Black Earth Farming Ltd Q2 Report 2017St Helier, Jersey, 2017-08-31 08:00 CEST --
Sale of Russian operations completed
On 12 April 2017 regulatory approval from FAS, the Russian anti-monopoly body, was received for the sale of the Company’s Russian operations. On 22 May 2017 the Company completed the sale of its Russian operations and on 27 June 2017 the Company redeemed all its outstanding bonds.
Due to the sale transaction events and contemplated voluntary liquidation, these interim financial statements are not prepared on a going concern basis. The basis of preparation is according to International Financial Reporting Standard 5 ‘non-current assets held for sale and discontinued operations’. The net result of the discontinued operations realised over the period and on the disposal of the discontinued operations is disclosed by a single amount in the income statement. As such these statements are on a different basis to prior year accounts.
The 1H17 Net loss from ordinary activity amounted to USD 5.8 mn, driven mainly by a decline of crop prices.
The Company also recorded a loss of USD 50.6 mn from the sale of Russian operations, explained by the reclassification to Profit or Loss of the accumulated translation reserve arisen largely from the devaluation of RUB assets in USD terms attributable to the disposed of group. Without this technical reclassification the profit from the sale of Russian operations would have amounted to USD 72.5 mn. Net cash inflow from the sale transaction was USD 197.9 mn.
These results have no impact on the transaction process or guidance given by the company in relation to the transaction.
1H 2017 Highlights1 (vs 1H 2016)
· Total revenue and gains of USD 31.3 mn (53.8)
· Sales volume of 240.2kt (228.3)
· Average sales price after distribution cost USD 136 per ton (177)
· Gross loss after distribution costs of USD 6.2 mn (gain 10.8)
· EBIT of USD -9.4mn (4.4)
· FX income of USD 7.0mn (3.7)
· Net profit (net of the technical reclassification of the accumulated translation reserve to the profit or loss) of USD 66.7mn (5.2)
Subsequent events
On 1 August, 9,826,375 new shares (4.63% of shares then outstanding) were issued as a result of the Company's Long term incentive program. Following the issue, the total number of outstanding shares became 222,106,356.
At the Annual General Meeting on 11 August 2017 it was resolved to approve the execution of a share split and to effect the mandatory redemption program, whereby each outstanding share of USD 0.01 each in the Company is divided into two (2) shares of USD 0.005 each, with one (1) of those shares being redeemable and the other non-redeemable. It was also resolved that the company should apply for delisting and the application was made on the same day to Nasdaq Stockholm for delisting of the Company’s depository receipts.
For additional information, please contact:
Richard Warburton, Chief Executive Officer, + 7 985 208 24 01, + 44 7899 064429 richard.warburton@BlackEarthFarming.com
This information was submitted for publication, through the agency of the CEO set out above, at 8 a.m. CEST on 31 August 2017.
About the Company:
Black Earth Farming Ltd. (Jersey) is a farming company that until recently operated in Russia. Its shares are listed as depository receipts on Nasdaq Stockholm. The Company has recently sold its agricultural land assets and the Company has resolved to distribute the proceeds from the sale and remaining funds to its shareholders. The Board thereafter intends to propose liquidation of the Company.
Corporate website: www.blackearthfarming.com
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