23rd Jan 2014 12:26
LONDON (Alliance News) - Amedeo Resources PLC said Thursday it is performing well across all areas of its business in a pre-close update after the company was relaunched to adopted a leaner operating structure during the reporting period.
In an update ahead of the financial year to January 31 2014, Amedeo said that its largest investment, YZJ Offshore Engineering PTE Ltd, in which it hold a 46.5% stake, has a 40% stake in Jiangsu Yangzijiang Offshore Engineering Co Ltd, a new offshore rig building yard. Amedeo said the yard development is running ahead of schedule and that the skidway and 900 tonne gantry crane are expected to be completed in the first-half of 2014.
The civil works and workshops are 50% completed and are set to be operational in the next few months, said the company.
Amedeo's USD175 million first rig order at partner Yangzijiang Shipbuilding (Holdings) Ltd's yard is also progressing well and is on schedule to be delivered mid-2015 with the main hull nearing completion.
MGR Resources PTE Ltd, the wholesale trader of ferrous metals and ore, in which Amedeo has a 49% stake, also performed well during the reporting period. The investment of USD49,000 in MGR equity and convertible loan of USD1.95 million were made and advanced, respectively, in April 2013, said the company. By the end of July 2013, MGR had paid its maiden dividend of USD210,000 and a second dividend, together with a management fee, are expected to be received shortly.
MGR is now broking approximately 100,000 tonnes of iron ore per month; advanced discussions are underway to increase this further with longer term contracts, Amedeo notes.
The company said, "During the fiscal year, the Company was relaunched and has been reorganised with the objective of having a relatively lean and self-sufficient structure supported by positive cash flows. We are pleased to report that significant progress has been made in this regard. With lead times and cash returns from the offshore construction business being relatively long... an investment was made in MGR which is already generating cash income in the form of dividends and management fees. In addition, cash administrative costs have been significantly reduced as compared to last year thereby reducing the gap between the outgoing and incoming cash."
Looking ahead, the firm said non-cash items continue as reported in the previous year.
Full-year results are scheduled to be released in early May.
Shares in the firm were trading up 3.70% Thursday afternoon at 0.56 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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