REG - Coro Energy PLC - Final Results
09/09/2024 17:00
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RNS Number : 4824D Coro Energy PLC 09 September 2024
Certain information communicated within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014. Upon the publication of this announcement, this inside
information is now considered to be in the public domain.
9 September 2024
Coro Energy Plc
("Coro" or the "Company")
Final Results
Coro Energy Plc, the South East Asian energy company with a natural gas and
clean energy portfolio, announces its final results for the year ended 31
December 2023.
FY2023 Highlights
· Restructuring of the Philippines renewables business increasing
Coro's entitlement to future dividends to 88%.
· Disposal of Italian portfolio to Zodiac Energy plc.
· First Wind Energy Service Contract ("WESC") awarded in the
Philippines.
· Sale of interest in IoN Ventures Holding Ltd.
· MOU signed with Mobile World Group ("MWG") granting exclusivity
on an initial 900 sites estimated at 50MW of rooftop solar capacity in
Vietnam.
· Restructuring of the Vietnam renewables business increasing
Coro's equity interest to 92.5%.
· Tom Richardson joined the Board as a Non Executive Director.
· Initiation of a farm down process by the Operator of the Duyung
PSC where Coro has drag and tag along rights.
Post Period End
· The Company signed a binding 14-year power purchase agreement
("PPA") with MWG to deliver power at the first ten sites as a pilot phase
with a capacity of 430kw.
· The Company signed a second binding PPA with MWG for the next 30
sites with a capacity of circa 1MW.
· A second Wind Energy Service Contract (WESC) was secured in the
Philippines.
· The Company received a letter from two lenders holding 68% of the
Company's Luxembourg listed Eurobonds which are currently due to expire on
12 April 2024 granting a conditional standstill on the repayment of the
Company's current debt obligations whilst the ongoing constructive discussions
with the Company in respect of the Eurobonds continue.
· Harry Beamish joined the board as Independent
Non-Executive Director following the AGM where the Chairman was not
re-elected to the Board.
· The Company signed binding key terms for the sale and purchase of
the domestic portion of the Mako gas field with PT Perusahaan Gas Negara Tbk.
· Binding Gas Sales Agreement entered into with Sembcorp for the
Mako gas field.
· The Company secured a six month $500k secured convertible loan.
For further information please contact:
Coro Energy plc Via Vigo Consulting Ltd
Tom Richardson, Non-Executive Chair
Cavendish Capital Markets (Nominated Adviser)
Adrian Hadden Tel: 44 (0) 20 7397 8900
Ben Jeynes
Hybridan LLP (Nominated Broker) Tel: 44 (0)20 3764 2341
Claire Louise Noyce
Vigo Consulting (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Finlay Thomson
Statement from the Directors
At the Company's Annual General Meeting, ("AGM") in May 2024 the Company's
previous Chairman was not re-elected which resulted in the suspension of
trading of Coro's shares on the AIM Market of the London Stock Exchange due to
an inquorate Board. As the sole remaining Director, I took immediate steps to
resolve this and as a result Harry Beamish was appointed to the Board. Harry
has significant expertise in the energy and renewables sectors with over a
decade specialising in emerging markets, and has developed, advised and
structured multiple renewable energy transactions across Hydro, Solar, Wind,
and Energy Efficiency and advises companies within the Energy Transition
space. With the publication of this annual report and accounts the Board
expects trading of the shares to resume. Also on publication of the annual
reports and accounts, I, Tom Richardson will be appointed as Non-Executive
Chair of the Company. The annual reports and accounts will be available on
the Company's website shortly following the release of this announcement, and
it is anticipated they will be posted to shareholders on or by Thursday, 12
September 2024. It is further anticipated that trading in the Company's
shares will resume on Tuesday, 10 September 2024.
In terms of our trading activity, the Company continues to make progress
across its South East Asian portfolio. Having been through a period of
portfolio refocus, selling both the ion investment and the Italian gas
portfolio in 2023, whilst we believe that long awaited and important
milestones are finally approaching at Duyung alongside continued developments
which are expected in our renewables portfolio across both the Philippines and
Vietnam. The objective of the Philippines business remains to secure RTB
projects, whilst in Vietnam the over-riding objective remains to generate
solid cost base covering cash flows.
Consistent with this regional focus and with a view to providing additional
time to the Company, the Company announced a standstill with its Eurobond
lenders following the financial year end. It continues to work towards a
broader debt restructuring solution that structurally solves Coro's capital
structure whilst providing funding for our renewables deployment.
Post the year under review, the Company raised US$500,000 via a secured
convertible loan with River Merchant Capital, an existing lender to the
Company under the Company's Luxembourg 8% listed Eurobond and Fenikso Limited.
The proceeds of this loan will be utilised to fund the Group's renewables
business and for general working capital purposes. Under the Group's forecast,
this loan together with existing bank balances provides sufficient funding to
fund the Company's working capital requirements through to the end of January
2025.
Notwithstanding the above, management have prepared a consolidated cash flow
forecast for the period to 31 December 2025 which shows that the Group will
require additional financing to meet its obligations and intended work
renewables work programme in Asia beyond this date. We enjoy the ongoing
support of our lenders whilst we continue to grow the renewables business
activities, but will continue to explore options which include issuing equity
and disposals. Shareholders attention is drawn to the Going Concern language
in section 2(c) in the notes to the accounts below.
Tom richardson
Non-Executive Chair
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Notes 31 December 2023 31 December 2022
US$'000 US$'000
Continuing operations
Revenue 235 51
Depreciation and amortisation expense (78) (21)
Gross profit 157 30
Other (loss) / income (3) 309
General and administrative expenses 5 (3,305) (3,574)
Depreciation expense (10) (15)
Impairment reversal 54 -
Gain on disposal of investments in associates and subsidiaries 19b 1,313 -
Share of loss of associates (49) (82)
Loss from operating activities (1,843) (3,332)
Finance income 7 1,045 636
Finance expense 7 (4,249) (5,491)
Net finance expense (3,204) (4,855)
Loss before income tax (5,047) (8,187)
Income tax benefit/(expense) 8 - -
Loss for the year from continuing operations (5,047) (8,187)
Discontinued operations
Gain for the year from discontinued operations 19a 6,738 2,642
Total profit / (loss) for the year 1,691 (5,545)
Other comprehensive income/loss
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations (3,339) 2,925
Total comprehensive loss for the year (1,648) (2,620)
Profit/(loss) attributable to:
Owners of the Company 1,717 (5,479)
Non-controlling interests (26) (66)
Total comprehensive loss attributable to:
Owners of the Company (1,622) (2,554)
Non-controlling interests (26) (66)
Basic and diluted profit / (loss) per share from continuing operations ($) 9 (0.002) (0.004)
Basic earnings per share from discontinued operations (US$) 0.0025 0.001
Diluted earnings per share from discontinued operations (US$) 0.0024 0.001
The consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes.
Consolidated Balance Sheet
Company number: 10472005
As at 31 December 2023
Notes 31 December 2023 31 December 2022
US$'000 US$'000
Non-current assets
Property, plant and equipment 12 1,680 1,854
Intangible assets 13 20,190 18,896
Investment in associates 23 - 259
Other financial assets 19a 472 -
Total non-current assets 22,342 21,009
Current assets
Cash and cash equivalents 21 1,095 166
Trade and other receivables 11 1,399 213
Inventory 10 35 34
Total current assets 2,529 413
Assets of disposal group held for sale 19 - 9,710
Total assets 24,871 31,132
Liabilities and equity
Current liabilities
Trade and other payables 15 660 819
Borrowings 16 31,327 -
Total current liabilities 31,987 819
Non-current liabilities
Borrowings 16 - 28,183
Total non-current liabilities - 28,183
Liabilities of disposal group held for sale 19 - 9,443
Total liabilities 31,987 38,445
Equity
Share capital 17 3,826 3,184
Share premium 17 51,762 50,862
Merger reserve 18 - 9,708
Other reserves 18 3,603 7,267
Non-controlling interests (92) (66)
Accumulated losses (66,215) (78,268)
Total equity (7,116) (7,313)
Total equity and liabilities 24,871 31,132
The consolidated balance sheet should be read in conjunction with the
accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Attributable to equity shareholders of the Company
Share capital Share premium Merger reserve Other reserves Accumulated losses Non-controlling interest Total
US$'000
US$'000 US$'000 US$'000
US$'000 US$'000 US$'000
At 1 January 2022 2,943 50,461 9,708 4,180 (72,822) - (5,530)
Total comprehensive loss for the year:
Loss for the year - - - - (5,479) (66) (5,545)
Other comprehensive income - - - 2,925 - - 2,925
Total comprehensive income/(loss) for the year - - - 2,925 (5,479) (66) (2,620)
Transactions with owners recorded directly in equity:
Issue of share capital 241 401 - - - - 642
Lapsed share options - - - (33) 33 - -
Share based payments for services rendered - - - 195 - - 195
Total transactions with owners recorded directly in equity 241 401 - 162 33 - 837
Balance at 31 December 2022 3,184 50,862 9,708 7,267 (78,268) (66) (7,313)
Attributable to equity shareholders of the Company
Share capital Share premium Merger reserve Other reserves Accumulated losses Non-controlling interest Total
US$'000
US$'000 US$'000 US$'000
US$'000 US$'000 US$'000
At 1 January 2023 3,184 50,862 9,708 7,267 (78,268) (66) (7,313)
Total comprehensive loss for the year:
Profit / (loss) for the year - - - - 1,717 (26) 1,691
Disposal of discontinued operations - - (9,708) (628) 10,336 - -
Other comprehensive loss - - - (3,339) - - (3,339)
Total comprehensive (loss)/profit for the year 3,184 50,862 - 3,300 (66,215) (92) (8,961)
Transactions with owners recorded directly in equity:
Issue of share capital 642 900 - - - - 1,542
Share based payments for services rendered - - - 303 - - 303
Total transactions with owners recorded directly in equity 642 900 - 303 - - 1,845
Balance at 31 December 2023 3,826 51,762 - 3,603 (66,215) (92) (7,116)
The consolidated statement of changes in equity should be read in conjunction
with the accompanying note 17 on share capital and note 18 Reserves.
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Notes 31 December 2023 31 December 2022
US$'000 US$'000
Cash flows from operating activities
Receipts from customers 2,970 6,270
Payments to suppliers and employees (5,709) (6,599)
Interest received 7 1 -
Net cash used in operating activities (2,738) (329)
Cash flow from investing activities
Payments for property, plant and equipment (11) (1,868)
Payments for exploration and evaluation assets 13 (1,024) (338)
Payments for intangible development assets 13 (138) (257)
Cash relating to deconsolidated subsidiary 19a (83) -
Receipt from sale of Italian operations 19a 3,070 -
Receipt from sale of ion Ventures 19b 1,286 -
Net cash generated by / (used) in investing activities 3,100 (2,463)
Net increase / (decrease) in cash and cash equivalents 362 (2,792)
Cash and cash equivalents brought forward 784 3,551
Effects of exchange rate changes on cash and cash equivalents (51) 25
Cash and cash equivalents carried forward 1,095 784
The consolidated statement of cash flows should be read in conjunction with
the accompanying notes, including the net debt reconciliation in note 16.
On 13 January 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 January 2023 in new
ordinary shares of the Company. A total of 229,325,962 new ordinary shares in
the Company were issued in connection with this election.
On 27 January 2023, the Company restructured its arrangements with its
Philippines partners to increase the Company's entitlement to future dividends
from 80% to 88% with the issuance of 40,000 new ordinary shares to the
Philippines partners.
On 13 April 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 April 2023 in new
ordinary shares of the Company. A total of 257,556,113 new ordinary shares in
the Company were issued in connection with this election.
Company Balance Sheet
Company number: 10472005
As at 31 December 2023
Notes 31 December 2023 31 December 2022
US$'000 US$'000
Non-current assets
Investment in subsidiaries 20 18,683 17,501
Property, plant and equipment 12 7 3
Intangible assets 13 - 7
Investment in associates 19b - 602
Total non-current assets 18,690 18,113
Current assets
Cash and cash equivalents 21 573 130
Trade and other receivables 11 4,190 3,204
Loans to subsidiaries 20 - 65
Total current assets 4,763 3,399
Total assets 23,453 21,512
Liabilities and equity
Current liabilities
Trade and other payables 15 318 734
Loans from subsidiaries 20 3,602 -
Borrowings 16 31,327 -
Total current liabilities 35,247 734
Non-current liabilities
Borrowings 16 - 28,183
Interest bearing loans 21 - 1,263
Total non-current liabilities - 29,446
Total liabilities 35,247 30,180
Equity
Share capital 17 3,826 3,184
Share premium 17 51,762 50,862
Other reserves 18 2,489 2,713
Accumulated losses (69,871) (65,427)
Total equity (11,794) (8,668)
Total equity and liabilities 23,453 21,512
The Company balance sheet should be read in conjunction with the accompanying
notes.
As permitted by s408 of the Companies Act 2006, the Company has not presented
its own income statement. The Company loss for the year was US$4.4m (2022:
loss US$7.1m).
Company Statement of Changes in Equity
For the year ended 31 December 2023
Share Share premium Other Accumulated losses Total
capital US$'000 reserves US$'000 US$'000
US$'000 US$'000
At 1 January 2022 2,943 50,461 2,095 (58,405) (2,906)
Total comprehensive loss for the year:
Loss for the year - - - (7,055) (7,055)
Other comprehensive income - - 456 - 456
Total comprehensive income/(loss) for the year - - 456 (7,055) (6,599)
Transactions with owners recorded directly in equity:
Issue of share capital 241 401 - - 642
Lapsed share options - - (33) 33 -
Share-based payments for services rendered - - 195 - 195
Total transactions with owners recorded directly in equity 241 401 162 33 837
Balance at 31 December 2022 3,184 50,862 2,713 (65,427) (8,668)
Share Share premium Other Accumulated losses Total
capital US$'000 reserves US$'000 US$'000
US$'000 US$'000
At 1 January 2023 3,184 50,862 2,713 (65,427) (8,668)
Total comprehensive loss for the year:
Loss for the year - - - (4,444) (4,444)
Other comprehensive loss - - (527) - (527)
Total comprehensive loss for the year - - (527) (4,444) (13,639)
Transactions with owners recorded directly in equity:
Issue of share capital 642 900 - - 1,542
Share-based payments for services rendered - - 303 - 303
Total transactions with owners recorded directly in equity 642 900 303 - -
Balance at 31 December 2023 3,826 51,762 2,489 (69,871) (11,794)
The consolidated statement of changes in equity should be read in conjunction
with the accompanying note 17 on share capital and note 18 Reserves.
Company Statement of Cash Flows
For the year ended 31 December 2023
Notes 31 December 2023 31 December 2022
US$'000 US$'000
Cash flows from operating activities
Payments to suppliers and employees (2,874) (4,428)
Net cash used in operating activities (2,874) (4,428)
Cash flow from investing activities
Proceeds on disposal of equity accounted associates 19b 1,286 -
Net cash generated from investing activities 1,286 -
Cash flows from financing activities
Loans from subsidiaries 20 2,080 -
Interest bearing borrowings from subsidiaries 21 - 1,263
Net cash generated from/(used in) financing activities 2,080 1,263
Net increase/(decrease) in cash and cash equivalents 492 (3,165)
Cash and cash equivalents brought forward 130 3,269
Effects of exchange rate changes on cash and cash equivalents (49) 26
Cash and cash equivalents carried forward 573 130
The Company statement of cash flows should be read in conjunction with the
accompanying notes.
On 13 January 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 January 2023 in new
ordinary shares of the Company. A total of 229,325,962 new ordinary shares in
the Company were issued in connection with this election.
On 27 January 2023, the Company restructured its arrangements with its
Philippines partners to increase the Company's entitlement to future dividends
from 80% to 88% with the issuance of 40,000 new ordinary shares to the
Philippines partners.
On 13 April 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 April 2023 in new
ordinary shares of the Company. A total of 257,556,113 new ordinary shares in
the Company were issued in connection with this election.
Notes to the Financial Statements
For the year ended 31 December 2023
NOTE 1: CORPORATE INFORMATION
Coro Energy plc (the "Company" and, together with its subsidiaries, the
"Group") is a company incorporated in England and listed on the AIM market of
the London Stock Exchange. The Company's registered address is c/o Pinsent
Masons LLP, 1, Park Row, Leeds, England, LS1 5AB, UK. The consolidated
financial statements for the year ended 31 December 2023 comprise the Company
and its interests in its subsidiaries, investments in associates and jointly
controlled operations (together referred to as the "Group").
NOTE 2: BASIS OF PREPARATION
(a) Statement of compliance
The financial statements are prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006.
(b) Basis of measurement
These financial statements have been prepared on the basis of historical cost
apart from non-current assets (or disposal groups) held for sale, which are
measured at fair value less costs of disposal and derivative financial
instruments recorded at fair value through profit and loss.
(c) Going concern
The Group and Company financial statements have been prepared under the going
concern assumption, which presumes that the Group and Company will be able to
meet its obligations as they fall due for the foreseeable future.
At 31 December 2023 the Group had cash reserves of $1.1m and current
receivables of $1.1m related to residual sales proceeds from the sale of
Italian operations and its investment in ion Venture. The Group's Eurobond
obligation matured on 12 April 2024 with the outstanding balances, including
the rolled up coupon, or US$31.3 million. The Group has been in active
discussions with bondholders in relation to the restructuring of the bonds and
received a letter from two lenders holding 68% of the Eurobonds on 12 April
2024 (the "Standstill"). The Standstill, which the Company is advised is
binding on the parties, provides a conditional standstill on the repayment of
the Group's current debt obligations on expiry whilst the ongoing constructive
discussions with the Group in respect of the Eurobonds continue and whilst
certain inflexion points in the business materialise, including the outcome of
the Duyung Operator's farm out process. The Group is working on a broader debt
restructuring, which it intends to formally propose to all Eurobond holders
and shareholders in due course. The Standstill conditions include a
requirement for lender consent on material capex spend during the period of
the standstill together with requirements for the provision of certain
information and the appointment of a financial advisor nominated by the
noteholders to provide advice to the Board and the lenders. During the
course of the Standstill, the Group will work with the lenders and the
financial advisor reviewing the existing arrangements and working towards a
permanent debt restructuring solution for the business. The Group cautions
that, notwithstanding the ongoing constructive discussions to-date and the
agreement of this Standstill, noteholders could withdraw the Standstill at any
time which would result in the Company triggering a default.
In the event of a default the amount owed under the Eurobond may result in the
group relinquishing control of Coro Energy Holdings Cell A Limited (which
ultimately holds the exploration and evaluation assets totalling $18,731k as
at 31 December 2023), against which the Eurobond is secured. Additionally, it
should be noted that the carrying value of the investment in the subsidiary
($17,452k) (note 20) and intercompany receivables of $254k and loans to
subsidiaries of $1.67m (note 20) on the parent company statement of financial
position are intrinsically linked to the carrying value of the exploration and
evaluation assets totalling $18,731k; therefore if control of Coro Energy
Holdings Cell A Limited is lost then these balances would all require
impairment.
As at 31 December 2023, the group reports net current liabilities of $34,516k,
consisting primarily of balances owed to the Eurobond holders along with trade
and other payables. The group requires funding to repay these balances or to
obtain an agreement to defer the balances owed to the Eurobond holders and
other creditors or a combination of both, in order to meet its liabilities as
they fall due. Additionally, whilst the group has generated cash from solar
project in Vietnam over the last two financial periods; this has not been
sufficient to meet the working capital requirements of the group.
Post the year under review, the Company raised US$500,000 via a secured
convertible loan with River Merchant Capital, an existing lender to the
Company under the Company's Luxembourg 8% listed Eurobond and Fenikso Limited.
The proceeds of the Loan will be utilised to fund the Group's renewables
business and for general working capital purposes. Under the Groups forecast,
this loan together with existing bank balances provides sufficient funding for
six months as at the date of this report.
During the year the Group secured a non-binding lending commitment from HD
Bank in Vietnam whereby the bank has provided the Group with an in principle
commitment letter initially focussed on providing debt finance for 50% of the
capital spend commitment for the ten locations in the pilot stage of the
previously announced 50MW MOU with Mobile World Investment Corporation to
install rooftop solar systems across their portfolio.
Management have prepared a consolidated cash flow forecast for the period to
31 December 2025 which shows that the Group will require additional equity
financing to meet its obligations and intended work renewables work programme
in Asia during this period. The Group is actively pursuing a significant
fundraise and the directors have a reasonable expectation that sufficient
funds can be raised on equity markets to provide this liquidity, although the
ability to raise sufficient capital is not guaranteed.
Based on the above, the Directors consider it appropriate to continue to adopt
the going concern basis of accounting in preparing the Group and Company
financial statements for the year ended 31 December 2023. Should the Group and
Company be unable to continue trading, adjustments would have to be made to
reduce the value of the assets to their recoverable amounts, to provide for
further liabilities which might arise and to classify fixed assets as current.
The auditors make reference to a material uncertainty in relation to going
concern within their audit report.
(d) Foreign currency transactions
The consolidated financial statements of the Group are presented in United
States Dollars ("USD" or "US$"), rounded to the nearest US$1,000.
The functional currency of the Company and all UK domiciled subsidiaries is
British Pounds Sterling ("GBP" or "£"). The Group's subsidiaries domiciled in
Singapore have a functional currency of USD. The Group's subsidiaries
domiciled in the Philippines have a functional currency of Philippines Pesos
("PHP"). The Group's subsidiaries domiciled in Vietnam have a functional
currency of Vietnamese Dong ("VND").
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss
as finance income or expense. Non-monetary assets and liabilities denominated
in foreign currencies are translated at the date of transaction and not
retranslated.
The results and financial position of Group companies that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities are translated at the closing rate;
• Income and expenses are translated at average rates; and
• Equity balances are not retranslated. All resulting exchange
differences are recognised in other comprehensive income.
(e) Use of estimates and judgements
The preparation of the financial statements requires management to make
judgments regarding the application of the Group's accounting policies, and to
use accounting estimates that impact the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
This note sets out the estimates and judgements taken by management that are
deemed to have a higher risk of causing a material adjustment to the reported
carrying amounts of assets and liabilities in future years.
(i) Key accounting judgements
Accounting for investment in ion Ventures Holdings Limited
In November 2020, the Group acquired a 20.3% shareholding in ion Ventures
Holdings Limited ("IVHL") in exchange for cash consideration of £500k
(US$682k). IVHL was founded in the UK in 2018 to exploit opportunities that
arise from the increasing complexity of energy systems, the shift to
distributed generation and more localised networks, and the need for flexible
and responsive solutions.
Under IFRS, the accounting for an interest in another entity depends on the
level of influence held over the investee by the investor. Management have
concluded that IVHL is an associate of the Group, due to Coro exercising
"significant influence" over IVHL. With reference to the factors outlined in
IAS 28 Investments in Associates and Joint Ventures, we concluded that
significant influence arises as a result of:
• 20.3% shareholding in IVHL, which is above the 20% threshold at
which significant influence is presumed to exist under IFRS (though this
presumption can be rebutted);
• Right to appoint one director (of five) to the Board of Directors
of IVHL; and
• Ability to exercise reserved powers under a Shareholder Agreement
to participate in the key strategic and operational decisions of the investee,
such as approval of annual budgets.
Associates are accounted for using the equity method, which is described
further in note 3a. The investment in IVHL was accounted for as such until its
disposal on 23 August 2023.
Accounting for investment in Coro Renewables VN1 Joint Stock Company
At the reporting date the Group owned 85% of Coro Renewables VN1 Joint Stock
Company ("CRV1"), which owns 100% of Coro Renewables VN2 Company Limited,
which in turn owns 100% of Coro Renewables Vietnam Company Limited ("CRVCL").
The non-controlling shareholder of CRV1 is Vinh Phuc Energy JSC ("VPE"). CRVCL
operates the Group's electricity generating operation in Vietnam.
Under IFRS, the accounting for an interest in another entity depends on the
level of influence held over the investee by the investor. Management have
concluded that CRV1 is an indirectly held subsidiary of the Company, due to
the Company controlling more than half of the voting rights. With reference to
the factors outlined in IAS 27 Consolidated and Separate Financial Statements,
we concluded that there was no change to managements conclusion.
• There is no agreement with VPE giving them control of the joint
venture;
• There is no statute or agreement ceding control to any other
party; and
• VPE does not have the power to appoint or remove the majority of
the Board of Directors.
100% of the transactions relating to CRV1 and its subsidiary undertakings have
been recorded in these consolidated financial statements and the Group has
recognised the appropriate non-controlling interest.
Share options and warrants
The Black-Scholes model is used to calculate the fair value of the share
options and warrants. The use of this model to calculate the charge involves a
number of estimates and judgements to establish the appropriate inputs to be
entered into the model, covering areas such as the use of an appropriate
interest rate and dividend rate, exercise restrictions and behavioural
considerations. A significant element of judgement is therefore involved in
the calculation of the charge.
(ii) Key accounting estimates
Estimate of gas reserves and resources
The disclosed amount of the Group's gas reserves and resources impacts a
number of accounting estimates in the financial statements including future
cash flows used in asset impairment reviews, see note 13.
The Group employs staff with the appropriate knowledge, skills and experience
to estimate reserves quantities. Periodically, the Group's reserves
calculations are also subject to independent third-party certification by a
competent person.
Assessment of indicators of impairment of intangible assets (note 13)
The Group's intangible assets consist of exploration and evaluation assets,
comprising assets related to the Duyung PSC, and development assets and
goodwill comprising assets related to Coro Clean Energy Philippines.
Exploration and evaluation assets are assessed for indicators of impairment
under IFRS 6 Exploration for, and evaluation of, mineral resources. Based on
estimates as at 31 December 2023, there was $Nil write-off (2022: $Nil).
The Group acquired its 15% interest in the Duyung PSC in April 2019 and
participated in a 2-well drilling campaign in 2019 that successfully appraised
Mako gas field.
During 2022 the Operator of Mako field commissioned Gaffney, Cline and
Associates ("GCA") to perform an updated independent resource audit for the
Mako gas field as at 31 July 2022. In March 2024 the Operator received an
update report of reserves and resources as at 31 December 2023. The update
report assessed that 2C (contingent) recoverable resource estimates are 392
Bcf (gross) (2022 resource audit: 437 Bcf (gross)), and in the upside case,
the 3C (contingent) resources are 591 Bcf (gross) (2022: 779 Bcf (gross)). The
reduction in resource volumes pertain to revised Final Investment Decision
timing and the delay in the startup of production from the Mako field until
mid-2026. Despite the reduction in resources, the results of this independent
resource update supports management's view on the potential to develop the
Mako field.
As a result of the resource confirmation, which was incorporated into our own
updated economic modelling for Duyung, no impairment indicators were noted.
Development assets and goodwill are assessed for indicators of impairment
under IAS 36 Impairment of Assets. Based on the estimates at 31 December 2023,
there was $Nil write-off (2022: $Nil).
During 2023 two 100MW onshore wind projects, which already have approved Wind
Energy Service Contracts ("WESCs"); a 100MW onshore solar project where an
application for a service contract is expected shortly; and one further 100MW
onshore wind project. The Philippines portfolio is therefore currently a total
of 400MW with all four projects being co-located, sharing a grid connection
and benefiting from the 130 metre high meteorological ("met") mast which is
collecting bankable data that will cover all three wind projects. As such no
impairment indicators were noted.
Disposals of investment in Coro Europe Limited ("CEL") and ion Ventures
Holdings Limited ("IVHL")
The Group disposed of its entire shareholding in IVHL on 23 August 2023 and of
its entire shareholding in CEL on 8 November 2023. In calculating the profit
on disposal the Group must recognise the results of operations of the
investees up to the date of completion of the sale in the statement of
Comprehensive Income. The most recent financial information that was available
as at the respective completion dates were:
CEL: 30 September 2023
IVHL: 30 June 2023
The Group has estimated the financial results between these dates and the
completion dates of the transactions and do not consider this to affect the
results disclosed in these consolidated financial statements in any material
respect.
Company only - impairment assessment for investment in subsidiaries, including
loans and receivables (notes 13, 15 and 20)
The Company in applying the expected credit loss ("ECL") model under IFRS 9
must make assumptions when implementing the forward-looking ECL model. This
model is required to assess its investments and loans receivable in
subsidiaries for impairment at each reporting date.
Estimations were made regarding the credit risk of the counterparty and the
underlying probability of default in each of the credit loss scenarios. The
scenarios identified by management included Production, Divestment, Fire-sale
and Failure. These scenarios considered technical data, necessary licences to
be awarded, the Company's ability to raise finance, and ability to sell the
project. The Directors make judgements on the expected likelihood and outcome
of each of the above scenarios, and these expected values are applied to the
loan balances.
The Company's main assets are its interest in the Duyung PSC, held by Coro
Energy Duyung (Singapore) Pte Ltd ("CEDSPL") and its investment in the solar
pilot project in Vietnam, held by Coro Renewables Vietnam Company Limited
(CRVCL"). As such, the recoverability of investments in subsidiaries depends
on the Company's assessment of indicators of impairment of the underlying
assets recorded within its subsidiaries.
As noted above, and in note 13, the Company identified no indicators of
impairment for its 15% interest in the Duyung PSC and, accordingly, the
Company's investment in CEDSPL (held indirectly) is deemed to be recoverable
in full.
The Company performed an impairment tests on its solar pilot project in
Vietnam and found that the recoverable value in use exceeds the net book
value, accordingly, the Company's investment in CRVCL (held indirectly) and
receivables from CRVCL is deemed to be recoverable in full.
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements include the results of Coro Energy plc
and its subsidiary undertakings made up to the same accounting date.
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that
control commences until the date that control ceases. The accounting policies
of subsidiaries have been changed when necessary to align them with the
policies adopted by the Group. All intra-group balances, transactions, income
and expenses are eliminated in full on consolidation.
(ii) Interests in other entities
The Group classifies its interests in other entities based on the level of
control exercised by the Group over the entity.
Associates
Associates are all entities over which the Group has significant influence but
not control or joint control. This is generally the case where the Group holds
between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting.
Under the equity method of accounting, the investments are initially
recognised at cost, including any directly attributable transaction costs, and
adjusted thereafter to recognise the Group's share of the post-acquisition
profits or losses of the investee in profit or loss. The Group's share of
movements in other comprehensive income of the investee are recognised in
other comprehensive income. Dividends received or receivable from associates
and joint ventures are recognised as a reduction in the carrying amount of the
investment.
Where the Group's share of losses in an equity-accounted investment equals or
exceeds its interest in the entity, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the
other entity.
Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group's interest in these entities. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity-accounted
investees have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment
at least annually.
Other investments
In a situation where the Group has direct contractual rights to the assets,
and obligations for the liabilities, of an entity but does not share joint
control, the Group accounts for its interest in those assets, liabilities,
revenues and expenses in accordance with the accounting standards applicable
to the underlying line item. This is analogous to the "joint operator" method
of accounting outlined in IFRS 11 Joint arrangements.
(b) Taxation
Income tax expense or credit for the period is the tax payable on the current
period's taxable income, based on the applicable income tax rate for each
jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantially enacted at the date of the statement
of financial position, and any adjustment to tax payable in respect of
previous years.
Deferred tax is provided using the balance sheet liability method, providing
for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes. The following temporary differences are not provided for the initial
recognition of assets or liabilities that affect neither accounting nor
taxable profit, and differences relating to investments in subsidiaries to the
extent that the Group is able to control the timing of the reversal of the
temporary difference and it is probable that they will not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities using tax rates enacted at the date of the statement of
financial position.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and where the
deferred tax balances relate to the same taxation authority. Current tax
assets and liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
(c) Property, plant and equipment
(i) Recognition and measurement
Property, plant and equipment comprises the Group's tangible oil and gas
assets, solar equipment as well as office furniture and equipment. Items of
property, plant and equipment are recorded at cost less accumulated
depreciation, accumulated impairment losses and pre-commissioning revenue and
expenses. Cost includes expenditure that is directly attributable to
acquisition of the asset.
Gains and losses on disposal of an item of property, plant and equipment are
determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment, and are recognised within "other income" in
profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with expenditure will flow to the Group.
(iii) Depreciation
Oil and gas assets
Oil and gas assets includes gas production facilities and the accumulation of
all exploration, evaluation, development and acquisition costs in relation to
areas of interest in which production licences have been granted and the
related project has moved to the production phase.
Amortisation of oil and gas assets is calculated on the units-of-production
("UOP") basis, and is based on Proved and Probable reserves. The use of the
UOP method results in an amortisation charge proportional to the depletion of
economically recoverable reserves. Amortisation commences when commercial
levels of production are achieved from a field or licence area.
The useful life of oil and gas assets, which is assessed at least annually,
has regard to both its physical life limitations and present assessments of
economically recoverable reserves of the field at which the asset is located.
These calculations require the use of estimates and assumptions, including the
amount of recoverable reserves and estimates of future capital expenditure.
The calculation of the UOP rate of depreciation/amortisation will be impacted
to the extent that actual production in the future is different from current
forecast production based on total proved reserves, or future capital
expenditure estimates change.
Changes to recoverable reserves could arise due to changes in the factors or
assumptions used in estimating reserves, including:
• The effect of changes in commodity price assumptions; or
• Unforeseen operational issues that impact expected recovery of
hydrocarbons.
Assets designated as held for sale, or included in a disposal group held for
sale, are not depreciated.
Other property, plant and equipment
Depreciation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and
equipment. The depreciation will commence when the asset is installed ready
for use.
The estimated useful lives of each class of asset fall within the following
ranges:
Solar equipment
8 - 25 years
Office furniture and equipment 3-5 years
The residual value, the useful life and the depreciation method applied to an
asset are reviewed at each reporting date.
(iv) Impairment
The Group assesses at each reporting date whether there is an indication that
an asset (or Cash Generating Unit - "CGU") may be impaired. For oil and gas
assets, management has assessed its CGUs as being an individual field, which
is the lowest level for which cash inflows are largely independent of those of
other assets. For Solar equipment, management has assessed its CGUs as being
individual solar arrays including inverters. If any indication exists, or when
annual impairment testing for an asset is required, the Group estimates the
asset's or CGU's recoverable amount. The recoverable amount is the higher of
an asset's or CGU's fair value less costs of disposal ("FVLCD") and value in
use ("VIU"). Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset/CGU is considered impaired and is written down
to its recoverable amount.
The Group bases its impairment calculation on detailed budgets and forecasts,
which are prepared separately for each of the Group's CGUs to which the
individual assets are allocated. These budgets and forecasts generally cover
the forecasted life of the CGUs. VIU does not reflect future cash flows
associated with improving or enhancing an asset's performance.
For assets/CGUs, an assessment is made at each reporting date to determine
whether there is an indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists, the
Group estimates the asset's or CGU's recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's/CGU's recoverable amount since the
last impairment loss was recognised. The reversal is limited so that the
carrying amount of the asset/CGU does not exceed either its recoverable
amount, or the carrying amount that would have been determined, net of
depreciation/amortisation, had no impairment loss been recognised for the
asset/CGU in prior years. Such a reversal is recognised in the income
statement.
(d) Intangible assets
(i) Exploration and evaluation assets
Exploration and evaluation assets are carried at cost less accumulated
impairment losses in the statement of financial position. Exploration and
evaluation assets include the cost of oil and gas licences, and subsequent
exploration and evaluation expenditure incurred in an area of interest.
Exploration and evaluation assets are not depreciated. When the commercial and
technical feasibility of an area of interest is proved, capitalised costs in
relation to that area of interest are transferred to property, plant and
equipment (oil and gas assets) and depreciation commences in line with the
depreciation policy outlined above.
Exploration and evaluation assets are assessed for impairment if sufficient
data exists to determine technical feasibility and commercial viability or
facts and circumstances suggest that the carrying value amount exceeds the
recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the
following facts and circumstances exist:
• the term of the exploration licence in the specific area of
interest has expired during the reporting period or will expire in the near
future, and is not expected to be renewed;
• substantive expenditure on further exploration for an evaluation
of mineral resources in the specific area is not budgeted nor planned;
• exploration for and evaluation of mineral resources in the
specific area have not led to the discovery of commercially viable quantities
of mineral resources and the decision was made to discontinue such activities
in the specific area; or
• sufficient data exists to indicate that, although a development in
the specific area is likely to proceed, the carrying amount of the exploration
and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
Areas of interest that no longer satisfy the above policy are considered to be
impaired and are measured at their recoverable amount, with any subsequent
impairment loss recognised in the profit and loss.
(ii) Software
Costs for acquisition of software, including directly attributable costs of
implementation, are capitalised as intangible assets and amortised over their
expected useful life (currently five years).
(iii) Goodwill
Goodwill arising from business combinations is included in intangible assets.
Goodwill is not amortised but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from the business
combination in which the goodwill arose.
(iv) Research and Development
Development costs that are directly attributable to the design and development
of identifiable and unique projects controlled by the Group are recognised as
intangible assets when the following criteria are met:
• It is technically feasible to complete the project;
• Management intends to complete the project;
• There is sufficient certainty that contractual rights, planning
and permitting will be agreed;
• It can be demonstrated how the project will generate probable
future economic benefits;
• Adequate technical, financial and other resources to complete the
project are available; and
• The expenditure attributable to the project can be reliably
measured.
Other development expenditures that do not meet these criteria are recognised
as an expense as incurred.
(e) Inventory
Inventory is comprised of drilling equipment and spares and is carried at the
lower of cost and net realisable value. Any impairment on value is taken to
the income statement.
(f) Non-current assets (or disposal groups) held for sale and discontinued
operations
Non-current assets (or disposal groups) are classified as held for sale if
their carrying amount will be recovered principally through a sale transaction
rather than through continuing use, they are available for sale in their
present condition, they are being actively marketed, and a sale is considered
highly probable. These conditions must be continuing for the assets to
continue to be classified as held for sale.
Disposal groups are measured at the lower of their carrying amount and fair
value less costs to sell, except for certain assets such as deferred tax
assets, which are specifically exempt from this requirement. An impairment
loss is recognised for any initial or subsequent write-down of the asset (or
disposal group) to fair value less costs to sell. A gain is recognised for any
subsequent increases in fair value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by the date of the sale
of the non-current asset (or disposal group) is recognised at the date of
derecognition.
Non-current assets (including those that are part of a disposal group) are not
depreciated or amortised while they are classified as held for sale. Interest
and other expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal
group classified as held for sale are presented separately from the other
assets in the balance sheet. The liabilities of a disposal group classified as
held for sale are presented separately from other liabilities in the balance
sheet.
A discontinued operation is a component of the entity that has been disposed
of or is classified as held for sale and that represents a separate major line
of business or geographical area of operations, is part of a single
co-ordinated plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the statement of profit or
loss.
(g) Investments and financial assets
(i) Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured subsequently at fair value (either through
other comprehensive income or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows.
(ii) Recognition and measurement
A financial asset is recognised if the Group becomes a party to the
contractual provisions of the instrument. Financial assets are derecognised if
the Group's contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial asset to another party without
retaining control or substantially all risks and rewards of the asset. Regular
way purchases and sales of financial assets are accounted for at trade date,
i.e. the date the Group commits itself to purchase or sell the asset.
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss ("FVTPL"), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVTPL are expensed in profit or loss.
Subsequent measurement of debt instruments depends on the Group's business
model for managing the asset and the cash flow characteristics of the asset.
Currently, the Group's financial assets are all held for collection of
contractual cash flows, which are solely payments of principal and interest.
Accordingly, the Group's financial assets are measured subsequent to initial
recognition at amortised cost.
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the
Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
(iii) Impairment
On a forward-looking basis, the Group estimates the expected credit losses
associated with its receivables and other financial assets carried at
amortised cost, and records a loss allowance for these expected losses.
(iv) Investment in subsidiaries
In the Company balance sheet, investments in subsidiaries are carried at cost
less accumulated impairment.
(h) Rehabilitation provision
Rehabilitation obligations arise when the Group disturbs the natural
environment where its oil and gas assets are located and is required by local
laws/regulations to restore these sites.
Full provision for these obligations is made based on the present value of the
estimated costs to be incurred in dismantling infrastructure, plugging and
abandoning wells and restoring sites to their original condition. Changes to
future cost estimates are capitalised and recorded in property, plant and
equipment (oil and gas assets) as rehabilitation assets, unless the carrying
value of these assets is not supportable, in which case changes to
rehabilitation provisions are recorded directly in the income statement.
Future cost estimates are inflated to the expected year of rehabilitation
activity and discounted to present value using a market rate of interest that
is deemed to approximate the time value of money.
The estimated costs of rehabilitation are reviewed annually and adjusted
against the relevant rehabilitation asset or in the income statement, as
appropriate. Annual increases in the provision relating to the unwind of the
discount rate are accounted for in the income statement as a finance expense.
(ii) Other provisions
Other provisions are measured at the present value of management's best
estimate of the expenditure required to settle the present obligation at the
end of the reporting period. The provisions are discounted to present value
using a market rate of interest that is deemed to approximate the time value
of money. The increase in the provision due to the passage of time is
recognised as interest expense.
(i) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred, and subsequently measured at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the
effective interest method. Loan fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan and amortised over
the life of the borrowings.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
(j) Trade and other payables
Trade and other payables represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid. The
amounts are unsecured and are usually paid within 30 days of the invoice date.
Trade and other payables are presented as current liabilities unless payment
is not due within 12 months after the reporting period. They are recognised
initially at their fair value and subsequently measured at amortised cost
using the effective interest method.
(k) Share capital
Ordinary Shares are classified as equity. Incremental costs directly
attributable to issue of shares are recognised as a deduction from equity, net
of any tax effects.
(l) Share-based payments
Share-based payments relate to transactions where the Group receives services
from employees or service providers and the terms of the arrangements include
payment of a part or whole of consideration by issuing equity instruments to
the counterparty. The Group measures the services received from non-employees,
and the corresponding increase in equity, at the fair value of the goods or
services received. When the transactions are with employees, the fair value is
measured by reference to the fair value of the share based payments. The
expense is recognised over the vesting period, which is the period over which
all of the specified vesting conditions are to be satisfied.
(m) Revenue
Under IFRS 15 Revenue from Contracts with Customers, there is a five-step
approach to revenue recognition:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the
contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
The Group has two revenue streams, being the sale of gas (recorded within
profit from discontinued operations), and the sale electricity from a solar
project. Gas is sold to wholesale customers under gas supply agreements, which
have different volume and price specifications (both fixed and variable). Gas
sales revenue is recognised when control of the gas passes at the delivery
point into the local gas pipeline network, which is the only performance
obligation. Electricity is sold to an industrial customer under a power
purchase agreement. Revenue is recognised based on actual produced
electricity, which is the only performance obligation, at contractual rates.
Revenue is presented net of value added tax ("VAT"), rebates and discounts and
after eliminating intra-group sales.
(n) Changes to accounting policies, disclosures, standards and interpretations
(i) New and amended standards adopted by the Group
The following new standards, amendments and interpretations are effective for
the first time in these financial statements. However, none has had a material
impact on the financial statements:
Standard Effective date
IFRS 17 Insurance Contracts 1 January 2023
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of 1 January 2023
Financial Statements and IFRS Practice Statement 2 Making Materiality
Judgements)
Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, 1 January 2023
Changes in Accounting Estimates and Errors)
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12 Income Taxes)
International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income 1 January 2023
Taxes) (effective immediately upon the issue of the amendments and
retrospectively)
(ii) New standards not yet adopted
There are no new International Financial Reporting Standards and
Interpretations issued but not effective for the reporting period ending 31
December 2023 that will materially impact the Group.
Standard Effective date
IAS 1 amendments - Non-current Liabilities with Covenants; and Classification 1 January 2024
of Liabilities as Current or Non-current
NOTE 4: SEGMENT INFORMATION
The Group's reportable segments as described below are based on the Group's
geographic business units. This includes the Group's upstream gas operations
in Italy, upstream gas and renewables operations in South East Asia, and the
corporate head office in the United Kingdom. This reflects the way information
is presented to the Board of Directors. Results from the Group's Italian
business are classified as a discontinued operation. See note 19.
Italy Asia UK Total
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2023 2022 2023 2022 2023 2022 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue - - 235 51 - - 235 51
Depreciation and amortisation - - (78) (21) (10) (15) (88) (36)
Interest expense - - - - (3,508) (3,584) (3,508) (3,584)
Share of loss of associates - - - - (49) (82) (49) (82)
Segment profit / (loss) before tax from continuing operations - - (599) (662) (4,448) (7,525) 5,047 (8,187)
Segment profit / (loss) before tax from discontinued operations 6,738 (2,642) - - - - 6,738 2,642
Italy Asia UK Total
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2023 2022 2023 2022 2023 2022 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Segment assets - 9,710 21,587 20,129 3,283 1,293 24,870 31,132
Segment liabilities - (9,548) (152) (182) (31,835) (28,715) (31,987) (38,445)
NOTE 5: GENERAL AND ADMINISTRATIVE EXPENSES
31 December 31 December
2023 2022
US$'000 US$'000
Employee benefits expense (note 6) 1,242 1,401
Business development 640 650
Corporate and compliance costs 508 667
Investor and public relations 99 223
G&A - Duyung venture 314 275
Other G&A 197 162
Share-based payments (note 22) 303 196
3,303 3,574
Auditor's remuneration
Services provided by the Group's auditor and its associates
During the year, the Group (including its overseas subsidiaries) obtained the
following services from the Company's auditor and its associates:
31 December 31 December
2023 2022
US$'000 US$'000
Fees payable to the Company's auditor for the audit of the Parent Company and 69 49
consolidated financial statements
NOTE 6: STAFF COSTS AND DIRECTORS' EMOLUMENTS
Group
Staff costs 31 December 31 December
2023 2022
US$'000 US$'000
Wages and salaries 435 436
Contracted staff 116 -
Pensions and other benefits 24 50
Social security costs 61 59
Share-based payments (note 22) 80 51
Total employee benefits 716 596
Average number of employees from continuing operations 3 4
(excluding Directors)
Group
Directors' emoluments 31 December 31 December
2023 2022
US$'000 US$'000
Wages and salaries 537 776
Pensions and other benefits - 5
Social security costs 69 100
Share-based payments (note 22) 223 145
Total employee benefits 829 1,026
The highest paid Director received aggregate cash emoluments of US$359k (2022:
US$403k) as disclosed in the Directors' Remuneration Report.
NOTE 7: FINANCE INCOME/EXPENSE
Group
Finance income 31 December 31 December
2022 2022
US$'000 US$'000
Interest income 1 -
Foreign exchange gain 1,044 636
Total finance income 1,045 636
Group
Finance expense 31 December 31 December
2023 2022
US$'000 US$'000
Interest on borrowings 3,508 3,584
Other finance charges 4 -
Foreign exchange loss 737 1,907
Total finance expense 4,429 5,491
NOTE 8: INCOME TAX
Income tax
Group
31 December 31 December
2023 2022
US$'000 US$'000
Deferred tax - (583)
Current tax - (1,325)
Total tax expense - (1,908)
Income tax expense is attributable to:
Loss from discontinued operations - (1,908)
- (1,908)
Numerical reconciliation of income tax result recognised in the statement of
comprehensive income to tax benefit/expense calculated at the Group's
statutory income tax rate is as follows:
Group
31 December 31 December
2023 2022
US$'000 US$'000
Loss from continuing operations before tax (5,047) (8,187)
Profit from discontinued operations before tax 6,738 4,550
Total profit/(loss) before tax 1,691 (3,637)
Income tax (charge)/credit using the Group's blended tax rate of 25.5% (2022: (432) 462
12.7%)
Non-deductible expenses (337) (548)
Non-taxable income 1,771 607
Deferred tax expense - (583)
Prior year adjustment (94) (363)
Tax losses utilised - 583
Special excess profit tax - Italy - (1,325)
Effect of subsidiary undertaking disposed 64 -
Current year losses and temporary differences for which no deferred tax asset (972) (741)
was recognised
Income tax benefit/(expense) - (1,908)
Deferred tax
Deferred tax assets ("DTA") totalling US$674k were recorded within assets of
the disposal group in the comparative period. No DTA in respect of carried
forward tax losses has been recognised in respect of any Group company due to
doubt about the availability of future profits in these companies. Total
unrecognised losses (gross) in respect of continuing operations are US$30m
(2022: US$25m). Unrecognised losses (gross) relating to discontinued
operations total US$Nil (2022: US$88m).
NOTE 9: EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the year.
31 December 31 December
2023 2022
US$'000 US$'000
Result for the year
Total loss for continuing operations for the year attributable to equity (5,047) (8,187)
shareholders
Weighted average number of shares 2,613,849,015 2,170,773,822
Basic and diluted loss per share from continuing operations (US$) (0.002) (0.004)
Total profit for discontinued operations for the year attributable to equity 6,738 2,642
shareholders
Basic earnings per share from discontinued operations (US$) 0.0025 0.001
Diluted earnings per share from discontinued operations (US$) 0.0024 0.001
Diluted loss per share from continuing operations for the current and
comparative period is equivalent to basic loss per share since the effect of
all dilutive potential Ordinary Shares is anti-dilutive. Diluted profit per
share from discontinued operations for the current and comparative period
includes the potential dilutive effect of all share options and warrants that
were "in the money" as at 31 December 2023, being 151,031,166 options. The
potential dilutive shares includes options issued to Directors and management
(note 22).
NOTE 10: INVENTORY
Group
31 December 31 December
2023 2022
US$'000 US$'000
Inventory - Duyung PSC 35 34
35 34
Inventory represents the Group's share of inventory held by the Duyung PSC,
which is mainly comprised of drilling spares.
NOTE 11: TRADE AND OTHER RECEIVABLES
Group
31 December 31 December
2023 2022
US$'000 US$'000
Current:
Trade receivables 38 37
Indirect taxes receivable 180 103
Other receivables 1,133 18
Prepayments and accrued income 48 55
1,399 213
Other receivables comprise mainly the residual proceeds receivable in relation
to the sale of the Italian operations ($780,000) and IVHL ($346,000).
Company
31 December 31 December
2023 2022
US$'000 US$'000
Current:
Indirect taxes receivable 42 41
Other receivables 346 107
Intercompany receivables 3,759 3,022
Prepayments 43 34
4,190 3,204
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Group
31 December 31 December
2023 2022
US$'000 US$'000
Office furniture and equipment 8 3
Solar assets 1,672 1,851
1,680 1,854
Reconciliation of the carrying amounts for each class of property, plant and
equipment are set out below:
Group
31 December 31 December
2023 2022
US$'000 US$'000
Office furniture and equipment:
Carrying amount at beginning of year 3 10
Additions 7 2
Depreciation expense (3) (8)
Effect of foreign exchange 1 (1)
Carrying amount at end of year 8 3
Group
31 December 31 December
2023 2022
US$'000 US$'000
Solar assets:
Carrying amount at beginning of year 1,851 -
Additions 4 1,868
Reclassifications (89) -
Depreciation expense (78) (21)
Effect of foreign exchange (16) 4
Carrying amount at end of year 1,672 1,851
Reclassifications relate to VAT recoverable in Vietnam that had previously
been capitalised.
Company
31 December 31 December
2023 2022
US$'000 US$'000
Office furniture and equipment 7 3
7 3
Reconciliation of the carrying amounts for each class of property, plant and
equipment are set out below:
Company
31 December 31 December
2023 2022
US$'000 US$'000
Office furniture and equipment:
Carrying amount at beginning of year 3 10
Additions 7 2
Depreciation expense (3) (8)
Effect of foreign exchange - (1)
Carrying amount at end of year 7 3
NOTE 13: INTANGIBLE ASSETS
Group
31 December 31 December
2023 2022
US$'000 US$'000
Exploration and evaluation assets 18,731 17,707
Intangible development assets 579 428
Goodwill 880 754
Software - 7
20,190 18,896
Reconciliation of the carrying amounts for each material class of intangible
assets are set out below:
Group
31 December 31 December
2023 2022
US$'000 US$'000
Exploration and evaluation assets:
Carrying amount at beginning of year 17,707 17,540
Reclassification to intangible development assets - (171)
Additions 1,024 338
Carrying amount at end of year 18,731 17,707
Exploration and evaluation assets relate to the Group's interest in the Duyung
PSC. No indicators of impairment of these assets were noted. See note 2e.
Group
31 December 31 December
2023 2022
US$'000 US$'000
Intangible development assets :
Carrying amount at beginning of year 428 -
Reclassification from exploration and evaluation assets - 171
Additions 138 257
Effect of foreign exchange 13 -
Carrying amount at end of year 579 428
Intangible development assets comprise additions related to expenditure
directly attributable to the design and development of identifiable and unique
renewables projects controlled by the Group in the Philippines.
Group
31 December 31 December
2023 2022
US$'000 US$'000
Goodwill:
Carrying amount at beginning of year 754 754
Recognised on acquisition 144 -
Effect of foreign exchange (18) -
Carrying amount at end of year 880 754
Goodwill acquired during the year relates to the acquisition of an additional
8% economic interest the Coro Clean Energy Philippines Inc.'s renewables
operations in the Philippines. No impairment of goodwill was noted following
testing performed at 31 December 2023.
Company
31 December 31 December
2023 2022
US$'000 US$'000
Software:
Carrying amount at beginning of year 7 15
Depreciation expense (7) (8)
Carrying amount at end of year - 7
NOTE 143: INTERESTS IN OTHER ENTITIES
Duyung PSC
The Group's wholly owned subsidiary, Coro Energy Duyung (Singapore) Pte Ltd,
is the owner of a 15% interest in the Duyung Production Sharing Contract
("PSC").
The Duyung PSC partners have entered into a Joint Operating Agreement ("JOA"),
which governs the arrangement. Through the JOA, the Group has a direct right
to the assets of the venture, and direct obligation for its liabilities.
Accordingly, Coro accounts for its share of assets, liabilities and expenses
of the venture in accordance with the IFRSs applicable to the particular
assets, liabilities and expenses.
The operator of the venture is West Natuna Exploration Ltd ("WNEL"). WNEL is a
company incorporated in the British Virgin Islands and its principal place of
business is Indonesia.
Coro Renewables VN1 Joint Stock Company
In October 2021, a binding shareholder agreement was signed with VPE and the
Group acquired an 85% interest in the newly incorporated Vietnamese company,
Coro Renewables VN1 Joint Stock Company, which owns 100% of Coro Renewables
VN2 Company Limited, which in turn owns 100% of Coro Renewables Vietnam
Company Limited.
NOTE 15: TRADE AND OTHER PAYABLES
Group
31 December 31 December
2023 2022
US$'000 US$'000
Current
Trade payables 123 143
Other payables 40 78
Accrued expenses 243 416
Joint venture payables 254 182
660 819
Company
31 December 31 December
2023 2022
US$'000 US$'000
Current
Trade payables 109 265
Accrued expenses 209 414
Intercompany payables - 55
318 734
During the year the Company settled in full its outstanding liability owing to
Sound Energy plc ("Sound") in relation to the sale of the Badile land and
offsetting rehabilitation costs. As at the reporting date there was $Nil
(2022: $92k) included within trade payables of the Company as a net payable
Sound.
NOTE 16: BORROWINGS
31 December 31 December
2023 2022
US$'000 US$'000
Current
Eurobond 31,327 -
31,327 -
Non-current
Eurobond - 28,183
- 28,183
In 2019, the Group issued €22.5m three-year Eurobonds with attached warrants
to key institutional investors. The bonds were issued in two equal tranches A
and B, ranking pari passu, with Tranche A paying a 5% cash coupon annually in
arrears, and Tranche B accruing interest at 5% per annum payable
on redemption.
The Eurobonds were due to mature on 12 April 2022 at 100% of par value plus
any accrued and unpaid coupon. Bond subscribers were issued with 41,357,500
warrants to subscribe for ten new Ordinary Shares in the Company at an
exercise price of 4p per share at any time over the three-year term of the
bonds. An additional 6,000,000 warrants were issued to the firm subscriber
Lombard Odier Asset Management (Europe) Limited and underwriter Pegasus
Alternative Fund Ltd. All warrants related to the Eurobonds expired in April
2022 and none were exercised.
The bonds were initially recognised at fair value and subsequently are
recorded at amortised cost, with an average effective interest rate of 18.10%.
In March and April 2022 respectively, the tranche B Noteholders and Tranche A
Noteholders approved the extension of the maturity of the bonds by two years
to 12 April 2024 with an increase in the coupon to 10% accrued annually and
payable in cash on redemption. In addition, the Company undertook to the
Noteholders that in the event of a sale of the Company's interest in the
Duyung PSC to utilise the net cash proceeds of such disposal(s) to first repay
the capital and rolled up interest on the Notes and thereafter to distribute
20% of remaining net proceed(s) to Noteholders. The remaining net proceeds of
any sales would be retained and/or distributed to shareholders by the Company.
The restructured bonds were initially recognised at fair value and
subsequently are recorded at amortised cost, with an average effective
interest rate of 12.10%. The contingent payment upon the sale of the Company's
interest in the Duyung PSC has not been considered in the estimate of the
effective interest rate as it meets the definition of a contingent liability
(note 23).
Since the interest quarter expiring on 12 July 2022, Noteholders had the
option to demand quarterly interest payments in newly issued ordinary shares
of the Company. This election was made for the quarters ended 12 January 2023
and 12 April 2023 (2022: election was made for the quarter ended 12 October
2022) and the quarterly interest was settled in shares (note 17). After this
date shareholder approval for the issuance of further shares in the Company as
satisfaction of interest charges expired and all interest accrued since this
date remains accrued and unpaid and included in the balance above.
Net debt reconciliation
An analysis of net debt and the movements in net debt for each of the years
presented is shown below:
Group
31 December 31 December
2023 2022
US$'000 US$'000
Cash and cash equivalents 1,095 166
Borrowings (31,327) (28,183)
Net debt (30,232) (28,017)
Cash and cash equivalents Borrowings Total
US$'000 US$'000 US$'000
Net debt as at 1 January 2022 3,334 (26,637) (23,303)
Cashflows (3,193) - (3,193)
Eurobond amortisation - (2,832) (2,832)
Effects of foreign exchange 25 1,286 1,311
Net debt as at 31 December 2022 166 (28,183) (28,017)
Cashflows 980 - 980
Eurobond amortisation - (2,107) (2,107)
Effects of foreign exchange (51) (1,037) (1,088)
Net debt as at 31 December 2023 1,095 (31,327) (30,232)
NOTE 17: SHARE CAPITAL AND SHARE PREMIUM
Number Nominal Share premium Total
000s value US$'000 US$'000
US$'000
As at 1 January 2023 2,339,977 3,184 50,862 54,046
Shares issued during the period:
Share issuance for Eurobond interest 486,882 594 804 1,398
Share issuance for 8% increase in Philippines investment 40,000 48 96 144
Closing balance at 31 December 2023 2,866,859 3,826 51,762 55,588
Number Nominal Share premium Total
000s value US$'000 US$'000
US$'000
As at 1 January 2022 2,124,036 2,943 50,461 53,404
Shares issued during the period:
Share issuance for Eurobond interest 215,941 241 401 642
Closing balance at 31 December 2022 2,339,977 3,184 50,862 54,046
All Ordinary Shares are fully paid and carry one vote per share and the right
to dividends. In the event of winding up the Company, Ordinary shareholders
rank after creditors. Ordinary Shares have a par value of £0.001 per share.
Share premium represents the issue price of shares issued above their nominal
value. As at the date of these financial statements, the Company no unused
authority to issue any new Ordinary Shares.
No dividends were paid or declared during the current period (2022: nil).
Issue of ordinary shares
On 13 January 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 January 2023 in new
ordinary shares of the Company. A total of 229,325,962 new ordinary in the
Company were issued at a price of 0.254 pence per share in connection with
this election.
On 27 January 2023, the Company restructured its arrangements with its
Philippines partners to increase the Company's entitlement to future dividends
from 80% to 88% with the issuance of 40,000 new ordinary shares to the
Philippines partners at a price of 0.3 pence per share.
On 13 April 2023, the Eurobond note holders elected to receive interest
payments on the notes in relation to the quarter to 12 April 2023 in new
ordinary shares of the Company. A total of 257,556,113 new ordinary shares in
the Company were issued at a price of 0.21935 pence per share in connection
with this election.
NOTE 18: RESERVES
Other reserves
Share-based payments reserve
The increase in share-based payments reserve is attributable to the current
period charge relating to options issued to Directors and management of the
Company, which was US$303k (2022: US$195k ). US$nil (2022: US$33k ) share
options lapsed during the year and were recycled to accumulated losses.
Functional currency translation reserve
The translation reserve comprises all foreign currency differences arising
from translation of the financial position and performance of the Parent
Company and certain subsidiaries, which have a functional currency different
to the Group's presentation currency of USD. The total loss on foreign
exchange recorded in other reserves for the year was US$3,339k (2022:
US$2,925k ).
NOTE 19a: DISPOSAL OF SUBSIDIARY
In August 2022 the Group entered into an option agreement with Zodiac Energy
plc ("Zodiac") whereby Zodiac acquired the right to acquire 100% of the issued
share capital of CEL for a total consideration of up to €7.5 million (the
"Option Agreement"), which included up to an aggregate of €1.5 million
through a 10% net profit interest ("NPI"). As announced by the Company on 24
August 2022, Zodiac paid a non-refundable deposit of €0.3 million, which was
recognised as income in the comparative period, with a further €5.7 million
to be paid in cash on completion and further contingent NPI payments.
Additionally Zodiac was liable to pay a working capital adjustment to the
Group for the net working capital as at the completion date which as at 31
December 2023 totalled US$472k (see note 21), and the Company was liable to
discharge certain tax obligations in Italy at completion. A definitive sale
and purchase agreement ("SPA") was executed on 27 March 2023 and the disposal
completed on 8 November 2023. From this date CEL ceased to be consolidated as
a group company.
During the period between 27 March 2024 and the completion date the Company
received advances of the consideration totalling €2.9m ($3.07m) and the SPA
was amended to reduce the total value of all consideration to €5.86m
(excluding the maximum potential value of the NPI) of which €0.3m was
recognised as income in the comparative period, leaving total base
consideration of €5.56 million receivable at completion.
The gain on disposal of CEL was determined as follows:
US$'000
Total cash consideration receivable 6,027
Working capital adjustment 1,105
Total consideration 7,132
Less amounts not recognised in statement of comprehensive income
Pre-completion redemption of intercompany loan prior to completion by Zodiac (107)
Pre-completion tax liabilities assumed by Zodiac (749)
Total consideration included in statement of comprehensive income 6,276
Cash 83
Property plant and equipment including oil and gas properties 4,027
Intangible assets 2,230
Inventory 242
Deferred tax asset 669
Trade and other receivables 1,216
Provisions (7,163)
Trade and other payables (1,556)
Total net liabilities disposed (252)
Gain on disposal of subsidiary undertaking 6,528
The total gain from discontinued operations is below:
2023 2022
US$'000 US$'000
Revenue 2,970 6,270
Operating costs (1,854) (2,060)
Gross profit 1,116 4,210
Other income 53 30
General and administrative expenses (564) (1,012)
Change in rehabilitation provisions (190) 52
Impairment reversals/(losses) (97) 1,330
Profit from operating activities 318 4,610
Finance expense (108) (60)
Profit before tax 210 4,550
Income tax expense - (1,908)
Profit for the period from 1 January 2023 to the date of disposal on 8 210 2,642
November 2023, after tax
Gain on disposal of subsidiary undertaking 6,528 -
6,738 2,642
NOTE 19b: DISPOSAL OF INVESTMENT IN ASSOCIATED COMPANY
On 24 August 2023, the Company completed the disposal of its 18.76%
shareholding in IVHL to a privately owned entity based in USA.
Cash consideration was £1.25m of which £1m ($1.286m) paid on completion and
the remaining £250,000 was to be paid by 31 March 2024. The original
shareholding had been acquired for £500,000 ($662,000) in 2020.
The gain on disposal of IVHL was determined as follows:
US$'000
Initial investment in IVHL 602
Company share of losses from acquisition to 31 December 2022 (343)
Book value of investment in IVHL on 1 January 2023 259
Effect of foreign exchange 85
Company share of losses from 1 January 2023 to date of disposal (49)
Book value on date of disposal 295
Consideration payable 1,608
Gain on disposal of associated company 1,313
NOTE 20: INVESTMENT IN, AND LOANS TO, SUBSIDIARIES
Company
2023 2022
US$'000 US$'000
Cost
At 1 January 52,374 52,374
Additions 144 -
At 31 December 52,518 52,374
Accumulated impairment
At 1 January (33,298) (33,298)
Impairment - -
At 31 December (33,298) (33,298)
Impact of foreign exchange (537) (1,575)
Net book value
At 31 December 18,683 17,501
In January 2023 the Company increased its entitlement to future dividends from
the Philippines projects held by Coro Clean Energy Philippines Inc. from 80%
to 88% under a restructuring agreement. In exchange for the increased share of
dividends and to align the Philippine partners with Coro shareholders, the
Company issue each of the two Philippines partners, who are also Officers of
the Philippine subsidiary, with 20,000,000 ordinary shares in Coro at a price
of 0.3p (representing a total of £60,000 each) - a 43% premium to the closing
mid-market price on 24 January 2023 (the "New Ordinary Shares"). 50% of the
New Ordinary Shares will be subject to lock-in restrictions until first power
production and revenue on the first Philippines renewable energy project, with
the remaining 50% subject to lock-in restrictions until first power production
and revenue on the second Philippines renewable energy project. Restated at
the year-end exchange rate at 31 December 2023 the carrying value of the
investment is US$1.2m (2022: $1.1m).
On 8 November 2023, the Company sold its interest in its Italian operations
via the sale of CEL (note 19a). The carrying value of CEL was Nil as at the
disposal date. Previously reported related parties with respect to CEL have
therefore been removed from the table below.
The Company's subsidiary undertakings at the date of issue of these financial
statements are set out below:
Name Incorporated Principal activity % owned Registered address
Coro Energy Asia Limited* England Holding company 100% c/o Pinsent Masons LLP, 1 Park Row, Leeds, England LS1 5AB
Coro Energy Holdings Cell A Limited England Holding company 100% c/o Pinsent Masons LLP, 1 Park Row, Leeds, England LS1 5AB
Coro Energy (Singapore) Pte Ltd* Singapore Holding company 100% 80 Robinson Road #02-00, Singapore 068898
Coro Energy Bulu (Singapore) Pte Ltd* Singapore Holding company 100% 80 Robinson Road #02-00, Singapore 068898
Coro Energy Duyung (Singapore) Pte Ltd* Singapore Exploration and development company 100% 80 Robinson Road #02-00, Singapore 068898
Coro Asia Renewables Ltd(†) Scotland Holding company 100% 12 Traill Drive, Montrose
DD10 8SW, Scotland
Coro Clean Energy Philippines Inc* # Philippines Exploration and development company 40% 1008 The Infinity Tower, 26th Street, Bonifacio Global City, Taguig City,
Fourth District, National Capital Region, Philippines, 1634.
Coro Philippines Project 109 Inc* Philippines Exploration and development company 40% 1008 The Infinity Tower, 26th Street, Bonifacio Global City, Taguig City,
Fourth District, National Capital Region, Philippines, 1634
Coro Philippines Project 121 Inc* Philippines Exploration and development company 40% 1008 The Infinity Tower, 26th Street, Bonifacio Global City, Taguig City,
Fourth District, National Capital Region, Philippines, 1634
Coro Philippines Project 128 Inc* Philippines Exploration and development company 40% 1008 The Infinity Tower, 26th Street, Bonifacio Global City, Taguig City,
Fourth District, National Capital Region, Philippines, 1634
Coro Clean Energy Ltd England Holding company 100% c/o Pinsent Masons LLP, 1 Park Row, Leeds, England LS1 5AB
Coro Clean Energy Vietnam Ltd* England Holding company 100% c/o Pinsent Masons LLP, 1 Park Row, Leeds, England LS1 5AB
Coro Renewables VN1 Joint Stock Company*@ Vietnam Holding company 85% 136 - 138 Vanh Dai Tay, Town 4, An Khanh Ward, Thu Duc City, Ho Chi Minh City,
Vietnam
Coro Renewables VN2 Company Ltd* Vietnam Holding company 85% 136 - 138 Vanh Dai Tay, Town 4, An Khanh Ward, Thu Duc City, Ho Chi Minh City,
Vietnam
Coro Renewables Vietnam Company Ltd* Vietnam Exploration and development company 85% 136 - 138 Vanh Dai Tay, Town 4, An Khanh Ward, Thu Duc City, Ho Chi Minh City,
Vietnam
* Indirectly held.
† Formerly Global Energy Partnership Limited, acquired on 17 March
2021.
# The Group has 80% economic interest and management's judgement is that
Company controls this entity
@ Increased to 92.5% in February 2024
The following subsidiaries are exempt from audit for the 2023 financial year
under s479A of the Companies Act 2006: Coro Clean Energy Limited, Coro Energy
Asia Limited, Coro Energy Holdings Cell A Limited, Coro Clean Energy Vietnam
Limited, and Coro Asia Renewables Limited.
Loans to subsidiaries
Company
2023 2022
US$'000 US$'000
Current
Loans to subsidiaries 1,665 750
Loans from subsidiaries (5,267) (685)
At 31 December (3,602) 65
Loans to subsidiaries comprise advances to and from Coro Energy Holdings Cell
A Limited which are unsecured, interest free and are repayable on demand.
NOTE 21: FINANCIAL INSTRUMENTS
Carrying amount versus fair value
The fair values of financial assets and financial liabilities, together with
the carrying amounts in the consolidated statement of financial position, are
as follows:
31 December 2023
Group
Carrying amount Fair value
US$'000 US$'000
Financial assets
Trade receivables (current and non-current) 1,335 1,335
Other financial assets > 1 year 472 472
Cash and cash equivalents 1,095 1,095
Financial liabilities
Trade and other payables 660 660
Borrowings (current and non-current) 31,327 31,327
31 December 2022
Group
Carrying amount Carrying amount
US$'000 US$'000
Financial assets
Trade receivables (current and non-current) 158 158
Cash and cash equivalents 166 166
Financial liabilities
Trade and other payables 819 819
Borrowings (current and non-current) 28,183 28,183
31 December 2023
Company
Carrying amount Fair value
US$'000 US$'000
Financial assets
Trade and intercompany receivables (current and non-current) 4,190 4,190
Cash and cash equivalents 573 573
Financial liabilities
Trade and other payables 3,920 3,920
Borrowings (current and non-current) 31,237 31,237
31 December 2022
Company
Carrying amount Fair value
US$'000 US$'000
Financial assets
Trade and intercompany receivables (current and non-current) 3,170 3,170
Loans to subsidiaries 65 65
Cash and cash equivalents 130 130
Financial liabilities
Trade and other payables 734 734
Borrowings (current and non-current) 29,446 29,446
Determination of fair values
All the Group's financial instruments are carried at amortised cost. The
carrying value of trade and other receivables, cash and cash equivalents and
trade and other payables approximates their fair value. Borrowings comprises
the Group's Eurobond, which is listed on the Luxembourg Stock Exchange.
Financial risk management
Exposure to credit, market and liquidity risks arise in the normal course of
the Group's business.
This note presents information about the Group's exposure to each of the above
risks, their objectives, policies and processes for measuring and managing
risk, and the management of capital.
Risk recognition and management are viewed as integral to the Group's
objectives of creating and maintaining shareholder value, and the successful
execution of the Group's strategy. The Board as a whole is responsible for
oversight of the processes by which risk is considered for both ongoing
operations and prospective actions. In specific areas, it is assisted by the
Audit Committee.
Management is responsible for establishing procedures that provide assurance
that major business risks are identified, consistently assessed and
appropriately addressed.
(i) Credit risk
The Group is exposed to credit risk on its cash and cash equivalents and trade
and other receivables. The maximum exposure to credit risk is represented by
the carrying amount of each financial asset as shown in the table above and in
note 19.
Credit risk with respect to cash is reduced through maintaining banking
relationships with financial intermediaries with acceptable credit ratings.
All banks with which the Group has a relationship have an investment grade
credit rating and a stable outlook, according to recognised credit rating
agencies.
The Group undertakes credit checks for all material new counterparties prior
to entering into a contractual relationship.
(ii) Market risk
Interest rate risk
The Group is primarily exposed to interest rate risk arising from cash and
cash equivalents that are interest bearing. The Group's Eurobond bears
interest at a fixed rate. Interest rate risk is currently not material for the
Group.
Currency risk
The Group operates internationally and is exposed to foreign exchange risk.
Foreign exchange risk arises from future commercial transactions and
recognised assets and liabilities denominated in a currency that is not the
functional currency of the relevant Group entity.
The Group's and Company's exposure to foreign currency risk at the end of the
reporting period is summarised below. All amounts are presented in US Dollar
equivalent.
Group
2023 2023 2023 2023 2023 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 2022 US $'000
USD SGD PHP VND GBP EUR US$'000 EUR
USD
Trade and other receivables 27 - - 171 403 798 - -
Other financial assets > 1 year - - - - - 472 - -
Cash and cash equivalents 397 2 273 239 183 1 119 1
Trade and other payables (284) (5) (13) (5) (353) - - (21)
Borrowings (current and non-current) - - - - - (31,327) - (28,183)
Net exposure 140 (3) 260 405 233 (30,056) 119 (28,203)
Sensitivity analysis
As shown in the table above, the Group is exposed to changes in USD exchange
rate. The table below shows the impact in USD on pre-tax profit and loss of a
10% increase/decrease in exchange rates, holding all other variables constant:
Group
2023 2023 2023 2023 2023 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 2022 US $'000
USD SGD PHP VND GBP EUR US$'000 EUR
USD
Net exposure 140 (3) 260 405 233 (30,056) 119 (28,203)
10% strengthening of currency to USD rate - - (26) (41) (23) 3,006 - 2,820
10% weakening of currency to USD rate - - 26 41 23 (3,006) - (2,820)
Company
2023 2023 2023 2023 2023 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 2022 US $'000
USD SGD PHP VND GBP EUR US$'000 EUR
USD
Trade and other receivables 3,440 9 178 - 532 31 3,022 -
Inter-company loans 1,270 - - - - - - -
Cash and cash equivalents 389 - - - 183 1 118 1
Loans to subsidiaries 750 (685)
Trade and other payables (2,398) - - - (544) (2,643) (32) (136)
Borrowings (current and non-current) - - - - - (31,327) - (29,446)
Net exposure 2,701 9 178 - 171 (33,938) 3,858 (30,266)
Sensitivity analysis
As shown in the table above, the Group is exposed to changes in USD exchange
rate. The table below shows the impact in USD on pre-tax profit and loss of a
10% increase/decrease in exchange rates, holding all other variables constant.
Company
2023 2023 2023 2023 2023 2023 2022
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 2022 US $'000
USD SGD PHP VND GBP EUR US$'000 EUR
USD
Net exposure 2,701 9 178 - 171 (33,938) 3,858 (30,266)
10% strengthening of currency to USD rate (1) (18) - (17) 3,394 - 3,026
10% weakening of currency to USD rate 1 18 - 17 (3,394) - (3,026)
(iii) Capital management
The Group's policy is to maintain a strong capital base so as to maintain
creditor confidence and to sustain future development of the business,
safeguard the Group's ability to continue as a going concern and provide
returns for shareholders.
As explained further in note 16 and note 2c, the Group's Eurobonds are due to
mature in April 2024 at 100% of par value plus any accrued and unpaid coupon.
(iv) Liquidity risk
The Group's approach to managing liquidity is to ensure that it will always
have sufficient liquidity to meet its liabilities when due. Refer to the going
concern statement in note 2c for further commentary.
The table below analyses the Group's financial liabilities into relevant
maturity groupings based on their contractual maturities. The amounts
presented are the contractual undiscounted cash flows.
Group
31 December 2023 Less than 6 to 12 Between Between Total contractual cash flows
6 months months 1 and 2 years 2 and 7 years US$'000
US$'000 US$'000 US$'000 US$'000
Trade and other payables 660 - - 660
Borrowings - 31,327 - - 31,327
Total 660 31,327 - - 31,987
31 December 2022 Less than 6 to 12 Between Between Total contractual cash flows
6 months months 1 and 2 years 2 and 7 years US$'000
US$'000 US$'000 US$'000 US$'000
Trade and other payables 406 - - - 406
Borrowings - - 28,183 - 28,183
Total 406 - 28,183 - 28,589
Company
31 December 2023 Less than 6 to 12 Between Between Total contractual cash flows
6 months months 1 and 2 years 2 and 7 years US$'000
US$'000 US$'000 US$'000 US$'000
Trade and other payables 3,920 - - - 3,920
Borrowings - 31,327 - - 31,327
Total 3,920 31,327 - - 35,247
31 December 2022 Less than 6 to 12 Between Between Total contractual cash flows
6 months months 1 and 2 years 2 and 7 years US$'000
US$'000 US$'000 US$'000 US$'000
Trade and other payables 320 - - - 320
Borrowings - - 28,183 1,263 29,446
Total 320 - 28,183 1,263 29,766
NOTE 22: SHARE-BASED PAYMENTS
Share options and warrants
The following equity settled share-based awards have been made under the
Company's discretionary share option plan.
31 December 2023 31 December 2022
Average exercise price per option (pence) Number of options Average exercise price per option Number of options
(pence)
As at 1 January 1.03 193,013,166 1.90 137,687,500
Granted during the year 0.255 70,000,000 0.10 93,825,666
Expired during the year 4.38 (42,000,000) - -
Forfeited during the year - - 1.88 (38,500,000)
As at 31 December 0.15 221,013,166 1.03 193,013,166
Vested and exercisable at 31 December - - 4.38 42,000,000
All remaining unvested options vest after three years of continuous service
with the Company and on condition that the mid-market closing price per Coro
ordinary share on the last day of the three year vesting period is equal to or
higher than 0.46 pence per ordinary share for 2021 grants and higher than 0.43
pence per ordinary share for 2022 grants. Grants issued in 2023 are
exercisable once certain performance criteria have been met. Once vested,
the Options may be exercised at any time until the sixth anniversary of
grant.
For options granted in 2021 and 2022 that have not yet vested, the number of
options which will vest on the vesting date will depend on the Company's Total
Shareholder Return ("TSR") over the 3 year performance period starting on the
date of grant, compared to a comparator group of 20 energy companies selected
by the Company's Remuneration Committee. The number of Options vesting will be
calculated as follows:
Relative TSR Percentage of Options vesting on the Vesting Date
Below median 0%
Median 30%
Upper decile 100%
Between median and upper decile Straight-line vesting between 30% and 100%
Options granted in 2023 are conditional upon a final investment decision
having been taken by the partners to the Duyung PSC or the successful sale of
Coro's interest in the Duyung PSC.
The fair value of services rendered in return for 2023 share options is based
on the fair value of share options granted and was measured using a Black
Scholes model.
The inputs used in the measurement of the options granted during the year are
summarised in the table below, with the volatility estimate of 61% based on
the Company's historical volatility:
February 2023
options
Fair value at grant date (p) 0.13
Share price at grant date (p) 0.24
Exercise price 0. 26
Expected volatility 61%
Option life 3 years
Risk-free interest rate (based on yield on five-year gilts) 3.2%
Expiry date 9 February 2028
p - British pence.
The fair value of the options granted are spread over the vesting period. The
amount recognised in the income statement for the year ended 31 December 2023
was US$303k (2022: US$196k).
During the year a total of 70,000,000 options were granted, 35,000,000 of
which were granted to the Company's Chairman, James Parsons, 20,000,000 to the
Company's Managing Director Michael Carrington and 15,000,000 to Ewen
Ainsworth, former CFO of the Company.
NOTE 23: CONTINGENCIES AND COMMITMENTS
Commitments
Coro's share of the 2024 Duyung Work Programme and Budget is estimated at
US$0.5m, which will be allocated between items of capital expenditure and
joint venture G&A. The Group had no committed work programmes in it
Philippine or Vietnam operations at the reporting date.
Contingent liabilities
The Company undertook to the Noteholders that in the event of a sale of the
Company's interest in the Duyung PSC to utilise the net cash proceeds of such
disposal(s) to first repay the capital and rolled up interest on the Notes and
thereafter to distribute 20% of remaining net proceed(s) to Noteholders. The
remaining net proceeds of any sales would be retained and/or distributed to
shareholders by the Company. Due to its nature, it is not possible to quantify
the financial impact of this contingent liability.
Contingent assets
The Group has the right to contingent payments of up to an aggregate of Euro
1.5m through a 10% net profit interest in the disposed Italian Portfolio over
the three years from the date of completion.
NOTE 24: RELATED PARTY TRANSACTIONS
Key management personnel compensation
2023 2022
US$'000 US$'000
Short-term benefits 926 1,201
Share-based payments 303 197
Key management personnel consists of the Directors of the Company and Ewen
Ainsworth (CFO) and Michael Carrington (COO).
Other related party transactions
ion Ventures Holdings Limited was a related party during the reporting period
due to the Company's, now disposed, 18.76% shareholding and ability it had to
appoint one director to the Board of Directors of ion. There were no
transactions between the two companies in 2023 up to the date of the disposal
or 2022 with the exception of Coro's initial £500k investment in ion.
Energy PTS is a company incorporated in Scotland in which Mark Hood, a
director of the Company during the reporting period, has a majority interest.
The Company paid consulting fees on an arm's length basis of £18k (2022:
£18k) to Energy PTS during the reporting period.
NOTE 25: SUBSEQUENT EVENTS
On 18 January 2024, the Company announced receipt of an in principle
commitment letter from HDBank of Vietnam to provide debt finance for its
previously announced 50MW MOU with Mobile World Investment Corporation to
install rooftop solar systems across their portfolio. The non-binding
commitment letter initially focuses on funding for the ten locations in the
pilot stage and would cover 50% of the total capital required for these
locations. It would then be the intention to broaden any funding arrangement
reached to the full scale 50MW roll out across all 900 project locations.
On 19 February 2024, the Company announced settlement of the working capital
adjustment from the disposal of the Group's Italian natural gas portfolio,
with the parties agreeing to a cash payment to the Company of Euro 1,000,000
in full and final settlement of the working capital adjustment. A cash payment
of Euro 200,000 was received by the Company in February 2024 and the balance
of Euro 800,000 will be paid in 22 monthly instalments.
The Company will also receive the previously announced Euro 136,000 balance of
the upfront consideration for the Italian natural gas portfolio, which shall
be paid in 23 monthly instalments.
On 29 February, the Company announced an update with respect to the
ongoing legal proceedings by the Company against an Italian contractor in
relation to damages following the historical cessation of production at the
Bezzecca field in Italy. The Company announced on 14 February 2023 that it was
initiating legal proceedings against an Italian contractor in relation to
damages following the historical cessation of production at the Bezzecca field
in Italy. The Company alleges that the original construction at Bezzecca
lacked an effective cathodic protection system which was required to avoid
corrosion, which ultimately led to the shut-in of gas production at the
Bezzecca field in March 2020 for safety and environmental reasons. Production
at Bezzecca was re-established in November 2022. The Company is claiming
damages of approximately Euro 300,000 for the capital and related costs of the
replacement equipment and necessary cathodic protection and a further Euro 7m
for consequential losses, including both lost revenue and incurred fixed
costs, during the shut in period. On 22 September 2023, the Company served a
writ of summons on the contractor. The contractor filed its response
statement to the court on 23 November 2023, which included the identification
of three potentially liable third parties (a supplier, a sub-contractor and
the sub contractor's insurance company). The judge has set the first hearing
for 5 June 2024, before which various supplementary memorandums are required
to be filed by both sides. The Company sold its Italian natural gas portfolio
during 2023, however, under the terms of this disposal any costs and proceeds
from the Bezzecca legal claim accrue to the Company.
On 8 March 2024, the Company announced that it had signed a binding 14-year
power purchase agreement ("PPA") with Mobile World Group ("MWG") to deliver
power at the first ten sites as a pilot phase with a capacity of 430kw. The
PPA term is extendable in certain circumstances and includes a variable price
with a floor of circa US$11.2 cents / kilowatt hour. Construction work at
these sites will begin in March 2024 and is expected to conclude 28 days
later. The capital required for the pilot phase is expected to be funded from
existing in-country Group resources and from a debt facility expected to be
provided by HDBank which is referenced here.
On 12 April 2024, The Company announced receipt of a letter from two lenders
holding 68% of the Company's Luxembourg listed Eurobonds which are currently
due to expire on 12 April 2024 (the "Standstill"). The Standstill, which the
Company is advised is binding on the parties, provides a conditional
standstill on the repayment of the Company's current debt obligations on
expiry whilst the ongoing constructive discussions with the Company in respect
of the Eurobonds continue and whilst certain inflexion points in the business
materialise, including the outcome of the Duyung Operator's farm out process.
On 24 April 2024, the Company announced that, as a result of the outturn of
the AGM, in that Resolution 2 concerning the re-election of James Parsons as a
Director of the Company, was not passed at the AGM. Accordingly Mr Parsons is
no longer a director of the Company. Whilst the Company has commenced the
process of recruiting at least one additional director with immediate effect,
the Company's Board currently comprises a single director. Following the AGM,
the Company's Board is not therefore quorate under the Company's Articles of
Association (the "Articles") or s154 of the Companies Act 2006 (the "Act") and
the Company is not therefore able to effectively operate under the Articles or
the Act. Accordingly, the Company has requested that trading in the Company's
ordinary shares on AIM be suspended with immediate effect pending, inter alia,
the appointment of at least one additional director. Notwithstanding the
suspension of trading in the Company's ordinary shares, the Company will
continue to make notifications as and when there are matters requiring
disclosure in accordance with the Company's obligations under the AIM Rules
for Companies and/or the UK Market Abuse Regulation.
On 12 June 2024, the Company announced an acceleration of receipt of a portion
of the proceeds from the disposal of the Group's Italian natural gas
portfolio. The Company sold its Italian natural gas portfolio as previously
announced by the Company during the course of 2023 and 2024 (the
"Disposal"). The Disposal includes a monthly payment to the company of Euro
42,750 through to November 2025 and a final payment of Euro 26,750 in December
2025. All monthly payments have been received to-date. The Company signed an
agreement to accelerate the next 9 months payment in exchange for a 22%
discount on those payments. Hence the Company will now receive Euro 150,000
on June 14 2024 and a further Euro 150,000 thirty days later. The monthly
payments will restart from April 2025.
On 24 June 2024, The Company announced that it had signed binding key terms
had been agreed for the sale and purchase of the domestic portion of the Mako
gas field with PT Perusahaan Gas Negara Tbk ("PGN"), the gas subsidiary of PT
Pertamina (Persero), the national oil company of Indonesia. The GSA, which
includes a seven month long stop date, is subject to the construction of the
pipeline connecting the West Natuna Transportation System with the domestic
gas market in Batam, and it forms part of the Domestic Market Obligation, as
set out in Mako's revised Plan of Development. The total contracted gas
volume under the GSA is up to 122.77 trillion British Thermal Units ("TBtu")
with estimated plateau production rates of 35 billion British Thermal Units /
day ("BBtud"). The terms of the GSA are confidential. The remainder of the
Mako sales gas volumes are targeted to be sold to Singapore, where a
non-binding Term Sheet was signed in 3Q 2023. Conrad is moving towards
finalising a GSA for the Mako export gas.
On 3 July 2024, the Company announced the appointment of Harry Beamish as
Independent Non-Executive Director of the Company with immediate effect.
On 15 August 2024, the Company announced that it has signed a six month $500k
secured convertible loan with River Merchant Capital, and existing lender to
the Company under the Company's Luxembourg 8.0% listed Eurobond and Fenikso
Limited.
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