Unaudited Interim Results for H1 2023

Molecular Energies PLC

28 September 2023

 

28 September 2023

MOLECULAR ENERGIES PLC

("Molecular", "the Company" or "the Group")

Unaudited Interim Results for H1 2023

Current trading

Molecular Energies PLC (AIM:MEN), the international energy company, announces its unaudited interim results for the six months ended 30 June 2023.

Selected Results Summary

All numbers exclude discontinued operations and are in US$ '000 unless stated	H1 2023	H1 2022	F/Y 2022
Average daily production, boe	1,559	1,885	1,656
Group turnover	14,674	16,183	31,547
Adjusted EBITDA	1,686	5,282	7,063
Profit after tax before non-cash items	693	5,280	5,638
Group net debt of which:	42,829	29,242	39,584
Third party debt (President Argentina) now removed from Group	33,782	22,923	35,452

Corporate and Financial Summary

·      Group turnover of US$14.7 million (H1 2022 US$16.2 million)

·      Adjusted EBITDA of US$1.7 million (H1 2022 US$ 5.3 million) 

·      Profit after tax before non-cash items* of US$0.7 million (H1 2022 US$5.3 million)

·    Third party financial borrowings in Argentina non-recourse to Group was US$33.8 million (H1 2022 US$22.9 million) all of which is now removed from Group pursuant to the sale in September 2023, of the Argentine business and assets.   

·      Mark to market value of holding in Atome Energy PLC (not taken into the Group accounts) as at 30 June 2023 of US$11.6 million (FY2022: US$11.6 million)

·    In April 2023 the shareholder loan outstanding to IYA Global Limited was converted to an interest free long-term loan repayable at the end of 2025. There is no other Group financial debt as at the date hereof.   

Operational Summary

·     In Paraguay, work continued in relation to preparation for drilling of the high impact exploration well with our partner CPC, the State Energy Company of Taiwan.

·   Green House Capital has been created with the purpose of becoming the alternative energy division of Molecular.

Current trading and developments

·     Sale of business and assets in Argentina approved by shareholders on 21 September 2023 (the "Sale"). The Sale has been completed and all Argentine debt is now removed.

·    The flow of monies to the Group resulting from the Sale is expected to commence in 2024 and to continue thereafter up to a period of five years providing the Group with base working capital. 

·    The exploration well in Paraguay is expected to commence drilling in October 2023 and will be subject to a separate announcement.

·      Work on the proposed initial public offering on the AIM market of Green House Capital is progressing well with further updates planned in the coming weeks. A Chief Executive Officer has now been appointed with the professional team all in place. Further announcements are expected to be issued in October.  

·      As detailed in its RNS of 21 September 2023, Molecular's management team are evaluating alternative major energy projects to place the Group at the forefront of the ongoing energy revolution utilising its assets, knowhow, geographic location and reputation on the ground. Such projects now include sustainable aviation fuel production on a commercial scale with Aecom, the international engineering consultancy, having been commissioned to produce a feasibility report which will be available in Q4 2023. In the meantime, several non-disclosure agreements have been entered into and discussions taking place with equipment suppliers and potential off takers.

Commenting on today's announcement, Peter Levine, Chairman said:

"Times change and so must Molecular.  By making plans to pivot to green fuel, the Company will benefit from its and its sister company's contacts, experience, know-how and location to create a major future fuel business.

"In the meantime, the existing business and assets of Molecular, now free from the large Argentine debt and all third-party financial debt, provide a solid and worthwhile base from which to grow."

* Adjusted EBITDA means Operating Profit before depreciation, depletion and amortisation, adjusted for non-cash share-based expenses and certain non-recurring items. Non-recurring items include where relevant workovers.

* Profit after tax before non-cash items which comprise depletion, depreciation, amortisation, impairment, non-operating gains/losses and deferred tax.

Notes to Editors

Molecular Energies PLC is an AIM listed company at the forefront of energy development and has interests across the energy spectrum, from an oil and gas project to the green and alternative energy sector.

The Company currently has an oil exploration asset in Paraguay. The Company has two separate subdivisions which are focused on early-stage opportunities in the green and/or alternative energy sub-sector.

Activities in the green and alternative energy space are being carried out direct through Molecular and under the Green House Capital brand and through AIM listed Atome Energy PLC, a green hydrogen, ammonia, and fertiliser company operating in Paraguay, Costa Rica and Iceland, in which Molecular currently has 20.5%.

With a strong strategic and institutional base of support, no third-party financial debt and a Chairman whose interests as the largest shareholder are aligned to those of its shareholders, Molecular gives UK investors access to an energy growth story combined with world class standards of corporate governance, environmental and social responsibility.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for the release of this announcement on behalf of the Company was Robert Shepherd, Finance Director.

Contact: Molecular Energies PLC Peter Levine, Chairman Rob Shepherd, Group FD	[phone] [e-mail]
Cavendish Corporate Finance Limited (Nominated Adviser and Broker) Simon Hicks, George Dollemore	[phone]
Tavistock (Financial PR & IR) Simon Hudson, Nick Elwes, Charles Baister	[phone]

Glossary of terms

Boe(pd)            Barrels of oil equivalent (per day)

Bopd                Barrels of oil per day

DDA                 Depletion, depreciation and. amortisation

EV                    Enterprise value meaning market capitalisation plus debt

MMbbls            Million barrels of oil

MMboe             Million barrels of oil equivalent

MMBtu              Million British Thermal Units (gas)

M³/d                 Cubic metres of production of gas or oil per day (as the case may be)

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2023

		6 months		6 months		Year to
		to 30 June		to 30 June		31 Dec
		2023		2022		2022
		(Unaudited)		(Unaudited)		(Note 2)
		US$000		US$000		US$000
Continuing Operations
Revenue		14,674		16,183		31,547
Cost of sales
Depletion, depreciation & amortisation		(3,415)		(4,273)		(7,296)
Other cost of sales		(10,643)		(10,294)		(20,174)
Total cost of sales	3	(14,058)		(14,567)		(27,470)
Gross profit/(loss)		616		1,616		4,077
Administrative expenses		(2,678)		(1,380)		(4,070)
Operating gain/(loss)		-		500		-
Operating profit / (loss) before impairment charge
and non-operating gains / (losses)		(2,062)		736		7
Impairment intangible asset in Paraguay		-		-		(8,583)
Loss in associate undertaking		-		(25)		(25)
Gain on disposal of USA business	5	1,411		-		-
Other non-operating gains /(losses)	5	1,280		351		1,269
Profit/(loss) after impairment and non-operating
gains and (losses)		629		1,062		(7,332)
Finance income	6	2,255		3,259		4,907
Finance costs	6	(2,877)		(3,029)		(6,617)
Profit / (loss) before tax from continuing operations		7		1,292		(9,042)
Income tax (charge)/credit
Current tax income tax (charge)/credit		(81)		-		(59)
Deferred tax being a provision for future taxes		156		2,030		2,033
Total income tax (charge)/credit		75		2,030		1,974
Profit/(loss) for the period from continuing operations		82		3,322		(7,068)
Profit/(loss) for the period from discontinued operations	7	(156)		245		(3,430)
Share of loss attributable to non-controlling interest		282		-		-
Profit/(loss) for the period attributable to equity holders		208		3,567		(10,498)
Other comprehensive income
- Items that may be reclassified subsequently to profit or loss
Exchange differences on translating
non-US Dollar operations		(35)		-		-
Total comprehensive profit/(loss) for the period
attributable to the equity holders of the Parent Company		173		3,567		(10,498)
Basic earnings/ (loss) per share		US cents		US cents		US cents
Earnings/ (loss) per share from continuing operations	8	3.5		32.3		(68.7)
Earnings / (loss) per share from discontinued operations	8	(1.5)		2.4		(33.3)
		2.0		34.7		(102.0)
Diluted earnings/ (loss) per share
Earnings/ (loss) per share from continuing operations	8	3.5		31.8		(68.7)
Earnings / (loss) per share from discontinued operations	8	(1.5)		2.3		(33.3)
		2.0		34.1		(102.0)

Condensed Consolidated Statement of Financial Position

As at 30 June 2023

				30 June		30 June		31 Dec
				2023		2022		2022
				(Unaudited)		(Unaudited)		(Audited)
				US$000		US$000		US$000
ASSETS		Note
Non-current assets
Intangible exploration and evaluation assets		9		45,721		54,304		45,721
Goodwill				705		705		705
Property, plant and equipment		9		72,758		74,071		71,937
				119,184		129,080		118,363
Deferred tax				-		356		45
Other non-current assets				-		103		103
				119,184		129,539		118,511
Current assets
Trade and other receivables		10		15,591		7,350		11,710
Cash and cash equivalents				3,093		4,970		7,941
				18,684		12,320		19,651
TOTAL ASSETS				137,868		141,859		138,162
LIABILITIES
Current liabilities
Trade and other payables		11		23,316		22,891		20,708
Borrowings		12		19,897		12,521		18,391
				43,213		35,412		39,099
Non-current liabilities
Trade and other payables		11		3,144		4,059		3,362
Long-term provisions				7,038		7,963		7,854
Borrowings		12		26,025		21,691		29,134
Deferred tax				94		253		250
				36,301		33,966		40,600
TOTAL LIABILITIES				79,514		69,378		79,699
EQUITY
Share capital				36,180		36,179		36,179
Share premium				289		48		48
Translation reserve				(50,270)		(50,240)		(50,235)
Profit and loss account				64,855		78,712		64,647
Other reserve				7,582		7,782		7,824
				58,636		72,481		58,463
Non-controlling interest				(282)		-		-
TOTAL EQUITY				58,354		72,481		58,463
TOTAL EQUITY AND LIABILITIES				137,868		141,859		138,162

Condensed Consolidated Statement of Changes in Equity

		Share capital & share premium		Profit and loss account		Other reserves		Total		Non-controlling interest		Total Equity
		US$000		US$000		US$000		US$000		US$000		US$000
Balance at 1 January 2022		36,227		75,145		(42,531)		68,841		-		68,841
Share-based payments		-		-		73		73		-		73
Transactions with owners		-		-		73		73		-		73
Loss for the period		-		3,567		-		3,567		-		3,567
Total comprehensive
income/(loss)		-		3,567		-		3,567		-		3,567
Balance at 30 June 2022		36,227		78,712		(42,458)		72,481		-		72,481
Share-based payments		-		-		42		42		-		42
Transactions with owners		-		-		42		42		-		42
Profit for the period		-		(14,065)		-		(14,065)		-		(14,065)
Exchange differences on
translation		-		-		5		5		-		5
Total comprehensive
income/(loss)		-		(14,065)		5		(14,060)		-		(14,060)
Balance at 1 January 2023		36,227		64,647		(42,411)		58,463		-		58,463
Exercise of options		242		-		(242)		-		-		-
Transactions with owners		242		-		(242)		-		-		-
Loss for the period		-		208		-		208		(282)		(74)
Exchange differences on
translation		-		-		(35)		(35)		-		(35)
Total comprehensive
income/(loss)		-		208		(35)		173		(282)		(109)
Balance at 30 June 2023		36,469		64,855		(42,688)		58,636		(282)		58,354

Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2023

		6 months		6 months		Year to
		to 30 June		to 30 June		31 Dec
		2023		2022		2022
		(Unaudited)		(Unaudited)		(Note 2)
		US$000		US$000		US$000
Cash flows from continuing operations - (Note 13)
Cash generated/(consumed) by operations		(368)		8,283		11,637
Interest received		218		83		244
Taxes paid		(59)		-		-
Cash generated/(consumed) by discontinued operations		(40)		356		(271)
		(249)		8,722		11,610
Cash flows from investing activities
Expenditure on exploration and evaluation assets		-		-		-
Expenditure on development and production assets
(excluding increase in provision for decommissioning)		(4,432)		(9,911)		(21,832)
Insurance proceeds		-		-		1,289
Recovery of previously impaired costs		-		-		748
Acquisition & licence extension in Argentina		1,280		-		-
Net cash used in investing activities in discontinued operations		-		(110)		(450)
		(3,152)		(10,021)		(20,245)
Cash flows from financing activities
Proceeds from issue of shares (net of expenses)		-		-		-
Loan drawdown		11,471		8,120		40,345
Repayment of borrowings		(12,784)		(3,018)		(21,747)
Payment of loan interest and fees		(1,092)		(1,539)		(4,366)
Repayment of obligations under leases		(424)		(640)		(947)
Net cash used in financing activities in discontinued operations		(37)		(63)		(120)
		(2,866)		2,860		13,165
Net increase/(decrease) in cash and cash equivalents		(6,267)		1,561		4,530
Opening cash and cash equivalents at beginning of year		7,941		2,014		2,014
Exchange (losses)/gains on cash and cash equivalents		1,419		1,395		1,397
Closing cash and cash equivalents		3,093		4,970		7,941

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023

1 Nature of operations and general information

Molecular Energies PLC and its subsidiaries' (together," the Group") principal activities are the exploration for and the evaluation and emerging new energy projects.

Molecular Energies PLC is the Group's ultimate parent company. It is incorporated and domiciled in England. Following the sale of business and assets in Argentina approved by shareholders on 21 September 2023, the Group has onshore exploration assets in Paraguay and interests in emerging alternative energy projects. The address of Molecular Energies PLC's registered office is Carrwood Park, Selby Road, Leeds, LS15 4LG. Molecular Energies PLC's shares are listed on the AIM of the London Stock Exchange.

These condensed consolidated interim financial statements (the interim financial statements) have been approved for issue by the Board of Directors on 27 September 2023. The financial information for the year ended 31 December 2022 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2023 and 30 June 2022 was neither audited nor reviewed by the auditor. The Group's statutory financial statements for the year ended 31 December 2022 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006

2 Basis of preparation

The interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2022, which have been prepared under UK adopted international accounting standards ("IFRS").

These financial statements have been prepared under the historical cost convention. The accounting policies adopted in the 2023 interim financial statements are the same as those adopted in the 2022 Annual report and accounts.

The 31 December 2022 audited results have been re-presented to disclose the operations discontinued in 2023, in accordance with IFRS 5.

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

			6 months		6 months		Year to
			to 30 June		to 30 June		31 Dec
			2023		2022		2022
			(Unaudited)		(Unaudited)		(Note 2)
			US$000		US$000		US$000
3 Cost of Sales
	Depreciation		3,415		4,273		7,296
	Release of abandonment provision		-		-		(711)
	Royalties & production taxes		2,364		3,161		4,968
	Well operating costs		8,279		7,133		15,917
			14,058		14,567		27,470
4 Adjusted EBITDA
	Adjusted EBITDA		1,686		5,282		7,063
	Non-recurring items		(290)		(159)		(252)
	EBITDA excluding share options		1,396		5,123		6,811
	Release of abandonment provision		-		-		711
	Depreciation, depletion & amortisation		(3,458)		(4,314)		(7,400)
	Share based payment expense		-		(73)		(115)
	Operating profit / (loss)		(2,062)		736		7

5 Non-operating (gains) / losses
	Recovery of impaired costs		-		-		(748)
	Gain on insurance proceeds		(1,280)		-		(115)
	Arising on lease modifications		-		4		(51)
	Other (gains) / losses		-		(355)		(355)
	Gain on USA disposal		(1,411)		-		-
			(2,691)		(351)		(1,269)
6 Finance income & costs
	Interest income		218		83		244
	Exchange gains		2,037		3,176		4,663
	Finance income		2,255		3,259		4,907
	Interest & similar charges		2,877		3,029		6,617
	Exchange losses		-		-		-
	Finance costs		2,877		3,029		6,617

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

7 Discontinued Operations				6 months		6 months		Year to
				to 30 June		to 30 June		31 Dec
				2023		2022		2022
				(Unaudited)		(Unaudited)		(Note 2)
				US$000		US$000		US$000
Discontinued Operations
Revenue				346		1,449		1,686
Cost of sales				(414)		(833)		(2,874)
Gross profit/(loss)				(68)		616		(1,188)
Administrative expenses				(30)		(361)		(473)
Operating profit / (loss) before impairment charge
and non-operating gains / (losses)				(98)		255		(1,661)
Impairment charge				-		-		(1,433)
Non-operating gains /(losses)				-		-		1
Profit/(loss) after impairment and non-operating
gains and (losses)				(98)		255		(3,093)
Finance income				-		-		-
Finance costs				(13)		(16)		(32)
Profit / (loss) before tax				(111)		239		(3,125)
Income tax (charge)/credit
Current tax income tax (charge)/credit				-		-		-
Deferred tax being a provision for future taxes				(45)		6		(305)
Total income tax (charge)/credit				(45)		6		(305)
Profit/(loss) for the period from discontinued operations				(156)		245		(3,430)

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

			6 months		6 months		Year to
			to 30 June		to 30 June		31 Dec
			2023		2022		2022
			(Unaudited)		(Unaudited)		(Note 2)
			US$000		US$000		US$000
8 Earnings / (loss) per share
	Net profit / (loss) for the period attributable
	to the equity holders of the
	Parent Company from continuing operations		364		3,322		(7,068)
	Net profit / (loss) for the period from
	discontinued operations		(156)		245		(3,430)
			Number		Number		Number
			'000		'000		'000
	Weighted average number
	of shares in issue		10,355		10,290		10,290
	Earnings /(loss) per share from continuing operation		US cents		US cents		US cents
	Basic		3.5		32.3		(68.7)
	Diluted		3.5		31.8		(68.7)
	Earnings /(loss) per share from discontinued operations		US cents		US cents		US cents
	Basic		(1.5)		2.4		(33.3)
	Diluted		(1.5)		2.3		(33.3)

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2022 - continued

9 Non-current assets
					Property
			E&E		Plant and		Total
			Assets		Equipment
			US$000		US$000		US$000
	Cost
	At 1 January 2022		146,725		163,197		309,922
	Additions		-		18,961		18,961
	Acqusition in USA		-		-		-
	Right of use assets (IFRS16)		-		377		377
	At 30 June 2022		146,725		182,535		329,260
	Additions		-		5,359		5,359
	Acquisition of well in USA		-		600		600
	Damaged by fire		-		(1,249)		(1,249)
	Disposals of Right of Use Assets (IFRS!^)		-		(1,404)		(1,404)
	At 1 January 2023		146,725		185,841		332,566
	Additions		-		4,547		4,547
	Disposal of USA		-		(12,514)		(12,514)
	Right of use assets (IFRS16)		-		-		-
	At 30 June 2023		146,725		177,874		324,599
	Depreciation/Impairment
	At 1 January 2022		92,421		104,049		196,470
	Charge for the period		-		4,415		4,415
	At 30 June 2022		92,421		108,464		200,885
	Impaired		8,583		1,433		10,016
	Disposals		-		(293)		(293)
	Damaged by fire		-		(75)		(75)
	Charge for the period		-		4,375		4,375
	At 1 January 2023		101,004		113,904		214,908
	Disposal of USA		-		(12,304)		(12,304)
	Charge for the period		-		3,516		3,516
	At 30 June 2023		101,004		105,116		206,120
	Net Book Value 30 June 2023		45,721		72,758		118,479
	Net Book Value 30 June 2022		54,304		74,071		128,375
	Net Book Value 31 December 2022		45,721		71,937		117,658

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

			30 June		30 June		31 Dec
			2023		2022		2022
			(Unaudited)		(Unaudited)		(Audited)
			US$000		US$000		US$000
10 Trade and other receivables
	Trade and other receivables		7,522		6,092		8,805
	Prepayments		8,069		1,258		2,905
			15,591		7,350		11,710
11. Trade and other payables
	Current
	Trade and other payables		8,903		9,176		7,707
	Drilling, workover and operation accruals		13,359		12,519		12,317
	Current portion of leases		1,054		1,196		684
			23,316		22,891		20,708
	Non-current
	Non-current trade and other payables		2,719		2,409		2,569
	Non-current portion of leases		425		1,650		793
			3,144		4,059		3,362
	Total carrying value		26,460		26,950		24,070
12 Borrowings
	Current
	Bank loan		951		1,680		1,183
	Promissory notes & bonds		18,946		10,841		17,208
			19,897		12,521		18,391
	Non-Current
	IYA Loan		12,140		11,289		12,073
	Bank loan		2,009		2,342		1,072
	Promissory notes & bonds		11,876		8,060		15,989
			26,025		21,691		29,134
	Total carrying value of borrowings		45,922		34,212		47,525

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

			6 months		6 months		Year to
			to 30 June		to 30 June		31 Dec
			2023		2022		2022
			(Unaudited)		(Unaudited)		(Note 2)
			US$000		US$000		US$000
Profit/(loss) from operations before taxation			7		1,292		(9,042)
	Interest on bank deposits		(218)		(83)		(244)
	Interest payable and loan fees		2,877		3,029		6,617
	Depreciation and impairment of property,
	plant and equipment		3,458		4,314		7,400
	Release of abandonment provision		-		-		(711)
	Impairment charge		-		-		8,583
	Loss on associate investment		-		25		25
	Gain on non-operating transaction		(1,280)		(351)		(1,269)
	Gain on disposal of USA business		(1,411)		-		-
	Share-based payments		-		73		115
	Foreign exchange difference		(2,037)		(3,176)		(4,663)
Operating cash flows before movements
	in working capital		1,396		5,123		6,811
	(Increase)/decrease in receivables		(4,565)		1,638		(3,137)
	(Increase)/decrease in inventory		-		1,687		1,691
	(Decrease)/increase in payables		2,801		(165)		6,272
Net cash generated by/(used in)
operating activities			(368)		8,283		11,637

Notes to the Half-Yearly Financial Statements

Six months ended 30 June 2023 - continued

14 Atome Energy plc
			6 months		6 months		Year to
			to 30 June		to 30 June		31 Dec
			2023		2022		2022
			(Unaudited)		(Unaudited)		(Audited)
Selected key financial extracts			US$000		US$000		US$000
Group Statement of Comprehensive Income
	Gain / (loss) on Atome associate investment		-		(25)		(25)
			-		(25)		(25)
Company Profit & Loss Statement
	Gain arising on mark to market of investment		49		580		1,414
			49		580		1,414
Company Statement of Financial position
	Investment in Atome Energy plc at market value		11,638		10,755		11,589

 

END