29 September 2011

Biofutures International plc

("Biofutures" or the "Group")

Half Yearly Results for the six months ended 30 June 2011

The Board of Biofutures announces the unaudited interim results of the Company for the period from 1 January 2011 to 30 June 2011. A copy of these financial statements will also be available on the Company's website www.biofuturesplc.com.

For further information, please contact:

CHAIRMAN'S STATEMENT 

I am pleased to present our unaudited interim results for the six months ended 30 June 2011.

This period marked the commencement of refining operations at the Zurex refinery after its commissioning at the end of 2010.  The Group generated maiden revenues of £38,000 from toll processing of 1,888 metric tonnes of crude palm oil.  The loss for the six month period ended 30 June 2011 was £245,000, compared to £445,000 for the same period in 2010.

Cash as at 30 June 2011 was £5,450,000 compared to £5,183,000 at 30 June 2010. During the half-year, the Group drew down £1,338,000 of new term loans under a facility with Bank Kerjasama Rakyat Malaysia Bhd (2010 - £1,725,000).

As announced to the market earlier in my statement in the 2010 Annual Report, we have taken a very cautious approach in our refining business given the backdrop of market forces. The balance is crucial as any mismatch on the timing between supply, production and sales can lead to unnecessary holding costs and cash flow interruptions due to price fluctuations in the intervening period. Over the period, Zurex processed 2,562 metric tonnes of crude palm oil, the majority of which was for tolling operations designed to minimize risks and to maximize cash flow.  674 tonnes of our own crude palm oil was processed which has resulted in an increase in inventories to £447,000.  We are continuing to expand our volume in tolling operations to optimize use of the refinery.

With the completion of the planned infrastructure by POIC of the connecting pipe line to the jetty from our refinery site expected to be completed by the end of the October 2011, Zurex will be in a position to enter a new phase with further options made available.  The completion of the connecting pipeline is crucial to Zurex as it serves two major purposes. First, it will allow Zurex to ship in crude palm oil in sufficient quantities at more favourable prices from around East Malaysia and Indonesia as compared to the local purchases of crude palm oil supplied by tankers. Second, it will allow Zurex to tap a greater marketplace as compared to the local market in the immediate vicinity of the refinery. Direct sales to overseas markets will provide certainty both in terms of sales and pricing and allow forward planning on the purchase of feedstock, production schedules and use of the refinery.

Zurex has been informed by its legal advisers that the Arbitrator for the arbitration proceedings against JJ Lurgi will only deliver his decision sometime in January 2012 after further clarification was made by the Arbitrator in August 2011 on some issues raised in the arbitration proceedings. The Directors under legal advice are of the opinion that the Company will be successful and accordingly no liability and asset has been recognized.

David Yeoh

Executive Chairman

28 September 2011

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2011

 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 
30 JUNE 2011

1          Basis of preparation

These unaudited interim condensed consolidated financial statements (the "interim financial statements") are for the six months ended 30 June 2011. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010. 

These interim financial statements have been prepared in accordance with the accounting policies as set out on pages 15 to 18 in the Group's annual financial statements for the year ended 31 December 2010. 

The financial information contained in these interim financial statements comprises the Group statement of financial position as at 30 June 2011, 30 June 2010 and 31 December 2010 and the Group statement of comprehensive income, the Group statement of cash flows and the Group statement of changes in equity for the half-years ended 30 June 2011 and 30 June 2010 and the year ended 31 December 2010.

The financial information set out on pages 3 to 6 is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The comparative numbers for the year ended 31 December 2010 have been extracted from the audited accounts which have been filed at Companies House and which carried an unqualified audit report with no statement under section 498 (2), (3) or (4) of the Companies Act 2006.

 2         Segmental Information

            Primary reporting format - business segment:

  3        Income tax expense

There is no tax charge due to the losses arising in the period.

  4        Net exchange differences on translating foreign operations

Income and expenditure for overseas subsidiaries are included based upon monthly average exchange rates to give a fair approximation to the transaction rate.  Balance sheet items are included at the exchange rate at the balance sheet date.  All other differences are included within the translation reserve, including related goodwill and intangible assets, which are translated at the rate ruling at the balance sheet date (30 June 2011 £1 = RM 4.88, at 30 June 2010 £1= RM 4.90 and at 31 December 2010 £1 = RM 4.74).

   5       Loss per share

The impact of options and warrants on the loss per share is anti-dilutive and therefore no diluted earnings per share figure have been included.

6          Cash used in operations

 7         Dividend

The directors do not recommend the payment of a dividend.

 8         Carrying value of plant

In the matter of Zurex versus J.J Lurgi, the Arbitrator will be delivering his decision in January of 2012.

No provision has been made for the balance of the contract costs and no contingent asset recognized relating to any potential refund in respect of the contract costs paid. The outcome of these arbitration proceedings could potentially impact on the carrying value of the assets. 

 9         Availability of half yearly report

The Company's half yearly report will be available in soft copy from the investors section of the Company's website (www.biofuturesplc.com).