RNS Number : 2583C
12 April 2013
12 April 2013
For Immediate Release
Bumi plc ("Bumi" or the "Company")
Update on Balance Sheet Review
On 19 March 2013, the Company announced its decision to defer publication of its Full Year results for the year ended 31 December 2012 until 24 April 2013 as a result of a thorough review of balance sheet items - a number of which required additional substantiation by new management at Berau.
Several items have not been supported to the satisfaction of the new Berau management team. Management at Berau has concluded that there is not sufficient evidence to support the capitalisation of certain expenditures, in particular expenditure attributed to hauling roads and overburden removal which are normal business activities of the Company to support expansion of the mine. These expenditures, which are estimated to be up to $56m, and were incurred during 2012, will be treated as costs in the 2012 income statement and excluded from the underlying results for the year.
In addition, in reviewing certain land compensation payments in 2012, new management at Berau have been unable to fully verify transactions relating to a number of landowner payments, and this is still the subject of the ongoing review. The amount under review is estimated to be up to $38m and a provision will be taken in respect of these historical expenditures pending the outcome of the review.
These adjustments will be reflected in the Full Year results together with any other items that may emerge from the ongoing balance sheet review. Given the level of further work that needs to be completed over the next few weeks there is a likelihood that the publication of final results will need to be further delayed.
The new management at Berau, under new leadership from Bumi plc, is intent on clarifying and rectifying these issues and is engaging with the previous management team to achieve this. In particular if and to the extent that expenditures cannot be substantiated, Berau is seeking undertakings from any responsible parties that it will be properly compensated for the financial impact.
Nick von Schirnding, chief executive of Bumi plc said "These actions underscore the fact that new management is leaving no stone unturned and that we are taking firm action to resolve all residual financial issues. While clearly the above findings are disappointing, it does reflect the fact that we are taking a grip and turning the corner with independent management in place at both Berau and Bumi plc. I am keen to draw a line under the legacy issues and these disclosures form part of an ongoing process of restoring investor confidence in Bumi plc. It is far preferable to achieve certainty and allow us then to move on with a clean slate."
For enquiries, please contact:
+44 (0) 20 7201 7506
Ed Simpkins / Charles O'Brien
+44 (0) 20 7251 3801
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