Global Energy Development (GED)

 

Global Energy turnover falls

Latin America-focused Global Energy Development recorded turnover of $14.9m for the six months to the end of June - 25% down on last time.

Sales of net oil volumes decreased to 172,597 bbls compared to 215,804 bbls during the first half of 2013 and average realised sales prices decreased to $86.13 per bbl during the period as compared to $91.16 per bbl from the same prior period last year. Based on the overall decrease in revenue, gross profit was $5.2 million, a decrease of 28% over the first half of 2013 ($7.2 million).

Cost of sales decreased by 22% from $12.5 million to $9.7 million during the Period due to a lesser reliance on diesel fuels and reductions in both rental equipment and operational personnel costs. The Group experienced higher depreciation expense due to an increase in the depreciation rates calculated for each operating segment or cash-generating unit (the Llanos Basin, the Bolivar Contract area and the Bocachico Contract area). Administrative costs (including share-based expense and exchange rate costs) increased slightly to $2.2 million during the Period against $2.0 million during the first half of 2013.

Profit from continuing operations before taxation decreased to $1.9 million during the Period compared to $4.1 million in the first half of 2013, mainly due to the decrease in revenues discussed above. During the Period, the Group transferred its Bolivar and Bocachico Contracts from its CEDCO Colombia branch to new wholly-owned Colombian branches resulting in an increase in its current income tax expense, due to the taxable profit generated from the transfer.

However in contrast, deferred tax expense was reduced due to the revaluation of tax balances resulting from this transfer of assets and liabilities at the Colombian branch level.

In addition, during the first half of 2013, a significant increase in the exchange rate of the Colombian Peso to the US dollar caused an overall increase in the Group's net deferred tax liabilities which required the Group to recognise a non-cash deferred tax expense of $2.4 million during the prior year period.

Overall, the Group's net tax expense decreased to $656,000 (H1 2013: $2.9 million), resulting in the same level of net profit $1.2 million reported for the Period as in the first half of 2013.

At 8:03am: (LON:GED) Global Energy Development PLC share price was -1p at 44p