Dow Jones received a payment from EQS/DGAP to publish this press release.
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
(MORE TO FOLLOW) Dow Jones Newswires
March 28, 2018 02:03 ET (06:03 GMT)
