30th Sep 2009 10:14
30 September 2009
GEM Biofuels Plc
("GEM" or the "Company")
Interim Results for the six months ended 30 June 2009
GEM BioFuels Plc (AIM: GBF), the emerging feedstock supplier to the global biodiesel industry, announces its interim financial results for the six months to 30 June 2009.
Operational Highlights
Conclusion of the 2008/2009 planting season, with a total of 21,600 hectares planted
55,700 hectares now planted since commencement of operations
Care and maintenance procedures currently being carried out on all plantations and preparation for the 2009/2010 plantation season has commenced
Financial Highlights
Group loss for six months ending 30 June 2009: £323,053 (2008: £386,003)
Cash as at 30 June 2009: £167,150 (2008: £1,511,068)
Subsequent to the end of the period, the Company completed a placing which raised £500,000, before expenses
Mr Paul Benetti, Chief Executive Officer, commented: "The first half of 2009 has seen us consolidate our position as an owner/manager of large-scale, low-cost, sustainable Jatropha plantations, which we believe will be a key source of non-traditional vegetable oil for the biodiesel industry. We continue to build the capabilities of our team, including our 'in country' relationships and alliances, as we progress towards our goal of crude Jatropha oil production and look forward to taking the next steps in the development of our business."
Enquiries:
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GEM Biofuels Plc |
Shore Corporate & Capital Limited |
Walbrook PR Ltd |
|
Paul Benetti |
Dru Danford / Stephane Auton |
Louise Goodeve / Leah Kramer |
|
Chief Executive Officer |
|
|
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+61 (0) 8 6365 3038 |
+ 44 (0) 20 7408 4090 |
+44 (0) 20 7933 8780 |
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+61 (0) 407 039 379 (mobile) |
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Notes to Editors
About GEM Biofuels
GEM Biofuels was founded in 2004 to capitalise on the opportunity presented by the local agricultural and socio-economic conditions in Madagascar to produce Jatropha oil for use as a biodiesel feedstock. Operations are based in the South of the island where the Jatropha tree grows wild.
The Company has secured 50 year agreements giving exclusive rights over 452,500 hectares (in excess of 1 million acres) to establish plantations, ranging in size from 2,500 - 50,000 hectares with a further 40,000 hectares of natural forest containing substantial numbers of mature Jatropha trees.
To date, the Company has planted 55,700 hectares of Jatropha and a total of 200,000 hectares is expected to be planted by 2011.
GEM Biofuels Plc was admitted to trading on AIM in October 2007.
Jatropha
Jatropha is a small tree/shrub, growing to about five metres in height and is well suited for use in the production of biodiesel. Jatropha trees are relatively drought resistant and suitable for cultivation in sub tropical regions. The high oil yielding seeds are mildly toxic and as such Jatropha is not a food and its use in biodiesel production does not affect the cost of living of the indigenous population. Biodiesel refined from Jatropha oil complies with international standards, including EN14214 in Europe, the major market for biodiesel.
Whilst the current production of Jatropha seed for commercial purposes is small, it is substantially increasing due to its attractiveness as a biodiesel feedstock because of its ability to grow on marginal land and the fact that it is non-edible.
Report of the Chairman and of the Chief Executive Officer
We are pleased to announce our results for the six months ended 30 June 2009. The first half of 2009 has seen GEM BioFuels Plc consolidate its position as an owner/manager of large-scale, low-cost, sustainable plantations for non-traditional vegetable oil plants. We have maintained our plantation establishment programme and continued to grow and strengthen our position as a significant participant in the biofuels industry whilst simultaneously bringing substantial social and economic influence in the regions in which we are working.
Plantation Operations
During the period under the review, the Company established a further 21,600 hectares of Jatropha plantation in Southern Madagascar, taking the total planting since the start of operations to 55,700 hectares.
As part of the most recent plantation establishment program, we successfully trialled the introduction of a partially mechanised plantation establishment methodology, which is expected to result in significant cost savings in future plantation campaigns. We have further developed our management programmes to ensure regular checking and maintenance of the trees and will be implementing these in the upcoming season.
Our planting and maintenance programmes work with local farmers, providing them with important economic and social benefits. We train local farmers in necessary agricultural practises and encourage the involvement of the local communes in the growth of their own crops, both edible and non-edible.
Financial Review
In the six months ended 30 June 2009, the Group's loss on ordinary activities after taxation was £323,053 (2008: £386,003), or a loss per ordinary share of 1.17p (2008: 1.42p). The Group's cash balance at the end of the period was £167,150 (2008: £1,511,068). Subsequent to the end of the period, the Company raised £500,000 (before expenses) by way of a placing to a number of institutional investors.
Management
We continue to build a team that will enable us to ensure GEM becomes a leading force in the biodiesel feedstock supply industry. Progress at the Company, as it nears crude Jatropha oil production and looks to broadening its scope of activities, has highlighted the need for a full-time finance professional and as a result, Mr. Murray Konarik has been appointed as a full-time Chief Financial Officer, with a view to joining the Company's Board at the appropriate time. Mr. Konarik is a Chartered Accountant who has held a variety of senior management positions in Agri-based and international trading businesses. He will be based in Perth alongside the Company's CEO.
Biodiesel Industry
GEM BioFuels business planning is predicated on the view that in the medium term we will see improving fundamentals in the biodiesel industry as demand and prices for both oil and carbon lead to higher prices. The current round of discussions on carbon emissions, while frustrating, is serving to highlight the importance of the issue in the business environment.
The global biodiesel industry's growth continues to be driven by government regulation seeking to deal with issues such as environmental emissions, energy security and poverty reduction and it is imperative that we are able to deal with these aspects if we are to build a successful business.
These issues, combined with an increasing requirement for environmental sustainability in the production of Biofuel feedstock is highlighting the economic case for a low-cost, sustainable, non-food biodiesel feedstock supply industry in which we operate.
We believe that our owner/manager model is ideally suited to delivering deliver commercial quantities of certifiable biodiesel feedstock at the required quality and price in a sustainable manner and that Jatropha is likely to be the only non-food feedstock that can supply sustainable commercial volumes in a carbon neutral manner at a price point competitive with fossil fuel.
Outlook
The recent rise in crude oil prices has again assisted in improving the confidence in the biofuels industry. While Jatropha-based biofuels have yet to achieve large-scale availability, there is growing recognition (through successful testing) of the part this feedstock will play in the future of global energy scene.
We believe that biodiesel will form an increasing portion of the global energy source over the foreseeable future, particularly in developing nations and those which have little (or no) crude oil reserves. Further, we believe that Jatropha's impressive sustainability credentials will enable it to overcome the problems associated with many other biodiesel feedstocks.
GEM BioFuels has already established itself as a leading participant in the non-traditional, biodiesel feedstock area and as a major future grower of Jatropha - which we expect to be a leading dedicated energy crop. Our approach of combining low-cost, sustainable agriculture with social responsibility is increasingly recognised as we continue to be presented with many opportunities to capitalise on our present industry position.
We look forward to an intensive second half of 2009 as we pursue the many opportunities which are being presented to the company. This, combined with the increasingly positive financial environment bodes well for GEM BioFuels future as we capitalise on our experience and the fundamental advantages of our owner/manager business model.
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Paul R Benetti |
Simon D Hunt |
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Chief Executive Officer |
Non-Executive Chairman |
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Interim Consolidated Income Statement for the six months ended 30 June 2009 |
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|
Note |
Unaudited Six Months Ended 30 June 2009 £ |
Unaudited Six Months Ended 30 June 2008 £ |
Audited Year Ended 31 December 2008 £ |
|||||||||||
|
Administrative expenses |
(424,576) |
(393,129) |
(1,279,755) |
|||||||||||
|
Finance income |
5 |
1,464 |
37,340 |
63,172 |
||||||||||
|
Other gains and losses |
100,059 |
(27,981) |
(173,027) |
|||||||||||
|
Finance costs |
5 |
- |
(2,233) |
(4,807) |
||||||||||
|
Loss before tax |
(323,053) |
(386,003) |
(1,394,417) |
|||||||||||
|
Tax expense |
6 |
- |
- |
- |
||||||||||
|
LOSS FOR THE YEAR / PERIOD |
(323,053) |
(386,003) |
(1,394,417) |
|||||||||||
|
Loss per ordinary share |
7 |
|||||||||||||
|
Basic loss per ordinary share (pence) |
1.17 |
1.42 |
5.05 |
|||||||||||
|
Diluted loss per ordinary share (pence) |
1.17 |
1.42 |
5.05 |
|||||||||||
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Interim Consolidated Balance Sheet as at 30 June 2009 |
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Unaudited 30 June 2009 £ |
Unaudited 30 June 2008 £ |
Audited 31 December 2008 £ |
|||||
|
ASSETS |
|||||||
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Non current assets |
|||||||
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Goodwill |
952,088 |
788,400 |
1,086,527 |
||||
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Property, plant and equipment |
36,157 |
41,924 |
64,358 |
||||
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Plantation assets |
923,720 |
351,162 |
614,619 |
||||
|
Other assets |
- |
- |
270 |
||||
|
1,911,965 |
1,181,486 |
1,765,774 |
|||||
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Current Assets |
|||||||
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Inventories |
24,166 |
3,648 |
11,185 |
||||
|
VAT refundable |
39,473 |
29,501 |
53,027 |
||||
|
Cash and cash equivalents |
167,150 |
1,511,068 |
1,070,753 |
||||
|
Other assets |
40,692 |
- |
- |
||||
|
271,481 |
1,544,217 |
1,134,965 |
|||||
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TOTAL ASSETS |
2,183,446 |
2,725,703 |
2,900,739 |
||||
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LIABILITIES |
|||||||
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Current liabilities |
|||||||
|
Trade and other payables |
108,642 |
101,013 |
80,024 |
||||
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TOTAL LIABILITIES |
108,642 |
101,013 |
80,024 |
||||
|
NET CURRENT ASSETS / (LIABILITIES) |
162,839 |
1,443,204 |
1,054,941 |
||||
|
NET ASSETS |
2,074,804 |
2,624,690 |
2,820,715 |
||||
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EQUITY |
|||||||
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Issued capital |
276,015 |
276,015 |
276,015 |
||||
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Share premium reserve |
4,391,866 |
4,391,866 |
4,391,866 |
||||
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Currency translation reserve |
173,657 |
(213,102) |
596,515 |
||||
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Share option reserve |
589,043 |
194,221 |
589,043 |
||||
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Accumulated losses |
(3,355,777) |
(2,024,310) |
(3,032,724) |
||||
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TOTAL EQUITY |
2,074,804 |
2,624,690 |
2,820,715 |
||||
Statement of Changes in Equity
for the six months ended 30 June 2009
|
Share Capital |
Share Premium |
Currency Translation Reserve |
Share Option Reserve |
Accumulated Losses |
Total |
||
|
£ |
£ |
£ |
£ |
£ |
£ |
||
|
Balance at Incorporation |
2 |
- |
- |
- |
- |
2 |
|
|
Loss for the period |
- |
- |
- |
- |
(660,381) |
(660,381) |
|
|
Acquisition of subsidiaries |
99,998 |
782,355 |
- |
- |
- |
882,353 |
|
|
Issue of shares during the period |
100,000 |
782,353 |
- |
- |
- |
882,353 |
|
|
Translation into presentation currency |
- |
- |
(190,294) |
- |
- |
(190,294) |
|
|
Balance as at 31 December 2006 (Audited) |
200,000 |
1,564,708 |
(190,294) |
- |
(660,381) |
914,033 |
|
|
Loss for the period |
- |
- |
- |
- |
(283,829) |
(283,829) |
|
|
Translation into presentation currency |
- |
- |
4,339 |
- |
- |
4,339 |
|
|
Balance at 30 June 2007 |
200,000 |
1,564,708 |
(185,955) |
- |
(944,210) |
634,543 |
|
|
Loss for the period |
- |
- |
- |
- |
(694,097) |
(694,097) |
|
|
Issue of shares during the period |
76,015 |
3,689,210 |
- |
- |
- |
3,765,225 |
|
|
Issue of options |
- |
- |
- |
194,221 |
- |
194,221 |
|
|
Share issue cost |
- |
(862,052) |
- |
- |
- |
(862,052) |
|
|
Translation into presentation currency |
- |
- |
(2,761) |
- |
- |
(2,761) |
|
|
Balance as at 31 December 2007 (Audited) |
276,015 |
4,391,866 |
(188,716) |
194,221 |
(1,638,307) |
3,035,079 |
|
|
Loss for the period |
- |
- |
- |
- |
(386,002) |
(386,002) |
|
|
Translation into presentation currency |
- |
- |
(24,387) |
- |
- |
(24,387) |
|
|
Balance as at 30 June 2008 |
276,015 |
4,391,866 |
(213,103) |
194,221 |
(2,024,309) |
2,624,690 |
|
|
Loss for the period |
- |
- |
- |
- |
(1,008,415) |
(1,008,415 |
|
|
Issue of shares during the period |
- |
- |
- |
- |
- |
- |
|
|
Issue of options |
- |
- |
- |
394,822 |
- |
394,822 |
|
|
Share issue cost |
- |
- |
- |
- |
- |
||
|
Translation into presentation currency |
- |
- |
809,618 |
- |
- |
809,618 |
|
|
Balance as at 31 December 2008 (Audited) |
276,015 |
4,391,866 |
596,515 |
589,043 |
(3,032,724) |
2,820,715 |
|
|
Loss for the period |
- |
- |
- |
- |
(323,053) |
(323,053) |
|
|
Issue of shares during the period |
- |
- |
- |
- |
- |
- |
|
|
Issue of options |
- |
- |
- |
- |
- |
- |
|
|
Share issue cost |
- |
- |
- |
- |
- |
- |
|
|
Translation into presentation currency |
- |
- |
(422,858) |
- |
- |
(422,858) |
|
|
Balance as at 30 June 2009 |
276,015 |
4,391,866 |
173,657 |
589,043 |
(3,355,777) |
(2,074,804) |
|
|
Interim Consolidated Cash Flow Statement for the six months ended 30 June 2009 |
|||||||||||
|
Note |
Unaudited Six Months Ended 30 June 2009 £ |
Unaudited Six Months Ended 30 June 2008 £ |
Audited Year Ended 31 December 2008 £ |
||||||||
|
Cash flows from operating activities |
|||||||||||
|
Cash used in operations |
8 |
(414,346) |
(509,919) |
(1,022,490) |
|||||||
|
Cash flows from investing activities |
|||||||||||
|
Purchases of property, plant and equipment |
(1,162) |
(12,293) |
(38,207) |
||||||||
|
Purchases of plantation assets |
(401,459) |
(165,738) |
(391,316) |
||||||||
|
Interest received |
1,464 |
37,340 |
63,172 |
||||||||
|
Interest paid |
- |
- |
(4,807) |
||||||||
|
Net cash used in investing activities |
(401,157) |
(140,691) |
(371,158) |
||||||||
|
Cash flows from financing activities |
|||||||||||
|
Proceeds from issue of shares |
- |
- |
- |
||||||||
|
Proceeds from borrowings |
- |
- |
- |
||||||||
|
Payment for share issue costs |
- |
- |
- |
||||||||
|
Net cash provided by financing activities |
- |
- |
- |
||||||||
|
Net increase in cash and cash equivalents |
(815,507) |
(650,610) |
(1,393,648) |
||||||||
|
Cash and cash equivalents at the beginning of the year/from incorporation |
1,070,753 |
2,169,831 |
2,169,831 |
||||||||
|
Effects of exchange rate changes on the balance of cash held in foreign currencies |
(88,099) |
(8,153) |
294,570 |
||||||||
|
Cash and cash equivalents at the end of the year / period |
167,150 |
1,511,068 |
1,070,753 |
||||||||
|
Notes to the Interim Results for the six months ended 30 June 2009 |
1. GENERAL INFORMATION
GEM BioFuels PLC is a company domiciled and incorporated in the Isle of Man with company registration number 115011C. The Company's ordinary shares are traded on AIM.
The consolidated accounts for GEM BioFuels Plc and its subsidiary (the "Group") have been prepared for the six months ended 30 June 2009.
The Company's registered address is 34 North Quay, Douglas, Isle of Man IM1 4LB.
The functional currency of the Company and the consolidated financial statements is United States Dollars ('USD') as it is the currency of the primary economic environment in which the Group operates. The consolidated financial statements are presented in Pounds Sterling (presentation currency) for the convenience of readers. The translation between the functional and presentation currency is in accordance with the Group's stated policy.
2. BASIS OF PREPARATION
The Group interim financial statements are prepared on the historical cost basis.
The financial information for the six months ended 30 June 2009 is unaudited and has been prepared in accordance with the accounting policies set out in the Group's Annual Report for the year ended 31 December 2008 ("Annual Report") and should be read in conjunction with the Annual Report. The financial information for the six months ended 30 June 2008 is also unaudited and the results have not been reviewed by the Group's auditors. The financial information relating to the year ended 31 December 2008 has been extracted from the full report for that year. The report of the Auditors on the 2008 accounts was unqualified. The statutory accounts for the year ended 31 December 2008 were approved at the Group's Annual General Meeting on 29 September 2009.
Where necessary, the comparatives have been reclassified from the previously reported interim results to take into account any presentational changes made in the Annual Report.
These interim financial statements were approved by the board of directors on 29 September 2009.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the process of applying the Group's accounting policies, the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements.
Impairment of goodwill
Following a detailed review of the business combinations acquired, the Directors are satisfied that the carrying amount of the goodwill is justified and no impairment loss is to be recognised at the period end.
Impairment of biological assets
Following a review of the company's plantation and forest assets, the company has determined that as at 30 June 2009 the biological asset will be measured at the cost of initial planting as little if any biological transformation had occurred at 30 June 2009 and accordingly cost reflected the best approximation at fair value.
4. SEGMENT REPORTING
The Group's primary reporting format is its geographical segment, while its secondary reporting format is its business segment.
The Group has one geographical segment being Madagascar.
The Group has one business segment, which is the production of feedstock for the Biodiesel market.
5. NET FINANCING INCOME
|
Unaudited Six Months Ended 30 June 2009 £ |
Unaudited Six Months Ended 30 June 2008 £ |
Audited Year Ended 31 December 2008 £ |
|||
|
Interest income from financial institutions |
1,464 |
37,340 |
63,172 |
||
|
Gross interest expenses |
- |
(2,233) |
(4,807) |
||
|
Net financing income |
1,464 |
35,107 |
58,365 |
6. INCOME TAX EXPENSE
The Income Tax (Amendment) Act 2006 provides that a standard zero rate of income tax will apply to the company in the Isle of Man for 2006/07 and subsequent years of assessment. Therefore no provision for liability to Isle of Man income tax has been included in these accounts.
The company's subsidiary pays tax at a rate of 30% on its taxable profits. No tax charge has been recorded in the current period in respect of the operations of the subsidiary due to losses arising. A deferred tax asset has not been recognised in respect of these losses due to the unpredictability of future income streams in the company.
7. LOSS PER ORDINARY SHARE
|
Unaudited Six Months Ended 30 June 2009 £ |
Unaudited Six Months Ended 30 June 2008 £ |
Audited Year Ended 31 December 2008 £ |
|||
|
Weighted average number of shares Loss per ordinary share - basic - diluted |
27,601,501 1.17 1.17 |
27,601,501 1.42 1.42 |
27,601,501 5.05 5.05 |
The number of shares in issue at 30 June 2009 was 27,601,501 (2008 - 27,601,501). For the purpose of calculating the diluted loss per share 1,986,666 (2008 - 1,986,666) options have not been included as the share options are not dilutive.
8. NOTES TO THE CASH FLOW STATEMENT
|
Unaudited Six Months Ended 30 June 2009 £ |
Unaudited Six Months Ended 30 June 2008 £ |
Audited Year Ended 31 December 2008 £ |
|||
|
Loss for the year / period |
(323,053) |
(386,002) |
(1,394,417) |
||
|
Adjustments for: |
|||||
|
Finance costs |
- |
2,233 |
4,807 |
||
|
Loss on disposal of property, plant and equipment |
- |
- |
- |
||
|
Share option expense |
- |
- |
394,822 |
||
|
Foreign exchange gain |
(100,059) |
(27,982) |
126,518 |
||
|
Interest income received and receivable |
(1,463) |
(37,340) |
(63,172) |
||
|
Depreciation of property, plant and equipment |
21,461 |
13,715 |
31,805 |
||
|
Operating cash flows before movements in working capital |
(403,114) |
(435,376) |
(899,637) |
||
|
I Increase in inventories |
(12,981) |
(2,006) |
(5,531) |
||
|
Decrease/(increase) in other assets |
(26,867) |
- |
(53,297) |
||
|
(Decrease)/increase in payables |
28,616 |
(72,537) |
(64,025) |
||
|
Net cash used in operating activities |
(414,346) |
(509,919) |
(1,022,490) |
9. SUBSEQUENT EVENTS
Subsequent to 30 June 2009, the Company raised £500,000 (before expenses) in new equity through the issue of new shares and warrants to a range of institutional investors, both new and existing shareholders.
10. AVAILABILITY OF THIS REPORT
This Interim Report is available from the Company's website at www.gembiofuels.com.
Related Shares:
HUN.L