28th Apr 2016 10:13
LONDON (Alliance News) - Atlas African Industries Ltd said Thursday its pretax loss widened in the eighteen months to December 31 as operating expenses rose after major restructuring activity left company operating purely in Ethiopia.
The African-focused support services and logistics company gave results for the 18 months to December 31 alongside a set of set of results for the twelve months to June 30, 2014. This came after the company previously reported its full year results to June 2015 in September, but changed its full year since that date.
In September, Atlas African had said its pretax loss in the year ended June 30 widened to USD9.5 million from USD1.4 million the year before.
On Thursday, Atlas African said in the eighteen months to December 31, its pretax loss widened further to USD14.7 million, despite the company reporting revenue of USD3.1 million, compared to no revenue in the previous period, as it was hit by USD13.3 million in operating expenses, from USD2.5 million during the previous period.
These higher operating expenses were largely due to foreign exchange losses, consultancy fees and staff costs, Atlas African said.
Atlas African changed its name from Atlas Development & Support Services Ltd in March and said it was "forced to change direction" due to difficulties within the oil and gas sector. This led to Atlas African liquidating its Kenyan subsidiary in December and focusing all its attention on Ethiopia.
"As shareholders will be aware, the 18-month period under review has been both turbulent and transformative. Together with the entire board, I believe that Atlas has navigated this period in a sensible manner and is now heading in the right direction to generate shareholder value," said Non-Executive Chairman Ian Mann.
"The collapse in the oil price, which persisted throughout the period under review, dramatically changed our operating environment, particularly in Kenya, and with oil companies aggressively cutting exploration budgets, our original core support services business was affected deeply," Mann added.
"In spite of the challenges that have faced us, I believe that we have made great strides in building a more sustainable business that is less exposed to market shocks. With the recent acquisition of the Chancho Project [in November], we have been able to diversify the business to negate the impact of the downturn in the oil and gas sector," Mann added.
Shares in Atlas African were down 3.2% at 0.300 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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