REG - Coro Energy PLC - Half-year Report
25/09/2023 07:00
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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 the 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 £1.25 million
($1.59 million), of which £1 million was paid immediately, and the remaining
£250,000 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 Adviser) Tel: 44 (0)20 7220 0500
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 (0)113 946 618
Harry Ansell
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 £1m 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 £1.25 million ($1.59 million),
of which £1 million was paid immediately, and the remaining £250,000 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
€1.5m 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
£1.25m, of which £1m was paid immediately, as well as receiving a further
advance of €0.7m 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 €22.5m ($24.5m) will become repayable in full along with
accrued and not paid interest of €6.8m ($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
Notes 30 June 2023 30 June 2022 Restated
$'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
Notes 30 June 2023 31 December 2022
$'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 capital Share premium Merger Reserve Other Reserves Accumulated Losses Non-controlling 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 capital Share premium Merger Reserve Other Reserves Accumulated Losses Non-controlling 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 (30) 12
and cash equivalents
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
£1.25m, of which £1m was paid immediately, as well as receiving a further
advance of €0.7m 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 €22.5m ($24.5m) will become repayable in full along with
accrued and not paid interest of €6.8m ($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 $'000
Finance income
Foreign exchange gains 1,273 404
Finance expense
Interest on borrowings 1,718 1,982
Other finance charges 3 -
Unrealised loss on foreign exchange - 34
Foreign exchange losses 482 512
Net finance income / (expense) (930) (2,124)
Note 5: Loss per share
30 June 30 June
2023 2022
Restated
Basic loss per share from continuing operations ($) (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 €22.5m 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 Nominal Share Premium 30 June
2023 value $'000 2023
Number $'000 Total
000's $'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 2022 Nominal Share 31 December 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 £0.0013 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 €7.5m (the "Option Agreement"). As announced by
the Company on 24 August 2022, Zodiac paid a non-refundable deposit of €0.3m
with a further €5.7m to be paid in cash on completion and further contingent
payments up to an aggregate of €1.5m through a net profit interest. A
definitive Sale and Purchase Agreement ("SPA") was executed on 27 March 2023
and an initial cash payment of €1.5m 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 €0.7m (the "Additional
Advance") which will bring the total advanced to Coro to date to €2.5m. The
Company has agreed to reduce the sum due at completion by the Additional
Advance and an additional €0.14m. Furthermore the longstop date under the
SPA has been extended to the 31 December 2023, and the requirement for the
Company to settle the €1.86m 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 €1.36m with
a further €0.14m 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 £1.25m ($1.59m),
of which £1m will be paid immediately, and the remaining £250k will be paid
by 31 March 2024. The shareholding was acquired by Coro for £500k ($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.
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