RNS Number : 7189M
Bumi plc
29 August 2013
 



BUMI PLC ANNOUNCES HALF YEAR 2013 RESULTS

 

H1 2013 Financial & Operating Highlights

 

·    Production of 11.5mt for the period up 19% from H1 2012

·    On track to produce 23mt for the full year

·    Realised coal price for H1 2013 fell 20% to $61.4/t

·    Production cost of sales down 10% to $37.1/t

·    Major cost reduction initiatives underway

·    EBITDA1 of $74m (H1 2012: $139m)

·    Operating Loss2 of $11m (H1 2012: Profit $52m)

·    Group Net Debt of $389m (31 December 2012: $514m)

 

Strategy to deliver shareholder value

 

·       Further operational efficiencies targeted through asset optimisation programme

·       Near term target of 30mt annual production - key licence for Binungan obtained in August 2013

·       Continued enhancement of financial systems and controls

·       Review of capital structure to reduce interest cost and lower debt

·       Separation transaction from the Bakrie Group and PT Bumi, now well advanced

·       New Chief Financial Officer and Chief Mining Officer appointed, to be based in Jakarta

 

Nick von Schirnding, Chief Executive of Bumi plc said:

 

"There have been two areas of focus at PT Berau in the first half of 2013. One has been a major effort to address governance and financial control issues identified earlier this year. We carried out an extensive review of the financial position of Berau which has resulted in increased alignment with Bumi plc policies and procedures and the enhancement of our financial systems and controls. This process is ongoing and further improvements will be made during the year. The second is the development of a revised mine plan in conjunction with an asset optimisation exercise to profitably increase coal production, improve efficiencies and reduce costs. This, together with the appointment of a new Chief Financial Officer and Chief Mining Officer, will further help us achieve our goals.

 

Good progress continues to be made on the transaction to separate from the Bakrie Group and Bumi Resources.  The circular to shareholders is at an advanced stage and the Company expects it will be sent to shareholders in September 2013".

 

1.     EBITDA excluding share of loss of associate PT Bumi.

2.     After charging $72m (H12012: $49m) in respect of the unwind of fair value adjustments created as a result of the acquisition of PT Berau.

 

 

 

 

Financial information for the six months ended 30 June 2013

US$ million, except per share amounts

6 months

 to 30 June 2013

6 months

to 30 June 2012

Restated1

 

Notes

 

1.   The 2012 numbers have been restated for other exceptional costs, reclassification of restricted cash and the impact of IFRIC 20.

 

2.   Operating (loss)/profit is after charging $72 million (H1 2012: $49 million) in respect of the unwind of fair value adjustments created as a result of the acquisition of PT Berau (84.7% at 30 June 2013).

 

3.   EBITDA represents profit before: net finance items, net taxation, depreciation and amortisation. It is calculated as follows:

 

US$ millions

6 months to

30 June 2013

6 months to

 30 June 2012

Restated

Loss before finance items and tax

(11)

(57)

Depreciation and Amortisation in subsidiaries

85

87

EBITDA including Share of Loss of Associate

 

Share of Loss of Associate

74

 

--

30

 

109

EBITDA excluding Share of Loss of Associate

Other Exceptional Costs

74

6

139

71

Underlying EBITDA excluding Share of Loss of Associate

80

210

 

 

 

4.   Underlying loss is calculated as follows:

 

US$ millions

6 months to

30 June 2013

6 months to

30 June 2012

Restated

Loss attributable to owners of the parent

(75)

(173)

Exclusions from underlying earnings:

 

 

Non-controlling interest

-

-

Other exceptional costs

6

71

Share of loss of associate

-

109

Movement on financial instruments at fair value through profit or loss

24

-

Separate items

30

180

Underlying (loss) / earnings (attributable to owners of the parent)

(45)

7

 

5.   After charging $34 million (H1 2012: $5 million) in respect of the unwind of fair value adjustments created as a result of the acquisition of PT Berau (84.7% at 30 June 2013).

6.   Basic earnings per share is calculated as (loss)/profit for the financial period divided by the weighted average number of ordinary shares in issue for the period.

7.   Underlying earnings per share is calculated as underlying (loss) / earnings divided by the weighted average number of ordinary shares in issue for the period.

 

Enquiries

Investors:

Bumi plc: Jayesh Pankhania, +44 (0) 207 201 7500

Media:

RLM Finsbury: Ed Simpkins / Charles O'Brien, + 44 (0)207 251 3801

 



 

REVIEW OF THE SIX MONTHS ENDED 30 JUNE 2013

 

Financial Results

 

EBITDA for the period was $74m (H1 2012: $139m), excluding the share of loss of PT Bumi, which was accounted for as an associate company in H1 2012.  Underlying EBITDA which excludes exceptional and other non-recurring items was $80m (H1 2012: $210m). Operating loss for the period was $11m (H1 2012: Profit (restated) $52m).

 

Earnings fell primarily due to a reduction in the average coal selling price in the period from $76.6/mt to $61.4/mt, partially offset by lower operating costs.

 

Despite a lower coal price environment, cash flow from operations increased by $6m to $189 million, mainly due to improved working capital management and lower costs.

 

Approximately 85% (H1 2012: 81%) of total coal sales went to exports, with 15% (H1 2012: 19%) to domestic Indonesian customers.

 

In terms of pricing, 90% of PT Berau's coal production for 2013 has been contracted and priced at an average of $61 per tonne.

 

Production Update 2013

 

PT Berau is on target to meet 23 million tonnes of production for the year, with first half 2013 production up 19%, despite loss-time rain delays being 9% higher than planned. The increase in coal mined is primarily from existing pits. The 2013 H1 stripping ratio of 8.7 bcm/t was 16% lower than prior year.

 

Reducing Costs - Asset Optimisation Update

 

A major asset optimisation programme is underway and the Company is targeting cost reductions across all areas of the business, including corporate overheads. The six key areas of immediate focus are reducing contractor costs, Life of Mine (LoM) planning, exploration and evaluation activities, marine services, fuel management and marketing. Stretch targets are currently being developed for each of these workstreams.

 

PT Berau's LoM plan is currently being reviewed with a view to profitably growing production and reducing overall costs through long term planning. A key focus is on reducing the overburden hauling distance, which is a significant driver of production costs.

 

Exploration and evaluation (E&E) activities are being assessed to improve the productivity and efficiency of E&E fieldwork, and to focus on maximising value by increasing drilling shifts and reducing overall number of rigs.

 

The Company is targeting an improvement in barging and transhipment productivity by increasing the capacity of barges and increasing the frequency of the barging cycles, as well as optimising the scheduling of barging and transhipment activities to ensure minimal delays in the transporting of coal.

 

In addition a review of fuel management is underway looking at improving the fuel usage of vehicles for overburden removal and coal mining, as well as barges for transport of coal. It is also looking at other various ways of reducing dependency on fuel.



Strengthening Management

 

Paul Fenby will join the Company as Chief Financial Officer shortly and will be based in Jakarta. Paul has over 20 years' experience in the oil and gas industry.  After qualifying as an accountant he joined Mobil Oil and later worked for BG Group where he held senior finance positions including being based in Egypt and Kazakhstan.  Most recently, he was Finance and Business Services Director for Petrofac's upstream business in Malaysia.  

 

Keith Downham will join the Company as Chief Mining Officer shortly and will also be based in Jakarta.  Keith has over 30 years' experience in the mining industry including working for Peabody Energy, BHP Billiton, AngloCoal and Glencore.  Keith was responsible for the construction, operation and expansion of Peabody's world class Wilpinjong Coal Mine in New South Wales, Australia for over five years.  Keith also spent five years in Indonesia working for BHP Billiton developing their Arutmin coal mine.  Keith holds an undergraduate degree in Mining Engineering from the Western Australian School of Mines.

 

Outlook

 

The near terms outlook for thermal coal prices remains challenging. While 90% of the Company's sales for 2013 have been fixed at $61 per tonne, our management efforts are focused on reducing operating costs through our asset optimisation programme to ensure the Group remains competitive going forward.

 

Certain statements in this interim report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable on the basis of information available to it at this time it can give no assurance that these expectations will prove to have been correct. Because these statements involve unknown risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements owing to factors beyond the Groups control where, for example, the Group decide on a change of plan or strategy. Accordingly no reliance may be placed on such forward looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.



 

 

Business Unit Performance

 

The following information is on a 100% mine level basis, for the 6 months ended 30 June 2013. The comparatives are for the 6 months ended 30 June 2012 for the Profit and Loss account, and as at 31 December 2012 for the Balance Sheet.

 

PT Berau

 

PT Berau's assets are located in the north eastern part of Kalimantan and consist of three operating mines, namely Lati, Binungan and Sambarata.

 

PT Berau had a strong operating performance for the first half of the year with production up 19%, despite lost time due to rain which was 9% higher than plan. Total coal mined was 11.5 million tonnes for the first half of 2013 compared with 9.6 million tonnes in the first half of 2012. The increase in coal mined is primarily from existing pits.

 

PT Berau's average selling price for the first half was $61.4 per tonne (H1 2012: $76.6 per tonne). Production cost of sales at PT Berau was $37.1 per tonne (H1 2012: $41.1 per tonne (restated)). The decrease is mainly due to a reduction in the stripping ratio, reduced hauling distances and lower fuel prices, partly offset by higher transhipment costs.

 

The average stripping ratio for the period was 8.7 bcm per tonne compared to 10.4 bcm per tonne for the first half of 2012. The improvements in stripping ratio were mainly at Lati Other, Binungan 7 East, Sambarata B1 and Sambarata B (East and West).

 

PT Berau is on track to deliver 23 million tonnes for the year. In terms of sales by destination, 32% of sales went to China (including Hong Kong), 27% to India and 26% went to the rest of Asia (including Taiwan and South Korea), with the remaining 15% sold domestically into Indonesia.

 

PT Berau: Operating Data

6 months to

30 June 2013

6 months to

30 June 2012

Year to

31 Dec 2012

H1 13 v H1 12

 

The effect of IFRIC20 on the Production cost of sales is given below:

 

PT Berau: Production Cost of Sales

6 months to

30 June 2013

6 months to

30 June 2012

Year to

31 Dec 2012

H1 13 v H1 12

 

1.     Bank cubic metres (bcm) of overburden removed per tonne of coal mined.

2.     Restated for impact of 'other exceptional costs' (see note 5 of the financial statements).

3.     Restated for impact of IFRIC 20 (see note 3 to the financial statements).



 

 

Key information

 

Bumi plc: key financials

(numbers are in US$ millions, unless otherwise stated)

6 months ended

30 June 2013

6 months ended

30 June 2012

Restated

Revenue

722

770

Operating (loss) / profit

(11)

52

Loss from equity accounted units

-

(109)

Loss after tax

(79)

(179)

Cash flow from operations

189

183

Net debt

389

470

Debt to total capital (gearing)

34.8%

18.2%

Interest cover (excluding associates)

n.a

1.9x

 

PT Berau: key financials

(numbers are in US$ millions, unless otherwise stated)

6 months ended

30 June 2013

6 months ended

30 June 2012

Restated

Revenue

722

770

Operating profit

106

194

Loss after tax

(38)

(96)

Net debt

469

615

Debt to total capital (gearing)

83.0%

80.0%

Interest cover

1.2x

2.6x

 

 

Summary of key operating data

6 months ended

30 June

2013

6 months ended

30 June

2012

12 months ended 31 December

2012


Berau





Coal mined (millions of tonnes)

11.5

9.6



21.0


Lati

5.1

4.9



10.7


Binungan

3.9

2.6



5.4


Sambarata

2.5

2.1



4.9


Sales (millions of tonnes)

11.5

9.8



21.1









FOB average selling price ($/t)

61.4

76.6



70.9


Production cost of sales ($/t)

37.1

41.12,3

38.72,3

 

Stripping ratio (bcm/t)1

8.7

10.4



9.6


 

1.     Bank cubic metres (bcm) of overburden removed per tonne of coal mined.

2.     Restated for impact of 'other exceptional costs' (see note 5 of the financial statements).

3.     Restated for impact of IFRIC 20 (see note 3 to the financial statements).



 

Production Report for the Second Quarter ended 30 June 2013 (unaudited)

 

 

 

Q1

Q2

Q3

Q4

Q1

Q2

Full Year

Q2

H1

 

 

2012

2012

2012

2012

2013

2013

2012

2013 v 2012

2013 v 2012

Coal mined

Berau Coal

 

 

 

 

 

 

 

 

 

 

Lati

mt

2.1

2.8

2.9

2.9

2.3

2.8

10.7

1.6%

3.6%

Binungan

mt

1.2

1.4

1.3

1.5

1.8

2.1

5.4

47.2%

50.8%

Sambarata

mt

0.8

1.3

1.3

1.5

1.2

1.3

4.9

1.2%

17.2%

Total

mt

4.1

5.5

5.5

5.9

5.3

6.2

21.0

13.4%

19.3%

Average realised prices

Berau Coal

$/t

78.3

75.2

71.3

61.8

63.2

59.8

70.9

(20.4%)

(19.9%)

Sales volumes

Berau Coal

mt

4.6

5.3

4.8

6.5

5.5

6.0

21.1

14.6%

16.8%

 

Bumi plc's ownership interest is as follows. Berau Coal: 76.2%

 

 

Principal risks and uncertainties

 

Our Group is subject to a variety of risks and uncertainties which are the result not only of the environment in which we operate but also of other factors over which we have little or no control. The principal risks and uncertainties facing the Group were set out in detail in the Business Review section of the Annual Report 2012 on pages 25 to 27 and remain appropriate in 2013. Key headline risks set out in the 2012 Annual Report (which is available on our website: www.bumiplc.com) relate to the following:

 

·    Delivery of strategy

·    Coal price

·    Cost reduction

·    Location risk

·    Compliance

·    Employees

·    Financial risk

 

Statement of Directors' responsibilities

 

The Directors confirm that these condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

·      an indication of important events that have occurred during the first six months and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

 

·      material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

 

The Directors confirm that to the best of their knowledge the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as a whole as required by DTR 4.2.4.

 

The Directors of Bumi plc are listed in the Bumi plc Annual Report for 31 December 2012 in the Governance section entitled Board of Directors, with the exception of the resignation of Scott Merrillees, Lord Robin Renwick and Sir Graham Hearne on 26 June 2013.

 

A list of current Directors is maintained on the Bumi plc website: www.bumiplc.com.

 

On behalf of the Board on 29 August 2013.

 

 

 

Nick von Schirnding
Chief Executive



 

 

Independent review report to Bumi plc

 

Introduction

We have been engaged by the Company to review the condensed consolidated interim financial statements in the half-yearly financial report of Bumi plc for the six months ended 30 June 2013, which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and related notes to the condensed consolidated interim financial statements. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial statements.

 

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 2 of Bumi plc 2012 Consolidated Financial Statements, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated interim financial statements included in this half-yearly financial report are prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements in the half-yearly financial report for the six months ended 30 June 2013 are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

PricewaterhouseCoopers LLP, Chartered Accountants, 1 Embankment Place, London, WC2N 6RH

29 August 2013

 

Notes

 

(i)      The maintenance and integrity of the Bumi plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(ii)     Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.



 

 

Consolidated Income Statement

 

US$ millions

Note

6 months to 30 June 2013

6 months to 30 June 2012

Restated*

Revenue

 

722

770

Cost of sales

 

(616)

(570)

Gross profit

 

106

200

General and administrative expenses

 

(66)

(51)

Distribution and marketing expenses

 

(45)

(26)

Other exceptional costs

5

(6)

(71)

Operating (loss)/profit

 

(11)

52

Share of loss of associate

 

-

(109)

Loss before finance items and income tax

 

(11)

(57)

Finance income

 

4

9

Finance costs

 

(54)

(65)

Movement on financial instruments at fair value through profit or loss

14

(24)

-

Net finance costs

 

(74)

(56)

Loss before income tax

 

(85)

(113)

Income tax

7

6

(66)

Loss for the period

 

(79)

(179)

Loss attributable to:

 

 

 

Owners of the parent

 

(75)

(173)

Non-controlling interests

 

(4)

           (6)

 

 

(79)

(179)

Loss per ordinary share

 

$

$

Basic

8

(0.31)

(0.72)

Diluted

8

(0.31)

(0.72)

 

* The 2012 numbers have been restated to reflect the impact of other exceptional costs, the associated tax effect, the write-off of assets under construction and also deferred stripping adjustments made as a result of the implementation of IFRIC 20. Refer to Note 11.

 

The notes on pages 16 to 29 form part of these condensed consolidated interim financial statements.

 



 

 

Consolidated Statement of Comprehensive Income

 

US$ millions

6 months to 30 June 2013

6 months to 30 June 2012

Restated*

Loss for the period

(79)

(179)

Other comprehensive income / (expense)

Items that may be reclassified subsequently to profit or loss:

 

 

Share of other comprehensive income of associate

-

2

Change in value of available for sale financial asset

(42)

-

Total comprehensive expense for the period 

(121)

(177)

Total comprehensive expense attributable to: 

 

 

Owners of the parent

(117)

(171)

Non-controlling interests

(4)

           (6)

 

(121)

(177)

 

* The 2012 numbers have been restated to show other exceptional costs separately, the tax effect thereof and the write-off of assets under construction, and deferred stripping adjustments made as a result of the implementation of IFRIC 20. Refer to Note 11.

 

The notes on pages 16 to 29 form part of these condensed consolidated interim financial statements.



 

 

Consolidated Balance Sheet

 

US$ millions

 

30 June 2013

31 Dec 2012

Restated*

Non-current assets

 

 

 

Goodwill

 

518

518

Exploration and evaluation assets

 

6

5

Property, plant and equipment

 

2,867

2,931

Derivative financial assets

 

-

24

Other non-current assets

 

27

25

Total non-current assets

 

3,418

3,503

Current assets

 

 

 

Inventories

 

34

39

Trade and other receivables

 

565

592

Available for sale financial assets

 

330

372

Restricted cash

 

-

124

Cash and cash equivalents

 

574

457

Total current assets

 

1,503

1,584

 

 

 

 

Total assets

 

4,921

5,087

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

898

833

Borrowings

 

11

12

Current taxation payable

 

52

119

Total current liabilities

 

961

964

 

 

 

 

Non-current liabilities

 

 

 

Borrowings

 

952

959

Deferred tax liabilities

 

1,169

1,209

Provisions

 

30

26

Total non-current liabilities

 

2,151

2,194

 

 

 

 

Total liabilities

 

3,112

3,158

 

 

 

 

Equity

 

 

 

Ordinary Shares

 

4

4

Share premium

 

141

141

Share payment reserve

 

1

-

Merger reserve

 

2,248

2,248

Accumulated losses

 

(1,016)

(899)

Total attributable to equity holders of the parent

 

1,378

1,494

Non-controlling interests

 

431

435

Total equity 

 

1,809

1,929

Total equity and liabilities

 

4,921

5,087

 

* The 2012 numbers have been restated to reflect the write-off of deferred stripping and the associated tax effect thereof resulting from the implementation of IFRIC 20. Refer to Note 11.

The notes on pages 16 to 29 form part of these condensed consolidated interim financial statements.

Consolidated Statement of Changes in Equity

 



Attributable to equity holders of the parent



US$ millions


Ordinary Shares

Share premium

Share based payment reserve

Merger reserve

Retained earnings

Total

Non- controlling interest

Total equity

Balance at 1 January 2012


4

141

-

2,248

1,551

3,944

691

4,635

Adjustments:










Prior period restatements


-

-

-

-

(33)

(33)

(11)

(44)

Balance at 1January 2012 (Restated*)


4

141

-

2,248

1,518

3,911

680

4,591











Dividends paid to non-controlling interests in subsidiaries


-

-

-

-

-

-

(25)

(25)

Loss for the six months to 30 June 2012


-

-

-

-

(117)

(117)

11

(106)

Other comprehensive income for the six months to 30 June 2012


-

-

-

-

2

2

-

2

Prior period restatements


-

-

-

-

(56)

(56)

(17)

(73)

Total comprehensive expense (Restated*)


-

-

-

-

(171)

(171)

(6)

(177)

Balance at 30 June 2012 (Restated*)


4

141

-

2,248

1,347

3,740

649

4,389

Loss for the six months to 31 December 2012


-

-

-

-

(2,158)

(2,158)

(214)

(2,372)

Other comprehensive expense for the six months to 31 December 2012


-

-

-

-

(88)

(88)

-

(88)

Total comprehensive expense for the six months to 31 December 2012


-

-

-

-

(2,246)

(2,246)

(214)

(2,460)











Balance at 31 December 2012


4

141

-

2,248

(899)

1,494

435

1,929











Share based payment expense


-

-

1

-

-

1

-

1

Loss for the six months to 30 June 2013


-

-

-

-

(75)

(75)

(4)

(79)

Other comprehensive expense for the period


-

-

-

-

(42)

(42)

-

(42)

Total comprehensive income / (expense)


-

-

-

-

(117)

(117)

(4)

(121)











Balance at 30 June 2013


4

141

1

2,248

(1,016)

1,378

431

1,809

 

he 2012 opening balance numbers and the total comprehensive income for the six months to 30 June 2012 have been restated to reflect the impact of other exceptional costs, the associated tax effect thereof, the write-off of assets under construction and the impact of the application of IFRIC 20. Refer to Note 11.

 

The notes on pages 16 to 29 form part of these condensed consolidated interim financial statements.

 

 

Consolidated Statement of Cash Flows

 

US$ millions

Note

 

6 months to 30 June 2013

6 months to 30 June 2012 Restated*

Net cash flows generated from operations

9

 

189

183

Other exceptional costs

 

 

(6)

(70)

Interest paid

 

 

(58)

(35)

Tax paid

 

 

(99)

(207)

Net cash flows generated from / (used in) operating activities

 

 

26

(129)

Cash flows from investing activities

 

 

 

 

Interest received

 

 

-

3

Purchase of property, plant & equipment (excluding deferred stripping)

 

 

(19)

(24)

Capitalised exploration and evaluation expenditure

 

 

(1)

(5)

Movements in restricted cash

 

 

124

15

Net cash generated from / (used in) investing activities

 

 

104

(11)

 

 

 

 

 

Cash flows before financing activities

 

 

130

(140)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from borrowings

 

 

-

494

Repayment of borrowings

 

 

(5)

(340)

Dividends paid to non-controlling interests in subsidiaries

 

 

-

(20)

Net cash (used in) / generated from financing activities

 

 

(5)

134

Net increase/(decrease) in cash and cash equivalents

 

 

125

(6)

Opening cash and cash equivalents

 

 

457

507

Effect of foreign exchange rates

 

 

(8)

3

Closing cash and cash equivalents

 

 

574

504

 

he 2012 numbers have been restated to reflect other exceptional costs, restricted cash and the impact of IFRIC 20. Refer to Note 11.

 

The notes on pages 16 to 29 form part of these condensed consolidated interim financial statements.



 

 

1.    General information

Bumi plc ('the Company') is the ultimate parent company of the Bumi plc group of companies ('the Group'). It is incorporated, domiciled and registered in England and Wales as a public company limited by shares. The ordinary shares of the Company are traded on the London Stock Exchange and its registered office is at Atlas House 3rd Floor, 173 Victoria Street, London SW1E 5NH. Its main subsidiary, PT Berau Coal Energy Tbk, ('PT Berau') is a group of coal mining companies listed on the Indonesia Stock Exchange. The Company also holds an investment in PT Bumi Resources Tbk ('PT Bumi') which is also listed on the Indonesia Stock Exchange and is also engaged in coal mining operations.

 

2.    Basis of preparation

a)  Statement of compliance

The condensed consolidated interim financial statements for the six months ended 30 June 2013 were authorised for issue in accordance with a resolution of the Board of Directors on 28 August 2013. They do not comprise statutory financial statements within the meaning of Section 434 of the Companies Act 2006. The condensed consolidated interim financial statements are unaudited but have been reviewed by the auditors, PricewaterhouseCoopers LLP ("PwC"), and their report is set out on page 10.  The audited financial statements for the year ended 31 December 2012 were approved by the Board of Directors on 31 May 2013 and have been filed with the Registrar of Companies.

 

The audit report contained two qualifications; firstly PwC were unable to obtain sufficient audit evidence over Bumi plc's share of loss from PT Bumi Resources Tbk ('PT Bumi') of $167m for the nine months ending 30 September 2012 due PT Bumi's management withholding its consent for PwC to review their auditor's working papers and were unable to perform alternative procedures; and secondly PwC were unable to complete their planned audit procedures in respect of the disclosures required under IAS24 Related party disclosures. In addition, the audit report contained an emphasis of matter in respect of Bumi plc's review of the financial position of PT Berau Coal Energy Tbk.

 

For further detail refer to Note 2.1c) of the Bumi plc 2012 Annual Report. That note makes specific reference to three areas; other exceptional costs, undisclosed liabilities, commitments and encumbrances over assets, and reclassifications and restatements.

 

The condensed consolidated interim financial statements for the six months ended 30 June 2013 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting', as adopted by the European Union. They should be read in conjunction with the audited financial statements for the year ended 31 December 2012, which have been prepared in accordance with IFRSs as adopted by the European Union.

 

The condensed consolidated interim financial statements are presented in millions of United States Dollars ("$").

 

b)  Critical accounting judgements and key sources of estimation uncertainty

The preparation of 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 these condensed 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 2012. Certain assumptions have been modified in line with the changing economic environment.



(i)   Recoverable amount of goodwill and property, plant and equipment

Judgement is required in the assessment of the recoverable amount of goodwill and property, plant and equipment. The directors have updated their 2012 year-end assessment of the recoverable amount of goodwill and property, plant and equipment as at 30 June 2013 and are satisfied that no further impairment is required.

 

Whilst the near term coal prices has fallen since the 2012 year-end, the longer term coal price is considered more stable. Based upon current initiatives, management is confident that the Group will reduce costs in the medium term through enhanced mining operations. However a more sustained, longer term decline in coal prices may cause the forecast recoverable amount of the group's assets to be reduced, unless further efficiencies can be achieved. We will perform a further review in the autumn as part of our annual and longer term planning process.

 

c)  Going concern

The Group meets its day to day working capital requirements through its banking facilities and senior notes. Global economic conditions remain uncertain and the Directors continue to monitor the situation especially the impact of efforts to stimulate the Chinese and Indian economies, the on-going crisis in the Eurozone and the pace of the US economy.  The Directors have, at the time of approving the condensed consolidated interim financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Group continues to adopt the going concern basis of accounting in preparing these condensed consolidated interim financial statements.

 

d)  Review of financial position at PT Berau

As discussed in the Bumi plc 2012 Annual Report, an extensive review of the financial position of PT Berau was initiated by new management in March 2013. This uncovered evidence of apparent financial irregularities and identified significant expenditure, predominantly in 2012, for which no clear business purpose could be established. In addition, the extensive review identified previously undisclosed encumbrances on cash balances. The findings of the review impacted the basis of preparation of the 2012 financial statements and the 2013 interim report in the following three areas:

(i)          Other exceptional costs

Expenditure for which no clear business purpose could be established has been classified separately as other exceptional costs in the Consolidated Income Statement and Consolidated Statement of Cash Flows. Refer to Note 5 for more details.

 

(ii)         Undisclosed liabilities, commitments and encumbrances over assets

 

The Board is satisfied all material liabilities, commitments and encumbrances over assets have been reflected at 30 June 2013.

 

(iii)        Reclassifications and restatements

Consideration has also been given to the presentation of amounts in respect of the six months to 30 June 2012, and the need to provide information on a comparable and appropriate basis. Amounts have been reclassified or restated, as follows:

A.  Expenditure previously attributed to assets under construction and land improvements of $53m at 30 June 2012 for which there is no clear business purpose has been written off and classified as other exceptional costs. Income tax has been adjusted to reflect the impact of this reclassification.

 

B.  A total of $13m has been reclassified from cost of sales to other exceptional costs for expenditure in the six months to 30 June 2012 where no clear business purpose could be established. Refer to Notes 5 and 11.

C.  Amounts previously included in cash and cash equivalents have been reclassified as restricted cash, to recognise that previously undisclosed pledges over cash balances amounting to $124m were in place at 30 June 2012.

 

D.  The tax impact of other exceptional costs identified in 2012 is $6m and the tax charge for the six months to 30 June 2012 has been restated.

The impact of reclassifications and restatements is summarised in Note 11.

3.    Accounting policies and presentation

The accounting policies and presentation adopted are consistent with those applied in the Bumi plc consolidated financial statements for the year ended 31 December 2012 with the exception of the application of IFRIC 20 described below.

The Group did not early adopt any standard or interpretation published by the IASB and endorsed by the European Union for which the mandatory application date is after 1 January 2013.

 

The following IFRSs or IFRICs that are effective for the first time for this interim period and that would not be expected to have a material impact on the Group, are:

 

Amendments to IFRS 7              "Disclosures offsetting financial assets and financial liabilities"

Amendments to IAS 12              "Income Taxes"

IFRS 13                                    "Fair value measurement"

 

The following IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on the Group, are:

 

IFRIC Interpretation 20    "Stripping Costs in the Production Phase of a Surface Mine"

 

The IFRS Interpretations Committee issued IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine ("IFRIC 20"), effective 1 January 2013. Prior to IFRIC 20, there was no specific guidance in the accounting for production stripping costs and it had been based on general IFRS principles.

 

Previously, the Group deferred stripping costs based on matching the cost against the related economic benefit and where the actual stripping ratio was above the planned stripping ratio. IFRIC 20 provides specific guidance on how to account for production stripping costs and acknowledges that stripping activity undertaken during the production phase may create two benefits - the first being the extraction of ore (inventory) in the current period and the second being improved access to the ore body to be mined in a future period. Where the benefits are realised in the form of inventory produced, the production stripping costs are to be accounted for in accordance with IAS 2 Inventories. Where the benefit is improved access to ore to be mined in the future, these costs are to be recognised as a non-current asset, the 'stripping activity asset ("SAA")', if required criteria are met.

 

To recognise an SAA, all the following criteria must be satisfied: (1) probability of future economic benefit, i.e., improved access to the ore body, (2) ability to identify the component of the ore body for which access has been improved, (3) stripping costs can be measured reliably.

 

The impact of IFRIC 20 for the Group has been assessed and stripping costs deferred at 31 December 2012, the impact of early implementation would have been to reduce the balance from $54m to $nil. No amounts have been allocated to inventory and SAA as they would be immaterial.

 

IFRIC 20 is to be applied prospectively to production stripping costs on or after the earliest period presented, which for the Group is 1 January 2012.

 

The adjustment to property, plant and equipment and retained earnings is shown in the following table:-



 

                       

US$ millions

Property, Plant and Equipment

Non-Controlling Interests

(Accumulated Losses)/Retained Earnings

Balance at 31 December 2011

36

691

1,551

Impact of IFRIC 20

(36)

(9)

(27)

Tax effect of the above adjustment

-

4

12

Other adjustments

-

(6)

(18)

Balance at 31 December 2011 (restated)

-

680

1,518

Deferred stripping costs previously capitalised

18

-

-

Net income / (expense) previously reported

-

11

(117)

Other comprehensive income

-

-

2

Impact of IFRIC 20

(18)

(4)

(14)

Tax effect of the above adjustment

-

2

6

Dividends paid

-

(25)

-

Other adjustments

-

(15)

(48)

Balance at 30 June 2012 (restated)

-

649

1,347

Deferred stripping costs previously capitalised

-

-

-

Net expense previously reported

-

(214)

(2,158)

Impact of IFRIC 20

-

-

-

Other comprehensive expense

-

-

(88)

Balance at 31 December 2012 (restated)

-

435

(899)

 

4.    Segmental analysis

In accordance with the provisions of IFRS 8 'Operating Segments', the operating segments used to present segment information were identified on the basis of internal reports used by the Bumi plc's Board of Directors to allocate resources to the segments and assess their performance. Bumi plc's Executive Board of Directors is the Group's "chief operating decision maker" within the meaning of IFRS 8.

 

The Board of Directors considers the business from a product perspective and has determined that the Group has one single reportable segment, being coal mining.  Information on financial performance and net assets is presented in the income statement and balance sheet and information on underlying earnings and underlying EBITDA is presented in note 6.

 

5.    Other exceptional costs

As referred to in note 2d), and as fully described in the Governance Report of the 2012 Annual Report, the PT Berau new management team appointed in March 2013 identified certain expenditure which had no clear business purpose and this expenditure was presented as other exceptional costs in the 2012 Bumi plc financial statements. Expenditure of a similar nature was incurred in January and February 2013 by previous management and accordingly this also has been presented as other exceptional costs.

 

The 30 June 2012 comparative numbers have been restated to reflect the impact of this extensive review. An analysis of other exceptional costs is set out below:



 

 

US$ millions

6 months to

30 June 2013

 

6 months to

 30 June 2012

Restated*

Expenditure attributed to hauling roads and construction in progress

6

27

Expenditure attributed to land related payments

-

26

Consulting services

-

12

Expenditure attributed to goodwill

-

5

Other

-

1

Total other exceptional costs

6

71

 

he 2012 numbers have been restated to show other exceptional costs separately, the tax effect thereof and the write-off of assets under construction. Refer to Note 11.

 

6.    Underlying earnings and underlying EBITDA

The Group presents underlying earnings and underlying earnings before interest, tax, depreciation and amortisation ("underlying EBITDA") as additional measures to provide greater understanding of the underlying business performance of its operations. Underlying earnings and underlying EBITDA exclude separate items which are those items of financial performance that the Group believes should be separately disclosed.

 

Separate items include when applicable, impairment of goodwill and other assets, costs of acquiring and integrating acquisitions, fundamental restructuring of business, profit or loss on disposal of a business or significant other asset, material claims and settlements, other exceptional costs and significant gains and losses on derivative instruments.

 

The PT Bumi loss for the six months to 30 June 2012 of $109m, which is presented as a share of associate, has been excluded from underlying earnings and underlying EBITDA as following the loss of significant influence the investment in PT Bumi is now presented as an available for sale asset and no longer represents a part of the on-going operations of the Group. The underlying earnings and underlying EBITDA for the six months to 30 June 2012 have been restated to exclude the share of loss of associate.

 

The impact of this has been to increase the prior year underlying earnings and underlying EBITDA by $109m.  In addition, 2012 numbers have been adjusted for the impact of other exceptional costs which has increased prior year underlying earnings and underlying EBITDA by $71m.

 

The adjustments made to net earnings to arrive at underlying earnings and underlying EBITDA are explained below:

 

US$ millions

6 months to

 30 June 2013

 

6 months to

 30 June 2012

Restated*

Loss attributable to owners of the parent

(75)

(173)

Exclusions from underlying earnings:

 


Other exceptional costs

6

71

Share of loss of associate

-

109

Movement on financial instruments at fair value through profit or loss

24

-

Separate items

30

180

Underlying (loss) / earnings attributable to owners of the parent

(45)

7

 

 

 



 

 

US$ millions

6 months to

 30 June 2013

 

6 months to

 30 June 2012

Restated*

Loss before finance items and tax

(11)

Depreciation and Amortisation in subsidiaries

85

87

EBITDA including Share of Loss of Associate

74

30

Share of Loss of Associate

-

109

EBITDA excluding Share of Loss of Associate

74

139

Other Exceptional Costs

6

71

Underlying EBITDA excluding Share of Loss of Associate

80

210

 

 

 

 

* The 2012 numbers have been restated to show separately the Share of Loss of Associate, the effect of other exceptional costs and associated tax effect as described in Notes 5 and 11.

 

7.    Taxation

Tax on the profit for the period comprises both current and deferred tax as well as adjustments in respect of prior periods. Tax is charged or credited to the consolidated income statement and consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the tax is also included directly within equity.

 

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted, or substantively enacted, by the end of the reporting period.

 

Deferred tax liabilities are offset against deferred tax assets within the same taxable entity or qualifying local tax group where there is both the legal right and the intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 

Significant judgement is required in determining the Group's income tax liabilities. In arriving at the current and deferred tax liability the Group has taken account of tax issues that are subject to on-going discussions with the relevant tax authorities. Calculations of these liabilities have been based on management's assessment of legal and professional advice, case law and other relevant guidance. Where the expected tax outcome of these matters is different from the amounts that were recorded initially, such differences will impact the current and deferred tax amounts in the period in which such determination is made.

 

US$ millions

6 months to

 30 June 2013

6 months to

 30 June 2012

Restated*

Tax charged to the consolidated income statement in the period:

 

 

Current tax

 

 

UK Corporation Tax at 23.25% (2012: 24.5%)

 

 

 - Current period

-

-

Overseas tax

 

 

Current period

  34

94

Deferred Tax

(40)

(28)

Total tax (credited) / charged to the consolidated income statement

(6)

66

 

he 2012 numbers have been restated to reflect the tax effect of other exceptional costs and the write-off of assets under construction. Refer to Note 11.



 

8.    (Loss) / Earnings per share 'EPS'

The Group is required to disclose basic and diluted EPS on the face of the Consolidated Income Statement. The Group has calculated underlying EPS as it believes that it is the most appropriate measure since it better reflects the business's underlying earnings.

 

Basic EPS for the six months to 30 June 2013 is calculated by dividing the loss attributable to the owners of the parent of $75 million (2012: loss $173 million) by the weighted average number of ordinary shares in issue during the period of 241 million. Basic earnings per ordinary share for the 6 months to 30 June 2012 are calculated on a similar basis.

 

Underlying basic EPS from the Group's total operations for the six months to 30 June 2013 is calculated by dividing the underlying loss for the period attributable to the equity holders of the Company of $45 million (2012 profit $7 million) by the weighted average number of ordinary shares in issue during the period of 241 million shares.  Underlying basic EPS for the 6 months to 30 June 2012 is calculated on a similar basis.  

 

US$ millions

6 months to 30 June 2013

 

6 months to 30 June 2012

Restated*

Loss attributable to ordinary shareholders

(75)

(173)

Separate items (note 6)

30 

180

Underlying (loss)/earnings

(45)

7

 

 

 

Number of shares (millions)

 

 

Basic weighted average number of ordinary shares

241

241

Potentially dilutive share options

-

-

Diluted weighted average number of shares

241

241

 

 

 

Basic loss per share

(0.31)

(0.72)

Effect of potentially dilutive share options

-

-

Diluted loss per share

(0.31)

(0.72)

 

 

 

Basic underlying (loss)/earnings per share

(0.19)

0.03

Effect of potentially dilutive share options

-

-

Diluted underlying (loss)/earnings per share

(0.19)

0.03

 

he 2012 underlying loss has been restated to reflect share of loss of associate and other exceptional costs as explained in Note 6.



 

9.    Consolidated cash flow analysis

Reconciliation of loss before tax to cash flows from operations

US$ millions

6 months to 30 June 2013

 

6 months to 30 June 2012

Restated*

Loss before income tax

(85)

(113)

Add back / (deduct):

 

 

Share of loss of associate

-

109

Depreciation and amortisation

85

87

Other exceptional costs

6

71

Movement in financial instruments at fair value through profit and loss

24

-

Net finance costs (excluding derivative movements)

50

56

Foreign exchange losses/gains in operating costs

8

(3)

Decrease/(increase) in inventories

5

(3)

Decrease/(increase) in receivables

25

(79)

Increase in payables

66

68

Increase/(decrease) in provisions

4

(10)

Share based payment expense

1

-

Cash flows generated from operations

189

183

 

he 2012 numbers have been restated to reflect the impact of other exceptional costs and restricted cash. Refer to Note 11.

 

Reconciliation of net cash flow to movement in net cash/ (debt)

 

31 December 2012

$m

 

Cash flows

$m

Other

Adjustments $m

Exchange adjustments

$m

30 June

2013

$m

Cash

457

125

-

(8)

574

Borrowings

(971)

5

3

-

(963)

Net Debt

(514)

130

3

(8)

(389)

 

10.  Commitments

At 30 June 2013, the Group had the following outstanding capital commitments:

 

Capital commitments

30 June

2013

$m

31 December

 2012

$m

Contracted but not provided:

 

 

Assets under construction

57

92

 

57

92

 

 



 

 

11.  Reclassifications and restatements

11.1      Consolidated Income Statement


6 months to

30 June 2012

$m

Reported

 

 

 

Note 1

$m

 

 

 

Note 2

$m

 

 

 

Note 3

$m

 

 

 

Note 4

$m

6 months to

30 June 2012

$m

Restated

Revenue

770

-

-

-

-

770

Cost of sales

(565)

13

-

-

(18)

(570)

Gross profit

205

13

-

-

(18)

200

General and administrative expenses

(51)

-

-

-

-

(51)

Distribution and marketing expenses

(26)

-

-

-

-

(26)

Costs associated with corporate transactions

Impairment of goodwill

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

Other exceptional costs

-

(13)

(5)

(53)

-

(71)

Operating profit

128

-

(5)

(53)

(18)

52

Share of loss of associate

(109)

-

-

-

-

(109)

Profit / (loss) before finance items and income tax

19

-

(5)

(53)

(18)

(57)

Finance income

9

-

-

-

-

9

Finance cost

(66)

-

1

-

-

(65)

Movement on financial instruments at fair value through profit or loss

-

-

-

-

-

-

Net finance costs

(57)

-

1

-

-

(56)

Loss before income tax

(38)

-

(4)

(53)

(18)

(113)

Income tax

(68)

(6)

-

-

8

(66)

Loss for the year

(106)

(6)

(4)

(53)

(10)

(179)

Loss attributable to:







Owners of the parent

(117)

(5)

(3)

(40)

(8)

(173)

Non-controlling interests

11

(1)

(1)

(13)

(2)

(6)


(106)

(6)

(4)

(53)

(10)

(179)








Loss per ordinary share

$

$

$

$

$

$

Basic

(0.49)

(0.02)

(0.01)

(0.17)

(0.03)

(0.72)

Diluted

(0.49)

(0.02)

(0.01)

(0.17)

(0.03)

(0.72)

 

Notes:

 

1.   Expenditure of $13m for which no clear business purpose could be identified has been reclassified from cost of sales to other exceptional costs. Income tax has been adjusted to reflect the impact of this reclassification.

2.   Included in Goodwill was $5m attributable to the acquisition of Infrastructure companies that was determined to have no clear business purpose.

3.   Expenditure attributed to assets under construction and land improvements of $53m for which there is no clear business purpose has been written off and classified as other exceptional costs. Income tax has been adjusted to reflect the impact of this reclassification.

4.   Deferred stripping has been restated to reflect the impact of IFRIC Interpretation 20 "Stripping Costs in the Production Phase of a Surface Mine" and to show meaningful comparative numbers. Income tax has been adjusted to reflect the impact of this reclassification.

 



 

 

11.2      Consolidated Balance Sheet Restatements


31 Dec 2012

$m

Reported

 

Note 1

$m

31 Dec 2012

$m

Restated

Non-current assets




Goodwill

518

-

518

Exploration and evaluation assets

5

-

5

Property, plant and equipment

2,985

(54)

2,931

Derivative financial assets

24

-

24

Other non-current assets

25

-

25

Total non-current assets

3,557

(54)

3,503

Current assets




Inventories

39

-

39

Available for sale financial asset

372

-

372

Trade and other receivables

592

-

592

Restricted cash

124

-

124

Cash and cash equivalents

457

-

457

Total current assets

1,584

-

1,584

Total assets

5,141

(54)

5,087

Current liabilities




Trade and other payables

833

-

833

Borrowings

12

-

12

Current taxation

119

-

119

Total current liabilities

964

-

964

Non-current liabilities




Borrowings

959

-

959

Deferred tax liabilities

1,233

(24)

1,209

Provisions

26

-

26

Total non-current liabilities

2,218

(24)

2,194

Total liabilities

3,182

(24)

3,158

Equity




Ordinary shares

4

-

4

Share premium

141

-

141

Merger reserve

2,248

-

2,248

Accumulated losses

(876)

(23)

(899)

Total attributable to owners of the parent

1,517

(23)

1,494

Non-controlling interests

442

(7)

435

Total equity

1,959

(30)

1,929

Total equity and liabilities

5,141

(54)

5,087

 

Notes:

 

1.   The opening Balance Sheet at 31 Dec 2012 has been restated to reflect the impact of IFRIC Interpretation 20 "Stripping Costs in the Production Phase of a Surface Mine". Deferred tax has been adjusted to reflect the impact of this reclassification.

 

 



 

 

11.3      Consolidated statement of cash flows restatements


 6 months to

30 June 2012

$m

Reported

 

 

Note 1

$m

 

 

Note 2

$m

6 months to

30 June 2012

$m

Restated

Net cash flows generated from operations

146

-

37

183

Other exceptional costs

-

-

(70)

(70)

Interest paid

(35)

-

-

(35)

Tax paid

(207)

-

-

(207)

Net cash used in operating activities

(96)

-

(33)

(129)

Cash flows from investing activities





Interest received

3

-

-

3

Acquisition of subsidiary, net of cash acquired

(4)

-

4

-

Purchase of property, plant and equipment

(53)

-

29

(24)

Capitalised exploration and evaluation expenditure

(5)

-

-

(5)

Movement in restricted cash

-

15

-

15

Net cash (used in)/generated from investing activities

(59)

15

33

(11)

Cash flows before financing activities

(155)

15

-

(140)

Cash flows from financing activities





Proceeds from issue of share capital

-

-

-

-

Increase in borrowings

494

-

-

494

Repayment of borrowings

(340)

-

-

(340)

Dividends paid to non-controlling interests in subsidiaries

(20)

-

-

(20)

Net cash (used in)/generated from financing activities

134

-

-

134

Net (decrease)/increase in cash and cash equivalents

(21)

15

-

(6)

Opening cash and cash equivalents

608

(101)

-

507

Effect of foreign exchange rates

3

-

-

3

Closing cash and cash equivalents

590

(86)

-

504

 

Notes:

 

1.   Cash and cash equivalents of $101m at 31 December 2011 were pledged as security to persons outside the Group, which reduced to $86m by 30 June 2012. This has been reclassified as restricted cash.

2.   Expenditure attributed to assets under construction, goodwill and consultancy costs for which there is no clear business purpose has been adjusted to arrive at net cash movements.



 

 

 

11.4      Reconciliation of loss before tax to cash flows from operations


6 months to

30 June 2012

$m

Reported

 

 

Note 1

$m

 

 

Note 2

$m

6 months to

30 June 2012

$m

Restated

Loss before income tax

(38)

(18)

(57)

(113)

Loss of associate

109

-

-

109

Depreciation

87

-

-

87

Impairment

-

-

-

-

Other exceptional costs

-

-

71

71

Foreign exchange costs

(3)

-

-

(3)

Finance income

(9)

-

-

(9)

Finance costs

66

-

(1)

65

Decrease in provisions

(10)

-

-

(10)

Increase in inventories

(3)

-

-

(3)

Increase in operating receivables

(79)

-

-

(79)

Increase in operating payables

76

(32)

24

68

Deferred stripping

(50)

50

-

-

Net cash generated from operating activities

146

-

37

183

 

Notes:

 

1.   Impact of the impact of IFRIC Interpretation 20 "Stripping Costs in the Production Phase of a Surface Mine".

2.   Expenditure attributed to assets under construction, goodwill and consultancy costs for which there is no clear business purpose has been adjusted to arrive at net cash movements.

 

12.  Related Parties

In the 2012 Bumi plc financial statements the related party disclosures included transactions for which there was no clear business purpose and where the ultimate beneficiary was uncertain. Following the replacement of the Berau President Director on 7 March 2013, controls regarding related party transactions have been enhanced.

The most significant related party transactions in the six months ended 30 June 2013 are with Recapital and Bakrie related entities in relation to transhipment services, and fuel supply and mining contractor services respectively. These contractual arrangements are in the ordinary course of business. Prior to 7 March 2013, a further $6m of expenditure was incurred where the ultimate beneficiary and business purpose was not clear, as disclosed in Note 5. After 7 March 2013, Recapital related entities ceased to be related parties of Bumi plc.

Related party debtors at 31 December 2012 included $7.1m due from PT Bukit Mutiara, a Recapital related entity. Whilst the company is still pursuing repayment, the debt is past due and the directors have provided against recovery of this debt at 30 June 2013.

 

13.  Contingent Asset

On 26 June 2013, the Company and Rosan Roeslani, the former President Director of Berau, entered into a settlement agreement providing for the return of $173m to Berau, either as assets or cash.  This amount has been included as a contingent asset. 



 

14. Financial instruments

The carrying amounts of financial assets carried at fair value are set out below:

 

30 June 2013

31 December 2012

 

Estimated fair value

$m

 

Carrying value

$m

Estimated fair value

$m

 

Carrying value

$m

At fair value through profit or loss

 

 

 

 

Derivative financial asset

0

0

24

24

At market value

 

 

 

 

Available for sale financial asset

330

330

372

372

 

An analysis of the financial assets carried at fair value by reference to the fair value hierarchy is set out below

 

 

30 June

2013

$m

31 December 2012

$m

Restated*

Financial assets

 

 

Level 1 - Available for sale financial asset (i)

330

372

Level 2

-

-

Level 3 - At fair value through profit or loss (ii)

0

24

Total financial assets

330

396

 

(i)         The available for sale financial asset consists of 6,091,699,637 ordinary shares in PT Bumi that are quoted on the Indonesia Stock Exchange and are denominated in Indonesian Rupiah (IDR).  The valuation has been calculated based on the closing bid price for PT Bumi ordinary shares and the closing bid US dollar exchange rate against the IDR on the last working day prior to the relevant dates.  The change in value of the available for sale asset is recognised in other comprehensive income.

 

(ii)         The financial asset at fair value through profit or loss is an early repayment option embedded in the 2015 and 2017 Senior Secured Notes drawn down by PT Berau.  The fair value represents the value of a call option that arises due to the difference between the market rate of interest that PT Berau could have borrowed at the period end and the actual rate of interest paid on each note, based on an option pricing model.  The change in valuation between reporting periods has been recognised in the Consolidated Income Statement in the line 'Movement on financial instruments at fair value through profit or loss'. 

The key inputs into the option pricing model are interest rate volatility and the actual US treasury rates representing the risk free rate which are based on observable market values; the time value of money which is based on the redemption dates; and the refinancing rate, which is considered to be the key unobservable input that significantly affects the fair value.  If the refinancing rate increased by 100 base points then the value of the derivative would decrease by $10m and if the refinancing rate decreased by 100 base points the value of the derivative would increase by $10m (31 December 2012: same).

There were no transfers between Levels 1, 2 or 3 during the period. 

The fair value of the following financial assets and liabilities approximate their carrying amount:

·      Cash and cash equivalents

·      Restricted cash

·      Trade and other receivables

·      Trade and other payables

The carrying amounts and fair values of borrowings are as follows:

 

30 June 2013

31 December 2012

 

Estimated fair value

$m

 

Carrying value

$m

Estimated fair value

$m

 

Carrying value

$m

At amortised cost

 

 

 

 

Borrowings

950

963

976

971

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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