(Alliance News) - Anglo Pacific Group PLC on Monday said portfolio contribution rose in the third quarter of 2019 thanks in part to higher dividends from Labrador Iron Ore Royalty Corp.
The natural resources and royalty streaming firm said its total portfolio contribution for the three months ended September 30 came to GBP12.9 million, up 6.6% from GBP12.1 million. Total portfolio contribution, Anglo Pacific explained "includes royalty income, cashflows from Denison/McClean Lake and other royalty financial instruments".
While royalty income alone fell 6.9% to GBP9.5 million from GBP10.2 million, the contribution from Labrador Iron dividends was more than one and a half times higher at GBP2.3 million versus GBP0.9 million before. Anglo Pacific invested another USD5 million in Labrador Iron in the quarter, giving a total investment of USD25 million for the year so far for a total of USD75 million - yielding more than 15% in dividends thus far in 2019.
This helped lift royalty related revenue by 6.0% to GBP12.3 million from GBP11.6 million and resulted in the higher portfolio contribution.
On a year-to-date basis, the improvement was much stronger, with total portfolio contribution for the nine months to September 30 up 39% at GBP46.0 million versus GBP33.1 million the year before, including a 29% rise in royalty income to GBP36.4 million from GBP28.2 million, with a 41% rose in royalty-related revenue to GBP43.4 million from GBP30.8 million.
The drop in coal and vanadium prices in the second half hurt third-quarter revenue, but volumes are still rising. Net debt at September end was GBP33.3 million, and the firm has access to liquidity of around USD50 million. Anglo Pacific is on track for "strong growth" in 2019, it said.
Chief Executive Julian Treger said: "With the income we have earned year to date, along with our expectation for strong volumes to come in the fourth quarter, we would expect 2019 to be another record year of revenue for the group. With USD75 million of acquisitions year to date, 2019 will be a record year of investment for Anglo Pacific. This is very much in line with our objectives at the beginning of the year to continue and accelerate our level of growth.
"The recent weakness in certain commodity prices combined with the impact of continued ongoing global economic uncertainty, not least the US China trade tension, should continue to provide investment opportunities for Anglo Pacific, and we see this currently in our pipeline. We have the financial capacity to do more and remain firmly focused on growth, but this will not be at the expense of our strict investment criteria which have served us well over the past number of years."
Shares in Anglo Pacific were marginally lower at 193.98 pence in London at midday.
By Anna Farley; annafarley@alliancenews.com
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