TIDMARL
RNS Number : 2178R
Atlantis Resources Limited
20 September 2017
20 September 2017
ATLANTIS RESOURCES LIMITED
("Atlantis", the "Company" or the "Group")
Interim Results (unaudited)
Atlantis Resources Limited, a vertically integrated turbine
supplier and project owner in the tidal power industry, is pleased
to announce its unaudited Interim Results for the six months to 30
June 2017.
Highlights
Financial highlights
-- The consolidated group cash position at 30 June 2017 was
GBP6.9 million (31 December 2016; GBP10.2 million), including
GBP3.3 million held at MeyGen (31 December 2016; GBP8.7
million).
-- Group total equity increased to GBP67.4 million over the
six-month period (31 December 2016; GBP66.6 million).
-- In May 2017, Atlantis raised GBP4.1 million before expenses
from new and existing shareholders to fund project development
activities across the Atlantis portfolio and to secure
opportunities for portfolio growth.
-- Subsequent to the reporting period, in July 2017, Atlantis
raised GBP5.0 million, before expenses, through a five-year bond
with a coupon of 8%, maturing in 2022. The proceeds will be used to
fund incremental project development activities across the Atlantis
portfolio and to secure opportunities for portfolio growth.
MeyGen Project
-- In January 2017, the final of the three Andritz Hydro
Hammerfest (AHH) turbines was successfully installed and started
generating to the grid.
-- In February 2017, the Company's AR1500 turbine, was installed
in Phase 1A of the MeyGen project. The turbine reached full power
output shortly afterwards and demonstrated levels of performance
above the contractual baseline required.
-- In March 2017, Phase 1A of the MeyGen project was granted
full accreditation by Ofgem under the Renewables Obligation Order.
The decision by Ofgem was made in respect to the 6MW tidal stream
generating station which commenced generation in November 2016. The
MeyGen project is now receiving five Renewables Obligations
Certificates (ROCs) for every MWh of renewable electricity
generated at the station.
-- The MeyGen project confirmed in March 2017 that generation
from the installed turbines was approaching 400MWh. It was also
confirmed that through this period of generation both turbines
supplied by Atlantis and Andritz Hydro Hammerfest were performing
above their contractual guarantee levels.
-- By the end of March 2017 all three AHH turbines were
recovered to undergo onshore inspection to permit AHH to implement
system enhancements derived from the lessons learned during the
initial period of operations.
-- In April 2017, the AR1500 was retrieved to allow a full
systems inspection before undergoing the contractual performance
testing regime reflecting the approach taken on the AHH systems.
This followed an unplanned grid outage which was unrelated to the
turbine itself, following a period of sustained generation.
-- In early July 2017, two of the three AHH turbines were
reinstalled and commenced generation at full power.
-- The MeyGen project confirmed in August 2017 that the project
had surpassed 1,000MWh of generation onto the grid.
-- The third AHH turbine was reinstalled in August 2017.
-- The MeyGen project confirmed in August 2017 that it had set a
new world record for monthly production from a tidal stream power
station of over 700MWh in August.
-- The AR1500 is expected to be redeployed in early October to
complete the four 1.5MW turbines for completion of Phase 1A to be
operating at full 6 MW capacity.
Corporate
-- In January 2017, the European Commission awarded GBP17.3
million (EUR20.3 million) in Horizon 2020 grant funding for the
next phase of the MeyGen project, Phase 1B, or Project Stroma. This
funding is in addition to the previously awarded NER300 funding of
EUR16.8 million.
-- In January 2017,Atlantis also announced the formation of a
new division, Atlantis Energy, to apply its skills and experience
in complementary sectors in marine renewable energy. This was
supported by memoranda of understanding with floating wind
developer Ideol and with Natural Energy Wyre, a key player in the
proposed Wyre Valley tidal barrage and flood protection scheme.
-- In March 2017, Atlantis signed a preferred supplier agreement
with SBS INTL LTD, a privately-owned international marine, subsea
and renewable energy project developer, for the supply of turbines,
engineering services and equipment for a 150MW tidal-stream array
located in Lombok, Indonesia. Atlantis also announced its
intentions to pursue projects in France, where commercial seabed
leasing rounds are planned.
-- In May 2017, the Group signed a strategic partnership
agreement with Hyundai Engineering and Construction Co. Ltd for
collaboration on the development of ocean power renewable projects
globally, and in particular the development of tidal stream
projects in South Korea.
-- In August 2017, Andrew Dagley was appointed Chief Finance
Officer, replacing Simon Counsell who stepped down to pursue other
business interests. Atlantis also announced that it was in
negotiation with the Duchy of Lancaster as its preferred developer
for the proposed Wyre estuary tidal barrage and flood protection
project, with a planned installed capacity of 160MW.
Tim Cornelius, Chief Executive of Atlantis, commented:
"The first half of 2017 has been a very positive step forward
for Atlantis and its portfolio of projects. The installation of the
four turbines at MeyGen earlier this year, was achieved safely and
in record time. We are extremely excited to see the final turbine,
our AR1500, be reinstalled at MeyGen in the coming weeks and seeing
the project complete its transition into full operations. MeyGen
Phase 1A has already set a number of records, with over 2GWh of
generation having been dispatched to grid, generating predictable
revenue from ROCs and wholesale power sales from the PPA. This now
allows us to consider a re-finance of the project to improve
returns and liberate capital for new investment opportunities.
"In addition, the first half of 2017 also saw us formally launch
Atlantis Energy and the announcement as preferred developer of the
160MW tidal barrage and flood protection infrastructure project in
the Wyre Estuary, England. We believe that this is the best
pathfinder project in the UK to help demonstrate the benefits of
predictable low-cost generation from a fleet of commercial scale
tidal barrages across the UK. We are very excited to develop this
project alongside the rest of our tidal stream portfolio throughout
the UK, Europe, North America and Asia. There are number of very
exciting projects being developed in South East Asia at present and
we are well positioned to convert these opportunities into
equipment sales and project development contracts."
Enquiries:
Atlantis Resources +44 (0)20 3727 1898
Tim Cornelius, Chief Executive Officer
Andrew Dagley, Chief Financial Officer
Peel Hunt LLP (Nominated
Adviser and Broker) +44 (0)20 7418 8900
Adrian Trimmings
George Sellar
Jock Maxwell Macdonald
FTI Consulting +44 (0)20 3727 1898
Ben Brewerton
Alex Beagley
James Styles
Chairman's Statement
As we embark on our third year as an AIM listed public company,
we have continued to grow and diversify whilst preserving the
innovation and enterprise which characterises the Atlantis team. In
particular, the launch of the new Atlantis Energy division has
enabled us to pursue opportunities which build on our heritage and
experience in tidal stream energy, and we're especially pleased
that the Duchy of Lancaster has selected us as the preferred
developer for the proposed 160 MW Wyre estuary tidal barrage and
flood protection project, near Fleetwood in Lancashire,
England.
Having commenced generation from the first phase of our MeyGen
project in Scotland we are able to focus on geographic
diversification. As well as our portfolio of UK opportunities we
are active in Canada, France and Asia, where support remains strong
for tidal stream energy as a source of predictable and sustainable
electricity. We've secured preferred supplier status for a 150 MW
project in Indonesia, and have entered into a partnership agreement
with Hyundai Engineering and Construction for worldwide projects,
including in South Korea.
Scotland, and MeyGen in particular, remains especially important
to us as Scottish waters are home to some of the world's best tidal
stream resource, and our agreements for lease with The Crown Estate
ensure we are well positioned to exploit this. We installed the
fourth and final turbine of Phase 1A of the MeyGen project in
February 2017, and following a period of initial operations all the
turbines were then retrieved for the manufacturers to implement
improvements. The first two turbines, supplied by Andritz Hydro
Hammerfest, were reinstalled in July 2017 and are running fully
autonomously. The third Andritz Hydro Hammerfest turbine was
successfully reinstalled in August 2017 and Atlantis's own AR1500
is scheduled for redeployment in early October 2017. Aggregate
export to grid during this commissioning phase has already exceeded
2 GWh, which equates to approximately GBP0.6 million of revenue. We
are very pleased with turbine performance thus far.
We were disappointed, but not surprised, with the recent
contracts for difference ("CfDs") announcement from the Department
for Business, Energy & Industrial Strategy ("BEIS"), where,
despite forecasting a two-third reduction in the level of revenue
support, we were not awarded a CfD in this allocation in respect of
Phase 1C of the MeyGen project. However, our electricity needs are
changing. National Grid's 2017 Future Energy Scenarios forecasts an
increase in demand in all cases, reversing the trend of decreasing
electricity use brought about through efficiency initiatives. This
increase must be met by affordable, secure and clean sources of
supply, and tidal stream generation from our waters can achieve all
three of these objectives and meet an estimated 20% of the UK's
electricity demand. Additionally, unlike other forms of weather
driven renewable generation, tidal energy is wholly predictable for
decades in advance.
The outcome of the recent CfD auction will deliver thousands of
megawatts of renewable energy projects, with an overwhelming
weighting towards offshore wind. These new additions to the
generation portfolio are welcomed, but must be complemented by a
more diverse basket of technologies. The funds are available to
facilitate this as 40% of the GBP290 million budget for the recent
auction round was not allocated through the competitive
process.
We intend to ask that the UK Government consider entering into
bilateral negotiations with us for the award of a 15 year contract
for difference which would allow us to proceed with the
construction of Phase 1C of the MeyGen project without further
delay. The proposed price per MWh is half of the administrative
strike price for our technology used in the recent auction rounds,
and demonstrates our commitment to rapid and significant cost
reductions.
We are delighted that support for our business remains strong,
allowing us to raise over GBP4 million in May 2017 through the
issue of new shares, and a further GBP5 million through a bond
issuance which was fully subscribed within a month of its launch in
June 2017. This will provide the capital required to fund
investigation and development of various opportunities for creating
value and generating revenue.
I am particularly pleased to note that the MeyGen project is now
exporting electricity to consumers using only the natural and
predictable power of the tides. This remarkable achievement has
only been possible because of the dedication and tenacity of our
team, our stakeholders and suppliers, and I extend my heartfelt
thank you to them all. I now look forward to building on this
foundation to fulfil our goal to create a thriving global industry,
with Atlantis at its forefront.
SUMMARY OF RESULTS
The capital raise in May 2017 meant that the net assets of the
Atlantis Group increased during the period from 31 December 2016 to
over GBP67 million.
Income for the six months to 30 June 2017 was GBP3.1 million,
which included Horizon 2020 grant funding in support of our ongoing
development expenditure. In the period, MeyGen generated revenue
from electricity production of GBP0.1 million. During this
commissioning phase, income is netted off against the cost of
construction. Together with the capital raise from the market and
grants received, total cash from financing activities for the
period, net of loan repayments, was GBP7.6 million.
The unaudited consolidated cash position of the Atlantis Group as at
30 June 2017 was GBP6.9 million.
Condensed consolidated statement of profit and loss and other comprehensive
income
For the six months ended 30 June 2017
Group
Six months ended
30 June 30 June
Note 2017 2016
GBP'000 GBP'000
Revenue - 235
Other gains and losses 7 3,130 645
Subcontractor costs (1,013) (346)
Depreciation and amortisation
expenses (763) (824)
Research and development
costs (78) (144)
Employee benefits expenses (2,440) (2,456)
Other operating expenses (1,510) (973)
---------- ---------
Total expenses (5,804) (4,743)
Loss from operating activities (2,674) (3,863)
Finance costs 8 (508) (525)
Share of results of equity-accounted
investee (37) (50)
Loss before tax (3,219) (4,438)
Income tax expense - -
Loss for the period (3,219) (4,438)
Other comprehensive income:
Items that may be reclassified
subsequently to profit
or loss
Exchange differences
on translation of foreign
operations (3) (408)
---------- ---------
Total comprehensive income
for the period (3,222) (4,846)
========== =========
Loss attributable to:
Owners of the Company (3,542) (4,438)
Non-controlling interest 323 -
---------- ---------
(3,219) (4,438)
Total comprehensive income
attributable to:
Owners of the Company (3,545) (4,846)
Non-controlling interest 323 -
---------- ---------
(3,222) (4,846)
========== =========
Loss per share (basic
and diluted) (pence) 15 (2.99) (4.75)
========== =========
Condensed consolidated statement of financial position
As at 30 June 2017
Group
30 June 31 December
Note 2017 2016
GBP'000 GBP'000
ASSETS
Property, plant and equipment 9 65,374 62,694
Intangible assets 35,590 36,324
Investment in joint venture - -
Loan to joint venture 1,316 1,236
Non-current assets 102,280 100,254
-------- -----------
Trade and other receivables 4,731 4,868
Cash and cash equivalents 10 6,939 10,232
Current assets 11,670 15,100
-------- -----------
Total assets 113,950 115,354
======== ===========
LIABILITIES
Trade and other payables 11 7,092 10,172
Provisions 1,629 2,339
Loans and borrowings 12 3,757 2,790
Current liabilities 12,478 15,301
-------- -----------
Loans and borrowings 12 29,738 29,592
Provisions 483 -
Deferred tax liabilities 3,830 3,830
-------- -----------
Non-current liabilities 34,051 33,422
-------- -----------
Total liabilities 46,529 48,723
-------- -----------
Net assets 67,421 66,631
======== ===========
EQUITY
Share capital 13 95,030 91,220
Capital reserve 12,665 12,665
Translation reserve 7,164 7,167
Option fee 6 6
Share option reserve 14 3,393 3,191
Accumulated losses (59,208) (55,666)
Total equity attributable
to owners of the Company 59,050 58,583
Non-controlling interests 8,371 8,048
-------- -----------
Total equity 67,421 66,631
======== ===========
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2017
Attributable to owners of the Company
------------------------------------------------------------------------
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January
2016 84,918 5,709 7,315 6 3,078 (47,950) 53,076 4,672 57,748
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Total comprehensive
income for the
period
Loss for the
period - - - - - (4,438) (4,438) - (4,438)
Other comprehensive
income - - (408) - - - (408) - (408)
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Total comprehensive
income for the
period - - (408) - - (4,438) (4,846) - (4,846)
Transactions
with owners,
recognised directly
in equity
Contributions
by and
distributions
to owners
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Issuance of shares 6,211 - - - - - 6,211 - 6,211
Recognition of
share-based
payments - - - - 140 - 140 - 140
Changes in
ownership
interest in
subsidiary
Dilution of
interest
in a subsidiary
without change
in control - 4,434 - - - - 4,434 2,146 6,580
Total transactions
with owners 6,211 4,434 - - 140 - 10,785 2,146 12,931
-------- -------- ----------- ------- -------- ----------- ------- ------------ -------
At 30 June 2016 91,129 10,143 6,907 6 3,218 (52,388) 59,015 6,818 65,833
======== ======== =========== ======= ======== =========== ======= ============ =======
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2017
Attributable to owners of the Company
----------------------------------------------------------------------
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January
2017 91,220 12,665 7,167 6 3,191 (55,666) 58,583 8,048 66,631
-------------- ------- ------- ----------- ------- ------- ----------- -------- ----------- -------
Total
comprehensive
income for the
period
Loss for the
period - - - - - (3,542) (3,542) 323 (3,219)
Other
comprehensive
income - - (3) - - - (3) - (3)
-------------- ------- ------- ----------- ------- ------- ----------- -------- ----------- -------
Total
comprehensive
income for
the
period - - (3) - - (3,542) (3,545) 323 (3,222)
Transactions
with owners,
recognised
directly
in equity
Contributions
by and
distributions
to owners
-------------- ------- ------- ----------- ------- ------- ----------- -------- ----------- -------
Issuance of
shares 3,810 - - - - - 3,810 - 3,810
Recognition of
share-based
payment - - - - 202 - 202 - 202
Total
transactions
with owners 3,810 - - - 202 - 4,012 - 4,012
------- ------- ----------- ------- ------- ----------- -------- ----------- -------
At 30 June
2017 95,030 12,665 7,164 6 3,393 (59,208) 59,050 8,371 67,421
======= ======= =========== ======= ======= =========== ======== =========== =======
Condensed consolidated statement of cash flows
For the six months ended 30 June 2017
Group
Six months ended
30 June 30 June
Note 2017 2016
GBP'000 GBP'000
Cash flows from
operating
activities
Loss for the period (3,219) (4,438)
Adjustments for:
Depreciation of plant
and
equipment 21 35
Amortisation of
intangible
asset 742 789
Interest income (78) (61)
Finance costs 8 508 525
Share-based payments 202 140
Provision movement (227) (41)
Share of results of
equity-accounted
investee 37 50
Grant income (1,840) (191)
Net foreign exchange
loss
/ (gain) 14 (111)
Operating cash flows
before
movements in working
capital (3,840) (3,303)
Movement in trade and
other
receivables 137 (28)
Movement in trade and
other
payables (786) 100
Net cash used in
operating
activities (4,489) (3,231)
----------- -------
Investing activities
Purchase of property,
plant
and equipment (6,532) (9,629)
Expenditure on project
development (8) (175)
Net cash used in
investing
activities (6,540) (9,804)
----------- -------
Financing activities
Proceeds from grants
received 4,226 3,046
(Repayment of) /
proceeds
from borrowings (300) 4,823
Deposits (pledged) /
released (132) 231
Proceeds from issue of
shares 4,050 6,538
Costs related to fund
raising (240) (327)
Net cash from financing
activities 7,604 14,311
----------- -------
Net (decrease) /
increase
in cash and cash
balances (3,425) 1,276
Cash and cash
equivalents
at beginning of period 8,586 10,182
Effect of foreign
exchange
rate changes on the
balance
of cash held in foreign
currencies - (85)
----------- -------
Cash and cash
equivalents
at end of period 10 5,161 11,373
=========== =======
Notes to the Consolidated Interim Financial Statements
The condensed consolidated statement of financial position of
Atlantis Resources Limited (the "Company") and its subsidiaries
(the "Group") as at 30 June 2017, the condensed consolidated
statement of profit or loss and other comprehensive income, the
condensed consolidated statement of changes in equity and the
condensed consolidated statement of cash flows for the Group for
the six-month period then ended and certain explanatory notes (the
"Consolidated Interim Financial Statements"), were approved by the
Board of Directors for issue on 19 September 2017.
These notes form an integral part of the Consolidated Interim
Financial Statements.
The Consolidated Interim Financial Statements do not comprise
statutory accounts of the Group within the meaning in the
provisions of the Singapore Companies Act, Chapter 50. The Group's
statutory accounts for the year ended 31 December 2016 were
prepared in accordance with the provisions of the Singapore
Companies Act and International Financial Reporting Standards
("IFRS"). The Group's statutory accounts were approved by the Board
of Directors on 30 May 2017 and have been reported by the Group's
auditors.
1 Domicile and activities
Atlantis Resources Limited is incorporated in the Republic of
Singapore with its registered office at 80 Raffles Place, Level 36,
Singapore 048624.
The principal activity of the Group is that of pioneering the
development of tidal current power as the most reliable, economic
and secure form of renewable energy. The Company is an inventor,
developer, owner, marketer and licensor of technology, intellectual
property, trademarks, products and services, and an investment
holding company.
2 Basis of preparation
Statement of compliance
The Consolidated Interim Financial Statements have been prepared
in accordance with International Accounting Standard ("IAS") 34 -
Interim Financial Reporting ("IAS 34").
Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in financial position and performance of the Group since
the last annual consolidated financial statements as at and for the
year ended 31 December 2016.
The Consolidated Interim Financial Statements, which do not
include the full disclosures of the type normally included in a
complete set of financial statements, are to be read in conjunction
with the last issued consolidated financial statements of the Group
as at and for the year ended 31 December 2016.
3 Significant accounting policies
Except for the new and revised IFRS effective for the financial
year beginning 1 January 2017 adopted during the six-month period
ended 30 June 2017, the accounting policies and method of
computation used in the Consolidated Interim Financial Statements
are consistent with those applied in the last issued consolidated
financial statements of the Group for the year ended 31 December
2016.
The adoption of the new and revised IFRS for the financial year
beginning 1 January 2017 does not have a significant effect on the
Consolidated Interim Financial Statements.
New standards, amendments to standards and interpretations that
are not effective for the six months ended 30 June 2017 have not
been applied in preparing these Consolidated Interim Financial
Statements. Except as otherwise indicated below, those new
standards, amendments to standards and interpretations are not
expected to have a significant effect on the Consolidated Interim
Financial Statements. The Group does not plan to adopt these
standards early.
-- IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers will replace IAS
18 Revenue, IAS 11 Construction Contracts and related
interpretations. IFRS 15 establishes a comprehensive framework for
determining whether, how much and when revenue is recognised. It
also introduces new cost guidance which requires certain costs of
obtaining and fulfilling contracts to be recognised as separate
assets when specified criteria are met.
When effective, IFRS 15 replaces existing revenue recognition
guidance, including IAS 18 Revenue, IAS 11 Construction Contracts,
IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate, IFRIC 18 Transfers of Assets from
Customers and IFRIC 31 Revenue - Barter Transactions Involving
Advertising Services.
IFRS 15 is effective for annual periods beginning on or after 1
January 2018, with early adoption permitted. IFRS 15 offers a range
of transition options including full retrospective adoption where
an entity can choose to apply the standard to its historical
transactions and retrospectively adjust each comparative period
presented in its 2018 financial statements. When applying the full
retrospective method, an entity may also elect to use a series of
practical expedients to ease transition.
The standard establishes the principle for companies to
recognise revenue to depict the transfer of goods or services to
customers in amounts that reflect the consideration to which the
company expects to be entitled to in exchange for those goods or
services. The new standard will also result in enhanced disclosures
about revenue, provide guidance for transactions that were not
previously addressed (e.g. service revenue and contract
modifications) and improved guidance for multi-element
arrangements.
The Group has completed an initial assessment of the potential
impact of the adoption of this standard on its consolidated
financial statements. Based on its initial assessment, the Group
does not expect the changes to have any material impact.
-- IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces most of the existing
guidance in IAS 39 Financial Instruments: Recognition and
Measurement. It includes revised guidance on classification and
measurement of financial instruments, a new expected credit loss
model for calculating impairment on financial assets, and new
general hedge accounting requirements. It also carries forward the
guidance on recognition and derecognition of financial instruments
from IAS 39.
IFRS 9 is effective for annual periods beginning on or after 1
January 2018, with early adoption permitted. Retrospective
application is generally required, except for hedge accounting. For
hedge accounting, the requirements are generally applied
prospectively, with some limited exceptions. Restatement of
comparative information is not mandatory. If comparative
information is not restated, the cumulative effect is recorded in
opening equity as at 1 January 2018.
The Group has completed an initial assessment of the potential
impact of the adoption of this standard on its consolidated
financial statements. Based on its initial assessment, the Group
does not expect the changes to have any material impact.
-- IFRS 16 Leases
IFRS 16 eliminates the lessee's classification of leases as
either operating leases or finance leases and introduces a single
lessee accounting model. Applying the new model, a lessee is
required to recognise right-of-use (ROU) assets and lease
liabilities for all leases with a term of more than 12 months,
unless the underlying asset is of low value.
IFRS 16 substantially carries forward the lessor accounting
requirements in IAS 17 Leases. Accordingly, a lessor continues to
classify its leases as operating leases or finance leases, and to
account for these two types of leases using the IAS 17 operating
lease and finance lease accounting models respectively. However,
IFRS 16 requires more extensive disclosures to be provided by a
lessor.
When effective, IFRS 16 replaces existing lease accounting
guidance, including IAS 17, IFRIC 4 Determining whether an
Arrangement contains a Lease, SIC - 15 Operating Leases -
Incentives, and SIC - 27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease.
IFRS 16 is effective for annual periods beginning on or after 1
January 2019, with early adoption permitted if IFRS 15 is also
applied.
The management is currently evaluating the impact of the
implementation of this standard, in view of the complexities and
the potential wide-ranging implications.
4 Critical accounting judgements and key sources of estimation uncertainty
The preparation of Consolidated Interim Financial Statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this set of Consolidated Interim Financial
Statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 31 December
2016.
5 Going concern basis
The Group meets its day to day working capital requirements
through shareholders' funding, loans and grants. The directors have
a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. The
Group therefore continues to adopt the going concern basis in
preparing the Consolidated Interim Financial Statements, not
withstanding the deficiency in net current assets.
6 Seasonality of operations
The Group's businesses were not affected significantly by
seasonal or cyclical factors during the financial period.
7 Other gains and losses
30 June 30 June
2017 2016
GBP'000 GBP'000
Grant income 1,840 191
Other income 1,226 282
Interest income 78 61
Net foreign exchange (loss)
/ gain (14) 111
3,130 645
======= =======
Other income comprises mainly liquidated damages income.
8 Finance costs
30 June 30 June
2017 2016
GBP'000 GBP'000
Interest expense arising
from:
* secured bridging loan 327 254
* secured long term loans 181 271
508 525
======= =======
9 Property, plant and equipment
During the period, a further GBP3.2 million (2016: GBP7.3
million) of expenditure related to the development of the MeyGen
tidal power project at the Inner Sound of the Pentland Firth off
the coast of Scotland was capitalised and an aggregate of
GBP617,000 (2016: GBP451,000) of grants were drawn down. Included
in the capitalised development costs is an amount of GBP919,000
(2016: GBP812,000) that represents borrowing costs capitalised
during the period. The project is approaching its operational phase
and management estimates the recoverable amount of property, plant
and equipment and intangible assets to be higher than the carrying
amount such that no impairment is required.
10 Cash and cash equivalents
30 June 31 December
2017 2016
GBP'000 GBP'000
Cash at bank 5,160 8,546
Fixed deposits 1,778 1,646
Cash on hand 1 40
------- -----------
Cash and cash equivalents in
the statements of financial
position 6,939 10,232
Less: Encumbered deposits (1,778) (1,646)
Cash and cash equivalents in
the statement of cash flows 5,161 8,586
======= ===========
The encumbered deposits serve as collateral on behalf of MeyGen
Limited, in support of the provision of bank guarantees and standby
letters of credit as required under the terms of MeyGen's seabed
lease and to secure the MeyGen project's electricity transmission
capacity.
11 Trade and other payables
30 June 31 December
2017 2016
GBP'000 GBP'000
Trade payables 3,590 7,353
Other payables 268 63
Accruals 1,006 2,549
Advanced receipts 2,228 207
------- -----------
7,092 10,172
======= ===========
Advanced receipts included deferred grant income of GBP2.2
million (2016: GBP0.2 million)
12 Loans and borrowings
30 June 31 December
2017 2016
GBP'000 GBP'000
Current loans and borrowings
Secured bridging loan from
non-controlling interest 2,815 2,790
Secured long term loans 942 -
3,757 2,790
Non-current loans and borrowings
Loans from a related party 4,182 4,056
Long term loan 4,109 3,984
Secured long term loans 21,447 21,552
------- -----------
29,738 29,592
------- -----------
Total loans and borrowings 33,495 32,382
======= ===========
During the period, a GBP300,000 repayment was made of the
Secured bridging loan. There were no further loan drawdowns (2016:
GBP4,823,000). Other than as described in note 19(ii), there were
no changes in the terms and conditions of any of the loans detailed
above and no covenants of any loans have been breached.
13 Share capital
Number
of ordinary
shares with
no
par value
'000 GBP'000
Issued and paid up during the period:
At 1 January 2016 105,068 84,918
Public offerings issued for cash 11,888 6,539
Transaction costs incurred in relation to
share issuance - (237)
------------ -------
At 31 December 2016 116,956 91,220
Public offerings issued for cash 9,000 4,050
Transaction costs incurred in relation to
share issuance - (240)
------------ -------
At 30 June 2017 125,956 95,030
============ =======
In May 2017, the Company raised GBP4.05 million, before
expenses, through the placing of 9 million new ordinary shares at a
placing price of 45 pence per share.
14 Share option reserve
During the period, no further options to take up unissued shares
of the Company were granted. No shares of the Company have been
issued by virtue of the exercise of an option to take up unissued
shares.
15 Loss per share
The calculation of loss per share is based on the loss after tax
and on the weighted average number of ordinary shares in issue
during each period.
Loss attributable Weighted average Loss per share
to owners of number of shares
the Company
30 June 30 June 30 June 30 June 30 June 30 June
2017 2016 2017 2016 2017 2016
GBP'000 GBP'000 '000 '000 pence pence
Basic and
diluted 3,542 4,438 118,547 93,352 2.99 4.75
At 30 June 2017, share options were excluded from the diluted
weighted average number of ordinary shares calculation as their
effect would have been anti-dilutive.
16 Related company and related party transactions
Other than those disclosed elsewhere in the Consolidated Interim
Financial Statements, there were the following significant
transactions with related parties companies during the period:
30 June 30 June
2017 2016
GBP'000 GBP'000
Interest income from a joint venture 78 61
Interest expense arising from related party
loans (327) -
======= =======
Compensation of directors and key management personnel:
The remuneration of directors and other members of key
management during the period are as follows:
30 June 30 June
2017 2016
GBP'000 GBP'000
Short term employee benefits 264 176
Defined contribution benefits 30 30
Share-based payments 61 88
======= =======
17 Segment information
(a) Operating segments
The Group is principally engaged in generating energy from tidal
current power generation projects, development of these projects,
as well as turbine and engineering services. In addition to the
development of power projects, the power generation division
currently focuses on the development of the MeyGen tidal energy
project, whereas the turbine and engineering services division
focuses on the development and delivery of turbines and technology
solutions for projects worldwide. The divisions are managed
separately because they require different expertise and marketing
strategies.
The Board of Directors, who are chief operating decision makers,
review internal management reports for each division regularly, in
relation to the capital expenditure, resources allocation and
funding availability of the three divisions.
Other operations include the provision of corporate services
which does not meet any of the quantitative thresholds for
determining reportable segments in 2017 and 2016.
There are varying levels of integration between the power
generation, project development and turbine and engineering
services divisions, including the delivery of a turbine from the
turbine and engineering services to the power generation
division.
Information regarding the results of each reportable segment is
included below.
Six months ended 30 June 2017 Turbine
Power and engineering Project
generation services development Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenues - - - -
=========== ================ ============= =======
Inter-segment revenue - 127 - 127
Interest revenue - 8 - 8
Interest expense - (507) - (507)
Depreciation and amortisation - (358) - (358)
Reportable segment profit / 1,390
(loss) before tax (1) (4,199) (147) (2,956)
=========== ================ ============= =======
(1) Comprise mainly liquidated damages income.
Six months ended Turbine
30 June 2016 Power and engineering Project
generation services development Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenues - 235 - 235
=========== ================ ============= =======
Inter-segment revenue - 2,141 - 2,141
Interest revenue - 14 - 14
Interest expense - (412) - (412)
Depreciation and
amortisation - (367) - (367)
Reportable segment
loss before tax (88) (4,832) - (4,920)
=========== ================ ============= =======
As at 30 June Turbine
2017 Power and engineering Project
generation services development Total
GBP'000 GBP'000 GBP'000 GBP'000
Reportable segment
assets 73,850 29,151 8,109 111,110
Capital expenditure 2,587 115 - 2,702
Reportable segment
liabilities (37,183) (29,682) (18,071) (84,936)
=========== ================ ============= ========
As at 31 December Turbine
2016 Power and engineering Project
generation services development Total
GBP'000 GBP'000 GBP'000 GBP'000
Reportable segment
assets 76,193 44,321 8,166 128,680
Capital expenditure 22,846 - 6,580 29,426
Reportable segment
liabilities (39,940) (32,536) (16,908) (89,384)
=========== ================ ============= ========
(b) Reconciliation of reportable segment revenue
30 June 30 June
2017 2016
GBP'000 GBP'000
Revenue for reportable segments 127 235
Elimination of inter-segment revenue (127) -
Consolidated revenue - 235
======= =======
(c) Reconciliation of reportable segment profit or loss
30 June 30 June
2017 2016
GBP'000 GBP'000
Total loss for reportable segments (2,956) (4,920)
Unallocated amounts (226) 532
Share of loss of equity-accounted investee (37) (50)
------- -------
Consolidated loss before tax (3,219) (4,438)
======= =======
18 Capital commitments
As at 30 June 2017, the Group had entered into contracts to
construct a tidal power plant for GBP47.7 million (2016: GBP51.4
million), of which GBP46.6 million (2016: GBP36.1 million) had been
incurred as at the reporting date. At 30 June 2017, the Group had
outstanding commitments under contracts for design and subcontract
works for GBP1.2 million (2016: GBP1.9 million), pre-final
investment decision costs of GBPnil (2016: GBP0.3 million) for new
sites.
19 Events after the reporting period
(i) On 25 July 2017, the Group, via its subsidiary company
Atlantis Ocean Energy PLC, raised GBP5.0 million through a
five-year bond with a coupon of 8%, payable semi-annually, and
maturing in 2022. The bond was offered through Abundance Investment
Limited ("Abundance"), the provider of a regulated green
peer-to-peer investment platform.
(ii) On 31 August 2017, one of the subsidiaries, Atlantis
Resources (Scotland) Limited entered into an agreement to extend
the repayment terms of a bridging loan to 28 February 2018 at an
interest rate of 15% per annum. In August 2017, GBP1.8 million of
this loan was repaid using proceeds from the bond issue mentioned
above. All other terms remain the same.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFEFWUFWSEFU
(END) Dow Jones Newswires
September 20, 2017 02:00 ET (06:00 GMT)
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