Trading Statement for the Year Ended 28 February 2018
EFORA ENERGY LIMITED
(Formerly SacOil Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE Share Code: EEL
(“Efora” or “the Company”)
TRADING STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2018
This statement is issued in compliance with paragraph 3.4(b) of the Listings Requirements of the JSE Limited.
The financial results have been impacted by the following material items during the year ended 28 February 2018:
- AfricOil acquisition was completed on 31 May 2017 and 9 months results were included in the reporting period. As previously reported, AfricOil suspended its Zimbabwean operations for a period of time to refocus the business model in the country resulting of R13 million, however, the volumes have been gradually increased to ensure that the business model is fully embedded. The finance costs incurred by AfricOil was largely due to a loan to acquire the Forever Fuels business. AfricOil also incurred additional costs for the provision of doubtful debt and write downs, coupled with integration and restructuring related costs.
- Reduced losses from Lagia operations of R16 million (2017:R34.2 million) for the reporting period that was impacted by the improved oil price, the free float of the Egyptian Pound and results from the efforts to improve cost control at the field;
- Current impairment charges total R6.2 million (2017: R143.3 million, includes Encha) primarily arising from the further impairment of the Transcorp receivable due to the postponement of the hearing of the matter in the Nigerian courts; and
- Foreign exchange losses of R14.3 million (2017: R68.0 million) due to the weakening of the Rand in the reporting period.
Shareholders are advised that the Group’s results contain a prior year adjustment and that comparative balances accordingly differ to those previously reported.
The prior year adjustment relates to a change in the accounting treatment of contingent liabilities relating to Block III in the DRC:
- During the prior periods, the Group’s cost carry arrangement with Total E&P RDC (“Total”) required Total to incur all exploration and appraisal costs on behalf of the Group with respect to its operations on Block III in the DRC. Under the terms of this arrangement, Total is entitled to recover these costs plus interest from the Group’s share of oil revenues if Block III goes into commercial production. In the prior years, the Group accounted for the liability that could arise from the cost carry arrangement with Total as a contingent liability.
- During the current financial year, Group’s new auditors believe that their interpretation of the relevant reporting standard is different and that the above accounting treatment was incorrect. It is their view that it is more probable than previously assessed that this liability should be accounted for as a provision and not a contingent liability. As a result the Group’s investment in Block III under exploration and evaluation assets was understated with a corresponding understatement of liabilities. The error has been corrected by restating each of the affected financial statement line items for the prior periods.
Accordingly, the results for the comparative period ending 28 February 2017 have been restated as follows:
Basic loss per share
Headline loss per share
The numbers set out below for the prior year reflect the reported measures adjusted for the impact of the share consolidation completed on 8 November 2017 (“Consolidation”).
As a result of the above, shareholders are advised that the basic and headline loss per share are expected to be between 36.06 cents and 48.62 cents, representing a decrease on the restated basic and headline loss per share of between 23% and 43% from the restated basic and headline loss per share of 62.80 cents (after the Consolidation) recorded for the year ended 28 February 2017.
The results for the year ended 28 February 2018 will be released on SENS on Thursday, 31 May 2018.
The financial information on which this trading statement is based has not been reviewed, audited or reported on by the Company’s external auditors.
31 May 2018
FOR FURTHER INFORMATION PLEASE CONTACT:
Efora Energy Limited
+27 (0)10 591 2260
Buchanan (Financial PR adviser)
Ben Romney / Chris Judd
+44 (0)20 7466 5000
Efora Energy Limited is a South African based independent African oil and gas company, listed on the JSE. The Company has a diverse portfolio of assets spanning production in Egypt; exploration and appraisal in the Democratic Republic of Congo; midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout Southern Africa. Our focus as a Group is on delivering energy for the African continent by using Africa’s own resources to meet the significant growth in demand expected over the next decade.
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