REG - Kibo Energy PLC - Interim results for the 6 months ended 30/06/22
23/09/2022 09:30
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RNS Number : 4498A Kibo Energy PLC 23 September 2022
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Group" or "the Company")
Unaudited Interim results for the six months ended 30 June 2022
Dated 23 September 2022
Kibo Energy PLC ('Kibo' or 'the Group' or 'the Company') (AIM: KIBO; AltX:
KBO), the renewable-energy-focused development company, is pleased to announce
its unaudited results for the six months ended 30 June 2022. The interim
results are also available on the Company's website:
https://kibo.energy/wp-content/uploads/Kibo-Interim-Results-30-June-2022.pdf
(https://kibo.energy/wp-content/uploads/Kibo-Interim-Results-30-June-2022.pdf)
Highlights
· Continued focus on the Company's revised renewable energy strategy in
order to align with global requirements:
o Entered a 10-year take-or-pay conditional Power Purchase Agreement ('PPA')
to generate base-load electricity from a 2,7 MW plastic-to-syngas power plant.
The project is the first under Sustineri Energy (Pty) Ltd ('Sustineri Energy'
or 'Sustineri'), a joint venture ('JV') in which Kibo holds 65%, with the
balance of 35% held by Industrial Green Energy Solutions (Pty) Ltd ('IGES')
o Signed a rolling five-year Framework Agreement ('FA') with Enerox GmbH
('CellCube') to develop and deploy Long Duration Energy Storage ('LDES')
solutions in selected target sectors in the Southern African Development
Community ('SADC') countries. The agreement grants Kibo exclusive rights to
the marketing, sales, configuration and delivery of CellCube solutions,
subject to successful Proof of Concepts ('POCs'), within the target sectors
o Acquired 51% of National Broadband Solutions ('NBS') to jointly assess and
develop a portfolio of LDES projects held exclusively by NBS in South Africa,
with an initial target of c. 36,320 MWh capacity
o Intention to dispose of original coal assets in accordance with an approved
disposal strategy that will realise value for shareholders
o Proceeded with further test work to identify a suitable clean/renewable
energy fuel source, based on test results to date, with the aim of converting
the Company's existing energy projects in Tanzania, Botswana and Mozambique to
clean/renewable energy projects
· Appointed Mr Cobus van der Merwe as Group Chief Financial Officer
('CFO') with effect from 1 June 2022
· Confirmed the appointment of former Group CFO, Mr Pieter Krügel as
Chief Executive Officer ('CEO') of Kibo subsidiary, Mast Energy Developments
PLC ('MED'), with effect from 1 June 2022
· As previously announced, Christian Schaffalitzky, the current
Chairman of the Board, will step down on conclusion of the adjourned AGM
· Appointed Shard Capital Partners LLP as a joint broker to the Company
with immediate effect, to act alongside the Company's current broker Hybridan
LLP and the Company's nominated advisor RFC Ambrian Ltd
· Settled outstanding fees owed to directors and management through the
issue of a convertible loan note ('CLN') instrument
· Signed a bridging loan facility agreement with an institutional
investor for up to £3 million with a term of up to 36 months and an initial
drawdown of £1 million available immediately. Funds advanced under the
facility will attract a fixed coupon interest rate of 3,5%, repayable with
accrued interest four months after the drawdown
· Post-reporting period:
o Successfully achieved the first CellCube FA target with a commitment to
purchase the first three POC projects
o Extended its conditional PPA of 10 years to 20 years for the Company's
first South African waste-to-energy ('WTE') project as part of the Sustineri
Energy JV with IGES
o Increased Kibo's interest in MED from 55,42% to 61,27%, following the
receipt of MED shares as partial settlement of outstanding shareholder loan
amount
o Initiated a process of Requests for Proposals ('RFPs') to investigate the
feasibility of replacing fossil fuel (coal) with renewable biofuel,
specifically regarding the operations and assets wherein the Company
determined to dispose all its coal assets while retaining the associated
energy (power) projects and maintaining/adding value for shareholders
o Proceeded with a signed definitive agreement to acquire 100% interest in a
waste gasification and power plant in the United Kingdom as part of its UK WTE
portfolio
Chairman's Statement
Introduction
Following the announcement in last year's interim results for the six months
ended 30 June 2021, that Kibo Energy ('Kibo' or 'the Company') had begun the
process of pivoting its business to the acquisition and development of a
portfolio of sustainable, renewable energy assets to capitalise on the global
clean energy revolution, I am pleased to report that the Company's continued
commitment to its renewed strategy in this regard has yielded positive
results. As part of Kibo's refocused strategy centred around renewable energy
development, the Company has acquired a waste gasification and power plant in
the United Kingdom as part of its UK WTE portfolio. We believe this
opportunity supports our strategic intent to significantly advance and
accelerate the development of the Company's renewable energy portfolio in the
UK.
In South Africa, we are excited to have signed our first WTE Power Purchase
Agreement ('PPA') to generate base-load electricity over 10 years from a 2,7
MW plastic-to-syngas power plant, which aligns with our clean energy strategy.
The project initiates a pipeline of projects under the Company's South African
WTE portfolio with our partners, Industrial Green Energy Solutions (Pty) Ltd
('IGES'). During the PPA process, the Company also performed a large amount of
work to procure funding for the project and has received a
higher-than-expected level of interest for the provision of project and debt
funding at very competitive commercial terms from various institutions.
The growing energy market in the Southern African Development Community
('SADC') countries, particularly the energy-starved South Africa, makes the
case for energy storage more viable. Further to the Company's strategy to
implement long-duration energy storage ('LDES') solutions we are delighted to
have signed a five-year Framework Agreement ('FA') with Enerox GmbH
('CellCube') to develop and deploy LDES solutions in the SADC countries (RNS
dated 17 May 2022). The development of a large project pipeline ready for
immediate execution is the main pivot on which the FA hinges.
These smaller-scale renewable energy projects are focused on the UK and
Southern Africa as the market opportunities, government support and technical
innovation in these countries is slowly evolving and at the ideal stage to
position Kibo as an influential innovator in the sector. This is most evident
in Kibo's large knowledge base of and experience in the renewable energy
sector, developed in recent years through its renewable energy and LDES
solutions for integration with and repositioning of its current large utility
fossil fuel-based projects.
The past few months have seen considerable progress across Kibo's renewable
and sustainable energy strategy. Following the RNS dated 16 June 2021, in
which Kibo announced an extensive review of operations and assets, the Company
decided to dispose of all its coal assets while retaining the associated
energy (power) projects through its introduction of innovative biofuel
technology to its arsenal of solutions. By undertaking an evidence-based
process of test and evaluation on the biofuel technology, we believe, subject
to confirmatory test work, replacement of conventionally mined coal with a
100% renewable energy source is possible. Work completed to date indicates
that our existing coal-fired power plant designs can be adapted, with minor
design changes, to accept the new renewable fuel solution. All current and
future projects across the Kibo Energy portfolio as well as its investment
holdings have been extensively reviewed and realigned with the Company's
renewed strategy to focus on renewable, sustainable energy solutions while
retaining maximum value for Kibo and its shareholders as well as remaining
attractive for acquisition, funding and construction by potential purchasers.
As progress continues on Kibo's portfolio of projects, the Company has further
invested in its management team with the appointment of Mr Cobus van der Merwe
as Chief Financial Officer ('CFO') as of 1 June 2022 (RNS dated 20 May 2022).
Van der Merwe brings a wealth of experience to the team as a registered
Chartered Accountant (South Africa) and having previously held managerial and
executive roles in the investment management and energy, utilities and
resource sectors. Most notably, he held a senior management position at
PricewaterhouseCoopers, servicing clients across the United Kingdom, Ireland
and Africa, as well as the position of Partner and Chair of the Investment
Committee at PSG Wealth, where he managed bespoke investment portfolios for
high net-worth individuals. The Company also confirmed the appointment of Mr
Pieter Krügel to Chief Executive Officer ('CEO') of Mast Energy Developments
('MED') as of 1 June 2022. Krügel previously held the position of Group CFO
at Kibo Energy for four years.
I firmly believe that these new appointments, as well as the focus on the
Company's renewable, sustainable energy strategy, will play an integral role
in delivering the Company's growth strategy while placing Kibo Energy in an
advantageous position within the alternative energy sectors in the UK and
sub-Saharan Africa, where the majority of the Company's investments are held.
Conclusion
As we move forward into the second half of 2022, despite the ongoing war in
Ukraine, rising inflation and increased interest rates adding to uncertainty
across industries, I am pleased to report that economic activity remains high,
and this has yielded positive results for Kibo in terms of the development of
its ongoing and new projects in the first half of 2022. The Company intends to
further streamline its operations with a primary focus on the acquisition and
development of its alternative and renewable, sustainable energy solution
projects, many on which we have already made considerable progress while
staying committed to the disposal and conversion of our large-scale fossil
fuel-based utility projects.
Kibo's knowledge, experience and developments in this area are at an advanced
stage in comparison to the sectors in the regions the Company operates.
Therefore, as technologies within the alternative and renewable energy sectors
evolve to include small-scale bespoke alternative and renewable energy
solutions, Kibo will remain at the forefront in providing an attractive
opportunity for potential investors.
Christian Schaffalitzky
Executive Chairman
Unaudited Interim Results for the six months ended 30 June 2022
Unaudited Condensed Consolidated Interim Statement of Comprehensive Income
For the six months ended 30 June 2022
6 months to 6 months to 12 months to
30 June 30 June 31 December
Note 2022 2021 2021
(Unaudited) (Unaudited) (Audited)
£ £ £
Revenue 15 305,384 - 3,245
Cost of sales (260,329) - (34,321)
Gross profit/loss 45,055 - (31,076)
Administrative expenses (1,210,016) (1,052,448) (2,325,750)
Impairment of non-current assets - - (20,705,209)
Project and exploration expenditure (415,621) (432,678) (687,963)
Listing and capital raising fees (185,070) (417,315) (321,365)
Operating Loss (1,765,652) (1,902,441) (24,071,363)
Other Income 8,593 56,565 1,017,937
Finance income - 11,945 -
Finance costs (86,914) (12,363) (46,372)
Share of loss from associate (118,357) - (48,357)
Loss before Tax (1,962,330) (1,846,294) (23,148,155)
Tax - - -
Loss for the period (1,962,330) (1,846,294) (23,148,155)
Other comprehensive income:
Exchange differences on translating of foreign operations, net of taxes 60,869 579,500 (212,919)
Exchange differences reclassified on disposal of foreign operation - - 345,217
Total Comprehensive Loss for the Period (1,901,461) (1,266,794) (23,015,857)
Loss for the period attributable to (1,962,330) (1,846,294) (23,148,155)
Owners of the parent (1,637,805) (1,011,565) (21,996,968)
Non-controlling interest (324,525) (834,729) (1,151,187)
Total comprehensive loss attributable to (1,901,461) (1,266,794) (23,015,857)
Owners of the parent (1,576,936) (432,065) (21,864,515)
Non-controlling interest (324,525) (834,729) (1,151,342)
Basic loss per share 4 (0.0006) (0.0004) (0.009)
Dilutive loss per share 4 (0.0006) (0.0004) (0.009)
Unaudited Condensed Consolidated Interim Statement of Financial Position
As at 30 June 2022
Note 30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
£ £ £
Assets
Non-current assets
Property, plant, and equipment 7 2,931,097 297,910 2,899,759
Intangible assets 8 4,995,608 18,491,105 4,964,550
Goodwill 9 - 300,000 -
Investment in associates 10 3,972,524 9,696,351 4,092,403
Total non-current assets 11,899,229 28,785,366 11,956,712
Current assets
Other financial assets 11 - - -
Other receivables 233,091 45,455 255,747
Cash and cash equivalents 1,163,297 4,882,121 2,082,906
Total current assets 1,396,388 4,927,576 2,338,653
Total assets 13,295,617 33,712,942 14,295,365
Equity
Called up share capital 5 21,140,481 20,631,196 21,042,444
Share premium 5 45,516,081 44,960,112 45,429,328
Common control reserve - (18,329) -
Foreign currency translation reserve (405,315) (19,137) (466,184)
Share based payment reserve 491,641 1,952,969 466,868
Retained deficit (58,265,194) (38,001,194) (56,627,389)
Attributable to equity holders of the parent 8,477,694 29,505,617 9,845,067
Non-controlling interest 1,638,291 2,242,907 1,962,816
Total Equity 10,115,985 31,748,524 11,807,883
Liabilities
Non-current liabilities
Lease liability 13 287,721 296,435 289,045
Total non-current liabilities 287,721 296,435 289,045
Current liabilities
Trade and other payables 1,156,901 1,166,160 1,116,273
Borrowings 12 1,732,423 499,401 1,079,691
Lease liability 13 2,587 2,422 2,473
Total current liabilities 2,891,911 1,667,983 2,198,437
Total liabilities 3,179,632 1,964,418 2,487,482
Total equity and liabilities 13,295,617 33,712,942 14,295,365
Unaudited Condensed Interim Consolidated Statement of Changes in Equity
Share Share Share based payment reserve Control Reserve Foreign currency translation reserve Retained deficit Non-controlling interest Total
Capital Premium
£ £ £ £ £ £ £ £
Balance at 1 January 2022 (audited) 21,042,444 45,429,328 466,868 - (466,184) (56,627,389) 1,962,816 11,807,883
Loss for the year allocated to equity owners - - - - - (1,637,805) - (1,637,805)
Loss for the period allocated to non-controlling interest (324,525) (324,525)
Other comprehensive income- translation of foreign operations - - - - 60,869 - - 60,869
Issue of share warrants - - 24,773 - - - - 24,773
Issue of share capital 98,037 86,753 - - - - - 184,790
Balance as at 30 June 2022 (unaudited) 21,140,481 45,516,081 491,641 - (405,315) (58,265,194) 1,638,291 10,115,985
Balance as at 31 December 2020 (audited) 20,411,493 44,312,371 1,728,487 (18,329) (598,637) (39,019,856) (256,841) 26,558,688
Loss for the year allocated to equity owners - - - - - (1,011,565) - (1,011,565)
Loss for the period allocated to non-controlling interest - - - - - - (834,729) (834,729)
Other comprehensive income- translation of foreign operations - - - - 579,500 - - 579,500
Issue of share capital 219,703 647,741 - - - - - 867,444
Acquisition of the Non-Controlling Interest without gaining control - - - - - (300,029) 300,029 -
Disposal of equity to Non-Controlling Interest without losing control - - - - - (3,034,448) 3,034,448 -
Changes in ownership interest in subsidiaries without a change in control - - - - - 5,354,486 - 5,354,486
Warrants and Share Options issued by Katoro Gold plc - - 234,700 - - - - 234,700
Expirations of share warrants - - (10,218) - - 10,218 - -
Balance as at 30 June 2021(unaudited) 20,631,196 44,960,112 1,952,969 (18,329) (19,137) (38,001,194) 2,242,907 31,748,524
Balance as at 31 December 2020 (audited) 20,411,493 44,312,371 1,728,487 (18,329) (598,637) (39,019,856) (256,841) 26,558,688
Loss for the year - - - - - (21,996,968) (1,151,187) (23,148,155)
Other comprehensive income - exchange differences - - - - (212,764) - (155) (212,919)
Shares issued 630,951 1,116,957 - - - - - 1,747,908
Disposal of non-controlling interest without losing control - - - - - 3,259,232 3,201,014 6,460,246
Acquisition of non-controlling interest - - - - - (308,030) 308,030 -
Vesting of share options - Katoro Gold plc - - 146,249 - - - - 146,249
Warrants issued Kibo Energy plc - - 48,695 48,695
Warrants issued Kibo Energy plc which expired during the year - - (559,400) - - 559,400 - -
Change of shareholding resulting is loss of control - - (897,163) 18,329 345,217 878,833 (138,045) 207,171
Balance as at 31 December 2021 (audited) 21,042,444 45,429,328 466,868 - (466,184) (56,627,389) 1,962,816 11,807,883
Unaudited Condensed Consolidated Interim Statement of Cash Flow
For the six months ended 30 June 2022
6 months to 6 months to 12 months to
30 June 30 June 31 December
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
£ £ £
Loss for the period before taxation (1,962,330) (1,846,294) (23,148,155)
Adjusted for:
Warrants and options issued 24,773 - 194,944
Exploration and development expenditure JV - 83,532 91,179
Expenses settled through share issue 95,000 310,369 -
(Profit)/Loss from the disposal of subsidiary - - (529,415)
Impairment of goodwill - - 300,000
Impairment of intangible assets - - 13,955,528
Impairment of associates - - 6,449,681
Impairment of financial asset receivable - - 43,722
Loss from equity accounting 118,357 - 48,357
Depreciation on property, plant, and equipment 7,621 1,733 10,635
Interest accrued 52,198 - 21,632
Debt forgiven - (56,565) (355,659)
Operating income before working capital changes (1,664,381) (1,507,225) (2,917,551)
Decrease/(Increase) in trade and other receivables 22,656 70,431 (145,525)
Increase/(Decrease) in trade and other payables 40,630 (278,826) (240,957)
Net cash outflows from operating activities (1,601,095) (1,715,620) (3,304,033)
Cash flows from financing activities
Proceeds from borrowings 960,000 - 38,975
Repayment of borrowings (316,173) (25,000) (195,282)
Proceeds from issue of share capital - 6,449,513 1,527,576
Proceeds from disposal of shares to non-controlling interest - - 6,099,500
Repayment of lease liabilities (1,210) - (2,275)
Net cash proceeds from financing activities 642,617 6,424,513 7,468,494
Cash flows from investing activities
Cash received/(forfeited) on disposal of subsidiary - - (272,075)
Cash advanced to Joint Venture - (83,532) (91,179)
Cash received on sale of plant and equipment - - -
Property, plant, and equipment acquired (38,960) - (1,654,239)
Intangible assets acquired - - (150,273)
Net cash used in investing activities (38,960) (83,532) (2,167,766)
Net movement in cash and cash equivalents (997,438) 4,625,361 1,996,695
Cash and cash equivalents at beginning of period 2,082,906 256,760 256,760
Exchange movements 77,829 - (170,549)
Cash and cash equivalents at end of period 1,163,297 4,882,121 2,082,906
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended 30 June 2022
1. General information
Kibo Energy PLC is a public company incorporated in Ireland. The condensed
consolidated interim financial results consolidate those of the Company and
its subsidiaries (together referred to as the "Group"). The Company's shares
are listed on the AIM Market ("AIM") of the London Stock Exchange and the
Alternative Exchange ("AltX") of the Johannesburg Stock Exchange ("JSE")
Limited. The principal activities of the Company and its subsidiaries are
related to the development of renewable energy projects in Southern Africa and
the United Kingdom.
2. Statement of Compliance and Basis of Preparation
The unaudited condensed consolidated interim financial results are for the six
months ended 30 June 2022, and have been prepared using the same accounting
policies as those applied by the Group in its December 2021 consolidated
annual financial statements, which are in accordance with the framework
concepts and the recognition and measurement criteria of the International
Financial Reporting Standards and Financial Reporting Pronouncements as issued
by the Financial Reporting Standards Council issued by the International
Accounting Standards Board ("IASB"), including the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee, IAS 34 - Interim
Financial Reporting, the Listings Requirements of the JSE Limited, the AIM
rules of the London Stock Exchange and the Irish Companies Act 2014.
These condensed consolidated interim financial statements do not include all
the notes presented in a complete set of consolidated annual financial
statements, as only selected explanatory notes are included to explain key
events and transactions that are significant to obtaining an understanding of
the changes throughout the financial period, accordingly the report must be
read in conjunction with the annual report for the year ended 31 December
2021.
The comparative amounts in the consolidated financial results include extracts
from the consolidated annual financial statements for the period ended 31
December 2021.
These extracts do not constitute statutory accounts in accordance with the
Irish Companies Acts 2014. All monetary information is presented in the
presentation currency of the Company being Pound Sterling. The Group's
principal accounting policies and assumptions have been applied consistently
over the current and prior comparative financial period.
3. Use of estimates and judgements
Preparing the condensed consolidated interim financial statements requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these
estimates.
In preparing these condensed consolidated interim financial statements,
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
applied to the consolidated financial statements as at and for the year ended
31 December 2021.
4. Loss per share
Basic, dilutive and headline loss per share for the six months ended 30 June
2022 are as follows:
6 months to 6 months to 12 months to
30 June 30 June 31 December
2022 2021 2021
£ £ £
Loss for the year attributable to equity holders of the parent (1,637,805) (1,011,565) (21,996,968)
Weighted average number of ordinary shares for the purposes of basic and 2,956,206,435 2,339,072,536 2,480,279,189
dilutive loss per share
Basic loss per share (0.0006) (0.0004) (0.009)
Dilutive loss per share (0.0006) (0.0004) (0.009)
6 months to 6 months to 12 months to
Reconciliation of Headline loss per share 30 June 30 June 31 December
2022 2021 2021
£ £ £
Loss for the year attributable to equity holders of the parent (1,637,805) (1,011,565) (21,996,968)
Adjusted for:
Profit on loss of control over of subsidiaries - - (529,415)
Impairment of goodwill - - 300,000
Impairment of intangible assets - - 13,955,528
Impairment of associates - - 6,449,681
Headline loss per share (1,637,805) (1,011,565) (1,821,174)
Weighted average number of ordinary shares for the purposes of headline loss 2,956,206,435 2,339,072,536 2,480,279,189
per share
Headline loss per share (0.0006) (0.0004) (0.0007)
Headline earnings per share (HEPS) is calculated using the weighted average
number of ordinary shares in issue during the period and is based on the
earnings attributable to ordinary shareholders, after excluding those items as
required by Circular 1/2021 issued by the South African Institute of Chartered
Accountants (SAICA).
5. Called up share capital and share premium
Authorised ordinary share capital of the company is 5,000,000,000 ordinary
shares of €0.001 each.
Authorised deferred shares of the company is 1,000,000,000 of €0.014 and
3,000,000,000 of €0.009 respectively.
Detail of issued capital is as follows:
Number of Ordinary Share Capital Deferred Share Called Up Share Share Premium
Shares Capital Capital
£ £ £ £
Balance at 31 December 2020 2,221,640,835 1,205,611 19,205,882 20,411,493 44,312,371
Shares issued in period 253,707,902 219,703 - 219,703 -
Balance at 30 June 2021 2,475,348,737 1,425,314 19,205,882 20,631,196 44,312,371
Shares issued in period 455,308,700 411,248 - 411,248 1,116,957
Balance at 31 December 2021 2,930,657,437 1,836,562 19,205,882 21,042,444 45,429,328
Shares issued in period 108,540,021 98,037 - 98,037 86,753
Balance at 30 June 2022 3,039,197,458 1,934,599 19,205,882 21,140,481 45,516,081
The company issued the following ordinary shares during the period, with
regard to key transactions:
- 39,264,079 new Kibo Shares were issued on 16 February 2022 of
€0.001 each at a deemed issue price of £0.0017828 per share to an
Institutional Investor ("Investor") in settlement of £70,000 of facility
implementation fee pursuant to the Funding Facility Agreement signed between
the Investor and the Company in February 2022;
- 13,157,895 new Kibo Shares were issued on 16 February 2022 of
€0.001 each at a deemed issue price of £0.0019 per share to certain
providers of financial and technical services in settlement of £25,000 of
outstanding invoices;
- 56,118,047 new Kibo Shares were issued on 20 May 2022 of €0.001
each at a deemed issue price of £0.0016 per share to Sanderson Capital
Partners Limited in full and final settlement of £89,788.88 of the total
remaining outstanding amount owing pursuant to the Forward Payment Facility;
and
- 168,274,625 Company warrants to subscribe for 168,274,625 new Kibo
shares under the terms of warrants announced on the 16(th) of February 2022.
6. Segment analysis
IFRS 8 requires an entity to report financial and descriptive information
about its reportable segments, which are operating segments or aggregations of
operating segments that meet specific criteria. Operating segments are
components of an entity about which separate financial information is
available that is evaluated regularly by the chief operating decision-maker.
The Chief Executive Officer is the chief operating decision maker of the
Group.
Management currently identifies individual projects as operating segments.
These operating segments are monitored, and strategic decisions are made based
upon their individual nature, together with other non-financial data collated
from project and exploration activities. Principal activities for these
operating segments are as follows:
30 June 2022
Mbeya Coal PP Bordersley Power Rochdale Power PyeBridge Power Sustinery Energy Corporate 30 June 2022 (£) Group
Revenue - - - 305,384 - - 305,384
Cost of sales - - - (260,329) - - (260,329)
Administrative and other costs (590) (16,143) (3,420) (20,151) (220) (1,354,562) (1,395,086)
Loss from equity accounted investment - - - - - (118,357) (118,357)
Project expenditure (25,908) (166,518) (39,284) (82,736) (50,985) (50,190) (415,621)
Finance cost - - - - - (86,914) (86,914)
Investment and other income 5,686 - - - 141 2,766 8,593
Loss after tax (20,812) (182,661) (42,704) (57,832) (51,064) (1,607,257) (1,962,330)
30 June 2021
Mabesekwa Independent Power Mbeya Coal to Power Mast Energy Developments Haneti Blyvoor Corporate 30 June 2021 (£) Group
Revenue - - - - - - -
Administrative cost (806) (4,968) (275,445) (5,084) (4,228) (761,917) (1,052,448)
Exploration expenditure - (33,254) (120,333) (119,802) (35,021) (124,268) (432,678)
Investment and other income - 1,821 - - - 54,744 56,565
Capital raising fees - - (260,878) - - (156,437) (417,315)
Loss from equity accounted investment - - - - - - -
Finance income - - - - - 11,945 11,945
Finance costs - - (12,363) - - - (12,363)
Loss after tax (806) (36,401) (669,019) (124,886) (39,249) (975,933) (1,846,294)
30 June 2022
Mbeya Coal PP Bordersley Power Rochdale Power PyeBridge Power Sustinery Energy Corporate Group 30 June 2022 (£) Group
Segment assets 8,388 413,424 10,079 2,641,183 305,071 9,917,472 13,295,617
Segment liabilities (21,650) (320,559) (26,682) (103,103) (33,493) (2,674,145) (3,179,632)
30 June 2021
Mabesekwa Independent Power Mbeya Coal to Power Mast Energy Development Haneti Corporate Group 30 June 2021 (£) Group
Segment assets - 9,822 4,590,930 5,536 29,104,836 33,712,942
Segment liabilities 8,464 98,090 686,205 90,527 1,079,633 1,964,418
7. Property, plant and equipment
Land Right of Use Asset Furniture and Fittings Motor Vehicles Office Equipment Computer Equipment Other Equipment Total
Opening balance of Cost at 1 January 2022 602,500 293,793 2,465 16,323 4,942 5,390 2,020,112 2,945,525
Additions - - - 36,012 36,012
Forex movement - - 268 1,779 452 3,325 923 6,747
Closing balance of Cost at 30 June 2022 602,500 293,793 2,733 18,102 5,394 8,715 2,057,047 2,988,284
Opening balance of Accumulated Depreciation at 1 January 2022 - (9,793) (2,465) (16,322) (4,409) (4,074) (8,703) (45,766)
Depreciation - (7,042) - - (498) (81) - (7,621)
Forex movement - - (268) (1,779) 61 (865) (949) (3,800)
Closing balance of Accumulated Depreciation at 30 June 2022 - (16,835) (2,733) (18,101) (4,846) (5,020) (9,652) (57,187)
Carrying value at 30 June 2022 602,500 276,958 - 1 548 3,695 2,047,395 2,931,097
Land Right of Use Asset Furniture and Fittings Motor Vehicles Office Equipment Computer Equipment Other Equipment Total
Opening balance of Cost at 1 January 2021 - - 2,436 16,131 4,970 4,989 8,601 37,127
Additions - 297,593 - - - - - 297,593
Forex movement - - - - - - - -
Closing balance of Cost at 30 June 2021 - 297,593 2,436 16,131 4,970 4,989 8,601 334,720
Opening balance of Accumulated Depreciation at 1 January 2021 - - (2,436) (15,285) (4,398) (4,289) (8,601) (35,009)
Depreciation - (1,733) - - - - - (1,733)
Forex movement - - (68) - - - (68)
Closing balance of Accumulated Depreciation at 30 June 2021 - (1,733) (2,436) (15,353) (4,398) (4,289) (8,601) (36,810)
- 295,860 - 778 572 700 - 297,910
Carrying value at 30 June 2021
Land Right of Use Asset Furniture and Fittings Motor Vehicles Office Equipment Computer Equipment Other Equipment Total
Opening balance of Cost at 1 January 2021 - - 2,436 16,131 4,970 4,989 8,601 37,127
Additions 602,500 293,793 - - - 509 2,011,409 2,908,211
Forex movement - - 29 192 (28) (108) 102 187
Closing balance of Cost at 31 December 2021 602,500 293,793 2,465 16,323 4,942 5,390 2,020,112 2,945,525
Opening balance of Accumulated Depreciation at 1 January 2021 - - (2,436) (15,285) (4,398) (4,289) (8,601) (35,009)
Depreciation - (9,793) - (842) - - - (10,635)
Forex movement - (29) (195) (11) 215 (102) (122)
Closing balance of Accumulated Depreciation at 31 December 2021 - (9,793) (2,465) (16,322) (4,409) (4,074) (8,703) (45,766)
602,500 284,000 - 1 533 1,316 2,011,409 2,899,759
Carrying value at 31 December 2021
8. Intangible assets
Composition of Intangible assets 30 June 30 June 31 December
2022 2021 2021
£ £ £
Carrying value at 1 January 2022 4,964,550 18,491,105 18,491,105
Foreign currency gain 31,058 - -
Acquisitions - - 428,973
Impairments - - (13,955,528)
Carrying value at 30 June 2022 4,995,608 18,491,105 4,964,550
Carrying value of intangible asset at 30 June 2022
Mbeya Coal to Power Project 1,947,500 15,896,105 1,940,577
Bordersley Power Project 2,595,000 2,595,000 2,595,000
Rochdale Power 150,273 - 150,273
Sustineri Energy 302,835 - 278,700
4,995,608 18,491,105 4,964,550
Intangible assets are not amortised, due to the indefinite useful life, which
is attached to the underlying prospecting rights, until such time that active
mining operations commence, which will result in the intangible asset being
amortised over the useful life of the relevant mining licences.
Intangible assets with an indefinite useful life are assessed for impairment
on an annual basis, against the prospective fair value of the intangible
asset. The valuation of intangible assets with an indefinite useful life is
reassessed on an annual basis through valuation techniques applicable to the
nature of the intangible assets.
As at reporting period end, taking into account the various applicable
aspects, the Group concluded that none of the impairment indicators had been
met in relation to the Mbeya Coal to Power Project, Bordersley Power Project,
Rochdale Power or Sustineri Energy.
9. Goodwill
30 June 30 June 31 December
2022 2021 2021
£ £ £
Goodwill - 300,000 -
- 300,000 -
MAST Energy Projects Limited - 2020
During the 30 June 2021 period, the Group acquired a 60% equity interest in
MAST Energy Project Limited, previously known as MAST Energy Development
Limited, for £300,000, settled through the issue of 5,714,286 ordinary shares
in Kibo Energy plc effective on 19 October 2018. The acquisition of MAST
Energy Projects Limited falls within the ambit of IFRS 3: Business
Combinations.
The net assets acquired were valued at Nil, with the resultant purchase price
being allocated to Goodwill on date of acquisition. Goodwill is assessed for
impairment on an annual basis, against the recoverable amount of underlying
Cash Generating Unit ("CGU"). The recoverable amount of the CGU is the higher
of its fair value less cost to sell and its value in use.
Because the underlying projects previously held by Mast Energy Projects
Limited have now been restructured into separate SPV's, controlled directly by
the intermediary holding company Sloane Developments Limited, there was no
prospective benefit from continued operations of Mast Energy Projects Limited
therefore the goodwill was impaired. The Company will cease operations in the
foreseeable future.
10. Investment in associates
30 June 30 June 31 December
2022 2021 2021
£ £ £
Mabesekwa Coal Independent Power Plant 3,563,639 9,696,351 3,563,639
Katoro Gold plc 528,764 - 577,121
Share of loss for the period (118,357) - (48,357)
Foreign exchange loss (1,522)
3,972,524 9,696,351 4,092,403
The value of the equity interest in Kibo Energy Botswana (Pty) Ltd was
determined based on the fair value of the proportionate equity interest
retained in the enlarged resource following the restructuring in the prior
period.
As at reporting period end, taking into account the various applicable
aspects, the Group concluded that none of the impairment indicators had been
met in relation to the Mabesekwa Coal Independent Power Plant project.
11. Other financial assets
30 June 2022 30 June 2021 31 December 2021
£ £ £
Other financial assets consist of:
Financial assets recognised at amortised cost - 1,880,556 -
Lake Victoria Gold - 657,061 -
Blyvoor Joint Venture - 1,223,495 -
Impairment of financial assets recognised at amortised cost - (1,880,556) -
Impairment - (1,880,556) -
Carrying value at reporting period end - - -
12. Borrowings
Amounts falling due within one year 30 June 30 June 31 December
2022 2021 2021
£ £ £
Short-term borrowings 1,732,423 499,401 1,079,691
1,732,423 499,401 1,079,691
Short-term borrowings consist of:
Apex Capital 661,911 - 960,686
Institutional Investor 1,070,512 - -
Sanderson Capital - 144,004 119,005
St Anderton on Vaal Ltd - 355,397 -
1,732,423 499,401 1,079,691
The borrowings relate to the following loan facilities:
Institutional Investor
The Institutional Investor borrowing is a bridge loan facility agreement for
up to £3m with a term of up to 36 months. Funds advanced under the Facility
will attract a fixed coupon interest rate of 3.5% and will be repayable with
accrued interest on 23 July 2022.
Sanderson Capital Partners Limited
Short term loans relate to the unsecured interest free loan facility from
Sanderson Capital Partners Limited in the amount of £NIL (31 December:
£119,005, 31 December: £144,004) which is was repaid through the issue of
ordinary shares by the Company.
Deferred vendor liability - Apex Capital
The amount due to vendors represents the balance of the purchase consideration
owing in respect of the acquisition of Pyebridge Power Limited. The liability
will be settled in cash as follows:
• £500,000 payable within 8 months after the signing of the SPA represents:
and
• £500,000 payable within 12 months after the signing of the SPA
represents.
The fair value of the deferred vendor liability is based on the anticipated
purchase consideration payable, at the fair value thereof on the date of the
transaction. The carrying value of current other financial liability equals
their fair value due mainly to the short-term nature of these payables.
St Anderton on Vaal Limited
The amount due to St Anderton on Vaal Limited represented the balance of
amounts owed by MAST Energy Projects Limited for consulting services rendered.
The amount due as at 30 June 2021 of £355,397 was written off by St Anderton
on Vaal Limited during the previous financial period and resulted in other
income of £355,397 during the financial period 1 July 2021 to 31 December
2021.
13. Right of use asset and Lease liability
The Group has one lease contract for land it shall utilise to construction a
5MW gas-fuelled power generation plant. The land is located at Bordesley,
Liverpool Street, Birmingham. The lease of the land has a lease term of 20
years, with an option to extend for 10 years which the Group has opted to
include due to the highly likely nature of extension as at the time of the
original assessment. The Group's obligations under its leases are secured by
the lessor's title to the leased assets. The Group's incremental borrowing
rate implicit to the lease is 8.44%. Refer to note 7 for the right of use
asset.
30 June 2022(£) 30 June 2021(£) 31 December 2021(£)
Lease liability
Carrying amounts of lease liabilities:
Opening balance 291,518 - -
Additions - 297,594 293,793
Interest 12,290 12,363 24,725
Payments (13,500) (11,100) (27,000)
Closing balance 290,308 298,857 291,518
Spilt of lease liability between current and non-current portions
Current 2,587 2,422 2,473
Non-current 287,721 296,435 289,045
290,308 298,857 291,518
14. Financial instruments
30 June 30 June 31 December
2022 2021 2021
£ £ £
Financial assets - carrying amount
Loans and receivables held at amortised cost
Trade and other receivables 233,091 45,455 255,747
Cash and cash equivalents 1,163,297 4,882,121 2,082,906
1,396,388 4,927,576 2,338,653
Financial liabilities - carrying amount
Financial liabilities held at amortised cost
Trade and other payables 1,156,901 1,166,160 1,116,273
Borrowings 1,732,423 499,401 1,079,691
2,889,324 1,665,561 2,195,964
The Board of Directors considers that the fair values of financial assets and
liabilities approximate their carrying values at each reporting date due to
the short-term nature thereof, and market related interest rate applied.
15. Revenue
30 June 30 June 31 December
2022 2021 2021
£ £ £
Electricity sales 305,384 - 3,245
305,384 - 3,245
Revenue is comprised of electricity sales from renewable energy operations of
MAST Energy Developments plc in the United Kingdom.
16. Unaudited results
These condensed consolidated interim financial results have not been audited
or reviewed by the Group's auditors.
17. Dividends
No dividends were declared during the interim period.
18. Board of Directors
There were no changes to the board of directors during the interim period, or
any other committee's composition.
19. Subsequent events
The following subsequent events have been noted:
· MAST appointed Mr. Pieter Krügel as a director with effect from 1
June 2022 and announced on the Company's RNS on 13 July 2022. Mr. Krügel was
appointed as Chief Executive Officer of the Company and announced on the
Company's RNS of the 20 May 2022 with effect from 1 June 2022 and this
completes his appointment to the board.
· KIBO has successfully achieved its first major Framework Agreement
('FA') target, by placing the first commitment, to purchase the first two
proof of concept ('POC') projects, as announced in the Company's RNS dated 17
May 2022. These projects relate to its signed strategic five-year FA with
CellCube to deploy long-duration energy storage in Southern Africa. The FA
envisages the deployment of c.1 Gigawatt of Long Duration Energy Storage in
Southern Africa over the next five years. Kibo placed the commitment to
purchase via its 51%-owned subsidiary National Broadband Solutions ('NBS'),
for two (2) CellCube FB 250 - 1000 Vanadium Redox Flow Batteries as part of
its initial stage of the FA.
· KIBO has extended to 20 years its conditional 10-year take-or-pay
Power Purchase Agreement ('PPA'), first announced in the Company's RNS dated
14 February 2022. The PPA outlines the construction, commissioning and
operation of a 2.7 MW plastic-to-syngas power plant to generate baseload
electricity for an industrial business park developer (the 'Client') in
Gauteng, South Africa (the 'Project'). The Project is the Company's first
under its joint venture, Sustineri Energy, in which Kibo Energy PLC holds 65%
and Industrial Green Energy Solutions Pty Ltd ('IGES') holds the balance of
35%. The extended term period to 20 years will improve the already compelling
Project highlights, including:
• Strong financials: An increase in the projected EBITDA from c. ZAR 388
million to c. ZAR 953 million, of which an amount of c. ZAR 619 million is
attributable to the Company;
• Improved Internal Rate of Return ('IRR'): An increased projected IRR of
15-18%, up from 11-14%; and
• Commencement of construction and commissioning: The Construction Phase is
scheduled to commence during Q1 2023 with project commissioning 11 to 14
months thereafter.
· MAST has issued 28,735,632 new MED Shares of £0.001 each ("the
Settlement Shares") at a deemed issue price of £0.0348 per share ("Settlement
Share Price") to its majority shareholder, Kibo Energy PLC ("Kibo") in partial
settlement of £1m (the "Partial Settlement") of the total remaining
outstanding amount owing to Kibo Mining Cyprus Ltd, a wholly owned subsidiary
of Kibo, pursuant to the shareholder loan account ("the Loan"), as disclosed
in the Company's IPO admission document and most recently its latest audited
annual report and accounts. Following the Partial Settlement, the Loan's
remaining outstanding amount owing to Kibo is c. £1.27m. The Settlement Share
Price is the 5-day VWAP for the period up to the closing price of the Company
shares on the London Stock Exchange on 26 July 2022, plus a 20% premium and
has effectively increase Kibo's shareholding in MED to 61.27%. This was
announced on the Company's RNS on 29 July 2022.
· KIBO has initiated a process for Requests for Proposals ('RFPs') to
investigate the feasibility of replacing fossil-fuel (coal) with renewable
biofuel, as mentioned in the Company's RNS dated 27 May 2022. This follows an
extensive review of the Company's operations and assets wherein it determined
to dispose of all its coal assets (RNS dated 16 June 2021) while retaining the
associated energy (power) projects through its introduction of innovative
biofuel technology, on which the Company has been doing extensive work in
recent months. Through the RFP process, Kibo intends to appoint an experienced
international biomass and biofuel consultant to determine the economic and
technical viability of utilising the specific biomass (or bio-coal)
technology, referred to above and in previous RNS's, as a feasible fuel source
at industrial scale, to fuel the Company's existing and already developed
utility scale power projects. The feasibility studies will investigate whether
sufficient biomass can be sustainably (NOTE: sustainable = economically,
environmentally and socially viable) produced and supplied as fuel for a 300
MW power plant over a 20 to 25-year power purchase agreement ('PPA') period.
The biofuel technology, which will be the subject of the above referred
investigation, has already been subjected to extensive bench testing and has
thus far delivered positive results in all tests performed.
· Kibo has signed a definitive Share Purchase Agreement (the 'SPA') to
acquire a 100% interest in a waste reception, Anaerobic Digestor and CHP power
plant ('Southport' or 'the Project') at Merseyside, United Kingdom. The
acquisition is in line with the Company's refocused strategy to acquire and
develop an energy portfolio centred around sustainable renewable / clean
energy solutions and opportunities, as detailed in a Company RNS dated 19
April 2021. This includes the addition of a 12MW waste-to-energy project in
the UK (see RNS dated 27 May 2022).
20. Going concern
The Group currently generated revenue of £305,384 and had net assets of
£10,115,985 as at 30 June 2022 (31 December 2021: net assets of £11,807,883;
30 June 2021: £31,748,524).
In performing the going concern assessment, the Board considered various
factors, including the availability of cash and cash equivalents; data
relating to working capital requirements for the foreseeable future;
cash-flows from operational commencement, available information about the
future, the possible outcomes of planned events, changes in future conditions,
the current global economic situation due to the Covid-19 pandemic and Ukraine
conflict and the responses to such events and conditions that would be
available to the Board.
Furthermore, the group has incurred losses in the current financial period and
previous periods. These losses coupled with the net current liability position
the Group finds itself in as at June 2022, indicate that a material
uncertainty exists which may cast significant doubt on the Group's ability to
continue as a going concern.
This is largely attributable to the short-term liquidity position the Group
finds itself in as a result of the significant capital required to develop
projects that exceeds cash contributed to the group by the capital
contributors.
The Directors have evaluated the Groups liquidity requirements to confirm
whether the Group has adequate cash resources to continue as a going concern
for the foreseeable future, taking into account the net current liability
position, and consequently prepared a cash flow forecast covering a period of
12 months from the date of these interim financial statements, concluding that
the Group would be able to continue its operations as a going concern.
The interim financial statements have accordingly been prepared on the going
concern basis which contemplates the continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the normal
course of business.
21. Commitments and contingencies
There are no material commitments, contingent assets or contingent liabilities
as at 30 June 2022 nor any of the comparative periods.
22. Seasonality of operations
The company's operations are not considered to be seasonal or cyclical. These
interim results were therefore not impacted by seasonality or cyclicality.
23 September 2022
**ENDS**
This announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) no. 596/2014 ("MAR").
For further information please visit www.kibo.energy (http://www.kibo.energy/)
or contact:
Louis Coetzee info@kibo.energy (mailto:info@kibo.energy) Kibo Energy PLC Chief Executive Officer
Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated Adviser
Claire Noyce +44 (0) 20 3764 2341 Hybridan LLP Joint Broker
Damon Heath +44 207 186 9952 Shard Capital Partners LLP Joint Broker
Bhavesh Patel / Stephen Allen +44 20 3440 6800 RFC Ambrian Ltd NOMAD on AIM
Zainab Slemang van Rijmenant zainab@lifacommunications.co.za (mailto:zainab@lifacommunications.comza) Lifa Communications Investor and Media Relations Consultant
Notes
Kibo Energy PLC is a renewable energy focused development company with its
primary focus to advance its business as a significant diversified energy
developer of sustainable power solutions that integrate existing and emerging
Renewable Generation technology, Waste-to-Energy technology and Energy Storage
technology in southern and eastern Africa, and the United Kingdom.
Additionally, the Company has a 61.27% interest in MAST Energy Developments
Limited ('MED'), a private UK registered company targeting the development and
operation of flexible power plants to service the UK Reserve Power generation
market.
Johannesburg
23 September 2022
Corporate and Designated Adviser River Group
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