TIDMTHAL
RNS Number : 6398M
Thalassa Holdings Limited
01 August 2017
Thalassa Holdings Ltd
(Reuters: THAL.L. Bloomberg: THAL:LN)
("Thalassa" or the "Company")
Results for the 6 months ended 30 June 2017
The Company is pleased to announce its financial results for the
6 months ended 30 June 2017. A summary of the results is set out
below.
Highlights for the 6 months ended 30 June 2017
GROUP RESULTS 1H 2017 versus 1H 2016
Revenue $8.2 vs. $5.2m
Gross Profit $4.9m vs. $2.9m
Gross Margin 59.6% vs. 56.7%
Operating Profit before depreciation (EBITDA) $2.4m vs. $0.5m
Group Net Profit $0.8m vs. $0.8m
Group Earnings Per Share - basic and diluted*(1) $0.04/GBP0.03 vs. $0.03/GBP0.02
Book value per share*(2) $1.29/GBP0.99 vs. $1.17/GBP0.77
Cash $3.1m vs. 1H16 $13.2m
Debt $nil vs $nil
*(1) based on weighted average number of shares in issue of 21,657,704
(1H16: 22,806,734)
*(2) based on actual number of shares in issue
as at 30 June 2017 of 21,633,865
1H17 OPERATIONAL HIGHLIGHTS
WGP
-- Completion of PRM surveys over Snorre and Grane in the North Sea
-- Completion of PRM survey over Ekofisk in the North Sea
-- Ongoing operations over Eldfisk In the North Sea
ARL
-- Completion of 1st stage testing of prototype flying node
-- Progress with the development of autonomous operational software
Contacts:
Thalassa Holdings Ltd:
Duncan Soukup, Executive Chairman +33 (0)6 78 63 26 89
WH Ireland Limited (Nominated adviser):
Chris Fielding, Head of Corporate Finance +44 (0)207 220 1650
Press Enquiries:
Square1 Consulting (Public Relations)
David Bick/Brian Alexander +44 (0)207 929 5599
Chairman's Statement
Operations
1H 2017 results surpassed the Board's expectations. However, the
continued non-performance of certain operating equipment is a major
concern. The Board hopes to resolve these equipment issues
equitably and without the need for litigation. The Company has
served notice on the supplier under the terms of the warranty,
however, there is no certainty that the Company will succeed in
exchanging equipment, nor that it will be able to recover costs or
damages. If resolution of the equipment problems is unsuccessful,
WGP has potential exposure in excess of $1m, to write down and
replace the non-performing equipment.
Clearly, after so much hard work, this would be a very annoying
and disappointing result.
M&A
During the period under review the Board spent a significant
amount of time involved in potential acquisition and partial
acquisition discussions of WGP and ARL respectively.
As reported in the Company's RNS of 13 July 2017, the Board
terminated these discussions as the final offer was, in the
aggregate, far removed from the indicative offer.
WGP
The seismic market's recovery remains elusive, as the price of
Brent crude dropped back during the first half of 2017 to around
$50/bbl, and market commentators do not expect a recovery in
seismic service day rates until at least mid-2018.
Given the difficult market environment, WGP's operational
performance was solid and it successfully completed three and a
quarter life of field surveys in the first half of 2017.
Unfortunately, one of WGP's projects continues to suffer from
significant operational issues which are yet to be resolved. These
issues have resulted in unacceptably high levels of downtime due to
equipment failure. Fortunately, however, data quality has not been
affected and data delivered is deemed better than 2016 by the
client.
In the first half of 2017 WGP continued with a solid HSE
performance with zero recordable incidents for the period. Also,
WGP's quality, occupational health & safety and environmental
management systems were successfully audited by BSI in May for
their compliance with ISO 9001, 18001 and 14001.
ARL
The development and testing of the prototype 'Flying Node' for
OBN seismic survey is progressing as planned with 1st stage testing
complete using partial control via a tether cable. Software for
autonomous operation is currently under development with testing of
the autonomous functions planned for Q3 of 2017. This 2nd stage
test of autonomous operation will also include initial testing of
the underwater acoustic communications and positioning
technology.
Outlook
I am hopeful that we can resolve our equipment problems swiftly
under which circumstances 2H 2017 and Full Year 2017 results should
show further improvement.
Duncan Soukup
Chairman
Thalassa Holdings Ltd
28 July 2017
Financial Review
Group results for the 6 months to 30 June 2017 showed an
increase in revenue of 58% to $8.2m versus $5.2m in 1H16. Revenue
from Seismic Operations has been generated from the Spring survey's
over the Snorre and Grane fields in the North Sea with the addition
of surveys over Ekofisk and Eldfisk in 1H17, also in the North
Sea.
Cost of Sales increased by 43% to $3.3m in 1H17 (1H16: $2.3m) as
a result of operational costs associated with the additional
surveys over Ekofisk and Eldfisk.
Gross profit was $4.9m versus $2.9m in 1H16, an increase of 69%
with gross margin of 59.6%, an increase of 2.9% points from 56.7%
in 1H16 and 1.6% points up from the full year 2016 gross margin of
58%.
Administrative expenses increased by $0.1m to $2.5m (1H16:
$2.4m) resulting in operating profit before depreciation of $2.4m
(1H16: $0.5m) with a margin of 29.3% (1H16: 10.0%).
Depreciation increased by 164% to $1.0m (1H16: $0.4m) reflecting
additional depreciation charged on new equipment acquired and put
into use in Q416. Operating Profit was therefore $1.3m (1H16 $0.1m)
with a margin of 15.8%.
Net financial income of $1.0m included foreign exchange
gains/losses and interest income (1H16: $1.0m).
Interest Expense of $1.3m (1H16: $0.2m) reflects accrued
interest on inter company loans between the parent company and its
subsidiaries.
Profit before tax was therefore $1.0m versus $0.9m in 1H16 with
Tax in the period of $0.2m incorporating an estimate of the tax
liability incurred from the Company's operations across its
different regions (1H16 $0.2m), resulting in a Net profit of $0.8m
compared to $0.8m in 1H16.
Net assets at 30 June 2017 amounted to $27.8m (1H16: $26.4m,
2016: $27.3m) resulting in net assets per share of $1.29/GBP0.99
based on 21,633,865 shares in issue versus $1.17/GBP0.77 in 1H16
(based on 22,578,865 shares in issue) and $1.24/GBP1.01 in 2016
(based on 21,958,865 shares in issue). Included is $3.1m of cash,
equivalent to $0.15/GBP0.11 per share (1H16: $0.58/GBP0.39, 2016:
$0.35/GBP0.29).
The Company had no net debt at the period end (1H16: $nil).
Included within Trade and Other Receivables was $5.7m of trade
receivables, of which $3.0m has since been received.
Net cash outflow from operating activities amounted to $(3.4)m
however this includes $5.7m of trade receivables and does not
reflect the $3.0m of outstanding trade receivables at 30 June 2017
subsequently received.
Net cash outflow from investing activities amounted to $0.9m
relating to the purchase of available for sale investments and
investments in associates.
Net cash outflow from financing activities amounted to $0.3m
relating to the buy back of 325,000 Thalassa ordinary shares into
Treasury.
Net decrease in cash and cash equivalents was $4.6m resulting in
Cash and Cash Equivalents of $3.1m as at 30 June 2017. Cash at the
time of reporting is $4.8m (1H16: $13.2m, Y/E 2016: $7.7m).
Consolidated Statement of Income
For the six months ended 30 June 2017
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
17 16 16
Unaudited Unaudited Audited
Note $ $ $
Revenue 8,195,290 5,195,619 13,987,926
Cost of sales (3,309,225) (2,250,995) (5,877,401)
Gross profit 4,886,065 2,944,624 8,110,525
---------------------------------------------------- ------------ ------------ ------------
Administrative expenses (2,530,871) (2,423,061) (5,885,970)
Operating profit before depreciation 2,355,194 521,563 2,224,555
---------------------------------------------------- ------------ ------------ ------------
Depreciation (1,027,361) (389,225) (1,100,445)
---------------------------------------------------- ------------ ------------ ------------
Operating profit 1,327,833 132,338 1,124,110
---------------------------------------------------- ------------ ------------ ------------
Net financial income 995,358 1,001,226 1,907,533
---------------------------------------------------- ------------ ------------ ------------
Interest Expense (1,268,711) (194,820) (600,505)
---------------------------------------------------- ------------ ------------ ------------
Share of profits less losses of associated
entities (7,167) - 60,741
---------------------------------------------------- ------------ ------------ ------------
Profit before taxation 1,047,313 938,744 2,491,880
---------------------------------------------------- ------------ ------------ ------------
Taxation (242,002) (181,097) (523,299)
---------------------------------------------------- ------------ ------------ ------------
Profit for the financial period 805,311 757,647 1,968,581
---------------------------------------------------- ------------ ------------ ------------
Earnings per share - US$ (using weighted
average
number of shares)
Basic and Diluted 3 0.04 0.03 0.09
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
17 16 16
Unaudited Unaudited Audited
$ $ $
Profit/(loss) for the financial period 805,311 757,647 1,968,581
Other comprehensive income:
Exchange differences on re-translating foreign
operations 37,110 (49,287) (86,587)
Unrealised losses on available for sale investments - (24,800) 11,130
Total comprehensive income 842,421 683,560 1,893,124
----------------------------------------------------- ----------- ----------- ----------
Consolidated Statement of Financial Position
At 30 June 2017
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
17 16 16
Unaudited Unaudited Audited
Assets $ $ $
Non-current assets
Goodwill 368,525 368,525 368,525
Property, plant and equipment 9,888,076 9,642,600 10,985,757
Available for sale financial assets 1,379,826 - 826,022
Intangible assets 197,200 - -
Loans 1,572,953 1,526,522 1,549,564
Investments in associated entities 8,833,565 - 8,636,972
Total non-current assets 22,240,145 11,537,647 22,366,840
------------------------------------- ------------- ------------- -------------
Current assets
Inventories 517,104 372,325 491,151
Derivative financial asset - 295,000 -
Trade and other receivables 6,693,666 6,128,395 836,908
Cash and cash equivalents 3,145,345 13,247,222 7,732,215
Total current assets 10,356,115 20,042,942 9,060,274
------------------------------------- ------------- ------------- -------------
Liabilities
Current liabilities
Trade and other payables 4,769,314 5,217,842 4,162,534
Total current liabilities 4,769,314 5,217,842 4,162,534
------------------------------------- ------------- ------------- -------------
Net current assets 5,586,801 14,825,100 4,897,740
------------------------------------- ------------- ------------- -------------
Net assets 27,826,946 26,362,747 27,264,580
------------------------------------- ------------- ------------- -------------
Shareholders equity
Share capital 250,675 250,675 250,675
Share premium 45,202,810 45,202,810 45,202,810
Treasury shares (2,238,109) (1,650,322) (1,958,054)
Foreign exchange reserve (72,579) (83,520) (109,689)
Retained earnings (15,315,851) (17,356,896) (16,121,162)
Total shareholders equity 27,826,946 26,362,747 27,264,580
Total equity 27,826,946 26,362,747 27,264,580
------------------------------------- ------------- ------------- -------------
These financial statements were approved by the board on 28 July
2017.
Signed on behalf of the board by: Duncan Soukup
Consolidated Statement of Cash Flows
For the six months ended 30 June 2017
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
17 16 16
Unaudited Unaudited Audited
$ $ $
Cash flows from operating activities
Profit for the period before taxation 1,047,313 938,744 2,491,879
Decrease/(increase) in inventories (25,953) 18,710 (100,116)
Decrease/(increase) in trade and other receivables (5,940,430) (5,316,668) (25,180)
Increase/(decrease) in trade and other payables 690,451 205,122 1,622,756
Net foreign exchange gain 37,110 (49,288) (86,587)
Accrued interest income (23,389) (22,699) (45,740)
Taxation (242,002) (181,095) (523,299)
---------------------------------------------------- ------------ ------------ -------------
Cash generated by/(used in) operations (4,456,900) (4,407,174) 3,333,713
---------------------------------------------------- ------------ ------------ -------------
Depreciation 1,027,361 389,225 1,100,445
Amortisation of multi-client library - - -
Net cash flow (used in)/from operating activities (3,429,539) (4,017,949) 4,434,158
---------------------------------------------------- ------------ ------------ -------------
Net cash flow used in/from investing activities (877,276) (2,328,068) (15,987,450)
---------------------------------------------------- ------------ ------------ -------------
Cash flows from financing activities
(Purchase)/disposal of treasury shares (280,055) (709,897) (1,017,629)
Net cash flow from financing activities (280,055) (709,897) (1,017,629)
---------------------------------------------------- ------------ ------------ -------------
Net decrease in cash and cash equivalents (4,586,870) (7,055,914) (12,570,921)
Cash and cash equivalents at the start of
the period 7,732,215 20,303,136 20,303,136
Cash and cash equivalents at the end of the
period 3,145,345 13,247,222 7,732,215
---------------------------------------------------- ------------ ------------ -------------
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017
Foreign Total
Share Share Treasury Exchange Retained Total
Capital Premium Shares Reserve Earnings Equity
$ $ $ $ $ $
Balance as at
30 June 2016 250,675 45,202,810 (1,650,322) (83,520) (17,356,896) 26,362,747
Share option - - - - - -
expense
Purchase of
treasury shares - - (307,732) - - (307,732)
Total comprehensive
income for the
period - - - (26,169) 1,235,734 1,209,565
Balance as at
31 December
2016 250,675 45,202,810 (1,958,054) (109,689) (16,121,162) 27,264,580
Purchase of
treasury shares - - (280,055) - - (280,055)
Total comprehensive
income for the
period - - - 37,110 805,311 842,421
Unrealised losses - - - - - -
on available
for sale investments
Balance as at
30 June 2017 250,675 45,202,810 (2,238,109) (72,579) (15,315,851) 27,826,946
----------------------- -------- ----------- ------------ ---------- ------------- -----------
Notes to the Consolidated Interim Financial Information
1. General information
Thalassa Holdings Ltd (the "Company") is a British Virgin Island
("BVI") International business company ("IBC"), incorporated and
registered in the BVI on 26 September 2007. The Company was
established as a holding company, and currently has three directly
owned subsidiaries, WGP Group Ltd ("WGP"), GO Science Group Ltd
("GO") and WGP Geosolutions Limited (together with Thalassa
Holdings Ltd, the "Group").
WGP Group Ltd is a wholly owned subsidiary of Thalassa which
owns the seismic operating assets of the Thalassa Group and whose
subsidiaries are:
-- WGP Energy Services Ltd ("WESL")
-- WGP Exploration Ltd ("WGPE")
-- WGP Technical Services Ltd ("WGPT")
-- WGP Professional Services Ltd ("WGPP")
-- WGP Survey Ltd ("WGPS")
GO Science Group Ltd is a wholly owned subsidiary of Thalassa
and is an Autonomous Underwater Vehicle ("AUV") research and
development company with one subsidiary:
-- Autonomous Robotics Limited ("ARL" - formerly GO Science 2013 Ltd)
WGP Geosolutions Limited is a wholly owned subsidiary of
Thalassa which has an additional subsidiary, WGP Group AT GmbH,
both currently non-operational.
The Group's interest in each of the subsidiaries is 100%.
2. Significant Accounting policies
The Group prepares its accounts in accordance with applicable
International Financial Reporting Standards ("IFRS") as adopted by
the EU.
The accounting policies applied by the Company in this unaudited
consolidated interim financial information are the same as those
applied by the Company in its consolidated financial statements as
at and for the period ended 31 December 2016.
2.1. Basis of preparation
The condensed consolidated interim financial information for the
six months ended 30 June 2017 has been prepared in accordance with
International Accounting Standard No. 34, 'Interim Financial
Reporting'. They do not include all of the information required for
full annual financial statements and should be read in conjunction
with the consolidated financial statements of the Company as at and
for the period ended 31 December 2016.
All intra-group transactions, balances, income and expenses are
eliminated in full on consolidation.
2.2. Going concern
The financial information has been prepared on the going concern
basis as management consider that the Group has sufficient cash to
fund its current commitments for the foreseeable future.
3. Earnings per share
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
The calculation of earnings per share is based
on
the following loss and number of shares:
Profit/(loss) for the period ($) 805,311 757,648 1,968,581
Weighted average number of shares of the Company 21,657,704 23,420,184 22,806,734
Earnings per share:
Basic and Diluted (US$) 0.04 0.03 0.09
4. Loans and receivables
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
17 16 16
Unaudited Unaudited Audited
$ $ $
Loans 1,572,953 1,526,522 1,549,564
--------------------------------------------- ----------- ----------- -----------
Loans and receivables includes a loan of $1,503,823 plus accrued
interest of $69,130 to the THAL Discretionary Trust. Interest is
payable at 3% per annum (reviewed periodically).
The THAL Discretionary Trust is a trust, independent of
Thalassa, established for the benefit of individuals or parties to
whom the Trustees wish to make awards at their discretion.
5. Related party balances and transactions
Under the consultancy and administrative services agreement
entered into on 23 July 2008 with a company in which the Chairman
has a beneficial interest, the Group was invoiced $280,000 for
consultancy and administrative services provided to the Group. At
30 June 2017 the amount owed to this company was $nil (1H16:
$40,694).
6. Share capital and share premium
Six months Year
ended ended
30 Jun 31 Dec
17 16
Unaudited Audited
$ $
Authorised share capital:
100,000,000 ordinary shares of $0.01 each 1,000,000 1,000,000
Allotted, issued and fully paid 250,675 250,675
Number
of
Number Treasury Treasury
of shares shares Shares
$
Number of shares outstanding at the period
end:
Balance as 31 December 2016 21,958,865 3,108,657 1,958,054
Shares purchased (325,000) 325,000 280,055
Balance as 30 June 2017 21,633,865 3,433,657 2,238,109
7. Subsequent events
There have been no material subsequent events to report.
8. Copies of the Interim Report
The interim report is available on the Company's website:
www.thalassaholdingsltd.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR RBMATMBTJBMR
(END) Dow Jones Newswires
August 01, 2017 02:00 ET (06:00 GMT)
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