TORONTO, May 7, 2020 /CNW/ - Labrador Iron Ore Royalty
Corporation ("LIORC", TSX: LIF) announced today its operation and
cash flow results for the first quarter ended March 31, 2020.
Royalty revenue for the first quarter of 2020 amounted to
$47.6 million as compared to
$38.5 million for the first quarter
of 2019. Equity earnings from Iron Ore Company of Canada ("IOC") amounted to $24.7 million or $0.39 per share in the first quarter of 2020 as
compared $22.4 million or
$0.35 per share in the first quarter
of 2019. Net income was $46.7 million
or $0.73 per share for the first
quarter of 2020 compared to $39.3
million or $0.61 per share for
the same period in 2019. Cash flow from operations for the first
quarter was $10.7 million or
$0.17 per share as compared to
$25.0 million or $0.39 per share for the same period in 2019.
The equity earnings from IOC and net income for the first
quarter of 2020 were higher than the first quarter of 2019, as a
result of higher sales of concentrate for sale ("CFS") and pellets.
Total IOC's sales for calculating the royalty to LIORC (CFS plus
pellets) of 4.7 million tonnes were 33% higher in the first quarter
of 2020 compared to the same period in 2019. CFS sales of 1.7
million tonnes were 103% higher than in the same period in 2019 and
pellet sales in the first quarter of 2020 of 3.0 million tonnes
were 12% higher than in the first quarter of 2019. Iron ore
prices in the first quarter were mixed. The average price for the
Platts index for 62% Fe Iron Ore,
CFR China ("62% Fe index") increased 8% to US$89 per tonne in the first quarter of 2020
compared to the average price in the first quarter of 2019 of
US$83 per tonne. However, the
quarterly Atlantic Basin blast furnace pellet premium, as reported
by Platts, averaged US$29 per tonne
in the first quarter of 2020, a 57% decrease over the first quarter
of 2019.
LIORC's results for the three months ended March 31 are summarized below:
(in millions
except per share information)
|
|
3 Months
Ended
Mar. 31,
2020
|
3 Months
Ended
Mar. 31,
2019
|
|
|
(Unaudited)
|
|
|
|
|
Revenue
|
|
$48.3
|
$39.2
|
Cash flow from
operations
|
|
$10.7
|
$25.0
|
Operating cash flow
per share
|
|
$0.17
|
$0.39
|
Net income
|
|
$46.7
|
$39.3
|
Net income per
share
|
|
$0.73
|
$0.61
|
Iron Ore Company of Canada Operations
Production
Total concentrate production in the first quarter of 2020 of 4.7
million tonnes was 7% higher than the first quarter of 2019 and 1%
higher than the fourth quarter of 2019. The mine set January and
February records for total material moved. However, the total
material moved in March was lower than budgeted.
IOC continued to maximize pellet production during the first
quarter of 2020. CFS production in the first quarter of 2020 of 1.6
million tonnes was 4% higher than in the first quarter of 2019 and
19% lower than the fourth quarter of 2019. Pellet production in the
first quarter of 2020 of 2.8 million tonnes was 3% higher than the
first quarter of 2019 and 15% higher than the fourth quarter of
2019. The pellet plant production in the first quarter of 2020 was
higher than budgeted due to better than expected reliability of
induration machine #1.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 4.7
million tonnes in the first quarter of 2020 was 33% higher compared
to the same period in 2019, mainly as a result of higher
production of CFS and pellets in the first quarter of 2020. In the
first quarter of 2020 CFS tonnage sold by IOC was 103% higher than
in the same period in 2019 and pellet sales tonnage was 12% higher
than in the first quarter of 2019.
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 9% to US$104 per tonne in the first quarter of 2020
compared to the average price in the first quarter of 2019 of
US$95 per tonne. Demand for the
high-quality iron ores that IOC produces remained strong in the
first quarter of 2020, mainly driven by a combination of seaborne
iron ore supply disruptions and solid demand from China's steel mills despite COVID-19 impacts.
The premium for the 65% Fe index compared to the 62% Fe index,
which had contracted over the last two quarters, increased in the
first quarter of 2020 to 16%, as compared to 11% in the prior
quarter.
The COVID-19 pandemic situation caused a slowdown in demand for
pellets in various markets and industries across Europe and North America. The quarterly
Atlantic Basin blast furnace pellet premium, as reported by Platts,
averaged US$29 per tonne in the first
quarter of 2020, a 57% decrease over the first quarter of 2019 and
21% lower than the fourth quarter of 2019.
Despite lower pellet premiums, higher CFS prices together with
higher concentrate and pellet tonnages, resulted in royalty revenue
for LIORC in the first quarter of 2020 increasing 24% as compared
to the royalty revenue in the first quarter of 2019.
A summary of IOC's sales for calculating the royalty to LIORC in
millions of tonnes is as follows:
|
3 Months
Ended Mar. 31,
2020
|
|
3 Months
Ended Mar.
31,
2019
|
|
Year
Ended
Dec. 31,
2019
|
|
|
|
|
|
|
Pellets
|
3.02
|
|
2.70
|
|
9.62
|
Concentrates(1)
|
1.68
|
|
0.83
|
|
7.51
|
|
|
|
|
|
|
Total(2)
|
4.70
|
|
3.53
|
|
17.14
|
|
|
(1)
|
Excludes third party
ore sales.
|
(2)
|
Totals may not add up
due to rounding.
|
Outlook
The COVID-19 pandemic increases the uncertainty regarding the
immediate outlook for LIORC. At present, IOC's mining,
processing, rail and shipping operations continue to operate safely
within the COVID-19 guidelines of both the Quebec and Newfoundland and Labrador governments. Rio Tinto's 2020
guidance for IOC's saleable production of CFS and pellets remains
unchanged at between 17.9 and 20.4 million tonnes on a 100% basis.
Additionally, despite a global economic slowdown due to the global
response to COVID-19, benchmark prices for iron ore concentrate
remain attractive. To date iron ore prices have benefited from
continued demand from China and
reduced supply, particularly from Brazil where heavy rains have reduced output.
However, there are no assurances that future impacts from COVID-19
will not affect IOC's operation levels or seaborne iron ore
prices.
Longer term LIORC is well positioned to benefit from its royalty
and equity investments in IOC. The Canadian dollar ended the first
quarter of 2020 at US$0.705, down
8.5% from the start of the year. A decrease in the Canadian dollar
increases IOC's profitability because seaborne iron ore is priced
in US dollars and IOC's costs are predominantly incurred in
Canadian dollars. Additionally, IOC's decision at the end of the
first quarter of 2020 to temporarily halt production of two pellet
machines in order to focus on meeting the demand for CFS highlights
IOC's ability to adjust its output of product to align with
changing market conditions. Finally, the recent renewal of all
12 of LIORC's mining leases for an additional 30 years by the
Ministry of Natural Resources of the Government of Newfoundland and Labrador, highlights the long life nature of
LIORC's unique royalty asset.
The LIORC cash balance at March 31,
2020 stood at $21.3 million
before LIORC dividends payable on April 25,
2020 of $0.35 per share or
$22.4 million. The net royalty from
IOC was received by LIORC on the same date, maintaining the
Corporation's strong cash balance.
Respectfully submitted on behalf of the Directors of Labrador
Iron Ore Royalty Corporation,
John F. Tuer
President and Chief Executive Officer
May 7, 2020
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 2019 Annual Report, and the financial
statements and notes contained therein and the March 31, 2020 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 2020 amounted to
$47.6 million as compared to
$38.5 million for the first quarter
of 2019. Equity earnings from IOC amounted to $24.7 million or $0.39 per share in the first quarter of 2020 as
compared $22.4 million or
$0.35 per share in the first quarter
of 2019. Net income was $46.7 million
or $0.73 per share for the first
quarter of 2020 compared to $39.3
million or $0.61 per share for
the same period in 2019. Cash flow from operations for the first
quarter was $10.7 million or
$0.17 per share as compared to
$25.0 million or $0.39 per share for the same period in 2019.
The equity earnings from IOC and net income for the first
quarter of 2020 were higher than the first quarter of 2019, as a
result of higher sales of CFS and pellets. Total IOC's sales for
calculating the royalty to LIORC (CFS plus pellets) of 4.7 million
tonnes were 33% higher in the first quarter of 2020 compared to the
same period in 2019. CFS sales of 1.7 million tonnes were 103%
higher than in the same period in 2019 and pellet sales in the
first quarter of 2020 of 3.0 million tonnes were 12% higher than in
the first quarter of 2019. Iron ore prices in the first
quarter were mixed. The average price for the Platts index for
62% Fe index increased 8% to US$89
per tonne in the first quarter of 2020 compared to the average
price in the first quarter of 2019 of US$83 per tonne. However, the quarterly Atlantic
Basin blast furnace pellet premium, as reported by Platts, averaged
US$29 per tonne in the first quarter
of 2020, a 57% decrease over the first quarter of 2019.
Total concentrate production in the first quarter of 2020 of 4.7
million tonnes was 7% higher than the first quarter of 2019 and 1%
higher than the fourth quarter of 2019. The mine set January and
February records for total material moved. However, the total
material moved in March was lower than budgeted.
IOC continued to maximize pellet production during the first
quarter of 2020. CFS production in the first quarter of 2020 of 1.6
million tonnes was 4% higher than in the first quarter of 2019 and
19% lower than the fourth quarter of 2019. Pellet production in the
first quarter of 2020 of 2.8 million tonnes was 3% higher than the
first quarter of 2019 and 15% higher than the fourth quarter of
2019. The pellet plant production in the first quarter of 2020 was
higher than budgeted due to better than expected reliability of
induration machine #1.
Total iron ore sales tonnage by IOC (CFS plus pellets) of 4.7
million tonnes in the first quarter of 2020 was 33% higher compared
to the same period in 2019, mainly as a result of higher production
of CFS and pellets in the first quarter of 2020. In the first
quarter of 2020 CFS tonnage sold by IOC was 103% higher than in the
same period in 2019 and pellet sales tonnage was 12% higher than in
the first quarter of 2019.
IOC sells CFS based on the Platts index for 65% Fe index. The
average price for the 65% Fe Index increased 9% to US$104 per tonne in the first
quarter of 2020 compared to the average price in the first quarter
of 2019 of US$95 per tonne. Demand
for the high-quality iron ores that IOC produces remained strong in
the first quarter of 2020, mainly driven by a combination of
seaborne iron ore supply disruptions and solid demand from
China's steel mills despite
COVID-19 impacts. The premium for the 65% Fe index compared to the
62% Fe index, which had contracted over the last two quarters,
increased in the first quarter of 2020 to 16%, as compared to 11%
in the prior quarter.
The COVID-19 pandemic situation caused a slowdown in demand for
pellets in various markets and industries across Europe and North America. The quarterly
Atlantic Basin blast furnace pellet premium, as reported by Platts,
averaged US$29 per tonne in the first
quarter of 2020, a 57% decrease over the first quarter of 2019 and
21% lower than the fourth quarter of 2019.
Despite lower pellet premiums, higher CFS prices together with
higher concentrate and pellet tonnages, resulted in royalty revenue
for LIORC in the first quarter of 2020 increasing 24% as compared
to the royalty revenue in the first quarter of 2019.
The following table sets out quarterly revenue, net income and
cash flow data for 2020, 2019 and 2018.
|
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)
|
|
|
|
|
|
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$48.3
|
$46.7
|
$0.73
|
$10.7
|
$0.17
|
$0.42
|
$0.35
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
$39.2
|
$39.3
|
$0.61
|
$25.0
|
$0.39
|
$0.34
|
$1.05
|
|
|
|
|
|
|
|
|
Second
Quarter
|
$53.3
|
$61.1
|
$0.95
|
$47.8(2)
|
$0.75(2)
|
$0.86(2)
|
$0.90
|
|
|
|
|
|
|
|
|
Third
Quarter
|
$46.2
|
$57.5
|
$0.90
|
$72.6(3)
|
$1.13(3)
|
$1.02(3)
|
$1.00
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$39.6
|
$47.4
|
$0.74
|
$79.1(4)
|
$1.24(4)
|
$1.03(4)
|
$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(5)
|
$0.93(5)
|
$1.30(5)
|
$0.55
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
$46.8
|
$43.4
|
$0.68
|
$53.3(6)
|
$0.83(6)
|
$0.79(6)
|
$0.60
|
|
|
|
|
|
|
|
|
|
(1) "Adjusted
cash flow" (see below).
|
(2) Includes
$25.4 million IOC dividend.
|
(3) Includes $40.1
million IOC dividend.
|
(4) Includes
$44.6 million IOC dividend.
|
(5) Includes
$58.6 million IOC dividend.
|
(6) Includes
$25.3 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 $0.17 for the
quarter (2019 - $0.39). Cumulative
standardized cash flow from inception of the Corporation is
$31.15 per share and total cash
distributions since inception is $30.69 per share, for a payout ratio of 99%.
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,
2020
|
|
3 Months
Ended
Mar. 31,
2019
|
Standardized cash
flow from operating activities
|
$10,653
|
|
$24,963
|
Changes in amounts
receivable, accounts payable and income taxes payable
|
16,173
|
|
(3,451)
|
Adjusted cash
flow
|
$26,826
|
|
$21,512
|
Adjusted cash flow
per share
|
$0.42
|
|
$0.34
|
Liquidity and Capital Resources
The Corporation had $21.3 million
in cash as at March 31, 2020
(December 31, 2019 - $77.9 million) with total current assets of
$69.4 million (December 31, 2019 - $114.0
million). The Corporation had working capital of
$32.6 million as at March 31, 2020 (December
31, 2019 - $28.2 million). The
Corporation's operating cash flow for the quarter was $10.7 million and the dividend paid during the
quarter was $67.2 million, resulting
in cash balances decreasing by $56.5
million during the first quarter of 2020.
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 has a $30 million
revolving credit facility with a term ending September 18, 2022 with provision for annual
one-year extensions. No amount is currently drawn under this
facility (2019 – nil) leaving $30.0
million available to provide for any capital required by IOC
or requirements of the Corporation.
Outlook
The COVID-19 pandemic increases the uncertainty regarding the
immediate outlook for LIORC. At present, IOC's mining,
processing, rail and shipping operations continue to operate safely
within the COVID-19 guidelines of both the Quebec and Newfoundland and Labrador governments. Rio Tinto's 2020
guidance for IOC's saleable production of CFS and pellets remains
unchanged at between 17.9 and 20.4 million tonnes on a 100% basis.
Additionally, despite a global economic slowdown due to the global
response to COVID-19, benchmark prices for iron ore concentrate
remain attractive. To date iron ore prices have benefited from
continued demand from China and
reduced supply, particularly from Brazil where heavy rains have reduced output.
However, there are no assurances that future impacts from COVID-19
will not affect IOC's operation levels or seaborne iron ore
prices.
Longer term LIORC is well positioned to benefit from its royalty
and equity investments in IOC. The Canadian dollar ended the first
quarter of 2020 at US$0.705, down
8.5% from the start of the year. A decrease in the Canadian dollar
increases IOC's profitability because seaborne iron ore is priced
in US dollars and IOC's costs are predominantly incurred in
Canadian dollars. Additionally, IOC's decision at the end of the
first quarter of 2020 to temporarily halt production of two pellet
machines in order to focus on meeting the demand for CFS highlights
IOC's ability to adjust its output of product to align with
changing market conditions. Finally, the recent renewal of all 12
of LIORC's mining leases for an additional 30 years by the Ministry
of Natural Resources of the Government of Newfoundland and Labrador, highlights the long life nature of
LIORC's unique royalty asset.
The LIORC cash balance at March 31,
2020 stood at $21.3 million
before LIORC dividends payable on April 25,
2020 of $0.35 per share or
$22.4 million. The net royalty from
IOC was received by LIORC on the same date, maintaining the
Corporation's strong cash balance.
John F. Tuer
President and Chief Executive Officer
Toronto, Ontario
May 7, 2020
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 indigenous groups, natural
disasters, severe weather conditions and public health epidemics,
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 5, 2020 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)
|
2020
|
|
2019
|
|
|
(Unaudited)
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and short-term
investments
|
$
|
21,312
|
|
$
|
77,859
|
|
Amounts
receivable
|
48,062
|
|
36,156
|
Total Current
Assets
|
69,374
|
|
114,015
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
Iron Ore Company of
Canada ("IOC")
|
|
|
|
|
royalty
and commission interests
|
246,076
|
|
247,701
|
|
Investment in
IOC
|
405,713
|
|
381,310
|
Total Non-Current
Assets
|
651,789
|
|
629,011
|
|
|
|
|
|
Total
Assets
|
$
|
721,163
|
|
$
|
743,026
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
$
|
9,995
|
|
$
|
7,939
|
|
Dividend
payable
|
22,400
|
|
67,200
|
|
Taxes
payable
|
4,387
|
|
10,710
|
Total Current
Liabilities
|
36,782
|
|
85,849
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
Deferred income
taxes
|
123,020
|
|
119,840
|
Total
Liabilities
|
159,802
|
|
205,689
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Share
capital
|
317,708
|
|
317,708
|
|
Retained
earnings
|
254,255
|
|
230,005
|
|
Accumulated other
comprehensive loss
|
(10,602)
|
|
(10,376)
|
|
|
561,361
|
|
537,337
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
721,163
|
|
$
|
743,026
|
|
|
|
|
|
|
|
|
|
|
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)
|
2020
|
|
2019
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
IOC
royalties
|
$
|
47,615
|
|
$
|
38,496
|
|
IOC
commissions
|
462
|
|
348
|
|
Interest and other
income
|
222
|
|
366
|
|
|
48,299
|
|
39,210
|
Expenses
|
|
|
|
|
Newfoundland royalty
taxes
|
9,523
|
|
7,699
|
|
Amortization of
royalty and commission interests
|
1,625
|
|
1,607
|
|
Administrative
expenses
|
557
|
|
770
|
|
|
11,705
|
|
10,076
|
|
|
|
|
|
Income before
equity earnings and income taxes
|
36,594
|
|
29,134
|
Equity earnings in
IOC
|
24,669
|
|
22,408
|
|
|
|
|
|
Income before
income taxes
|
61,263
|
|
51,542
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
|
Current
|
11,393
|
|
9,229
|
|
Deferred
|
3,220
|
|
2,964
|
|
|
14,613
|
|
12,193
|
|
|
|
|
|
Net income for the
period
|
46,650
|
|
39,349
|
|
|
|
|
|
Other
comprehensive (loss) income
|
|
|
|
|
Share of other
comprehensive (loss) income of IOC that will not be
|
|
|
|
|
reclassified
subsequently to profit or loss (net of income taxes
|
|
|
|
|
of 2020 - $40; 2019 -
$202)
|
(226)
|
|
1,145
|
|
|
|
|
|
Comprehensive
income for the period
|
$
|
46,424
|
|
$
|
40,494
|
|
|
|
|
|
Net income per
share
|
$
|
0.73
|
|
$
|
0.61
|
|
|
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
For the Three
Months Ended
|
|
March
31,
|
(in thousands of
Canadian dollars)
|
2020
|
|
2019
|
|
(Unaudited)
|
Net inflow
(outflow) of cash related
|
|
|
|
|
to the following
activities
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
Net income for the
period
|
$
|
46,650
|
|
$
|
39,349
|
|
Items not affecting
cash:
|
|
|
|
|
Equity earnings in
IOC
|
(24,669)
|
|
(22,408)
|
|
Current income
taxes
|
11,393
|
|
9,229
|
|
Deferred income
taxes
|
3,220
|
|
2,964
|
|
Amortization of
royalty and commission interests
|
1,625
|
|
1,607
|
|
Change in amounts
receivable
|
(11,906)
|
|
6,200
|
|
Change in accounts
payable
|
2,056
|
|
(1,528)
|
|
Income taxes
paid
|
(17,716)
|
|
(10,450)
|
|
Cash flow from
operating activities
|
10,653
|
|
24,963
|
|
|
|
|
Financing
|
|
|
|
|
Dividend paid to
shareholders
|
(67,200)
|
|
(38,400)
|
|
Cash flow used in
financing activities
|
(67,200)
|
|
(38,400)
|
|
|
|
|
Decrease in cash,
during the period
|
(56,547)
|
|
(13,437)
|
|
|
|
|
Cash, beginning of
period
|
77,859
|
|
80,495
|
|
|
|
|
Cash, end of
period
|
$
|
21,312
|
|
$
|
67,058
|
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, 2018
|
$
|
317,708
|
$
|
280,759
|
$
|
(7,616)
|
$
|
590,851
|
Adjustment on initial
application of IFRS 16
|
|
(93)
|
|
(93)
|
Net income for the
period
|
-
|
39,349
|
-
|
39,349
|
Dividends 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
|
|
|
|
|
|
Balance as at
December 31, 2019
|
$
|
317,708
|
$
|
230,005
|
$
|
(10,376)
|
$
|
537,337
|
Net income for the
period
|
-
|
46,650
|
-
|
46,650
|
Dividends declared to
shareholders
|
-
|
(22,400)
|
-
|
(22,400)
|
Share of other
comprehensive loss from investment in IOC (net of taxes)
|
-
|
-
|
(226)
|
(226)
|
Balance as at March
31, 2020
|
$
|
317,708
|
$
|
254,255
|
$
|
(10,602)
|
$
|
561,361
|
The complete consolidated financial statements for the first
quarter ended March 31, 2020,
including the notes thereto, are posted on sedar.com and
labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation