Atlas Pearls : 31 December 2021 Interim Financial Report

For personal use only

I N T E R I M F I N A N C I A L R E P O R T

A B N 3 2 0 0 9 2 2 0 0 5 3 • 3 1 D E C E M B E R 2 0 2 1

For personal use only

For personal use only

CONTENTS

Directors' Report	4.
Auditors Independence Declaration	6.
Consolidated Statement of Profit or Loss & Other Comprehensive Income	7.
Consolidated Statement of Financial Position	8.
Consolidated Statement of Changes in Equity	9.
Consolidated Statement of Cashflows	10.
Notes to & Forming part of the Consolidated Financial Statements	11.
Directors' Declaration	21.
Independent Review Report	22.

Half Year Report | ATLAS PEARLS | Page 3

DIRECTORS REPORT

Your Directors present their report on the consolidated entity consisting of Atlas Pearls Ltd and the entities it controlled at the end of, or during, the half year ended 31 December 2021, referred to hereafter as, the Company, the Group or Atlas Pearls.

1.	Directors
only	The following persons were Directors of Atlas Pearls during the whole of the half year and up to the date of this report unless otherwise stated.
	NAME	PERIOD OF DIRECTORSHIP
use
		Director since 15 October 2010
GEOFF NEWMAN, Executive Chairman
Appointed Chairman 16 February 2015
B. Ec (Hons), M.B.A, F.C.P.A, F.A.I.C.D
		Appointed Executive Chairman 01 October 2019
TIMOTHY MARTIN, Non-Executive Director	Director since 4 February 2013
BA, M.B.A, G.A.I.C.D
CADELL BUSS, Independent Non-Executive Director	Director since 1 February 2018
	M.B.A, M.P.M, G.A.I.C.D

2.	Review of Operations
2.1	REVIEW OF OPERATIONS
personalDuring the uncertainty of the pandemic, Directors, Perth, and Expatriate personnel accepted pay decreases from April through to December

The Company is pleased to report another profitable period (30 June 2021: $8M profit before tax). This result exceeded the Company's expectations and is the result of a variety of factors.

During the financial year ending 30 June 2021, Atlas Pearls launched its online sales platform, in response to the COVID-19 pandemic, enabling the Company to continue selling its pearls worldwide through uncertain times. The COVID-19 pandemic restricted movement of people, pearls, and resources but through the strategic initiative of the management team, negative impacts were minimal and opportunities to capture new markets were secured.

The online platform facilitated the sale of pearls in line with a 24-month harvest period. When the Company was reliant on traditional auction timing, the pearls often had to be harvested early to meet the auction deadline instead of being able to grow to their full potential. As the Company is now in control of the timing of sales events, pearl quality is improving.

2020. The Board is pleased to report that in December 2021, Atlas has repaid amounts forgone to current employees.

For3. Financial Result

The Group net profit for the period ended 31 December 2021 is $4.1M, compared to a $744k loss in the prior year comparative period.

To give a better picture of the underlying performance, Atlas has adopted Normalised Earnings before interest, taxes, depreciation, amortisation (Normalised EBITDA) as a more effective way to report comparative results.

	6 MONTHS	6 MONTHS
	ENDED	ENDED
	31 DEC 21	31 DEC 20
Total revenue from contracts with customers	12,360,776	6,826,155
Net profit/(loss) after tax	4,135,528	(744,208)
Normalised earnings before interest, taxes, depreciation, and amortisation (Normalised EBITDA)	3,909,215	502,850

Half Year Report | ATLAS PEARLS | Page 4

Reconciliation of Normalised EBITDA to Profit/(Loss) for the half year (Consolidated Statement of Profit or Loss and Other Comprehensive Income)

			6 MONTHS	6 MONTHS
			ENDED	ENDED
			31 DEC 21	31 DEC 20
only
Net profit/(loss) after tax	4,135,528	(744,208)
Tax (benefit)/expense	(690,858)	668,639
	Interest net costs	155,742	226,625
	Depreciation/Amortisation	145,554	237,573
	Foreign exchange (gain)/loss	360,392	565,650
	Agriculture standard revaluation (gain)/loss	(197,143)	(499,481)
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Other non-operating (income)/expense	-	33,977
Derivative instruments loss/(gain)	-	14,075
NORMALISED EBITDA	3,909,215	502,850
3.1	FINANCIAL POSITION
	Cash reserves have increased to $4.4M (30 June 2021: $3.0M) at 31 December 2021.
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	Oyster asset values have decreased to $16.5M during the six months ended 31 December 2021 (30 June 2021: $17.2M). The quantity of seeded
	oysters on hand has decreased from 1.3M shells at June 2021 to 1.2M shells at December 2021, due to seasonal timing.
	The number of pearls on hand has decreased from 81,289 at 30 June 2021 to 76,546 at 31 December 2021. The value has increased from $0.5M
	at 30 June 2021 to $1.8M at 31 December 2021, due to variation in the quality of stock available.
	Borrowings have decreased by $1.6M to $2.6M at 31 December 2021 (30 June 2021: $4.2M). The decrease in borrowings is due to repayments
	made during the period. Refer to note 8 for further details.
	The Company's net tangible assets per share are $0.055 as at 31 December 2021 which has increased from the position at 30 June 2021 ($0.043).
	The number of shares on issue remains unchanged at 427,871,758 (30 June 2021: 427,871,758).
4.	Auditor's Independence Declaration
	A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 6. Signed in
	accordance with a resolution of the Directors.
For

GEOFF NEWMAN

Executive Chairman

24 February 2022

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