REG - Coro Energy PLC - Half Year Report
30/09/2024 07:00
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RNS Number : 1170G Coro Energy PLC 30 September 2024
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.
30 September 2024
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 2024.
Highlights
Operational
· The Company signed a binding 14-year power purchase
agreement ("PPA") with Mobile World Group ("MWG") to deliver power at the
first ten C&I rooftop solar sites as a pilot phase with a capacity of
430kw.
· Signature of a second binding PPA with MWG for the next
30 sites with a capacity of circa 1MW.
· Second Wind Energy Service Contract (WESC) secured in
the Philippines.
· Conrad Asia Energy Limited, the holder of a 76.5% operated
interest in the Duyung Production Sharing Contract, in which the Group has a
15% interest, signed binding key terms for the sale and purchase of the
domestic portion of the Mako gas field with PT Perusahaan Gas Negara Tbk.
· The Company received a letter from two lenders holding 68% of
the Company's Luxembourg listed Eurobonds which were due to expire on 12
April 2024 granting a conditional standstill on the repayment of the Company's
current debt obligations whilst the ongoing constructive discussions with the
Company in respect of the Eurobonds continue.
Post Balance Sheet Events
· Conrad Asia Energy Limited, the holder of a 76.5% operated
interest in the Duyung Production Sharing Contract, in which the Group has a
15% interest, signed a binding Gas Sales Agreement for the sale and purchase
of the export portion of natural gas from the Mako gas field with Sembcorp Gas
Pte Ltd, a wholly-owned subsidiary of Sembcorp Industries Ltd, a leading
energy and urban solutions provider, headquartered in Singapore.
· Third binding PPA with MWG entered into and initiated
construction at the next 50 sites with MWG with an aggregate capacity of
c.1.9MW which brings the total contracted capacity to 3.3MW across 90 sites.
· Six month US$500,000 secured convertible loan note with
River Merchant Capital and Fenikso Limited secured.
· Harry Beamish appointed as an independent non-executive
director of the Company.
For further information please contact:
Coro Energy plc Via Vigo Consulting Ltd
Cavendish Capital Markets Limited (Nominated Adviser) Tel: 44 (0)20 7220 0500 (tel:(0)20%207220%200500)
Adrian Hadden
Ben Jeynes
Hybridan LLP (Nominated Broker) Tel: 44 (0)20 3764 2341 (tel:(0)20%C2%A03764%202341)
Claire Louise Noyce
Vigo Consulting (IR/PR Advisor) Tel: 44 (0)20 7390 0230 (tel:(0)20%207390%200230)
Patrick d'Ancona
Finlay Thomson
STATEMENT FROM THE CHAIRPERSON
The Company continues to make progress across its South East Asian
portfolio. Important milestones have been met at Duyung and work continues
to find a Farm in partner. Our renewables portfolio across both the
Philippines and Vietnam continues to grow with the recent funding secured
locally to help speed up the roll out of the MWG rooftop solar project. The
target remains to build greater critical mass in both Vietnam and Philippines
through a larger pipeline of opportunities across renewables.
Post the period under review, the Company raised US$500,000 via a secured
convertible loan with River Merchant Capital, an existing lender to the
Company under the Company's Luxembourg 8% listed Eurobond and Fenikso Limited.
The proceeds of this loan will be utilised to fund the Group's renewables
business and for general working capital purposes. The Group's forecasts that
this loan together with existing bank balances provides sufficient funding to
fund the Company's working capital requirements through to the end of January
2025. The Company continues to work towards a broader debt restructuring and
recapitlisation of the business.
Notwithstanding the above, management have prepared a consolidated cash flow
forecast for the period to 31 December 2025 which shows that the Group will
require additional financing to meet its obligations and intended renewables
work programme in Asia beyond this date. We enjoy the ongoing support of our
lenders whilst we continue to grow the renewables business activities but will
continue to explore options which include issuing equity and disposals.
Shareholders attention is drawn to the Going Concern language in the Annual
Report published on the 9(th) of September.
Oil & Gas
Italy
The Company disposed 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,
which was completed in November 2023. In June 2024 the Company signed an
agreement to accelerate the next nine months of payment in exchange for a 22
per cent discount on payments of circa US$46 per month.
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 WNEL, a 100%-owned subsidiary of Conrad Asia
Energy Ltd ("Conrad"), and has continued to technically mature the development
of the Mako gas field alongside negotiations of a GSA, both in preparation for
FID.
In March 2024, Conrad provided an update on the Mako Gas Field reserves and
resources as of 31 December 2023 prepared by Gaffney, Cline & Associates
(Consultants) Pte Lt which updated its assessment of resources for current
expectations of Final Investment Decision and production commencement delay.
Conrad proposes a two-phase development plan based on six initial development
wells tied back to a leased production platform at the Mako gas field, with
sales gas transported via the West Natuna Transport System ("WNTS") pipeline
to Singapore for sale to the Singapore market, and potentially to the
Indonesian domestic market via a yet-to-be constructed spur from the WNTS. Two
further development wells are planned 3 years after first gas. The development
plan proposes a plateau production of 120 MMscfd for 3.5 (Low case), 6.5 (Best
case), or 11.5 (High case) years.
The revised estimates of gross (full field - 100%) recoverable dry gas as of
31 December 2023 per the Update Report are:
Gross Contingent Resource Estimates Update Change from
Report GCA Report
(31(st) Dec 2023) (1(st) Jul 2022)
1C (Low Case) Bcf gas 227 -8.8%
2C (Best Case) Bcf gas 392 -10.3%
3C (High Case) Bcf gas 591 -24.1%
Consequently, the net attributable to Coro 2C resources are reduced from 42.1
to 36.6 Bcf gas.
In June 2024, Conrad signed a binding Gas Sales Agreement with PT Perusahaan
Gas Negara Tbk, the gas subsidiary of PT Pertamina (Persero), the national oil
company of Indonesia. This agreement which includes a seven month long stop
date, is subject to the construction of the pipeline connecting the West
Natuna Transportation System with the domestic gas market in Batam, and it
forms part of the Domestic Market Obligation, as set out in Mako's revised
Plan of Development. The total contracted gas volume under this agreement
is up to 122.77 trillion British Thermal Units ("TBtu") with estimated plateau
production rates of 35 billion British Thermal Units / day ("BBtud")
Renewables
Vietnam
A 3 MW rooftop solar pilot project was completed in 2022 and has continued to
deliver revenue throughout 2023 and into 2024. The next material project is
with the Mobile World Group ("MWG"), where the Company currently has 10
existing producing sites (cc.0.4MW) and a further 30 sites (c.1MW) currently
under construction. All sites are contracted with a Purchasing Power
Agreement ("PPA") with a 14 year term which is extendable in certain
circumstances and includes a variable price with a floor of circa US$11.2
cents / kilowatt hour.
Coro continues to evaluate further solar projects in Vietnam.
Philippines
During 2022, the Marcos administration was entrusted with the presidency of
the Philippines for a six-year term. With new ministerial appointments in key
departments, such as that of Energy, the administration has strengthened the
need for greater renewables generation in country, reducing dependency on fuel
imports and addressing climate change matters that the country is vulnerable
to. The Government of the Philippines continues to champion renewable energy
and looks to enact legislation changes to make investment easier than ever
before. The 2022 changes had impacts on 2023, with key changes surrounding
100% foreign ownership of power generating companies coming into effect,
however, these decisions made at top level Government have taken and continue
to take time to filter through all Government Departments, providing
challenges on timings to project permitting tasks.
Our projects in the Philippines are driven by an experienced in-country team
comprising of a board of three Filipino national Directors. The board is
supported by a further team of three, fulfilling a range of roles across
technical, financial and administration.
With the 100 MW wind project desktop studies completed, during 2021, it was
planned during 2022 to deploy a Lidar wind data collector to gain real
evidence of the wind resource in our chosen location and prior to deploying a
130-metre Met Mast for bankable wind data collection. From the Lidar
deployment in 2022, suitable confidence was achieved from data collected to
invest in the Met Mast. In mid-2023 a procurement exercise was completed and a
contract awarded to a local provider in the Philippines, who began
construction of the Met Mast in September which became operational in early
January 2024. The Met Mast will provide bankable data to the project and has
the potential to support neighbouring projects due to its designed siting and
location. Coro believes this will add tremendous value to the project(s), as
well as providing key information to determine engineering decisions that need
to be made throughout 2024.
The Met Mast and Lidar working harmoniously will deliver robust data, needed
for debt providers and provide risk mitigation for wind turbine design and
performance.
In May 2024 the Company received approval by Philippines Department of Energy
on its application for a Wind Energy Service Contract ("WESC") in respect of
a second area of interest for the onshore Oslob Wind Power Project. This WESC
is Coro's second contract and neighbours the Company's first project site and
would be in respect of an additional installed capacity of circa 100MW. The
above mentioned 130 metre meteorological mast installed by the Company January
2024 will also serve this second project in gathering data and determining the
wind resource available.
Coro continues to evaluate further wind and solar projects in the Philippines.
Post Reporting Period
Indonesia
As announced on the 2 September 2024 by the Company, Conrad Asia Energy
Limited, the holder of a 76.5% operated interest in the Duyung Production
Sharing Contract, in which the Group has a 15% interest signed binding Gas
Sales Agreement for the sale and purchase of the export portion of natural gas
from the Mako gas field with Sembcorp Gas Pte Ltd, a wholly-owned subsidiary
of Sembcorp Industries Ltd, a leading energy and urban solutions provider,
headquartered in Singapore.
Vietnam
The Group has recently initiated construction at the next 50 sites with MWG
with an aggregate capacity of c.1.9MW which brings the total contracted
capacity to 3.3MW across 90 sites.
To facilitate the MWG construction, the Company has entered into an EPC
contract and agreed upon payment arrangements with the EPC provider which will
in effect provide deferred payment terms for 85% of the EPC costs. These
arrangements defer payment for two months and the deferred payments are
subject to a 12% annual coupon and a 2% fee. The Company currently can draw up
to a total of US$1.5M (excluding VAT).
Corporate
As announced on 15 August 2024 the Company signed a six month US$500,000
secured convertible loan note with River Merchant Capital, an existing lender
to the Company under the Company's 8% listed Eurobond, which is under
standstill as announced on 12 April 2024, and Fenikso Limited.
Harry Beamish was appointed as an independent non-executive director of the
Company.
Tom Richardson
Chairman
FINANCIAL REVIEW
Results from continuing operations
The Group made a loss after tax from continuing operations of $1.4m (H1 2023:
$2.5m). The overall reduction in loss after tax compared to the first half of
2023 was primarily due to the decrease in general and administrative expenses
of $0.5m and net finance expense of $0.6m, which comprised mainly of an
increase in unrealised foreign exchanges gains related to the translation of
the Eurobond debt.
General and administrative expenses of $1.1m (H1 2023: $1.6m) saw a reduction
of $0.5m from the comparative period. As shown in more detail in note 4, there
were decreases in employee benefits ($51k), business development ($125k) and
corporate and compliance ($56k) expenses. There were no share-based payments
for the period (H1 2023: $212k).
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 $0.5m and current receivables of $0.5m
related to the residual sales proceeds from the sale of the Italian
operations. The Group's Eurobond obligation matured on 12 April 2024 with the
outstanding balances, including the rolled up coupon, or US$31.4 million. The
Group has been in active discussions with bondholders in relation to the
restructuring of the bonds and received a letter from two lenders holding 68%
of the Eurobonds on 12 April 2024 (the "Standstill"). The Standstill, which
the Company is advised is binding on the parties, provides a conditional
standstill on the repayment of the Group's current debt obligations on expiry
whilst the ongoing constructive discussions with the Group in respect of the
Eurobonds continue and whilst certain inflexion points in the business
materialise, including the outcome of the Duyung Operator's farm out process.
The Group is working on a broader debt restructuring, which it intends to
formally propose to all Eurobond holders and shareholders in due course. The
Standstill conditions include a requirement for lender consent on material
capex spend during the period of the standstill together with requirements for
the provision of certain information and the appointment of a financial
advisor nominated by the noteholders to provide advice to the Board and the
lenders. During the course of the Standstill, the Group will work with the
lenders and the financial advisor reviewing the existing arrangements and
working towards a permanent debt restructuring solution for the business. The
Group cautions that, notwithstanding the ongoing constructive discussions
to-date and the agreement of this Standstill, noteholders could withdraw the
Standstill at any time which would result in the Company triggering a default.
Post the period under review, the Company raised US$500,000 via a secured
convertible loan with River Merchant Capital, an existing lender to the
Company under the Company's Luxembourg 8% listed Eurobond and Fenikso Limited.
The proceeds of this loan will be utilised to fund the Group's renewables
business and for general working capital purposes. Under the Group's forecast,
this loan together with existing bank balances provides sufficient funding to
fund the Company's working capital requirements through to the end of January
2025.
During 2023 the Group secured a non-binding lending commitment from HD Bank in
Vietnam whereby the bank has provided the Group with an in principle
commitment letter initially focussed on providing debt finance for 50% of the
capital spend commitment for the ten locations in the pilot stage of the
previously announced 50MW MOU with Mobile World Investment Corporation to
install rooftop solar systems across their portfolio.
Management have prepared a consolidated cash flow forecast for the period to
31 December 2025 which shows that the Group will require additional equity
financing to meet its obligations and intended work renewables work programme
in Asia during this period. The Group is actively pursuing a significant
fundraise and the directors have a reasonable expectation that sufficient
funds can be raised on equity markets to provide this liquidity, although the
ability to raise sufficient capital is not guaranteed.
Based on the above, the Directors consider it appropriate to continue to adopt
the going concern basis of accounting in preparing the Group and Company
financial statements for the period ended 30 June 2024. Should the Group and
Company 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.
The auditors make reference to a material uncertainty in relation to going
concern within their audit report.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended 30 June 2024
Notes 30 June 2024 30 June 2023
$'000 $'000
Revenue 136 116
Depreciation and amortisation expense (40) (41)
Gross profit 96 75
General and administrative expenses 4 (1,156) (1,633)
Depreciation expense (2) (6)
Share of loss of associates - (48)
Loss from operating activities (1,062) (1,612)
Finance income 884 1,273
Finance expense (1,186) (2,203)
Net finance expense 4 (302) (930)
Loss before income tax (1,364) (2,542)
Income tax benefit / (expense) - -
Loss for the period from continuing operations (1,364) (2,542)
Discontinued operations
Gain for the period from discontinued operations - 232
Total loss for the period (1,364) (2,310)
Other comprehensive income/loss
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations 77 (1,496)
Total comprehensive loss for the period (1,287) (3,806)
Loss attributable to:
Owners of the company (1,371) (2,296)
Non-controlling interests 7 (14)
Total comprehensive loss attributable to:
Owners of the company (1,294) (3,792)
Non-controlling interests 7 (14)
Basic loss per share from continuing operations ($) 5 (0.001) (0.001)
Diluted loss per share from continuing operations ($) 5 (0.001) (0.001)
Basic profit per share from discontinued operations ($) 5 - 0.0001
Diluted profit per share from discontinued operations ($) 5 - 0.0001
The above condensed consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2024
Notes 30 June 2024 31 December 2023
$'000 $'000
Non-current assets
Property, plant and equipment 6 1,619 1,680
Intangible assets 7 20,465 20,190
Investment in associates - -
Other financial assets 541 472
Total non-current assets 22,625 22,342
Current assets
Cash and cash equivalents 510 1,095
Trade and other receivables 556 1,399
Inventory 34 35
Total current assets 1,100 2,529
Assets of disposal group held for sale - -
Total assets 23,725 24,871
Liabilities and equity
Current liabilities
Trade and other payables 11 789 660
Borrowings 8 31,351 31,327
Total current liabilities 32,140 31,987
Non-current liabilities
Borrowings 8 - -
Total non-current liabilities - -
Liabilities of disposal group held for sale - -
Total liabilities 32,140 31,987
Equity
Share capital 9 3,826 3,826
Share premium 9 51,762 51,762
Merger reserve - -
Other reserves 10 3,668 3,603
Non-controlling interests (85) (92)
Accumulated losses (67,586) (66,215)
Total equity (8,415) (7,116)
Total equity and liabilities 23,725 24,871
The above condensed consolidated balance sheet should be read in conjunction
with the accompanying notes.
UNAUDITED 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 income - - - (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)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2024
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 2024 3,826 51,762 - 3,603 (66,215) (92) (7,116)
Total comprehensive loss for the period:
Loss for the period - - - - (1,371) 7 (1,364)
Other comprehensive loss - - - 77 - - 77
Total comprehensive loss for the period - - - 77 (1,371) 7 (1,287)
Transactions with owners recorded directly in equity:
Issue of share capital - - - - - - -
Share based payments for services rendered - - - (12) - - (12)
Balance at 30 June 2024 3,826 51,762 - 3,668 (67,586) (85) (8,415)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended 30 June 2024
30 June 2024 30 June 2023
$'000 $'000
Cash flows from operating activities
Receipts from customers - 2,168
Payments to suppliers and employees (345) (3,761)
Interest paid - -
Net cash used in operating activities (345) (1,593)
Cash flow from investing activities
Payments for property, plant & equipment (7) (5)
Payments for intangible assets (91) (507)
Payments/refunds related to development intangible assets (135) 4
Advance on receipt from sale of Italian operations - 1,639
Net cash provided by / (used in) investing activities (233) 1,131
Cash flows from financing activities
Net cash provided by / (used in) financing activities - -
Net decrease in cash and cash equivalents (578) (462)
Cash and cash equivalents brought forward 1,095 1,616
Effects of exchange rate changes on cash (7) (30)
and cash equivalents
Cash and cash equivalents carried forward 510 1,124
Cash and cash equivalents carried forward at 30 June 2023 includes $473k
relating to discontinued operations and $651k and relating to continuing
operations.
The above condensed consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
Note 1: Basis of preparation of the interim financial statements
The condensed consolidated interim financial statements of Coro Energy plc
(the "Group") for the six month period ended 30 June 2024 have been prepared
in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2023,
which was prepared under International Financial Reporting Standards (IFRS) in
conformity with the requirements of the Companies Act 2006, and any public
announcements made by Coro Energy plc during the interim reporting period.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2022
prepared under IFRS have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been audited.
The condensed consolidated interim financial statements of the Group are
presented in United States Dollars ("USD" or "$"), 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 $0.5m and current receivables of $0.5m
related to the residual sales proceeds from the sale of the Italian
operations. The Group's Eurobond obligation matured on 12 April 2024 with the
outstanding balances, including the rolled up coupon, or US$31.4 million. The
Group has been in active discussions with bondholders in relation to the
restructuring of the bonds and received a letter from two lenders holding 68%
of the Eurobonds on 12 April 2024 (the "Standstill"). The Standstill, which
the Company is advised is binding on the parties, provides a conditional
standstill on the repayment of the Group's current debt obligations on expiry
whilst the ongoing constructive discussions with the Group in respect of the
Eurobonds continue and whilst certain inflexion points in the business
materialise, including the outcome of the Duyung Operator's farm out process.
The Group is working on a broader debt restructuring, which it intends to
formally propose to all Eurobond holders and shareholders in due course. The
Standstill conditions include a requirement for lender consent on material
capex spend during the period of the standstill together with requirements for
the provision of certain information and the appointment of a financial
advisor nominated by the noteholders to provide advice to the Board and the
lenders. During the course of the Standstill, the Group will work with the
lenders and the financial advisor reviewing the existing arrangements and
working towards a permanent debt restructuring solution for the business. The
Group cautions that, notwithstanding the ongoing constructive discussions
to-date and the agreement of this Standstill, noteholders could withdraw the
Standstill at any time which would result in the Company triggering a default.
Post the period under review, the Company raised US$500,000 via a secured
convertible loan with River Merchant Capital, an existing lender to the
Company under the Company's Luxembourg 8% listed Eurobond and Fenikso Limited.
The proceeds of this loan will be utilised to fund the Group's renewables
business and for general working capital purposes. Under the Group's forecast,
this loan together with existing bank balances provides sufficient funding to
fund the Company's working capital requirements through to the end of January
2025.
During 2023 the Group secured a non-binding lending commitment from HD Bank in
Vietnam whereby the bank has provided the Group with an in principle
commitment letter initially focussed on providing debt finance for 50% of the
capital spend commitment for the ten locations in the pilot stage of the
previously announced 50MW MOU with Mobile World Investment Corporation to
install rooftop solar systems across their portfolio.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
Management have prepared a consolidated cash flow forecast for the period to
31 December 2025 which shows that the Group will require additional equity
financing to meet its obligations and intended work renewables work programme
in Asia during this period. The Group is actively pursuing a significant
fundraise and the directors have a reasonable expectation that sufficient
funds can be raised on equity markets to provide this liquidity, although the
ability to raise sufficient capital is not guaranteed.
Based on the above, the Directors consider it appropriate to continue to adopt
the going concern basis of accounting in preparing the Group and Company
financial statements for the period ended 30 June 2024. Should the Group and
Company 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.
The auditors make reference to a material uncertainty in relation to going
concern within their audit report.
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.
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
There have been no significant changes affecting the financial position and
performance of the Group during the six months to 30 June 2024. The results of
the Group for the comparative period to 30 June 2023.
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.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
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
2024 2023 2024 2023 2024 2023 2024 2023
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Depreciation and amortisation - - (39) (41) (1) (6) (40) (47)
Finance expense - - - - (929) (1,718) (929) (1,718)
Share of loss of associates - - - - - (48) - (48)
Segment loss before tax from continuing operations - - (294) (286) (1,070) (2,256) (1,364) (2,542)
Segment profit before tax from discontinued operations (2022 restated) - 232 - - - - - 232
Italy Asia UK Total
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2024 2023 2024 2023 2024 2023 2024 2023
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Segment assets - - 21,601 21,587 2, 124 3,283 23.725 24,870
Segment liabilities - - (379) (152) (31,658) (31,835) (32,037) (31,987)
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
2024 2023
$'000 $'000
Employee benefits expense 463 514
Business development 293 418
Corporate and compliance costs 166 222
Investor and public relations 53 42
Other G&A 104 158
G&A - non-operated joint operations 89 67
Share based payments (note 9) (12) 212
1,156 1,633
b) Finance income / expense
30 June 30 June
2024 2023
$'000 $'000
Finance income
Foreign exchange gains 884 1,273
Finance expense
Interest on borrowings 929 1,718
Other finance charges 3 3
Unrealised loss on foreign exchange - -
Foreign exchange losses 254 482
Net finance income / (expense) (302) (930)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
Note 5: Loss per share
30 June 30 June
2024 2023
Basic loss per share from continuing operations ($) (0.001) (0.001)
Diluted loss per share from continuing operations ($) (0.001) (0.001)
Basic profit per share from discontinued operations ($) - 0.0001
Diluted profit per share from discontinued operations ($) - 0.0001
The calculation of basic loss per share from continuing operations was based
on the loss attributable to shareholders of $1.4m (2023: $2.5m) and a weighted
average number of ordinary shares outstanding during the half year of
2,866,858,784 (2023: 2,348,242,699).
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 was $nil (2023:
$0.2m).
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.
Note 6: Property, plant and equipment
30 June 31 December
2024 2023
$'000 $'000
Office furniture and equipment 5 8
Solar assets 1,614 1,672
1,619 1,680
Reconciliation of the carrying amounts for each material class of intangible
assets for the six months ended 30 June 2024 are set out below:
Solar assets:
30 June
2023
$'000
Carrying amount at beginning of period 1,672
Additions 5
Depreciation and amortisation (38)
Retranslation differences (25)
Carrying amount at end of period 1,614
Solar assets comprise of the Group's 3-megawatt pilot rooftop solar project in
Vietnam.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
Note 7: Intangible assets
30 June 31 December
2024 2023
$'000 $'000
Exploration and evaluation assets 18,866 18,731
Intangible development assets 726 579
Goodwill 873 880
20,465 20,190
Reconciliation of the carrying amounts for each material class of intangible
assets for the six months ended 30 June 2024 are set out below:
Exploration and evaluation assets:
30 June
2023
$'000
Carrying amount at beginning of period 18,731
Additions 135
Carrying amount at end of period 18,866
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 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
2023.
Note 8: Borrowings
30 June 31 December
2024 2023
$'000 $'000
Current
Eurobond 31,351 31,327
31,351 31,327
Non-current
Eurobond - -
- -
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.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
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
2024 value $'000 2024
Number $'000 Total
000's $'000
As at 1 January 2024 2,866,859 3,826 51,762 55,588
Shares issued during the period:
Shares issued - - - -
Closing balance at 30 June 2024 2,866,859 3,826 51,762 55,588
31 December 2023 Nominal Share 31 December 2023
Number value Premium Total
000's $'000 $'000 $'000
As at 1 January 2023 2,339,977 3,184 50,862 54,046
Shares issued during the period:
Proceeds from share issuance for Eurobond interest 486,882 594 804 1,398
Consideration for increase in Philippines dividend entitlement (note 7) 40,000 48 96 144
Closing balance - 31 December 2023 2,866,859 3,826 51,762 55,588
Note 10: Reserves
a) Other reserves
Share based payments reserve
No new options were issued in the period under review. In 2023 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 if 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 $0.1m (H1 2023: $1.5m gain).
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2024
Note 11: Trade and other payables
30 June 31 December
2024 2023
$'000 $'000
Current
Trade payables 255 123
Other Payables 36 40
Accrued expenses 16 243
Joint venture payables 482 254
789 660
Note 12: Interests in other entities
Duyung PSC
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.
Coro Renewables VN1 Joint Stock Company
In October 2021, a binding shareholder agreement was signed with VPE and the
Group acquired an 85% interest in the newly incorporated Vietnamese company,
Coro Renewables VN1 Joint Stock Company, which owns 100% of Coro Renewables
VN2 Company Limited, which in turn owns 100% of Coro Renewables Vietnam
Company Limited.
Note 13: Contingencies and commitments
Commitments
Coro's share of the 2024 Duyung Work Programme and Budget is estimated at
US$0.5m, which will be allocated between items of capital expenditure and
joint venture G&A. The Group had no committed work programmes in it
Philippine or Vietnam operations at the reporting date.
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.
Contingent assets
The Group has the right to contingent payments of up to an aggregate of Euro
1.5m through a 10% net profit interest in the disposed Italian Portfolio over
the three years from the date of completion.
Note 14: Subsequent events
On 3 July 2024, the Company announced the appointment of Harry Beamish as
Independent Non-Executive Director of the Company with immediate effect.
On 15 August 2024, the Company announced that it has signed a six month $500k
secured convertible loan with River Merchant Capital, and existing lender to
the Company under the Company's Luxembourg 8.0% listed Eurobond and Fenikso
Limited.
On 10 September 2024, the temporary suspension on trading on AIM was lifted.
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