Ambrian PLC Trading Update (0074Z)
December 12 2017 - 02:00AM
UK Regulatory
TIDMAMBR
RNS Number : 0074Z
Ambrian PLC
12 December 2017
Ambrian plc
Trading Update
Ambrian plc ("Ambrian" or the "Company" or, together with its
subsidiaries, the "Group") provides the following trading update in
respect of the Group's cement production activities in Beira,
Mozambique and on the current financial position of the
Company.
Operational Update
Cement sales volumes for the second and third quarters of 2017
reflected the trends reported by the National Department for
Statistics in respect of overall cement sales in the central part
of Mozambique, being 16 % lower in Q3 2017 compared to Q3 2016 but
20% higher compared to Q2 2017. The general economic conditions in
the country have been very challenging over the last 12 months.
However, the Group has seen activity within the construction sector
improving over the last six months and, in terms of sales, the
fourth quarter of 2017 has been very strong and has represented the
first quarter where the Group's operations have been ahead of
budget for three consecutive months. For the year ending 2017,
sales are forecast to be approximately 25% higher than for the same
period 2016. In addition, the Group has seen cement prices improve
year-on-year and the plant in Beira is now generating a positive
EBITDA.
With regards to the debt position of Cimentos de Beira ("CdB"),
the restructuring of the term loan facilities with the Industrial
Development Corporation of South Africa, as outlined in the Interim
Results announcement in September 2017, still remains subject to
conditions precedent being satisfied. CdB also has local working
capital facilities which charge interest based on national Lending
Rates which are currently in excess of 25 per cent. and which
impact upon the net income of the business.
Financial Update
Whilst the operational performance of the cement operations in
Mozambique is improving, the Company is facing urgent short-term
liquidity issues owing to difficulties in moving cash resources
held within the Group to the Company.
As a consequence, the Board is closely monitoring the cash
position of Company and anticipates that short-term, external
financing will be required in order to ensure the Company can
continue to meet its obligations as they fall due. In that regard,
the Company is currently in discussions with potential
counterparties in relation to securing both short-term financing
for the Company and a longer-term strategic partnership and
investment for the Group as a whole to allow it to reduce its debt
and develop its principal asset in Mozambique significantly. Whilst
these discussions are at an advanced stage, there can be no
certainty that any such financing or strategic partnership will be
concluded.
The Board has undertaken a number of steps in an effort to
mitigate the extent of the Company's cash outflows in the
short-term, including deferral of non-executive director fees for
December 2017. As at the date of this announcement, the majority of
non-executive board members have agreed to this deferral.
The Company is also in discussions with all Board members and
senior management of Ambrian who hold Convertible Loan Notes issued
by the Company on 16 October 2015, the principal terms of which
were announced on 30 September 2015 (the "Convertible Loan Notes")
about the possibility of deferring the interest payment due on
those Convertible Loan Notes for the period 1 July to 31 December
2017, with such interest currently scheduled to be paid in December
2017.
As announced on 31 July 2017, the Company has engaged Verdant
Capital, an African corporate finance specialist, to assess
strategic options for the Company's cement operations. This review
is ongoing.
Further updates will be issued in due course.
For further information, please contact:
Ambrian plc
Martin Abbott, Chairman +44 (0)20 7634 4700
Roger Clegg, COO
John Coles, CFO
Cenkos Securities plc
Neil McDonald +44 (0)131 220 9771
This announcement contains inside information for the purposes
of Article 7 of the Regulation (EU) No 596/2014 on market abuse
This information is provided by RNS
The company news service from the London Stock Exchange
END
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