LONDON (Alliance News) - Anglo Pacific Group PLC said Wednesday its 2017 profit fell amid revaluations of its Kestrel coal asset as royalty income rose sharply to a record level.
In 2017, pretax profit fell to GBP11.9 million from GBP28.3 million the year prior. This was despite royalty income rose to GBP37.4 million from GBP19.7 million the year before.
Profit performance was hurt by a massive headwind from a revaluation of coal royalties at its Kestrel mine in Queensland, Australia. The revaluation was a GBP11.9 million drag from a GBP17.9 million gain the year prior.
Royalty income was boosted, however, by a more than doubling of income from Kestrel to GBP28.8 million from GBP13.1 million the year prior. Also in Australia its thermal coal royalty at Narrabri saw a 17% rise in income to GBP4.9 million from GBP4.3 million.
Its El Valle-Boinas/Carles gold, copper and silver royalty in Spain saw royalty income rise to GBP1.7 million from GBP1.2 million and in Brazil its Maracas Menchen vanadium royalty saw income more than double to GBP2.0 million from GBP800,000 the year before.
For the full year, Anglo Pacific hiked its dividend 17% to 7.0p from 6.0p the year prior.
"2017 was a record year for Anglo Pacific with royalty income of GBP37.4 million, and total income of GBP42.4 million when the cash flows from our Denison transaction are included," Anglo Pacific Chief Executive Officer Julian Treger said. "This was achieved through a combination of higher commodity prices across our portfolio and a significant increase in mining from within our private royalty area at Kestrel - up from 67% in 2016 to 93% - very much in line with our guidance".
"Anglo Pacific has enjoyed two years of significant growth in income and aims to maintain this momentum for future years by acquiring new royalties," Treger added. "With access to over USD50 million of liquidity from our balance sheet and a favourable commodity pricing outlook, we believe we are well placed to take advantage of the opportunities to deploy capital in an accretive manner."
Anglo Pacific emphasised its pipeline was in "very good shape" for 2018.
"We enter 2018 in a position of strength, having enjoyed a record 2017," Treger continued. "With less organic revenue growth anticipated in 2018, our focus is now to accelerate the growth of our asset base by acquiring royalties which provide immediate cash flow or the potential to deliver significant growth over the longer term."
Shares in Anglo Pacific were 1.5% lower at 150.75 pence on Wednesday.
