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Crown Energy AB
Quarterly Report • May 29, 2024
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Quarterly Report
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THREE MONTH REPORT JANUARY - MARCH
FIRST QUARTER - JANUARY-MARCH 2024
- Turnover amounted to SEK 8,485 thousand (10,685).
- Operating profit was SEK -18,969 thousand (-18,511).
- Net financial items amounted to SEK -31,334 thousand (13.718).
- Unrealised changes in the value of properties amounted to SEK -163 thousand (-7,990).
- Profit before tax was SEK -50,467 (-12,753) thousand, and profit after tax amounted to SEK -40,244 (-14,024) thousand, corresponding to SEK -0.08 (-0.03) per share.
EVENTS DURING THE REPORTING PERIOD JANUARY-MARCH 2024
On 6 February, 2024 Crown Energy AB announced that it had entered a strategic partnership with KAYA Climate Solutions GmbH ("KAYA"), a project developer in nature-based solutions for climate change mitigation in Sub-Saharan Africa. By partnering with KAYA, Crown Energy gains access to cutting-edge expertise and a team with a proven track record of developing and managing projects with a carbon credit focus. This strategic alliance unlocks a new avenue for Crown Energy.
EVENTS AFTER THE PERIODS END
- During the second quarter of 2024 Crown Energy received a further 8 million USD in accordance with agreement relating to the sale of the oil & gas assets of the company, signed in October 2021. Crown Energy has now received a total of 115 million USD.
- On 30 April 2024 Crown Energy announced a strategic agreement with Proger S.p.A ("Proger") and the founders (earlier shareholders) of AccYouRate. In short, the agreement includes acquisitions of shares from Crown Energy in SmarTee by Proger and the original founders at the same valuation as when Crown Energy acquired the shares in February of 2023. But there is also conversion of loans, put and call options. For more information see the section Sustainable Investments as well as Note 11
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
| GROUP | Q | Q1 | |
|---|---|---|---|
| Amounts in kSEK | 2024 | 2024 2023 | |
| Total revenues | 8,485 | 10,745 | 42,473 |
| Operating costs | -27,454 | -29,256 | -152,699 |
| Operating income/loss | -18,969 | -18,511 | -110,226 |
| Net financial income/expense | -31,334 | 13,718 | 157,162 |
| Net profit/loss for the period, after tax | -40,244 | -14,054 | 1,180 |
| Earnings per share | -0.08 | -0.03 | 0.02 |
| Equity per share, SEK | 1.05 | 2.09 | 1.55 |
| Change in cash and cash equivalents | 1,141 | -73,477 | -794,140 |
CEO STATEMENT
DEAR SHAREHOLDERS AND INVESTORS,
An intense and promising quarter for Crown Energy
The first quarter 2024 has been intense in the new Crown. A number of projects are developing in several areas.
The major investment within The Crown Energy Group is AccYouRate, which was made in 2023. Several interesting customer pilot projects are now ongoing within AccYouRate. One is with the largest independent engineering consulting company of Italy: Proger. Also, Proger will be a minority shareholder in AccYouRate following the rearrangement of financing for AccYouRate that we announced on April 30. Furhermore, the CEO of Proger, Marco Lombardi has assumed the role of CEO of AccYouRate. The involvement of Proger and Marco Lombardi will really contribute to strong growth, made possible thanks to their knowledge and professionalism as well as their contacts in several different industries.
Another customer contract was also signed with GCF (Generale Costruzioni Ferroviarie), a major company in railway construction. This project is aimed to use the smart T-shirt for workers.
A totally different story, but also very interesting, is a newly signed contract with the Albanian Olympic committee. In this project the Smart T-shirt is being tested and used on 200 children in the age range 8-18. They are monitored while playing basketball and volleyball, during schooltime and at home, with the aim of finding out the best training methods for them. This project will be completed and evaluated in June 2024. All of these pilot projects are performed at the expense of the customer and are quite large at 150-200 test persons for each project.
Through discussions we have several larger cooperations ongoing both in the lone worker area, as well as in the Health and Medical sector.
Having a professional management with incentive structures contributes to us all having the same goal: to grow with profitability.
The second investment area was entered into during the first quarter 2024: the strategic partnership with KAYA Climate Solutions GmbH. KAYA is one of the few experienced project developers in nature-based solutions for climate change mitigation in Sub-Saharan Africa. Our collaboration aims to be a starting point for large impact in climate change mitigation and adaptation through landscape restoration and nature conservation which will be financed by the voluntary carbon market and similar mechanisms.
We are now about to start our first mutual project in Angola, a forestry management and planting pilot project in the Angolan State of Melange which is very exciting. As Crown's knowledge, experience and assets in Angola are well developed since many years, Angola and Luanda will become even more important to us going forward. The business area Asset Development and Management based there is also doing very well, with full occupancy and a lot of interest from serious foreign clients and potential investors.
In the oil and gas business, the one remaining asset is a passive holding of a Licence which following the signing of a sale and purchase agreement will lead to a divestment. After the reporting period during the second quarter, we have received another 8 million USD payment according to the agreed schedule.
Yoav Ben-Eli CEO, Crown Energy
Sustainable investment area
ACCYOURATE GROUP – THE FIRST INVESTMENT
The business area of Sustainable Investments was formed during 2022 as part of the ongoing transformation of Crown Energy's business direction. Crown Energy is dedicated to the move towards a new and more socially and environmentally responsible business area contributing to a positive change for our societies. Our focus is on the medical technology industry and on improving our green footprint as these markets offer great potential while both enhancing and saving lives. Alongside evaluating new sustainable investment opportunities, Crown Energy is working energetically in line with our goal of completing a responsible and for our shareholders financially beneficial exit from the oil and gas industry.
In early February 2023 Crown Energy entered into a Share Purchase Agreement for the acquisition of an 85 per cent equity stake in SmarTee S.a.r.l., a Luxembourg company which is the parent holding company of the Italian registered AccYouRate Group.
THE TRANSACTION
The total purchase price of EUR 163 million is payable by Crown Energy to the seller in a total of nine instalments. The first instalment of EUR 75 million was paid upon signing of the SPA and at which time the 85 per cent equity stake in SmarTee was transferred to Crown Energy. The rest of the payments are to be made in instalments of EUR 9 million six months after each instalment date with a final payment of EUR 25 million.
Crown Energy announced in the Q4 report of 2023 that the total consideration of 163 million Euro in relation to the acquisition of SmarTee (100 % owner of the AccYouRate Group) was to be paid to the seller in a total of nine instalments. The first instalment of 75 million Euro was paid in connection with the acquisition whereby Crown became the 85 % owner of SmarTee. The remaining instalments of 9 million each are to be made in six-month intervals with a final payment of 25 million Euro. The latest instalment has been postponed as the payment schedule is subject to further commercial discussions with the seller. Crown Energy also announced that there was a contingent liability of 10 million Euro to the former shareholders of AccYouRate Italy, that was due at the end of 2023, which is secured over the shares in AccYouRate SPA. As the payment schedule relating to the acquisition, with regards to the mutual ambitions and goals for the group, is subject to further commercial discussions part of the instalments are still outstanding. On 30 April 2024 Crown Energy announced a strategic agreement with Proger. and the founders (earlier shareholders) of AccYouRate, who SmarTee, as a part of a contingent consideration, owes 10 million EUR to, that the parties earlier agreed would be settled first at end of September 2024. In accordance with the agreement Proger and the founders acquire shares in SmarTee from Crown Energy, corresponding to 0.65 % of the shares in SmarTee for a consideration amounting to 1,250,000 EUR. Crown Energy at the same time commits to provide up 1,750,000 EUR in loan financing to AccYouRate. After providing such financing the total amount lent by Crown Energy will amount to 8,470,000 EUR, including earlier loans provided. As a part of the agreement these loans will be converted into shares in SmarTee. At the same time the 10,000,000 EUR owed to Proger and the original founders will be converted into shares in SmarTee. After the transactions, that are subject to the approval of the Annual General Meeting of shareholders in Crown Energy, Crown Energy will hold 81 % of the shares in SmarTee, Proger and the original founders 5.5 % and the seller 13.5 %. All transactions and subsequent issuance of shares under this agreement will be made at the same valuation as when Crown Energy acquired 85 % of SmarTee. Crown Energy has also entered into an option agreement with Proger and the founders in relation to their shareholding in SmarTee. So, after 14 months following signing, Proger and the founders has the right to request Crown Energy to purchase the shares for 13 million Euro. At the same time Crown Energy also has the right, after 14 months of signing, to request Proger and the founders to sell their shares to Crown Energy, but at a price of 15 million Euro. For more information on transaction, see note 11.
ABOUT ACCYOURATE
Crown Energy acquired 85% of Smart Tee SARL in Luxembourg, the full owner of AccYouRate Limited which in turn is the full owner of AccYouRate Group S.p.a. It is an international group with operations in L'Aquila, Bologna and Israel. The business currently has about 20 employees and its activities include the development of a new ecosystem with research and development, small scale production of 'smart' wearable garments and software development.
AccYouRate has patented the ability to thinly print a conductive polymer on fabrics combined with a proprietary, coin size, central unit. The first product is a t-shirt like top that measures 7 indicators - ECG, pulse, temperature, respiration and respiration depth. It also has a built-in GPS as well as an accelerometer.
The product, in combination with a large medical database and a decision-making layer (algorithms), serves as the basis for the ecosystem. AccYouRate's unique ecosystem facilitates measurements of posture, location, and vital signs to be made continuously, accurately and for extended periods. The data, which we view as having potentially significant long-term value, in an anonymised form, is then uploaded to a large medical database.
These large-scale measurements allow the development of sophisticated software algorithms for various market-specific uses, and most importantly, enable the early detection of critical health events, thereby proactively mitigating potentially adverse outcomes.
This growing data base is to be held at our technology hub at AccYouRate AI where the anonymised medical data will be analysed and processed to generate further value for the company.
Asset Development and Management business area
THE PROPERTY MARKET AND CURRENCY IN ANGOLA
Angola's real estate market continues to be firmly linked to the oil and gas sector. Less companies are signing long-term commitments than before, so now landlords and tenants enter into more flexible contracts with shorter lease terms or with more adaptable solutions to meet immediate
The Angolan currency, Kwanza, has depreciated by 2,9 against the Swedish krona during the first quarter of 2024. Exchange rate fluctuations in recent quarters have had an impact on the Company's reported revenues in SEK. The chart illustrates the development of revenues since the first quarter of 2022.
SUMMARY OF PROPERTY-RELATED KEY RATIOS
For definitions of key ratios, see pages 28-29.
| AMOUNTS IN KSEK | 31/03/2024 | 31/12/2023 |
|---|---|---|
| Revenue backlog | 29,958 | 28,487 |
| Rent backlog | 24,868 | 23,487 |
| Contracted annual rental and service revenues, SEK thousand | 34,147 | 30,441 |
| Contracted annual rental revenues, SEK thousand | 27,689 | 24,496 |
| Area occupancy rate (excl. C-View), % | 90% | 84% |
| Economic occupancy rate (excl. C-view), % | 81% | 82% |
| WAULT rent and service, months | 10.8 | 11.5 |
| Market value of portfolio (excl. C-View), SEK thousand | 210,120 | 196,713 |
| Market value C-View, SEK thousand | 254,188 | 240,540 |
Properties
19 917 Leasable area, sqm
30 MSEK
Revenue backlog
10,8 months
Area occupancy rate
COMMENTS ON PROPERTY-RELATED KEY RATIOS
Changes in the first quarter of 2024
Below is a list of changes in revenue and rent backlog for the first quarter of 2024.
| AMOUNTS IN KSEK | REVENUE BACKLOG | RENT BACKLOG |
|---|---|---|
| Backlog per31 Dec 2023 | 28,487 | 23,487 |
| Changes during the quarter 2024 | ||
| Contracted revenue | -8,142 | -6,569 |
| New/extended contracts | 8,016 | 6,641 |
| Contracts terminated early | -18 | -15 |
| Exchanges rates differences | 1,616 | 1,325 |
| Backlog per 31 Mar 2024 | 29,958 | 24,869 |
Contracted rental value and service value of extended and new contracts amount to SEK 6,569 thousand and SEK 1,376 thousand, totalling SEK 8,016 thousand. The effect on Revenue Backlog of contracts that were terminated prematurely is -18. In total 106 lease agreements remain. Due to exchange rate effects, the Group's revenue backlog and rent backlog have Increased with SEK 1,616 thousand and SEK 1,325 thousand respectively. The distribution between USD and AOA contracts amounts to 17 and 83 per cent, respectively.
The Company's WAULT has changed since the fourth quarter 2023 from 11.5, to 10.8 months. The area occupancy rate has increased since the fourth quarter from 84 per cent to 90 percent. Offices in Soho building are mainly occupied by YBE Immobiliaria. The economic occupancy rate has risen since he start of the year 2024 at 83 (82) per cent.
Crown Energy's view is that the Luanda property market is improving and that it is a more balanced market than it was before in general, however recent kwanza depreciation has put pressure on current rents and prices and they will likely adjust to the previous levels.
Energy Business Area
MARKET
During the year of 2023 and into 2024, we have been seeing an oil price remaining in a range between the USD \$75's to \$85's and a firm gas price. The Energy market, in 2024, still remains strong.
Crown is carrying on within its move away from the Energy Industry to greener and more socially responsible projects.
75–85 USD/bbl
Oil price in first quarter2024
Financial overview
KEY EVENTS DURING THE REPORTING PERIOD JANGUARY TO MARCH 2024
KAYA CLIMATE SOLUTIONS – A STRATEGIC PARTNERSHIP
On 6 February 2024 Crown Energy AB announced that it had entered a strategic partnership with KAYA Climate Solutions GmbH ("KAYA"), a project developer in nature-based solutions for climate change mitigation in Sub-Saharan Africa.
By partnering with KAYA, Crown Energy gains access to cutting-edge expertise and a team with a proven track record of developing and managing projects with a carbon credit focus. This strategic alliance unlocks a new avenue for Crown Energy.
The vision for the long-term collaboration is to contribute to the fight against climate change and foster sustainable development in Sub-Saharan Africa while capitalizing on the economic opportunities presented by this rapidly expanding market. The aim is to partner with and empower local communities by creating a sustainable economic growth which will be coupled with co-benefits such as job creation, improved food security, supporting sustainable agricultural practices and promoting long-term food production and improved healthcare services.
KAYA will provide project development and management while Crown will support through its network and infrastructure in Angola as well as with short-term financing. The financing will amount to maximum 400 million AOA (Angolan kwanza), corresponding to approximately 400,000 Euros, with 100 million AOA already advanced at the time of publishing this report. The financing will guarantee Crown an option to convert the debt into 10% of the shares in KAYA.
After the pilot phase in 2024, subject to a successful reciprocal due diligence, Crown will have the opportunity to become a larger shareholder in KAYA by another option agreement during an exclusivity period. Crown Energy will also enjoy the right of first offer for any other investments KAYA may require, further solidifying the commitment to the collaborative effort and its long-term success.
ABOUT KAYA
KAYA Climate Solutions GmbH was founded in January 2023 by Chaitanya Sure, an engineer and nature scientist by education and a renowned environmentalist with successful stints in private and development sectors spanning across thirteen years. KAYA today has 6 employees and 6 consultants, all experts in forestry, conservation, and project management, whereof 8 are in Germany, 4 in Angola.
KAYA specializes in implementing impactful forestry and grassland projects in sub–Saharan Africa. These projects not only generate valuable carbon credits for the voluntary market but also deliver a wide range of co-benefits for local communities.
COMMENTS ON FINANCIAL PERFORMANCE
Operating profit/loss
During the reporting period, net sales decreased by 23 percent compared to the last year. Please see more information about this in the section Asset Development and Management. Property costs for the reporting period amounted to SEK -3,628 thousand (-4,416). Other external costs totalled SEK -6,437 thousand (-16,768). Associated mainly with additional internal and external consulting costs in Angola, the acquisitions of the new AccYouRate Group, and write-down of capitalised expenses from previous period.
The employee benefit expenses have decreased to SEK -4,088 (-6,927).
Net financial items
Net financial items during the reporting period amounted to SEK -31,334 thousand (13,718). The net exchange rate effects amount to SEK -20,231 thousand (12,523). The currency effects are a result of re-valuations of both internal and external monetary balances in foreign currency.
Changes in value
Changes in value of investment properties during the reporting period amount to SEK -163 thousand (-7,990) and refers to unrealised changes in investment property.
The result for the period includes SEK -2,164 thousand attributable to minority shareholders in SmarTee S.a.r.l.
Other comprehensive income
Other comprehensive income includes translation differences of SEK 91,881 thousand (-6,341) which arose because of revaluation of the subsidiaries' assets and liabilities from local currencies to SEK.
The total comprehensive income for the period includes SEK 10,988 thousand attributable to minority shareholders in SmarTee S.a.r.l.
COMMENTS ON CONSOLIDATED FINANCIAL POSITION
Assets
The carrying amount of investment properties totalled SEK 210,120 thousand. Net change since yearend 2023 totalled SEK 13,407 thousand. The change in value is mainly attributable to adjustment of the Manhattan and Ocean Corner property as well as the exchange rate differences in SEK against USD. See note 3 for a summary of the period's changes.
The Report includes a purchase price allocation analysis (PPA). Until the PPA was finalised the net value of the acquired assets were attributed to Goodwill amounting to SEK 2,094,550 thousand at the time of the acquisition. For more information see Note 10. The overvalue consist of the discounted purchase price of the asset amounting EUR 150,965 thousand corresponding to SEK 1,709,236 thousand and a non-controlling interest in the company amounting to SEK 301,635 thousand. In the final PPA, the value of the acquired assets has been allocated to goodwill, which at the time of the acquisition amounted to Euros 122,654 thousand (SEK 1,388,716 thousand), Intangible assets of SEK 87,583 thousand. Intangible assets included developed software, fair value of Intellectual Property, licences, patents. Some assets such as costumer relationships, cooperation agreements, brands were identified, but were included in Goodwill. Also, EUR -25,241 thousand (- 301,635), was attributed as a Deferred Tax Liability. The useful life of Intellectual property is considered to be 20 years.
The C-View property is classified as a property asset held for sale. C-View is reported at a fair value amounting to AOA 19,853 million, which corresponds to the agreed purchase price, discounted over the payment period of three years. This corresponds to a value of SEK 254,188 thousand as per 31 March 2024. The increase of SEK 13,648 thousand since year-end 2023 is attributable to FX rate effects. For more information about the C-View sale and the accounting of the transaction, see note 7.
Financial assets reported at amortised costs refers mainly to investments in Angolan government bonds indexed against the Inflation totalling SEK 68,213 thousand as of 31 March 2024. The decrease is mainly due to FX effects, and investments in short term deposits.
Prepaid costs and deferred income amount to SEK 101,564 thousand and have decreased by SEK 3,053 thousand since year-end 2023, which is mainly prepaid transactional costs for sales of C-View and E&E Assets.
Liabilities
Contract liabilities relate normally only to revenues, invoiced in advance. In December 2019, the Group started to receive payments from the Angolan finance ministry (MINFIN), for the C-View sale, which are included in the contract liabilities. These payments are accounted as contract liabilities, until the economic control is transferred to MINFIN. The contract liability related to the C-View sale amounts as per 31 March 2024 to SEK -222,245 thousand. As of end March 2024, the buyer has not assumed control of the building due to changes in the purpose of further usage of the property. For more information about the C-View sale and the accounting, see note 7.
Accrued Expenses and deferred income includes a payment for exploration assets amounting to SEK 981,672 thousand.
The deferred payment for the acquisition of AccYouRate Group is divided between Other Short-term liabilities, which amount to SEK 272,715 thousand and Other non-current liability amounting to SEK 555,062 thousand. For more information about the Acquisition of AccYouRate Group and the accounting, see note 8.
COMMENTS ON CASH FLOWS
The cash flow for the period amounts to SEK -5 890 (-779,775) thousand.
Parent company
The Parent Company's revenue for January-March 2024 amounted to SEK 731 thousand (433). Revenue related to re-invoicing of costs and management fees to subsidiaries.
Other external expenses of SEK -1,919 thousand (-2,869). The expenses are mainly related to preparation to the change of listing and external consultants' costs.
There were 5 persons (4) employed by the Parent Company at the end of the period.
Consolidated statements of comprehensive income
| AMOUNTS IN KSEK | Q | FULL-YEAR | ||
|---|---|---|---|---|
| NOTE | 2024 | 2023 | 2023 | |
| Revenue, of which | 8,172 | 10,685 | 37,107 | |
| Rental revenues | 2 | 6,726 | 8,935 | 30,289 |
| Service revenues | 2 | 1,446 | 1,750 | 6,818 |
| Other operating revenue | 2 | 312 | 59 | 5,366 |
| Property-related costs | -3,628 | -4,416 | -19,930 | |
| Materials and other services | -208 | - | -5,150 | |
| Other external expenses | -6,437 | -16,768 | -58,361 | |
| Employee benefits expense | -4,088 | -6,927 | -18,674 | |
| Depreciation and write-downs | -13,064 | -495 | -49,168 | |
| Impairment of exploration assets | 4 | - | - | - |
| Other operating expenses | -29 | -650 | -1,415 | |
| EBIT | -18,969 | -18,511 | -110,226 | |
| Financial income | 1 | 12,115 | 23,213 | 237,852 |
| Financial expenses | -43,449 | -9,465 | -80,690 | |
| Net financial items | -31,334 | 13,748 | 157,162 | |
| Profit/loss before tax and changes in value | -50,304 | -4,763 | 46,936 | |
| Unrealised changes in value of property | 3 | -163 | -7,990 | -46,546 |
| Profit/loss before tax | -50,467 | -12,753 | 390 | |
| Income tax | 6 | _ | 102 | |
| Deferred tax | 10,217 | -1,271 | 689 | |
| Profit/loss for the period | -40,244 | -14,024 | 1,180 | |
| Of which attributable to owners of the parent company | -38,080 | -15,228 | 11,751 | |
| Of which attributable to holdings without controlling ownership | -2,164 | 1,174 | -10,572 | |
| Average number of basic and diluted shares, thousands | 477,315 | 477,315 | 477,315 | |
| Basic and diluted earnings per share, SEK | -0.08 | -0.03 | 0.02 |
Comprehensive income
| AMOUNTS IN KSEK | Q1 | FULL-YEAR | ||
|---|---|---|---|---|
| NOTE | 2024 | 2023 | 2023 | |
| Profit/loss for the period | -40,244 | -14,054 | 1,180 | |
| Other comprehensive income: | ||||
| Currency Translation Differences | 91,881 | -6,341 | -284,517 | |
| Total items that can be reclassified to profit or loss | 91,881 | -6,341 | -284,517 | |
| Other comprehensive income, net of tax | 91,881 | -6,341 | -284,517 | |
| Total comprehensive income for the year | 51,637 | -20,396 | -283,337 | |
| Owners of the parent company | 40,649 | -26,150 | -267,234 | |
| Non-controlling interests | 10,988 | 5,754 | -16,104 |
Condensed consolidated statements of financial position
| AMOUNTS IN KSEK | NOTE | 2024-03-31 | 2023-03-31 | 2023-12-31 |
|---|---|---|---|---|
| Assets | ||||
| Fixed assets | ||||
| Investment property | 3 | 210,120 | 216,910 | 196,713 |
| Equipment, tools, fixtures, and fittings | 7,162 | 12,250 | 6,273 | |
| Intangible fixed assets | 1,025,923 | 70,192 | 999,683 | |
| Exploration and evaluation assets | 4 | 50,752 | 50,752 | 50,752 |
| Goodwill | 8 | 1,413,591 | 2,085,998 | 1,360,972 |
| Financial assets valued at amortised cost | 68,213 | 115,746 | 70,062 | |
| Deferred tax assets | 2,785 | 2,730 | 2,673 | |
| Total non-current assets | 2,778,545 | 2,554,578 | 2,687,126 | |
| Current assets | ||||
| Inventory | 6,325 | - | 6,743 | |
| Accounts receivable | 11,942 | 14,243 | 11,070 | |
| Other receivables | 5 | 64,384 | 63,373 | 54,117 |
| Prepaid expenses and accrued income | 101,564 | 124,366 | 104,621 | |
| Cash and cash equivalents | 122,568 | 142,130 | 121,428 | |
| Total current assets | 306,783 | 344,113 | 297,979 | |
| Property assets held for sale | 254,188 | 406,993 | 240,540 | |
| Total assets | 3,339,516 | 3,305,684 | 3,225,645 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 14,033 | 14,033 | 14,033 | |
| Other contributed capital | 859,523 | 859,523 | 859,523 | |
| Reserves | -703,087 | -516,142 | -781,773 | |
| Accumulated profit or loss earnings | 366,637 | 354,885 | 354,884 | |
| Profit/loss for the period | -38,080 | -12,881 | 11,667 | |
| Total equity attributable to owners of the parent company | 499,026 | 699,418 | 458,335 | |
| Non-controlling interests | 294,228 | 299,224 | 283,281 | |
| Total equity | 793,253 | 998,642 | 741,616 | |
| Liabilities | ||||
| Non-current liabilities | ||||
| Other financial liability | 562,708 | 722,734 | 641,920 | |
| Other provisions | - | - | - | |
| Current lease liability | 4,451 | 1,749 | 4,451 | |
| Deferred tax liabilities | 341,931 | 105,674 | 338,169 | |
| Total non-current liabilities | 909,090 | 830,157 | 984,541 | |
| Current liabilities | ||||
| Trade payables | 10,070 | 9,110 | 11,329 | |
| Contract liabilities | 234,410 | 364,224 | 213,595 | |
| Income tax liability | 4,367 | 6,142 | 6,015 | |
| 394,575 | 279,414 | 278,126 | ||
| Other financial liabilities() | ||||
| Accruals and deferred income | 992,852 | 817,366 | 989,369 | |
| Lease liabilities Total current liabilities |
899 1,637,173 |
629 1,476,885 |
1,056 1,499,488 |
Condensed consolidated statement of changes in equity
| AMOUNTS IN KSEK | NOTE | 31/03/2024 | 31/03/2023 | 2023-12-31 |
|---|---|---|---|---|
| Opening equity | 741,616 | 725,569 | 725,569 | |
| Profit/loss for the period | -40,244 | -14,054 | 1,180 | |
| Other comprehensive income, net of tax | 91,881 | -6,341 | -286,767 | |
| Comprehensive income for the period | 51,637 | -20,395 | -285,588 | |
| Acquisition of group companies | - | 293,469 | 301,635 | |
| Closing equity | 793,253 | 998,643 | 741,616 | |
| Attributable to: | ||||
| Shareholders of the parent company | 499,025 | 699,418 | 456,213 | |
| Non-controlling interests | 294,228 | 299,225 | 285,403 |
Condensed consolidated statements of cash flows
| Q1 | FULL-YEAR | |||
|---|---|---|---|---|
| Amounts in kSEK | NOTE | 2024 | 2023 | 2023 |
| Cash flow from operating activities before changees in working ca | pital | 462 | 34,444 | -66,002 |
| Changes in working capital | -8,242 | 26,560 | 96,222 | |
| Cash flow from operating activities | -7,780 | 61,004 | 30,220 | |
| Investments in investment property | -5,466 | - | -18,202 | |
| Capital expenditures on exploration and evalutation assets | - | -0 | - | |
| #N/A | -1,892 | -44 | -2,311 | |
| Investments in financial assets (government bonds) | 9,891 | 4,556 | 4,106 | |
| Prepaid payments, sale of exploration and evaluation assets | - | - | 170,841 | |
| Acquisition of group companies | - | -844,467 | -947,652 | |
| Cash flow from (-used in) investing activities | 3, 4 | 2,533 | -839,956 | -793,218 |
| Cash flow from financing activities | -644 | -824 | -166 | |
| Cash flow for (-used in) the period | -5,890 | -779,775 | -763,164 | |
| Cash and cash equivalents at the beginning of the period | 121,428 | 915,568 | 915,568 | |
| Cash flow for (-used in) the period | -5,890 | -779,775 | -763,164 | |
| Exchange difference in cash and cash equivalents | 7,031 | 6,338 | -30,976 | |
| Cash and cash equivalents at the end of the period | 122,568 | 142,131 | 121,428 |
Consolidated key ratios
For definitions of key ratios, see pages 28-29.
Quarterly summary – group
| AMOUNT IN SEK THOUSAND UNLESS | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 |
|---|---|---|---|---|---|---|---|---|
| OTHERWISE STATED | 4 | . | 4 | , | 4 | * | ~ | |
| EARNINGS | ||||||||
| Rental and service revenues | 8,172 | 8,915 | 7,327 | 10,179 | 10,685 | 10,334 | 13,882 | 7,840 |
| Other operating revenue | 312 | -550 | 5,727 | 65 | 59 | 60 | 479 | 58 |
| Operating profit/loss | -18,969 | -50,754 | 12,216 | -12,266 | -18,511 | -7,467 | -1,487 | -184,341 |
| Net profit/loss for the period, after tax | -40,244 | -54,653 | -22,114 | 55,785 | -1,054 | 59,949 | 66,442 | -107,213 |
| PROPERTY-RELATED KEY RATIOS | ||||||||
| Rental revenue | 6,726 | 7,099 | -2,585 | 8,420 | 8,935 | 7,725 | 13,076 | 5,087 |
| Service revenues | 1,446 | 1,816 | -267 | 1,759 | 1,750 | 2,609 | 805 | 2,753 |
| Property-related costs | -3,628 | -7,440 | 3,394 | -5,734 | -4,416 | -4,866 | -5,251 | -6,356 |
| Net operating income | 4,544 | 1,475 | 542 | 4,445 | 6,270 | 5,468 | 8,631 | 1,484 |
| Operating surplus, property portfolio, % | 56% | 17% | 24% | 44% | 59% | 53% | 62% | 19% |
| Revenue backlog | 29,958 | 28,487 | -33,018 | 33,018 | 24,601 | 27,149 | 39,420 | 33,018 |
| Rent backlog | 24,869 | 23,487 | -26,694 | 26,694 | 20,208 | 23,437 | 31,261 | 26,694 |
| Contracted annual rental and service revenues, SEK thousand | 34,147 | 30,441 | -9,737 | 38,761 | 38,594 | 37,534 | 45,989 | 38,761 |
| Contracted annual rental revenues, SEK thousand | 27,689 | 24,496 | -8,553 | 30,797 | 30,720 | 29,841 | 36,603 | 30,797 |
| FINANCIAL KEY RATIOS | ||||||||
| EBITDA | -12,774 | -12,774 | 21,462 | -29,323 | -18,016 | -7,201 | -1,216 | -6,972 |
| EBITDA margin, % | neg. | neg. | neg. | neg. | neg. | neg. | neg. | neg. |
| RATIOS PER SHARE | ||||||||
| Basic and diluted shares outstanding, thousand | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 |
| Average number of shares, thousands | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 |
| Diluted earnings per share, SEK | -0.08 | -0.11 | 0.05 | 0.12 | -0.03 | 0.13 | 0.14 | -0.22 |
| EMPLOYEES | ||||||||
| Average number of employees | 29 | 29 | 26 | 26 | 17 | 17 | 17 | 17 |
Periodic summary - group
| AMOUNTS IN KSEK | JAN-N | //AR | FULL-YEAR | ||
|---|---|---|---|---|---|
| UNLESS OTHERWISE STATED | 2024 | 2023 | 2023 | 2022 | 2021 |
| Profit/loss for the period | |||||
| Rental and service revenues | 8,172 | 10,685 | 37,107 | 39,369 | 20,764 |
| Other operating revenue | 312 | 59 | 5,366 | 1,809 | 6 |
| Operating income/loss | -18,969 | -18,511 | -110,226 | -201,099 | -27,089 |
| Operating profit/loss before items affecting comparability | -18,969 | -18,511 | -110,226 | -201,099 | -27,089 |
| Net profit/loss for the period, after tax | -40,244 | -14,054 | 1,180 | -7,989 | -30,592 |
| PROPERTY-RELATED KEY RATIOS | |||||
| Rental revenue | 6,726 | 8,935 | 30,289 | 31,167 | 14,041 |
| Service revenues | 1,446 | 1,750 | 6,818 | 8,201 | 6,723 |
| Property-related costs | -3,628 | -4,416 | -19,930 | -22,465 | -10,982 |
| Net operating income | 4,544 | 6,270 | 17,177 | 16,903 | 9,782 |
| Operating surplus, property portfolio, % | 0.56 | 0.59 | 0.46 | 0.43 | 0.47 |
| Revenue backlog, SEK thousand | 29,958 | 24,601 | 28,487 | 33,018 | 16,680 |
| Rent backlog, KSEK | 24,868 | 20,208 | 23,487 | 26,694 | 12,885 |
| Contracted annual rental and service revenues, SEK thousand | 34,147 | 38,594 | 30,441 | 38,761 | 24,552 |
| Contracted annual rental revenues, SEK thousand | 27,689 | 30,720 | 24,496 | 30,797 | 17,217 |
| Area occupancy rate, %*** | 90% | 74% | 84% | 75% | 56% |
| Economic occupancy rate, %*** | 81% | 73% | 82% | 74% | 44% |
| WAULT rent and service, months | 11 | 8 | 12 | 10 | 9 |
| Market value of portfolio | 210,120 | 216,208 | 196,713 | 226,471 | 162,250 |
| Leasable area, thousands of square meters | 20 | 20 | 20 | 20 | 20 |
| Number of properties (at end of period) | 13 | 13 | 13 | 13 | 14 |
| FINANCIAL KEY RATIOS | |||||
| Return on equity (ROE), % | 7% | -2% | 0% | 0% | 0% |
| Return on assets (ROA), % | neg. | 0% | 0% | 0% | 0% |
| EBITDA | -5,905 | -18,016 | -61,058 | -23,046 | -26,033 |
| Average assets | |||||
| RATIOS PER SHARE | |||||
| Basic and diluted shares outstanding, thousand | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 |
| Average number of basic and diluted shares, thousands | 477,315 | 477,315 | 477,315 | 477,315 | 477,315 |
| Diluted earnings per share, SEK | -0.01 | -0.03 | 0.02 | -0.03 | -0.06 |
| Equity per share, SEK | |||||
| EMPLOYEES | |||||
| Average number of employees | 29 | 17 | 29 | 17 | 17 |
Parent Company
Condensed Income Statement – Parent Company
| AMOUNTS IN KSEK | Q | FULL-YEAR | ||
|---|---|---|---|---|
| NOTE | 2024 | 2023 | 2023 | |
| Net sales | 5 | 731 | 433 | 3,429 |
| Other operating revenue | -0 | 4 | 12 | |
| Other external expenses | -1,919 | -2,869 | -11,882 | |
| Employee benefits expense | -1,077 | -929 | -4,803 | |
| Depreciation and write-downs | - | - | - | |
| Other operating expenses | -12 | -0 | -4 | |
| Operating income/loss | -2,277 | -3,361 | -13,248 | |
| Dividends from subsidiaries | - | - | - | |
| Write-down of participations in Group companies | - | - | - | |
| Interest income and similar items | 4,543 | 15,361 | 88,938 | |
| Interest income from group companies | 531 | 400 | 1,742 | |
| Interest expenses and similar items | -38,755 | -4,182 | -107,863 | |
| Profit/loss before tax | -35,957 | 8,218 | -30,431 | |
| Untaxed reserves | - | - | - | |
| Income tax | - | - | ||
| Profit/loss for the period | -35,957 | 8,218 | -30,431 |
Condensed balance sheet – Parent Company
| AMOUNTS IN KSEK | NOTE | 31/03/2024 | 31/03/2023 | 2023-12-31 |
|---|---|---|---|---|
| Assets | ||||
| Fixed assets | ||||
| Investments in group companies | 2,178,613 | 2,176,583 | 2,178,613 | |
| Other long-term receivables | - | 39,861 | - | |
| Receivables from Group companies | 102,630 | 29,628 | 88,736 | |
| Total non-current assets | 2,281,244 | 2,246,072 | 2,267,349 | |
| Current assets | ||||
| Receivables from Group companies | 3,555 | 249 | 951 | |
| Current receivables | 60,023 | 58,792 | 62,124 | |
| Cash and cash equivalents | 63,844 | 45,889 | 74,919 | |
| Total current assets | 127,422 | 104,930 | 137,993 | |
| Total assets | 2,408,666 | 2,351,001 | 2,405,342 | |
| EQUITY AND LIABILITIES | ||||
| Restricted equtiy | ||||
| Share capital | 14,033 | 14,033 | 14,033 | |
| Total restricted equity | 14,033 | 14,033 | 14,033 | |
| Non-restricted equity | ||||
| Share premium reserve | 1,651,106 | 1,651,106 | 1,651,106 | |
| Accumulated profit or loss earnings | -1,046,072 | -1,015,641 | -1,015,641 | |
| Net profit/loss for the year | -35,958 | 8,218 | -30,431 | |
| Total non-restricted equity | 569,077 | 643,683 | 605,034 | |
| Total equity | 583,110 | 657,716 | 619,067 | |
| Untaxed reserves | ||||
| Tax allocation reserve | 10,002 | 10,002 | 10,002 | |
| Total untaxed reserves | 10,002 | 10,002 | 10,002 | |
| Non-current liabilities | ||||
| Long-term contractual liabilities from acquisition of SmarTee 85% | 555,062 | 708,408 | 626,101 | |
| Total non-current liabilities | 555,062 | 708,408 | 626,101 | |
| Current liabilities | ||||
| Short-term contractual liabilities from acquisition of SmarTee 85% | 272,715 | 155,873 | 160,269 | |
| Other current liabilities | 987,778 | 819,003 | 989,904 | |
| Total current liabilities | 1,260,493 | 974,876 | 1,150,173 | |
| TOTAL EQUITY AND LIABILITIES | 2,408,666 | 2,351,001 | 2,405,342 |
CONDENSED STATEMENT OF CHANGES IN EQUITY -PARENT COMPANY
| Total equity | 583,110 | 657.716 | 619,067 |
|---|---|---|---|
| Comprehensive income for the period | -35,958 | 8,218 | -30,431 |
| Profit/loss for the period | -35,958 | 8,218 | -30,431 |
| Opening equity | 619,067 | 649,498 | 649,498 |
| AMOUNTS IN KSEK NOT | E 31/03/2024 | 31/03/2023 | 2023-12-31 |
Other information
COMPANY INFORMATION
The Parent Company, Crown Energy AB (publ), with corporate ID 556804-8598, is a limited company registered in Sweden and domiciled in Stockholm. The street address of the main office is Skeppargatan 27, 114 52 Stockholm.
The number of employees in the Group at the end of the reporting period is 29 (17) linked to the operations in Angola and Italy. Five including part time are employed in the Parent Company in Sweden.
ÄGARSTRUKTUR
The number of shares registered in Crown Energy AB's share register (as per Euroclear) as of publication of this report is 477,315,350 with a quotient value of SEK 0.03 per share.
The Company's ordinary shares are listed on NGM Main Regulated and are traded under the ticker name CRWN with ISN code SE0004210854.
| SHAREHOLDER | NUMBERS OF SHARES |
SHARES (%) | NUMBERS OF VOTES |
VOTES (%) |
|---|---|---|---|---|
| Yoav Ben-Eli via company 1 | 343,817,971 | 72% | 343,817,971 | 72% |
| Cement Fund SCSp | 63,000,000 | 13% | 63,000,000 | 13% |
| Veronique Salik | 29,496,530 | 6% | 29,496,530 | 6% |
| Alan Simonian and family | 3,429,521 | 1% | 3,429,521 | 1% |
| Other shareholders | 37,571,328 | 8% | 37,571,328 | 8% |
| Total number of shares | 477,315,350 | 100% | 477,315,350 | 100% |
<sup>1 The shares are owned by YBE Ventures Ltd, which is controlled by Yoav Ben-Eli.
SEASONAL VARIATIONS
We estimate that there are not any significant seasonal variations in any of the Group's business areas or in Crown Energy as an individual company.
RISKS AND UNCERTAINTIES
A detailed description of the Group's and Parent Company's risks and risk management can be found in Crown Energy's 2023 Annual Report. In May 2023 the Company decided to exit the license Block 2B and fully impair the value of that asset.
Notes
ACCOUNTING POLICIES
This interim report was prepared pursuant to IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act, and RFR 1 Supplementary Accounting Regulations for Groups. As with the 2023 annual accounts, the consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the Swedish Annual Accounts Act. The financial statements of the Parent Company were prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's RFR 2 Accounting for Legal Entities.
The same accounting policies were used during the period as were used for the 2023 financial year and as described in the 2023 Annual Report. None of the new or revised standards, interpretations, or amendments adopted by the EU have influenced the Group's earnings or position.
This three month report does not contain all the information and disclosures contained in the Annual Report, so the three month report should be read alongside the 2023 Annual Report.
REVENUE CATEGORIES
The Group has two revenue streams: rental revenue from leases and revenue from service contracts with tenants. Rental revenue, which makes up most of the Group's revenue, is covered by IFRS 16, Leases, which is why it is excluded from IFRS 15 and its disclosure requirements.
Regarding accounting principles and risks linked to these revenues, see the Annual Report 2023
| Assets Development | Other and | |||
|---|---|---|---|---|
| REVENUE CATEGORIES, AMOUNTS IN SI | Energy | and Management | eliminations | Total |
| JAN-MAR 2024 | ||||
| Rental revenue | - | 6,726 | - | 6,726 |
| Service revenues | - | 1,446 | - | 1,446 |
| Other revenue | - | - | 312 | 312 |
| Total Revenue | - | 8,172 | 312 | 8,485 |
| Of which revenue from contracts with customers, subject to IFRS 15 | - | 1,446 | - | 1,446 |
| JAN-MAR 2023 | ||||
| Rental revenue | - | 8,935 | - | 8,935 |
| Service revenues | - | 1,750 | - | 1,750 |
| Other revenue | - | - | 59 | 59 |
| Total Revenue | - | 10,685 | 59 | 10,745 |
| Of which revenue from contracts with customers, subject to IFRS 15 | - | 1,750 | - | 1,750 |
INVESTMENT PROPERTY
Changes in carrying amount:
| GROUP | Q1 | ||
|---|---|---|---|
| Amounts in kSEK | 2024 | 2023 | 2023 |
| Opening carrying amount | 196,713 | 227,608 | 227,608 |
| + Capital expenditures the period | 5,466 | - | 18,324 |
| + Acquisitions for the period | - | - | 268 |
| - Disposals for the period | 300 | - | -9,790 |
| +/- Unrealised changes in value | 158 | -7,787 | -36,895 |
| +/- Change in lease liability | - | -336 | -478 |
| Change in lease contracts, not affecting income | - | - | - |
| +/- Exchange rate effects | 7,483 | -2,576 | -2,324 |
| Closing carrying amount | 210,120 | 216,910 | 196,713 |
The valuation of the investment properties has been prepared internally as per 31 March 2024. Required returns were determined for housing and office premises and are set at between 6 and 6.5 percent, before tax, on average. The weighted average cost of capital (WACC) for the market (Luanda, Angola) was estimated at between 16.2 and 17 percent for the period, after tax.
Lease costs for rights of use are included in the fair value, which means that the lease liability is reversed to avoid double counting these costs:
| Carrying amount at the end of the reporting period | 210,120 | 216,910 | 196,713 |
|---|---|---|---|
| Reversal of lease costs recognized as lease liabilities | 670 | 702 | 415 |
| Fair value, investment properties | 209,449 | 216,208 | 196,298 |
| GROUP, AMOUNTS IN SEK THOUSANDS | 31/03/2024 | 31/03/2023 | 2023-12-31 |
EXPLORATION AND EVALUATION ASSETS
Changes in carrying amount:
| GROUP | Q | FULL-YEAR | |
|---|---|---|---|
| Amounts in kSEK | 2024 | 2023 | 2023 |
| Opening carrying amount | 50,752 | 50,752 | 50,752 |
| Capital expenditures for the period | - | - | - |
| Write down of E&E assets | - | - | - |
| Write down due additional puchase price | - | - | - |
| Translation and revaluation effects | - | - | - |
| Closing accumulated cost of acquisition | 50,752 | 50,752 | 50,752 |
Regarding our Energy assets, as previously reported on 20th October 2021, Crown Energy has successfully entered into an agreement with a buyer who has the right to acquire Crown Energy's upstream oil and gas assets, covering Crown Energy Iraq AB, for a total consideration of up to USD 450 million before the deduction of transaction costs. In accordance with IFRS 15 no write up of the assets was performed, until the control over the assets is transferred to the buyer, which is expected after a full consideration of 180 MUSD is paid, scheduled by October 2026.
TRANSACTIONS WITH RELATED PARTIES
PURCHASES AND SALES WITHIN THE GROUP
Of the Parent Company's revenue for the first quarter 2024, 100 per cent (100) represents re-invoicing and management fees to other companies within the Group. Of the Parent Company's total interest income, 100 per cent (100) relates to other entities within the Group.
PURCHASE OF SERVICES
Since 1 February 2021, Yoav Ben-Eli, Board member and largest shareholder in the Company, is remunerated by the Group's subsidiary in Angola through a consulting agreement and since January 2022 is employed by the parent company. The agreement amounts to EUR 40,500 per month, and the total payments for the period correspond to SEK 125 thousand for the period.
Yoav Ben-Eli received a salary of approximately SEK 53 thousand per month from the parent company for the period January-March 2024, totalling 156 TSEK.
ESI Angola
The Company's principal shareholder Yoav Ben-Eli owns 100 per cent of ESI Angola Lda and according to a service contract, ESI Angola Lda provides property management and other services to YBE Imobiliária Angola Lda. The Group's purchases of services from ESI Angola Lda amounted to SEK 1,476 thousand during the reporting period.
In addition to these ongoing purchases of services, Crown Energy has a receivable from ESI Angola Lda. For more information about the receivable, please see the Annual Report 2023. As of 31 March 2024, this receivable amounted to the equivalent of SEK 47,441 thousand including interest.
All transactions are performed on normal commercial terms.
C OPERATING SEGMENTS
| OPERATING SEGMENTS, SEK THOUSAND Q1 2024 |
Energy | Asset Development | Sustainable investments | Other and eliminations | Total |
|---|---|---|---|---|---|
| Total revenues | - | 8,233 | 252 | -0 | 8,485 |
| Operating costs | -165 | -7,366 | -17,605 | -2,318 | -27,454 |
| EBIT | -165 | 868 | -17,353 | -2,319 | -18,969 |
| Net financial income/expense | 2,173 | 775 | -643 | -33,640 | -31,334 |
| Profit/loss before tax and changes in value | 2,008 | 1,643 | -17,996 | -35,958 | -50,304 |
| Changes in value: | |||||
| Property, unrealised | - | -163 | - | - | -163 |
| Profit/loss before tax | 2,008 | 1,480 | -17,996 | -35,958 | -50,467 |
| Income tax | - | - | 6 | - | 6 |
| Deferred tax | - | 6,651 | 3,566 | 0 | 10,217 |
| Profit/loss for the period | 2,008 | 8,131 | -14,425 | -35,958 | -40,244 |
| Non-current assets at the end of the period | 50,752 | 283,203 | 2,444,435 | 155 | 2,778,545 |
| Angola | - | 283,203 | - | - | 283,203 |
| Iraq | 50,752 | - | - | - | 50,752 |
| Italy | - | - | 2,444,435 | - | 2,444,435 |
| Sweden | - | - | - | 155 | 155 |
| Madagascar | - | - | - | - | - |
| South Africa | - | - | - | - | - |
| OPERATING SEGMENTS, SEK THOUSAND | Asset | Sustainable | Other and | ||
|---|---|---|---|---|---|
| Q1 2023 | Energy | Development | investments | eliminations | Total |
| Total revenues | - | 10,685 | 55 | 4 | 10,744 |
| Operating costs | -65 | -17,814 | -6,204 | -5,174 | -29,256 |
| EBIT | -65 | -7,129 | -6,149 | -5,170 | -18,511 |
| Net financial income/expense | -606 | 3,569 | -301 | 11,056 | 13,717 |
| Profit/loss before tax and changes in value | -671 | -3,560 | -6,450 | 5,886 | -4,793 |
| Changes in value: | |||||
| Property, unrealised | - | -7,990 | - | - | -7,990 |
| Profit/loss before tax | -671 | -11,550 | -6,450 | 5,886 | -12,783 |
| Income tax | - | - | - | - | - |
| Deferred tax | - | -1,272 | 2 | - | -1,271 |
| Profit/loss for the period | -671 | -12,822 | -6,448 | 5,886 | -14,054 |
| Non-current assets at the end of the period | 50,752 | 339,511 | 2,164,161 | 153 | 2,554,577 |
| Angola | - | 339,511 | - | - | 339,511 |
| Iraq | 50,752 | - | - | - | 50,752 |
| Italy | - | - | 2,164,161 | - | 2,164,161 |
| Sweden | - | - | - | 153 | 153 |
| Madagascar | - | - | - | - | - |
| South Africa | - | - | - | - | - |
SALE OF THE C-VIEW PROPERTY
Background
On 30 April 2019 Crown Energy concluded an agreement for the sale of the C-View property in Angola. Buyer is the Angolan State via the Ministry of Finance ("Minfin"). The transaction is made in Angolan kwanza and will be paid over three years. The payments will be adjusted with an official inflation rate. The inflation compensation will be determined before the last instalment. For more information about the transaction and how it will be accounted for, please see Note 32 Sale of the C-View Property in the Annual Report 2023.
Accounting during 2024
C-View, up until the economic control is transferred to the buyer, continues to be managed by Crown Energy, which means that it remains classified as an asset held for sale. The asset is recognised at fair value, which corresponds to the contractual purchase consideration (in accordance with IAS 40), discounted over the agreed payment period of three years. Transaction costs will be accounted for as a part of the net realised result of the transaction, in connection with the transfer of the economic control.
As of 31 March 2024, the client did not take over economic control of the property, despite reaching the required threshold of 1/3 of the purchase price in April 2021, thus the property is still accounted for as an asset held for sale. Crown Energy will recognise the profit and costs associated with sale of the asset in accordance with IFRS 15, as soon as the buyer assumes the economic control of the asset.
The payments from Minfin are recognised as deferred income (classified as a contract liability) until economic control is transferred to Minfin. As per 31 March 2024, the contract liability related to the C-View sale amounts to SEK 222,245 thousand which in local currency corresponds to 80 per cent of the total sales price. The original agreement stipulated a payment schedule and the transfer of economic rights to the client as well as an inflation compensation provision. For the following two reasons the transfer of the economic control was postponed and YBE Immobiliaria has continued the upkeep of the property. The first results from to the changes in payments schedule of the agreement by the Angolan Governmental buyer. The second is that we still await a decision by the Angolan Government as to which ministry or entity will be purposed with the use of the C-View property The parties are now in negotiations regarding the final settlement (including the inflation compensation) and amendments to the agreement, that will permit finalising the transfer of economic control, which in turn will trigger the recognition of sale of the property for the Crown Energy Group in accordance with IFRS 15. The title for the C-View property in accordance with local laws will be transferred to the buyer after final settlement is received by the YBE Immobiliaria, which is when the transfer will be recognised in local accounting. During those negotiations YBE Immobiliaria has continued to receive payments for the property which have
reached 80% of the original purchase price. Due to an uncertain timeline for this payment and the amount depending on future inflation Crown Energy did not account for the inflation compensation so far in 2024.
8 INTANGIBLE ASSETS
| OPERATING SEGMENTS, SEK THOUSAND |
Goodwill | Internally generated software |
Projects in progress | Oth. intangible fixed assets |
Right of use | Total |
|---|---|---|---|---|---|---|
| 2023-12-31 | ||||||
| Costs | 1,360,972 | 5,130 | 38,952 | 998,273 | 6,247 | 2,409,574 |
| Accumulated depreciation and amortization | - | -1,485 | - | -46,226 | -1,208 | -48,920 |
| Net Book Amount 2024-01-01 | 1,360,972 | 3,645 | 38,952 | 952,047 | 5,039 | 2,360,654 |
| Acquired balances through subsidiaries | - | _ | - | - | - | - |
| Investments in assets | - | - | 731 | - | 6 | 737 |
| Disposals of assets | - | - | -26 | - | -103 | -129 |
| Currency Translation Effects | 52,619 | 141 | 1,520 | 36,542 | 177 | 90,998 |
| Depreciation and amortization | - | - | - | -12,349 | -398 | -12,747 |
| Closing net amount | 1,413,591 | 3,786 | 41,177 | 976,240 | 4,720 | 2,439,514 |
| Costs | 1,413,591 | 5,271 | 41,177 | 1,034,815 | 6,327 | 2,501,181 |
| Accumulated depreciation and amortization | - | -1,485 | - | -58,575 | -1,607 | -61,667 |
| Net Book Amount 2024-03-31 | 1,413,591 | 3,786 | 41,177 | 976,240 | 4,720 | 2,439,514 |
CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES
| CONTRACTUAL MATURITIES FOR FINANCIAL LIABILITIES AS OF 31 MAR 2024 IN THOUSANDS OF SEK |
<6 months | 6-12 months |
1-2 years | 3-5 years | Total contractual cashflow | Carrying amount (assets)/liabilities |
|---|---|---|---|---|---|---|
| Non-derivatives | ||||||
| Trade payables | 10,070 | - | - | - | 10,070 | 10,070 |
| Contingent consideration (note 10) | - | 115,250 | - | - | 115,250 | 115,250 |
| Payments SmarTee | 207,450 | 103,725 | 207,450 | 391,850 | 910,475 | 827,776 |
| Lowns | 1,075 | 1,092 | 1,427 | 1,992 | 5,586 | 5,586 |
| Lease liabilities | 899 | 899 | 1,089 | 2,178 | 5,064 | 5,064 |
| Total non-derivatives | 209,424 | 220,966 | 209,966 | 396,019 | 1,036,375 | 963,746 |
There is a contingent consideration amounting to 10 million EUR to former shareholders of the AccYourate Group Italy that was payable at the end of the year 2023. The debt is secured over the shares in AccYouRate Group S.P.A. With reference to the mutual ambitions and aims for the company between Crown, the former shareholders and the current shareholders the payment is under further commercial discussions and as such the payment terms have been extended to September 2024. On 30 April 2024 Crown Energy announced that it had entered into a strategic agreement with Proger S.p.A ("Proger"), and the founders (and earlier shareholders), of AccYouRate, whereby the debt of 10 million euro will be converted into shares in SmarTee. The conversion will be made at the same valuation as when Crown Energy acquired the company. The conversion is subject to the approval of the Annual General Meeting of shareholders in Crown Energy, scheduled for 10 June
ACQUISITION OF ACCYOURATE GROUP
| TOTAL PURCHASE CONSIDERATION | Final | |
|---|---|---|
| EUR Thousands | SEK Thousands | |
| Cash paid | 75,000 | 849,165 |
| Deferred interest-free cash payments | 88,000 | 996,354 |
| Discount amount on deferred cash consideration* | -12,034 | -136,255 |
| Contingent additional purchase price | - | =_ |
| Total purchase consideration | 150,966 | 1,709,263 |
* Interest rate for discount amount is 6%
| PURCHASE PRICE ALLOCATION (PPA) | Fin | Final | |||
|---|---|---|---|---|---|
| EUR Thousands | SEK Thousands | ||||
| Intangible assets | 87,583 | 991,631 | |||
| Added goodwill in acquired companies | -6,064 | -68,658 | |||
| Other assets | - | - | |||
| Cash and cash equivalents | - | - | |||
| Borrowing | - | - | |||
| Deferred tax, net | -25,241 | -285,788 | |||
| Other current liabilities | - | - | |||
| Net identifiable assets acquired | -1,325 | -15,002 | |||
| Less: non-controlling interest | -26,641 | -301,635 | |||
| ADD: goodwill | 122,654 | 1,388,716 | |||
| Total purchase consideration | 150,966 | 1,709,263 |
Crown Energy AB on February 3, 2023, signed a purchase agreement for the acquisition of 85 percent of the shares in SmarTee S.a.r.l., a Luxembourg company which is the parent company of the Italian AccYouRate Group. AccYouRate Group is focused on wearable medicine technique and currently holds exclusive patents for advanced and groundbreaking technologies in the market for advanced fabric technologies.
Euros 75 million (SEK 849 million) was paid upon signing and the balance of Euros 88 million (SEK 996 million) is to be paid in nine instalments of EUR 9 million six months after each instalment date with a final payment of EUR 25 million. The first and second instalments have been paid and the following instalment payment schedule is pending and is subject to further commercial discussions with the seller. The interest free cash consideration has been discounted at 6%, making the total purchase consideration Euros 151 million (SEK 1 709 million).
There is a contingent consideration included in borrowings amounting to 10 million EUR to former shareholders of the AccYourate Group Italy that was payable at the end of the year 2023. This is secured over shares in the Accyourate Group S.P.A. This consideration has been the subject of further commercial discussions and its terms have been extended to September 2024. The debt is subject to conversion into shares in accordance with the strategic agreement announced by Crown Energy on 30 April 2024. For more information see Note 9.
In the purchase agreement there is an earn-out clause giving the seller a right, during the first 24 months, to 30% of any additional value under certain conditions. It is the assessment of the board and management that these conditions are unlikely to occur and therefore the contingent consideration has been set to zero (0).
The group recognises non-controlling interests in an acquired entity either at fair value or at the noncontrolling interest's proportionate share of the acquired entity's net identifiable assets. This decision is made on an acquisition by-acquisition basis. For the non-controlling interests in Crown Energy AB, the group elected to recognise the noncontrolling interests at its proportionate share of the acquired net identifiable assets.
The useful life of Intellectual property is considered to be 20 Years.
The table above is a purchase price allocation (PPA). In the final PPA, the value of the acquired assets has been allocated to goodwill, which at the time of the acquisition amounted to EUR 122,654 thousand (SEK 1,388,716 thousand), Intangible assets of Euro 87,583 thousand. Intangible assets included developed software, fair value of Intellectual Property. Also, EUR -25,241 thousand (-301,635), were attributed as a Deferred Tax Liability.
Acquisition-related costs from the business combination amounts to 1.5 mSEK and has been accounted for in the income statement for the 2023 period.
11 EVENTS AFTER THE END OF THE REPORTING PERIOD
ACQUISITION OF THE ACCYOURATE GROUP
Crown Energy announced in the Q4 report of 2023 that the total consideration of 163 million Euro in relation to the acquisition of SmarTee (100 % owner of the AccYouRate Group) was to be paid to the seller in a total of nine instalments. The first instalment of 75 million Euro was paid in connection with the acquisition whereby Crown became the 85 % owner of SmarTee. The remaining instalments of 9 million each are to be made in six-month intervals with a final payment of 25 million Euro. The latest instalment is still outstanding as the payment schedule is subject to further commercial discussions with the seller. Crown Energy also announced that there was a contingent liability of 10 million Euro to the former shareholders of AccYouRate Italy, that was due at the end of 2023, which is secured over the shares in AccYouRate SPA. As the payment schedule relating to the acquisition, with regards to the mutual ambitions and goals for the group, is subject to further commercial discussions a part of the instalments is still outstanding. On 30 April 2024 Crown Energy announced a strategic agreement with Proger and the founders (earlier shareholders) of AccYouRate, who SmarTee, as a part of a contingent consideration, owes 10 million EUR to, that the parties earlier agreed would be settled first at end of September 2024. In accordance with the agreement Proger and the founders acquires shares in SmarTee from Crown Energy, corresponding to 0.65 % of the shares in SmarTee for a consideration amounting to 1,250,000 EUR. Crown Energy at the same time commits to provide up 1,750,000 EUR in loan financing to AccYouRate. After providing such financing the total amount lent by Crown Energy will amount to 8,470,000 EUR, taking into account earlier loans provided. As a part of the agreement these loans will be con- verted into shares in SmarTee. At the same time the 10,000,000 EUR owed to Proger and the original founders will be converted into shares in SmarTee. After the transactions, that are subject to the approval of the Annual General Meeting of shareholders in Crown Energy, Crown Energy will hold 81 % of the shares in SmarTee, Proger and the original founders 5.5 % and the seller 13.5 %. All transactions and subsequent issuance of shares as a result of the agreement are performed at the same valuation as when Crown Energy acquired 85 % of SmarTee. Crown Energy has also entered into an option agreement with Proger and the founders in relation to their shareholding in SmarTee. In accordance with the agreement, after 14 months of signing, Proger and the founders has the right to request Crown Energy to purchase the shares for 13 million Euro. At the same time Crown Energy also has the right, after 14 months of signing, to request Proger and the founders to sell their shares to Crown Energy, but at a price of 15 million Euro.
OTHER
During the second quarter of 2024 Crown Energy received a further 8 million USD in accordance with the agreement relating to the sale of the oil & gas assets of the company, signed in October 2021. Crown Energy has now received a total of 115 million USD with 65 million USD remaining to be paid to Crown Energy. The next payment will be received during the fourth quarter of 2024. Crown Energy also has the possibility to receive an additional 270 million USD as an earn-out payment if certain conditions materialize.
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The Board and CEO hereby certify that this three month report gives a fair overview of the Parent Company's and Group's operations, position, and earnings, and describes significant risks and uncertainty factors to which the Group and its companies are exposed.
This report has not been reviewed by the Company's auditors.
Stockholm, 29 May 2024
Pierre-Emmanuel Weil Chairman of the Board Yoav Ben-Eli Board member,CEO Jean Benaim Board member
Alan Simonian Board member, COO
PUBLICATION
This information is information as Crown Energy AB (publ) is required to disclose under the EU Market Abuse Regulation. The information was submitted for publication at 08:30 AM CET, on 29 May 2024.
REPORTING DATES
AGM 2024 10 June 2024 Half-year Report 2024 23 August 2024 Nine months report 2024 22 November 2024 Year-End report 2024 26 January 2025
FINANCIAL INFORMATION
All financial information is posted at www.crownenergy.se as soon as it is released. Shareholders, other players in the stock market, and the public are free to subscribe to the Company's press releases and financial reports through our homepage Crownenergy.se or https://www.crownenergy.se/en/investors/subscription/.
For additional information, contact:
Yoav Ben-Eli, CEO +46 (0)8 400 207 20
ADDRESS
Crown Energy AB (publ)
Skeppargatan 27
SE-114 52 Stockholm, Sweden
www.crownenergy.se
Glossary and definitions
ALTERNATIVE PERFORMANCE MEASURES
The Company applies the European Securities and Markets Authority's (ESMA) guidelines on alternative performance measures. The alternative key financial performance indicators are defined as financial measures of historical or future earnings trends, financial position, financial performance or cash flows that are not defined or specified in the applicable regulations for financial reporting, IFRS and the Annual Accounts Act. These measures should not be regarded as a substitute for measures defined in accordance with IFRS.
If an alternative performance measure cannot be identified directly from the financial statements, a reconciliation is required.
ALL INDICATORS ARE ALTERNATIVE UNLESS STATED OTHERWISE.
DEFINITIONS OF KEY RATIOS
Financial key ratios EBITDA
Earnings before interest, taxes, depreciation and amortisation. EBITDA is used to measure earnings from operating activities, independently of depreciation, amortisation and impairment losses.
EBITDA margin
Measurement of a company's operating profitability as a percentage of its total revenue. The EBITDA margin is used to compare EBITDA in relation to revenue.
Equity, SEK
Equity at end of period.
Equity/assets ratio, %
Equity including non-controlling interest as a percentage of total assets. Used to highlight the Company's interest rate sensitivity and financial stability.
Return on assets (ROA), %
This ratio measures profitability relative to total assets. Return on assets is used to highlight a company's ability to generate profit on the group's assets, unaffected by the group's financing.
Return on equity (ROE), %
The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
Total assets
Total assets at the end of the period. Total assets are a measure of the value of assets at the end of the period.
Ratios per share
Earnings per share, SEK*
Earnings after tax divided by average number of shares for the period. Used to show the shareholders share of the Group's earnings per share.
Equity per share, SEK
Equity at end of period divided by number of shares at end of period. Used to highlight the shareholders' portion of the company's total assets per share.
Total number of shares outstanding* Number of shares outstanding at end of period.
Weighted average number of shares* Weighted number of shares outstanding during the year.
Employees
Average number of employees** Average number of employees during the period.
PROPERTY-RELATED DEFINITIONS AND GLOSSARY
Area occupancy rate**
Leased area in relation to total leasable area at the end of the period.
Economic occupancy rate**
Calculated by dividing contracted annual rental revenue in relation to the rental value. This figure is used to help facilitate the assessment of rental revenue in relation to the total value of available, unleased area. Note that this calculation does not include service revenues. Relates to contracted annual rent plus assessed market rent for vacant premises.
Leasable area, sqm**
Leased area plus leasable vacant area.
Operating net
Total revenue less property costs.
Rent backlog**
Outstanding rental revenues during remaining contract period. Rent backlog is used to highlight the Group's remaining contract value for rental revenues to be invoiced to the tenant, at a given point in time. Cannot be derived from the Company's financial reporting.
Rental revenue*
Billed rents, rent surcharges and rental guarantees less rent discounts.
Revenue backlog**
Outstanding rental and service revenues during remaining contracted contract period. Revenue backlog is used to highlight the Group's total remaining contract value to be invoiced to the tenant, at a given point in time. Cannot be derived from the Company's financial reporting.
Service revenue*
Service in accordance with client contract. Service may, depending on how the contract is designed, include everything from operating costs to Internet and catering costs.
Weighted average unexpired lease term (WAULT)**
Used to illustrate the average lease term until expiry for the entire property portfolio, weighted after total contractually agreed rental and service revenues. Calculated by dividing contracted revenue (rent and service) until expiry by annual contracted rents and service. Expressed in months.
*Key ratio defined by IFRS/IAS.
**Key ratio not covered by ESMA's guidelines for alternative performance measures (physical, non-financial or not based on information from the financial reports).
About Crown Energy
Crown Energy is transforming into a new and more socially responsible business direction, with focus on the medical technology industry and on improving the green footprint by way of investing in companies active in those areas.
The investment into the Healthtech company AccYouRate marked the start of the new Crown Energy in early 2023. AccYouRate holds hightech patents and creates algorithms to support production of 'smart' wearable garments for use in the medical industry as well as services such as analysis, data gathering and extrapolations of medical information and growth of medical databases.
Crown has in early 2024 entered a strategic partnership with KAYA Climate Solutions GmbH, a project developer in nature-based solutions for climate change mitigation in Sub-Saharan Africa. This collaboration aims to be a starting point for large impact in climate change mitigation and adaptation through landscape restoration and nature conservation which will be financed by the voluntary carbon market and similar mechanisms.
The business area Asset Development and Management based in Angola is providing international companies Real estate and services. Crown Energy has been active in the oil and gas business for more than 10 years. Today the only remaining asset in the energy field is a passive holding of energy reserves which following the signing of a sale and purchase agreement is being divested. Crown has withdrawn from and/or written down its other earlier Licence holdings.