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Myanmar Investments (MIL)

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Monday 26 November, 2018

Myanmar Investments

Interim results to 30 September 2018

RNS Number : 5317I
Myanmar Investments Intl Ltd
26 November 2018
 

This announcement contains inside information

26 November 2018

 

Myanmar Investments International Limited

 

Interim results to 30 September 2018 and strategic update

 

Myanmar Investments International Limited [AIM: MIL] ("MIL" or the "Company"), the AIM-quoted Myanmar focused investment company, today announces its unaudited interim financial results for the six months to 30 September 2018 and an update on the Company's recent performance, strategy and prospects for its next stage of growth.  All financial data is based on the unaudited management accounts. All dates are in the year 2018 unless otherwise stated.

 

Overview

 

To date the Company has invested in three businesses in Myanmar, all of which are performing well and each of which are having a positive impact on the lives of Myanmar citizens. The Company takes an active role in each of these businesses; meeting regularly with the management teams at board and shareholder level and contributing to their strategic development.

 

As stated in the strategic update in April, the Company has taken steps to reduce its operational overheads and to restructure and stream-line its operations to focus on managing these existing businesses in an efficient manner. Whilst less time is spent and lower costs are incurred on looking at new investments, the Company continues to keep a look out for attractive business opportunities.

 

The impact of the cost reduction measures can already be seen to be taking effect from the reduction in the Company's annualised cash overheads for the period being 23% lower on a per share basis than for the year to 31 March. The Company expects to show a more significant reduction in the level of its cash overheads in the second half of the year.

 

Summary update

 

·    MIL's existing joint venture businesses have achieved positive results over the period:

 

Apollo Towers Holdings Limited ("Apollo Towers"), one of Myanmar's leading independent tower companies ("ITC") is steadily growing the number of co-tenancies on its existing towers (all four of the existing mobile network operators and one of the fixed broadband companies). The Company will be exchanging its shares in Apollo Towers for shares in Towers (M) Holdings Pte Ltd ("Towers Holdings"), which in turn owns Pan Asia Majestic Eagle Limited ("Pan Asia Towers") Myanmar's fourth largest ITC. It is intended that both Apollo Towers and Pan Asia Towers will be under the common ownership of Towers Holdings. Together the two businesses will have an initial aggregated portfolio of approximately 3,050 towers and 6,100 tenants.

 

Myanmar Finance International Limited ("MFIL"), the Company's microfinance joint venture, has continued to grow its business on the back of additional debt funding.  As a result, its loan book has increased by a Compounded Annual Growth Rate ("CAGR") of 61% (since investment) to US$14.3 million and the number of borrowers has increased to over 70,000.

 

Medicare International Health & Beauty ("MIHB"), the Company's joint venture with Medicare of Vietnam has become a leading franchise in the pharmacy, health and beauty space. To date MIL has invested US$1.9 million for a 48.6% stake, funding an initial network of 14 stores with a further two under construction. As previously announced, the joint venture has plans to roll-out more stores and build on its market leading position.  

 

·    The reduction in overheads, that started midway through this financial period, is already illustrated in the financial results. In the period to 30 September, the unaudited accounts show the core cash-based overheads were US$880,000 which is 23% lower on a per share basis than for the year to 31 March. Management expects that by March 2019 the monthly overheads to have reduced even further.

 

·    As at 30 September, the Company had cash resources of approximately US$4.7 million (2017: US$8.3 million) according to the unaudited accounts.  

 

·    The Company continues to see interesting investment opportunities and evaluates those where it believes there is a compelling business case in segments of the economy where the Directors see investment and growth opportunities arising; currently the focus is on prospective investments in the healthcare, financial services and consumer sectors. 

 

·    The transition from military dictatorship to civilian government continues though not without its difficulties. The situation in Rakhine state, which stems from a complex and historically charged background, remains unremedied. The Advisory Commission, led by the late former UN Secretary General Kofi Annan, on the Rakhine State crisis has provided an important framework which can possibly provide the foundations for addressing the distressing situation there.

 

Apollo Towers

 

Background

Apollo Towers is the second largest independent telecom tower company in Myanmar. Established in 2013 it provides tower and power services to all of the countries mobile network operators, being Telenor of Norway (Apollo Towers' anchor tenant), Ooredoo of Qatar, MPT (the state-owned enterprise jointly managed with KDDI and Sumitomo) and the Viettel-led consortium, MyTel.

 

MIL first invested in Apollo Towers in July 2015 when it led a consortium of investors that invested US$30 million for a 14.2% shareholding in Apollo Towers.  The other shareholders were TPG Growth ("TPG"), one of the world's largest alternative asset managers with assets under management of over US$90 billion, and Sanjiv Ahuja, the ex-Orange CEO. As at 30 September, MIL's indirect shareholding in Apollo Towers was 9.1% for a cost of US$21 million.

 

On 21 September, the Company announced that its subsidiary, MIL 4 Limited, had agreed to exchange its existing shares in Apollo Towers for shares in Towers (M) Holdings Pte. Ltd. ("Towers Holdings"). This reorganisation forms part of a much larger transaction under which funds controlled by TPG have set up Towers Holdings which has acquired Pan Asia Majestic Eagle Limited ("Pan Asia Towers"), Myanmar's fourth largest independent tower company.

 

MIL sits on the board of Apollo Towers (and will sit on the board of Towers Holdings) and contributes actively to the strategy and growth of the company.

 

Update

·   The Myanmar telecoms sector continues to experience solid growth with continuing demand for capacity expansion. Myanmar's mobile penetration rate continues to grow with estimates currently as high as 105%.  Coupled with this is the prevalence of data enabled devices. Smartphones are estimated to account for approximately 80% of the mobile phones in use in the country and data demand drives the need for connectivity. Connectivity requires an extensive network of telecom towers with reliable power. Myanmar currently has 15,827 towers and is expected to reach 23,000 towers within the next few years. Apollo Towers has built a strong reputation in the market for its capability in providing and maintaining "tower and power" solutions for its customers. Pan Asia Towers has built a strong reputation for providing towers only. Towers Holdings, the new owner of Pan Asia Towers, will look to leverage the best practices of both companies in providing as full a suite of services as is possible and commercially attractive to the customers of both businesses.

 

·   Apollo Towers has nearly doubled its tower portfolio to 1,776 towers since MIL's investment in 2015 and Tower Holdings will have higher capacity to build more towers in its next phase of development. 11% of Myanmar's telecom towers are now under Apollo Towers' management, making it the second largest independent telecom tower in Myanmar.

 

·   Apollo Towers is experiencing a significant increase in the number of co-tenants on its towers from both the entry of Myanmar's fourth mobile operator, MyTel, and also the country's multiple new internet service providers. As at 30 September its co-location ratio (being the number of multiple tenancies on its towers) was 2.0 times. The co-location ratio (or "Lease-up-Rate" or "LUR") is a key driver of profitability for tower companies. By adding additional tenants to existing towers, the yield on invested capital can significantly improve, making each additional tenant highly accretive in terms of EBITDA and eventually enterprise value. Market analysis for Myanmar points to a LUR of 2.2x by 2021.

 

·   Pan Asia Towers was established in 2013 and owns approximately 1,300 towers that it has constructed and leased to Ooredoo Myanmar Limited (Pan Asia Towers' anchor tenant), Telenor Myanmar Limited and MPT. In addition, Pan Asia Towers has long-term tenancy contracts with all the country's MNOs including a large-scale commitment for additional tenancies from the recent arrival, MyTel.

 

·   It is intended that both Apollo Towers and Pan Asia Towers will be under the common ownership of Towers Holdings. Together the two businesses will have an initial aggregated portfolio of approximately 3,050 towers and 6,100 tenants, which, on a pro-forma aggregated basis would represent a LUR of approximately 2.0x as at the end of September 2018.

 

·    Apollo Towers' and Pan Asia Towers' unaudited management accounts for the six months from March to September 2018, were they to be annualised and aggregated, indicate annual revenues of US$89 million and an EBITDA of US$61 million.

 

·   Going forward, the two businesses intend to increase the number of towers in their portfolios and, given the existing undrawn debt facilities available to them, coupled with cash flows from operations, there will be available capital to add a further 1,000 additional towers over the next few years. Additionally, the two businesses intend to add additional tenancies to these new towers as well as their existing towers and thereby increase the combined LUR from the current pro-forma level of 2.0x and will target to achieve or exceed an LUR 2.2x within a few years in line with the market.

 

·   The existing debt facilities will remain in place, including the US$250 million loan facility granted by the US Government's Overseas Private Investment Corporation ("OPIC") to Apollo Myanmar (of which only US$165 million has been drawn) and Apollo Towers' US$100 million mezzanine facility. In addition, based on the existing and new acquisition debt facilities, less the available cash, the net debt in the two businesses at closing is expected to be approximately US$326 million (5.4x the proforma annualised EBITDA of the two underlying businesses).

 

·   Once the share swap is complete, MIL 4's 13.6% shareholding in Apollo Towers will have been exchanged for an approximate 6.0% shareholding in Towers Holding. The ratio, for deriving the relative shareholdings in Towers Holdings, was derived on an arm's length basis between MIL 4 and TPG taking into account input from an independent valuer and is still subject to finalisation of some of the account balances. MIL's indirect interest in Towers Holdings will be approximately 4.0%.

 

·   The Directors are of the view that contributing MIL's investment in Apollo Towers into a reorganised holding under Towers Holding will enhance the future growth of the investment and accelerate a path to an ultimate liquidity event. Having the two businesses under common ownership would make a suitable candidate for a listing on one of the region's stock exchanges over the next one to two years. It is therefore advantageous to move its investment into a combined business holding company rather than remain as a minority investor in one of the businesses. The Directors expect to have similar levels of minority protection and investor rights attached to an investment in Towers Holding upon the share-swap and will be represented on the board of Directors of Towers Holding.

 

Myanmar Finance International Limited ("MFIL")

 

Background

MFIL is one of the leading microfinance operators in Myanmar and provides small loans (US$202 (MMK 315,000) on average per borrower, but it can be as high as MMK 10 million or US$6,410) to small-scale business operators in rural and semi-urban areas in Yangon and Bago.

 

MFIL was established as a microfinance joint venture in August 2014 by MIL and Myanmar Finance Company Limited ("MFC") a company controlled by U Htet Nyi, a Myanmar entrepreneur and honorary consul for Norway and Finland.  In November 2015, the Norwegian Investment Fund for Developing Countries ("Norfund"), the Norwegian development finance institution, also became a shareholder such that the shareholdings today are MIL 37.5%, MFC 37.5% and Norfund 25%, with a total paid up capital of nearly US$6 million. MIL's total investment cost to date is US$2.3 million.

 

MIL sits on the board of MFIL and works closely with the management and shareholders in growing the business, especially in assisting with securing debt finance.

 

Update

 

·   MFIL is a profitable microfinance company and has a positive impact on the lives and economic well-being of its customers.

 

·   The key driver of profitability for a microfinance business is the net interest margin. Gross loan rates are capped at 30%. The highest marginal cost is the costs of funds followed by the cost of operations and the provisions for loan losses. In addition to keeping a tight grip on loan losses, the key means of driving profitability further is through scale, lowering the cost of operations.

 

·   MFIL is looking to grow its loan book (by increasing the average size of loan, adding more qualified customers, and broadening its product offering to include microbusiness loans) in the existing areas of operation as well as expand its geographic presence. It recognises, however, that with growth and expansion of products, it must continue to invest more in systems and training.

 

·   During the six months to 30 September, MFIL continued its strong growth trajectory with its borrower base now over 70,000 borrowers and its loan book up to MMK 22.2 billion (US$14.3 million), a CAGR of 61% and 126% respectively since MIL's initial investment. 

 

·   The average loan size provided by MFIL has increased by 294% to MMK 315,000 (US$202) from MMK 80,000 at the time of the initial investment.

 

·   MFIL's net profit after tax for the six months to 30 September was US$228,000 according to the unaudited accounts.

 

·   MFIL's portfolio-at-risk ("PAR") (over 30 days) stood at 0.8% as of end September. Over the last 6 months the industry has seen a gradual but persistent rise in its PAR. Although we believe MFIL's is still below industry norms it nonetheless is a cause for concern and management has been reviewing its operations and implementing remedial actions.

 

·   The new micro-business product has been well received and as of end September, comprises 21% of the total loans portfolio.

 

·   MFIL now has nine branches, including five in Yangon and four in Bago, with plans to add 2 more branches in Bago.

 

·   MFIL has to-date drawn down about US$12 million worth of Kyat-denominated debt facilities and is continuing to source further similar debt facilities.

 

·   Certain areas in which MFIL operates are showing strains in terms of borrower over-indebtedness and excessive competition. MIL will continue to work closely with MFIL management to navigate through these challenges ahead, with the cooperation of the industry through the Myanmar Microfinance Association.

 

·   During the period, the US dollar has appreciated substantially against the Kyat, from 1,335 as of end March 2018 to 1,560 as of end September 2018. MFIL's operations are almost entirely denominated in local currency, and as such, has seen minimal impact on operations from the significant forex movements. There is however some impact on the cost of borrowings on the unhedged portion of the interest on certain US Dollar loans. The most significant impact on MFIL from the Company's perspective is on the Company's valuation of MFIL, given the functional and presentation currency of MFIL are both in Kyat, against the Company's functional and presentation currency in US Dollars.

 

Medicare International Health & Beauty ("Medicare")

 

Background

 

Medicare is the first full service chain of modern pharmacy, health and beauty franchise stores in Myanmar. MIL established the business in 2017 together with Medicare Vietnam, Vietnam's leading pharmacy, health, beauty and personal care retail groups. The business is now the largest such chain in the country and is reputed to be the largest employer of trained pharmacists in the country. In 12 months there are now 14 modern franchised stores on the streets and in the shopping centres of Yangon. Medicare provides the growing customer base at its franchised stores with a very broad range (4,500 SKUs) of international quality products at affordable prices.

 

As of 30 September, MIL has invested US$1.9 million for a 48.6% shareholding in Medicare and expects to invest more as the store rollout programme continues.

 

Update

 

·   MIL is excited at the prospects for the pharmacy, healthcare and personal care retail sector given the expected rise in consumer spending power. McKinsey has predicted that the middle and affluent classes in Myanmar are set to boom in the coming years and this segment could grow to 19 million people by 2030, tripling consumer spending from US$35 billion to US$100 billion.

 

·   Since March, the Medicare joint venture has rolled out an additional five stores and so now has 14 stores operating in Yangon with two more stores expected to open shortly.

 

·   Medicare now employs over 146 staff, many of whom were sent to Vietnam for their initial training. All the pharmacists are University educated and speak both Myanmar and English.

 

·   At this stage, Medicare is continuing to refine its product offering both in terms of the range of products that it offers as well as the locations in which it operates. It is expected that within three years, Medicare will expand the number of stores to over 60 stores, predominantly in Yangon and the other major cities.

 

·   As Medicare is still in the ramp up phase it continues to make losses and the Company's share of the losses for the period from March to September amounted to US$404k according to the unaudited accounts.

 

Strategic Update

 

In April, MIL issued a strategic update setting out its approach to addressing the challenges arising from both inside and outside the country. Since that date, the Company has made significant headway in reducing its cost base and focussing its resources on the Company's three core investments.

 

MIL has a clear strategy for its current and potential investments in Myanmar:

·   To stay focused on managing the value creation process in the existing businesses and actively managing risk minimisation / reward maximisation to produce superior long-term returns. This will also come from additional investment in the existing companies.

·   Seeking to optimise returns by determining the point and method of monetisation. 

 

In essence, MIL's strategy is to build net asset value per share as well as to generate dividends when it becomes commercially appropriate.  Over time this will provide an attractive total return to its shareholders.

 

Financial Performance

 

Profit and Loss

 

For the six months to 30 September, MIL's unaudited consolidated loss after tax was US$1.38 million.

 

This principally represents:

·    the overheads associated with running the Company's business (US$904,000);

·    our share of MFIL's profits (US$85,000);

·    our share of Medicare's losses (US$404,000);

·    transaction costs associated with investigating investments that did not come to fruition (US$49,000); and

·    the non-cash impact of the share-based payments arising from the Company's Employee Share Option Plan ("ESOP") (US$96,000).

 

It should be noted that for the six months to 30 September 2017, the cost of MIL's overheads (i.e. excluding the joint venture results, transaction costs and share based payments) was US$1.09 million. As such the level of overheads for the six months to 30 September reduced by US$190,000 over the past year. On a per share basis this has dropped from 3.22¢ to 2.41¢, a reduction of 25.3%.

 

Net asset value

 

The Directors have determined that MIL's Net Asset Value ("NAV") as at 30 September was US$35.5 million, or US$0.944 per share. This is comprised of: 

·    the investment in Apollo Towers of US$24 million, excluding the non-controlling interests, determined using Discounted Cash Flow methodology;

·    the investment in MFIL of US$4.9 million, determined using the Price to Book Value methodology;

·    the investment in Medicare of US$1.9 million, determined based on the price of recent investment; and

·    cash and other net assets of US$4.7 million.

 

In accordance with the Company's stated policy, the Company's investments have been determined by reference to the prevailing International Private Equity and Venture Capital Guidelines.

 

As at 31 March the Directors had assessed the value of the Group's investment in Apollo Towers to be US$24 million, this being determined using the discounted cash flow methodology. In assessing the value of the investment as at 30 September, the Directors have decided that it is still appropriate to maintain that methodology and, whilst some of the variables may have changed slightly during the period, it is still appropriate to maintain that value.

 

As at 31 March the Directors had assessed the value of the Group's investment in MFIL to be US$6.3 million, this being determined using the price to forward book value methodology. In assessing the value of the investment in MFIL as at 30 September, the Directors have decided that it is appropriate to maintain that methodology. On that basis, the value of the investment in MFIL as at 30 September is assessed to be US$4.9 million. The core business has continued to perform and grow well during this period however the reduction in value is due mainly to:

·    Changes in the prevailing values of comparable companies (69.2% of the changed value); and

·    The 17% appreciation of the US dollar against the Myanmar Kyat over this six month period (69.6% of the changed value).

 

The Directors have assessed the value of the Group's investment in Medicare as at 30 September to be US$1.9 million determined based on the price of recent investment. This is the same methodology as was used at 31 March.

 

During the six months to 30 September, the Company raised US$152,179 from the exercise of warrants.

 

The NAV valuation of US$35.5 million is a decrease of US$2.4 million (6.2%) from US$37.9 million over the six month period to 30 September. This is mainly attributable to:

·    the US$1.4 million reduction in the valuation of MFIL due to the Kyat depreciation and the reduction of the comparable benchmarks; and

·    overheads and transaction costs of US$960,000.

 

Unaudited Financial Statements

 

Attached to this announcement are the unaudited financial statements, which have been prepared in compliance with IFRS.

 

Commenting on the Interim Results, Craig Martin, Managing Director of Myanmar Investments International Limited, said: 

 

"In the light of a difficult market for raising new funds, the Board has taken prudent measures to ensure that the Company has enough cash to meets its operating overheads and investment needs for the next 24 months. Although the results at 30 September show improved cost control, the full impact of the reduction in overheads will only be seen by March 2019. Each of the existing investments are growing in their segments and making a positive impact to the economy and the communities in which they operate. Within the next 24 months or so we anticipate that the investment in the telecom tower sector may become ripe for a potential liquidity event, which could provide the opportunity for the first realisation and a distribution. We will seek to make further efforts to protect the downside in the portfolio, enhance options for upside and maintain a strict and stringent focus on operational overheads."

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

For further information please contact:

Craig Martin

Managing Director

Myanmar Investments International Ltd

+95 (0) 1 391 804

+95 (0) 94 0160 0501

[email protected]

Michael Dean

Finance Director

Myanmar Investments International Ltd

+95 (0) 1 391 804

+95 (0) 94 2006 4957

[email protected]

 

Nominated Adviser

Philip Secrett / Jamie Barklem / Seamus Fricker

Grant Thornton UK LLP

+44 (0) 20 7383 5100

 

Broker

William Marle / Giles Rolls

finnCap Ltd

+44 (0) 20 7220 0500

 

For more information about MIL, please visit www.myanmarinvestments.com

 



 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 



Present

Interims

Prior

Interims

Prior Full

Year


Note

1 April 2018 to 30 Sept 2018

1 April 2017 to 30 Sept 2017

1 April 2017 to 31 March 2018



Unaudited

Unaudited

Audited



US$

US$

US$






Revenue


-

-

-

Other item of income





Other income

4

317

182

530

Items of expense





Employee benefits expense

5

(644,981)

(835,839)

(1,601,194)

Depreciation expense

12

(11,023)

(3,966)

(8,789)

Other operating expenses


(396,912)

(476,780)

(1,252,959)

Finance costs

6

(7,715)

(6,999)

(15,211)

Share of results of joint venture, net of tax

10

(318,185)

(63,120)

(190,949)

Loss before income tax

7

(1,386,522)

(3,068,572)

Income tax (expense)/credit

8

(876)

374

(6,164)

Loss for the financial period


(1,379,375)

(1,386,148)

(3,074,736)






Other comprehensive income:





Items that may be reclassified subsequently to profit or loss:





Exchange (loss)/gain arising on translation of foreign operations

10

(325,335)

11,773

57,051

Fair value gain on available-for-sale financial assets

11

-

-

4,604,478

Other comprehensive income for the financial period, net of tax


(325,335)

11,773

4,661,529

Total comprehensive income for the financial period


(1,704,708)

(1,374,375)

1,586,793






Loss attributable to:





Owners of the parent


(1,366,706)

(1,384,970)

(3,049,533)

Non-controlling interests


(12,669)

(1,178)

(25,203)



(1,379,375)

(1,386,148)

(3,074,736)

Total comprehensive income attributable to:





Owners of the parent


(1,692,041)

(1,373,197)

77,170

Non-controlling interests


(12,669)

(1,178)

1,509,623



(1,704,710)

(1,374,375)

1,586,793

Loss per share (cents)





-  Basic and diluted

9

(3.64)

(4.08)

(8.57)

 

 


 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 



Present

Interims

Prior

Interims

Prior Full

Year


Notes

1 April 2018 to 30 Sept 2018

1 April 2017 to 30 Sep 2017

1 April 2017 to 31 March 2018



Unaudited

Unaudited

Audited



US$

US$

US$

ASSETS





Non-current assets





Investments in joint ventures

10

3,204,263

2,155,334

3,347,783

Available for sale financial assets

11

-

31,395,522

36,000,000

Equity instrument designated at fair value through profit or loss

11

36,000,000

-

-

Plant and equipment

12

46,881

12,217

54,751

Total non-current assets


39,251,144

33,563,073

39,402,534






Current assets





Other receivables


234,202

291,068

194,584

Cash and cash equivalents


4,654,103

8,305,290

6,282,330

Total current assets


4,888,305

8,596,358

6,476,914

TOTAL ASSETS


44,139,449

42,159,431

45,879,448






EQUITY AND LIABILITIES





Equity





Share capital

14

40,257,473

39,689,881

40,161,942

Share option reserve

15

1,316,327

1,094,090

1,220,549

Accumulated losses


(9,008,457)

(9,054,535)

(10,711,403)

Fair value reserve

16

-

-

3,069,652

Foreign exchange reserve


(537,625)

(257,569)

(212,290)

Equity attributable to owners of the parent


32,027,718

31,471,867

33,528,450

Non-controlling interests


11,891,062

10,392,929

11,903,731

Total equity


43,918,780

41,864,796

45,432,181






LIABILITIES





Current liabilities





Other payables


208,435

287,100

432,330

Income tax payable


12,234

7,535

14,937

Total current liabilities


220,669

294,635

447,267

TOTAL EQUITY AND LIABILITIES


44,139,449

42,159,431

45,879,448

NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY


32,027,718

31,471,867

33,528,450

 


UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2018

 

 


Note

Share

capital

Share option

reserve

Foreign

exchange

reserve

Fair value

reserve

Accumulated

losses

Equity

attributable

to owners of

the parent

Non-

controlling

interests

Total



US$

US$

US$

US$

US$

US$

US$

US$











At 31 March 2018


40,161,942

1,220,549

(212,290)

3,069,652

(10,711,403)

33,528,450

11,903,731

45,432,181

Effect of adopting IFRS 9


-

-

-

(3,069,652)

3,069,652

-

-

-

At 1 April 2018


40,161,942

1,220,549

(212,290)

-

(7,641,751)

33,528,450

11,903,731

45,432,181











Loss for the financial period


-

-

-

-

(1,366,706)

(1,366,706)

(12,669)

(1,379,375)











Other comprehensive income for the financial period










Exchange gain/(loss) arising on translation of foreign operations

10

-

-

(325,335)

-

-

(325,335)

-

(325,335)

Total other comprehensive income for the financial period


-

-

(325,335)

-

-

(325,335)

-

(325,335)

Total comprehensive income for the financial period


-

-

(325,335)

-

(1,366,706)

(1,692,041)

(12,669)

(1,704,710)

Contributions by and distributions to owners










Exercise of warrants

14

152,179

-

-

-

-

152,179

-

152,179

Share issue expenses

14

(56,648)

-

-

-

-

(56,648)

-

(56,648)

Share option expense

15

-

95,778

-

-

-

95,778

-

95,778

Total contributions by and distributions to owners


95,531

95,778

-

-

-

191,309

-

191,309

At 30 September 2018


40,257,473

1,316,327

(537,625)


(9,008,457)

32,027,718

11,891,062

43,918,780



 

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2018

 

 


Note

Share
capital

Share

option
reserve

Foreign

exchange

reserve

Fair value reserve

Accumulated

losses

Equity

attributable

to owners of

the parent

Non-

controlling

interests

Total



US$

US$

US$

US$

US$

US$

US$

US$











At 1 April 2017


32,656,994

866,390

(269,341)

-

(7,669,565)

25,584,478

10,394,108

35,978,586











Loss for the financial year


-

-

-

-

(3,049,533)

(3,049,533)

(25,203)

(3,074,736)











Other comprehensive income for the financial year










Exchange gain arising on translation of foreign operations

10

-

-

57,051

-

-

57,051

-

57,051

Fair value gain on available-for-sale financial assets

16

-

-

-

3,069,652

-

3,069,652

1,534,826

4,604,478

Total other comprehensive income for the financial year


-

-

57,051

3,069,652

-

3,126,703

1,534,826

4,661,529

Total comprehensive income for the financial year


-

-

57,051

3,069,652

(3,049,533)

77,170

1,509,623

1,586,793











Contributions by and distributions to owners










Issue of shares

14

7,293,725

-

-

-

-

7,293,725

-

7,293,725

Exercise of warrants

14

520,781

-

-

-

-

520,781

-

520,781

Share issue expenses

14

(309,558)

-

-

-

-

(309,558)

-

(309,558)

Share options expense

15

-

361,854

-

-

-

361,854

-

361,854

Cancellation of share options

15

-

(7,695)

-

-

7,695

-

-

-

Total contributions by and distributions to owners


7,504,948

354,159

-

-

7,695

7,866,802

-

7,866,802











At 31 March 2018


40,161,942

1,220,549

(212,290)

3,069,652

(10,711,403)

33,528,450

11,903,731

45,432,181


CONSOLIDATED STATEMENT OF CASH FLOWS

 

 



Present

Interims

Prior

Interims

Prior Full

Year



Period ended 30 Sept 2018

Period ended 30 Sept 2017

Period ended 31 March 2018



Unaudited

Unaudited

Audited


Note

US$

US$

US$






Operating activities





Loss before income tax


(1,378,499)

(1,386,522)

(3,068,572)






Adjustments for:





    Interest income

4

(317)

(182)

(530)

    Finance costs

6

7,715

6,999

15,211

    Depreciation of plant and equipment

12

11,023

3,966

8,789

    Fixed assets written off


-

-

1,207

    Share-based payment expense

15

95,778

-

361,854

    Share of results of joint ventures, net of tax

10

318,185

63,120

190,949

Operating cash flows before working capital changes


(946,115)

(1,084,919)

(2,491,092)






Changes in working capital:





    Other receivables


(39,618)

(92,564)

3,920

    Other payables


(223,895)

(345,639)

(200,408)

Cash used in operations


(1,209,628)

(1,523,122)

(2,687,580)

    Interest received


317

182

530

    Finance costs paid


(7,715)

(6,999)

(15,211)

    Income tax paid


(3,579)

(2,311)

(1,447)

Net cash flows used in operating activities


(1,220,605)

(1,532,250)

(2,703,708)






Investing activities





Investments in joint ventures

10

(500,000)

(495,000)

(895,000)

Advances to joint ventures

10

-

-

(875,000)

Purchase of plant and equipment

12

(3,153)

(3,673)

(52,237)

Net cash flows used in investing activities


(503,153)

(498,673)

(1,822,237)






Financing activities





Net proceeds from issuance of shares

14

95,531

7,032,887

7,504,948

Net cash flows generated from financing activities


95,531

7,032,887

7,504,948






Net change in cash and cash equivalents


(1,628,227)

5,001,964

2,979,003

Cash and equivalents at beginning of the period


6,246,186

3,267,183

3,267,183

Cash and equivalents at end of financial period


4,617,959

8,269,147

6,246,186

 



 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2018

 

 

1.        General corporate information

 

Myanmar Investments International Limited (the "Company") is a limited liability company incorporated and domiciled in the British Virgin Islands ("BVI"). The Company's registered office is at Jayla Place, Wickhams Cay I, Road Town, Tortola, British Virgin Islands.

 

The Company's ordinary shares and warrants are traded on the AIM market of the London Stock Exchange under the ticker symbols MIL and MILW respectively.

 

The Company has been established for the purpose of identifying and investing in, and disposing of, businesses operating in or with business exposure to Myanmar. The Company will target businesses operating in sectors that the Directors believe have strong growth potential and thereby can be expected to provide attractive yields, capital gains or both.

 

Details of the Company's investments in its joint ventures are disclosed in Note 10; its equity instrument designated at fair value through profit or loss is disclosed in Note 11 and the principal activities of the subsidiaries are disclosed in Note 13.

 

The consolidated financial statements of the Company and its subsidiaries (the "Group") for the six month period ended 30 September 2018 were approved by the Board of Directors on 26 November 2018.

 

Whilst the financial information included in this announcement has been prepared in accordance with the International Financial Reporting Standards ("IFRS"), this announcement does not in itself contain sufficient information to comply with IFRS.  The full audited financial statements of the Company for the year to 31 March 2018 can be found on the Company's website at www.myanmarinvestments.com.

 

1.1      Going concern

 

After due and careful enquiries, the Directors have a reasonable expectation that the Company has adequate financial resources to continue in operational existence for the foreseeable future. This expectation is based on a review of the Company's existing financial resources, its present and expected future commitments in terms of its overheads and running costs; and its commitments to its existing investments.

 

Accordingly, the Directors have adopted the going concern basis in preparing the consolidated financial statements.

 

2.        Summary of significant accounting policies

 

The Company's accounting policies are available in the financial statements for the year to 31 March 2018, a copy of which can be found on the Company's website at www.myanmarinvestments.com.

 

The Group has also adopted IFRS 9 and designated its available-for-sale financial assets as equity instruments carried at fair value through profit or loss in the current financial period. Accordingly, the Group has transferred the fair value reserve to retained earnings on adoption of IFRS 9.

 

3.        Significant accounting judgements and estimates

 

The Company's significant accounting judgements and estimates used in the preparation of these financial statements are available in the full audited financial statements for the year to 31 March 2018, a copy of which can be found on the Company's website at www.myanmarinvestments.com. 

4.        Other income

 


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018


US$

US$

US$





Interest income

317

182

530


317

182

530

 

5.        Employee benefits expense

 


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018


US$

US$

US$





Salaries, wages and other staff benefits

535,503

573,139

1,104,340

Bonuses

13,700

35,000

135,000

Share option expense

95,778

227,700

361,854


644,981

835,839

1,601,194

 

The employee benefits expense includes the remuneration of Directors as disclosed in Note 17.

 

6.        Finance costs

 

Finance costs represent bank charges for the financial period.

 

7.        Loss before income tax

 

In addition to the charges and credits disclosed elsewhere in the notes to the consolidated financial statements, the above includes the following charges and credits:

 


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018


US$

US$

US$





Auditor's remuneration

27,252

21,946

54,815

Consultants fees

170,141

153,897

349,911

Operating lease expenses

50,585

32,842

64,042

Professional fees

23,881

47,848

68,291

Travel and accommodation

38,663

49,850

156,875

Transaction costs

49,206

-

168,856

 

8.        Income tax

 

 


6 months to 30 September 2018


US$

Current income tax


-   current financial period

680

-   under-provision in prior financial year

196


876



 

9.        Loss per share

 

Basic loss per share is calculated by dividing the loss for the financial period attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial period.

 

The following reflects the loss and share data used in the basic and diluted loss per share computation:

 


6 months to

30 September 2018

6 months to

30 September 2017

Year ended 31 March 2018





Loss for the financial period attributable to owners of the Company (US$)

(1,366,706)

(1,384,970)

(3,049,533)





Weighted average number of ordinary shares during the financial period applicable to basic loss per share

37,538,733

33,944,443

35,570,618





Loss per share




Basic and diluted (cents)

(3.64)

(4.08)

(8.57)

 

Diluted loss per share is the same as the basic loss per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the shares conversion would be to decrease the loss per share.

 

10.      Investments in joint ventures

 


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018



US$

US$





At 1 April

2,472,783

1,711,681

1,711,681

Investments during the period

1,375,000

495,000

895,000

Share of results of joint ventures, net of tax

(318,185)

(63,120)

(190,949)

Foreign exchange adjustment

(325,335)

11,773

57,051

Balance at end of financial period

3,204,263

2,155,334

2,472,783

Advances

-

-

875,000


3,204,263

2,155,334

3,347,783

 

Medicare International Health and Beauty Pte. Ltd. and its subsidiary

 

At the end of the previous financial year, the Company's carrying amount of investment in its joint venture Medicare International Health and Beauty Pte. Ltd. ("Medicare") amounted to US$1,068,111. Included in this were advances of US$500,000 to Medicare for which 500,000 shares in Medicare were issued on 6 April 2018. During this financial period these advances are now recognised as investment in a joint venture.

 

During the financial period, Medicare issued 1,000,000 shares for a consideration of US$1,000,000 for

which the Company subscribed for 500,000 shares and paid a consideration of US$500,000.

 

In the previous financial year, the Company has also provided advances of US$100,000 to the shareholders of Medicare's joint operator which is recognised as part of cost of investment in Medicare.

 

The Company's effective equity interest in Medicare is 48.6% as at 30 September 2018.

 

Medicare is deemed to be a joint venture of the Company as the appointment of its directors and the allocation of voting rights for key business decisions require the approval of some of the other shareholders.

 

Myanmar Finance International Ltd.

 

At the end of the previous financial year, the Company's carrying amount of investment in its joint venture Myanmar Finance International Ltd. ("MFIL") amounted to US$2,279,672. Included in this were advances of US$375,000 to MFIL for which 375,000 shares in MFIL were issued on 4 April 2018. During this financial period these advances are now recognised as investment in a joint venture.

 

MFIL is a well-established provider of microfinance loans to small-scale business operators in rural and urban areas of Yangon and neighbouring Bago.

 

MFIL is deemed to be a joint venture of the Company as the appointment of its directors and the allocation of voting rights for certain key business decisions require the unanimous approval of all its shareholders.

 

The detail of the joint ventures are as follows:

 

Name of joint ventures

(Country of incorporation/place of business)

Principal

activities

Effective

equity interest

held by the Company



30 September 2018

30 September 2017



%

%





Medicare International Health and Beauty Pte. Ltd.(1)

(Singapore) ("Medicare")

Provider of beauty, health, and pharmaceutical products

48.6

45





Myanmar Finance International Limited(2)

(Myanmar) ("MFIL")

Provider of microfinance loans

37.5

37.5

 

(1) Audited by BDO LLP, Singapore

(2) Audited by JF Group Audit Firm, Yangon, Myanmar.

 

Summary


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018

Share of results of joint venture, net of tax

US$

US$

US$

MFIL

85,480

56,925

135,938

Medicare

(403,665)

(120,045)

(326,887)


(318,185)

(63,120)

(190,949)

 

11.      Equity instrument designated at fair value through profit or loss / Available-for-sale financial assets

 


6 months to 30 September 2018

6 months to 30 September 2017

Year ended 31 March 2018


US$

US$

US$





At 1 April

36,000,000

31,395,522

31,395,522

Fair value gain on available-for-sale financial assets

-

-

4,604,478

Balance at end of financial period

36,000,000

31,395,522

36,000,000

 

MIL 4 Limited ("MIL 4"), a 66.67% subsidiary of the Company, was incorporated by the Company to acquire shares in Apollo Towers Pte. Ltd. ("Apollo"), an unquoted Singapore incorporated company.

 

On 29 July 2015, MIL 4 acquired a 14.18% stake in Apollo for a purchase consideration of US$30,182,725.

 

On 24 December 2015, Apollo held a further round of fund raising in which MIL 4 only invested US$1,202,797 into Apollo, resulting in a dilution of MIL 4's equity interest to 13.48%.

 

On 16 June 2016, MIL 4 purchased a warrant for a total consideration of US$10,000, allowing MIL 4 to purchase for a nominal amount 1.56% of Apollo's total capital stock on a fully diluted basis. The warrant has not been exercised by MIL 4 as of 31 March 2018.

 

On 23 June 2017, a reorganisation took place as a result of which a new holding company was created to own all of the shares in Apollo and MIL 4's shareholding was exchanged for shares in the new holding company, Apollo Towers Holdings Limited ("Apollo Towers").

 

Following other changes in the composition of Apollo Towers share structure, as at 31 March 2018 MIL 4's shareholding was 13.45% (fully diluted).

 

As announced on 21 September 2018, MIL 4 has agreed to exchange its investment in Apollo Towers for shares in Towers (M) Holdings Pte. Ltd. ("Towers Holdings") which owns Pan Asia Majestic Eagle Limited ("Pan Asia Towers") another Myanmar independent tower company. Upon completion of this reorganisation, MIL 4's existing 13.45% shareholding in Apollo Towers will be exchanged for a shareholding of approximately 6.0% in Towers Holdings, of which approximately 4.0% will be indirectly held by MIL. This reorganisation has not yet been effected, but due to other changes in the composition of Apollo Towers' share structure during this financial period, MIL 4's investment in available-for-sale financial assets represents an effective 13.65% equity interest in the unquoted share capital of Apollo Towers.

 

Apollo Towers owns and operates a telecommunication tower business in Myanmar through its wholly-owned subsidiary, Apollo Towers Myanmar Limited.

 

The investment is denominated in United States Dollars.

 

Management engaged their internal valuation specialists to perform a valuation on the investment. The valuation of the unquoted investment is categorised into Level 3 of the fair value hierarchy. The information on the significant unobservable inputs and the inter-relationship between key unobservable inputs and fair value are as follows:

 

Financial assets

Valuation

technique used

Significant

unobservable inputs

Inter-relationship between key unobservable inputs

and fair value





Unquoted equity investments

Discounted

cash flow

-    Projected revenue growth rates (range between 12% to 16% per annum, compound annual growth rate of 13%)

Increase in projected revenue growth rates based on anchor and co-location tenancy growth rates will increase the fair value of the financial asset.







-   Discount rate (14.4%)

Increase in discount rate will decrease the fair value of the financial asset.







-   Terminal value based on EBITDA multiplier of 12.4 times (from a range of 7.2 to 19.8 times)

Increase in terminal value based on EBITDA multiplier will increase the fair value of the financial asset.

 

The Group has designated its equity investment previously classified as available-for-sale financial assets in the financial year ended 31 March 2018 to be measured as fair value through profit or loss as at 1 April 2018. The Group intends to hold these investments for long-term appreciation in value as well as strategic investment purposes.

 

12.      Plant and equipment

 


Computer equipment

Office equipment

Furniture and fittings

Total


US$

US$

US$

US$

Financial period ended 30 September 2018





Cost





Balance at 1 April 2018

9,983

1,118

51,985

63,086

Additions

-

-

3,153

3,153

Balance at 30 September 2018

9,983

1,118

55,138

66,239






Accumulated depreciation





Balance at 1 April 2018

3,472

796

4,067

8,335

Depreciation for the financial period

1,765

187

9,071

11,023

Balance at 30 September 2018

5,237

983

13,138

19,358






Carrying amount





Balance at 30 September 2018

4,746

135

42,000

46,881

 

 

Financial year ended 31 March 2018





Cost





Balance at 1 April 2017

17,410

4,895

34,733

57,038

Additions

3,931

-

48,306

52,237

Written off

(11,358)

(3,777)

(31,054)

(46,189)

Balance at 31 March 2018

9,983

1,118

51,985

63,086






Accumulated depreciation





Balance at 1 April 2017

11,753

3,012

29,763

44,528

Depreciation for the financial year

3,077

1,038

4,674

8,789

Written off

(11,358)

(3,254)

(30,370)

(44,982)

Balance at 31 March 2018

3,472

796

4,067

8,335






Carrying amount





Balance at 31 March 2018

6,511

322

47,918

54,751






 



 

13.      Investment in subsidiaries

 

Details of the investments in which the Group has a controlling interest are as follows:

Name of subsidiaries

Country of incorporation/

principal place of business

Principal activities

Proportion of

ownership interest held by the Group

Proportion of

ownership interest held by non-control interests




%

%








Myanmar Investments Limited(1)

Singapore

Investment holding company

100

-








MIL Management Pte. Ltd.(1)

Singapore

Provision of management services to the Group

100

-








MIL No. 3 Pte. Ltd.(2)

Singapore

Dormant

100

-








MIL 4 Limited (1)

British Virgin Islands

Investment holding company

66.67

33.33








MIL Tower Ventures Limited (2)

British Virgin Islands

Dormant

100

-








Held by MIL Management Pte. Ltd.







MIL Management Co., Ltd (3)

Myanmar

Provision of management services to the Group

100

-

(1)  Audited by BDO LLP, Singapore.

(2) Not required to be audited as the subsidiary is dormant since the date of its incorporation.

(3) Audited by JF Group Audit Firm, Yangon, Myanmar.

 

14.      Share capital

6 months to 30 September 2018

6 months to 30 September 2017

Year to 31 March 2018

US$

US$

US$




40,161,942

32,656,994

32,656,994

-

7,293,725

7,293,725

152,179

11,250

520,781

(56,648)

(272,088)

(309,558)

40,257,473

39,689,881

40,161,942

 

Ordinary Shares

Warrants

At the beginning of the financial period

37,432,291

15,346,507

Exercise of warrants during the financial period

202,905

(202,905)

At the end of the financial period

37,635,196

15,143,602

 

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share without restriction at meetings of the Company.

 

During the financial period, a total of 202,905 warrants were exercised at a price of US$0.75 by the parties that held them for cash consideration of US$152,179. The new ordinary shares issued during the financial period ranked pari passu in all respects with the existing ordinary shares of the Company.

 

All shares have been admitted to trading on AIM under the ticker MIL.

 

Warrants

 

As announced on 22 May 2018, the Company's shareholders and warrant holders approved the resolution to amend the terms of the Company's existing Warrants as follow:

·      the Warrants can be exercised at US$0.75 on or before 21 June 2018, in line with their original terms; and

·      in relation to any Warrants that remain outstanding at 21 June 2018:

a)     the exercise period for the Warrants will be automatically extended such that the Warrants can be exercised until 31 December 2021, but at a higher exercise price of US$0.90; and

b)    in the extended period, Warrantholders will have the option to exercise their Warrants on a cashless basis in December of each year in certain circumstances.

 

As at 30 September 2018 there are 15,143,602 Warrants in issue.

 

All Warrants have been admitted to trading on AIM under the ticker MILW.

 

15.      Share option reserve

 

Details of the Share Option Plan

 

Details of the Share Option Plan (the "Plan") are set out in the financial statements for the year to 31 March 2018, which can be found on the Company's website at www.myanmarinvestments.com.

 

During the period to 30 September 2018 no further options were created, granted or forfeited.

 

As at 30 September 2018 2,640,862 share options had been granted under the Plan.

 

16.      Fair value reserve

 

Fair value reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired.

 


6 months to 30 September 2018

6 months to 30 September 2017

Year to 31 March 2018


US$

US$

US$





Balance at start of the financial period

3,069,652

-

-

Effect of adoption of IFRS 9

(3,069,652)

-

-

Fair value gain on available-for-sale financial assets (Note 11)

-

-

4,604,478

Less: Attributable to non-controlling interest

-

-

(1,534,826)

Balance at end of financial period

-

-

3,069,652

 



 

17.      Significant related party disclosures

 

Compensation of key management personnel

 

Director remuneration for the six month period ended 30 September 2018 is as follows:

 


Directors'

fee

Short term

employee

benefits(1)

Share

option

plan

Total


US$

US$

US$

US$






Executive directors





Maung Aung Htun

-

91,954

26,782

118,736

Craig Robert Martin

-

15,000

5,652

20,652

Anthony Michael Dean

-

154,748

25,485

180,233






Independent non-executive directors





Christopher William Knight

15,125

-

5,652

20,777

Christopher David Appleton

12,333

-

5,652

17,985

Henrik Bodenstab

10,000

-

2,552

12,552


37,458

261,702

71,771

370,935






 

(1) The short term employee benefits also includes rental expenses paid for Directors' accommodation.

 

18.      Dividends

 

The Directors of the Company do not recommend any dividend in respect of the six month period ended 30 September 2018.

 

19.      Financial risk management objectives and policies

 

The Company's financial risk management objectives and policies are set out in the audited financial statements for the year to 31 March 2018, a copy of which can be found on the Company's website at www.myanmarinvestments.com.

 

20.      Subsequent events

 

There have been no material subsequent events since the period end.

 

 

Notes to Editors


Myanmar Investments International Limited (AIM: MIL) was the first Myanmar-focused investment company to be admitted to trading on the AIM market of the London Stock Exchange. MIL was established in 2013 with the intention of building long-term shareholder value by proactively investing in a diversified portfolio of Myanmar businesses that will benefit from the country's re-emergence and ongoing economic development. The Company is led by an experienced and entrepreneurial team who between them have considerable industrial, corporate and financial management experience.

 

MIL aims to identify investments with strong growth which if necessary can be "de-risked" through the introduction of experienced senior line-management, mentors and/or strategic partners sourced by MIL's management board. The Company's main focus is on opportunities that are experiencing acute supply and demand imbalances.

 

MIL provides investors with a highly disciplined and conservative investment process into one of the most promising growth opportunities of this era.

 

MIL's largest investment to-date (US$21 million investment for a 9.1% effective shareholding) is in Apollo Towers, Myanmar's second largest telecommunications towers company with approximately 1,800 towers. Apollo operates in the high growth telecommunications sector with a strong management that is growing the number of co-locations (i.e. multiple tenancies) on its portfolio of towers. The reorganisation with Pan Asia Towers is expected to produce a more efficient and profitable combined investment with greater prospects for an eventual liquidity event. In June 2016, OPIC provided a US$250 million debt facility to Apollo Towers.

 

MIL's first investment in August 2014 was into Myanmar Finance International Limited ("MFIL") which today is one of the leading microfinance companies in Myanmar. Since MIL invested, MFIL's business has expanded rapidly. The business is profitable with a sustainable expansion plan for long-term growth. In November 2015, the Norwegian Government's Norwegian Investment Fund for Developing Countries ("Norfund"), the Norwegian development finance institution, also became a 25% shareholder in MFIL.

 

MIL's third investment in May 2017 was into Medicare International Health and Beauty Pte. Ltd., ("Medicare"). This was a greenfield pharmacy, healthcare and personal care product retail franchise joint venture. The joint venture partners are: a) H&B Management Solutions Pte. Ltd., which owns Medicare Vietnam, one of the largest pharmacy, health, beauty and personal care retail groups which runs over 70 outlets in Vietnam; and b) Randy Guttery, an industry veteran in the retail sector in Asia. It is expected that Medicare will fill a vacuum in the present retail landscape and at the same time tap into the rapid growth of the middle and affluent classes in Myanmar. As of 30 September, MIL has invested US$1.9 million for a 48.6% shareholding in Medicare and expects to invest more as the store rollout programme continues.

 

Myanmar, a country of approximately 54 million people and roughly the size of France, has been isolated for much of the last 50 years. Strategically situated in one of the world's most economically dynamic regions amid the intersection of India, China and South East Asia it is a key component of China's 'One Belt One Road' strategy providing direct access to the Indian Ocean.

 

Whilst it was once one of the more prosperous countries in Southeast Asia with an abundance of natural resources (oil, natural gas, arable land, tourist attractions and a long coastline), it is now one of the least developed countries in the world. However, it has a number of competitive advantages: a population of 54 million people (it is the 26th most populous country in the world); a large workforce with a high literacy rate of 90%; 68% of the population is of working age (between 15 and 65); and 28% of the population is under 24 which is expected to provide a strengthening consumer demand. According to the IMF, Myanmar's GDP growth rate is expected to be 7.0% through to 2013.

 

Myanmar has undergone an unprecedented transformational reform process, initiated by the U Thein Sein administration in 2011. The elections in 2015 were the first democratic elections in 50 years. This remarkable change has not been without its difficulties and the situation in Rakhine state, which stems from a complex and historically charged background, remains un-remedied. The Advisory Commission on the Rakhine State crisis, led by the late former UN Secretary-General Kofi Annan, has provided an important framework which can provide the foundations for addressing the distressing situation there.

 

For more information about MIL, please visit www.myanmarinvestments.com

 


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IR BUBDBISDBGIL

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