DJ Block Commodities Ltd: Interim Results
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Block Commodities Ltd (BLOC) Block Commodities Ltd: Interim Results 28-March-2018 / 07:00 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. Block Commodities Limited / Epic: BLCC / Sector: Mining 28 March 2017 Block Commodities Limited ('Block Commodities' or 'the Company') Interim Results Chairman's Statement The last six months have seen significant developments for Block Commodities as we begin to implement our new strategy as an innovative commodity operator in Africa. Our vision is to build a growing revenue-generating business which will create value for all stakeholders, as well as establish your Company as a key contributor of growth and empowerment across sub-Saharan Africa. In working to build a fertiliser trading business in Africa over the last two years, we have clearly seen the valuable opportunity for security and certainty that blockchain technology could bring to the local commodity and agricultural framework. In this context, in February 2018, the Company changed its name from "African Potash Limited" to "Block Commodities Limited" to better reflect our strategic decision to leverage our existing trading business and network to create a new trading platform to promote and secure an efficient agricultural ecosystem. This platform will help African farmers raise productivity and secure better returns for their produce, while establishing African communities as significant future global agricultural players. Our model is simple: as part of a blockchain plan which enables us to secure vendor finance for our fertiliser products we will borrow tokens and lend them to farmers (at interest rates lower than current commercial rates); the farmers will then use the tokens to purchase fertiliser products from us. The blockchain-based, closed-loop supply chain allows us to circumvent "the middle man" (and related, unnecessary costs), while simplifying and expediting the process using only one currency throughout: the token. In this way, we hope to empower farmers and democratise the whole fertiliser supply/purchase cycle. In order to succeed in our objectives, we have identified key world-class partners to work alongside us. · In November last year, we announced an agreement with FinComEco Limited, a subsidiary of GMEX Group Limited, as a joint venture partner to deploy a complete blockchain-based agricultural ecosystem trading solutions via integrated token-based microloan financing. FinComEco will ensure the purchase of agricultural commodities grown by the small-scale farmers ("SSF") through the use of existing warehouse receipt systems and commodity exchanges with secure payment of profit to the farmer after the repayment of the loan and interest to the Company. · TokenCommunities Limited, a Gibraltar-based token finance specialist, has also been engaged to assist us in facilitating our strategy and plans. · In addition, we have decided to take a 21% stake in VIPA Holdings (Pty) Limited ("VIPA"), a leading provider of fertilisers and raw animal feed materials to South Africa's agricultural industry. VIPA will provide us with access to high-quality, specialised agricultural products, forming the procurement platform for our strategy. · Finally, we have recently signed a strategic partnership with the Wala/Dala team, a blockchain-powered financial services platform and cryptocurrency token issuer already well-established in African financial services. Wala and Dala will be working to develop and operate a web-enabled mobile phone operable platform using the blockchain ledger for the food commodities cycle trading ecosystem currently being developed with FinComEco. Trading In the first half of the year, we set up four community-based fertilizer warehouses in Zambia. Working capital constraints led to the decision to focus solely on sales to those SSF who had registered with the Zambian government's e-voucher programme (which was scheduled to go live in October 2017). There were persistent delays in rolling out the e-voucher programme and, subsequently, in loading the cards with credit. In our areas of operation, cards were only loaded in late December 2017and our first sales were successfully made early in 2018. Consequently, there was no turnover in the six months to 31 December 2017, although, following the end of the period under review, sales under the e-voucher scheme have commenced. Lac Dinga Key to freeing up management's time and shareholder funds to concentrate on developing its broader strategy has been the farming out of the Lac Dinga potash salts concession. On 19 July, the Company announced that it had entered into an agreement with African Agronomix Limited ("AAX") whereby AAX, over a period of time, has the right to acquire up to 100% of the Company's interest in the Lac Dinga exploration licence in the Republic of Congo (held by La Societé des Potasses et des Mines SA ("SPM") in which the Group has a 70% interest). The agreement with AAX became effective on 17 October 2017 and AAX has been acting as project operator on behalf of SPM since this time. AAX is currently planning a further drilling campaign in support of its application to renew the exploration licence for a further two years from 25 April 2018. Financial results Revenue for the 6 months to 31 December 2017 was $nil (2016: $103,000). Operating expenses for the period fell to $263,000 (2016: $782,000). After an impairment charge in respect of exploration assets of $271,000 (2016: $284,000) and $101,000 in respect of the decision to divest of its stake in Advanced Agricultural Holdings (Pty) Limited, the loss before taxation for the period was $782,000 (2016: $1,188,000). Cash balances at 31 December 2017 were $206,000 (2016: $30,000). Outlook The last six months have been a transitional period of positive change for Block Commodities. Management believes that blockchain technology and the array of potential applications will transform day-to-day life in the future. The Company's local understanding and early mover advantage into the blockchain and crypto space has provided it with invaluable insight, connections and investment opportunities to be leveraged for the benefit of all stakeholders. In order to allow us maximise our trading business in Africa we have been very active in identifying the most suitable local partners to assist us in developing our strategy and to build the right innovative and forward-thinking platform. We aim to build a business which generates high revenues, whilst maintaining a strong social humanitarian and empowerment ethos. Block Commodities' pilot agricultural ecosystem platform project in collaboration with the Dala/Wala financial platform and FinComEco, will be located in Uganda and if successful, we expect to quickly expand into other sub-Saharan countries and explore opportunities for other commodities which are compatible with our platform and could benefit from our blockchain-based model. We would like to sincerely thank our loyal shareholders for their continued and patient support over the last year and we look forward to updating the market with news of Block Commodities' progress in the future - we are just at the beginning of an exciting journey! Chris Cleverly Executive Chairman UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 Unaudited Consolidated Income Statement For the half year to 31 December 2017 Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 31 December 31 December 30 June 2017 2016 2017 Note $'000 $'000 $'000 Revenue 4 - 113 - Cost of sales - (103) - Gross margin - 10 - Other trading - - 9 income Operating (263) (782) (1251) expenses Share of loss of - - (24) associate Impairment of: - exploration 6 (271) (284) (719) and evaluation costs 7 (101) - - - investment in associate Other losses (44) (19) (2) Operating loss (679) (1,075) (1,987) Net finance (103) (113) (286) expense Loss before (782) (1,188) (2,273) taxation Income tax - - expense Loss for the (782) (1,188) (2,273) period attributable to owners of the parent company Loss per share: 5 (0.04 cents) (0.11 cents) (0.17 cents) basic and diluted All results relate to continuing activities Unaudited Consolidated Comprehensive Income Statement
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For the half year to 31 December 2017 Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 31 December 31 December 30 June 2017 2016 2017 $'000 $'000 $'000 Loss for the period (782) (1,188) (2.273) Other comprehensive income Exchange translation 89 (103) 46 differences on foreign operations Total comprehensive income (693) (1,291) (2,227) for the period attributable to owners of the parent company Unaudited Consolidated Statement of Financial Position As at 31 December 2017 Unaudited Unaudited Unaudited 31 31 30 June December December 2017 2017 2016 Note $'000 $'000 $'000 Non-current assets Intangible assets: exploration 3,000 3,000 3,000 activities 6 Investment in 7 - - 101 associate Investment in quoted companies - 28 - Property plant and equipment 82 92 99 Total non-current 3,082 3,120 3,200 assets Current assets Inventory 68 26 - Trade and other 109 39 25 receivables Cash and cash 206 30 11 equivalents Total current 383 95 36 assets Total assets 3,465 3,215 3,326 Current liabilities Trade and other (1,613) (1,025) (1,574) payables Loan note (1,412) (1,111) (1,170) Net 440 1,079 492 (liabilities)/ass ets Equity Issued capital 8 19,192 18,202 18,551 Share based 2,633 2,637 2,633 payment reserve Foreign exchange translation (488) (726) (577) reserve Retained earnings (20,897) (19,034) (20,115) Total equity 440 attributable to equity holders 1,079 492 Statement of Changes in Equity Share Foreign based exchange payment translatio reserve n reserve Ordinary $'000 $'000 share capital Retained earnings $'000 Total $'000 $'000 Balance at 1 17,531 2,637 (623) (17,846) 1,699 July 2016 Loss for the - - - (1,188) (1,188) period Other comprehensive income Exchange - - (103) - (103) translation differences on foreign operations Total - - (103) (1,188) (1,291) comprehensive income for the period Transactions with owners Issue of 671 - - - 671 shares Total 671 - - - 671 transactions with owners Balance at 31 18,202 2,637 (726) (19,034) 1,079 December 2016 Loss for the - - - (1,085) (1,085) period Other comprehensive income Exchange - - 149 - 149 translation differences on foreign operations Total - - 149 (1,085) (936) comprehensive income for the period Transactions with owners Issue of 349 - - - 349 shares Lapse / - (4) - 4 - exercise of share-based payments Total 349 (4) - 4 349 transactions with owners Balance at 1 18,551 2,633 (577) (20,115) 492 July 2017 Loss for the - - - (782) (782) period Other comprehensive income Exchange - - 89 - 89 translation differences on foreign operations Total - - 89 (782) (693) comprehensive income for the period Transactions with owners Issue of 641 - - - 641 shares Total 641 - - - 641 transactions with owners Balance at 31 19,192 2,633 (488) (20,897) 440 December 2017 Unaudited Consolidated Statement of Cash Flows For the half year to Unaudited Unaudited Unaudited 31 December 2017 6 months to 6 months to year ended 31 December 31 December 30 June 2017 2016 2017 Operating $'000 $'000 $'000 activities Loss before (782) (1,328) (2,273) tax Adjustments for: Impairment of 271 424 719 evaluation and exploration assets Impairment of 101 - - investment in associate Impairment of - 19 - investments Profit on disposal - - (37) of investment Share of loss of - - 24 associate Share based payment 7 - 98 change Depreciation 5 - - Movements in 48 (84) (4) exchange Net 103 113 286 interest expense Operating cash flow (247) (856) (1,188) before movements in working capital Working capital adjustments: - (Increase) / (68) (26) - decrease in inventory - Decrease / (9) 36 51 (increase) in receivables - Increase / (decrease) (41) 277 659 in payables Cash used (365) (569) (478) in operations Net (1) (113) (152) interest paid Net cash outflow (366) (682) (630) from operating activities Investing activities Purchase of evaluation and - (398) (626) exploration assets Sale of - - 80 investments Purchase of - (1) (14) property, plant and equipment Net cash flow from - (399) (560) investing activities Financing activities Issue of shares 561 622 713 Draw down of loan - 191 190 note Net cash flow from 561 813 903 financing activities Net increase / 195 (268) (287) (decrease) in cash and cash equivalents Cash and cash 11 298 298 equivalents at start of the period Effect of foreign - - - exchange rates Cash and cash 206 30 11 equivalents at end of the period Notes to the Unaudited Interim Financial Statements 1. General information Block Commodities Limited ('Block Commodities' or the 'Company') is building a fertiliser trading business and network to create a new trading platform using block chain technology to promote and secure an efficient agricultural ecosystem as it seeks to develop an integrated African focussed fertiliser operation. Block Commodities is a public limited company incorporated and domiciled in the Guernsey. The address of its registered office is Richmond House, St Julians Avenue, St Peter Port, Guernsey GY1 1GZ. The Company is admitted to trading on the NEX Exchange Growth market. The unaudited interim financial statements for the 6 months ended 31 December 2017 were approved for issue by the board on 27 March 2018. The interim financial statements for the 6 months ended 31 December 2017 and the 6 months ended 31 December 2016 are unaudited and do not constitute full accounts. The comparative figures for the year ended 30 June 2017 are extracts from the annual report and do not constitute statutory accounts. The unaudited interim financial statements have been prepared in US Dollars as this is the currency of the primary economic environment in which the Group operates. 2. Basis of preparation The condensed consolidated financial statements of the Group for the six months ended 31 December 2017, which are unaudited and have not been reviewed by the Company's auditor, have been prepared in accordance with the
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