TORONTO, May 7, 2018 /CNW/ - Labrador Iron Ore
Royalty Corporation ("LIORC", TSX: LIF) announced today its
operation and cash flow results for the first quarter ended
March 31, 2018.
Royalty revenue for the first quarter of 2018 amounted to
$33.8 million as compared to
$42.8 million for the first quarter
of 2017. Equity earnings from Iron Ore Company of Canada ("IOC") amounted to $14.6 million or $0.23 per share in the first quarter of 2018 as
compared to $22.2 million or
$0.35 per share in the first quarter
of 2017. Net income was $30.3 million
or $0.47 per share for the first
quarter of 2018 compared to $42.9
million or $0.67 per share for
the same period in 2017. Cash flow from operations for the first
quarter was $20.3 million or
$0.32 per share as compared to
$28.2 million or $0.44 per share for the same period in 2017.
The cash flow from operations, equity earnings and net income
for the first quarter of 2018 were lower than the first quarter of
2017 mainly due to reduced sales tonnages and reduced prices for
concentrate and pellets. The average index price for 62% fines
decreased 13% to US$74 per tonne CFR
China in the first quarter of 2018 compared to the average price in
the first quarter of 2017 of US$86
per tonne. Total IOC's sales for calculating the royalty to LIORC -
pellets plus concentrate for sale ("CFS") - of 3.9 million tonnes
was 17% lower in the first quarter of 2018 compared to the same
period in 2017, driven largely by lower CFS tonnage sales being 38%
lower than in the same period in 2017. The pellet sales tonnages in
the first quarter of 2018 were slightly higher (2%) than in the
first quarter of 2017. LIORC received an IOC dividend in the first
quarter of 2017 in the amount of $10.0
million or $0.16 per share,
whereas LIORC received no IOC dividend in the first quarter of
2018.
LIORC's results for the three months ended March 31 are summarized below:
(in millions
except per share information)
|
|
|
|
3 Months
Ended Mar. 31,
2018
|
3 Months
Ended Mar. 31,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$34.3
|
$43.4
|
Cash flow from
operations
|
|
|
|
$20.3
|
$28.2
|
Operating cash flow
per share
|
|
|
|
$0.32
|
$0.44
|
Net income
|
|
|
|
$30.3
|
$42.9
|
Net income per
share
|
|
|
|
$0.47
|
$0.67
|
Iron Ore Company of Canada Operations
Production
Issues with the parallel ore delivery system, increased ore
hardness, and a work stoppage, which commenced on March 27, 2018, adversely affected concentrate
production in the first quarter. Consequently, total concentrate
production in the first quarter of 2018 of 4.2 million tonnes was
13% lower than the first quarter of 2017 and was 15% lower than the
fourth quarter of 2017. The first quarter of 2017 was a record for
first quarter concentrate production.
The decreased concentrate production in the first quarter
primarily affected CFS production since pellet production was
favoured due to continued strong demand and premiums. CFS
production in the first quarter of 2018 was 28% lower than in the
first quarter of 2017 and 31% lower than the previous quarter.
Pellet production in the first quarter of 2018 was 7% higher than
in the first quarter of 2017; pellet production in the first
quarter of 2018 was approximately the same as the previous quarter.
The pellet plant operated well in the first quarter of 2018.
Sales as Reported for the LIORC Royalty
First quarter 2018 total iron ore tonnage sold by IOC (CFS plus
pellets) of 3.9 million tonnes was 17% below the total sales
tonnage in the first quarter of 2017 and 28% below the fourth
quarter of 2017. In the first quarter of 2018, the pellet sales
tonnage was 8% lower and CFS sales tonnage was 49% lower than the
fourth quarter of 2017.
The benchmark price for 62% Fe CFR China was 13% lower in the
first quarter of 2018 as compared to the first quarter of 2017. The
lower benchmark prices were somewhat offset by the improved
year-over-year pellet premiums and also the improved differential
between 62% and 65% concentrate. The higher premiums were driven by
the Chinese governments enacting and enforcing measures to reduce
pollution; these measures favour higher quality products such as
the CFS and pellets produced by IOC. The Canadian dollar was 4%
stronger in the first quarter of 2018 as compared to the first
quarter of 2017. As a result of the lower benchmark prices, reduced
sales tonnages and the effect of the stronger Canadian dollar,
somewhat offset by improved premiums, the royalty revenue for LIORC
in the first quarter of 2018 was 21% lower than the revenue in last
year's first quarter.
A summary of IOC's sales for calculating the royalty to LIORC in
millions of tonnes is as follows:
|
|
|
|
3 Months
Ended Mar.
31, 2018
|
|
3 Months
Ended Mar.
31, 2017
|
|
Year Ended Dec.
31, 2017
|
|
|
|
|
|
|
|
|
|
Pellets
|
|
|
|
2.54
|
|
2.48
|
|
10.48
|
Concentrates(1)
|
|
|
|
1.35
|
|
2.19
|
|
8.67
|
|
|
|
|
|
|
|
|
|
Total(2)
|
|
|
|
3.89
|
|
4.67
|
|
19.15
|
|
(1)
|
Excludes third party
ore sales
|
|
(2)
|
Totals may not add up
due to rounding
|
Outlook
The outlook for LIORC is clouded by the labour disruption at
IOC, which started on March 27, 2018,
and at the time of this writing is not resolved. IOC had
operational issues in the fourth quarter of 2017 and in the first
quarter of 2018, but the benchmark prices for concentrate and
pellet premiums were good and the demand for pellets remained
strong. When operations resume at IOC, LIORC can expect
strong royalty revenue and the possibility of IOC dividends, if
these market conditions continue. The labour disruption will also
affect the timing of capital investments, including the
refurbishment of the No. 4 pellet line and the development of the
Wabush 3 open pit.
It is the stated objective of IOC management to achieve fair and
equitable agreements with the workforce. However, IOC must be
positioned for the highs and the lows of the mining cycle in order
to remain a responsible and competitive business in the global
market for the long term.
The LIORC cash balance at March 31,
2018 stood at $25.6 million
before LIORC dividends payable on April 25,
2018 of $0.35 per share or
$22.4 million. The net royalty from
IOC was paid on the same date, maintaining the Corporation's strong
cash balance. The duration of the labour disruption at IOC, the
production achieved over the balance of 2018 after a settlement has
been reached, and the iron ore prices and premiums during that time
period will be the main factors that determine future LIORC
dividends.
Respectfully submitted on behalf of the Directors of Labrador
Iron Ore Royalty Corporation,
William H. McNeil
President and Chief Executive Officer
May 7, 2018
Management's Discussion and Analysis
The following discussion and analysis should be read in
conjunction with the Management's Discussion and Analysis section
of the Corporation's 2017 Annual Report, & the financial
statements and notes contained therein and the March 31, 2018 interim condensed consolidated
financial statements. The Corporation's revenues are entirely
dependent on the operations of IOC as its principal assets relate
to the operations of IOC and its principal source of revenue is the
7% royalty it receives on all sales of iron ore products by
IOC. In addition to the volume of iron ore sold, the
Corporation's royalty revenue is affected by the price of iron ore
and the Canadian – U.S. dollar exchange rate.
The first quarter sales of IOC are traditionally adversely
affected by the closing of the St. Lawrence Seaway and general
winter operating conditions and are usually 15% – 20% of the annual
volume, with the balance spread fairly evenly throughout the other
three quarters. Because of the size of individual shipments,
some quarters may be affected by the timing of the loading of ships
that can be delayed from one quarter to the next.
Royalty revenue for the first quarter of 2018 amounted to
$33.8 million as compared to
$42.8 million for the first quarter
of 2017. Equity earnings from Iron Ore Company of Canada ("IOC") amounted to $14.6 million or $0.23 per share in the first quarter of 2018 as
compared to $22.2 million or
$0.35 per share in the first quarter
of 2017. Net income was $30.5 million
or $0.47 per share for the first
quarter of 2018 compared to $42.9
million or $0.67 per share for
the same period in 2017. Cash flow from operations for the first
quarter was $20.3 million or
$0.32 per share as compared to
$28.2 million or $0.44 per share for the same period in 2017.
The cash flow from operations, equity earnings and net income
for the first quarter of 2018 were lower than the first quarter of
2017 mainly due to reduced sales tonnages and reduced prices for
concentrate and pellets. The average index price for 62% fines
decreased 13% to US$74 per tonne CFR
China in the first quarter of 2018 compared to the average price in
the first quarter of 2017 of US$86
per tonne. Total IOC's sales for calculating the royalty to LIOR –
pellets plus concentrate for sale ("CFS") - of 3.9 million tonnes
was 17% lower in the first quarter of 2018 compared to the same
period in 2017, driven largely by lower CFS tonnage sales being 38%
lower than in the same period in 2017. The pellet sales tonnages in
the first quarter of 2018 were slightly higher (2%) than in the
first quarter of 2017. LIORC received an IOC dividend in the first
quarter of 2017 in the amount of $10.0
million or $0.16 per share,
whereas LIORC received no IOC dividend in the first quarter of
2018.
Issues with the parallel ore delivery system, increased ore
hardness, and a work stoppage, which commenced on March 27, 2018, adversely affected concentrate
production in the first quarter. Consequently, total concentrate
production in the first quarter of 2018 of 4.2 million tonnes was
13% lower than the first quarter of 2017 and was 15% lower than the
fourth quarter of 2017. The first quarter of 2017 was a record for
first quarter concentrate production.
The decreased concentrate production in the first quarter
primarily affected CFS production since pellet production was
favoured due to continued strong demand and premiums. CFS
production in the first quarter of 2018 was 28% lower than in the
first quarter of 2017 and 31% lower than the previous quarter.
Pellet production in the first quarter of 2018 was 7% higher than
in the first quarter of 2017; pellet production in the first
quarter of 2018 was approximately the same as the previous quarter.
The pellet plant operated well in the first quarter of 2018.
First quarter 2018 total iron ore tonnage sold by IOC (CFS plus
pellets) of 3.9 million tonnes was 17% below the total sales
tonnage in the first quarter of 2017 and 28% below the fourth
quarter of 2017. In the first quarter of 2018, the pellet sales
tonnage was 8% lower and CFS sales tonnage was 49% lower than the
fourth quarter of 2017.
The benchmark price for 62% Fe CFR China was 13% lower in the
first quarter of 2018 as compared to the first quarter of 2017. The
lower benchmark prices were somewhat offset by the improved
year-over-year pellet premiums and also the improved differential
between 62% and 65% concentrate. The higher premiums were driven by
the Chinese governments enacting and enforcing measures to reduce
pollution; these measures favour higher quality products such as
the CFS and pellets produced by IOC. The Canadian dollar was 4%
stronger in the first quarter of 2018 as compared to the first
quarter of 2017. As a result of the lower benchmark prices, reduced
sales tonnages and the effect of the stronger Canadian dollar,
somewhat offset by improved premiums, the royalty revenue for LIORC
in the first quarter of 2018 was 21% lower than the revenue in last
year's first quarter.
The following table sets out quarterly revenue, net income and
cash flow data for 2018, 2017 and 2016.
|
Revenue
|
Net
Income
|
Net
Income
per Share
|
Cash Flow
|
Cash Flow
from
Operations
per Share
|
Adjusted
Cash Flow
per Share (1)
|
Dividends
Declared per
Share
|
|
(in millions
except per share information)
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$34.3
|
$30.3
|
$0.47
|
$20.3
|
$0.32
|
$0.29
|
$0.35
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$43.4
|
$42.9
|
$0.67
|
$28.2(2)
|
$0.44(2)
|
$0.53(2)
|
$0.50
|
|
|
|
|
|
|
|
|
Second
Quarter
|
$34.2
|
$32.3
|
$0.50
|
$45.6(3)
|
$0.71(3)
|
$0.53(3)
|
$0.60
|
|
|
|
|
|
|
|
|
Third
Quarter
|
$40.4
|
$43.8
|
$0.69
|
$53.6(4)
|
$0.84(4)
|
$0.85(4)
|
$1.00
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$40.6
|
$38.3
|
$0.60
|
$39.6(5)
|
$0.62(5)
|
$0.65(5)
|
$0.55
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$22.3
|
$11.0
|
$0.17
|
$12.5
|
$0.19
|
$0.19
|
$0.25
|
|
|
|
|
|
|
|
|
Second
Quarter
|
$25.8
|
$8.3
|
$0.13
|
$7.6
|
$0.12
|
$0.22
|
$0.25
|
|
|
|
|
|
|
|
|
Third
Quarter
|
$28.4
|
$21.2
|
$0.33
|
$15.2
|
$0.24
|
$0.24
|
$0.25
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$38.6
|
$37.7
|
$0.59
|
$28.3(6)
|
$0.44(6)
|
$0.57(6)
|
$0.25
|
|
(1)
|
"Adjusted cash
flow" (see below)
|
|
(2)
|
Includes $10.0
million IOC dividend.
|
|
(3)
|
Includes $15.3
million IOC dividend.
|
|
(4)
|
Includes $32.2
million IOC dividend.
|
|
(5)
|
Includes $19.3
million IOC dividend.
|
|
(6)
|
Includes $15.1
million IOC dividend.
|
Standardized Cash Flow and Adjusted Cash Flow
For the Corporation, standardized cash flow is the same as cash
flow from operating activities as recorded in the Corporation's
consolidated statements of cash flow as the Corporation does not
incur capital expenditures or have any restrictions on
dividends. Standardized cash flow per share was $0.32 for the quarter (2017 - $0.44). Cumulative standardized cash flow from
inception of the Corporation is $25.47 per share and total cash distributions
since inception is $24.94 per share,
for a payout ratio of 98%.
The Corporation also reports "Adjusted cash flow" which is
defined as cash flow from operating activities after adjustments
for changes in amounts receivable, accounts payable and income
taxes recoverable and payable. It is not a recognized measure
under International Financial Reporting Standards ('IFRS").
The Directors believe that adjusted cash flow is a useful
analytical measure as it better reflects cash available for
dividends to shareholders.
The following reconciles standardized cash flow from operating
activities to adjusted cash flow (in '000's).
|
|
3 Months
Ended Mar. 31, 2018
|
3 Months
Ended Mar. 31, 2017
|
Standardized cash
flow from operating activities
|
|
$20,277
|
$28,183
|
Changes in amounts
receivable, accounts payable and income taxes payable
|
|
(1,591)
|
5,441
|
Adjusted cash
flow
|
|
$18,686
|
$33,624
|
Adjusted cash flow
per share
|
|
$0.29
|
$0.53
|
Adjusted cash flow, which better reflects cash available for
dividends, was $18.7 million, or
$0.29 per share, compared to
$33.6 million or $0.53 per share in the previous year. The
standardized cash flow from operating activities in the first
quarter of 2017 included a $10
million or $0.16 per share
cash dividend from IOC; IOC did not pay a dividend in the first
quarter of 2018.
Liquidity and Capital Resources
The Corporation had $25.6 million
in cash as at March 31, 2018
(December 31, 2017 - $40.5 million) with total current assets of
$60.0 million (December 31, 2017 - $82.6
million). The Corporation had working capital of
$29.4 million as at March 31, 2018 (December
31, 2017 - $33.1 million). The
Corporation's operating cash flow for the quarter was $20.3 million and the dividend paid during the
quarter was $35.2 million, resulting
in cash balances decreasing by $14.9
million during the first quarter of 2018.
Cash balances consist of deposits in Canadian dollars with
Canadian chartered banks. Amounts receivable primarily consist of
royalty payments from IOC. Royalty payments are received in U.S.
dollars and converted to Canadian dollars on receipt, usually 25
days after the quarter end. The Corporation does not normally
attempt to hedge this short-term foreign currency exposure.
Operating cash flow of the Corporation is sourced entirely from
IOC through the Corporation's 7% royalty, 10
cents commission per tonne and dividends from its 15.10%
equity interest in IOC. The Corporation intends to pay cash
dividends of the net income derived from IOC to the maximum extent
possible, subject to the maintenance of appropriate levels of
working capital.
The Corporation has a $50 million
revolving credit facility with a term ending September 18, 2019 with provision for annual
one-year extensions. No amount is currently drawn under this
facility (2017 – nil) leaving $50.0
million available to provide for any capital required by IOC
or requirements of the Corporation.
Outlook
The outlook for LIORC is clouded by the labour disruption at
IOC, which started on March 27, 2018,
and at the time of this writing is not resolved. IOC had
operational issues in the fourth quarter of 2017 and in the first
quarter of 2018, but the benchmark prices for concentrate and
pellet premiums were good and the demand for pellets remained
strong. When operations resume at IOC, LIORC can expect
strong royalty revenue and the possibility of IOC dividends, if
these market conditions continue. The labour disruption will also
affect the timing of capital investments, including the
refurbishment of the No. 4 pellet line and the development of the
Wabush 3 open pit.
It is the stated objective of IOC management to achieve fair and
equitable agreements with the workforce. However, IOC must be
positioned for the highs and the lows of the mining cycle in order
to remain a responsible and competitive business in the global
market for the long term.
The LIORC cash balance at March 31,
2018 stood at $25.6 million
before LIORC dividends payable on April 25,
2018 of $0.35 per share or
$22.4 million. The net royalty from
IOC was paid on the same date, maintaining the Corporation's strong
cash balance. The duration of the labour disruption at IOC, the
production achieved over the balance of 2018 after a settlement has
been reached, and the iron ore prices and premiums during that time
period will be the main factors that determine future LIORC
dividends.
William H. McNeil
President and Chief Executive Officer
Toronto, Ontario
May 7, 2018
Forward-Looking Statements
This report may contain
"forward-looking" statements that involve risks, uncertainties and
other factors that may cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Words such as "may", "will", "expect",
"believe", "plan", "intend", "should", "would", "anticipate" and
other similar terminology are intended to identify forward-looking
statements. These statements reflect current assumptions and
expectations regarding future events and operating performance as
of the date of this report. Forward-looking statements involve
significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. A number of factors could cause actual results to
vary significantly, including iron ore price and volume volatility,
exchange rates, the performance of IOC, market conditions in the
steel industry, mining risks and insurance, relationships with
aboriginal groups, changes affecting IOC's customers, competition
from other iron ore producers, estimates of reserves and resources
and government regulation and taxation. A discussion of these
factors is contained in LIORC's annual information form dated
March 8, 2018 under the heading,
"Risk Factors". Although the forward-looking statements contained
in this report are based upon what management of LIORC believes are
reasonable assumptions, LIORC cannot assure investors that actual
results will be consistent with these forward-looking statements.
These forward-looking statements are made as of the date of this
report and LIORC assumes no obligation, except as required by law,
to update any forward-looking statements to reflect new events or
circumstances. This report should be viewed in conjunction with
LIORC's other publicly available filings, copies of which can be
obtained electronically on SEDAR at www.sedar.com.
Notice:
The following unaudited interim condensed
consolidated financial statements of the Corporation have been
prepared by and are the responsibility of the Corporation's
management. The Corporation's independent auditor has not reviewed
these interim financial statements.
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
As
at
|
|
|
March
31,
|
|
December
31,
|
(in thousands of
Canadian dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash
|
|
$
|
25,575
|
|
$
|
40,498
|
|
Amounts
receivable
|
|
34,425
|
|
42,092
|
Total Current
Assets
|
|
60,000
|
|
82,590
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
|
Iron Ore Company of
Canada ("IOC")
|
|
|
|
|
|
|
royalty and
commission interests
|
|
257,703
|
|
259,032
|
|
Investment in
IOC
|
|
423,308
|
|
408,691
|
Total Non-Current
Assets
|
|
681,011
|
|
667,723
|
|
|
|
|
|
Total
Assets
|
|
$
|
741,011
|
|
$
|
750,313
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
7,075
|
|
$
|
8,601
|
|
Dividend
payable
|
|
22,400
|
|
35,200
|
|
Taxes
payable
|
|
1,153
|
|
5,703
|
Total Current
Liabilities
|
|
30,628
|
|
49,504
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
|
Deferred income
taxes
|
|
128,970
|
|
127,220
|
Total
Liabilities
|
|
159,598
|
|
176,724
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Share
capital
|
|
317,708
|
|
317,708
|
|
Retained
earnings
|
|
272,123
|
|
264,272
|
|
Accumulated other
comprehensive loss
|
|
(8,418)
|
|
(8,391)
|
|
|
581,413
|
|
573,589
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
741,011
|
|
$
|
750,313
|
Approved by the
Directors,
|
|
|
|
|
|
|
|
|
|
William H.
McNeil
|
|
|
|
Patricia M.
Volker
|
Director
|
|
|
|
Director
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March
31,
|
(in thousands of
Canadian dollars)
|
|
2018
|
|
2017
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
IOC
royalties
|
|
$
|
33,811
|
|
$
|
42,837
|
|
IOC
commissions
|
|
383
|
|
460
|
|
Interest and other
income
|
|
119
|
|
59
|
|
|
34,313
|
|
43,356
|
Expenses
|
|
|
|
|
|
Newfoundland royalty
taxes
|
|
6,762
|
|
8,567
|
|
Amortization of
royalty and commission interests
|
|
1,329
|
|
1,544
|
|
Administrative
expenses
|
|
862
|
|
1,049
|
|
|
8,953
|
|
11,160
|
|
|
|
|
|
Income before
equity earnings and income taxes
|
|
25,360
|
|
32,196
|
Equity earnings in
IOC
|
|
14,649
|
|
22,237
|
Income before
income taxes
|
|
40,009
|
|
54,433
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
|
|
Current
|
|
8,003
|
|
10,132
|
|
Deferred
|
|
1,755
|
|
1,387
|
|
|
9,758
|
|
11,519
|
|
|
|
|
|
Net income for the
period
|
|
30,251
|
|
42,914
|
|
|
|
|
|
Other
comprehensive loss
|
|
|
|
|
|
Share of other
comprehensive loss of IOC that will not be
|
|
|
|
|
|
reclassified
subsequently to profit or loss (net of income
taxes
|
|
|
|
|
|
of 2018 - $5; 2017 -
$17)
|
|
(27)
|
|
(96)
|
|
|
|
|
|
Comprehensive
income for the period
|
|
$
|
30,224
|
|
$
|
42,818
|
|
|
|
|
|
Net income per
share
|
|
$
|
0.47
|
|
$
|
0.67
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March
31,
|
(in thousands of
Canadian dollars)
|
|
2018
|
|
2017
|
|
|
|
Net inflow
(outflow) of cash related
|
|
|
|
|
|
to the following
activities
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
Net income for the
period
|
|
$
|
30,251
|
|
$
|
42,914
|
|
Items not affecting
cash:
|
|
|
|
|
|
|
Equity earnings in
IOC
|
|
(14,649)
|
|
(22,237)
|
|
|
Current income
taxes
|
|
8,003
|
|
10,132
|
|
|
Deferred income
taxes
|
|
1,755
|
|
1,387
|
|
|
Amortization of
royalty and commission interests
|
|
1,329
|
|
1,544
|
|
Common share dividend
from IOC
|
|
-
|
|
10,016
|
|
Change in amounts
receivable
|
|
7,667
|
|
(9,789)
|
|
Change in accounts
payable
|
|
(1,526)
|
|
1,741
|
|
Income taxes
paid
|
|
(12,553)
|
|
(7,526)
|
|
Cash flow from
operating activities
|
|
20,277
|
|
28,182
|
|
|
|
|
|
Financing
|
|
|
|
|
|
Dividends paid to
shareholders
|
|
(35,200)
|
|
(16,000)
|
|
Cash flow used in
financing activities
|
|
(35,200)
|
|
(16,000)
|
|
|
|
|
|
(Decrease)
increase in cash, during the period
|
|
(14,923)
|
|
12,182
|
|
|
|
|
|
Cash, beginning of
period
|
|
40,498
|
|
23,937
|
|
|
|
|
|
Cash, end of
period
|
|
$
|
25,575
|
|
$
|
36,119
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
other
|
|
|
|
Share
|
Retained
|
comprehensive
|
|
(in thousands of
Canadian dollars)
|
|
capital
|
earnings
|
loss
|
Total
|
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2016
|
|
$
|
317,708
|
$
|
276,588
|
$
|
(10,451)
|
$
|
583,845
|
Net income for the
year
|
|
-
|
42,914
|
-
|
42,914
|
Dividends declared to
shareholders
|
|
-
|
(32,000)
|
-
|
(32,000)
|
Share of other
comprehensive loss from investment in IOC (net of taxes)
|
|
-
|
-
|
(96)
|
(96)
|
Balance as at March
31, 2017
|
|
$
|
317,708
|
$
|
287,502
|
$
|
(10,547)
|
$
|
594,663
|
|
|
|
|
|
|
Balance as at
December 31, 2017
|
|
$
|
317,708
|
$
|
264,272
|
$
|
(8,391)
|
$
|
573,589
|
Net income for the
year
|
|
-
|
30,251
|
-
|
30,251
|
Dividends declared to
shareholders
|
|
-
|
(22,400)
|
-
|
(22,400)
|
Share of other
comprehensive loss from investment in IOC (net of taxes)
|
|
-
|
-
|
(27)
|
(27)
|
Balance as at March
31, 2018
|
|
$
|
317,708
|
$
|
272,123
|
$
|
(8,418)
|
$
|
581,413
|
The complete consolidated financial statements for the first
quarter ended March 31, 2018,
including the notes thereto, are posted on sedar.com and
labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation