ZOL.L Regulatory News (ZOL)

29 Sep 2006 09:46

Crosby Capital Partners Inc29 September 2006 CROSBY CAPITAL PARTNERS London, 29 September 2006 - Crosby Capital Partners Inc. ("Crosby") notes therevised financial forecasts announced today by IB Daiwa Corporation ("IB Daiwa"- Jasdaq 3587). Crosby owns, through two wholly owned subsidiaries, 102,425,000shares (24.02%) of the issued share capital of JASDAQ listed IB Daiwa. Theholdings have remained unchanged from the 2006 Interim Report of Crosby and aredesignated as 'financial assets at fair value through profit or loss' and are,therefore, marked to market with gains and losses being recognised in the incomestatement. Robert Owen, Crosby's Chairman, commented: "IB Daiwa has built a solid auditedreserve base and a diversified portfolio of attractive oil and gas explorationprospects. Much remains to be done to exploit the full potential of Darcy andLodore, and, I am confident that, with the continued support of Crosby, theexperienced and skilled management team in the IB Daiwa Group is more thancapable of extracting the value inherent in these businesses." Simon Fry, Crosby's CEO, added: "Today's revisions to IB Daiwa's financialforecasts reflect delays rather than any reduction in either the value orpotential of the asset base. In fact, there has been a substantial improvementin IB Daiwa's asset base since the original financial forecasts were made.Crosby remains committed to assisting IB Daiwa in the continued transformationof its business, and in the development and exploitation of its reserves and itsportfolio of exploration prospects." A summary of the Jasdaq announcement can be found below. The complete version isavailable on IB Daiwa's website: www.ibdaiwa.co.jp.___________________________________________________________________________ SUMMARY OF THE IB DAWIA ANNOUNCEMENT Revisions to Forecasts for Consolidated Financials Interim Period - 1 April 2006 - 30 September 2006 JPY millions Sales Revenue Ordinary Profit Net ProfitPrevious Forecast 2,158 -320 1,171Revised Forecast 1,751 -822 -890 Full Year - 1 April 2006 - 31 March 2007 Sales Revenue Ordinary Profit Net ProfitPrevious Forecast 7,078 1,857 2,484Revised Forecast 3,922 -1,216 169 Reasons for Revisions to Forecast for Consolidated Financials Interim: 1 April 2006 - 30 September 2006 (1) Sales Revenue The fall in sales revenue between the previous and revised forecasts is due toboth the gas production volume and the gas price being revised down. (i) Production volume The fall in gas production volume is attributable to: (1) technical problemsencountered at existing platforms and wells, (2) delays in production from newplatforms and wells mainly caused by the weather and industry-wide shortages ofmanpower and equipment, and (3) the change in the operator at Main Pass and EastCameron requiring revisions to work schedules. At the time the Company announced its 1st quarter results on 23rd August, it wasof the view that it could maintain the previous forecast, based on the plan toincrease the daily production volume both from new production at the No. 2platform at East Cameron, which was installed in July, and from the existingplatforms and wells. However, delays in the production from No. 2 platform atEast Cameron have caused the Company to conclude that it is difficult tomaintain the previous forecast for the production volume. (ii) Price When the Company announced its 1st quarter results, the gas price had beenhedged and thus there were no material influence made by the low gas price inthe first quarter. In August, the gas price increased in the gas spot andforward markets caused by the heat wave in the US. However, the gas price hasrecently declined to such a level that caused the Company to conclude that it isdifficult to maintain the previous forecast. (2) Ordinary Profit / Loss The main factors in the variance in the operating loss are the fall in salesrevenue outlined above, the increase in oil & gas business operation expenses,and the increase in professional fees and other various SG&A expenses at bothparent and subsidiary levels. (3) Net Profit / Loss In the previous forecast, the net profit included approx. JPY1.5 billion ofextraordinary gain from selling shares in a subsidiary company, or part of theworking interests of their exploration and production assets. This gain has beendelayed until the second half of the year. Full-Year: 1 April 2006 - 31 March 2007 (1) Sales Revenue The fall in sales revenue between the previous and revised forecasts isattributable to: (1) lower than originally projected production volume due tothe delays and technical problems encountered in the first half of the year, (2)the complications experienced at the Millrich #1 well at the Big Mouth Bayouprospect delaying production from the well, and (3) the recent decline in thegas price. The table below shows the previous and revised sales revenue forecasts for theCompany's oil and gas business by segment: Segment Sales revenue * Sales volume Price Crude oil Previous forecast JPY 690 mil 95.43 MBLs US$ 65.74 / Bbbl Revised forecast JPY 576 mil 83.66 MBLs US$ 59.90 / Bbbl Gas Previous forecast JPY 5,259 mil 5,764.9 MMCF US$ 8.294 / MCF Revised forecast JPY 2,153 mil 2,555.6 MMCF US$ 7.350 / MCF Total Previous forecast JPY 5,949 mil - - Revised forecast JPY 2,729 mil - - * Exchange rate used: 110.0 yen/US$ for the previous forecast; 114.6 yen/US$ forthe revised forecast. (2) Ordinary Profit / Loss The main factors in the variance in the operating loss are the fall in salesrevenue outlined above and the increase in professional fees and other variousSG&A expenses in the first half of the fiscal year as described above. (3) Net Profit / Loss The decline in the consolidated net profit is based on the revised forecast forthe ordinary loss, decreased income taxes, and the inclusion of theextraordinary gain from selling shares in a subsidiary company, or part of theworking interests of their exploration and production assets, delayed from thefirst half of the year. The forecasts for the unconsolidated financials for both the Interim Period andthe Full Year have not been revised.___________________________________________________________________________ Crosby Capital Partners Inc. Crosby Capital Partners Inc. ("Crosby") is a leading independent deal-focusedAsia-oriented merchant banking and asset management group. Crosby is quoted onthe London Stock Exchange's AIM market (CSB). For further information on Crosby please contact: Stephen Fletcher, Chief Operating Officer on 44 207 590 2803. This information is provided by RNS The company news service from the London Stock Exchange