8 Jun 2020 07:00
8 June 2020
BiON plc
("BiON" or "the Company")
Trading Update and Publication of Results
BiON (AIM: BION), one of Malaysia's most established environmental engineering and renewable energy solutions providers, gives the following update on trading for the year ended 31 December 2019 and the impact of COVID-19 on current trading and operations.
2019 Trading
As noted in the Company's interim results announcement on 30 September 2019, during the year BiON recommenced pursuing engineering, procurement, construction and commissioning ("EPCC") opportunities and successfully secured a number of contracts before year end. This included working on biogas power plants owned by Megagreen Energy Sdn Bhd as well as some small infrastructure projects with other customers. In addition, the Company continued to generate revenue from the sale of power at the Company's fully-owned biogas power plant at Malpom, Penang.
As a result, the Company expects to report growth in revenue for the twelve months ended 31 December 2019 to approximately MYR24.0m (2018: MYR1.92m) and profit before tax of approximately MYR0.71m (2018: MYR13.65m loss). Net assets and cash as at 31 December 2019 were MYR51.73m and MYR0.08m respectively.
Notes: The figures stated above are derived from the Company's management accounts and are unaudited and therefore subject to change in the final audited results when published as referred to below. Due to the Company changing its financial year end during 2018, the comparative period is for the 15 months ended 31 December 2018.
COVID-19 Update
The Company entered 2020 with positive momentum as it continued to deliver on its EPCC contracts as well as continuing the upgrading works at its Kahang biogas power plant in Johor to enable it resume power sales. However, following the outbreak of COVID-19, on 18 March 2020 the Government of Malaysia implemented a Movement Control Order ("MCO"), which is the lockdown and restriction of movement for all civilians and non-essential businesses, including a ban on interstate travel. This required the Company to cease its construction activities at the various project sites as supplies, materials and equipment were not transportable or obtainable. The Company's employees worked from home where possible and the Company implemented measures to ensure the safety of employees who were required to attend the office from time-to-time in compliance with government guidelines regarding standard operating procedures ("SOPs").
As of 1 May 2020, the Government of Malaysia transitioned the MCO to a Controlled Movement Control Order ("CMCO"), which has allowed certain business sectors and companies to resume operations within continued strict parameters regarding social distancing, such as requiring companies to have their employees work on a rotational basis or from home. Civilian movement remains very restricted, including children and the elderly being refrained from outdoor activities or entering business premises.
The Company has commenced resuming its operations in a phased manner and in adherence with the Government of Malaysia's latest working SOPs. Interstate border control has yet to be lifted and so, while employees are permitted to travel to the project sites with a Letter of Authority from the Company, the movement of resources, materials and equipment to sites or offices is progressing slowly. The current phase of the CMCO is scheduled to end by 9 June 2020, however this is subject to further advice by and instructions from the Government of Malaysia. As a result, the Company anticipates some continued disruption to its business.
The Company has implemented a number of mitigation measures to ensure it maintains a healthy cash flow during this period of reduced trading. This includes participating in the Social Security Organisation's Wage Subsidy Programme, which was introduced under the Government of Malaysia's Prihatin Rakyat Economic Stimulus package to help businesses affected by the COVID-19 outbreak with paying employee wages. The Company is working with its creditors or suppliers to revise and renegotiate payment terms, in a manner acceptable to all parties, either through postponing payments, devising a staggered payment plan or revising the existing payment plan. The Company is also engaging with its customers to address any issues regarding payment procedures.
While it remains too early to predict the full impact of COVID-19 on the Company's results for 2020, based on the actions described above and that BiON is starting to resume activity, the Board is confident that the Company will have sufficient cash to remain viable during this period. The Company will update the market as appropriate in due course.
Publication of Results
As a result of the MCO and CMCO, the Company's audit for the 2019 financial results has been delayed as the Company's finance team and its auditors have been unable to enter the office premises. While work has commenced remotely, this only provides limited access to the Company's accounting systems and supporting documents. Consequently, the Company applied for a three-month extension for the publication of its annual report and accounts for 2019, and it has received approval from AIM and the Jersey Financial Services Commission. As a result, the Company will publish its annual report and audited results for 2019 by 30 September 2020.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the EU Market Abuse Regulation (596/2014).
Enquiries:
BiON plc
Syed Nazim bin Syed Faisal, Executive Director +603 2095 0024
Beaumont Cornish (Nominated Adviser)
Roland Cornish, Felicity Geidt +44 20 7628 3396
Optiva Securities (Broker)
Vishal Balasingham +44 20 3137 1903
Luther Pendragon (Financial PR Adviser)
Claire Norbury +44 20 7618 9100