Interim Management Report

Transcription

1 Half-year financial report 2014

2 Interim Management Report This interim report by the Management Board sets forth the key aspects of the operations for the period of January 1 st to June 30 st Exploration As the Company communicated in May 2014 Tantalus performed extensive exploration work in The area explored covered roughly 130 km2 of the total concession of approximately 300 km2. The exploration work was performed in the Caldera area (60 km2), parts of which had already been explored in 2011 and in the previously unexplored north-western part of the concession (70km2). In total app clay samples were taken. Company obtained preliminary test results during the review period. These results from the Caldera area seem to confirm the findings of 2011 exploration and preliminary test results from the North-West are showing similar amounts of REE as in the Caldera area. Full results are to be published as a resource estimate update in the second half of Environmental An environmental and social baseline study covering the whole concession area commenced late 2013 and has progressed well during the review period. The final results are expected to be ready during second half of This baseline study which is a prerequisite for the environmental impact assessment which is planned to be commenced in early Processing In April 2014 Tantalus contracted Outotec to perform bulk sample testing with a kg sample. Based on the test results, Outotec will design, for Tantalus, the process for rare earth elements extraction at the site. The project with Outotec proceeded well during the review period and results are expected to be available towards the end of Regulatory Tantalus obtained a three-year extension to the exploration license in January 2014, which means that the license remains valid until January Based on the current stage of the project and recent positive political and economical developments in Madagascar, Tantalus expects to apply for an exploitation license before the end of the current exploration license, with the target to enter into production thereafter. On 26 June 2014, the Annual General Meeting of Tantalus Rare Earths AG took place in Grünwald. Beside other items, the shareholders of the Company elected one new member of the Supervisory Board, after Mr. Carlo Schneider had announced his resignation from the Supervisory Board at the end of the Annual General Meeting. As the new Member of the Supervisory Board, Ms. Anna-Kreeta Rantamaa-Hiltunen, Management Board Member at Novator (Luxembourg) S.á.r.L, Luxemburg has been elected. Mr. Ulrich Krauskopf who was the Chairmen of the Supervisory Board already before has been re-elected by the

3 Supervisory Board after the Annual General Meeting. In addition, Mr. Kai Knötsch has also been re-elected as Vice Chairman of the Supervisory Board. In addition to the changes concerning the Supervisory Board of the Company, the shareholders also approved all other proposals made by the Board of Management and the Supervisory Board contained in the agenda for this year's Annual General Meeting. Risks Compared to the described risks and risks set out in the annual report 2013 there has been no substantial changes during the review period.

4 II CONSOLIDATED BALANCE SHEET as of June 30, 2014 Tantalus Rare Earths AG 06/30/ /31/2013 ASSETS EUR EUR A. Noncurrent assets I Capitalized expenses for exploration and evaluation II Plant and equipment Total noncurrent assets B. Current assets I Tax refunds II Short-term financial assets III Other assets IV Cash and cash equivalents Total current assets Total assets LIABILITIES AND EQUITY A. Equity I Share capital II Additional paid-in capital III Paid contribution on increase of share capital IV Reserve for foreign currency translation adjustments V Retained earnings Total equity B. Noncurrent liabilities Convertible bonds Total noncurrent liabilities C. Current liabilities I Trade payables II Other current financial liabilities III Other current liabilities Total current liabilities Total liabilities Total equity and liabilities

5 I CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the period January 1 to June 30, 2014 Tantalus Rare Earths AG I. Income statements EUR EUR Revenue 0 0 Capitalized exploration and evaluation expenses Site development expenses General and administrative expenses Other operating income Other operating expenses Operating result Interest income 0 0 Interest expense Other financial result Financial result Result before tax Income tax expense Net result for the period II. Other comprehensive income (loss) Income and expense recognized directly in equity Items to be reclassified either as profit or loss Foreign currency translation Total other comprehensive income III. Comprehensive income (loss) Result per share in EUR (basic and deluted) -0,68-0,58

6 III CONSOLIDATED CASH FLOW STATEMENT Tantalus Rare Earths AG to to EUR EUR Net result for the period Income tax expenses Interest result Depreciation and amortization Stock option compensation Foreign currency translation Change of working capital Change of other assets Change of trade payables Change of other liabilities Cash flows from operating activities Expenditures for purchases of plant and equipment Expenditures for intangible assets (exploration and evaluation) Cash flows from investing activities Proceeds from stock issues Pepayment of financial liabilities Cash flows from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period

7 III CONSOLIDATED CASH FLOW STATEMENT Tantalus Rare Earths AG to to EUR EUR Net result for the period Income tax expenses Interest result Depreciation and amortization Stock option compensation Foreign currency translation Change of working capital Change of other assets Change of trade payables Change of other liabilities Cash flows from operating activities Expenditures for purchases of plant and equipment Expenditures for intangible assets (exploration and evaluation) Cash flows from investing activities Proceeds from stock issues Pepayment of financial liabilities Cash flows from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period

8 Consolidated intermin financial statement 1 Basis used for the preparation of the financial statement 1 Consolidated companies, consolidation principles and foreign currency translation 2 Accounting and valuation methods 2 Notes concerning the individual items of the consolidated financial statement 3 Operating results 3 Financial results 3 Tax on profits 3 Earnings per share 4 Notes concerning the individual items of the consolidated balance sheet 5 Non-current assets 5 Current assets 5 Equity capital 6 Non-current liabilities 6 Current liabilities 6 Other information 7 Contingent liabilities and other financial obligations 7 Information concerning related parties 7 Significant events after the end of the reporting period 7 Auditing of the interim financial statement 7 The consolidated interim financial report 2014, as well as the consolidated financial statement per 31 st December 2013, comply with the requirements which have been published by the International Accounting Standards Board (IASB) and adopted by the EU International Financial Reporting Standards (IFRS). The provisions of IAS 34 Interim Financial Reporting have been applied accordingly. All interim financial statements of the companies included in the consolidated financial statement of Tantalus Rare Earths AG have been prepared using uniform accounting and valuation principles.

9 The consolidated interim financial statements do not contain all the necessary information and attachments for a consolidated financial statement to the end of the fiscal year and is thus to be read in conjunction with the consolidated financial statement as per 31 st December The consolidated interim financial statement has been compiled in Euros (EUR). Unless otherwise stated, all amounts are shown in Euros (EUR). As they have been commercially rounded off, this may cause rounding differences. Insofar as a comparison for the period and a period analysis with the same period of the previous year is made in the following, the period from 1 st January 2014 to 30 th June 2014 has been compared with the period from 1 st January 2013 to 30 th June 2013 The value for financial comparison is taken as per 31 st December There have been no changes in the consolidated companies as per 31 st December Furthermore, the consolidation principles presented in the consolidated financial statement as per 31 st December 2013, as well as the principles used for the translation of foreign currency shall continue to apply unchanged. As interim reporting is based on the consolidated financial statement, reference is made to the extensively presented accounting, valuation and consolidation methods mentioned in the Appendix of the consolidated financial statement as per 31 st December The accounting and valuation methods generally comply with the methods used in the previous year. The following applies in addition to the accounting and valuation methods described in the Appendix of the consolidated financial statement as per 31 st December With effect from 1 st January 2014, the following new standards, interpretations and amendments to the IAS/IFRS standards shall apply mandatorily: Amendments to IAS 32: Offsetting Financial Assets and Financial Liabilities Amendments to IAS 39: Novation of Derivatives and Continuation of Hedge Accounting Amendments to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets Amendments to IFRS 10, IFRS 12 and IAS 27: Investment Entities IAS 28: Investments in Associates and Joint Ventures IFRS 10: Consolidated Financial Statements IFRS 11: Joint arrangements These above-mentioned changes have no essential impact on the Tantalus Group. Page 2

10 Capitalised exploration and evaluation expenditures amounting to EUR 1,746,028 (first half of 2013 EUR 0) relate to the expenses which have been incurred directly with regard to exploration and evaluation activities, as well as the decline in value of the fixed assets used for these activities. Project development expenditures amounted to EUR 1,123,099 following EUR 215,087 in the period on the previous year. The administrative expenditures of the Group subsidiaries amounting to EUR 2,084,440 (first half-year 2013 EUR 1,453,223) show the administrative costs of the companies in the Group. These are essentially general management costs, consultancy fees, external services and general administration costs. Other operating income amounted to EUR 2,325 in the first half of 2014, and EUR 41,698 in the first half of This also includes payments for value-adjusted accounts receivable. Other financial results come exclusively from income and expenses from exchange rate changes. The accrued interest for the first half of 2013 includes compounding for the convertible bond. Tax expenditure for the period amounting to EUR 32 (first half year of 2013 EUR 17,588) only includes current tax expenses. Page 3

11 The earnings per share have been calculated in accordance with IAS 33. In order to calculate the earnings per share, the ratio of the net profit for the period attributable to the equity holders of the parent company is set in relationship to the number of outstanding shares in circulation to give a weighted average. There is no dilution effect. The share capital of TRE AG consists of 2,834,136 no-par value bearer shares each with a notional value of EUR 1.00 per share on 30 th June The consolidated result attributable to shareholders of TRE AG for the period 1 st January to 30 th June 2014 amounts to EUR -1,889,804 (compared to the same half-year period for the previous year: EUR -1,359,977). Earnings per share are calculated as follows: EUR 01/01 to 30/06/ /01 to 30/06/2013 Shares in circulation on 1 st January 2,599,370 2,350,966 Average number of shares in circulation as per 30 th June 2,793,269 2,356,002 Net result in EUR for the period -1,889,804-1,359,977 Earnings per share in EUR (undiluted/diluted) Page 4

12 Taking into account scheduled depreciation (EUR 39,147) and EUR 461,886 investments in tangible fixed assets, as well as currency translation effects of EUR -24,602, the value of tangible fixed assets increased by EUR 398,137 (31/12/2013 EUR 336,197). Assets for exploration developed from 1 st January to 30 th June 2014 as follows: In EUR Assets for exploration Exploration licenses Total Procurement costs as of 01/01/2014 8,394, ,895 8,729,386 Additions 1,746, ,746,026 Disposals Currency effects -370,244-15, ,368 Procurement costs as of 30/06/2014 9,770, ,771 10,090,044 Depreciation as of 01/01/ , , ,283 Depreciation 01/01 30/06/ Currency effects -1,373-15,124-16,497 Depreciation as of 30/06/ , , ,786 Book value as of 01/01/2014 8,364, ,364,103 Book value as of 30/06/2014 9,741, ,741,258 Other current assets are reported at EUR 927,585 (31/12/2013 EUR 703,249). These are essentially pre-tax demands by the Corporate Group in Madagascar (EUR 580,299), as well as advanced payments (EUR 320,959). Page 5

13 The item includes freely available means of payment amounting to EUR 528,638 (31/12/2013 = EUR 2,164,709) On the basis of the decisions of the annual general meeting on 20 th September 2013, the Board of Directors has been authorised by way of amendment to the articles of association to increase the stock capital with the approval of the Supervisory Board to up to EUR 1,182,185 by issuing new no-par value bearer shares. With this authorisation, the Board of Directors decided to increase the share capital by EUR 184,766 by issuing new no-par value bearer shares on 21 st November 2013, with the approval of the Supervisory Board on the same day. As the entry of the capital increase into the commercial registry which was decided in 2013 first took place in January and February of 2014, the increase in the subscribed capital was increased at the time of entry in the commercial registry in January and February 2014 by EUR 184,766 to EUR 2,784,136. Taking advantage of the abovementioned authorisation, the Board of Directors decided on a further increase in share capital by EUR 50,000 on 27 th February 2014, with the consent of the Supervisory Board on the same day, which was entered in the commercial registry on 8 th April, Thus, the nominal share capital amounted to EUR 2,834,136 on 30 th June Capital reserves increased by a premium of EUR per share after the increase in share capital by EUR 234,766. Furthermore, the capital reserves increased by EUR 277, through the issue of stock options. With regard to the issue of options and convertible bonds, reference is made to the notes concerning the consolidated financial statement as of 31 st December There were no changes during the reporting half-year period. Other current liabilities include, amongst other things, interest not yet paid on convertible bonds for previous years amounting to EUR 154,404. Page 6

14 Other current liabilities essentially include: EUR 572,062 sales tax liabilities, EUR 7,305 income tax liabilities and EUR 5,660 social deductions. There are no contingent liabilities as of the balance sheet date. Reference is made to the other financial obligations in the notes concerning the consolidated financial statement for the fiscal year There have been no significant changes. Reference is made to the relationship of related parties presented in the notes concerning the consolidated financial statement for the fiscal year There have been no significant changes. There have been no significant events which have an impact on the assets and financial position after 30 th June The present interim financial statements has neither been audited nor subjected to a review by an auditor. Page 7