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Labrador Iron Ore Royalty Income Fund - Results for the first quarter ended March 31, 2010
Labrador Iron Ore Royalty Income Fund - Results for the first quarter ended March 31, 2010
About this update from Labrador Iron Ore Royalty Corporation
[{"type":"text","content":"\n\n\n\n May 4, 2010 (Canada NewsWire Group) -- Labrador Iron Ore Royalty Income Fund (TSX: LIF.UN) announced its results for the first quarter ended March 31, 2010.\nRoyalty income for the first quarter of 2010 amounted to $16.37 million as compared to $16.27 million for the first quarter of 2009. The Fund's cash flow from operating activities after adjustments for changes in amounts receivable, accounts payable and income taxes payable/recoverable (adjusted cash flow) for the first quarter was $22.33 million or $0.70 per unit as compared to $11.11 million or $0.35 per unit for the same period in 2009. Net income was $15.41 million or $0.48 per unit compared to $16.53 million or $0.52 per unit for the same period in 2009.\nThe first quarter sales of Iron Ore Company of Canada (IOC) are traditionally adversely affected by the closing of the St. Lawrence Seaway and general winter shipping conditions and are not indicative of the full year's sales.\nThe strengthening of the iron ore markets which started in the fourth quarter of 2009 continued into the first quarter of 2010. Markets are approaching the peak levels that occurred in early 2008 with demand currently exceeding supply and spot prices exceeding the record levels of 2008. IOC sales volume in the first quarter was appreciably above the first quarter of 2009 and approached a more normal first quarter level. IOC sales, and thus our revenue, were recorded at 2009 benchmark prices as 2010 prices are still under negotiation. Unfortunately the strength of the Canadian dollar, which is currently about 25% higher against its U.S. counterpart than a year ago, offset the increased sales volume. Had the exchange rate remained unchanged, royalty revenue would have been about $4 million higher for the first quarter.\nWhen settled, 2010 pricing will be retroactive to January 1, 2010 and, accordingly, the second quarter results should include a substantial adjustment relating to the first quarter. Press reports indicate that some settlements appear to be taking place at 80% to 100% above 2009 levels and that settlements are moving from annual to quarterly pricing. IOC is still in the process of negotiating 2010 pricing.\nEquity earnings from IOC amounted to $4.5 million ($0.14 per unit) as compared to $6.8 million ($0.21 per unit) in 2009. Principal cause of the lower earnings was the s...