus being on two high graded opportunities in the
Philippines: a 100 MW solar project and 100 MW onshore wind
project. Work done on the projects prior to acquisition date mainly
comprised GEPL management's time including pre-feasibility studies,
understanding of relevant laws/regulations, site visits, community
engagement, liaising with potential engineering contractors and
financiers, and building networks and partnerships locally. The
Directors believe there is significant latent value which can be
unlocked by investing in these Filipino opportunities however, at
the date of acquisition, there were no contractual rights
associated with the projects and accordingly, we have assessed that
there were no identifiable assets under IFRS. Similarly, GEPL had
no liabilities, with all creditors extinguished prior to
acquisition completion.
Accordingly, the full purchase consideration of $788k has been
allocated to goodwill. While GEPL has identified opportunities in
Vietnam and Indonesia, we view the principal value in the company
as being its Philippines project pipeline and associated
intellectual property and the goodwill has been allocated
accordingly. No impairment of goodwill was identified in the short
period from acquisition to 30 June 2021.
Revenue and profit contribution
The acquired business contributed nil revenues and a net loss of
$23k to the Group in the period from 17 March 2021 to 30 June 2021.
If the business were acquired on 1 January 2021 the Group's loss
before tax would have increased by $2k.
Note 11: Discontinued operations
The Group classifies the assets and liabilities of its Italian
business as a disposal group held for sale following a decision by
the Board of Directors to prioritise full divestment of the Group's
Italian operations in the first half of 2019. Given the Italian
business represents a separate geographical area of operation for
the Group, the Italian results have also been treated as a
discontinued operation. In May 2021, the Group announced it had
entered into a conditional Sale and Purchase Agreement ("SPA") with
Dubai Energy Partners, Inc ("DEPI") to dispose of the Company's
interest in Coro Europe Limited ("CEL"), which in turn owns
Apennine Energy SpA ("AES"), for cash consideration of EUR300,000
(the "Disposal"). AES owns all the Group's gas properties in Italy.
Completion of the Disposal is conditional on, inter alia, receipt
of required regulatory approvals from the Italian authorities. The
disposal has an economic effective date of 26 May 2021, being the
date the SPA was signed. However, until all conditions precedent
for the disposal have been met, principally the receipt of all
regulatory approvals, Coro continues to control Coro Europe and
AES. As a result, we have continued to consolidate the results of
CEL and AES in line with the requirements of IFRS 10.
The results of the Italian operations for the period are
presented below:
30 June 30 June
2021 2020
$'000 $'000
------------------------------------ ------- -------
Revenue 263 623
Operating costs (399) (597)
Gross profit/(loss) (136) 26
------------------------------------ ------- -------
Other income 143 79
General and administrative expenses (233) (505)
Depreciation expense - -
Change in rehabilitation provisions (67) 27
Impairment losses (138) (517)
------------------------------------ ------- -------
Loss from operating activities (431) (890)
------------------------------------ ------- -------
Finance income - 21
Finance expense (25) (78)
------------------------------------ ------- -------
Loss before tax (456) (947)
------------------------------------ ------- -------
Income tax benefit/(expense) - (848)
------------------------------------ ------- -------
Loss for the period after tax (456) (1,795)
------------------------------------ ------- -------
The major classes of assets and liabilities of the Italian
operations classified as held for sale as at 30 June 2021 are as
follows:
31 December
30 June 2020
2021 $'000
$'000
---------------------------------- ------- -----------
Assets
Property, plant and equipment 4,390 4,622
Exploration and evaluation assets 1,939 1,992
Right of use assets 32 108
Land 1,561 1,927
Deferred tax assets 1,406 1,455
Inventories 209 300
Trade and other receivables 789 958
Cash 106 55
---------------------------------- ------- -----------
Total assets 10,432 11,417
---------------------------------- ------- -----------
Liabilities
Trade and other payables 1,033 1,702
Lease liabilities 32 62
Provisions 8,952 9,157
---------------------------------- ------- -----------
Total liabilities 10,017 10,921
---------------------------------- ------- -----------
Net assets 415 496
---------------------------------- ------- -----------
Under IFRS 5, non-current assets are not depreciated once they
are designated as held for sale. As a result, impairments of $138k
were recorded on other PPE (office furniture and equipment) and
Right-of-Use assets, representing the amount that would have
otherwise been depreciated if IFRS 5 accounting was not
applied.
The entire Italian business has been fair valued at the balance
sheet date to determine if any further writedowns are required in
addition to the impairments discussed above. Management determined
the fair value of the disposal group with reference to the disposal
price agreed with DEPI which is EUR300k ($355k). In addition, under
the terms of the SPA, DEPI is required to reimburse Coro for any
working capital surplus within CEL/AES calculated on the date of
signing the SPA, which is estimated at EUR150k ($177k). This
results in a small amount of headroom so no further impairment has
been recorded.
The net cash flows of the Italian operations were as
follows:
30 June 30 June
2021 2020
$'000 $'000
---------------------------------------- ------- -------
Net cash flow from operating activities (142) (278)
Net cash flow from investing activities 91 (59)
Net cash flow from financing activities 102 374
---------------------------------------- ------- -------
Net cash inflow/(outflow) 51 37
---------------------------------------- ------- -------
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"), which contains the Mako gas
field. The operator of the Duyung venture is West Natuna
Exploration Ltd ("WNEL"). WNEL is a subsidiary of Conrad Petroleum
Ltd, and is incorporated in the British Virgin Islands with its
principal place of business in Indonesia.
The Duyung PSC partners have entered into a Joint Operating
Agreement ("JOA") which governs the arrangement. The Group 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.
Italy
In April 2021, the Group's Italian subsidiary, Apennine Energy
SpA, completed the acquisition of a 10% interest in the Cascina
Castello production licence from Petrorep Italiana SpA. This
licence, which contains the Bezzecca gas field and West Vitalba
exploration prospect, is now 100% owned by AES. In exchange for the
acquisition, AES received EUR130k ($156k) from Petrorep, paid in
cash.
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's share of loss of associates for the 6 month period
ended 30 June 2021 was $65k. There were no dividends declared or
paid by associates during the period.
Note 13: Contingencies and commitments
Commitments
The remaining 2021 work program for the Duyung PSC is estimated
at $164k net to the Group, of which approximately $24k is capital
in nature. The Group has no other capital commitments.
Contingencies
The Group has no contingent assets or liabilities.
Note 14: Subsequent events
On 12 July 2021 the Company entered into a Heads of Terms to
acquire rights over a portfolio of 150 MW rooftop solar projects in
Vietnam from Vinh Phuc Electrical Mechanical Installation Co Ltd,
trading as Vinh Phuc Energy JSC ("VPE"). Upon execution of
definitive transaction documents, Coro will acquire 85% of a newly
formed joint venture company in Vietnam, which will be used as a
vehicle for development of the rooftop solar projects currently
within the VPE portfolio. In exchange for its 85% interest, Coro
will provide initial funding up to $500k to develop a 5 MW pilot
rooftop solar project through to Ready to Build status. Subject to
meeting satisfactory technical and commercial specifications, Coro
will provide up to a further $3.5m for construction of the pilot
project. VPE will retain a 15% share of the new vehicle. VPE are a
leading Vietnamese Solar asset owner and Engineering, Procurement
and Construction contractor, with an experienced team of over 90
operations staff and extensive experience deploying solar PV
systems in Vietnam.
There are no other material subsequent events requiring
disclosure.
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END
IR UWVWRAKUKRAR
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