Ambrian : Interim report for the six months to 30 June 2014

LONDON, 12 September 2014

AMBRIAN PLC

Interim Report for the six months to 30 June 2014

Ambrian plc ("Ambrian" or the "Company" and, together with its subsidiaries, the "Group") today announces its unaudited consolidated results for the six months ended 30 June 2014.

Financial highlights

· Profit before tax: US$1.17 million (H1 2013: US$ 1.31 million)

· Net profit per share: US 0.81 cents (H1 2013: US 0.81 cents)

· Total equity as at 30 June 2014: US$ 29.88 million (31 December 2013: US$ 28.96 million)

· Net asset value per share as at 30 June 2014: US 29.7 cents (31 December 2013: US 28.8 cents)

Commenting on the results, Charles Crick, non-executive Chairman, stated:

"The interim results reflect a solid performance in our metals trading activities for the period. Current market conditions affecting the metals in which we deal are challenging, but we remain confident in our business model and of a successful outcome for the year".

Enquiries

Notes to Editors

Ambrian is primarily active in the physical trading of base metals. It sources and supplies a variety of commodities to end users all over the world. Supported by its offices in London, Shanghai, Taiwan and a network of agents in North and South America, Asia and the Middle East. Ambrian provides producers and consumers with its marketing insight whilst emphasizing the financing and risk management aspect of its trading activities. Ambrian also holds and manages a number of equity investments. Ambrian is quoted on the Alternative Investment Market of the London Stock Exchange under the ticker symbol AMBR.

Further information on Ambrian is available on the Company's website:www.ambrian.com

Chairman's Statement

Total income for the Group for the six months ended 30 June 2014 was US$ 4.53 million (US$ 5.17 million for the six months ended 30 June 2013). Substantially all of this income (US$ 4.52 million) was derived from the Group's core metals trading business, Ambrian Metals Limited ("AML"), and compares with total income for AML for the six month period ended 30 June 2013 of US$ 5.38 million.

Total profit before tax for the Group for the six months ended 30 June 2014 amounted to US$ 1.17 million (US$ 1.31 million for the six months ended 30 June 2013). Within this, AML reported a profit before tax of US$ 2.18 million for the period compared with US$ 2.48 million for the equivalent period in 2013.

Over the period we have increased our footprint in the metals market with the opening of a new office in Taiwan which specialises in lead and zinc. As previously announced, we also completed the disposal of our head office lease in London during the period and moved into new offices in the City of London. The net ongoing cost of these offices is almost 50 per cent of that of our former offices.

Central expenses, which are principally the costs of the holding company, amounted to US$ 1.02 million compared with US$ 0.96 million for the same period in 2013.

The Group's net assets as at 30 June 2014 were US$ 29.88 million (US$ 28.96 million at 31 December 2013), representing US 29.7 cents per share, an increase of 3% on the US 28.8 cents per share at 31 December 2013.

Further details of the Group's financial performance over the period are contained in the Financial Review which accompanies this Statement.

Trading conditions in our metals markets for the first part of the period under review were relatively benign. However, conditions became more challenging for all participants towards the end of the period due to the volatility in forward spreads, with periods of backwardation where forward prices are less than the spot price. This change in conditions impacted the profitability of our trades. However, against this background, AML has achieved a good performance over the period and, whilst we expect the current market conditions to continue, we also expect AML to achieve net revenues for the second half in line with those of the first half.

The Group's future growth and prospects remain constrained by our asset base. We continue to work on means to increase this and diversify our revenue streams.

Financial Review

Overview

Total income for the Group was US$ 4.53 million for the six months ended 30 June 2014 (H1 2013: US$ 5.17 million).

Profit before tax was US$ 1.17 million, compared with a profit of US$ 1.31 million for the same period last year, derived principally from our metals trading operation in Ambrian Metals Limited ("AML").

Metals trading

AML reported a profit before tax for the period under review of US$ 2.18 million (US$ 2.48 million for H1 2013). AML achieved a 28 per cent increase in metal tonnages traded compared to the same period last year. A major contributor to this increase has been the establishment of our new business in Taiwan which specialises in lead and zinc.

Total income from turnover for AML was US$ 1,528 million for the period under review compared with US$ 1,383 million for the same period in 2013.

The period has seen average copper prices per tonne drop from $7,439 in January to $6,955 by the end of June.

Investment portfolio

The investment portfolio recorded a small profit before tax of US$ 6,281 (H1 2013: loss of US$ 208,553). This arose from a small capital distribution on one of our investments whilst we still retain the investment concerned.

The total value of the investment portfolio (excluding cash and the holding in Consolidated General Minerals plc ("CGM")) at 30 June 2014 was US$ 0.21 million. This compares with a principal investment portfolio valued at US$ 0.22 million (excluding cash and the CGM holding) at 31 December 2013. The Company continues to hold an 11.95 per cent interest in CGM, valued at US$ 2.53 million at 30 June 2014. We now have a larger holding in this investment following the open offer which was completed by CGM in January 2014 and under which we subscribed for additional shares for a total consideration of US$ 0.82 million. Construction of CGM's clinker grinding mill and cement packing plant in Beira, Mozambique, is now well underway; there have been delays in the construction programme but completion is now expected towards the end of the current year. CGM continues to own a 29.9 per cent interest in the issued share capital of the Company.

Expenses

Group administrative expenses were US$ 3.37 million for the six months to 30 June 2014 (H1 2013: US$ 3.86 million), of which US$ 1.02 million (H1 2013: US$ 0.96 million) was represented by central costs. The one-off costs of moving to our new offices in the City of London, completed in June this year, have been largely offset by the release of a dilapidations provision on our old offices. Total headcount at 30 June 2014 was 31, an increase of 7 since 30 June 2013, principally due to the establishment of our new operation in Taiwan.

Balance Sheet

Total assets were US$ 427 million at 30 June 2014 compared with US$ 318 million at 30 June 2013. The majority of the increase is due to an increase in inventory which represents metal in transit as well as metal in warehouse. A small part of the increase in total assets is due to additional fixed assets associated with the fitting out of our new offices.

The Group's cash resources totalled US$ 12.08 million at 30 June 2014 compared with US$18.58 million at 30 June 2013. AML has used some of its own cash resources in funding a limited number of short voyage shipments of metal.

Shareholders' equity was US$ 29.95 million at 30 June 2014 compared with US$ 29.03 million at 31 December 2013. Tangible net asset value per share was US 29.7 cents per share (31 December 2013, US 28.8 cents). Tangible net asset value per share is based on 100,602,104 ordinary shares outstanding at 30 June 2014 (excluding treasury shares and shares held by the Ambrian Capital Employee Benefit Trust).

Notes to the condensed consolidated interim financial statements

1. Basis of preparation

The condensed interim financial statements are for the six months ended 30 June 2014. The financial information set out in these condensed interim financial statements does not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006. The condensed interim financial statements should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2013 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRSs"). The auditor's report on those financial statements was unqualified and did not contain a statement under s.498(2) or s.498(3) of the Companies Act 2006.

The accounts for the period have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34") and the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2013, unless otherwise stated, and those envisaged for the financial statements for the year ended 31 December 2014.

These condensed interim financial statements have been reviewed by BDO LLP, but not audited.

The Group's results are not materially affected by seasonal variations.

The interim financial statements were approved by the Directors on 11 September 2014 and copies are available to the public free of charge from the Company at 62-64 Cornhill, London EC3V 3NH during normal office hours, Saturdays, Sundays and Bank Holidays excepted, for 14 days from today.

The "other comprehensive income" line in the Condensed consolidated statement of comprehensive income for the six month period to 30 June 2013 has been adjusted to include the effect of foreign exchange rates on historic earnings and provides consistency with relevant IFRS's and the accounting policies used in the annual report for 2013.

2. Segmental Analysis

The Group has two reportable segments attributable to its continuing operations and Head office:

· Physical metals: comprises Ambrian Metals Limited, a physical metals merchant.

· Investment portfolio: comprises the Group's principal investment portfolio held in Ambrian Principal Investments Limited.

· Head office: principally relates to overheads incurred in operating the public limited company and includes the remuneration of the Directors of Ambrian plc. This segment also includes the activities of Ambrian Resources AG.

Total income disclosed below includes investment and other income. The investment portfolio includes realised and unrealised gains on financial assets.

3. Cash and cash equivalents

Own cash resources included in cash at bank and in hand amounted to US$ 12,076,316 as at 30 June 2014 (30 June 2013: US$ 18,580,171 and 31 December 2013: US$ 22,074,881).

4. Earnings per share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust on 30 June 2014 of 6,259,046 (2013: 6,259,046) and Treasury shares 30 June 2014 of 4,500,058 (2013: 4,500,058).

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

The profit attributable to the owners of the company for operations used in the above calculations is that presented in the condensed consolidated statement of comprehensive income. The profit attributable to the owners of the company operations is derived from the profit from continuing operations adjusted for the profit/loss for the period attributable to the non-controlling interest.

5. Financial instruments

Financial assets and financial liabilities are classified in their entirety into only one of three levels.

The fair value hierarchy has the following levels:

· Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities

· Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

· Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

6. Non-controlling interest

The non-controlling interest disclosed in the condensed consolidated statement of comprehensive income and condensed consolidated statement of financial position represents a 20% minority interest in Ambrian Resources AG held by shareholders other than Ambrian plc.

Ambrian Resources AG, a private equity business, was established in February 2010 in partnership with a team of three former executives from Glencore who hold 20% of the share capital of the company.

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