The past financial year has been a significant rollercoaster for your Company. After initially making steady progress in the first half of the financial year with our labour hire and training strategy, we encountered strong headwinds due to the consequences of COVID-19 resulting in significant operational and logistical impediments to our business through the period to 30 June, before regaining momentum in the period to the date of this Report.
While our preparations to supply a range of labour-related services to Mozambique's emerging LNG industry have undoubtedly advanced, there was no escaping the fallout of COVID-19 notwithstanding the multi-national companies operating these LNG projects confirming they are pressing ahead with their development strategies and maintaining their construction timelines.
Shortly before the emergence of COVID-19, your Company took a pivotal step in its strategy by securing a strategic sublease to the established Wentworth camp site in Palma. This will enable RBR to scale-up operations and train workers for nearby LNG construction jobs.
The camp is located less than 10km from the Mozambique LNG construction site, less than 1km from both the Palma airport and Palma marina and across the road from the well-known Amarula hotel, which is a popular venue for visiting expatriates.
After securing the Wentworth camp sublease, the Company won its first major contract to train workers for the LNG construction projects. The contract comprised a grant funded by UKaid to provide training services to Mozambican youth to prepare them for the work.
This contract was part of the UK Department for International Development (DFID) Skills for Employment (S4E) Programme, known locally as JOBA. Unfortunately, the impact of COVID-19 on the UK economy has since resulted in this contract being wound back and effectively closed out with the financial payments due currently being finalised. The Company expects remittance of those final funds in the coming month.
However, despite COVID-19 and the subsequent declaration of a State of Emergency, your Company's strategy remains as valid and as promising as ever.
RBR's capabilities in Mozambique give the Company a significant point of difference. Other labour providers focus on recruiting "work-ready" candidates but do not have RBR's capacity to develop their own workforce with internationally recognised qualifications.
As part of this workforce strategy, RBR's local training subsidiary, Futuro Skills Mozambique (FSM) started work in August 2019 with the Catalisa Youth Training Program, which is an initiative of the Total-led Mozambique LNG Project (Moz LNG), as further referenced in attached letter from CEO Richard Carcenac.
Mozambique has now emerged from the lockdown and petroleum giant Total, which operates the most- advanced of the planned onshore LNG projects, has renewed its commitment to its construction timetable.
The end result is that Mozambique remains poised to host one of the biggest construction sites in the world, requiring tens of thousands of workers on site and many, many more needed to build surrounding infrastructure.
The Wentworth site is now operational, our facilities are in place, we have secured the core of our training team and we have already trained more than 100 local Mozambicans in basic health and safety, and construction skills.
At the time of writing, the EPC contractor for the Total-led project had accelerated the release of requests for expressions of interest and tenders.
Subsequent to the end of the financial year, our balance sheet was significantly enhanced by the combination of a $811,655 capital raising and extinguishing $904,513 in short-term debt via conversion of outstanding Convertible Notes.
CHAIRMAN'S LETTER (Continued)
It has unquestionably been a rocky year on several fronts. But your Directors believe strongly that our strategy to build a robust skills training and labour services business is back on track. Alliances that we have established are bearing fruit as our partners formalise their LNG project-related contracts.
Whilst establishing a sustainable presence in Mozambique remains our priority; looking forward we must broaden our view. We will seek to replicate our business strategy in other geographic locations such as Guinea, West Africa where we established a presence and an alliance some time ago. Ideally, given our Head Office and company registration in Western Australia and the listing on ASX we will also identify and secure a viable business opportunity here.
While we live in an uncertain world with a pandemic afoot and a host of other economic and geo-political issues emerging, I believe our Company can look forward with greater confidence to the new financial year.
In closing I would like to give particular mention to our staff and contractors in Mozambique who have managed to keep our business moving forward under extraordinary pressures this past year.
I would also extend my gratitude to all our staff and suppliers and look forward to reporting more positive news to you our Shareholders in the coming weeks and months.
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