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Labrador Iron Ore Royalty Income Fund - Results for the third quarter ended September 30, 2009
Labrador Iron Ore Royalty Income Fund - Results for the third quarter ended September 30, 2009
About this update from Labrador Iron Ore Royalty Corporation
[{"type":"text","content":"\n\n\n\nOct. 29, 2009 (Canada NewsWire Group) -- TORONTO, Oct. 29 /CNW/ -- Labrador Iron Ore Royalty Income Fund (TSX: LIF.UN) announced its results for the third quarter ended September 30, 2009.Royalty income for the third quarter of 2009 amounted to $15.51 million as compared to $43.20 million for the third quarter of 2008. 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 third quarter was $18.81 million or $0.59 per unit as compared to $104.10 million or $3.25 per unit for the same period in 2008. Net income was $13.63 million or $0.43 per unit compared to $65.64 million or $2.05 per unit for the same period in 2008.Royalty income for the quarter was substantially below the 2008 quarter due to the 2009 benchmark price reduction for pellets of 48.3% and concentrates of 29.75% as compared to 2008 benchmark prices, and the lower volume of sales. Cash flow from operations was affected by the reduced royalty revenue and the reduction in the dividend from Iron Ore Company of Canada (IOC) which was $8.2 million compared to the $77.9 million received in the 2008 third quarter. Net income was affected by these factors as well as substantially lower equity earnings from IOC. The retroactive effect of the price settlements which occurred during the quarter (retroactive to January 1) had been provided for in previous quarters.The world recession which started last year continued to cause the demand for iron ore, especially pellets, to be reduced from the previous year. As a result IOC, which had previously idled some pellet machines, shut down its Carol Lake operations in Labrador City from July 7 to August 10, 2009 in order to balance inventories with demand. Shipment from IOC's terminal in Sept-Iles continued during this period. With the revival of pellet demand in traditional markets, IOC resumed full pellet production subsequent to the summer shut down.Equity earnings from IOC amounted to $3.26 million ($0.10 per unit) as compared to $34.19 million ($1.07 per unit) in 2008. IOC earnings were negatively affected by reduced sales volume and lower prices for concentrates and pellets as compare to 2008.On September 30, 2009 the Fund received a dividend from IOC totaling US$7.5 million equating to CDN$8.2 ...