Labrador Iron Ore Royalty Corporation - 2019 Results of Operations
Labrador Iron Ore Royalty Corporation - 2019
Results of Operations
TORONTO
,
March 5, 2020
/CNW/ - Labrador Iron Ore Royalty Corporation ("LIORC") (TSX: LIF)
announced the results of its operations for the year ended
December 31, 2019
.
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
Annual Report for the year ended
December 31, 2019
.
82 Years in Labrador West
Labrador Iron Ore Royalty Corporation has been involved in Labrador West for 82 years. Under a
Statutory Agreement with
Newfoundland
made in 1938, a predecessor company, Labrador Mining
and Exploration Limited, was granted extensive exploration and mining rights in Labrador West.
LM&E found the iron ore bodies that now constitute the mine operated by Iron Ore Company of
Canada
. LM&E received grants of leases and licences under the Statutory Agreement. It also
received a grant of surface rights to establish the town site that became
Labrador City
. LM&E sublet
the leases to IOC and IOC, with major steel companies as original shareholders, built the
infrastructure, mine, railway and port. Under the sublease, LIORC receives a 7% gross overriding
royalty on iron ore products produced and sold by IOC.
Financial Performance
The Shareholders' cash flow from operations for the year ended
December 31, 2019
was
$224.6
million
or
$3.51
per share as compared to
$148.8 million
or
$2.32
per share for 2018. The financial
results for LIORC in 2019 benefited from higher iron ore prices and increased sales tonnages.
The Shareholders' consolidated net income for the year ended
December 31, 2019
was
$205.3
million
or
$3.21
per share compared to
$128.5 million
or
$2.01
per share in 2018. Equity earnings
from Iron Ore Company of
Canada
("IOC") amounted to
$112.1 million
compared to
$57.0 million
in
2018. LIORC received dividends from IOC in 2019 totaling
$110.1 million
or
$1.72
per share
compared to
$83.9 million
or
$1.31
per share in 2018. LIORC received an IOC dividend in the fourth
quarter of 2019 in the amount of
$44.6 million
or
$0.70
per share compared to
$25.3 million
or
$0.40
per share in the fourth quarter of 2018. IOC's 2019 iron ore sales for calculating the royalty to
LIORC totaled 17.1 million tonnes compared to 15.1 million tonnes in 2018. Royalty revenue
increased to
$175.4 million
as compared to
$128.8 million
due to higher realized iron ore prices and
increased sales tonnages in 2019.
The cash flow from operations, equity earnings and net income for the year were higher than last
year mainly due to: (i) higher sales tonnages for concentrate and pellets in 2019, as 2018 production
and sales were negatively impacted by a work stoppage in the second quarter; and (ii) higher iron
ore prices as a result of continued demand from
China
and reduced supply predominantly from
Vale
.
Total concentrate production of 19.0 million tonnes in 2019 was 21% higher as compared to 2018 of
15.7 million tonnes, largely due to the work stoppage in the second quarter of 2018. Increased
concentrate production lead to increased pellet and concentrate for sale ("CFS") tonnages in 2019.
Sales tonnage of pellets in 2019, for calculating the royalty to LIORC, was 14% higher than in 2018
and the CFS tonnage in 2019 was higher than in 2018 by 12%.
IOC sells CFS based on the Platts index for 65% Fe, CFR China ("65% Fe index"). The average
price for the 65% Fe index increased 16% to
US$104
per tonne in 2019 compared to the average
price in 2018 of
US$90
per tonne. The seaborne iron ore prices were affected by a reduction of iron
ore supply, predominantly from
Vale
as a result of the collapse of the tailings dam at
Vale's
Corrego
do Fejao mine in Brumadinho, Minas Gerais state,
Brazil
("Brumadinho") and the subsequent closure
of other dams. The premium for the 65% Fe index compared to the Platts index for 62% Fe, CFR
China ("62% Fe index"), which had been expanding over the last few years, declined to 12% in 2019
as compared to 30% in 2018. The 62% Fe index averaged
US$93
per tonne in 2019 compared to
US$69
per tonne in 2018. The monthly Atlantic Blast Furnace 65% Fe pellet premium index (the
"pellet premium"), as quoted by Platts, averaged
US$57
per tonne in 2019, compared to an average
in 2018 of
US$59
. Blast Furnace pellet premiums were relatively stable for the first half of 2019 at
approximately
US$67
per tonne, but decreased in the second half of 2019 as high underlying
benchmark prices combined with weak margins for steel producers caused buyers, particularly in
Europe
, to reduce demand and substitute lower quality product for higher quality pellets. In the
fourth quarter of 2019 the pellet premium averaged
US$37
per tonne compared to
US$61
per tonne
in the fourth quarter of 2018.
The average price realized by IOC for CFS and pellets, FOB Sept-Îles, net of selling costs was
approximately
C$148
per tonne in 2019 compared to
C$119
per tonne in 2018. Higher iron ore
prices, particularly for CFS, together with a slightly lower Canadian dollar exchange rate increased
the average realized price FOB Sept-Îles in 2019. Despite greater variability throughout the year, on
average shipping costs for 2019 were similar to shipping costs in 2018.
Iron Ore Company of Canada Operations
Production
Total concentrate production of 19.0 million tonnes in 2019 was 21% higher as compared to 2018 of
15.7 million tonnes, largely due to the work stoppage in the second quarter of 2018. Concentrate
production in 2019 was adversely affected in the first half of 2019 by frozen material and blocked
feeders in the ore barn and a delay in the restart after the planned annual outage in June as a result
of a flooding issue. Fourth quarter concentrate production at IOC was 7% lower than the
corresponding period of 2018 as a result of a derailment of an automated train and unscheduled
autogenous mill repairs and tailings flume repairs.
The IOC saleable production (CFS plus pellets) of 17.9 million tonnes in 2019 was 18% higher than
saleable production of 15.2 million tonnes in 2018, but slightly below the lower end of Rio Tinto's
revised guidance of 18.2 to 19.3 million tonnes. Total pellet production in 2019 of 10.1 million tonnes
was 18% higher than pellet production of 8.5 million tonnes in 2018, largely due to the work
stoppage in the second quarter of 2018. Pellet production in 2019 was at times adversely affected
by lack of feed from the concentrator and unplanned induration machine maintenance.
The total cost of goods sold, excluding depreciation, was higher in 2019 than in 2018 by 14%,
predominantly due to higher production. The unit cost of goods sold, excluding depreciation, in 2019
was 4% lower than in 2018.
Third party haulage by the Québec North Shore and Labrador Railway Company, Inc. ("QNS&L") in
2019 was 30% higher than in 2018, predominantly from increased shipments of iron ore concentrate
from the Bloom Lake Mine, owned by Champion Iron Limited ("Champion"). Champion reported that
it sold 7.4 million dry metric tonnes of iron ore concentrate in the twelve months ending
December
31, 2019
.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 17.1 million tonnes in 2019 was 14%
higher than the total sales tonnage in 2018. The pellet sales tonnage was 14% higher and CFS sales
tonnage was 12% higher than in 2018. The higher sales tonnages were the result of the higher
saleable production, as explained above. Total iron ore sales tonnages were lower than saleable
production in 2019, as a result of timing differences and breakdowns in reclaiming and ship loading
equipment at the terminal. As a result, inventory levels of CFS and pellets at the terminal increased
in 2019 by 1.3 million tonnes.
Capital Expenditures
Capital expenditures for IOC in 2019 were
$294 million
in total as compared to
$205 million
in 2018.
At the beginning of 2019 IOC forecasted that capital expenditures for 2019 would be in the range of
$225 million
to
$245 million
. Increased capital expenditures in 2019 included the purchase of five haul
trucks, increased costs related to the induration machine #6 rebuild, and the Mill 11 circuit redesign.
Outlook
Rio Tinto's 2020 guidance for IOC's saleable production tonnage (CFS and pellets) is 17.9 million to
20.4 million tonnes. On
February 2, 2020
Platts listed the February price index for the Atlantic Blast
Furnace 65% Fe pellet premium at
US$30
per tonne, up from the
January 2019
price of
$29
per
tonne. At these pellet premiums, it is in IOC's economic interest to continue to maximize pellet
production in 2020. IOC's current pellet capacity is 12.5 million tonnes.
The capital expenditures for 2020 at IOC are forecasted to be approximately
$350 million
, as
compared to
$294 million
in 2019. The 2020 forecast includes approximately
$115 million
of growth
and development projects, as compared to
$70 million
of growth and development projects in 2019.
The 2020 growth and development capital expenditure projects include the implementation of the Mill
11 circuit redesign to increase weight yield, various improvements to debottleneck and increase the
pellet plant throughput rates and a redesign of the tailings system to increase the life of use and
reduce electricity and water usage. The growth and development capital expenditure forecast also
includes over
$40 million
to increase third party haulage capacity, which is subject to finalizing the
applicable third party service contracts.
The collapse of the Brumadinho tailings dam had a profound effect on the market for seaborne iron
ore in 2019.
Vale's
total iron ore fines and pellet production in 2019 fell 21.5% and 24.4% to 302
million tonnes and 41.8 million tonnes, respectively. While some growth in supply is expected,
Vale
production levels in 2020 are not expected to reach 2018 levels.
Vale
predicts that 15 million tonnes
of capacity will come back online in 2020 followed by a further 25 million tonnes in 2021. In its fourth
quarter production report,
Vale
maintained its iron ore fines production guidance for 2020 at 340 to
355 million tonnes, of which 44 million tonnes is expected to be pellet production.
The average price of the 65% Fe index from
January 1, 2020
to
February 13, 2020
was
US$104
,
the same as the average of the 65% Fe index for 2019. However,
China
continues to represent
over 70% of the total demand for seaborne iron ore and it is unclear what the long-term effect of the
coronavirus ("COVID-19") will be on iron ore prices. From
January 23, 2020
(the first day of
widespread concern about COVID-19) to
February 13, 2020
the average price of the 65% Fe index
dropped from
US$106
to
US$100
.
If current iron ore prices and premiums continue for the rest of 2020 and IOC achieves its production
guidance, LIORC should continue to be the beneficiary of strong revenues at IOC.
I would like to take this opportunity to thank our Shareholders for their interest and loyalty and my
fellow Directors for their wisdom and support.
Respectfully submitted on behalf of the Directors of the Corporation,
John F. Tuer
President and Chief Executive Officer
March 5, 2020
Corporate Structure
LIORC is a Canadian corporation formed to give effect to the conversion of the Labrador Iron Ore
Royalty Income Fund (the "Fund") into a corporation under a plan of arrangement completed on
July
1, 2010
. LIORC is also the successor by amalgamation of a predecessor of LIORC with Labrador
Mining Company Limited, formerly a wholly-owned subsidiary of the Fund, that occurred pursuant to
the plan of arrangement.
LIORC, directly and through its wholly-owned subsidiary Hollinger-Hanna, holds a 15.10% equity
interest in IOC and receives a 7% gross overriding royalty and a
10 cent
per tonne commission on
all iron ore products produced, sold and shipped by IOC. Generally, LIORC pays cash dividends
from its net income to the maximum extent possible, subject to the maintenance of appropriate levels
of working capital. The common shareholders receive quarterly dividends on the common shares on
the 25th day of the month following the end of each quarter.
Six Directors are responsible for the governance of the Corporation and also serve as directors of
Hollinger-Hanna. The Directors, in addition to managing the affairs of the Corporation and Hollinger-
Hanna, oversee the Corporation's interests in IOC. The Audit, Compensation and Nominating
Committees are composed of three independent Directors. On
January 7, 2020
LIORC appointed
two additional independent Directors to the Board. Effective
January 1, 2019
, Suske Capital Inc.,
pursuant to an administration agreement, acts as the administrator of the Corporation and Hollinger-
Hanna.
Taxation
The Corporation is a taxable corporation. Dividend income received from IOC and Hollinger-Hanna is
received tax free while royalty income is subject to income tax and
Newfoundland
royalty tax.
Expenses of the Corporation include administrative expenses. Hollinger-Hanna is a taxable
corporation.
Income Taxes
Dividends to a shareholder that are paid within a particular year are to be included in the calculation
of the shareholder's taxable income for that year. All dividends paid in 2019 were "eligible dividends"
under the Income Tax Act.
Review of Operations
Iron Ore Company of
Canada
The income of the Corporation is entirely dependent on IOC as the only assets of the Corporation
and its subsidiary are related to IOC and its operations. IOC is one of
Canada's
largest iron ore
producers, operating a mine, concentrator and pellet plant at
Labrador City, Newfoundland
and
Labrador
, and is among the top five producers of seaborne iron ore pellets in the world. It has been
producing and processing iron ore concentrate and pellets since 1954. IOC is strategically situated
to serve markets throughout the world from its year-round port facilities at Sept-Îles, Québec.
IOC has ore reserves sufficient for approximately 24 years at current production rates with
additional resources of a greater magnitude. It currently has the nominal capacity to extract around
55 million tonnes of crude ore annually. The crude ore is processed into iron ore concentrate and
then either sold or converted into many different qualities of iron ore pellets to meet its customers'
needs. The iron ore concentrate and pellets are transported to IOC's port facilities at Sept-Îles,
Québec via its wholly-owned QNS&L, a 418 kilometer rail line which links the mine and the port.
From there, the products are shipped to markets throughout
North America
,
Europe
, the
Middle East
and the
Asia-Pacific
region.
IOC's 2019 sales totaled 17.2 million tonnes, comprised of 9.6 million tonnes of iron ore pellets and
7.6 million tonnes of iron ore concentrate. Production in 2019 was 10.1 million tonnes of pellets and
7.9 million tonnes of CFS. IOC generated ore sales revenues (excluding third party ore sales) of
$2,558 million
in 2019 (2018 -
$1,815 million
).
Selected IOC Financial Information
2019
2018
2017
2016
2015
($ in millions)
Operating Revenues
2,719
1,930
2,315
1,676
1,495
Cash Flow from Operating
Activities
1,302
578
923
456
267
Net Income
749
383
499
170
21
Capital Expenditures
(1)
294
205
265
99
143
(1)
Reported on an incurred basis
IOC Royalty
The Corporation holds certain leases and licenses covering approximately 18,200 hectares of land
near
Labrador City
. IOC has subleased certain portions of these lands from which it currently mines
iron ore. In return, IOC pays the Corporation a 7% gross overriding royalty on all sales of iron ore
products produced from these lands. A 20% tax on the royalty is payable to the Government of
Newfoundland
and
Labrador
. For the five years prior to 2019, the average royalty net of the 20% tax
had been
$98.2 million
per year and in 2019 the net royalty was
$140.4 million
(2018 -
$103.0
million
).
Because the royalty is "off-the-top", it is not dependent on the profitability of IOC. However, it is
affected by changes in sales volumes, iron ore prices and, because iron ore prices are denominated
in US dollars,
the United States
- Canadian dollar exchange rate.
IOC Equity
In addition to the royalty interest, the Corporation directly and through its wholly owned subsidiary,
Hollinger-Hanna, owns a 15.10% equity interest in IOC. The other shareholders of IOC are Rio
Tinto Limited with 58.72% and Mitsubishi Corporation with 26.18%.
IOC Commissions
Hollinger-Hanna has the right to receive a payment of
10 cents
per tonne on the products produced
and sold by IOC. Pursuant to an agreement, IOC is obligated to make the payment to Hollinger-
Hanna so long as Hollinger-Hanna is in existence and solvent. In 2019, Hollinger-Hanna received a
total of
$1.7 million
in commissions from IOC (2018 -
$1.5 million
).
Quarterly Dividends
Dividends of
$4.00
per share including special dividends of
$3.00
per share were declared in 2019
(2018 – dividends of
$1.75
per share including special dividends of
$0.75
). These dividends were
allocated as follows:
Period
Record
Payment
Dividend
Income
Total
Dividend
Ended
Date
Date
per Share
($ Million)
Mar. 31, 2019
Mar. 31, 2019
Apr. 25, 2019
$0.25
$16.0
Special Dividend
Mar. 31, 2019
Apr. 25, 2019
0.80
51.2
Jun. 30, 2019
Jun. 30, 2019
Jul. 25, 2019
0.25
16.0
Jun. 30, 2019
Jun. 30, 2019
Jul. 25, 2019
0.65
41.6
Sep. 30, 2019
Sep. 30, 2019
Oct. 25, 2019
0.25
16.0
Special Dividend
Sep. 30, 2019
Oct. 25, 2019
0.75
48.0
Dec. 31, 2019
Dec. 31, 2019
Jan. 25, 2020
0.25
16.0
Special Dividend
Dec. 31, 2019
Jan. 25, 2020
0.80
51.2
Dividend to Shareholders – 2019
$4.00
$256.0
Mar. 31, 2018
Mar. 31, 2018
Apr. 25, 2018
$0.25
$16.0
Special Dividend
Mar. 31, 2018
Apr. 25, 2018
0.10
6.4
Jun. 30, 2018
Jun. 30, 2018
Jul. 25, 2018
0.25
16.0
Sep. 30, 2018
Sep. 30, 2018
Oct. 25, 2018
0.25
16.0
Special Dividend
Sep. 30, 2018
Oct. 25, 2018
0.30
19.2
Dec. 31, 2018
Dec. 31, 2018
Jan. 25, 2019
0.25
16.0
Special Dividend
Dec. 31, 2018
Jan. 25, 2019
0.35
22.4
Dividend to Shareholders - 2018
$1.75
$112.0
The quarterly dividends are payable to all shareholders of record on the last day of each calendar
quarter and are paid on the 25th day of the following month.
Management's Discussion and Analysis
The following is a discussion of the consolidated financial condition and results of operations of the
Corporation for the years ended
December 31, 2019
and 2018. This discussion should be read in
conjunction with the consolidated financial statements of the Corporation and notes thereto for the
years ended
December 31, 2019
and 2018. This information is prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") and all amounts are shown in Canadian dollars unless otherwise
indicated.
The Corporation is a Canadian corporation resulting from the conversion of the Fund into a
corporation under a plan of arrangement completed on
July 1, 2010
. LIORC is also the successor by
amalgamation of a predecessor of LIORC with Labrador Mining Company Limited, formerly a
wholly-owned subsidiary of the Fund, that occurred pursuant to the plan of arrangement.
General
The Corporation is dependent on the operations of IOC. IOC's earnings and cash flows are affected
by the volume and mix of iron ore products produced and sold, costs of production and the prices
received. Iron ore demand and prices fluctuate and are affected by numerous factors which include
demand for steel and steel products, the relative exchange rate of the US dollar, global and regional
demand and production, political and economic conditions and production costs in major producing
areas.
Liquidity and Capital Resources
The Corporation had
$77.9 million
(2018 -
$80.5 million
) in cash as at
December 31, 2019
with total
current assets of
$114.0 million
(2018 -
$127.0 million
). The Corporation had working capital of
$28.2 million
(2018 -
$76.1 million
). The Corporation's operating cash flow was
$224.6 million
(2018
-
$148.8 million
) and dividends paid during the year were
$227.2 million
, resulting in cash balances
decreasing by
$2.6 million
during 2019.
Cash balances consist of deposits in Canadian dollars and US dollars with Canadian chartered
banks. Accounts 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, 2022
with provision for annual one-year extensions. No amount is currently drawn under this facility
leaving
$30 million
available to provide for any capital required by IOC or requirements of the
Corporation.
Operating Results
The following table summarizes the Corporation's 2019 operating results as compared to 2018
results (in '000's).
Revenue
2019
2018
IOC royalties
(net of 20% Newfoundland royalty tax)
$
140,360
$
103,047
IOC commissions
1,687
1,486
Other
1,126
580
143,173
105,113
Expenses
Administrative expenses
3,182
3,503
Income taxes expense – current
42,000
30,521
45,182
34,024
Net Income before undernoted items
97,991
71,089
Non cash revenue (expense)
Equity earnings in IOC
112,076
56,987
Deferred income taxes
1,417
5,597
Amortization
(6,145)
(5,186)
107,348
57,398
Net income for the year
205,339
128,487
Other comprehensive gain
(2,760)
775
Comprehensive income for the year
$
202,579
$
129,262
A summary of IOC's sales for calculating the royalty to LIORC in millions of tonnes is as follows:
First
Quarter
2019
Second
Quarter
2019
Third
Quarter
2019
Fourth
Quarter
2019
Total
Year
2019
Total
Year
2018
Pellets
2.70
2.42
2.04
2.46
9.62
8.41
Concentrates
(1)
0.83
2.14
2.46
2.08
7.51
6.70
Total
(2)
3.53
4.57
4.51
4.54
17.14
15.10
(1)
Excludes third party ore sales.
(2)
Totals may not add up due to rounding.
IOC's 2019 iron ore sales for calculating the royalty to LIORC totaled 17.1 million tonnes compared
to 15.1 million tonnes in 2018. Royalty revenue increased to
$175.4 million
as compared to
$128.8
million
in 2018. The Shareholders' consolidated net income for the year ended
December 31, 2019
was
$205.3 million
or
$3.21
per share compared to
$128.5 million
or
$2.01
per share in 2018.
Equity earnings from IOC amounted to
$112.1 million
compared to
$57.0 million
in 2018. The higher
royalty revenue, net income and equity earnings achieved in 2019 as compared to 2018 were mainly
due to: (i) higher sales tonnages for concentrate and pellets in 2019, as 2018 production and sales
were negatively impacted by a work stoppage in the second quarter; and (ii) higher iron ore prices
as a result of continued demand from
China
and reduced supply predominantly from
Vale
.
IOC sells CFS based on the 65% Fe index. The average price for the 65% Fe index increased 16%
to
US$104
per tonne in 2019 compared to the average price in 2018 of
US$90
per tonne. The
seaborne iron ore prices were affected by a reduction of iron ore supply, predominantly from
Vale
as a result of the collapse of the Brumadinho tailings dam and the subsequent closure of other
dams. The premium for the 65% Fe index compared to the 62% Fe index, which had been
expanding over the last few years, declined to 12% in 2019 as compared to 30% in 2018. The 62%
Fe index averaged
US$93
per tonne in 2019 compared to
US$69
per tonne in 2018. The monthly
Blast Furnace pellet premium, as quoted by Platts, averaged
US$57
per tonne in 2019, compared to
an average in 2018 of
US$59
. Blast Furnace pellet premiums were relatively stable for the first half
of 2019 at approximately
US$67
per tonne, but decreased in the second half of 2019 as high
underlying benchmark prices combined with weak margins for steel producers caused buyers,
particularly in
Europe
, to reduce demand and substitute lower quality product for higher quality
pellets. In the fourth quarter of 2019 the pellet premium averaged
US$37
per tonne compared to
US$61
per tonne in the fourth quarter of 2018.
The average price realized by IOC for CFS and pellets, FOB Sept-Îles, net of selling costs was
approximately
C$148
per tonne in 2019 compared to
C$119
per tonne in 2018. Higher iron ore
prices, particularly for CFS, together with a slightly lower Canadian dollar exchange rate increased
the average realized price FOB Sept-Îles in 2019. Despite greater variability throughout the year, on
average shipping costs for 2019 were similar to shipping costs in 2018.
Capital expenditures for IOC in 2019 were
$294 million
in total as compared to
$205 million
in 2018.
At the beginning of 2019 IOC forecasted that capital expenditures for 2019 would be in the range of
$225 million
to
$245 million
. Increased capital expenditures in 2019 included the purchase of five haul
trucks, increased costs related to the induration machine #6 rebuild, and the Mill 11 circuit redesign.
Administration expenses for the year ended
December 31, 2019
totaling
$3.2 million
include cash
bonuses and grants of restricted share units accrued to date totaling
$0.3 million
. Amortization
expense for royalty and commission interests increased
$1.0 million
for the year ended
December
31, 2019
, as 2018 production was negatively impacted by a work stoppage in the second quarter.
Fourth quarter 2019 CFS sales were lower year-over-year by 22%, and pellet sales were lower by
6% as a result of lower concentrate production due to a derailment of an automated train and
unscheduled autogenous mill repairs and tailings flume repairs, as well lower shipments from the
terminal due to breakdowns on reclaiming and ship-loading equipment. However, this was partially
offset by an increase in the realized sales price of CFS, resulting in royalty income of
$38.9 million
for the quarter as compared to
$45.9 million
for the same period in 2018. Fourth quarter 2019 cash
flow from operations was
$79.1 million
or
$1.24
per share compared to 2018 of
$53.3 million
or
$0.83
per share. LIORC received an IOC dividend in the fourth quarter of 2019 in the amount of
$44.5 million
or
$0.70
per share (2018 -
$25.3 million
or
$0.40
per share). Equity earnings from IOC
amounted to
$23.7 million
or
$0.37
per share in the fourth quarter 2019 compared to
$17.8 million
or
$0.28
per share for the same period in 2018.
Selected Consolidated Financial Information
The following table sets out financial data from a Shareholder's perspective for the three years
ended
December 31, 2019
, 2018 and 2017.
Years Ended December 31
Description
2019
2018
2017
(in millions except per
share information)
Revenue
$178.3
$130.9
$158.6
Net Income
$205.3
$128.5
$157.3
Net Income per Share
$3.21
$2.01
$2.46
Cash Flow from Operations
$224.6
(1)
$149.0
(2)
$167.0
(
3)
Cash Flow from Operations per Share
$3.51
(
1)
$2.32
(
2)
$2.61
(
3)
Total Assets
$743.0
$763.6
$750.0