DJ Block Commodities Ltd: Interim Results
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)
DJ Block Commodities Ltd: Interim Results -2-
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
(MORE TO FOLLOW) Dow Jones Newswires
March 28, 2018 02:03 ET (06:03 GMT)
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 30 June 2017 (available at
www.blockcommodities.com [1]). The Group does not anticipate any additional
significant change in these accounting policies for the year ended 30 June
2018. References to 'IFRS' hereafter should be construed as references to
IFRSs as adopted by the EU.
While 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.
3. Significant accounting policies
Basis of accounting
The unaudited interim financial statements have been prepared on the
historical cost basis except for financial instruments measured at fair
value. The principal accounting policies adopted are consistent with those
of the financial statements for the year ended 30 June 2017.
4. Segment reporting
The directors consider that the Group's activities comprise the segments of
fertiliser trading and potash exploration and other unallocated expenditure
in one Geographical segment, Africa.
Revenue represents sales to external customers. Unallocated expenditure
relates to central costs and any items of expenditure that cannot be
directly attributed to an individual segment.
6 months ending Trading Exploration Unallocated Total
31 December 2017
$'000 $'000 $'000 $'000
Revenue - - - -
Segment results
- Operating loss (122) - (185) (307)
- Impairment (101) (271) - (372)
- Interest expense - - (103) (103)
Loss before tax (223) (271) (288) (782)
Income tax - - - -
Loss after tax (223) (271) (288) (782)
6 months ending Trading Exploration Unallocated Total
31 December 2016
$'000 $'000 $'000 $'000
Revenue 113 - - 113
Segment results
- Operating loss (454) - (318) (772)
- Impairment - (284) (19) (303)
- Interest expense - - (113) (113)
Loss before tax (454) (284) (450) (1,188)
Income tax - - - -
Loss after tax (454) (284) (450) (1,188)
Year ending 30 June Trading Exploration Unallocated Total
2017
$'000 $'000 $'000 $'000
Revenue - - - -
Segment results
- Operating loss (806) - (438) (1,244)
- Share of loss of (24) - - (24)
associate
- Impairment - (719) - (719)
- Interest expense - - (286) (286)
Loss before tax (830) (719) (724) (2,273)
Income tax - - - -
Loss after tax (830) (719) (724) (2,273)
Year ending Trading Exploration Unallocated Total
30 June 2016
$'000 $'000 $'000 $'000
Revenue 59 - - 59
Segment
results
- Operating (1,385) - (3,678) (5,06
loss 3)
- Impairment - (7,758) (47) (7,80
5)
- Reversal of deferred - 3600 - 3600
consideration
- Interest - - (202) (202)
expense
Loss before (1,385) (4,158) (3,927) (9,47
tax 0)
Income tax - - - -
Loss after (1,385) (4,158) (3,927) (9,47
tax 0)
Segment assets consist primarily of intangible assets, property, plant and
equipment, other receivables and cash and cash equivalents. Segment
liabilities comprise operating liabilities.
Capital expenditure comprises of additions to property, plant and equipment
and intangibles.
The segment assets and liabilities at 31 December 2017 and capital
expenditure for the year then ended are as follows:
Trading Exploration Unallocated Total
$'000 $'000 $'000 $'000
Assets 78 3,089 299 3,465
Liabilities - (1,117) (1,908) (3,025)
Capital expenditure - 132 - 132
Segment assets and liabilities are reconciled to Group assets and
liabilities as follows:
At 31 December 2017 Assets Liabilities
$'000 $'000
Segment assets and liabilities 3,167 1,117
Unallocated:
Other receivables 94 -
Cash 205 -
Trade and other payables - 496
Loan Note - 1,412
Total 3,465 3,025
The segment assets and liabilities at 31 December 2016 and capital
expenditure for the year then ended are as follows:
Trading Exploration Unallocated Total
$'000 $'000 $'000 $'000
Assets 26 3,087 102 3,215
Liabilities (65) (655) (1,417) (2,136)
Capital expenditure - 399 - 399
Segment assets and liabilities are reconciled to Group assets and
liabilities as follows:
At 31 December 2016 Assets Liabilities
$'000 $'000
Segment assets and liabilities 3,113 720
Unallocated:
Investments 28 -
Other receivables 48 -
Cash 26 -
Trade and other payables - 305
Loan Note - 1,111
Total 3,215 2,136
The segment assets and liabilities at 30 June 2017 and capital expenditure
for the year then ended are as follows:
Trading Exploration Unallocated Total
$'000 $'000 $'000 $'000
Assets 124 3,100 12 3,236
Liabilities 15 946 1,783 2,744
Capital expenditure 10 719 - 729
Segment assets and liabilities are reconciled to Group assets and
liabilities as follows:
At 30 June 2017 Assets Liabilities
$'000 $'000
Segment assets and liabilities 3,224 961
Unallocated:
Other receivables 12 -
Trade and other payables - 613
Loan Note - 1,170
Total 3,236 2,774
5. Earnings per share
The calculation of basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited Unaudited
6 months 6 months year
to to ended
31 31 30 June
December December
2017
2017 2016
$'000 $'000 $'000
Loss for the purpose of basic
loss per share
(782) (1,188) (2,273)
Number of shares
Weighted average number of
ordinary shares for the purposes
of calculating basic and diluted
loss per share
2,209,126 1,056,847 1,300,955
,360 ,527 ,409
Basic and diluted loss per share (0.04c) (0.11c) (0.17c)
(cents)
-attributable to equity holders
6. Intangible assets Evaluation and exploration
costs
$'000
At 1 July 2016 3,000
Additions 398
Impairment provision (284)
Exchange rate (114)
adjustment
At 31 December 2016 3,000
Additions 238
Impairment provision (435)
Exchange rate 197
adjustment
At 30 June 2017 3,000
Additions 132
Impairment provision (271)
Exchange rate 139
adjustment
At 31 December 2017 3,000
(MORE TO FOLLOW) Dow Jones Newswires
March 28, 2018 02:03 ET (06:03 GMT)
