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News Releases

2009 RESULTS OF OPERATIONS

March, 03, 2010

Toronto

Labrador Iron Ore Royalty Income Fund (TSX: LIF.UN) announced the results of its operations for the year ended December 31, 2009.

Financial Performance

The Fund’s adjusted cash flow (see Management’s Discussion & Analysis for definition and calculation) for the year ended December 31, 2009 was $58.3 million or $1.82 per unit as compared to $174.9 million or $5.46 per unit for 2008.
Iron ore sales of the IOC amounted to 14.2 million tonnes compared to 15.1 million tonnes in 2008. Iron ore markets which had deteriorated suddenly in the last two months of 2008 continued to be very weak in the first half of 2009, not recovering to more normal levels until late in the third quarter of the year. The weak market conditions resulted in sales being below last year's levels which had also been adversely affected by the slowdown in the final quarter of the year. The market weakness also resulted in benchmark price reductions for the year of 48.3% for pellets and 29.75% for concentrates as compared to 2008 benchmark prices. The lower volume and change in product mix combined with lower prices resulted in royalties for 2009 being 53% below the 2008 level. While quite disappointing, this was 14% above the 2007 level and 25% higher than the average royalties received in the 5 years prior to 2008. The Canadian dollar which had declined against its U.S. counterpart last year, reversed course and was again approaching parity with the U.S. dollar at year end. This negatively affected results for the year. The Fund’s adjusted cash flow includes a dividend from IOC of $8.2 million (2008 - $77.9 million).

The Fund’s consolidated net income for the year ended December 31, 2009 was $75.1 million or $2.35 per unit compared to $176.5 million or $5.52 per unit in 2008. The Fund’s share of IOC’s earnings amounted to $31.7 million compared to $84.5 million in 2008. The 2008 earnings were reduced by an after tax charge of $26 million ($0.81 per unit) in the fourth quarter relating to IOC’s decision to write down the value of the partly refurbished pellet plant at Sept-Îles.

Please download PDF file for further information.

 


For further information, please contact:
Bruce C. Bone
Chairman & Chief Executive Officer
(416) 863-7133