30th Jun 2015 10:49
LONDON (Alliance News) - Obtala Resources Ltd Tuesday said it swung to a substantial pretax loss in 2014 but said the company's assets remain undervalued.
The African-focused vertically integrated agribusiness, timber and retail company swung to a GBP24.1 million pretax loss in 2014 from a GBP74.8 million profit in 2013, even as revenue rose to GBP1.7 million from GBP455,000.
Obtala swung to a loss due to a GBP107.4 million gain on the fair value of its forestry assets in 2013 not being repeated in 2014, coupled with a GBP21.0 million loss in 2014 on the disposal of its investment in fellow-listed Paragon Diamonds Ltd as it moved away from the mining sector to focus on agriculture.
The company said the agribusiness has been focused on Tanzania, where it creates fresh produce such as dried fruits sold under its own brand name. It is currently in the process of obtaining international food safety standard certification.
Timber operations in Mozambique continue to supply products for national infrastructure upgrade programmes, and Obtala also acquired a chain of retail outlets in Lesotho during the year.
"This will provide an additional route to market for our products and presents an ideal opportunity to roll-out an African Home Stores concept in other countries in the Southern and East African region where Obtala has expertise," said the company.
"Overall the equity market has not recognised the value of the company's assets, which is true of many diversified companies. However, the business we are building is based on long-term investment programmes particularly whilst advancing the development phase, which will provide a platform to deliver future profitability and growth, generating revenues with the focus on strong margins," said Obtala.
"I am confident 2015 will prove equally as exciting and look forward to reporting on the further development of our agri-processing, farming and timber operations," added Executive Chairman Francesco Scolaro.
Obtala shares were down 9.8% to 8.01 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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