TORONTO, Aug. 4, 2022
/CNW/ - Labrador Iron Ore Royalty Corporation ("LIORC"), (TSX: LIF)
announced today its operation and cash flow results for the second
quarter ended June 30, 2022.
Financial Performance
In the second quarter of 2022, LIORC's financial results were
negatively affected by lower iron ore prices, partially offset by
higher pellet premiums and higher volumes of pellets and
concentrate for sale ("CFS") sales. Royalty revenue for the second
quarter of 2022 amounted to $65.9
million compared to $78.8
million for the second quarter of 2021. Equity earnings from
Iron Ore Company of Canada ("IOC")
were $47.2 million in the second
quarter of 2022 compared to $66.2
million in the second quarter of 2021. Net income per share
for the second quarter of 2022 was $1.23 per share, which was a 29% decrease over
the same period in 2021. The adjusted cash flow per share for the
second quarter of 2022 was $0.88 per
share, which was 52% lower than in the same period in 2021, as a
result of lower royalty revenues and because LIORC received a
dividend from IOC in the amount of $19.6
million from IOC in the second quarter of 2022, compared to
a dividend from IOC in the amount of $74.4
million in the second quarter of 2021.
In the second quarter of 2022, iron ore prices declined from the
record levels experienced in 2021, predominantly as a result of
lower steel production. According to the World Steel
Association, global crude steel production decreased 5% in the
second quarter of 2022 over the second quarter of 2021, as supply
chain disruptions impacted the demand for steel and higher energy
prices negatively affected steel producer margins. In China, which accounts for over 70% of all
seaborne iron ore demand, crude steel production decreased 4% in
the second quarter of 2022 over the second quarter of 2021, due to
concerns about the country's property construction and
infrastructure sectors.
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 second quarter of 2022, the
65% Fe index averaged US$160 per
tonne, a 31% decrease over the average of US$233 per tonne in the second quarter of 2021,
and a 6% decrease over the average of US$170 in the first quarter of 2022. The monthly
Atlantic Blast Furnace 65% Fe pellet premium index as quoted by
Platts (the "pellet premium") averaged US$81 per tonne in the second quarter of 2022, up
24% from an average of US$65 in the
same quarter of 2021.
Rio Tinto has disclosed that the average realised price achieved
for IOC pellets, FOB Sept-Îles, in the second quarter of 2022 was
US$206 per tonne, compared to
US$247 per tonne in the same quarter
of 2021. 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$168
per tonne in the second quarter of 2022, compared to approximately
US$222 per tonne in the second
quarter of 2021 and US$173 per tonne
in the first quarter of 2022.
Iron Ore Company of Canada
Operations
Operations
IOC concentrate production of 5.0 million tonnes in the second
quarter of 2022 was 5% higher than the same quarter of 2021 and 15%
higher than in the first quarter of 2022, despite the negative
impact of the planned 7-day annual maintenance shutdown which was
successfully completed in June (vs September in 2021). While
crushed ore (feed to the concentrator) in the second quarter of
2022 was comparable to the second quarter of 2021, IOC benefited
from a higher weight yield, as a greater percentage of ore came
from the Moss pit.
The IOC saleable production (CFS plus pellets) of 4.4 million
tonnes in the second quarter of 2022 was 4% lower than the same
period in 2021, due to a negative stockpile survey adjustment and
lower pellet recovery rates during the quarter. Saleable production
in the second quarter of 2022 was also negatively impacted by the
annual maintenance shutdown in June referred to above. The IOC
saleable production in the second quarter of 2022 was 8% higher
than the first quarter of 2022.
Pellet production in the second quarter of 2022 of 2.2 million
tonnes was 16% lower than the corresponding quarter in 2021
and 8% lower than the first quarter of 2022. Pellet
production in the second quarter of 2022 was negatively impacted by
a feed system conveyor failure and lower than planned filter and
balling rates due to ongoing reliability challenges, as well as
the June shutdown and negative stockpile survey
adjustment referred to above. In the second quarter of 2022,
CFS production of 2.2 million tonnes was 11% higher than the
same quarter last year and 33% higher than the first quarter of
2022, due to increased concentrate production and lower pellet
production.
Sales as Reported for the LIORC
Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 4.3
million tonnes in the second quarter of 2022 was 5% higher than the
total sales tonnage for the same period in 2021 and 20% higher than
the first quarter of 2022. Sales tonnage in the second quarter of
2021 was negatively impacted by the lack of availability of
reclaimers at the port facility in Sept-Îles. Sales tonnage in
the first quarter of 2022 was negatively impacted by equipment
failures and lower product availability. Pellet sales tonnage in
the second quarter of 2022 was 9% higher than the same period in
2021 and 1% higher than the first quarter of 2022. CFS sales
tonnage was consistent with the same quarter last year and 59%
higher than the first quarter of 2022.
Outlook
Rio Tinto's 2022 guidance for IOC's saleable production (CFS
plus pellets) remains at 17.0 million to 18.7 million tonnes. This
compares to 16.6 million tonnes of saleable production in 2021. As
reported in the 2021 Annual Report, IOC has ambitious capital
expenditure plans to continue renewing the asset infrastructure and
to improve the production results at IOC. These initiatives
will be of benefit to LIORC as both an equity holder and a royalty
holder. Certain changes in IOC's capital expenditures program,
including the postponement of the dumper cage replacement at
Sept-Îles to 2023, has resulted in IOC revising its 2022 capital
expenditure forecast from $606
million to $515 million.
There continues to be a number of adverse issues affecting the
outlook for the seaborne iron ore market. High inflation and global
recession concerns have negatively impacted the demand outlook for
steel. As a result, steel production has fallen. At the same
time steel inventories have increased which could further
negatively impact future steel production. Steel producer margins
have also decreased as a result of lower demand for steel and
higher energy prices. This may cause some producers to substitute
higher quality iron ore with less expensive low quality iron ore,
which could reduce demand for the high quality concentrate and
pellets that IOC produces.
The current economic outlook is having a significant negative
impact on the price of seaborne iron. In July 2022, the average price of the 65% Fe index
was US$120 per tonne, or 25% lower
than the average of the 65% Fe index for the second quarter of
2022. So far the pellet premiums have remained strong. The pellet
premium for July was US$87 per tonne
compared to the average of US$81 per
tonne in the second quarter of 2022. For context, in 2019 the
65% Fe index and the pellet premium averaged US$104 and US$57,
respectively. In 2019, IOC sold 17.1 million tonnes of
pellets and CFS and LIORC generated $3.25 of adjusted cash flow per share. As a
result, we remain positive about LIORC's ability to continue to
benefit from the current iron ore pricing environment through
royalty revenues and expected future dividends from IOC.
LIORC has no debt and at June 30,
2022 had positive net working capital (current assets less
current liabilities) of $26.2
million, which included the second quarter net royalty
payment received from IOC on July 26,
2022 and the LIORC dividend paid to shareholders on the same
day.
Respectfully submitted on behalf of the Directors of the
Corporation,
John F. Tuer
President and Chief Executive Officer
August 4, 2022
Management's Discussion and
Analysis
The following discussion and analysis should be read in
conjunction with the Management's Discussion and Analysis section
of Labrador Iron Ore Royalty Corporation's ("LIORC" or the
"Corporation") 2021 Annual Report, and the financial statements and
notes contained therein and the June 30,
2022 interim condensed consolidated financial
statements.
Overview of the Business
The Corporation's revenues are entirely dependent on the
operations of IOC as its principal assets relate to the operations
of IOC and its principal source of revenue is the 7% royalty it
receives on all sales of iron ore products by IOC. In addition to
the volume of iron ore sold, the Corporation's royalty revenue is
affected by the price of iron ore and the Canadian – U.S. dollar
exchange rate. The first quarter sales of IOC are traditionally
adversely affected by the general winter operating conditions and
are usually 15% – 20% of the annual volume, with the balance spread
fairly evenly throughout the other three quarters. Because of the
size of individual shipments, some quarters may be affected by the
timing of the loading of ships that can be delayed from one quarter
to the next.
Financial Highlights
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
($ in millions
except per share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
66.4
|
79.2
|
|
120.5
|
144.9
|
|
|
|
|
Equity earnings from
IOC
|
47.2
|
66.2
|
|
87.6
|
123.2
|
|
|
|
|
Net
income
|
78.4
|
110.2
|
|
141.7
|
196.8
|
|
|
|
|
Net income per
share
|
$ 1.23
|
$ 1.72
|
|
$ 2.21
|
$ 3.08
|
|
|
|
|
Dividend from
IOC
|
19.6
|
74.4
|
|
19.6
|
93.4
|
|
|
|
|
Cash flow from
operations
|
41.1
|
115.9
|
|
45.2
|
158.6
|
|
|
|
|
Cash flow from
operations per share(1)
|
$ 0.64
|
$ 1.81
|
|
$ 0.71
|
$ 2.48
|
|
|
|
|
Adjusted cash
flow(1)
|
56.4
|
118.3
|
|
86.2
|
173.7
|
|
|
|
|
Adjusted cash flow per
share(1)
|
$ 0.88
|
$ 1.85
|
|
$ 1.35
|
$ 2.71
|
|
|
|
|
Dividends declared per
share
|
$ 0.90
|
$ 1.75
|
|
$ 1.40
|
$ 2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 second quarter of 2022 as compared to 2021 were mainly due
to lower iron ore prices, partly offset by higher pellet premiums
and sales of pellets. The second quarter of 2022 sales tonnage
(pellets and CFS) were higher by 5% than the second quarter of 2021
predominantly due to the lack of availability of reclaimers during
the second quarter of 2021, which limited the loading rate at the
port facility in Sept-Îles. CFS sales tonnage was consistent
with the same quarter last year and pellet sales tonnage was 9%
higher than the same quarter last year. Pellet sales tonnage in the
second quarter of 2021 was constrained due to the loading
restrictions caused by the lack of reclaimer availability at the
port.
However, the higher sales tonnage was more than offset by a
decrease in the realized sales price of pellets and CFS, resulting
in royalty income of $65.9 million
for the quarter as compared to $78.8
million for the same period in 2021. Second quarter 2022
cash flow from operations was $41.1
million or $0.64 per share
compared to $115.9 million or
$1.81 per share for the same period
in 2021. LIORC received an IOC dividend in the second quarter of
2022 in the amount of $19.6 million
or $0.31 per share. Equity earnings
from IOC amounted to $47.2 million or
$0.74 per share in the second quarter
of 2022 compared to $66.2 million or
$1.03 per share for the same period
in 2021.
Operating Highlights
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
IOC
Operations
|
2022
|
2021
|
|
2022
|
2021
|
|
(in millions
of tonnes)
|
Sales(1)
|
|
|
|
|
|
Pellets
|
2.46
|
2.26
|
|
4.89
|
4.70
|
Concentrate for sale
("CFS")(2)
|
1.84
|
1.83
|
|
2.99
|
3.51
|
Total(3)
|
4.30
|
4.09
|
|
7.88
|
8.21
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
Concentrate
produced
|
5.03
|
4.79
|
|
9.41
|
9.20
|
|
|
|
|
|
|
Saleable
production
|
|
|
|
|
|
Pellets
|
2.25
|
2.67
|
|
4.71
|
5.18
|
CFS
|
2.18
|
1.97
|
|
3.82
|
3.45
|
Total(3)
|
4.43
|
4.63
|
|
8.53
|
8.63
|
|
|
|
|
|
|
Average index prices
per tonne (US$)
|
|
|
|
|
|
65% Fe
index(4)
|
$ 160
|
$ 233
|
|
$ 165
|
$ 212
|
62% Fe
index(5)
|
$ 138
|
$ 200
|
|
$ 140
|
$ 184
|
Pellet
premium(6)
|
$ 81
|
$ 65
|
|
$ 74
|
$ 54
|
|
|
|
|
|
|
(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 second
quarter of 2022, the 65% Fe index averaged US$160 per tonne, a 31% decrease over the average
of US$233 per tonne in the second
quarter of 2021. Iron ore prices decreased, as lower global steel
production reduced the demand for seaborne iron ore. The monthly
pellet premium averaged US$81 per
tonne in the second quarter of 2022, up 24% from an average of
US$65 in the same quarter of
2021.
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$168 per tonne in
the second quarter of 2022, compared to approximately US$222 per tonne in the second quarter of 2021
and US$173 per tonne in the first
quarter of 2022. The decrease in the average realized price FOB
Sept-Îles in 2022 was a result of lower CFS prices and lower pellet
prices (comprised of lower iron ore index pricing partially offset
by higher pellet premiums).
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 $0.64 for the quarter (2021 - $1.81).
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.
|
|
|
|
|
|
|
3 Months
Ended
Jun. 30,
2022
|
3 Months
Ended
Jun. 30,
2021
|
6 Months
Ended
Jun. 30,
2022
|
6 Months
Ended
Jun. 30,
2021
|
|
|
(in thousands except
for per share information)
|
|
|
|
|
Standardized cash flow
from operating
activities
|
$41,073
|
$115,866
|
$45,213
|
$158,552
|
|
|
Changes in amounts
receivable, accounts
payable and income taxes payable
|
15,280
|
2,402
|
40,982
|
15,126
|
|
Adjusted cash
flow
|
$56,353
|
$118,268
|
$86,195
|
$173,678
|
|
Adjusted cash flow per
share
|
$0.88
|
$1.85
|
$1.35
|
$2.71
|
|
Liquidity and Capital
Resources
The Corporation had $22.5 million
in cash as at June 30, 2022
(December 31, 2021 - $82.9 million) with total current assets of
$98.3 million (December 31, 2021 - $132.6
million). The Corporation had working capital of
$26.2 million as at June 30, 2022 (December
31, 2021 - $29.6 million). The
Corporation's operating cash flow was $41.1
million and the dividend paid during the quarter was
$32 million, resulting in cash
balances increasing by $9.1 million
during the second quarter of 2022. In June the Directors of the
Corporation declared the second quarter dividend of $57.6 million that was paid on July 26, 2022.
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, 2024 with provision for annual
one-year extensions. No amount is currently drawn under this
facility (2021 – 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
August 4, 2022
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
licences 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 11,
2022 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
|
|
|
June
30,
|
|
December
31,
|
(in thousands of
Canadian dollars)
|
2022
|
|
2021
|
|
|
(Unaudited)
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and short-term
investments
|
$
22,526
|
|
$
82,913
|
|
Amounts
receivable
|
70,793
|
|
49,681
|
|
Income taxes
recoverable
|
4,943
|
|
-
|
Total Current
Assets
|
98,262
|
|
132,594
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
Iron Ore Company of
Canada ("IOC")
|
|
|
|
|
royalty
and commission interests
|
232,019
|
|
235,341
|
|
Investment in
IOC
|
495,990
|
|
421,376
|
Total Non-Current
Assets
|
728,009
|
|
656,717
|
|
|
|
|
|
Total Assets
|
$
826,271
|
|
$
789,311
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
$
14,484
|
|
$
10,786
|
|
Dividend
payable
|
57,600
|
|
73,600
|
|
Taxes
payable
|
-
|
|
18,625
|
Total Current
Liabilities
|
72,084
|
|
103,011
|
|
|
|
|
|
Non-Current
Liabilities
|
|
|
|
|
Deferred income
taxes
|
132,450
|
|
122,240
|
Total
Liabilities
|
204,534
|
|
225,251
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Share
capital
|
317,708
|
|
317,708
|
|
Retained
earnings
|
309,847
|
|
257,772
|
|
Accumulated other
comprehensive loss
|
(5,818)
|
|
(11,420)
|
|
|
621,737
|
|
564,060
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
826,271
|
|
$
789,311
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
June
30,
|
(in thousands of
Canadian dollars except for per share information)
|
2022
|
|
2021
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
IOC
royalties
|
$
65,907
|
|
$
78,793
|
|
IOC
commissions
|
423
|
|
402
|
|
Interest and other
income
|
38
|
|
35
|
|
|
66,368
|
|
79,230
|
Expenses
|
|
|
|
|
Newfoundland royalty
taxes
|
13,181
|
|
15,758
|
|
Amortization of royalty
and commission interests
|
2,017
|
|
1,591
|
|
Administrative
expenses
|
641
|
|
773
|
|
|
15,839
|
|
18,122
|
|
|
|
|
|
Income before equity
earnings and income taxes
|
50,529
|
|
61,108
|
Equity earnings in
IOC
|
47,195
|
|
66,215
|
|
|
|
|
|
Income before income
taxes
|
97,724
|
|
127,323
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
Current
|
15,744
|
|
18,857
|
|
Deferred
|
3,551
|
|
(1,697)
|
|
|
19,295
|
|
17,160
|
|
|
|
|
|
Net income for the period
|
78,429
|
|
110,163
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
Share of other
comprehensive income of IOC that will not be
|
|
|
|
|
reclassified
subsequently to profit or loss (net of income
taxes
|
|
|
|
|
of 2022 - $989; 2021 -
$557)
|
5,602
|
|
3,156
|
|
|
|
|
|
Comprehensive income for the
period
|
$
84,031
|
|
$
113,319
|
|
|
|
|
|
Net income per
share
|
$
1.23
|
|
$
1.72
|
|
|
|
|
|
|
|
|
|
|
LABRADOR IRON ORE ROYALTY
CORPORATION
|
|
|
|
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
(in thousands of
Canadian dollars except for per share information)
|
2022
|
|
2021
|
|
|
|
(Unaudited)
|
|
Revenue
|
|
|
|
|
|
IOC
royalties
|
$
119,655
|
|
$
144,041
|
|
|
IOC
commissions
|
776
|
|
808
|
|
|
Interest and other
income
|
101
|
|
100
|
|
|
|
120,532
|
|
144,949
|
|
Expenses
|
|
|
|
|
|
Newfoundland royalty
taxes
|
23,931
|
|
28,808
|
|
|
Amortization of royalty
and commission interests
|
3,322
|
|
3,057
|
|
|
Administrative
expenses
|
1,525
|
|
1,544
|
|
|
|
28,778
|
|
33,409
|
|
|
|
|
|
|
|
Income before equity
earnings and income taxes
|
91,754
|
|
111,540
|
|
Equity earnings in
IOC
|
87,574
|
|
123,192
|
|
|
|
|
|
|
|
Income before income
taxes
|
179,328
|
|
234,732
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
|
Current
|
28,432
|
|
34,358
|
|
|
Deferred
|
9,221
|
|
3,563
|
|
|
|
37,653
|
|
37,921
|
|
|
|
|
|
|
|
Net income for the period
|
141,675
|
|
196,811
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
Share of other
comprehensive income of IOC that will not be
|
|
|
|
|
|
reclassified
subsequently to profit or loss (net of income taxes
|
|
|
|
|
|
of 2022 - $989; 2021 -
$557)
|
5,602
|
|
3,156
|
|
|
|
|
|
|
|
Comprehensive income for the
period
|
$
147,277
|
|
$
199,967
|
|
|
|
|
|
|
|
Net income per
share
|
$
2.21
|
|
$
3.08
|
|
LABRADOR IRON ORE
ROYALTY CORPORATION
|
|
|
|
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
|
|
June
30,
|
(in thousands of
Canadian dollars)
|
2022
|
|
2021
|
|
|
|
|
(Unaudited)
|
Net inflow (outflow)
of cash related
|
|
|
|
|
to the following
activities
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
Net income for the
period
|
$
141,675
|
|
$
196,811
|
|
Items not affecting
cash:
|
|
|
|
|
|
Equity earnings in
IOC
|
(87,574)
|
|
(123,192)
|
|
|
Current income
taxes
|
28,432
|
|
34,358
|
|
|
Deferred income
taxes
|
9,221
|
|
3,563
|
|
|
Amortization of royalty
and commission interests
|
3,322
|
|
3,057
|
|
Common share dividend
from IOC
|
19,551
|
|
93,439
|
|
Change in amounts
receivable
|
(21,112)
|
|
(24,627)
|
|
Change in accounts
payable
|
3,698
|
|
4,586
|
|
Income taxes
paid
|
(52,000)
|
|
(29,443)
|
|
Cash flow from
operating activities
|
45,213
|
|
158,552
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
Dividend paid to
shareholders
|
(105,600)
|
|
(179,200)
|
|
Cash flow used in
financing activities
|
(105,600)
|
|
(179,200)
|
|
|
|
|
|
|
|
Decrease in cash,
during the period
|
(60,387)
|
|
(20,648)
|
|
|
|
|
|
|
|
Cash, beginning of
period
|
82,913
|
|
106,091
|
|
|
|
|
|
|
|
Cash, end of
period
|
$
22,526
|
|
$
85,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2020
|
$
317,708
|
$
262,000
|
$
(13,340)
|
$
566,368
|
Net income for the
period
|
-
|
196,811
|
-
|
196,811
|
Dividends declared to
shareholders
|
-
|
(176,000)
|
-
|
(176,000)
|
Share of other
comprehensive income from investment in IOC (net of
taxes)
|
-
|
-
|
3,156
|
3,156
|
Balance as at June 30,
2021
|
$
317,708
|
$
282,811
|
$
(10,184)
|
$
590,335
|
|
|
|
|
|
Balance as at December
31, 2021
|
$
317,708
|
$
257,772
|
$
(11,420)
|
$
564,060
|
Net income for the
period
|
-
|
141,675
|
-
|
141,675
|
Dividends declared to
shareholders
|
-
|
(89,600)
|
-
|
(89,600)
|
Share of other
comprehensive income from investment in IOC (net of
taxes)
|
-
|
-
|
5,602
|
5,602
|
Balance as at June 30,
2022
|
$
317,708
|
$
309,847
|
$
(5,818)
|
$
621,737
|
The complete consolidated financial statements for the second
quarter ended June 30, 2022,
including the notes thereto, are posted on sedar.com and
labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation