TORONTO, Nov. 2, 2023
/CNW/ - Labrador Iron Ore Royalty Corporation ("LIORC") (TSX: LIF)
announced today its operation and cash flow results for the third
quarter ended September 30, 2023.
To the Holders of Common Shares of Labrador Iron Ore Royalty
Corporation
The Directors of Labrador Iron Ore Royalty Corporation ("LIORC"
or the "Corporation") present the third quarter report for the
period ended September 30, 2023.
Financial Performance
In the third quarter of 2023, LIORC's financial results were
negatively affected by lower pellet prices and lower sales volumes
of pellets and concentrate for sale ("CFS"). Royalty revenue for
the third quarter of 2023 amounted to $47.0
million compared to $63.5
million for the third quarter of 2022. Equity earnings from
Iron Ore Company of Canada ("IOC")
were $23.1 million in the third
quarter of 2023 compared to $46.8
million in the third quarter of 2022, as a result of lower
revenue and higher unit operating costs at IOC. Net income per
share for the third quarter of 2023 was $0.77 per share, which was a 38% decrease over
the same period in 2022. LIORC received a dividend from IOC in the
amount of $30.6 million in the third
quarter of 2023, compared to a dividend from IOC in the amount of
$34.2 million in the third quarter of
2022. The adjusted cash flow per share for the third quarter of
2023 was $0.89 per share, which was
18% lower than in the same period in 2022, as a result of lower
royalty revenues. While adjusted cash flow is not a recognized
measure under International Financial Reporting Standards ("IFRS"),
the Directors believe that it is a useful analytical measure as it
better reflects cash available for dividends to shareholders.
In the third quarter of 2023, iron ore prices for concentrate
and fines were generally consistent with the prior quarter and
higher than the levels experienced in the third quarter of 2022,
predominantly as a result of marginally higher global steel
production and increasing expectations that government stimulus
will lessen concerns over China's
economy and its property sector. According to The World Steel
Association, global crude steel production increased 2.4% in the
third quarter of 2023 over the third quarter of 2022. In
China, which accounts for over 70%
of all seaborne iron ore demand, crude steel production increased
2.9% in the third quarter of 2023 over the third quarter of 2022.
Overall, in the first nine months of 2023 global crude steel
production has been flat compared to the first nine months of 2022.
Conversely, pellet prices, while consistent with the prior quarter
were substantially lower than the levels experienced in the second
quarter of 2022, as global economic pressures on European steel
producers continued to negatively impact the demand for iron ore
pellets.
IOC sells CFS based on the Platts index for 65% Fe, CFR China
("65% Fe index"). All references to tonnes and per tonne prices in
this report refer to wet metric tonnes, other than references to
Platts quoted pricing, which refer to dry metric tonnes.
Historically, IOC's wet ore contains approximately 3% less ore per
equivalent volume than dry ore. In the third quarter of 2023, the
65% Fe index averaged US$125 per
tonne, an 8% increase over the average of US$115 per tonne in the third quarter of 2022,
and a 1% increase over the average of US$124 in the second quarter of 2023. However,
low steel production margins in China caused steel mills to continue to prefer
medium-grade fines over high-grade fines. As a result, the spread
of the 65% Fe index over the Platts index for 62% Fe, CFR China
("62% Fe index") narrowed further in the third quarter of 2023 to
$11 per tonne from $12 per tonne in the third quarter of 2022.
The monthly Atlantic Blast Furnace 65% Fe pellet premium index as
quoted by Platts (the "pellet premium") averaged US$49 per tonne in the third quarter of 2023,
down 39% from an average of US$80 per
tonne in the same quarter of 2022.
Based on sales as reported for the LIORC Royalty, the overall
average price realized by IOC for CFS and pellets, FOB Sept-Îles,
was approximately US$127 per tonne in
the third quarter of 2023, compared to approximately US$146 per tonne in the third quarter of 2022 and
US$125 per tonne in the second
quarter of 2023. The decrease in the average realized price FOB
Sept-Îles in 2023 was a result of lower pellet prices and to a
lesser extent a change in product mix, as pellets represented 46%
of sales in the third quarter of 2023, compared to 52% of sales in
the same quarter of 2022 and the second quarter of 2023.
Iron Ore Company of Canada Operations
Operations
IOC concentrate production of 4.3 million tonnes in the third
quarter of 2023 was 13% lower than the same quarter of 2022, mainly
due to (i) an unexpected equipment failure with the thickener rake
drive which is used in the dewatering process in the concentrator,
and (ii) conveyor belt failures on the overland delivery system
between the mine and the concentrator. Concentrate production
in the quarter was 11% higher than in the second quarter of 2023,
as the second quarter was negatively impacted by the forest fires
affecting the rail line.
The IOC saleable production (CFS plus pellets) of 4.1 million
tonnes in the third quarter of 2023 was 14% lower than the same
period in 2022, as operations were impacted by extended plant
downtime resulting from the equipment and conveyor belt failures,
referred to above. The IOC saleable production in the third quarter
of 2023 was 16% higher than the second quarter of 2023, as a result
of the wildfires in the second quarter.
Pellet production in the third quarter of 2023 of 2.1 million
tonnes was 19% lower than the corresponding quarter in 2022
and 32% higher than the second quarter of 2023. Pellet
production in the third quarter of 2023 was negatively
impacted by an increase in the machine 3 rebuild duration and
plant reliability issues. In the third quarter of 2023, CFS
production of 1.9 million tonnes was 8% lower than the same
quarter last year and consistent with the second quarter of 2023,
due to the reduction of concentrate production for the reasons
referred to above.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 3.9
million tonnes in the third quarter of 2023 was 14% lower than the
total sales tonnage for the same period in 2022 and 11% lower than
the second quarter of 2023, mainly due to inventory availability
and shipment timing. Pellet sales tonnage in the third quarter of
2023 was 22% lower than the same period in 2022 and 21% lower than
the second quarter of 2023. CFS sales tonnage was 5% lower than the
same quarter last year and consistent with the second quarter of
2023.
Outlook
Given the third quarter production performance, Rio Tinto's full
year 2023 guidance for IOC's saleable production (CFS plus pellets)
has been lowered to 15.8 million to 16.7 million tonnes (previous
guidance was 17.0 million to 18.7 million tonnes). This revised
guidance compares to 17.6 million tonnes of saleable production in
2022, and 16.6 million tonnes of saleable production in 2021.
Inflation and the resulting monetary tightening around the world
have slowed global investment and consumption. This in turn has put
pressure on steel demand and production. Additionally,
China's property sector, and the
potential effects from the financial difficulties that major real
estate developers are experiencing, continues to create significant
concerns for China's economy. That
being said, The World Steel Association is forecasting that
China's property market will
stabilise in the latter part of the year and that China's steel demand will record slight
positive growth thanks to government measures. Globally, it
is forecasting that steel demand will grow by 1.8% in 2023 and 1.9%
in 2024 (after falling 3.3% in 2022).
In the near term, despite the global economic challenges, iron
ore prices have so far remained relatively consistent. In
October 2023 the average price of the
65% Fe index was US$128 per tonne,
roughly equivalent to the average of the 65% Fe index for the
second and third quarter of 2023. However, the pellet premiums have
come under further pressure as steel producers in Europe (significant consumers of pellets)
continue to face pressure. The pellet premium for October was
US$38 per tonne compared to the
average of US$49 per tonne in the
third quarter of 2023.
Longer term, IOC remains well positioned to benefit from the
movement to produce low emission green steel. The production of
steel, a key material for infrastructure and net-zero energy
transition, currently contributes around 7-9% of global carbon
emissions. IOC's high-quality products, including direct reduction
pellets, are part of the solution to reducing GHG emissions in the
steel making process, as demonstrated by IOC's recent multi-year
agreement to supply high grade direct reduction pellets to H2 Green
Steel ("H2GS"). H2GS will process IOC's direct reduction
pellets into low-carbon hot briquetted iron and then make
steel through electric arc furnaces using green hydrogen at its
flagship plant in Boden, Sweden.
The Boden facility, which will hold one of the world's largest
electrolysis plants for the production of green hydrogen, will be
one of the world's first large-scale producers of low carbon iron
and steel. By using green hydrogen in electric arc furnaces
instead of coal in traditional steelmaking with a blast furnace,
CO2 emissions can be reduced by up to 95 percent.
LIORC has no debt and at September 30,
2023 had positive net working capital (current assets less
current liabilities) of $25.8
million, which included the third quarter net royalty
payment received from IOC on October 25,
2023 and the LIORC dividend in the amount of $0.95 per share paid to shareholders on the next
day.
Respectfully submitted on behalf of the Directors of the
Corporation,
John F. Tuer
President and Chief Executive Officer
November 2, 2023
Management's Discussion and Analysis
The following discussion and analysis should be read in
conjunction with the Management's Discussion and Analysis section
of Labrador Iron Ore Royalty Corporation's ("LIORC" or the
"Corporation") 2022 Annual Report, and the financial statements and
notes contained therein and the September
30, 2023 interim condensed consolidated financial
statements.
Overview of the Business
The Corporation's revenues are entirely dependent on the
operations of IOC as its principal assets relate to the operations
of IOC and its principal source of revenue is the 7% royalty it
receives on all sales of iron ore products by IOC. In addition to
the volume of iron ore sold, the Corporation's royalty revenue is
affected by the price of iron ore and the Canadian – U.S. dollar
exchange rate. The first quarter sales of IOC are traditionally
adversely affected by the general winter operating conditions and
are usually 15% – 20% of the annual volume, with the balance spread
fairly evenly throughout the other three quarters. Because of the
size of individual shipments, some quarters may be affected by the
timing of the loading of ships that can be delayed from one quarter
to the next.
Financial Highlights
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
($ in millions
except per share information)
|
|
|
|
|
|
|
Revenue
|
47.7
|
64.1
|
|
146.4
|
184.6
|
Equity earnings from
IOC
|
23.1
|
46.8
|
|
58.5
|
134.4
|
Net
income
|
49.4
|
79.2
|
|
134.9
|
220.9
|
Net income per
share
|
$ 0.77
|
$ 1.24
|
|
$ 2.11
|
$ 3.45
|
Dividend from
IOC
|
30.6
|
34.2
|
|
50.4
|
53.7
|
Cash flow from
operations
|
65.7
|
78.5
|
|
126.1
|
123.7
|
Cash flow from
operations per share(1)
|
$ 1.03
|
$ 1.23
|
|
$ 1.97
|
$ 1.93
|
Adjusted cash
flow(1)
|
56.8
|
69.7
|
|
131.3
|
155.9
|
Adjusted cash flow per
share(1)
|
$ 0.89
|
$ 1.09
|
|
$ 2.05
|
$ 2.44
|
Dividends declared per
share
|
$ 0.95
|
$ 1.00
|
|
$ 2.10
|
$ 2.40
|
(1)
This is a non-IFRS financial measure
and does not have a standard meaning under
IFRS.
|
Please refer to
Standardized Cash Flow and Adjusted Cash Flow section in the
MD&A.
|
The lower revenue, net income and equity earnings achieved in
the third quarter of 2023 as compared to 2022 were mainly due
to lower pellet prices and lower sales volumes of pellets and
concentrate for sale ("CFS"). The third quarter of 2023 sales
tonnage (pellets and CFS) was lower by 14% than the third quarter
of 2022 mainly due to inventory availability and shipment timing.
CFS sales tonnage was 5% lower than the same quarter last year and
pellet sales tonnage was 22% lower than the same period in
2022.
The lower sales tonnage, together with a decrease in the
realized sales price of pellets, resulted in royalty income of
$47.0 million for the quarter as
compared to $63.5 million for the
same period in 2022. Third quarter 2023 cash flow from operations
was $65.7 million or $1.03 per share compared to $78.5 million or $1.23 per share for the same period in 2022.
LIORC received an IOC dividend in the second quarter of 2023 in the
amount of $30.6 million or
$0.49 per share compared to
$34.2 million or $0.53 per share for the same period in 2022.
Equity earnings from IOC amounted to $23.1
million or $0.36 per share in
the third quarter of 2023 compared to $46.8
million or $0.73 per share for
the same period in 2022.
Operating Highlights
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
IOC
Operations
|
2023
|
2022
|
|
2023
|
2022
|
|
(in millions
of tonnes)
|
Sales(1)
|
|
|
|
|
|
Pellets
|
1.82
|
2.35
|
|
6.08
|
7.23
|
Concentrate for sale
("CFS")(2)
|
2.10
|
2.20
|
|
5.89
|
5.19
|
Total(3)
|
3.92
|
4.55
|
|
11.96
|
12.42
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
Concentrate
produced
|
4.27
|
4.92
|
|
12.72
|
14.33
|
|
|
|
|
|
|
Saleable
production
|
|
|
|
|
|
Pellets
|
2.12
|
2.62
|
|
5.92
|
7.33
|
CFS
|
1.94
|
2.11
|
|
5.96
|
5.93
|
Total(3)
|
4.06
|
4.73
|
|
11.88
|
13.26
|
|
|
|
|
|
|
Average index prices
per tonne (US$)
|
|
|
|
|
|
65% Fe
index(4)
|
$ 125
|
$ 115
|
|
$ 130
|
$ 148
|
62% Fe
index(5)
|
$ 114
|
$ 103
|
|
$ 117
|
$ 128
|
Pellet
premium(6)
|
$ 49
|
$ 80
|
|
$ 47
|
$ 76
|
(1)
For calculating the royalty to
LIORC.
|
|
|
(2)
Excludes third party ore
sales.
|
|
|
(3)
Totals may not add up due to rounding.
|
|
|
(4)
The Platts index for 65% Fe, CFR
China.
|
|
|
(5)
The Platts index for 62% Fe, CFR
China.
|
|
|
(6)
The Platts Atlantic Blast Furnace 65%
Fe pellet premium index.
|
IOC sells CFS based on the 65% Fe index. In the third quarter of
2023, the 65% Fe index averaged US$125 per tonne, an 8% increase over the average
of US$115 per tonne in the third
quarter of 2022. Iron ore prices, which were consistent with the
prior quarter, increased over the third quarter of 2022
predominantly as a result of marginally higher global steel
production and increasing expectations that government stimulus
will lessen concerns over China's
economy and its property sector. The monthly pellet premium
averaged US$49 per tonne in the third
quarter of 2023, down 39% from an average of US$80 per tonne in the same quarter of 2022, as
global economic pressures on steel production outside of
China continued to negatively
impact the demand for iron ore pellets.
Based on sales as reported for the LIORC Royalty, the overall
average price realized by IOC for CFS and pellets, FOB Sept-Îles,
was approximately US$127 per tonne in
the third quarter of 2023, compared to approximately US$146 per tonne in the third quarter of 2022 and
US$125 per tonne in the second
quarter of 2023. The decrease in the average realized price FOB
Sept-Îles in 2023 was a result of lower pellet prices and to a
lesser extent a change in product mix, as pellets represented 46%
of sales in the third quarter of 2023, compared to 52% of sales in
the same quarter of 2022 and the second quarter of 2023.
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 $1.03 for the
quarter (2022 - $1.23).
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
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.
|
3 Months
Ended
Sept. 30,
2023
|
3 Months
Ended
Sept. 30,
2022
|
9 Months
Ended
Sept. 30,
2023
|
9 Months
Ended
Sept. 30,
2022
|
|
|
(in millions except
for per share information)
|
|
|
|
|
Standardized cash flow
from operating activities
|
$65.7
|
$78.5
|
$126.1
|
$123.7
|
|
|
Changes in amounts
receivable, accounts payable and income taxes payable
|
(8.9)
|
(8.8)
|
5.1
|
32.1
|
|
Adjusted cash
flow
|
$56.8
|
$69.7
|
$131.2
|
$155.8
|
|
Adjusted cash flow per
share
|
$0.89
|
$1.09
|
$2.05
|
$2.44
|
|
Liquidity and Capital Resources
The Corporation had $47.6 million
in cash as at September 30, 2023
(December 31, 2022 - $39.9 million) with total current assets of
$95.7 million (December 31, 2022 - $83.0
million). The Corporation had working capital of
$25.8 million as at September 30, 2023 (December 31, 2022 - $28.9
million). The Corporation's operating cash flow was
$65.7 million and the dividend paid
during the quarter was $41.6 million,
resulting in cash balances increasing by $24.1 million during the third quarter of 2023.
In September the Directors of the Corporation declared the third
quarter dividend of $60.8 million
that was paid on October 26,
2023.
Cash balances consist of deposits in Canadian dollars with a
Canadian chartered bank. 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 the free cash flow generated from IOC 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, 2025 with provision for annual
one-year extensions. No amount is currently drawn under this
facility (2022 – nil) leaving $30.0
million available to provide for any capital required by IOC
or requirements of the Corporation.
John F. Tuer
President and Chief Executive Officer
Toronto, Ontario
November 2, 2023
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; the performance of
IOC; market conditions in the steel industry; fluctuations in the
value of the Canadian and U.S. dollar; mining risks that cause a
disruption in operations and availability of insurance; disruption
in IOC's operations caused by natural disasters, severe weather
conditions and public health crises, including the COVID-19
outbreak; failure of information systems or damage from cyber
security attacks; adverse changes in domestic and global economic
and political conditions; changes in government regulation and
taxation; national, provincial and international laws, regulations
and policies regarding climate change that further limit the
emissions of greenhouse gases or increase the costs of operations
for IOC or its customers; changes affecting IOC's customers;
competition from other iron ore producers; renewal of mining
licenses and leases; relationships with indigenous groups;
litigation; and uncertainty in the estimates of reserves and
resources. A discussion of these factors is contained in LIORC's
annual information form dated March 7,
2023 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.sedarplus.ca.
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
|
|
|
September
30,
|
|
December
31,
|
(in thousands of
Canadian dollars)
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
$
47,644
|
|
$
39,904
|
|
Amounts
receivable
|
43,706
|
|
42,758
|
|
Income taxes
recoverable
|
4,381
|
|
357
|
Total Current
Assets
|
95,731
|
|
83,019
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
Iron Ore Company of
Canada ("IOC")
|
|
|
|
|
royalty
and commission interests
|
224,350
|
|
228,918
|
|
Investment in
IOC
|
521,488
|
|
513,828
|
Total Non-Current
Assets
|
745,838
|
|
742,746
|
|
|
|
|
|
Total Assets
|
$
841,569
|
|
$
825,765
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
9,141
|
|
$
9,286
|
|
Dividend
payable
|
60,800
|
|
44,800
|
Total Current
Liabilities
|
69,941
|
|
54,086
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
Deferred income
taxes
|
134,030
|
|
134,220
|
Total
Liabilities
|
203,971
|
|
188,306
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Share
capital
|
317,708
|
|
317,708
|
|
Retained
earnings
|
325,275
|
|
324,821
|
|
Accumulated other
comprehensive loss
|
(5,385)
|
|
(5,070)
|
|
|
637,598
|
|
637,459
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
841,569
|
|
$
825,765
|
Approved by the
Directors,
|
|
|
|
|
|
|
|
John F. Tuer
|
Patricia M.
Volker
|
Director
|
Director
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
September
30,
|
(in thousands of
Canadian dollars except for per share information)
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
IOC
royalties
|
$
46,986
|
|
$
63,475
|
|
IOC
commissions
|
385
|
|
447
|
|
Interest and other
income
|
314
|
|
137
|
|
|
47,685
|
|
64,059
|
Expenses
|
|
|
|
|
Newfoundland royalty
taxes
|
9,397
|
|
12,695
|
|
Amortization of royalty
and commission interests
|
1,522
|
|
1,660
|
|
Administrative
expenses
|
730
|
|
687
|
|
|
11,649
|
|
15,042
|
|
|
|
|
|
Income before equity
earnings and income taxes
|
36,036
|
|
49,017
|
Equity earnings in
IOC
|
23,118
|
|
46,781
|
|
|
|
|
|
Income before income
taxes
|
59,154
|
|
95,798
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
Current
|
11,289
|
|
15,186
|
|
Deferred
|
(1,560)
|
|
1,410
|
|
|
9,729
|
|
16,596
|
|
|
|
|
|
Net income for the
period
|
49,425
|
|
79,202
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
for the period
|
$
49,425
|
|
$
79,202
|
|
|
|
|
|
Net income per
share
|
$
0.77
|
|
$
1.24
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
|
|
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine months
Ended
|
|
|
September
30,
|
(in thousands of
Canadian dollars except for per share information)
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
IOC
royalties
|
$
144,470
|
|
$
183,130
|
|
IOC
commissions
|
1,177
|
|
1,223
|
|
Interest and other
income
|
789
|
|
238
|
|
|
146,436
|
|
184,591
|
Expenses
|
|
|
|
|
Newfoundland royalty
taxes
|
28,894
|
|
36,626
|
|
Amortization of royalty
and commission interests
|
4,568
|
|
4,982
|
|
Administrative
expenses
|
2,159
|
|
2,212
|
|
|
35,621
|
|
43,820
|
|
|
|
|
|
Income before equity
earnings and income taxes
|
110,815
|
|
140,771
|
Equity earnings in
IOC
|
58,478
|
|
134,355
|
|
|
|
|
|
Income before income
taxes
|
169,293
|
|
275,126
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
Current
|
34,573
|
|
43,618
|
|
Deferred
|
(134)
|
|
10,631
|
|
|
34,439
|
|
54,249
|
|
|
|
|
|
Net income for the
period
|
134,854
|
|
220,877
|
|
|
|
|
|
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 2023 - $56; 2022 -
$989)
|
(315)
|
|
5,602
|
|
|
|
|
|
Comprehensive income
for the period
|
$
134,539
|
|
$
226,479
|
|
|
|
|
|
Basic and diluted
income per share
|
$
2.11
|
|
$
3.45
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
|
|
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine months
Ended
|
|
|
|
|
September
30,
|
(in thousands of
Canadian dollars)
|
2023
|
|
2022
|
|
|
|
|
(Unaudited)
|
Net inflow (outflow)
of cash related
|
|
|
|
|
to the following
activities
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
Net income for the
period
|
$
134,854
|
|
$ 220,877
|
|
Items not affecting
cash:
|
|
|
|
|
|
Equity earnings in
IOC
|
(58,478)
|
|
(134,355)
|
|
|
Current income
taxes
|
34,573
|
|
43,618
|
|
|
Deferred income
taxes
|
(134)
|
|
10,631
|
|
|
Amortization of royalty
and commission interests
|
4,568
|
|
4,982
|
|
Common share dividends
from IOC
|
50,447
|
|
53,719
|
|
Change in amounts
receivable
|
(948)
|
|
(8,584)
|
|
Change in accounts
payable
|
(145)
|
|
1,304
|
|
Income taxes
paid
|
(38,597)
|
|
(68,492)
|
|
Cash flow from
operating activities
|
126,140
|
|
123,700
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
Dividends paid to
shareholders
|
(118,400)
|
|
(163,200)
|
|
Cash flow used in
financing activities
|
(118,400)
|
|
(163,200)
|
|
|
|
|
|
|
|
Increase (decrease)
in cash, during the period
|
7,740
|
|
(39,500)
|
|
|
|
|
|
|
|
Cash, beginning of
period
|
39,904
|
|
82,913
|
|
|
|
|
|
|
|
Cash, end of
period
|
$
47,644
|
|
$
43,413
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
|
|
|
|
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
other
|
|
|
Common
|
Share
|
Retained
|
comprehensive
|
|
(in thousands of
Canadian dollars except share amounts)
|
shares
|
capital
|
earnings
|
loss
|
Total
|
|
(Unaudited)
|
|
|
|
|
|
|
Balance as at December
31, 2021
|
64,000,000
|
$
317,708
|
$
257,772
|
$
(11,420)
|
$
564,060
|
Net income for the
period
|
-
|
-
|
220,877
|
-
|
220,877
|
Dividends declared to
shareholders
|
-
|
-
|
(153,600)
|
-
|
(153,600)
|
Share of other
comprehensive income from investment in IOC (net of
taxes)
|
-
|
-
|
-
|
5,602
|
5,602
|
Balance as at September
30, 2022
|
64,000,000
|
$
317,708
|
$
325,049
|
$
(5,818)
|
$
636,939
|
|
|
|
|
|
|
Balance as at December
31, 2022
|
64,000,000
|
$
317,708
|
$
324,821
|
$
(5,070)
|
$
637,459
|
Net income for the
period
|
-
|
-
|
134,854
|
-
|
134,854
|
Dividends declared to
shareholders
|
-
|
-
|
(134,400)
|
-
|
(134,400)
|
Share of other
comprehensive loss from investment in IOC (net of taxes)
|
-
|
-
|
-
|
(315)
|
(315)
|
Balance as at September
30, 2023
|
64,000,000
|
$
317,708
|
$
325,275
|
$
(5,385)
|
$
637,598
|
The complete consolidated financial statements for the third
quarter ended September 30, 2023,
including the notes thereto, are posted on sedar.com and
labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation