Noranda Income Fund Reports Fourth Quarter and 2014 Annual Results
(firmenpresse) - SALABERRY-DE-VALLEYFIELD, QUEBEC -- (Marketwired) -- 03/11/15 -- Noranda Income Fund (TSX: NIF.UN) (the "Fund") today released its fourth quarter and annual 2014 results.
Fourth Quarter and 2014 Overview:
2014 Capital Spending
Capital spending was $35.1 million in 2014 compared to $33.4 million in 2013. Most of the annual 2014 capital investment was spent on sustaining the Fund's operations, including $8.2 million on replacement anodes for the cell house, $4.5 million on major roaster and acid plant equipment and $1.9 million on electrical infrastructure. Investment in the silica removal project totalled $9.5 million in 2014.
Financial and Operating Highlights (Fourth quarter 2014 compared to the fourth quarter 2013)
The Fund reported loss before income taxes of $27.9 million in the three months ended December 31, 2014 compared to earnings of $9.3 million in the same period a year ago. The $37.2 million decrease was mainly due to a $40.5 million asset impairment charge, and a $4.3 million increase in pension expense related to additional pension benefits and early retirement provisions for the new collective agreement. This decrease was partially offset by higher net revenues resulting from higher zinc sales volumes and premiums.
The $40.5 million non-cash asset impairment charge is primarily as a result of:
This non-cash charge is not expected to have an impact on the Fund's borrowing facilities.
Cash provided from operating activities in the three months ended December 31, 2014 was $13.6 million, including a negative $1.9 million increase in non-cash working capital due to an increase in accounts receivable and a decrease in accounts payable, partially offset by a decrease in inventory. In the same period of 2013, cash provided from operating activities was $21.7 million, which was positively impacted by a $7.6 million decrease in non-cash working capital due to an increase in accounts payable, partially offset by an increase in inventories and accounts receivable.
Financial and Operating Highlights (2014 compared to 2013)
Loss before income taxes was $6.0 million in 2014, compared to earnings before income taxes of $65.0 million in 2013. The $71.0 million difference is due to:
This decrease was partly offset by higher zinc metal premiums.
Cash used in operating activities in 2014 was $7.0 million, including a negative $53.7 million increase in non-cash working capital due mainly to an increase in inventories and a reduction in accounts payable and accrued liabilities. In 2013, cash provided by operating activities was $91.2 million, including the benefit of a $28.6 million reduction in non-cash working capital due to a decrease in accounts receivable and inventories and an increase in accounts payable and accrued liabilities.
Outlook for the Fund
The Board continues to work on the long-term strategy for the Fund.
The main challenges facing the Fund are (a) the continued supply of zinc concentrate and (b) the ability for the Processing Facility to continue to operate profitably after the expiry of the initial term of the Supply and Processing Agreement in May 2017, at which time the Fund expects that it will be required to purchase concentrate on market terms instead of the current fixed processing fee. The Fund's results under market terms will be subject to more volatility than under the current Supply and Processing Agreement.
Over the last several months, discussions have been held with various potential counterparties regarding the supply of zinc concentrate following May 2, 2017. These discussions will continue; however, there is no assurance that they will result in continued supply on terms that allow the Fund to continue profitable operations.
The Independent Committee is being assisted in its work by an industry consultant, Steve Hayes, whom the Independent Committee retained in December 2012 to advise it with regards to the zinc concentrate market. In May 2014, TD Securities was engaged as financial advisor to the independent trustees.
Distribution Policy
When not restricted, and as may be considered appropriate by the Board, the Fund's policy is to make monthly distributions to Unitholders. In determining whether there shall be a distribution and the level thereof, the Board periodically reviews the Fund's financial performance, business environment and prospects, and determines the appropriate levels of reserves. The Board also continues to evaluate on a monthly basis the expected future cash flows of the Fund as well as the reserves that may be required in the future.
Given the challenges described above, the Board continues to evaluate the expected future cash flows in a variety of potential scenarios, as well as required reserves under each of those scenarios. Given the uncertainty of future pricing and market conditions for zinc concentrate, and that several potential scenarios are being considered, including the discontinuation of operations following the expiry of the agreement, the Board is carefully reviewing and, if required, will augment the Fund's reserves. An increase in reserves would have an adverse effect on cash available for distributions. There is no assurance that monthly distributions will continue in the future; nor is there any assurance that, if they do continue, the level of such distributions will not vary from the level of the most recent monthly cash distribution.
Conference Call and Webcast:
In addition, you can listen to the teleconference and view the slide presentation from the Noranda Income Fund website: or click on this link: http://www.gowebcasting.com/6361.
Conference Call Replay:
A full version of the annual 2014 MD&A and the audited Consolidated Financial Statements will be posted on and on the Fund's website at http://www.norandaincomefund.com/investor/financials.html later today, March 11, 2015. Readers should be advised that the summarized communication presented in this press release is limited in its disclosure. It is not a suitable source of information for readers who are unfamiliar with the Fund, and it is not in any way a substitute for reading the Consolidated Financial Statements and MD&A because a reader relying on this summary alone might overlook decision critical information.
Forward-Looking Information
This press release contains forward-looking information and statements within the meaning of applicable securities laws. Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause actual events, results or performance to be materially different from any future events, results or performance expressed or implied by the forward-looking information, and as a result, the Fund cannot guarantee that any forward-looking statements or information will materialize.
Such risks and uncertainties include, but are not limited to, the effect of general business and economic conditions, the Fund's ability to operate at normal production levels, the Fund's capital expenditure requirements and other general risks and uncertainties set out in the Fund's continuous disclosure documents on available on SEDAR at .
Forward-looking information contained in this press release is based on, among other things, management's current estimates, expectations, assumptions, plans and intentions, which management believes are reasonable as of the current date, and which are subject to a number of risks and uncertainties. Except as required by law, the Fund does not undertake to update these forward-looking statements or information, whether written or oral, that may be made from time to time by the Fund or on the Fund's behalf.
Noranda Income Fund is an income trust whose units trade on the Toronto Stock Exchange under the symbol "NIF.UN". Noranda Income Fund owns the electrolytic zinc processing facility and ancillary assets (the "Processing Facility") located in Salaberry de-Valleyfield, Quebec. The Processing Facility is the second-largest zinc processing facility in North America and the largest zinc processing facility in eastern North America, where the majority of zinc customers are located. It produces refined zinc metal and various by-products from sourced zinc concentrates. The Processing Facility is operated and managed by Canadian Electrolytic Zinc Limited, a wholly-owned subsidiary of Glencore Canada Corporation.
Except where otherwise indicated, all amounts in this press release are expressed in Canadian dollars.
Further information about Noranda Income Fund can be found at .
Key Performance Drivers
The following table provides a summary of the performance of the Fund's key drivers for the three months and years ended December 31, 2014 and 2013:
Contacts:
Michael Boone
Vice President & Chief Financial Officer of
Canadian Electrolytic Zinc Limited,
Noranda Income Fund's Manager
416-775-1561
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Datum: 11.03.2015 - 11:45 Uhr
Sprache: Deutsch
News-ID 377638
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contact information:
Town:
SALABERRY-DE-VALLEYFIELD, QUEBEC
Kategorie:
Mining & Metals
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