RNS Number:7619R
Arko Holdings PLC
27 September 2005
ARKO HOLDINGS PLC
CHAIRMAN'S STATEMENT
For the six month period ended 30 June 2005
I am pleased to report Arko Holdings plc's ("Arko" or the Group) result for
the interim period 1 January 2005 to 30 June 2005.
Results
In the first half of 2005, gross margin (before exceptionals) improved by 24.8%
to 41.3% reflecting the change of the major income structure of the Group. The
group turnover of US$3.8m (2004: US$37.6m) represents the revenue from terminal
and shipping logistics business. Earnings before interest, tax, depreciation
and amortisation (EBITDA) dropped to US$828,000 (2004: US$4m). The loss on
ordinary activities before taxation was US$94,000 (2004: profit of US$1.56m)
after a charge of US$827,768 for depreciation is taken into account. The loss on
ordinary activities after taxation and minority interest was US$10,000 (2004:
profit of US$839,000.)
No interim dividend is declared.
Operational Review
We are bearing down ever harder on the problems of the past and are building on
the strength of the continuing businesses. Our continuing business delivered
stable results, in particular the terminal operation. There was an increase of
21% in the handling of TEUs (TEU is a 20 foot equivalent unit container)
compared to the same period of last year and 30% increase in turnover. However,
our discontinued units continued to show reserve deterioration. As to the power
plant, the low electricity tariff and the expensive coal price were the major
obstacle to its profitability. Recently, a letter of intent has been reached
between the power plant and a PRC privately-owned enterprise whereby the party
agreed to invest money to secure coal supply as well as to the maintenance of
the machineries in return of profit sharing. The power plant has gradually
resumed operation in August.
Board Change
I am delighted to welcome Mr. Zhang Jing, the new Executive Director and Mr. Liu
Shengrong, new Non-Executive Director of Arko Holdings plc.
Outlook
Shareholders will be aware from my previous report, that we have focused our
current endeavours into the key terminal and shipping logistics business. A
number of projects have not been able to move ahead due to the non performance
of capital commitments. Despite that, the terminal operation records steady
growth, competition remains very tense in the region and an increase in
customers in external trading is essential in order to reduce the impact of
price reduction. On the other hand, it is a long term goal of the board to
consider the possibility of the introduction of a strategic partner to the
Group.
In summary, the board remains cautious in its outlook for the year and will
continue to evaluate each opportunity in a prudent manner.
Staff
The board would again like to thank all our staff, for the commitment,
professionalism and loyalty that they have shown during the last six months.
Qin Shun Chao
Chairman
27 September 2005
ARKO HOLDINGS PLC
FINANCIAL HIGHLIGHT
6 months ended
30 June
2005 2004
US$'000 US$'000
Turnover 3,842 37,648 -89.80%
E/ (L) BITDA* 828 4,417 -81.25%
Operating profit 1 1,790 -99.94%
Shareholders' funds and minority interest 65,523 74,526 -12.08%
* Earning before interest, tax, depreciation and amortisation
ARKO HOLDINGS PLC
CONSOLIDATED PROFIT & LOSS (Unaudited) (Audited)
ACCOUNT 6 months ended Year ended
30 June 31 December
For the six month period ended 30 June 2005 2005 2004 2004
US$'000 US$'000 US$'000
Turnover 3,842 37,648 43,696
Cost of sales (2,256) (31,436) (37,594)
Gross profit 1,586 6,212 6,102
Other operating income - - 202
Net operating expenses (1,585) (3,725) (11,492)
Operating profit / (loss) before
provisions and exceptional items 1 2,487 (5,188)
Goodwill amortisation - (697) (1,397)
Operating profit / (loss) 1 1,790 (6,585)
Loss on disposal of fixed assets - (132) -
Interest receivable - - 407
Interest payable (95) (98) (1,018)
(Loss) / profit / on ordinary
activities before taxation (94) 1,560 (7,196)
Taxation on profit on ordinary
activities (50) (133) (378)
(Loss) / profit on ordinary
activities after taxation (144) 1,427 (7,574)
Minority interest 134 (588) 405
(Loss) / profit for the financial period (10) 839 (7,169)
(Loss) / earnings per share (US cents)
Basic 0.00 0.042 (0.362)
Diluted 0.00 0.042 (0.362)
ARKO HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
As at 30 June 2005
(Unaudited) (Audited)
As at 30 June As as 31
December
2005 2004 2004
US$'000 US$'000 US$'000
FIXED ASSETS
Intangible assets 24,201 24,901 24,201
Tangible fixed assets 35,272 41,847 36,098
Investment in associates 12 1,093 12
59,485 67,841 60,311
CURRENT ASSETS
Stock 271 1,062 264
Debtors 12,843 13,900 12,768
Cash at bank and in hand 259 360 421
13,373 15,322 13,453
CREDITORS
Amounts falling due within one year (4,495) (7,421) (4,997)
NET CURRENT ASSETS 8,878 7,901 8,456
TOTAL ASSETS LESS CURRENT LIABILITIES 68,363 75,742 68,767
CREDITORS
Amounts falling due after more than one year (2,840) (1,216) (2,695)
NET ASSETS 65,523 74,526 66,072
CAPITAL AND RESERVES
Called up equity share capital 14,922 13,147 14,922
Shares to be issued - 5,622 -
Share premium 15,662 11,417 15,662
Merger relief reserve 26,043 26,043 26,043
Profit and loss account (4,597) 3,592 (4,587)
Other reserve 1,276 1,394 1,681
53,306 61,215 53,721
MINORITY INTEREST 12,217 13,311 12,351
SHAREHOLDERS' FUNDS 65,523 74,526 66,072
ARKO HOLDINGS PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six month period ended 30 June 2005
6 months ended Year ended
30 June 31 December
2005 2004 2004
US$'000 US$'000 US$'000
NET CASH
(OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (17) 124 2,135
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received - - 407
Interest paid (95) (98) (1,018)
(95) (98) (611)
TAXATION (50) (992)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire fixed assets - (155) (1846)
Receipts from sale of assets - 256 435
- 101 (1,411)
NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS 1,081
NET CASH (OUTFLOW) / INFOLW BEFORE FINANCING (162) 127 202
FINANCING
Issued equity share capital - - 398
Capital element of finance lease rental payment - - (22)
Increase in debt - - 12
Loan repayment to fellow investor - (7) -
INCREASE / (DECREASE) IN CASH (162) 120 (418)
RECONCILIATION OF OPERATING PROFIT
TO NET CASH (OUTFLOW) / INFOLW FROM
OPERATING ACTIVITIES
Operating profit / (loss) 1 1560 (6,585)
Amortisation - 697 1,397
Depreciation 826 2,062 2,063
Increase / (decrease) in stock (7) (789) 10
Increase / (decrease) in debtors (75) (2,435) 5,903
Decrease in creditors (356) (1,103) (1,017)
Loss on disposal of fixed assets - 132 126
Exchange adjustments (406) - 238
(17) 124 2,135
ARKO HOLDINGS PLC
Notes to the accounts (unaudited)
1 BASIS OF PREPARATION
The Interim Report is unaudited and does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The statutory
accounts for 2004, which were prepared under UK GAAP, have been delivered to the
Register of Companies. The auditors' opinion on these accounts was unqualified
and did not contain a statement made under Section 237(2) or Section 237(3) of
the Companies Act 1985.
The accounting policies applied are consistent with these used in the financial
statements for the year ended 31 December 2004.
2 TURNOVER
(Unaudited) (Audited)
30 June 31 December
2005 2004 2004
US$'000 US$'000 US$'000
Turnover comprises:
Terminals and shipping 3,842 4,007 7,357
logistics
Power plant - 5,287 8,700
Trading and others - 28,354 27,639
3,842 37,648 43,696
ARKO HOLDINGS PLC
3 (LOSS) / EARNINGS PER SHARE
The calculation of (loss) / earnings per share is based on the loss of US$10,000
(31 December 2004: loss of US$7,169,000 and 30 June 2004: profit of US$839,000)
divided by the weighted average number of shares in issue and to be issued
during the period. The weighted average number of shares is 1,978,895,000 shares
(31 December 2004: 1,978, 017,000 and 30 June 2004:1,979,076,000 shares). For
the purpose of calculating diluted (loss) / earnings per share, there are no
dilutive share options.
4 DIVIDENDS
The directors do not recommend the payment of any dividend.
5 INTANGIBLE ASSETS
Goodwill
Cost US$'000
At 30 June 2004 and 30 June 2005 27,890
Accumulated amortisation:
At 30th June 2004 2,989
Amortisation charged 700
At 31 December 2004 and 30th June 2005 3,689
Net book value:
At 30th June 2005 24,201
At 30th June 2004 24,901
At 31st December 2004 24,201
ARKO HOLDINGS PLC
6 PRINCIPAL SUBSIDIARY COMPANIES
Name Equity
attributable
to the Place of
Group Principal activities incorporation
Arko Energy Limited 100% Investment holding British Virgin Islands
Arko Consultants Limited 100% Providing management British Virgin Islands
(formerly known as services
Arko Mining Limited)
Arko Pacific Limited 100% Investment holding British Virgin Islands
(formerly known as
Winko Development
Limited)
Long Prosperity 100% Investment holding Republic of Seychelles
Industrial Limited*
Arko Silicon (Hubei) 100% Dormant The People's Republic
Limited of China
Sanko Mineral Limited* 100% Sub-letting of yachts, British Virgin Islands
(formerly known as ships and vessels
Arko Mineral Limited)
Arko Logistics Limited* 100% Providing logistics and Hong Kong
related services
Arko Satellite Limited* 100% Dormant British Virgin Islands
Arko Terminal Limited 100% Investment holding Republic of Seychelles
("ATL")*
Changzhou Power 59.2% Operating a coal-fired The People's Republic
Development thermal power plant of China
Company Limited*
Keen Chance Terminal (GZ) 40% Investing in and The People's Republic
Company Limited* operation of a of China
terminal
and providing
logistics
services
Fujian Sanko Mining 70% Dormant The People's Republic
Limited* of China
* held by a subsidiary of Arko
Offshore Holdings Limited
This information is provided by RNS
The company news service from the London Stock Exchange
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