SALABERRY-DE-VALLEYFIELD, QUEBEC — (Marketwire) — 05/14/12 — Noranda Income Fund (the „Fund“) (TSX: NIF.UN) reported solid first quarter cash provided by operating activities before net changes in non-cash working capital items, supported by the highest premiums since the first quarter of 2008 and near-record sulphuric acid netbacks. Adjusted EBITDA(1) increased to $29 million from $22.7 million in the same quarter a year ago.
Q1 2012 and Subsequent Highlights:
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Financial and Operating Highlights
Earnings before income taxes were $15.6 million in the first quarter of 2012, compared to $16.7 million in the same quarter a year ago. The $1.1 million decrease was mainly due to lower zinc sales and lower copper prices, partially offset by higher premiums and sulphuric acid netbacks, lower production costs and lower finance costs.
In the first quarter of 2012, the provisional pricing feature in the Supply and Processing Agreement negatively impacted earnings before income taxes by $3.7 million. In the first quarter of 2011, the provisional pricing feature in the Supply and Processing Agreement positively impacted earnings before income taxes by $10 million.
Cash provided by operating activities before changes in non-cash working capital in the first quarter of 2012 was $18.4 million compared to $13.3 million in the first quarter of 2011. During the first quarter of 2012, non-cash working capital increased by $24.0 million due to an increase in accounts receivable and inventories and a decrease in income taxes payable, partially offset by an increase in accounts payable and accrued liabilities. During the first quarter of 2011, non-cash working capital decreased by $30.5 million due to a decrease in accounts receivable, an increase in accounts payable and accrued liabilities and the impact of the change in the fair value of the embedded derivative related to the zinc concentrate payable.
A full version of the first quarter 2012 Management-s Discussion and Analysis („MD&A“) and the Unaudited Interim Financial Statements will be posted on the Fund-s website, today, May 14, 2012 and they will be available on on May 15, 2012. 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 Unaudited Interim Financial Statements and MD&A because a reader relying on this summary alone might overlook decision critical information.
May Cash Distribution
The Fund also announced today that the Board of Trustees of Noranda Operating Trust has approved a distribution for the month of May 2012 of $0.04167 per Priority Unit payable on June 25, 2012 to Priority unitholders of record as at the close of business on May 31, 2012.
There is no assurance that monthly distributions will continue in the future, nor is there any assurance that, if they do continue, the level or frequency of such monthly distributions will not vary from the level of the most recent monthly cash distributions.
Noranda Income Fund is an income trust whose units trade on the Toronto Stock Exchange under the symbol „NIF.UN“. The Noranda Income Fund owns the electrolytic zinc processing facility and ancillary assets (the „CEZinc processing facility“) located in Salaberry-de-Valleyfield, Quebec. The CEZinc 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 byproducts from zinc concentrates purchased from mining operations. The CEZinc processing facility is operated and managed by Canadian Electrolytic Zinc Limited.
Except where otherwise indicated, all amounts in this press release are expressed in Canadian dollars.
Further information about the Noranda Income Fund can be found at .
Adjusted Earnings before Distributions to Unitholders, Finance Costs, Income Taxes, Depreciation and Amortization („Adjusted EBITDA“)
Adjusted EBITDA is used by the Fund as an indication of cash generated from operations. Adjusted EBITDA is not a recognized measure under IFRS and therefore the Fund-s method of calculating Adjusted EBITDA is unlikely to be comparable to methods used by other entities.
The Fund-s Adjusted EBITDA is calculated by starting with earnings before finance costs and income taxes and adjusting for all of the non-cash items such as depreciation, rehabilitation expense, net change in employee benefits, changes in fair value of embedded derivatives and non-cash gains/(losses) on derivative financial instruments. A reconciliation of earnings before finance costs and income taxes to Adjusted EBITDA for the first quarter of 2012 compared to the first quarter of 2011 is provided below:
Contacts: Financial information: Canadian Electrolytic Zinc Limited, Noranda Income Fund-s Manager Michael Boone, Vice President & Chief Financial Officer 416 775-1561
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