LONDON (Alliance News) - Obtala Resources PLC Friday said its pretax profit jumped in 2013 as a massive adjustment in the fair value of its forestry assets in Mozambique offset a drop in revenues at the company's overall forestry business and losses due to the disposal of its previous interest in Bushveld Minerals Ltd.
The agri-processing, farming and timber company said its pretax profit saw a more than five-fold increase to GBP74.8 million from GBP14.4 million the previous year.
The company said it benefited from a substantial GBP107.4 million adjustment in the fair value of its forestry assets in Mozambique, after an independent valuation used a discounted cash flow model for the site.
The valuation indicated a net present value before tax and consideration of non-controlling interests ranging between USD141 million and USD308 million for the Mozambican forestry concessions based on a 10-year cash flow forecast with a capital expenditure requirement of USD15 million over the period.
However, Obtala said its revenues fell 67% to GBP304,000 from GBP929,000 as sales from its forestry business dropped, while it was also hit by higher impairment charges and a GBP21.2 million charge based on losses due to the company's disposal of interest in AIM-listed Bushveld Minerals during the period.
The company also noted a GBP34.4 million tax charge which reduced its net profit figure to GBP40.4 million.
2014 will see Obtala increase production of a range of products and will see the launch of its "African Home Stores" concept during the third quarter, which should provide entry into the African consumables market.
"We will sell our own products locally, and provide a centre for local residents to buy a range of necessities imported from around the world. Our initial plans are to rollout three African Home Stores in Lesotho, Tanzania and Mozambique by end of the first half 2015," Executive Chairman Francesco Scolaro said in a statement.
Obtala shares were down 3.8% to 10.82 pence on Friday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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