TORONTO, May 13, 2019 /CNW/ - Labrador Iron Ore Royalty
Corporation ("LIORC", TSX: LIF) announced today its operation and
cash flow results for the first quarter ended March 31, 2019.
Royalty revenue for the first quarter of 2019 amounted to
$38.5 million as compared to
$33.8 million for the first quarter
of 2018. Equity earnings from Iron Ore Company of Canada ("IOC") amounted to $22.4 million or $0.35 per share in the first quarter of 2019 as
compared to $14.6 million or
$0.23 per share in the first quarter
of 2018. Net income was $39.3 million
or $0.61 per share for the first
quarter of 2019 compared to $30.3
million or $0.47 per share for
the same period in 2018. Cash flow from operations for the first
quarter was $25.0 million or
$0.39 per share as compared to
$20.3 million or $0.32 per share for the same period in 2018.
The cash flow from operations, equity earnings and net income
for the first quarter of 2019 were higher than the first quarter of
2018, despite lower sales of concentrate, as a result of higher
prices for concentrate and pellets. The average price for the
Platts index for 62% Fe Iron Ore,
CFR China ("62% Fe index") increased 12% to US$83 per tonne in the first quarter of 2019
compared to the average price in the first quarter of 2018 of
US$74 per tonne. Total IOC's sales
for calculating the royalty to LIORC - concentrate for sale ("CFS")
plus pellets of 3.5 million tonnes - was 9% lower in the first
quarter of 2019 compared to the same period in 2018, largely as a
result of CFS tonnages being 39% lower than in the same period in
2018. The pellet sales tonnages in the first quarter of 2019 were
6% higher than 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,
2019
|
3 Months
Ended
Mar. 31,
2018
|
|
|
(Unaudited)
|
|
|
|
|
Revenue
|
|
$39.2
|
$34.3
|
Cash flow from
operations
|
|
$25.0
|
$20.3
|
Operating cash flow
per share
|
|
$0.39
|
$0.32
|
Net income
|
|
$39.3
|
$30.3
|
Net income per
share
|
|
$0.61
|
$0.47
|
Iron Ore Company of Canada Operations
Production
Frozen material and blocked feeders in the ore barn as a result of
adverse weather in January and February caused various delays which
lowered production. There were also delays associated with starting
the mine development program with a new contractor in 2019. These
were partially offset by higher production in March, mainly due to
higher than plan weight yield and robust feed from the mine.
As a result, total concentrate production in the first quarter of
2019 of 4.4 million tonnes was 7% higher than the first quarter of
2018.
As is usual for the first quarter of any year, due to weather,
concentrate production in the first quarter of 2019 was 12% lower
than the fourth quarter of 2018.
The lower than budgeted 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 2019 of 1.5 million tonnes was
11% higher than in the first quarter of 2018 and 38% lower than the
previous quarter. Pellet production in the first quarter of 2019 of
2.7 million tonnes was 2% higher than the first quarter of 2018 and
13% higher than the previous quarter. The pellet plant production
in the first quarter of 2019 was negatively impacted by unplanned
maintenance to induration machine #1, while lower pellet production
than budgeted in the fourth quarter of 2018 was mainly due to the
rebuild of induration machine #4, which was deferred from the
second quarter of 2018 due to the strike.
Sales as Reported for the LIORC Royalty
First quarter 2019 total iron ore tonnage sold by IOC (CFS plus
pellets) of 3.5 million tonnes was 9% lower in the first quarter of
2019 compared to the same period in 2018, largely as a result of
CFS tonnage being 39% lower than in the same period in 2018.
Despite higher CFS production in the first quarter of 2019
than in the same period in 2018, sales of CFS were lower in the
first quarter of 2019 compared to the first quarter of 2018 due to
timing differences. In the first quarter of 2019, the pellet sales
tonnage was 6% higher than in the first quarter of 2018.
IOC sells CFS based on the Platts index for 65% Fe Iron Ore, CFR China ("65% Fe index"). The
average price for the 65% Fe Index increased 6% to US$95 per tonne in the first quarter of 2019
compared to the average price in the first quarter of 2018 of
US$90 per tonne. The seaborne iron
ore prices were affected by a reduction of iron ore supply by Vale
as a result of the collapse of the tailings dam at Vale's Córrego
do Feijão mine in Brumadinho, Minas Gerais state, Brazil ("Brumadinho") and subsequent closing
of other dams. The premium for the 65% Fe index compared to the 62%
Fe index, which had been expanding over the last few years as the
Chinese governments enacted and enforced measures to reduce
pollution, declined somewhat in the first quarter of 2019 to 15%,
as compared to 22% in the first quarter of 2018. The quarterly
Atlantic Basin blast furnace pellet premium, as reported by Platts,
averaged US$67 per tonne in the first
quarter of 2019, a 16% increase over the first quarter of 2018 and
10% higher than the fourth quarter of 2018.
The Canadian dollar was 5% weaker in the first quarter of 2019
as compared to the first quarter of 2018. As a result of higher
concentrate and pellet prices, and the effect of the weaker
Canadian dollar, somewhat offset by reduced concentrate sales
tonnages, the royalty revenue for LIORC in the first quarter of
2019 was 14% higher than the royalty 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,
2019
|
3 Months
Ended
Mar. 31,
2018
|
Year
Ended
Dec. 31,
2018
|
|
|
|
|
|
Pellets
|
|
2.70
|
2.54
|
8.41
|
Concentrates(1)
|
|
0.83
|
1.35
|
6.70
|
Total(2)
|
|
3.53
|
3.89
|
15.10
|
|
|
(1)
|
Excludes third party
ore sales
|
(2)
|
Totals may not add up
due to rounding
|
Outlook
The outlook for LIORC remains positive. Rio Tinto's 2019
guidance for IOC's saleable production of CFS and pellets remains
unchanged at between 19.2 and 20.9 million tonnes on a 100% basis.
Benchmark amounts for concentrate and pellet premiums remain
attractive. The Brumadinho dam failure on January 25, 2019 and subsequent closures
resulted in approximately 10% of the world's iron ore pellet
production being removed from the market. The major suppliers of
pellets are generally operating at near planned capacity with no
new pellet plants or additional capacity coming on line in the
short or medium term. In addition, long-term fundamental
changes, such as China taking
action to reduce the effects of pollution and placing a greater
emphasis on producing higher quality steel products, could provide
continued support for higher quality iron ore products, like those
sold by IOC. LIORC can expect strong royalty revenue and the
possibility of IOC dividends, if these market conditions
continue.
The LIORC cash balance at March 31,
2019 stood at $67.1 million
before LIORC dividends payable on April 25,
2019 of $1.05 per share or
$67.2 million. The net royalty from
IOC was paid on the same date, maintaining the Corporation's strong
cash balance. On May 9, 2019 the
Board of IOC declared a dividend of US$125
million, payable to shareholders of IOC on May 23, 2019.
Respectfully submitted on behalf of the Directors of Labrador
Iron Ore Royalty Corporation,
John F. Tuer
President and Chief Executive Officer
May 13, 2019
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 2018 Annual Report, and the financial
statements and notes contained therein and the March 31, 2019 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 2019 amounted to
$38.5 million as compared to
$33.8 million for the first quarter
of 2018. Equity earnings from IOC amounted to $22.4 million or $0.35 per share in the first quarter of 2019 as
compared to $14.6 million or
$0.23 per share in the first quarter
of 2018. Net income was $39.3 million
or $0.61 per share for the first
quarter of 2019 compared to $30.3
million or $0.47 per share for
the same period in 2018. Cash flow from operations for the first
quarter was $25.0 million or
$0.39 per share as compared to
$20.3 million or $0.32 per share for the same period in 2018.
The cash flow from operations, equity earnings and net income
for the first quarter of 2019 were higher than the first quarter of
2018, despite lower sales of concentrate, as a result of higher
prices for concentrate and pellets. The average price for the 62%
Fe index increased 12% to US$83 per
tonne in the first quarter of 2019 compared to the average price in
the first quarter of 2018 of US$74
per tonne. Total IOC's sales for calculating the royalty to LIORC -
CFS plus pellets of 3.5 million tonnes - was 9% lower in the first
quarter of 2019 compared to the same period in 2018, largely as a
result of CFS tonnages being 39% lower than in the same period in
2018. The pellet sales tonnages in the first quarter of 2019 were
6% higher than in the first quarter of 2018.
Frozen material and blocked feeders in the ore barn as a result
of adverse weather in January and February caused various delays
which lowered production. There were also delays associated with
starting the mine development program with a new contractor in
2019. These were partially offset by higher production in March,
mainly due to higher than plan weight yield and robust feed from
the mine. As a result, total concentrate production in the
first quarter of 2019 of 4.4 million tonnes was 7% higher than the
first quarter of 2018. As is usual for the first quarter of any
year, due to weather, concentrate production in the first quarter
of 2019 was 12% lower than the fourth quarter of 2018.
The lower than budgeted 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 2019 of 1.5 million tonnes was
11% higher than in the first quarter of 2018 and 38% lower than the
previous quarter. Pellet production in the first quarter of 2019 of
2.7 million tonnes was 2% higher than the first quarter of 2018 and
13% higher than the previous quarter. The pellet plant production
in the first quarter of 2019 was negatively impacted by unplanned
maintenance to induration machine #1, while lower pellet production
than budgeted in the fourth quarter of 2018 was mainly due to the
rebuild of induration machine #4, which was deferred from the
second quarter of 2018 due to the strike.
First quarter 2019 total iron ore tonnage sold by IOC (CFS plus
pellets) of 3.5 million tonnes was 9% lower in the first quarter of
2019 compared to the same period in 2018, largely as a result of
CFS tonnage being 39% lower than in the same period in 2018.
Despite higher CFS production in the first quarter of 2019
than in the same period in 2018, sales of CFS were lower in the
first quarter of 2019 compared to the first quarter of 2018 due to
timing differences. In the first quarter of 2019, the pellet sales
tonnage was 6% higher than in the first quarter of 2018.
IOC sells CFS based on the Platts index for the 65% Fe index.
The average price for the 65% Fe Index increased 6% to US$95 per tonne in the first quarter of 2019
compared to the average price in the first quarter of 2018 of
US$90 per tonne. The seaborne iron
ore prices were affected by a reduction of iron ore supply by Vale
as a result of the collapse of the tailings dam in Brumadinho and
subsequent closing of other dams. The premium for the 65% Fe index
compared to the 62% Fe index, which had been expanding over the
last few years as the Chinese governments enacted and enforced
measures to reduce pollution, declined somewhat in the first
quarter of 2019 to 15%, as compared to 22% in the first quarter of
2018. The quarterly Atlantic Basin blast furnace pellet premium, as
reported by Platts, averaged US$67
per tonne in the first quarter of 2019, a 16% increase over the
first quarter of 2018 and 10% higher than the fourth quarter of
2018.
The Canadian dollar was 5% weaker in the first quarter of 2019
as compared to the first quarter of 2018. As a result of higher
concentrate and pellet prices, and the effect of the weaker
Canadian dollar, somewhat offset by reduced concentrate sales
tonnages, the royalty revenue for LIORC in the first quarter of
2019 was 14% higher than the royalty revenue in last year's first
quarter.
The following table sets out quarterly revenue, net income and
cash flow data for 2019, 2018 and 2017.
|
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)
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$39.2
|
$39.3
|
$0.61
|
$25.0
|
$0.39
|
$0.34
|
$1.05
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$34.3
|
$30.3
|
$0.47
|
$20.3
|
$0.32
|
$0.29
|
$0.35
|
|
|
|
|
|
|
|
|
Second
Quarter
|
$5.2
|
$(3.3)
|
$(0.05)
|
$15.5
|
$0.24
|
$0.04
|
$0.25
|
|
|
|
|
|
|
|
|
Third
Quarter
|
$44.6
|
$58.1
|
$0.91
|
$59.7(2)
|
$0.93(2)
|
$1.30(2)
|
$0.55
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$46.8
|
$43.4
|
$0.68
|
$53.3(3)
|
$0.83(3)
|
$0.79(3)
|
$0.60
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$43.4
|
$42.9
|
$0.67
|
$28.2(4)
|
$0.44(4)
|
$0.53(4)
|
$0.50
|
|
|
|
|
|
|
|
|
Second
Quarter
|
$34.2
|
$32.3
|
$0.50
|
$45.6(5)
|
$0.71(5)
|
$0.53(5)
|
$0.60
|
|
|
|
|
|
|
|
|
Third
Quarter
|
$40.4
|
$43.8
|
$0.69
|
$53.6(6)
|
$0.84(6)
|
$0.85(6)
|
$1.00
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$40.6
|
$38.3
|
$0.60
|
$39.6(7)
|
$0.62(7)
|
$0.65(7)
|
$0.55
|
|
|
(1)
|
"Adjusted cash
flow" (see below)
|
(2)
|
Includes $58.6
million IOC dividend
|
(3)
|
Includes $25.3
million IOC dividend
|
(4)
|
Includes $10.0
million IOC dividend
|
(5)
|
Includes $15.2
million IOC dividend
|
(6)
|
Includes $32.2
million IOC dividend
|
(7)
|
Includes $19.3
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
cash flow statements as the Corporation does not incur capital
expenditures or have any restrictions on dividends.
Standardized cash flow per share was $0.39 for the quarter (2018 - $0.32). Cumulative standardized cash flow from
inception of the Corporation is $27.86 per share and total cash distributions
since inception is $27.39 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,
2019
|
|
3 Months
Ended
Mar. 31,
2018
|
Standardized cash
flow from operating activities
|
$24,963
|
|
$20,277
|
Changes in amounts
receivable, accounts payable and income taxes
payable
|
(3,451)
|
|
(1,591)
|
Adjusted cash
flow
|
$21,512
|
|
$18,686
|
Adjusted cash flow
per share
|
$0.34
|
|
$0.29
|
Liquidity and Capital Resources
The Corporation had $67.1 million
in cash as at March 31, 2019
(December 31, 2018 - $80.5 million) with total current assets of
$107.4 million (December 31, 2018 - $127.0
million). The Corporation had working capital of
$30.4 million as at March 31, 2019 (December
31, 2018 - $76.3 million). The
Corporation's operating cash flow for the quarter was $25.0 million and the dividend paid during the
quarter was $38.4 million, resulting
in cash balances decreasing by $13.4
million during the first quarter of 2019.
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 normally pays cash
dividends from its net income to the maximum extent possible,
subject to the maintenance of appropriate levels of working
capital.
The Corporation had increased its cash balance based on the
directors' view that it was prudent at that particular time to have
some additional financial flexibility. On March 7, 2019 the directors determined that the
cash balance be reduced to a more typical level with excess cash
distributed to shareholders by means of a special dividend to be
paid on April 25, 2019.
The Corporation has a $50 million
revolving credit facility with a term ending September 18, 2021 with provision for annual
one-year extensions. No amount is currently drawn under this
facility (2018– nil) leaving $50.0
million available to provide for any capital required by IOC
or requirements of the Corporation.
Outlook
The outlook for LIORC remains positive. Rio Tinto's 2019
guidance for IOC's saleable production of CFS and pellets remains
unchanged at between 19.2 and 20.9 million tonnes on a 100% basis.
Benchmark amounts for concentrate and pellet premiums remain
attractive. The Brumadinho dam failure on January 25, 2019 and subsequent closures resulted
in approximately 10% of the world's iron ore pellet production
being removed from the market. The major suppliers of pellets are
generally operating at near planned capacity with no new pellet
plants or additional capacity coming on line in the short or medium
term. In addition, long-term fundamental changes, such as
China taking action to reduce the
effects of pollution and placing a greater emphasis on producing
higher quality steel products, could provide continued support for
higher quality iron ore products, like those sold by IOC.
LIORC can expect strong royalty revenue and the possibility of IOC
dividends, if these market conditions continue.
The LIORC cash balance at March 31,
2019 stood at $67.1 million
before LIORC dividends payable on April 25,
2019 of $1.05 per share or
$67.2 million. The net royalty from
IOC was paid on the same date, maintaining the Corporation's strong
cash balance. On May 9, 2019 the
Board of IOC declared a dividend of US$125
million, payable to shareholders of IOC on May 23, 2019.
John F. Tuer
President and Chief Executive Officer
Toronto, Ontario
May 13, 2019
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, the renewal of the mining leases, outcomes of
existing or future litigation, 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 7, 2019 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)
|
2019
|
|
2018
|
|
|
(Unaudited)
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and short-term
investments
|
$
|
67,058
|
|
$
|
80,495
|
|
Amounts
receivable
|
40,348
|
|
46,548
|
Total Current
Assets
|
107,406
|
|
127,043
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
Iron Ore Company of
Canada ("IOC")
|
|
|
|
|
royalty
and commission interests
|
252,239
|
|
253,846
|
|
Investment in
IOC
|
406,350
|
|
382,704
|
Total Non-Current
Assets
|
658,589
|
|
636,550
|
|
|
|
|
|
Total
Assets
|
$
|
765,995
|
|
$
|
763,593
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
$
|
8,441
|
|
$
|
9,969
|
|
Dividend
payable
|
67,200
|
|
38,400
|
|
Taxes
payable
|
1,392
|
|
2,613
|
Total Current
Liabilities
|
77,033
|
|
50,982
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
Deferred income
taxes
|
124,910
|
|
121,760
|
Total
Liabilities
|
201,943
|
|
172,742
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Share
capital
|
317,708
|
|
317,708
|
|
Retained
earnings
|
252,815
|
|
280,759
|
|
Accumulated other
comprehensive loss
|
(6,471)
|
|
(7,616)
|
|
|
564,052
|
|
590,851
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
765,995
|
|
$
|
763,593
|
|
|
|
|
|
|
|
|
|
|
Approved by the
Directors,
|
|
|
|
|
|
|
|
|
John F.
Tuer
|
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 except for per share information)
|
2019
|
|
2018
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
IOC
royalties
|
$
|
38,496
|
|
$
|
33,811
|
|
IOC
commissions
|
348
|
|
383
|
|
Interest and other
income
|
366
|
|
119
|
|
|
39,210
|
|
34,313
|
Expenses
|
|
|
|
|
Newfoundland royalty
taxes
|
7,699
|
|
6,762
|
|
Amortization of
royalty and commission interests
|
1,607
|
|
1,329
|
|
Administrative
expenses
|
770
|
|
862
|
|
|
10,076
|
|
8,953
|
|
|
|
|
|
Income before
equity earnings and income taxes
|
29,134
|
|
25,360
|
Equity earnings in
IOC
|
22,408
|
|
14,649
|
|
|
|
|
|
Income before
income taxes
|
51,542
|
|
40,009
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
|
Current
|
9,229
|
|
8,003
|
|
Deferred
|
2,964
|
|
1,755
|
|
|
12,193
|
|
9,758
|
|
|
|
|
|
Net income for the
period
|
39,349
|
|
30,251
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
Share of other
comprehensive loss of IOC that will not be
|
|
|
|
|
reclassified
subsequently to profit or loss (net of income taxes
|
|
|
|
|
of 2019 - $202; 2018
- $5)
|
1,145
|
|
(27)
|
|
|
|
|
|
Comprehensive
income for the period
|
$
|
40,494
|
|
$
|
30,224
|
|
|
|
|
|
Net income per
share
|
$
|
0.61
|
|
$
|
0.47
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
For the Three
Months Ended
|
|
March
31,
|
(in thousands of
Canadian dollars)
|
2019
|
|
2018
|
|
(Unaudited)
|
Net inflow
(outflow) of cash related
|
|
|
|
to the following
activities
|
|
|
|
|
|
|
|
Operating
|
|
|
|
Net income for the
period
|
$
|
39,349
|
|
$
|
30,251
|
Items not affecting
cash:
|
|
|
|
Equity earnings in
IOC
|
(22,408)
|
|
(14,649)
|
Current income
taxes
|
9,229
|
|
8,003
|
Deferred income
taxes
|
2,964
|
|
1,755
|
Amortization of
royalty and commission interests
|
1,607
|
|
1,329
|
Change in amounts
receivable
|
6,200
|
|
7,667
|
Change in accounts
payable
|
(1,528)
|
|
(1,526)
|
Income taxes
paid
|
(10,450)
|
|
(12,553)
|
Cash flow from
operating activities
|
24,963
|
|
20,277
|
|
|
|
|
Financing
|
|
|
|
Dividend paid to
shareholders
|
(38,400)
|
|
(35,200)
|
Cash flow used in
financing activities
|
(38,400)
|
|
(35,200)
|
|
|
|
|
Decrease in cash,
during the period
|
(13,437)
|
|
(14,923)
|
|
|
|
|
Cash, beginning of
period
|
80,495
|
|
40,498
|
|
|
|
|
Cash, end of
period
|
$
|
67,058
|
|
$
|
25,575
|
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
|
|
(Unaudited)
|
|
|
|
|
|
Balance as at
December 31, 2017
|
$
|
317,708
|
$
|
264,272
|
$
|
(8,391)
|
$
|
573,589
|
Net income for the
period
|
-
|
30,251
|
-
|
30,251
|
Dividend 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
|
|
|
|
|
|
Balance as at
December 31, 2018
|
$
|
317,708
|
$
|
280,759
|
$
|
(7,616)
|
$
|
590,851
|
Adjustment on initial
application of IFRS 16 (note 3)
|
|
(93)
|
|
(93)
|
Net income for the
period
|
-
|
39,349
|
-
|
39,349
|
Dividend declared to
shareholders
|
-
|
(67,200)
|
-
|
(67,200)
|
Share of other
comprehensive income from investment in IOC (net of
taxes)
|
-
|
-
|
1,145
|
1,145
|
Balance as at March
31, 2019
|
$
|
317,708
|
$
|
252,815
|
$
|
(6,471)
|
$
|
564,052
|
The complete consolidated financial statements for the first
quarter ended March 31, 2019,
including the notes thereto, are posted on sedar.com and
labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation