SALABERRY-DE-VALLEYFIELD, QUEBEC — (Marketwire) — 07/23/12 — Noranda Income Fund (the „Fund“) (TSX: NIF.UN) reported strong second quarter earnings before income taxes, supported by the continued high zinc premiums and sulphuric acid netbacks.
Q2 2012 and Subsequent Highlights:
Financial and Operating Highlights (Second quarter 2012 compared to second quarter 2011)
Earnings before income taxes were $11.9 million in the second quarter of 2012, compared to $10.4 million in the same quarter a year ago. The $1.5 million increase was mainly due to higher zinc sales volumes and zinc premiums, and lower finance costs, partially offset by lower by-product revenues.
Cash provided by operating activities in the second quarter of 2012, before net changes in non-cash working capital items and cash distributions, was $18.4 million compared to $21.4 million during the same period of 2011. During the second quarter of 2012, non-cash working capital decreased by $7.0 million due to a decrease in inventories, partially offset by an increase in accounts receivable and a decrease in accounts payable and accrued liabilities. During the second quarter of 2011, non-cash working capital increased by $6.8 million due to an increase in accounts receivable and the impact of the change in the fair value of the embedded derivative related to the zinc concentrate payable.
Financial and Operating Highlights (First half 2012 compared to first half 2011)
Earnings before income taxes were $27.5 million in the first half of 2012, compared to $27.1 million in the same period a year ago. The $0.4 million increase was mainly due to higher zinc premiums, sulphuric acid netbacks and sulphuric acid sales, and lower finance costs, partially offset by lower zinc sales volumes and lower copper sales and prices.
Cash provided by operating activities in the first half of 2012, before net changes in non-cash working capital items and cash distributions, was $41.5 million compared to $34.6 million during the same period of 2011. During the first half of 2012, non-cash working capital increased by $17.0 million due to a decrease in income taxes payable and accrued liabilities, partially offset by a decrease in inventories and accounts receivable. During the first half of 2011, non-cash working capital decreased by $23.8 million due to a decrease in accounts receivable, an increase in accounts payable and accrued liabilities and income taxes payable 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 second quarter 2012 Management-s Discussion and Analysis („MD&A“) and the Unaudited Interim Financial Statements will be posted on the Fund-s website, today, July 23, 2012 and they will be available on on July 24, 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.
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 by-products 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 second quarter and first half of 2012 compared to the same periods 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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