TIDMAGTA
RNS Number : 2799N
Agriterra Ltd
29 January 2021
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
Agriterra Limited ('Agriterra' or the 'Company')
Interim Results
Agriterra Limited, the AIM listed African agricultural company,
announces its unaudited results for the six months ended 30
September 2020.
Chair's Statement
I am pleased to provide an update on our performance in the
first half of the 2021 financial year ('HY-2021'). These results
will be made available on the Company's website.
Operational update
Grain division
The Grain division faced competition from cheap imported maize
from South Africa in the southern market of Mozambique, however
total sales revenue for the Grain division increased by 3% as
compared to the prior period as a result of better performance in
the other regions. We managed to maintain our strong hold in the
central region of Mozambique and intend to expand and diversify our
product ranges to cater for different customer needs.
Revenue for the 6 months increased to $ 4.0m (HY-2020: $ 3.9m),
however EBITDA decreased to $ 0.1m (HY-2020: EBITDA of $ 0.4m) due
to an increase in grain purchasing cost as compared to the prior
year. The finance costs increased to $ 430,000 (HY-2020: $ 352,000)
resulting in a loss after tax of $ 407,000 (HY-2020: loss $
139,000).
Improved quality and the recommissioning of a 1kg packaging
line, are expected to lead our entry directly into the informal
sector in the second half of the year. This product has a higher
margin than the larger packs of meal.
We entered into three pre-paid contracts for our products with
wholesalers which provided some liquidity to purchase early season
maize. The strategy was to acquire sufficient maize for the
financial year in the period April - July, however delays in the
approval of additional overdraft facilities to finance the
procurement of maize, meant that the division was not able to take
full advantage of lower early season maize prices. Consequently, it
is expected that the division's margins will be under more pressure
against budget in the second half of the year.
In 2020 we entered into a joint venture with Snax for Africa
Limited to produce maize snacks, operating from our premises in
Chimoio. COVID-19 restrictions delayed the commissioning of the new
plant, but this became operational in December 2020 and early
results show an increasing demand for the product.
Beef division
After a significant improvement in the division's trading in the
prior year, the Beef division has seen a fall in volumes as the
South African Rand depreciated to less than 4 Metical during
Q1/early Q2 FY-21. This has led to tough trading conditions in the
south of the country where our beef product has to compete with
cheap imports from South Africa. This situation is expected to
change, as the Rand has strengthened to over 4.8 Meticais, which,
if it holds, will make imports more expensive in Q3 and Q4 of
FY-21.
Revenue for the 6 months fell to $ 1.5m (HY-2019: $ 2.2m),
however EBITDA improved to a loss of $ 0.1m (HY-2020: loss $ 0.4m).
Finance costs decreased to $ 74,000 (HY-2020: $ 84,000) and the
loss after tax decreased to $ 346,000 (HY-2020: loss $ 708,000).
The loss for the period significantly decreased due to cost
management initiatives implemented during the period and the
strategy to unlock the southern market, notably Maputo,
commenced.
Plans are being made to develop a sustainable presence in the
Maputo market. This will provide a platform for growth in the Beef
division.
Group Results
Group revenue for the half-year ended 30 September 2020
decreased by 9% to $ 5.5m (H1-2020: $6.1m). As a result of cost
management in the Grain division, and despite the difficulties in
the Beef division, the Group's trading operations showed a
reduction in the operating loss before interest to $ 0.5m (H1-2020:
loss $ 0.8m). The containment of the operational loss is due to
aggressive cost monitoring and control measures implemented by
management during the period. However, financing costs increased by
24% to $0.5 million (H1- 2020: $0.4 million) but despite this, the
Group loss after tax decreased by 21% to $ 0.997 million (H1-2020:
loss $ 1.268 million). During the period, inventories increased by
$ 1.2m to $ 2.8m (H1-2020: $1.6m). Net debt at 30 September 2020
was $ 6.8m (31 March 2020: $ 4.3m). Increase in net debt resulted
from procurement of grain stock using the overdraft facility, which
will provide a large proportion of the inventory requirements in
the second half of the 2021 financial year.
Outlook and COVID-19
COVID-19 has had a significant negative impact globally, both
economically and socially. There is a risk the virus will start to
escalate in Mozambique, which could potentially impact the Group's
operations through the contraction of the economy and restrictions
on movement within the country. Currently the incidence of COVID-19
is increasing and Mozambique health care units and facilities are
reported to be 90 percent full. All countries in Southern Africa
are implementing aggressive COVID-19 preventive measures which
include closing land borders in response to the new COVID-19
variants, with travel bans widespread.
The operating companies continue with the training and awareness
programmes implemented at the start of the pandemic. The training
and practical measures taken to protect staff health have resulted
in no significant cases amongst the staff. We remain alert to the
fast-changing environment and are prepared to put in place
mitigating actions as events develop. As previously reported, our
products are key staples in the domestic Mozambican market and
demand is not expected to be significantly affected.
The investment in the oil and gas sector in the North remains in
large part suspended and has reinforced the
importance of developing the presence of our Beef division in the South.
CSO Havers
Chair
28 January 2021
For further information please VISIT www.agriterra-ltd.com or
contact:
Agriterra Limited Strand Hanson Limited
Caroline Havers caroline@agriterra-ltd.com James Spinney / Ritchie Tel: +44 (0) 207
Balmer / Rob Patrick 409 3494
--------------------------- ------------------------ -----------------
Consolidated statement of profit or loss and other comprehensive
income
Consolidated income statement
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
Note $000 $000 $000
CONTINUING OPERATIONS
Revenue 2 5,525 6,082 12,910
Cost of sales (4,740) (4,793) (10,643)
(Decrease)/Increase in fair value of
biological assets (104) 76 (489)
Gross profit 681 1,365 1,778
(4,700)
Operating expenses (1,166) (2,249) 225222255
Other income 7 4 842
Profit on disposal of property, plant
and equipment 26 51 80
--------------
Operating loss (452) (829) (2,000)
Net finance costs 3 (545) (439) (964)
--------------
Loss before taxation (997) (1,268) (2,964)
Taxation - - 29
-------------- -------------- -----------
Loss for the period 2 (997) (1,268) (2,993)
Loss for the period attributable to
owners of the Company (997) (1,268) (2,993)
============== ============== ===========
LOSS PER SHARE
Basic and diluted loss per share - US
Cents 4 (4.69) (5.97) (14.09)
============== ============== ===========
Consolidated Statement of comprehensive income
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
$000 $000 $000
Loss for the period (997) (1,268) (2,993)
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation differences (121) (185) (1,517)
Other comprehensive loss for the period (1,118) (185) (1,517)
-------------- -------------- ----------
Total comprehensive loss for the period
attributable to owners of the Company (1,118) (1,453) (4,510)
============== ============== ==========
Consolidated statement of financial position
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
(Restated)
Note $000 $000 $000
Non-current assets
Property, plant and equipment 5,526 6,955 6,049
Intangible assets 75 100 92
5,601 7,055 6,141
------------- ------------- ----------
Current assets
Biological assets 561 701 665
Inventories 2,843 1,594 825
Trade and other receivables 1,586 952 1,249
Cash and cash equivalents 411 1,590 1,034
5,401 4,837 3,773
------------- ------------- ----------
Total assets 11,002 11,892 9,914
------------- ------------- ----------
Current liabilities
Borrowings 5 5,061 3,727 3,339
Trade and other payables 3,741 1,218 3,315
8,802 4,945 6,654
------------- ------------- ----------
Net current liabilities (3,401) (108) (2,881)
------------- ------------- ----------
Non-current liabilities
Borrowings 5 2,102 2,674 2,044
------------- ------------- ----------
Total liabilities 10,904 7,619 8,698
------------- ------------- ----------
Net assets 98 4,273 1,216
============= ============= ==========
Share capital 6 3,373 3,373 3,373
Share premium 151,442 151,442 151,442
Share based payments reserve 87 172 87
Translation reserve (18,494) (17,041) (18,373)
Accumulated losses (136,310) (133,673) (135,313)
------------- ------------- ----------
Equity attributable to equity holders of the parent 98 4,273 1,216
============= ============= ==========
The unaudited condensed consolidated financial statements of
Agriterra Limited for the six months ended 30 September 2020 were
approved by the Board of Directors and authorised for issue on 28
January 2021.
Signed on behalf of the Board of Directors:
CSO Havers
Chair
Consolidated statement of changes in equity
Share Share based Translation Accumulated Total
capital Share premium payment reserve reserve losses Equity
US$000 US$000 US$000 US$000 US$000 US$000
--------- -------------- ----------------- ------------ ------------ --------
Balance at 1 April
2019 3,373 151,442 172 (16,856) (132,405) 5,726
Loss for the period - - - - ( 1,268 ) (1,268)
Other
comprehensive
income:
Exchange
translation loss
on foreign
operations - - - (185) - (185)
--------- -------------- ----------------- ------------ ------------ --------
Total comprehensive
loss for the year - - - (185) (1,268) (1,453)
Transactions with
owners
Share based
payments - - - - - -
Total transactions
with owners for the
period - - - - - -
Balance at 30
September 2019 3,373 151,442 172 (17,041) (133,673) 4,273
Loss for the period - - - - (1,725) (1,725)
Other
comprehensive
income:
Exchange
translation loss
on foreign
operations - - - (1,332) - (1,332)
Total
comprehensive
loss for the
period - - - (1,332) (1,725) (3,057)
Transactions with
owners
Share based
payments - - (85) - 85 -
--------- -------------- ----------------- ------------ ------------ --------
Total transactions
with owners for
the period - - (85) - 85 -
Balance at 31 March
2020 3,373 151,442 87 (18,373) (135,313) 1,216
Loss for the period - - - - (997) (997)
Other
comprehensive
income:
Exchange
translation loss
on foreign
operations - - - (121) - (121)
--------- -------------- ----------------- ------------ ------------ --------
Total comprehensive
loss for the
period - - - (121) (997) (1,118)
Balance at 30
September 2020 3,373 151,442 87 (18,494) (136,310) 98
--------- -------------- ----------------- ------------ ------------ --------
Consolidated cash flow statement
Year
6 months ended 6 months ended ended
30 September 30 September 31 March
2020 2019 2020
Note Unaudited Unaudited Audited
$000 $000 $000
Loss before tax for the period (997) (1,268) (2,964)
Adjustments for:
Amortisation and depreciation 2 208 420 619
Profit on disposal of property, plant and equipment (26) (51) (80)
Foreign exchange loss/(gain) 37 (42) (1,383)
(Increase)/Decrease in value of biological assets (104) (76) 489
Net decrease/(increase) in biological assets 172 205 (366)
Net Finance costs 545 439 964
Operating cash flows before movements in working capital (165) (373) (2,721)
Increase in inventories (2,018) (919) (192)
Increase in trade and other receivables (337) (254) (579)
Increase in trade and other payables 426 32 2,207
Cash used in operating activities (2,094) (1,514) (1,285)
Corporation tax paid - - (14)
Interest received 3 - 2 14
Net cash used in operating activities (2,094) (1,512) (1,285)
--------------- --------------- ----------
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment,
net of expenses incurred 26 51 80
Acquisition of property, plant and equipment (79) (385) (46)
Acquisition of intangible assets - (3) (15)
Net cash (used in)/generated from investing activities (53) (337) 19
--------------- --------------- ----------
Cash flow from financing activities
Finance costs 3 (545) (441) (978)
Net drawdown of overdrafts 5 1,639 1,913 1,732
Net drawdown/(repayment) of loans and finance leases 5 489 (230) (624)
Net cash generated from financing activities 1,583 1,242 130
--------------- --------------- ----------
Net decrease in cash and cash equivalents (564) (607) (1,136)
Effect of exchange rates on cash and cash equivalents (59) - (27)
--------------- --------------- ----------
Cash and cash equivalents at beginning of period 1,034 2,197 2,197
--------------- --------------- ----------
Cash and cash equivalents at end of period 411 1,590 1,034
=============== =============== ==========
General information
Agriterra Limited ('Agriterra' or the 'Company') and its
subsidiaries (together the 'Group') is focussed on the agricultural
sector in Africa. Agriterra is a non-cellular company limited by
shares incorporated and domiciled in Guernsey, Channel Islands. The
address of its registered office is Connaught House, St Julian's
Avenue, St Peter Port, Guernsey GY1 1GZ.
The Company's Ordinary Shares are quoted on the AIM Market of
the London Stock Exchange ('AIM').
The unaudited condensed consolidated financial statements have
been prepared in US Dollars ('US$' or '$') as this is the currency
of the primary economic environment in which the Group
operates.
1. Basis of preparation
The condensed consolidated financial statements of the Group for
the 6 months ended 30 September 2020 (the 'H1-2021 financial
statements'), which are unaudited and have not been reviewed by the
Company's Auditor, have been prepared in accordance with the
International Financial Reporting Standards ('IFRS'), as adopted by
the European Union, accounting policies adopted by the Group and
set out in the annual report for the year ended 31 March 2020
(available at www.agriterra-ltd.com). The Group does not anticipate
any significant change in these accounting policies for the year
ended 31 March 2021. References to 'IFRS' hereafter should be
construed as references to IFRSs as adopted by the EU.
This interim report has been prepared to comply with the
requirements of the AIM Rules of the London Stock Exchange (the
'AIM Rules'). In preparing this report, the Group has adopted the
guidance in the AIM Rules for interim accounts which do not require
that the interim condensed consolidated financial statements are
prepared in accordance with IAS 34, 'Interim financial reporting' .
Whilst the financial figures included in this report have been
computed in accordance with IFRSs applicable to interim periods,
this report does not contain sufficient information to constitute
an interim financial report as that term is defined in IFRSs.
The financial information contained in this report also does not
constitute statutory accounts under the Companies (Guernsey) Law
2008, as amended. The financial information for the year ended 31
March 2020 is based on the statutory accounts for the year then
ended. The Auditors reported on those accounts. Their report was
unqualified and referred to going concern as a key audit matter.
The Auditors drew attention to note 3 to the financial statements
concerning the Group's ability to continue as a going concern which
shows that the Group will need to renew its overdraft facilities,
maintain its current borrowings and raise further finance in order
to continue as a going concern.
The H1-2021 financial statements have been prepared in
accordance with the IFRS principles applicable to a going concern,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations. Having carried
out a going concern review in preparing the H1-2020 financial
statements, the Directors have concluded that there is a reasonable
basis to adopt the going concern principle.
2. Segment information
The Board consider that the Group's operating activities during
the period comprised the segments of Grain and Beef, undertaken in
Mozambique. In addition, the Group has certain other unallocated
expenditure, assets and liabilities.
The following is an analysis of the Group's revenue and results
by operating segment:
6 months ended 30 September 2020 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
-------- ------- --------------- ---------------- --------
Revenue
External sales(2) 3,990 1,535 - - 5,525
Inter-segment sales(1) 128 - - (128) -
-------- ------- --------------- ---------------- --------
4,118 1,535 - (128) 5,525
-------- ------- --------------- ---------------- --------
Segment results
- Operating loss (46) (283) (203) - (532)
- Interest expense (430) (74) (41) - (545)
- Other gains and losses 69 11 - 80
Loss before tax (407) (346) (244) - (997)
Income tax - - - - -
-------- ------- --------------- ---------------- --------
Loss for the period (407) (346) (244) - (997)
======== ======= =============== ================ ========
6 months ended 30 September 2019 - Unaudited
Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
-------- ------- --------------- ---------------- --------
Revenue
External sales(2) 3,888 2,194 - - 6,082
Inter-segment sales(1) 263 - - (263) -
-------- ------- --------------- ---------------- --------
4,151 2,194 - (263) 6,082
-------- ------- --------------- ---------------- --------
Segment results
- Operating profit/(loss) 203 (669) (418) - (884)
- Net interest expense (352) (84) (3) - (439)
- Other gains and losses 10 45 - 55
Loss before tax (139) (708) (421) - (1,268)
Income tax - - - - -
-------- ------- --------------- ---------------- --------
Loss for the period (139) (708) (421) - (1,268)
======== ======= =============== ================ ========
Year ended 31 March Grain Beef Unallo-cated Elimina-tions Total
2020 - Audited
$000 $000 $000 $000 $000
-------------- ------------------ ------------------ ------------------ --------
Revenue
External sales(2) 8,955 3,955 - - 12,910
Inter-segment
sales(1) 453 - - (453) -
-------------- ------------------ ------------------ ------------------ --------
9,408 3,955 - (453) 12,910
-------------- ------------------ ------------------ ------------------ --------
Segment results
- Operating loss (964) (1,452) (562) - (2,978)
- Net interest
expense (805) (155) (4) - (964)
- Other gains and
losses 883 95 - - 978
Loss before tax (886) (1,512) (566) - (2,964)
Income tax 29 - - - (29)
-------------- ------------------ ------------------ ------------------ --------
Loss for the year (915) (1,512) (566) - (2,993)
============== ================== ================== ================== ========
(1) Inter-segment sales are charged at prevailing market prices.
(2) Revenue represents sales to external customers. Sales from the Grain and
Beef divisions are
principally for supply to the Mozambican market.
The segment items included within continuing operations in the
consolidated income statement for the periods are as follows:
6 months ended 30 September 2020 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation and amortisation 85 123 - - 208
====== ===== ============= ============== ======
6 months ended 30 September 2019 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation and amortisation 173 239 8 - 420
====== ===== ============= ============== ======
Year ended 31 March 2020 - Audited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation and amortisation 167 452 - - 619
====== ===== ============= ============== ======
3. NET FINANCE COSTS
6 months ended 6 months ended Year
30 September 30 September ended
2020 2019 31 March
Unaudited Unaudited 2020
Audited
$000 $000 $000
--------------- --------------- ----------
Interest expense:
Bank loans, overdrafts and finance leases 545 441 978
Interest income:
Bank deposits - (2) (14)
--------------- --------------- ----------
545 439 964
=============== =============== ==========
4. LOSS per share
The calculation of the basic and diluted loss per share is based on the following data:
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
US$000 US$000 US$000
------------- ------------- -----------
Loss for the period/year for the purposes of basic and diluted
earnings per share attributable
to equity holders of the Company (997) (1,268) (2,993)
============= ============= ===========
Weighted average number of Ordinary Shares for the purposes of basic
and diluted lossper share 21,240,618 21,240,618 21,240,618
============= ============= ===========
Basic and diluted loss per share - US cents (4.69) (5.97) (14.09)
============= ============= ===========
The Company has issued options over ordinary shares which could
potentially dilute basic loss per share in the future. There is no
difference between basic loss per share and diluted loss per share
as the potential ordinary shares are anti-dilutive.
5. Borrowings
30 September 2020 30 September 2019 31 March
2020
Unaudited Unaudited Audited
$000 $000 $000
------------------ ------------------ ---------
Non-current
Bank loans 1,766 2,674 1,661
Leases 336 - 383
------------------ ------------------ ---------
2,102 2,674 2,044
Current
Bank loans and finance leases 1,059 860 798
Bank overdrafts 4,002 2,867 2,541
5,061 3,727 3,339
------------------ ------------------ ---------
7,163 6,401 5,383
================== ================== =========
Grain division
At 30 September 2020, the principal outstanding balance on the
term loan is 136 million Metical ($ 1.9m) and during the period MZN
24 million ($ 0.34 million) of the principal amount was repaid. The
outstanding loan balance was MZN 160 million ($ 2.4 million) as 31
March 2020. The loan matures on 06 July 2023 with an interest rate
of Bank's prime lending rate +0.25% and fixed monthly repayments of
MZN 4 million ($ 56,000) plus interest charge.
MZN 30 million ($ 0.4 million) of the overdraft facilities
amounting to MZN 90 Million ($ 1.3 million) as at 31 March 2020 was
repaid during the period. The outstanding overdraft facility at 30
September 2020 is MZN 60 million ($ 0.84 million). This facility
was converted into a term loan on 30 September 2020 maturing on 06
July 2023 with an interest rate of prime less than 1.75% per annum
and fixed monthly repayment amounts of MZN 1.8 million ($25 199).
The overdraft facility was fully drawn as at 31 March 2020.
Outstanding finance lease facility on vehicles was repaid MZN 1
544 419 ($ 22 241) during the period and the outstanding balances
as at 30 September 2020 is MZN 9.8 million ($ 137 197). The finance
lease arrangements mature in 2023 and attract an interest rate of
16.5% per annum.
The Group obtained additional working capital finance in the
form of an overdraft facility in May 2020 and in September 2020
amounting to MZN 153 million ($ 2.3 million) and MZN 99.5 million
($1.4 million) respectively. The overdraft facility was used to
purchase maize during the harvest season and will be repaid before
31 May 2021.
Beef division
The Finance lease on agricultural equipment outstanding balance
is MTN 20.0m ($ 0.3m). During the period, MZN1.5 million ($ 21 601)
of the principal balance was repaid. The finance lease is repayable
over 5 years maturing in July 2023 and is secured on certain
agricultural equipment.
The amount drawn down on the overdraft facility as at 30
September 2020 was MZN 1.2 million ($ 16 800). The overdraft
facility was fully repaid after period end.
Reconciliation to cash flow statement
At 31 Cash flow Foreign At 30 September
March Exchange 2020
2020
Non-current bank loans and finance
leases 2,044 177 (119) 2,102
Current bank loans and finance
leases 798 312 (51) 1,059
Overdrafts 2,541 1,639 (178) 4,002
5,383 2,128 (348) 7,163
======= ========== ========== ================
6. Share capital
Authorised Allotted and fully paid
Number Number US$000
------------ ------------------------ -------
At 31 March 2020, 30 September 2020 and 2019 23,450,000 21,240,618 3,135
At 31 March 2020, 30 September 2020 and 2019
Deferred shares of 0.1p each 155,000,000 155,000,000 238
Total share capital 178,450,000 176,240,618 3,373
============ ======================== =======
The Company has one class of ordinary share which carries no
right to fixed income.
The deferred shares carry no right to any dividend; no right to
receive notice, attend, speak or vote at any general meeting of the
Company; and on a return of capital on liquidation or otherwise,
the holders of the deferred shares are entitled to receive the
nominal amount paid up after the repayment of GBP1,000,000 per
ordinary share. The deferred shares may be converted into ordinary
shares by resolution of the Board.
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