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Labrador Iron Ore Royalty Income Fund - Results for the second quarter ended June 30, 2009
Labrador Iron Ore Royalty Income Fund (TSX: LIF.UN) announced its results for the second quarter ...
About this update from Labrador Iron Ore Royalty Corporation
[{"type":"text","content":"\n\n\n\nLabrador Iron Ore Royalty Income Fund (TSX: LIF.UN) announced its results\nfor the second quarter ended June 30, 2009.\n\n\nTORONTO, Aug. 6 /CNW/ - Royalty income for the second quarter of 2009\namounted to $19.24 million as compared to $57.61 million for the second\nquarter of 2008. The Fund's cash flow from operating activities after\nadjustments for changes in amounts receivable, accounts payable and income\ntaxes payable (adjusted cash flow) for the second quarter was $12.58 million\nor $0.39 per unit as compared to $32.95 million or $1.03 per unit for the same\nperiod in 2008. Net income was $17.78 million or $0.55 per unit compared to\n$73.92 million or $2.31 per unit for the same period in 2008.\n\n\nThe second quarter of 2008 included a retroactive pricing adjustment\nrelating to the 2008 first quarter resulting from the price increase of 87.67%\nfor pellets and 68.75% for concentrates that occurred in the second quarter of\n2008 but were retroactive to January. These retroactive adjustments increased\n2008 second quarter royalty income by $6.6 million or $0.20 per unit and\nequity earnings from Iron Ore Company of Canada (IOC) by $16 million or $0.50\nper unit. Without these adjustments adjusted cash flow per unit in 2008 would\nhave been $0.83 per unit and net income per unit would have been $1.61 per\nunit.\n\n\nThe world recession which started last year and sharply reduced demand\nfor iron ore starting in the fourth quarter of 2008 continued into the second\nquarter of 2009, resulting in pellet sales for the quarter being sharply lower\nthan 2008. However this was substantially offset by increased spot sales of\nconcentrates. In order to manage inventories, IOC shut down all production\nfacilities from July 7 to August 10, 2009. This will not affect its shipping\noperations at Sept-Iles.\n\n\nIOC has yet to settle 2009 contract pricing, but when settled the prices\nare expected to approximate other settlements that have taken place and have\nresulted in reductions of 48.3% for pellets and 28.2% for concentrates. Spot\nprices, which had fallen below the 2009 Asian settlement prices, recovered\nduring the quarter. The expected price settlements have been recorded in\nearnings for the quarter so that a retroactive adjustment such as occurred in\n2008 should not occur in 2009.\n\n\nEquity earnings from IOC amoun...