Ambrian earnings fall as it runs down metals business

Ambrian announced its audited consolidated results for the year to 31 December 2016 on Friday, which was the first full year of production at the cement plant in Mozambique.

The AIM-traded firm also confirmed a run-down of the metals trading business was nearing completion.

Turnover for the year was $1.05bn, down from $1.9bn year-on-year, while the company swing to gross profit of $1.22m, from a gross loss of $4.01m in the prior year.

Its loss before interest, tax, depreciation and amortisation (LBITDA) narrowed to $6.04m from $8.75m, while its loss before tax, but before impairment charge, was slightly wider at $9.85m from $9.36m.

The loss before tax, including an impairment charge on the cement operations of $21.29m, was $31.14m, wider than the $9.36m reported in 2015.

Ambrian’s tangible net asset value at 31 December stood at $27.04m, almost half the $50.97m reported a year earlier, which was equivalent to a tangible net asset per share of 10.97 US cents, down from 20.67 cents.

Total equity at 31 December was $29.22m, lowering from $53.43m.

“The metals business is being run down following the company's announcement in October 2016 to withdraw from the business,” said non-executive chairman Martin Abbott.

“We appreciate the support of all stakeholders over this period in order to execute the contracts in an orderly way.

“We expect the business to be closed by mid-year 2017 when the working capital in the business will be converted to cash.”

Abbott said the company was “pleased” with the technical performance of the cement plant in 2016, despite the full benefits of that performance having yet to materialise.

“The challenging conditions in Mozambique, particularly as regards to adverse exchange rate movements, punitive interest rates and sharp public spending cuts in infrastructure, have deeply affected the construction sector.

“However, we continue to believe in the long-term growth potential of Mozambique.”

With an improving commodity outlook, Abbott said Mozambique's largest export sectors were now “picking up”.

“The challenge remains to ensure that future wealth from these sectors is deployed efficiently in other economic sectors and infrastructure projects without corrupt practices undermining the country's efforts.

“We expect improving the country's transport network and access to power will become significant drivers of the construction sector and hence spur demand for cement and concrete based products.”