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Baltic Oil Terminals Plc
01 June 2010
1st JUNE 2010
Baltic Oil Terminals PLC
("Baltic" or "the Group")
Preliminary results for year ended 31 December 2009
Baltic owns and operates oil product terminals in the strategically vital Russian port of Baltysk, Kaliningrad on the
Baltic Sea and through its subsidiaries is engaged in matched refined oil product trading.
HIGHLIGHTS
* Full year profitability achieved: pre-tax profit of £2.0 million (2008: loss before tax of £7.3 million).
* 46% reduction in administrative costs from £5.0 million in 2008 to £2.7 million in 2009
* Settlement of dispute with former director, removing major uncertainty and potential cost, and permitting the
management to concentrate on the main business and new trading and tank opportunities
* Significant progress made in developing Rosbunker terminal into a fully commercial sea port
* Establishment and successful launch of trading joint venture, which is sourcing and selling oil products mainly through
Black Sea ports
* Favourable trading conditions have continued into 2010
* TDKN leased out and will contribute revenue starting June 2010
* On track to deliver further growth during 2010
Simon Escott, Chief Executive of Baltic, commented:
"We are pleased to have reversed the first half loss and to announce that we are a profitable enterprise, despite the
difficulties and obstacles placed in our way.
We are now seeing a noticeable shift in sentiment. Baltysk is rapidly transforming itself from a military base through
which trade was tightly controlled into a fully commercial sea port enjoying the benefits of a free market. This presents a
significant opportunity for Baltic: our trading network and terminal expertise can now be applied to achieve long term
growth in shareholder value.
We are confident that 2010 will be the breakthrough year for Baltic to really establish itself as a major terminal operator
and trader of oil products. We expect the proof of this to become apparent within a short period of time."
Enquiries:
Baltic Oil Terminals plc Tel: +44 (0)20 7034 7030
Simon Escott, Chief Executive
Arbuthnot Securities Limited Tel: +44 (0)20 7012 2000
Alastair Moreton, Corporate Finance
Pelham Bell Pottinger
Archie Berens Tel: +44 (0)20 7861 3112
About Baltic Oil Terminals
Over the last four years, Baltic has built up a terminals business in the Russian ports of Baltysk and Kaliningrad. A
separate enclave located between Poland and Lithuania, Kaliningrad is Russia's only year round access to the Baltic Sea.
Other ports in the region, such as St Petersburg, are frozen for much of the winter, as are many rivers, including the
Volga River, one of the most significant commercial waterways in the world. As Russia relies on year round export of its
vast supplies of petroleum products, Kaliningrad is thus a trading centre of major strategic importance.
Baltic's key asset is a 50% interest in the Rosbunker terminal, which is located at Baltysk, right on the Baltic Sea at the
mouth of the Pregol River leading into Kaliningrad. It is the only port in the region at which all types of ship can take
on cargo, as the channel into Kaliningrad is too shallow for many vessels. Trains are able to deliver products from all
over Russia, the Former Soviet Union and Asia directly to the terminal.
Since 2007, the Rosbunker terminal has been handling consignments of oil refined products, specialising in fuel oil
(mazut), a product that requires heating and special equipment and as such is not handled by other terminals in the area.
Baltic earns tolling fees for processing the unloading of cargo from trains into storage tanks and then onto vessels.
Baltic is also able to trade in these products in its own right, taking advantage of local price differences. Since the
financial crisis in Russia, this market has become increasingly interesting to Baltic. Baltic's transportation and trading
activities utilises its extensive network of industrial partners and refineries.
In addition to Rosbunker, Baltic also has interests in several other oil product assets in Kaliningrad, which derive
revenues through processing and distribution of oil products to domestic markets.
Baltic's executive management have a wealth of experience of the oil services industry. The team has worked in the
industry for more than 40 years, constructing and operating oil rigs, terminals and other infrastructure in world wide
locations, including the Former Soviet Union.
Baltic has been listed on AIM since May 2006. It is headquartered in Kaliningrad, with a small representative office in
London.
Baltic Oil Terminals plc
Preliminary results for year ended 31 December 2009
Chairman's and Chief Executive's Statement
Introduction
2009 saw a transformation of Baltic Oil Terminals. The year began slowly, with the export markets adversely impacted by
high taxes and the overall weakness of the global economy. The Russian authorities took longer than expected to reduce
these taxes, but the fiscal regime became steadily more favourable as the year progressed. Moreover, trading activity
picked up rapidly in the second half of the year. The decision by President Obama to cancel the missile shield program in
Eastern Europe also resulted in a real and positive improvement in the relations with the Navy in Baltysk and the
authorities in Kaliningrad.
A key development, which was finalised since the year end, was the settling of the Company's dispute with former director
Mr Vladimir Gavrilov and an associated trading partner. These settlements have enabled the Company to remove several
liabilities from its balance sheet and recognise the consequent gains. In addition, areas of the business that had
previously been under Mr. Gavrilov's influence are now performing much better. Finally, the ongoing time and costs spent in
resolving this dispute have been removed, allowing management to focus entirely on the Company's operations.
By the end of the year, our key Rosbunker terminal was operating at full capacity and our trading venture, Baltic
Hydrocarbons had begun to make a significant contribution with a large increase in revenues. Together with the gains
referred to above, we were able to reverse the loss reported for the first half of the year and report a profit for the
year as a whole. Baltic thus emerged from the year leaner, stronger and much better positioned to capitalise on
significantly improved trading conditions.
Financial Results
Revenue for the year ended 31 December 2009 was £8.4 million. This does not include a significant amount of revenue from
the Rosbunker terminal earned subsequent to year end due to a backlog at the terminal, which was only able to be recognised
after the year end. As previously reported, we took the decision during 2009 to change the focus from the high volume/low
margin trades with increased exposure to low volume/high margin to back to back trades with minimal exposure. This allowed
the Company to change the revenue recognition from gross trading revenues to recognising net trading revenues. Any
comparison with the previous year's turnover is therefore difficult due to the different nature of the trading activities,
although the change in method of trading also meant a corresponding reduction in cost of sales. On this basis, the improved
performance is reflected in a 19.5% improvement in gross profit.
We continued to cut costs aggressively throughout the year, resulting in a 46% reduction in administrative expenses, from
£5.0 million to £2.7 million, of which £0.34 million were non-recurring legal costs and £0.24 million reimbursements due
from minority shareholder. With the realisation of £3.0 million gains associated with the settlement of the legal disputes
referred to above and in note 3, the Company was able to turn a pre-tax loss of £7.3 million in 2008 to a pre-tax profit of
£2.0 million in 2009. This is an extremely impressive result and is due, in no small part, to our operational and sales
team's ability to take swift advantage of the improved trading conditions in the second half of the year.
As at 31 December 2009, the Group's cash position was £232,000. We reduced our cash burn during the first half of the year,
although we did hire additional operators in October to manage the increased throughput at Rosbunker. Subsequent to the
year end, the Company placed 2.5 million shares for cash to satisfy demand from new and existing investors which raised
£562,500 to provide additional working capital. Our cash position currently stands at £420,000. We have no external bank
borrowing with the exception of a small trading loan in Baltic Top.
Review of Operations
Rosbunker
After a disappointing first six months, the Rosbunker terminal steadily grew throughput during the second half of the year
and by December was operating at full capacity. This continued into 2010, while the Volga River remained closed. Although
the river has now reopened for the summer, Baltic expects to be able to replace customers who are required to use the
terminal in the winter months and to maintain high capacity levels through supplying its own products.
Looking forward, we see the whole area of Baltysk become increasingly demilitarised, with the emphasis more on traditional
commercial sea port activities. The Rosbunker terminal is a key asset in this regard. Its long term capabilities as a
commercial terminal were underlined by the proposed joint venture with Alpcot Agro AB and its investment adviser Alpcot
Capital Management. The joint venture envisages the development of a grain terminal adjacent to Rosbunker. All financing of
the grain terminal project will be arranged by Alpcot Capital Management.
Baltic Hydrocarbons
Following the establishment of our trading joint venture at the end of 2009, at no cost to Baltic, the JV traded 170,000
tons of fuel oil in December 2009. The joint venture has continued to perform strongly in 2010. Our partners' ability to
source trades of oil products for shipment through the Black Sea, combined with BHL's execution skills, is producing a wide
range of trading opportunities.
Baltic Top
Our team at Baltic Top have performed very well and enjoyed a much better operating environment in the second half of the
year. The team at Baltic Top has been strengthened by the appointment of a new General Director. We expect revenues at
Baltic Top to steadily increase during the remainder of 2010 and that its borrowings will be phased out or repaid
completely.
TDKN
As expected, TDKN did not operate in 2009 and made no contribution. TDKN can only handle oven fuel product that does not
require heating. Since Rosbunker was operating at full capacity towards the end of 2009, it was not possible for any mixing
of products there, as this might have caused product quality issues.
However, Baltic has recently entered into an agreement to lease out TDKN to a local company that specialises in oven fuel.
This is a "bare boat" lease that will be paid on a monthly basis, commencing June 2010, at a monthly operating lease of
$72,000 per month. There are no costs to the Company and the lease is for seven years. This will result in healthy, visible
earnings from TDKN. It will be the first time TDKN has made a contribution.
Current Trading and Outlook
The favourable trading conditions that became apparent in the second half of 2009 have continued into the current year,
allowing all areas of the business to perform strongly.
Baltic has worked hard to remove all the uncertainties that had previously constrained the Company's operations. This
exercise has also enabled us to present a simpler, cleaner set of results. We are therefore very well placed to grow from
this base and, with various partners, to exploit the increasingly exciting trading opportunities that are available to us.
The trading ventures which we have established are indicative of what we can achieve and we will continue to explore other
opportunities where our network and expertise can be applied. Our objective is to become a major terminal operator and
trader of oil products and we are optimistic of achieving this.
Richard Healey
Simon Escott
Chairman
Chief Executive
28 May 2010
28 May 2010
Baltic Oil Terminals plc
Preliminary results for year ended 31 December 2009
Financial Overview
Overview
2009 witnessed significant changes within Baltic. The Company was able to satisfactorily resolve long standing financial
issues with a previous director and has further refined its focus on trading operations. These changes have allowed the
Company to recognise better trading margins, streamline operations and to align itself with strategic partners.
During 2008, Baltic Oil Terminals made the transition from a project company to an operating and trading business. Baltic
began a further refining of this transition from late 2008 to early 2009 in order to provide a sustainable operating model.
The previous model was necessary to facilitate the product flow at the Rosbunker terminal and after the effects of the
crisis in 2008/2009, the terminal generated throughput without such measures being required. The Company has directed its
energies on streamlining operations to begin to increase volumes and reduce overheads.
Results
In spite of the difficult climate and fluctuating dollar, Baltic Oil Terminals recorded a net profit of £1.8 million for
2009, compared to a loss of £5.9 million in 2008. The shift in strategy has allowed the Company to work on improving the
trading margins and to restructure operations to reduce costs. Because of the changes made to the method by which trading
operations were recorded, as announced during 2009, turnover was £8.4 million in 2009 and the related cost of sales was
£6.7 million. This apparent reduction from 2008 is actually only the reflection of the way trading is reported rather than
a decrease in volume.
The Company has achieved an increase in gross margin of £0.2 million (from £1.5 million in 2008 to £1.7 million in 2009).
The streamlining of operations has provided a significant benefit and allowed the Company to further reduce administrative
costs as identified in the Chairman and Chief Executives statement. The resolution of the disputes with the previous
director and a trading partner allowed the Company to write-back a further £1.4 million and £1.6 million, respectively, to
the profit and loss for previously accrued expenditures and liabilities. The Company also recognised a further reduction to
administrative costs of £0.24 million for expenses that have been identified as due from a minority shareholder. (see note
3).
The overall goal of the Group has been to reduce risk and focus on the success of specific trades. In turn this helped to
reduce financing charges and reliance upon letters of credit.
To further highlight the effective changes in operations, the Company's Current Ratio increased from 0.83x in 2008 to 1.28x
in 2009. This is due to the Company's successful resolution of the outstanding disputes with a previous director and a
trading partner as well as focusing on low volume/high margin trading.
The Company's cash balance, receivables and prepayments at 31 December 2009 were £0.23 million, £4.08 million and £1.53
million, respectively. This is indicative of the crisis situation in Russia as many small refineries experienced temporary
interruptions to operations. In spite of the crisis, Baltic has managed to weather the most difficult part of this period
by extending terms to counterparties in order to ensure continued business relationships and supply lines. As these
refineries appear to have begun operations again, Baltic expects to be able to convert the prepayments and receivables into
cash or product to significantly lower the prepayment and receivables balances.
Subsequent to year end, the Company had independent valuations performed by Baltyskexpertisa on the Rosbunker, TDKN,
Baltictop, Polex and Tetoil Baltic assets. These valuations were performed in order to assess the carrying value of the
assets and the related goodwill, where applicable. In all instances, the carrying value of the assets is more than
supported by the valuations.
As evidenced in the consolidated cash flow statement, continued tight cash management over the last year was crucial for
the aforementioned reasons as was Baltic's ability to resolve and extinguish £3.0 million in current liabilities during the
year. Although Baltic expects cash to become more readily available from continuing operations and the resolution of
outstanding assets, the Company continues to closely manage cash balances to save borrowing facilities for potential growth
opportunities.
On 8 December 2009, Baltic announced that it had entered into an agreement to create a joint venture with Exoy Shipping and
Trading AG (or "Exoy") in order to commence trading out of the Black Sea any other previously non exploited Russian ports.
Exoy agreed to purchase 50% of Baltic Hydrocarbons Ltd for a nominal stake.
Baltic Oil Terminals PLC
Consolidated income statement
For the year ended 31 December 2009
2009 2008
Notes £'000 £'000
Revenue 8,405 46,858
Cost of sales (6,657) (45,396)
Gross profit 1,748 1,462
Other operating gains 3 3,013 -
Exploration and evaluation costs - (3,637)
Administrative expenses (2,701) (5,009)
Operating profit/(loss) before taxation and finance items 3 2,060 (7,184)
Finance income - 66
Finance costs (34) (212)
Profit/(loss) before taxation 2,026 (7,330)
Taxation 4 (178) 1,381
Profit/(loss) for the year 1,848 (5,949)
Attributable to:
Equity shareholders of the Company 1,848 (5,957)
Minority interest - 8
1,848 (5,949)
Earnings/(loss) per share attributable to equity shareholders of the Company:
Basic and diluted 5 3.26p (10.73p)
Consolidated statement of comprehensive income
For the year ended 31 December 2009
2009 2008
£'000 £'000
Profit/(loss) after tax 1,848 (5,949)
Other comprehensive income
Exchange differences on translating foreign operations (1,441) 1,240
Other comprehensive income for the year, net of tax (1,441) 1,240
Total comprehensive income for the year attributable to equity shareholders 407 (4,717)
Total comprehensive income for the year attributable to minority interest - 8
Total comprehensive income for the year 407 (4,709)
Baltic Oil Terminals PLC
Consolidated Balance Sheet
As at 31 December 2009
2009 2008
Notes £'000 £'000
Non current assets
Intangible assets 2 3
Property, plant and equipment 14,467 16,561
Investments in associates 1,189 1,189
Goodwill 2,674 2,680
18,332 20,433
Current assets
Inventories 232 1,019
Prepayments and other current assets 1,526 2,471
Trade and other receivables 4,075 1,681
Cash and cash equivalents 232 1,106
6,065 6,277
TOTAL ASSETS 24,397 26,710
Share capital 571 558
Share premium 40,559 40,559
Other reserves - Equity - share options - 2,459
Other reserves - Equity - foreign exchange reserves (770) 671
Retained losses (22,165) (26,472)
Total equity 18,195 17,775
Non current liabilities
Deferred tax liability 4 1,462 1,407
1,462 1,407
Current liabilities
Trade and other payables 3,799 3,152
Borrowings 6 941 4,376
4,740 7,528
Total liabilities 6,202 8,935
TOTAL EQUITY AND LIABILITIES 24,397 26,710
Baltic Oil Terminals PLC
Consolidated cash flow statement
For the year ended 31 December 2009
2009 2008
Notes £'000 £'000
Cash flows from operating activities
Profit/(loss) before taxation 2,026 (7,330)
Adjustments to reconcile profit/(loss) before taxation
to net cash inflows/(ouflows) from operating activities
Non cash items 3 (3,266) -
Finance costs net 130 146
Foreign exchange gain (22) (139)
Share based payment credit - (176)
Depreciation and impairment of property, plant and equipment 645 1,204
Amortisation and impairment of intangible assets 1 3,574
Loss on disposal of property, plant and equipment 125 257
Fair value gains on derivative financial instruments - (17)
Decrease/(increase) in inventories 676 (794)
(Increase)/decrease in trade and other receivables (2,021) 1,887
Increase/(decrease) in trade and other payables 1,892 (524)
Cash inflow/(outflow) from operations 186 (1,912)
Income taxes refunded/(paid) (2) (32)
Interest paid (130) (212)
Net cash inflow/(outflow) from operating activities 54 (2,156)
Cash flows from investing activities
Interest received - 66
Purchase of property, plant and equipment (294) (792)
Proceeds from sale of property, plant and equipment - 82
Purchase of intangible assets - (71)
Purchase of joint venture interest, net of cash acquired - (2,578)
Loans repaid 126 151
Net cash outflows from investing activities (168) (3,142)
Cash flows from financing activities
Proceeds from shares issued 13 3,361
Repayment of borrowings (630) (475)
Net cash (outflows)/inflows from financing activities (617) 2,886
Decrease in cash and cash equivalents (731) (2,412)
Cash and cash equivalents at beginning of year 1,106 2,953
Effect of exchange rate on cash and cash equivalents (143) 565
Cash and cash equivalents at end of year 232 1,106
(731)
(2,412)
Cash and cash equivalents at beginning of year
1,106
2,953
Effect of exchange rate on cash and cash equivalents
(143)
565
Cash and cash equivalents at end of year
232
1,106
Baltic Oil Terminals PLC
Consolidated statement of changes in equity
For the year ended 31 December 2009
Attributable to equity shareholders of the parent
Share capital Share premium Share based payment reserve Foreign currency translation adjustment Retained losses Total Minority interests Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2008 476 33,195 2,635 (569) (20,515) 15,222 (8) 15,214
Exchange differences on translating foreign operations - - - 1,240 - 1,240 - 1,240
Loss for the year - - - - (5,957) (5,957) 8 (5,949)
Total comprehensive income
for the year - - - 1,240 (5,957) (4,717) 8 (4,709)
Shares issued during the year 82 7,364 - - - 7,446 - 7,446
Share based payment reserve - - (176) - - (176) - (176)
At 31 December 2008 and 1 January 2009 558 40,559 2,459 671 (26,472) 17,775 - 17,775
Exchange differences on translating foreign operations - - - (1,441) - (1,441) - (1,441)
Profit for the year - - - - 1,848 1,848 - 1,848
Total comprehensive income
for the year - - - (1,441) 1,848 407 - 407
Shares issued during the year 13 - - - - 13 - 13
Share based payment reserve - - (2,459) - 2,459 - - -
At 31 December 2009 571 40,559 - (770) (22,165) 18,195 - 18,195
Baltic Oil Terminals PLC
Notes to the consolidated financial statements for the year ended 31 December 2009
1. Basis of Preparation
a) The financial information for the years ended 31 December 2009 and 31 December 2008 does not constitute the
company's statutory financial statements but is extracted from the audited accounts for those years. The auditors have
reported on those accounts; their reports were unqualified and did not contain statements under Section 498 (2) or (3) of
the Companies Act 2006.
b) The audited accounts for the year ended 31 December 2008 have been delivered to the Registrar of Companies. The
Annual Report and Financial Statements for the year ended 31 December 2009 will be delivered to the Registrar of Companies
following the Annual General Meeting. Copies will be available on the Company's website www.balticpetroleum.com.
c) The Group's financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
The consolidated financial statements have been prepared on a historical cost basis.
The consolidated financial statements are presented in pounds sterling ("£") and all monetary amounts are rounded to the
nearest thousand (£'000) except when otherwise indicated.
The financial statements have been prepared on the going concern basis, which assumes that the company and its subsidiaries
will continue in operational existence for the foreseeable future. The Board has performed a review of the next 12 months
cash flows and is confident that with recently announced new trading contracts and the existing Group cash balance which on
31 December 2009 stood at £0.2 million (£1.1 million in 2008) is sufficient to meet liabilities as they fall due. The
directors are not aware of any material uncertainties that might cast significant doubt on the Group's ability to continue
as a going concern.
2. Segment information
The Group considers that its activities be split into two key areas, terminal and trading activities. An operating segment
is a component of the Group engaged in terminal or trading activities that is regularly reviewed by the Chief Operating
Decision Maker for the purposes of making economic decisions. In addition, Head Office costs are disclosed separately and
added to the sector result in arriving at an operating profit.
The terminals operating segment provides terminal handling and storage services on behalf of clients wishing to export oil
products and is based in the Kaliningrad Oblast, the trading operating segment matches buyers and sellers of hydrocarbon
product and takes a margin on the product sold. The Exploration and Production division which holds exploration licences in
Kurgan, Western Siberia, ceased in activity during the year ended 31 December 2008.
The following table analyses the sector revenue and result and reconciles the sector result to the profit/(loss) after
tax.
(a) Operating segments - year ended 31 December 2009
Terminals Trading Total
£'000 £'000 £'000
Revenue 4,082 4,323 8,405
Results
Segment result 1,022 2,688 3,710
Unallocated expenses (1,650)
Group operating profit 2,060
Finance costs - net (34)
Group profit before taxation 2,026
Tax charge (178)
Profit for the year 1,848
Assets and liabilities
Segment assets 14,123 4,365 18,488
Unallocated assets 5,909
Total assets 24,397
Segment liabilities (2,817) (2,787) (5,604)
Unallocated liabilities (598)
Total liabilities (6,202)
Total assets includes
Property, plant and equipment 14,436 - 14,436
Unallocated property, plant and equipment 31
Goodwill 2,674 - 2,674
The following significant non-cash items are included in the segment results:
§ Terminals - depreciation of £580,000 and other operating gains of £926,000 .
§ Trading - other operating gains of £2,087,000
(b) Operating segments - year ended 31 December 2008
Exploration and production Terminals Trading Total
£'000 £'000 £'000 £'000
Revenue - 3,128 43,560 46,688
Unallocated revenue 170
Total revenue 46,858
Results
Segment result (3,583) (1,355) (505) (5,443)
Unallocated expenses (1,741)
Group operating loss (7,184)
Finance costs - net (146)
Group loss before taxation (7,330)
Tax credit 1,381
Share of loss of associate -
Loss for the year (5,949)
Assets and liabilities
Segment assets - 16,747 3,310 20,057
Unallocated assets 6,653
Total assets 26,710
Segment liabilities - (4,696) (3,929) (8,625)
Unallocated liabilities (310)
Total liabilities (8,935)
Total assets includes
Property, plant and equipment - 16,470 - 16,470
Unallocated property, plant and equipment 91
Goodwill - 2,680 - 2,680
The following significant non-cash items are included in the segment results:
§ Exploration and production - impairment loss and amortisation of £3,574,000.
§ Terminals - depreciation of £1,129,000.
§ Unallocated expenses - share based payment credit of £176,000.
(c) Geographical disclosures - year ended 31 December 2009
UK Russian Federation Total
£'000 £'000 £'000
Revenue 3,662 4,743 8,405
Results
Profit for the year 498 1,562 2,060
Other segment information
Segment assets 5,093 19,304 24,397
Total assets
Property, plant and equipment 31 14,436 14,467
Intangible fixed assets - 2,676 2,676
(d) Geographical disclosures - year ended 31 December 2008
UK Russian Federation Total
£'000 £'000 £'000
Revenue 8,153 38,705 46,858
Results
Loss for the year (2,037) (5,147) (7,184)
Other segment information
Segment assets 2,801 23,909 26,710
Total assets
Property, plant and equipment 91 16,470 16,561
Intangible fixed assets - 2,683 2,683
3. Operating profit/(loss)
The operating profit/(loss) is stated after charging/(crediting):
2009 2008
£'000 £'000
Depreciation and amortisation 646 1,205
Foreign currency gain (22) (139)
Amount due from minority shareholder (239) -
Impairment of exploration and license assets - 3,447
Impairment of goodwill - 126
Other operating gains (3,013) -
In prior years, the Company incurred and recognised expenses in relation to the commissioning of TDKN. Baltic paid these
expenses on its own behalf and on behalf of the minority shareholder. To date, the minority shareholder has not reimbursed
the Company for its share of the expenses. As a result, Baltic has recognised the minority shareholders portion of the
expenses up to the value of current outstanding obligations due to the minority shareholder from TDKN. The remaining
difference is recorded and fully provided for in the accounts. The net effect of the £0.239m adjustment is recorded to
administrative expenses to offset the original expenses.
During the latter half of 2009, the Company was able to reach a resolution on long outstanding disputes with a trading
partner and a previous director of the Company. These resolutions resulted in the conclusion of various outstanding
liabilities and assets across the Group. These outstanding balances were the result of trading operations between the
parties between 2008 and 2009. As a result of the agreement, the Company has now concluded the outstanding disputes and
closed the outstanding balances in the financial statements. This has resulted in the Company recognising gains of £1.4m
and £1.6m with the previous director and trading partner, respectively.
4. Taxation
(a) Tax on profit/(loss) on ordinary activities
Current income tax (charged)/credited in the income statement:
2009 2008
£'000 £'000
UK corporation tax - -
Russian corporation tax (1) (32)
Deferred tax (177) 1,413
Tax (charge)/credit reported in the income statement (178) 1,381
(b) Deferred tax
The deferred tax included in the balance sheet is as follows:
2009 2008
£'000 £'000
Balance brought forward 1,407 1,538
Foreign exchange adjustment (122) 227
Acquisition fair value adjustment - 1,055
Income statement charge/(credit) 177 (1,413)
Deferred tax liability 1,462 1,407
The Group has tax losses which arose in the UK of £11,775,000 (2008: £12,487,000) and in Russia of £6,462,000 (2008:
£6,247,000) that are available for offset against future taxable profits of those companies in which the losses arose.
Deferred tax assets have not been recognised in respect of these losses due to uncertainty over the timing of when such
amounts will be realised.
5. Earnings per share (EPS)
Basic EPS is calculated by dividing the net loss for the year attributable to ordinary equity shareholders of the Company
by the weighted average number of ordinary shares of 1 pence each outstanding during the year. There is no dilutive effect
of the share options in either year, there are no share options outstanding as at 31 December 2009 (year ended 31 December
2008: no dilutive effect due to the loss recorded for the year).
The following reflects the income and adjusted share data used in the EPS computation.
2009 2008
£'000 £'000
Net profit/(loss) attributable to equity shareholders of the company 1,848 (5,949)
2009 2008
Number Number
Number of shares
Weighted average number of ordinary shares of 1 pence each for EPS calculation 56,613,409 55,463,196
Earnings/(loss) per share - basic and diluted 3.26p (10.73p)
6. Borrowings
2009 2008
£'000 £'000
Bank borrowings 239 493
Loans from related parties 654 1,908
Letters of credit - 824
Other loans 48 1,151
941 4,376
Bank borrowings are at fixed interest rates so there is no exposure to interest rate changes. Bank borrowings are
unsecured.
There is no difference between the carrying value and fair value of financial liabilities.
The ageing analysis of borrowings is as follows:
2009 2008
£'000 £'000
Amounts due in 0 - 3 months 122 2,637
Amounts due in 3 - 6 months 419 1,739
Amounts due in 6 - 12 months 400 -
941 4,376
7. Dividend
The Directors do not recommend the payment of a dividend.
8. Circulation to Shareholders
Copies of the Company's Annual Report will be sent to shareholders shortly, with further copies available from the Company
Secretary, Baltic Oil Terminals PLC, International House, 1-6 Yarmouth Place, London W1J 7BU and on the Company's website
www.balticpetroleum.com.
This information is provided by RNS
The company news service from the London Stock Exchange