Final Results

LONDON, 8 June 2016

AMBRIAN PLC

Preliminary Results for the year ended 31 December 2015

Ambrian plc ("Ambrian" or the "Company" and, together with its subsidiaries, the "Group") today announces its audited consolidated results for the twelve months ended 31 December 2015.

Highlights

·    Completion of business combination with Consolidated General Minerals (Schweiz) AG ("CGM") in March 2015 and commissioning of the cement plant in Mozambique

·    Loss before tax for the period of US $9.36 million (2014: profit before tax of US$ 1.10 million) primarily reflecting the challenging metals' marketing conditions

·    Net asset value at 31 December 2015 of US$ 46.23 million (31 December 2014 : US$ 29.21 million), equivalent to US¢ 21.7 per share (31 December 2014: US¢ 29.0) attributable to the purchase of the cement business in Mozambique

·    Total equity at 31 December 2015 of US$ 53.43 million (31 December 2014: US$ 29.15 million)

Commenting on the results, Robert F. Adair, Non-executive Chairman, stated:

"In 2015 we encountered challenging conditions in the commodities sector arising from macro-economic factors that translated into reduced volumes traded in our metals activities combined with a sharp drop in the premiums for most of the products we trade. We have taken steps to ensure that our service-like margin based business model going forward is resilient.

Our cement plant in Mozambique was commissioned in October 2015, leading to commercial sales of cement shortly before year-end and this resulted in a positive contribution to the Group for the year.  Our focus will be to secure market share without being disruptive in an increasing competitive environment and the uncertain economic situation currently prevailing in the country."

Enquiries

Notes to Editors

Ambrian is active is sourcing and marketing a range of industrials metals, minerals and value added products to industrial customers worldwide.  Ambrian's services add value at every stage of the supply chain; we plan procurement and logistics to streamline and simplify transportation and deliver on time commodities in the most cost efficient manner from remote locations to wherever they are needed by our customers.  We pursue selective strategic acquisitions and ventures that can demonstrate a compelling industrial and commercial justification and ultimately strengthen Ambrian's supply chain and value added activities such as the manufacturing and distribution of branded cement products in Mozambique.  Ambrian is quoted on the Alternative Investment Market of the London Stock Exchange under the ticker symbol AMBR.

Further information on the Group is available on the Company's website www.ambrian.com or the website of Cimentos da Beira Lda www.cdb.co.mz.

Chairman's and Chief Executive's statement

Overview

2015 has been one of the most testing years in the natural resources sector.  The Bloomberg Commodity Index (a broadly diversified commodity price index) fell more than 25% in 2015, the fifth straight losing year and its worst drop since 2008. This situation has been building up for some time as the world's largest commodity consumers have experienced a sharp drop in GDP growth rates including China, a significant market for Ambrian. Part of the slowdown in China relates to the authorities' attempts to shift the cornerstone of the country's growth from government spending and investment fuelled growth to growing private sector consumption. This, combined with the restructuring of Chinese state-owned enterprises, tighter credit conditions and inventory drawdowns, has negatively affected consumption, depressed prices and created a growing supply surplus in a number of commodities.

Furthermore, the strong performance of the US dollar against most currencies in 2015 contributed generally in reducing the margins of our customers in local currency terms.

Against this backdrop, commodities exporting led economies, particularly in Africa, have been severely affected.  Declining export receipts creating significant current account deficits and unsustainable international debt repayment conditions have all contributed to GDP growth forecasts being sharply revised downwards.  In Mozambique, the situation is particularly acute as most infrastructure projects, the backbone of the country's efforts to grow its fledging agricultural and manufacturing sectors, have been delayed or even cancelled due to the lack of funding and mismanagement.

Managing our businesses against this depressed macro background has been difficult but there have been some positive events. We completed the merger with CGM early in the year and the cement plant was finally commissioned in October 2015, culminating in first sales of cement by the end of the year. This modern, efficient cement plant is the latest industrial-scale production capacity that has been built in Mozambique. The combination of efficient production capacity and optimal logistics between plant and market will enable us to successfully enter the building materials industry whilst adhering to industry's best practice in terms of emissions and environmental protection.  Good quality products and service offering have resulted in demand for our brand in a highly contested market. 

The primary focus of the Directors during this period has been liquidity management, inventory control, improving reporting and control systems, and ensuring that our business model going forward is resilient.

Our marketing business certainly has an important role to play as a specialist merchant in a sector in which a number of participants have disappeared, leaving customers with fewer alternatives to transact with qualified partners. The focus in our cement business is to establish our brand and secure market share but also to utilise our expertise in developing a marketing and logistics platform in cement and associated products. We continue to review the strategy of our businesses within the group and believe that the current course is the appropriate one in the present circumstances.

Throughout this period, the support of the Board and our key stakeholders continues to be very strong as evidenced by the successful private placement completed in September and the continued support of our lenders and customers.

Completion of merger

In March 2015, Ambrian and CGM successfully completed the combination of their businesses. The Group's core business of physical trading and logistics is now supplemented by the acquisition of a custom-built cement mill operation in Beira, Mozambique. The acquisition of this 800'000 tonne annual capacity facility was justified by its long-term economic rationale and also by the opportunity to leverage our expertise to source raw materials competitively and develop an additional marketing activity.

Fund raising                                                                                                                                                                                                                   

During the year the Company completed a fundraising for £2.6 million with certain of its existing shareholders, Directors and senior management.  This funding was deemed prudent considering the difficult environment in which we have to operate.  The net proceeds after satisfying cost overruns in the construction of the cement plant provided the Group with additional headroom for future general working capital requirements.

Board changes

As a result of the acquisition transaction referred to above, we (Robert Adair and Jean-Pierre Conrad) joined the Board of the Company as Non-executive Chairman and Chief Executive Officer respectively, on 27 March 2015. Furthermore, Martin Abbott and Charles Davies joined the Board in October. Martin, the former Chief Executive of the London Metal Exchange, has invaluable experience in the commodity markets and will undoubtedly assist in the Group's future development strategy of its marketing activities whilst emphasizing risk control.  Charles, a businessman with a variety of interests including in Mozambique, will contribute his "hands on" experience in the Group's drive to develop its portfolio of operating assets.

During the year, Kevin Lyon stepped down as a Non-executive Director and Chairman of the Company. The Board is grateful to Kevin for his unwavering and professional contribution in driving the merger process to its conclusion.

Outlook

Although most market commentators have predicted an improvement in the business environment for 2016, there are little visible signs that this has yet materialised sustainably, particularly in the markets in which we operate.

In our marketing activities, we have seen a subdued start of the year as the focus remains on macroeconomic developments in China. The first quarter of 2016 saw record highs of copper imports boosted by a favourable arbitrage window, a surge in fixed asset investments and a recovery in seasonal demand.  However, questions remain on the efficacy of the government stimulus and whether a recovery in China is sustainable. Whilst copper prices have rallied, premiums remain subdued into the second quarter of 2016 indicating poor industrial demand.  As a result, we have developed additional businesses in the Middle East, India and Europe and have increased our business flows with South America and Africa.  With a view to ensuring cash flows are insulated in times of weak market fundamentals, a significant portion of our trading with long standing relationships has been contractually arranged at the beginning of the new year for most or all of 2016.  Continuous reduction in net working capital and improving our cash generation ability in our marketing activities remain our prime focus.  Finally, we have also invested in improving our finance and risk management systems and processes to support our enlarged operations, but more significantly to provide us with the necessary tools to manage risks more efficiently.

In Mozambique, we have been pleased with the technical performance of the cement plant in its first few months of operation and believe that the high quality cement produced is proving attractive both to retail customers and in the construction sector.  Cement demand is driven by both infrastructure projects and small and mid-sized private sector initiatives.  In Central Mozambique, 2015 was a particularly good year in terms of cement demand despite the first signs of problems to come as cement prices in US dollar equivalent decreased markedly in the second half, in line with the dramatic weakening of the local currency.  Since the beginning of 2016, the situation has deteriorated rapidly with the economic situation in the country remaining uncertain as direct foreign investments and foreign support to the country's budget deficits have all but dried up.  Given current macroeconomic assumptions and the lack of any visible immediate solution to the predicament the country is going through, we believe that residential construction will suffer as disposable income falls and the banking system is short of foreign currency.  The non-residential construction industry is mostly a function of infrastructure projects and incentives rolled out by the oil and gas and mining industries, which have been suspended or postponed. With increased downward pressure on margins expected and a reduction in demand growth anticipated, our focus is to secure market share without being disruptive, improve free cash flows and reduce gearing in Mozambique. We continue to place emphasis on liquidity management and generating cash to reduce gearing.

We would like to thank our colleagues for their hard work and dedication in what has been a challenging year. We look forward to a better year though no doubt not without its difficulties.

Robert F. Adair                 Jean-Pierre Conrad

Chairman                            Chief Executive Officer

Ambrian plc

Consolidated statement of comprehensive income
for the year ended 31 December 2015