REG - Molecular Energies - Unaudited Interim Results for H1 2023
28/09/2023 07:00
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RNS Number : 9111N Molecular Energies PLC 28 September 2023
28 September 2023
MOLECULAR ENERGIES PLC
("Molecular", "the Company" or "the Group")
Unaudited Interim Results for H1 2023
Current trading
Molecular Energies PLC (AIM:MEN), the international energy company, announces
its unaudited interim results for the six months ended 30 June 2023.
Selected Results Summary
All numbers exclude discontinued operations and are in US$ '000 unless stated H1 2023 H1 2022 F/Y 2022
Average daily production, boe 1,559 1,885 1,656
Group turnover 14,674 16,183 31,547
Adjusted EBITDA 1,686 5,282 7,063
Profit after tax before non-cash items 693 5,280 5,638
Group net debt of which: 42,829 29,242 39,584
Third party debt (President Argentina) now removed from Group 33,782 22,923 35,452
Corporate and Financial Summary
· Group turnover of US$14.7 million (H1 2022 US$16.2 million)
· Adjusted EBITDA of US$1.7 million (H1 2022 US$ 5.3 million)
· Profit after tax before non-cash items* of US$0.7 million (H1
2022 US$5.3 million)
· Third party financial borrowings in Argentina non-recourse to Group
was US$33.8 million (H1 2022 US$22.9 million) all of which is now removed from
Group pursuant to the sale in September 2023, of the Argentine business and
assets.
· Mark to market value of holding in Atome Energy PLC (not taken
into the Group accounts) as at 30 June 2023 of US$11.6 million (FY2022:
US$11.6 million)
· In April 2023 the shareholder loan outstanding to IYA Global Limited
was converted to an interest free long-term loan repayable at the end of 2025.
There is no other Group financial debt as at the date hereof.
Operational Summary
· In Paraguay, work continued in relation to preparation for drilling
of the high impact exploration well with our partner CPC, the State Energy
Company of Taiwan.
· Green House Capital has been created with the purpose of becoming the
alternative energy division of Molecular.
Current trading and developments
· Sale of business and assets in Argentina approved by shareholders on
21 September 2023 (the "Sale"). The Sale has been completed and all Argentine
debt is now removed.
· The flow of monies to the Group resulting from the Sale is expected to
commence in 2024 and to continue thereafter up to a period of five years
providing the Group with base working capital.
· The exploration well in Paraguay is expected to commence drilling in
October 2023 and will be subject to a separate announcement.
· Work on the proposed initial public offering on the AIM market of
Green House Capital is progressing well with further updates planned in the
coming weeks. A Chief Executive Officer has now been appointed with the
professional team all in place. Further announcements are expected to be
issued in October.
· As detailed in its RNS of 21 September 2023, Molecular's
management team are evaluating alternative major energy projects to place the
Group at the forefront of the ongoing energy revolution utilising its assets,
knowhow, geographic location and reputation on the ground. Such projects now
include sustainable aviation fuel production on a commercial scale with Aecom,
the international engineering consultancy, having been commissioned to produce
a feasibility report which will be available in Q4 2023. In the meantime,
several non-disclosure agreements have been entered into and discussions
taking place with equipment suppliers and potential off takers.
Commenting on today's announcement, Peter Levine, Chairman said:
"Times change and so must Molecular. By making plans to pivot to green fuel,
the Company will benefit from its and its sister company's contacts,
experience, know-how and location to create a major future fuel business.
"In the meantime, the existing business and assets of Molecular, now free from
the large Argentine debt and all third-party financial debt, provide a solid
and worthwhile base from which to grow."
* Adjusted EBITDA means Operating Profit before depreciation, depletion and
amortisation, adjusted for non-cash share-based expenses and certain
non-recurring items. Non-recurring items include where relevant workovers.
* Profit after tax before non-cash items which comprise depletion,
depreciation, amortisation, impairment, non-operating gains/losses and
deferred tax.
Notes to Editors
Molecular Energies PLC is an AIM listed company at the forefront of energy
development and has interests across the energy spectrum, from an oil and gas
project to the green and alternative energy sector.
The Company currently has an oil exploration asset in Paraguay. The Company
has two separate subdivisions which are focused on early-stage opportunities
in the green and/or alternative energy sub-sector.
Activities in the green and alternative energy space are being carried out
direct through Molecular and under the Green House Capital brand and through
AIM listed Atome Energy PLC, a green hydrogen, ammonia, and fertiliser company
operating in Paraguay, Costa Rica and Iceland, in which Molecular currently
has 20.5%.
With a strong strategic and institutional base of support, no third-party
financial debt and a Chairman whose interests as the largest shareholder are
aligned to those of its shareholders, Molecular gives UK investors access to
an energy growth story combined with world class standards of corporate
governance, environmental and social responsibility.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for
the release of this announcement on behalf of the Company was Robert Shepherd,
Finance Director.
Contact:
Molecular Energies PLC
Peter Levine, Chairman +44 (0)20 7016 7950
Rob Shepherd, Group FD info@molecularenergiesplc.com (mailto:info@molecularenergiesplc.com)
Cavendish Corporate Finance Limited (Nominated Adviser and Broker)
Simon Hicks, George Dollemore +44 (0)20 7220 0500
Tavistock (Financial PR & IR)
Simon Hudson, Nick Elwes, Charles Baister +44 (0)20 7920 3150
Glossary of terms
Boe(pd) Barrels of oil equivalent (per day)
Bopd Barrels of oil per day
DDA Depletion, depreciation and. amortisation
EV Enterprise value meaning market
capitalisation plus debt
MMbbls Million barrels of oil
MMboe Million barrels of oil equivalent
MMBtu Million British Thermal Units (gas)
M(3)/d Cubic metres of production of gas or
oil per day (as the case may be)
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2023
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
Continuing Operations
Revenue 14,674 16,183 31,547
Cost of sales
Depletion, depreciation & amortisation (3,415) (4,273) (7,296)
Other cost of sales (10,643) (10,294) (20,174)
Total cost of sales 3 (14,058) (14,567) (27,470)
Gross profit/(loss) 616 1,616 4,077
Administrative expenses (2,678) (1,380) (4,070)
Operating gain/(loss) - 500 -
Operating profit / (loss) before impairment charge
and non-operating gains / (losses) (2,062) 736 7
Impairment intangible asset in Paraguay - - (8,583)
Loss in associate undertaking - (25) (25)
Gain on disposal of USA business 5 1,411 - -
Other non-operating gains /(losses) 5 1,280 351 1,269
Profit/(loss) after impairment and non-operating
gains and (losses) 629 1,062 (7,332)
Finance income 6 2,255 3,259 4,907
Finance costs 6 (2,877) (3,029) (6,617)
Profit / (loss) before tax from continuing operations 7 1,292 (9,042)
Income tax (charge)/credit
Current tax income tax (charge)/credit (81) - (59)
Deferred tax being a provision for future taxes 156 2,030 2,033
Total income tax (charge)/credit 75 2,030 1,974
Profit/(loss) for the period from continuing operations 82 3,322 (7,068)
Profit/(loss) for the period from discontinued operations 7 (156) 245 (3,430)
Share of loss attributable to non-controlling interest 282 - -
Profit/(loss) for the period attributable to equity holders 208 3,567 (10,498)
Other comprehensive income
- Items that may be reclassified subsequently to profit or loss
Exchange differences on translating
non-US Dollar operations (35) - -
Total comprehensive profit/(loss) for the period
attributable to the equity holders of the Parent Company 173 3,567 (10,498)
Basic earnings/ (loss) per share US cents US cents US cents
Earnings/ (loss) per share from continuing operations 8 3.5 32.3 (68.7)
Earnings / (loss) per share from discontinued operations 8 (1.5) 2.4 (33.3)
2.0 34.7 (102.0)
Diluted earnings/ (loss) per share
Earnings/ (loss) per share from continuing operations 8 3.5 31.8 (68.7)
Earnings / (loss) per share from discontinued operations 8 (1.5) 2.3 (33.3)
2.0 34.1 (102.0)
Condensed Consolidated Statement of Financial Position
As at 30 June 2023
30 June 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$000 US$000 US$000
ASSETS Note
Non-current assets
Intangible exploration and evaluation assets 9 45,721 54,304 45,721
Goodwill 705 705 705
Property, plant and equipment 9 72,758 74,071 71,937
119,184 129,080 118,363
Deferred tax - 356 45
Other non-current assets - 103 103
119,184 129,539 118,511
Current assets
Trade and other receivables 10 15,591 7,350 11,710
Cash and cash equivalents 3,093 4,970 7,941
18,684 12,320 19,651
TOTAL ASSETS 137,868 141,859 138,162
LIABILITIES
Current liabilities
Trade and other payables 11 23,316 22,891 20,708
Borrowings 12 19,897 12,521 18,391
43,213 35,412 39,099
Non-current liabilities
Trade and other payables 11 3,144 4,059 3,362
Long-term provisions 7,038 7,963 7,854
Borrowings 12 26,025 21,691 29,134
Deferred tax 94 253 250
36,301 33,966 40,600
TOTAL LIABILITIES 79,514 69,378 79,699
EQUITY
Share capital 36,180 36,179 36,179
Share premium 289 48 48
Translation reserve (50,270) (50,240) (50,235)
Profit and loss account 64,855 78,712 64,647
Other reserve 7,582 7,782 7,824
58,636 72,481 58,463
Non-controlling interest (282) - -
TOTAL EQUITY 58,354 72,481 58,463
TOTAL EQUITY AND LIABILITIES 137,868 141,859 138,162
Condensed Consolidated Statement of Changes in Equity
Share capital & share premium Profit and loss account Other reserves Total Non-controlling interest Total Equity
US$000 US$000 US$000 US$000 US$000 US$000
Balance at 1 January 2022 36,227 75,145 (42,531) 68,841 - 68,841
Share-based payments - - 73 73 - 73
Transactions with owners - - 73 73 - 73
Loss for the period - 3,567 - 3,567 - 3,567
Total comprehensive
income/(loss) - 3,567 - 3,567 - 3,567
Balance at 30 June 2022 36,227 78,712 (42,458) 72,481 - 72,481
Share-based payments - - 42 42 - 42
Transactions with owners - - 42 42 - 42
Profit for the period - (14,065) - (14,065) - (14,065)
Exchange differences on
translation - - 5 5 - 5
Total comprehensive
income/(loss) - (14,065) 5 (14,060) - (14,060)
Balance at 1 January 2023 36,227 64,647 (42,411) 58,463 - 58,463
Exercise of options 242 - (242) - - -
Transactions with owners 242 - (242) - - -
Loss for the period - 208 - 208 (282) (74)
Exchange differences on
translation - - (35) (35) - (35)
Total comprehensive
income/(loss) - 208 (35) 173 (282) (109)
Balance at 30 June 2023 36,469 64,855 (42,688) 58,636 (282) 58,354
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2023
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
Cash flows from continuing operations - (Note 13)
Cash generated/(consumed) by operations (368) 8,283 11,637
Interest received 218 83 244
Taxes paid (59) - -
Cash generated/(consumed) by discontinued operations (40) 356 (271)
(249) 8,722 11,610
Cash flows from investing activities
Expenditure on exploration and evaluation assets - - -
Expenditure on development and production assets
(excluding increase in provision for decommissioning) (4,432) (9,911) (21,832)
Insurance proceeds - - 1,289
Recovery of previously impaired costs - - 748
Acquisition & licence extension in Argentina 1,280 - -
Net cash used in investing activities in discontinued operations - (110) (450)
(3,152) (10,021) (20,245)
Cash flows from financing activities
Proceeds from issue of shares (net of expenses) - - -
Loan drawdown 11,471 8,120 40,345
Repayment of borrowings (12,784) (3,018) (21,747)
Payment of loan interest and fees (1,092) (1,539) (4,366)
Repayment of obligations under leases (424) (640) (947)
Net cash used in financing activities in discontinued operations (37) (63) (120)
(2,866) 2,860 13,165
Net increase/(decrease) in cash and cash equivalents (6,267) 1,561 4,530
Opening cash and cash equivalents at beginning of year 7,941 2,014 2,014
Exchange (losses)/gains on cash and cash equivalents 1,419 1,395 1,397
Closing cash and cash equivalents 3,093 4,970 7,941
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023
1 Nature of operations and general information
Molecular Energies PLC and its subsidiaries' (together," the Group") principal
activities are the exploration for and the evaluation and emerging new energy
projects.
Molecular Energies PLC is the Group's ultimate parent company. It is
incorporated and domiciled in England. Following the sale of business and
assets in Argentina approved by shareholders on 21 September 2023, the Group
has onshore exploration assets in Paraguay and interests in emerging
alternative energy projects. The address of Molecular Energies PLC's
registered office is Carrwood Park, Selby Road, Leeds, LS15 4LG. Molecular
Energies PLC's shares are listed on the AIM of the London Stock Exchange.
These condensed consolidated interim financial statements (the interim
financial statements) have been approved for issue by the Board of Directors
on 27 September 2023. The financial information for the year ended 31 December
2022 set out in this interim report does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The financial information
for the six months ended 30 June 2023 and 30 June 2022 was neither audited nor
reviewed by the auditor. The Group's statutory financial statements for the
year ended 31 December 2022 have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified and did not
draw attention to any matters by way of emphasis and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006
2 Basis of preparation
The interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group for the
year ended 31 December 2022, which have been prepared under UK adopted
international accounting standards ("IFRS").
These financial statements have been prepared under the historical cost
convention. The accounting policies adopted in the 2023 interim financial
statements are the same as those adopted in the 2022 Annual report and
accounts.
The 31 December 2022 audited results have been re-presented to disclose the
operations discontinued in 2023, in accordance with IFRS 5.
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
3 Cost of Sales
Depreciation 3,415 4,273 7,296
Release of abandonment provision - - (711)
Royalties & production taxes 2,364 3,161 4,968
Well operating costs 8,279 7,133 15,917
14,058 14,567 27,470
4 Adjusted EBITDA
Adjusted EBITDA 1,686 5,282 7,063
Non-recurring items (290) (159) (252)
EBITDA excluding share options 1,396 5,123 6,811
Release of abandonment provision - - 711
Depreciation, depletion & amortisation (3,458) (4,314) (7,400)
Share based payment expense - (73) (115)
Operating profit / (loss) (2,062) 736 7
5 Non-operating (gains) / losses
Recovery of impaired costs - - (748)
Gain on insurance proceeds (1,280) - (115)
Arising on lease modifications - 4 (51)
Other (gains) / losses - (355) (355)
Gain on USA disposal (1,411) - -
(2,691) (351) (1,269)
6 Finance income & costs
Interest income 218 83 244
Exchange gains 2,037 3,176 4,663
Finance income 2,255 3,259 4,907
Interest & similar charges 2,877 3,029 6,617
Exchange losses - - -
Finance costs 2,877 3,029 6,617
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
7 Discontinued Operations 6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
Discontinued Operations
Revenue 346 1,449 1,686
Cost of sales (414) (833) (2,874)
Gross profit/(loss) (68) 616 (1,188)
Administrative expenses (30) (361) (473)
Operating profit / (loss) before impairment charge
and non-operating gains / (losses) (98) 255 (1,661)
Impairment charge - - (1,433)
Non-operating gains /(losses) - - 1
Profit/(loss) after impairment and non-operating
gains and (losses) (98) 255 (3,093)
Finance income - - -
Finance costs (13) (16) (32)
Profit / (loss) before tax (111) 239 (3,125)
Income tax (charge)/credit
Current tax income tax (charge)/credit - - -
Deferred tax being a provision for future taxes (45) 6 (305)
Total income tax (charge)/credit (45) 6 (305)
Profit/(loss) for the period from discontinued operations (156) 245 (3,430)
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
8 Earnings / (loss) per share
Net profit / (loss) for the period attributable
to the equity holders of the
Parent Company from continuing operations 364 3,322 (7,068)
Net profit / (loss) for the period from
discontinued operations (156) 245 (3,430)
Number Number Number
'000 '000 '000
Weighted average number
of shares in issue 10,355 10,290 10,290
Earnings /(loss) per share from continuing operation US cents US cents US cents
Basic 3.5 32.3 (68.7)
Diluted 3.5 31.8 (68.7)
Earnings /(loss) per share from discontinued operations US cents US cents US cents
Basic (1.5) 2.4 (33.3)
Diluted (1.5) 2.3 (33.3)
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2022 - continued
9 Non-current assets
Property
E&E Plant and Total
Assets Equipment
US$000 US$000 US$000
Cost
At 1 January 2022 146,725 163,197 309,922
Additions - 18,961 18,961
Acqusition in USA - - -
Right of use assets (IFRS16) - 377 377
At 30 June 2022 146,725 182,535 329,260
Additions - 5,359 5,359
Acquisition of well in USA - 600 600
Damaged by fire - (1,249) (1,249)
Disposals of Right of Use Assets (IFRS!^) - (1,404) (1,404)
At 1 January 2023 146,725 185,841 332,566
Additions - 4,547 4,547
Disposal of USA - (12,514) (12,514)
Right of use assets (IFRS16) - - -
At 30 June 2023 146,725 177,874 324,599
Depreciation/Impairment
At 1 January 2022 92,421 104,049 196,470
Charge for the period - 4,415 4,415
At 30 June 2022 92,421 108,464 200,885
Impaired 8,583 1,433 10,016
Disposals - (293) (293)
Damaged by fire - (75) (75)
Charge for the period - 4,375 4,375
At 1 January 2023 101,004 113,904 214,908
Disposal of USA - (12,304) (12,304)
Charge for the period - 3,516 3,516
At 30 June 2023 101,004 105,116 206,120
Net Book Value 30 June 2023 45,721 72,758 118,479
Net Book Value 30 June 2022 54,304 74,071 128,375
Net Book Value 31 December 2022 45,721 71,937 117,658
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
30 June 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$000 US$000 US$000
10 Trade and other receivables
Trade and other receivables 7,522 6,092 8,805
Prepayments 8,069 1,258 2,905
15,591 7,350 11,710
11. Trade and other payables
Current
Trade and other payables 8,903 9,176 7,707
Drilling, workover and operation accruals 13,359 12,519 12,317
Current portion of leases 1,054 1,196 684
23,316 22,891 20,708
Non-current
Non-current trade and other payables 2,719 2,409 2,569
Non-current portion of leases 425 1,650 793
3,144 4,059 3,362
Total carrying value 26,460 26,950 24,070
12 Borrowings
Current
Bank loan 951 1,680 1,183
Promissory notes & bonds 18,946 10,841 17,208
19,897 12,521 18,391
Non-Current
IYA Loan 12,140 11,289 12,073
Bank loan 2,009 2,342 1,072
Promissory notes & bonds 11,876 8,060 15,989
26,025 21,691 29,134
Total carrying value of borrowings 45,922 34,212 47,525
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Note 2)
US$000 US$000 US$000
Profit/(loss) from operations before taxation 7 1,292 (9,042)
Interest on bank deposits (218) (83) (244)
Interest payable and loan fees 2,877 3,029 6,617
Depreciation and impairment of property,
plant and equipment 3,458 4,314 7,400
Release of abandonment provision - - (711)
Impairment charge - - 8,583
Loss on associate investment - 25 25
Gain on non-operating transaction (1,280) (351) (1,269)
Gain on disposal of USA business (1,411) - -
Share-based payments - 73 115
Foreign exchange difference (2,037) (3,176) (4,663)
Operating cash flows before movements
in working capital 1,396 5,123 6,811
(Increase)/decrease in receivables (4,565) 1,638 (3,137)
(Increase)/decrease in inventory - 1,687 1,691
(Decrease)/increase in payables 2,801 (165) 6,272
Net cash generated by/(used in)
operating activities (368) 8,283 11,637
Notes to the Half-Yearly Financial Statements
Six months ended 30 June 2023 - continued
14 Atome Energy plc
6 months 6 months Year to
to 30 June to 30 June 31 Dec
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
Selected key financial extracts US$000 US$000 US$000
Group Statement of Comprehensive Income
Gain / (loss) on Atome associate investment - (25) (25)
- (25) (25)
Company Profit & Loss Statement
Gain arising on mark to market of investment 49 580 1,414
49 580 1,414
Company Statement of Financial position
Investment in Atome Energy plc at market value 11,638 10,755 11,589
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