(Alliance News) - Ncondezi Energy Ltd on Monday said its loss narrowed in 2019 thanks primarily to a much higher share-based payment charge the year before.
The power producer, which has its headquarters in the British Virgin Islands, posted a USD2.3 million pretax loss for 2019, narrowed from a USD3.5 million loss in 2018.
This narrower loss resulted from a sharply lower share-based payment charge of USD402,000 compared to the previous year's USD1.3 million charge. Moreover, other administrative expenses fell to USD1.2 million from USD1.5 million.
In October 2019, the company obtained a USD750,000 working capital facility to help strengthen its balance sheet as it continued with its Ncondezi project in Mozambique. USD250,00 of this has been drawn down with the rest available to June end, although Ncondezi does not intend to make further use of it.
Since then, on May 15, the firm raised GBP650,000 though a 21.7 million share placing. Chief Executive Hanno Pengilly and senior management team members have all deferred 30% of fees owed until November end.
As at June 1, 2020 the firm had cash reserves totalling USD900,000 which is enough to last until the fourth quarter of the year. Projections emit further funding for its commercial and industrial solar battery project, which is under construction but on hold as a result of Covid-19 restrictions.
Forecasts are also subject to the extension and restructuring of Ncondezi's USD4.5 million shareholder loan. This loan matured at the end of November 2019 and the company is evaluating its options with regard to a restructure of this loan.
At present, the firm is in a tariff submission and negotiation process with Electricidade de Mocambique.
"Negotiations with EDM are currently underway and progressing well despite the travel restrictions due to the Covid-19 outbreak. However, I am mindful that the implications of the global Covid-19 outbreak are developing rapidly and whilst we are taking all pragmatic steps to respond to this unprecedented situation, including suspending all travel and moving all workstreams that we can online the impact on our business remains uncertain," said Non-Executive Chair Michael Haworth.
"Following a request from EDM to update the transmission integration study and to conduct an independent market study the Company has submitted an updated timetable and work programme to EDM targeting the finalisation of the power tariff and other deliverables during the second half of 2020. A more detailed timetable update will be provided to investors at the appropriate time," Haworth added.
Shares in Ncondezi were flat at 3.50 pence in London at midday.
By Anna Farley; annafarley@alliancenews.com
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