MILLIPORE CORPORATION 
By NEW YORK, Nov. 14, 2013/PRNewswire/ -- MFC Industrial Ltd. ("MFC" or the "Company") (NYSE: MIL) announces its results for the nine- and three-month periods ended September 30, 2013and provides an update on its recent corporate developments. The Company's financial statements are prepared in accordance with International Financial Reporting Standards. (All references to dollar amounts are in United Statesdollars unless otherwise stated.)
HIGHLIGHTS |
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 |
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*Note: EBITDA is not a measure of financial performance under International Financial Reporting Standards ("IFRS"), has significant limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under IFRS. See page 3 of this news release for a reconciliation of our net income to EBITDA.
For the nine months ended September 30, 2013, our revenues increased by 58% compared to the same period in 2012. This was good, but we can certainly improve. Our EBITDA (earnings before interest, taxes depreciation and amortization) for the current nine-month period was impacted by higher costs of sales. During the three months ended September 30, 2013, our commodities operations were also adversely affected by historically severe flooding in the Southern Alberta, Canada, region in and around the city of Calgary. Such flooding caused us to lose 73 days of natural gas production which resulted in approximately C$7.5 millionin lost net revenue and approximately C$1.5 millionin capital expenditures for repairs. Such operations returned to normal operating levels on September 26, 2013.
RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
Total revenues for the nine months ended September 30, 2013increased 58% to $591.8 million, compared to $373.9 millionin 2012. Revenues were up for the nine months ended September 30, 2013because of several factors, including the integration of our new operations and increases in volumes for some of our commodities.
EBITDA for the nine months ended September 30, 2013was $54.6 million. EBITDA has significant limitations as an analytical tool and should not be considered in isolation or as a substitute for our results as reported under IFRS. See page 3 of this news release for a reconciliation of net income to EBITDA.
Net income for the nine ended September 30, 2013decreased to $22.2 million, or $0.35per share on a diluted basis, from $252.1 million, or $4.03per share on a diluted basis (which included a bargain purchase gain of $225.2 millionin the same period of 2012), for the same period last year. Net income for the current nine month period was down due to several factors, including higher costs of sales and the flooding in Alberta, Canada.
The income statement for the nine months ended September 30, 2013includes non-cash depletion and depreciation expenses of approximately $18.4 million, or $0.29per share on a diluted basis. Depletion and depreciation are non-cash expenses and represent the amortization of the historical cost of our natural gas assets and other assets over their economic life. They are income statement expenses but are added back in the cash flow statement.
Revenues for our commodities and resources business were $566.6 millionfor the nine months ended September 30, 2013, compared to $345.8 millionfor the same period in 2012. Included are the gross revenues generated by our iron ore royalty interest which, for the nine months ended September 30, 2013, were approximately $18.5 million, compared to $19.7 millionin 2012. A total of 2.0 million tons of iron ore products were shipped during the nine months of 2013, compared to 2.3 million tons shipped during the same period in 2012.
Revenues from our merchant banking business were $8.9 millionfor the nine months ended September 30, 2013, compared to $14.3 millionfor the same period in 2012.
Other revenues, which encompass our corporate and other operations, were $16.4 millionfor the nine months ended September 30, 2013, compared to $13.8 millionfor the same period in 2012.
Costs of sales increased to $508.4 millionduring the nine months ended September 30, 2013from $302.9 millionfor the same period in 2012. Selling, general and administrativeexpenses increased to $46.3 million for the nine months ended September 30, 2013from $32.4 million for the same period in 2012.
OVERVIEW OF OUR RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
Our total revenues by operating segment for each of the nine months ended September 30, 2013and 2012 are broken out in the table below:
REVENUES All amounts in thousands | ||
September 30, 2013 nine months | September 30, 2012 nine months | |
Commodities and resources | $ 566,572 | $ 345,822 |
Merchant banking | 8,880 | 14,290 |
Other | 16,351 | 13,784 |
Total revenues | $ 591,803 | $ 373,896 |
Our income from operations for each of the nine months ended September 30, 2013and 2012 are broken out in the table below:
INCOME FROM OPERATIONS All amounts in thousands, except per share amounts | ||
September 30, 2013 nine months | September 30, 2012 nine months | |
Commodities and resources | $ 17,557 | $ 20,995 |
Merchant banking | 13,579 | 241,776* |
Other | (6,439) | (5,095) |
Income before income taxes | 24,697 | 257,676 |
Income tax recovery (expenses) | 1,208 | (417) |
Resource property revenue tax expenses | (3,611) | (4,010) |
Net income attributable to non-controlling interest | (67) | (1,103) |
Net income attributable to our shareholders | $ 22,227 | $ 252,146 |
Earnings per share, diluted | $ 0.35 | $ 4.03 |
* Note: The nine months of 2012 included a bargain purchase of $225.2 millionor $3.60per share.
EBITDA BREAKDOWN
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Management uses EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to net income as a performance measure primarily because we incur depreciation, depletion and amortization expenses and EBITDA generally represents cash flow from operations. The following table reconciles our EBITDA to net income for the nine months ended September 30, 2013to net income.
EBITDA (earnings before interest, taxes, depreciation and amortization) All amounts in thousands | |
September 30, 2013 | |
Net income | $ 22,294 |
Income taxes | 2,403 |
Finance costs | 11,551 |
Depreciation, depletion and amortization | 18,383 |
EBITDA | $ 54,631 |
*Note: EBITDA is not a measure of financial performance under IFRS, has significant limitations as an analytical and should not be considered in isolation or as a substitute for analysis of our results as reported under IFRS.
FINANCIAL
The following table highlights certain selected key numbers and ratios as of September 30, 2013in order to assist our shareholders to better understand MFC's financial position.
FINANCIAL HIGHLIGHTS All amounts in thousands, except per share amount and ratios | |
September 30, 2013 | |
Cash, cash equivalents and securities | $ 293,478 |
Short-term deposits | 188 |
Trade receivables | 95,504 |
Current assets | 686,400 |
Total assets | 1,289,413 |
Current liabilities | 287,645 |
Working capital | 398,755 |
Current ratio* | 2.39 |
Acid test ratio* | 1.50 |
Total liabilities | 551,515 |
Shareholders' equity | 735,339 |
Equity per common share | 11.76 |
*Note: The current ratio is calculated as current assets divided by current liabilities. The acid test ratio is calculated as cash and cash equivalents plus short-term cash deposits, short-term securities and receivables divided by total current liabilities (excluding liabilities relating to assets held for sale).
LIQUIDITY
As at September 30, 2013, we had cash, short-term deposits and securities of $293.7 million. We monitor our capital on the basis of our debt-to-adjusted capital ratio and long-term debt-to-equity ratio.
LIQUIDITY All amounts in thousands | ||
September 30, 2013 | December 31, 2012 | |
Total debt | $ 186,532 | $ 162,993 |
Less: cash and cash equivalents | (281,225) | (273,790) |
Net debt (net cash & cash equivalents) | (94,693) | (110,797) |
Shareholders' equity | 735,339 | 737,091 |
LONG-TERM DEBT
The long-term debt-to-equity ratio is calculated as long-term debt divided by shareholders' equity.
LONG-TERM DEBT AND DEBT METRICS All amounts in thousands, except ratio | ||
September 30, 2013 | December 31, 2012 | |
Long-term debt, less current portion* | $ 145,977 | $ 118,824 |
Shareholders' equity | 735,339 | 737,091 |
Long-term debt-to-equity ratio | 0.20 | 0.16 |
* Note: This table does not include the MPP term financing as it involves a purchase option & future processing fees.
CREDIT FACILITIES
We maintain various kinds of credit lines and facilities with banks and insurers. Most of these facilities are short-term, and are used for day-to-day business and structured financing activities in commodities. The amounts drawn under such facilities fluctuate with the type and level of transactions being undertaken.
As at September 30, 2013, we had credit facilities aggregating $492.9 millionas follows: (i) unsecured revolving credit facilities aggregating $219.6 millionfrom banks; (ii) revolving credit facilities aggregating $47.1 millionfrom banks for structured solutions, a special trade financing where the margin is negotiable when the facility is used; (iii) a non-recourse factoring arrangement with a bank for up to $128.6 millionfor our commodities activities. We may factor our commodity receivable accounts upon invoicing at the inter-bank rate plus a margin; (iv) a foreign exchange credit facility of $59.6 millionwith a bank; and (v) secured revolving credit facilities aggregating $38.0 million. All of these facilities are renewable on a yearly basis.
UPDATE ON OUR NATURAL GAS & MIDSTREAM FACILITIES
In June 2013, Alberta, Canada, experienced heavy rainfall that triggered catastrophic flooding described by the provincial government as the worst in Albertahistory. Rivers and their tributaries were particularly affected. Four people were confirmed dead as a direct result of the flooding and over 100,000 people were displaced throughout the region. Total damage estimates exceeded C$5 billion and in terms of insurable damages, is one of the costliest disasters in Canadian history.
One of our sour gas pipelines and a fuel gas line that feed our main gas processing facility were damaged and exposed by the flooding at the Sheep River crossing, and our Incident Management Team was activated. Although there were no leaks, there was surface damage to the protective covering, necessitating the decision to block in all sour production and sweeten and de-pressure the exposed line to eliminate any chance of a release. All sour gas wells feeding the pipeline were shut in. The sour gas production without this pipeline was not enough to keep our plant running and so the plant was shut down in mid-July 2013.
We have spent approximately C$1.5 millionto repair the pipeline and gas line. This project required significant effort, including: surveys; line locates; excavation; work crews; sourcing pipe; arranging for welders; and applying for an updated pipeline license.
The high pressure drill method of replacing the pipe was required to ensure regulatory approval without disturbing the river and wildlife. On September 26, 2013, the high sour gas gathering system was brought back on line to pre-flood volumes and the plant showed little effects of the prolonged shut down.
We have filed a claim with the insurer for approximately C$9 millionwhich includes approximately C$7.5 millionin lost revenues for the three month period, while the balance is for the actual repair costs associated with the replacement of the pipeline.
NITON ARRANGEMENT
In November 2013, we entered into an agreement with an experienced local oil and gas company (the "Operator") to develop certain oil and gas properties held by us in the Niton area of Alberta. The Operator is an oil and gas exploration and production company that has a significant presence in the area already, and currently produces 7,000 - 8,000 boe/d.
Terms
- The Operator will spend a minimum of C$50 millionto drill at least three net wells per year and a total of 12 net wells (to a minimum of 800 horizontal meters each) during the initial three-year term.
- The Operator will pay 100% of the drilling and completion costs of each well at its sole risk and expense.
- After a well is drilled and there is continuous production from each well we can elect to participate for up to 30% on a look-back basis in the working interest of each well by paying 25% of its actual costs; or
- Alternatively, we can elect to receive a 10% gross royalty on the production instead.
- We will process the natural gas produced from the new wells through our processing plant for the life of the wells.
MARGINAL WELLS
A portion of our production comes from predominantly shallow low productivity, low pressure dry gas wells located in Southern Alberta. The challenge facing us and other operators in the region arises from trying to profit from these assets in a low gas price environment coupled with high operating costs.
The strategy to address these profitability issues is focused on implementing a "marginal well" operation to achieve the lowest possible cost of production, as well as potentially layering in a gas price hedging program to improve the revenue profile. The marginal wells in this area are homogenous, low risk, low decline, multi-zone production that includes gas and light oil opportunities. There is an extensive low pressure, large diameter gathering system owned and operated in the area which provides competitive advantages and flexibility to acquire and operate similar assets in an efficient manner.
In addition to the development of our existing lands, opportunities exist in the region for further consolidation and acquisition. Our marginal wells are expected to be economically stronger as part of an expanded entity with similar homogenous well types and we have an opportunity to acquire wells that other producers have struggled to operate under their higher-cost structures. By offering such producers the opportunity to dispose of these marginally productive wells, we are in a better position to acquire these and establish a profitable earnings profile. We intend to focus on additional cost reduction and optimization through a variety of means.
Wells and other processing facilities: The following table sets out our average sales prices, operating costs, royalty amounts, transportation costs and production for the nine months ended September 30, 2013:
NATURAL GAS WELLS (COSTS AND PRODUCTION) All amounts in Canadian dollars, except production numbers | |||||
For the nine months ended September 30, 2013 | |||||
Natural Gas (C$/mcf) | NGLs (1) (C$/bbl) | Crude Oil (C$/bbl) | Total (C$/boe) | ||
Price(2) | C$ 3.34 | C$ 78.41 | C$ 87.36 | C$30.48 | |
Royalties | 0.63 | 25.77 | 20.88 | 6.96 | |
Transportation costs | 0.14 | 4.61 | 2.55 | 1.34 | |
Operating costs(3) | --- | --- | --- | 13.48 | |
Production(4) | 13,054 mmcf | 306.1 mboe | 86.0 mbbl | 2,567.7 mboe | |
Notes: | (1) Includes sulphur. (2) Average sales price includes third party processing fees. (3) A portion of our natural gas production is associated with crude oil production. Excludes the impact of hedging on prices and does not include non-cash operating costs of C$5.48 per boe consisting of depletion, depreciation and amortization. Operating costs per individual product are not available as they are charged to gas production only, and any allocation would be arbitrary. (4) Net of working interest. | ||||
Update on our Midstream Facilities: Theplans for our gas processing facility include the development of midstream facilities that will help reduce our exposure to the volatility of natural gas prices and have the potential to create long-term stable processing income, as well as a value-added-component for our natural gas asset. Our strategy involves pursuing bolt-on or value-added projects to our existing facility. We have placed the orders for the generators for the co-generation plant (17 to 60 MW) that will provide electricity for our own use with any surplus power being sold to the electrical grid.
Well Cycle Policy: Our well cycle policy gives us the ability to maximize and protect the value of our assets by shutting in unprofitable production until natural gas pricing returns to adequate economic levels. When our production becomes economical we will resume operations.
Land bank: Our land bank as at September 30, 2013was 289,420 net undeveloped acres (1,171.2 square kilometers) which we do not plan to sell or develop at this time.
UPDATE ON NEW MARKETS AND EXPANSION OF OUR COMMODITIES PLATFORM
As part of the integration of MFC Resources Inc. (formerly: ACC Resources) ("MFCR") into our group, we are now utilizing our Shanghaioffice for our Chinasourcing and freight forwarding from Asia. One of our main goals at MFCR is to reduce the cost of shipping which is the key component to enhancing their competitiveness.
We are evaluating the possible value added benefits of establishing a warehouse facility at our existing processing plant in Alberta, which would provide central distribution into the Canadian and U.S. oil and gas and farming industries. The facility benefits from a rail terminal, which runs to the west coast of Canadalinking into the ports of Seattleand Tacomain the U.S. as well as Vancouverin Canada.
One of our new trading products in Mexicois proppants, which are purchased in China, and shipped, warehoused and sold in South America. We have also increased management personnel in these markets.
UPDATE ON THE ROYALTY INTEREST AT THE WABUSHMINE
In March of this year, the operator of the Wabush Iron Ore Mine ("Wabush"), Cliffs Natural Resources Inc. ("Cliffs"), has announced that it was changing its production of the mine to iron ore concentrates from iron ore pellets. In the third quarter of this year, Cliffs started shipping concentrate as well as pellets. For the nine months ended September 30, 2013, Cliffs shipped a total of 2,034,271 tons of iron ore pellets and concentrate, compared to 2,338,303 tons in 2012. The price per ton (ore pellets and/or concentrate) for the nine months was C$9.34versus C$9.49in the same period in 2012.
The following table shows tonnage and pricing from our royalty interest for the three months ended September 30, 2013and 2012.
ROYALTY INTEREST PAYMENTS FROM THE WABUSH MINE All amounts in are in Canadian dollars, except tonnage amounts | ||
September 30, 2013 three months | September 30, 2012 three months | |
Total tonnage concentrate/pellets shipped | 1,176,984 | 944,701 |
Average price per ton | $ 9.34 | $ 9.40 |
Revenue from pellets | $ 10,996,562 | $ 8,885,858 |
Cliffs have narrowed their 2013 full year Eastern Canadian iron ore sales and production volume expectations to 8.5 million to 9 million tons, up slightly from their previous range of 8 million to 9 million tons. This is comprised of 5.5 million to 6 million tons from other Eastern Canadian mines and 3 million tons from Wabush.
UPDATE ON OUR CAPTIVE SOURCES OF FERROUS METALS AT PEA RIDGE
MFC has appointed a new general manger to manage our interest in Pea Ridge mine and work with our partner, Alberici Group, Inc. in St Louis, Missouri.
The project is currently at a preliminary stage and any decision on proceeding, including development activities, is dependent on the completion of further analysis, including feasibility studies. Activities at the project are proceeding in an orderly fashion and it is currently anticipated that substantial additional expenditures will be incurred in order to determine the feasibility of the project.
ACCOUNTING NOTES
Revision of bargain purchase during the measurement period
Pursuant to IFRS 3, Business Combinations, comparative information for prior periods presented in financial statements is revised to account for adjustments made during the measurement period in connection with a business combination.
In September 2012, we acquired a 100% equity interest in Compton Petroleum Corporation ("Compton") and recognized a bargain purchase of $244.6 millionin the consolidated financial statements for the year ended December 31, 2012. During the measurement period in September 2013, the fair values of the assets and liabilities of Comptonwere revisited and it was determined that the bargain purchase was $222.8 millionon the acquisition date. As a result, interest on liabilities was recomputed and finance costs were reduced by $0.8 millionfor the year ended December 31, 2012. In addition, expiry loss of the unproved lands of $0.9 millionwas de-recognized for the year ended December 31, 2012.
The following table reconciles the retained earnings as at December 31, 2012before and after the adjustments during the measurement period in connection with the acquisition of Compton:
RETAINED EARNINGS All amounts in thousands | |
As at December 31, 2012 | |
Retained earnings as previously reported | $ 426,184 |
Changes during measurement periods: | |
-- Bargain purchase | (21,821) |
-- Effects resulting from the adjustments since the acquisition date | 1,715 |
Retained earnings, revised | $ 406,078 |
Decommissioning obligations
Our provisions for decommissioning obligations represent management's best estimate of the present value of the future cash outflows required to settle the liability which reflects estimates of future costs, inflation, movements in foreign exchange rates and assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting the future cash outflows.
Decommissioning obligations were $106.9 millionat September 30, 2013and $136.6 millionat December 31, 2012, or a change of $30.0 millionduring the nine months ended September 30, 2013. These changes are primarily recorded with a corresponding change to the carrying amounts of related properties. Adjustments to the carrying amounts of related properties have no profit or loss impact.
ANNUAL CASH DIVIDEND
In January, our Board of Directors declared an annual cash dividend for 2013 of $0.24per common share. The dividend is 9% higher than the dividend paid in 2012 and represents a yield of approximately 2.81% compared to an annual dividend yield of approximately 2.5% for the NYSE Composite Index in 2012. Details of the dividend are as follows:
- The 2013 cash dividend was paid in equal quarterly installments of $0.06per common share.
- The first payment was paid on February 8, 2013.
- The second payment was paid on April 22, 2013.
- The third payment was paid on July 30, 2013.
- Final payment was paid on October 28, 2013.
CORPORATE TAXATION
We are a company that strives to be fiscally responsible. The corporate income tax paid in cash was approximately $2.3 millionfor the nine months ended September 30, 2013.
COMMENTS
Chairman Michael Smithcommented: "Our revenues increased by 58% for the nine months ended September 30, 2013, compared to the same period in 2012. This was good, but we can certainly improve on it. On the trading side we saw pricing of some commodities under seasonal pressure during the nine months. We still need to improve our margins, they are not at what we believe are acceptable levels.
We are continuing to make progress towards our goal of building a global commodities supply chain company, with the emphasis on the expansion of our operations and increasing our captive sources of supply. With any expansion or acquisition, our policy is to avoid diluting our shareholders by issuing new shares and to maintain our balance sheet and financial ratios. "
Shareholders are encouraged to read the entire Form 6-K, which includes our unaudited financial statements and management's discussion and analysis for the nine months ended September 30, 2013and was filed with the U.S. Securities and Exchange Commission and Canadian securities regulators today, for a greater understanding of the Company.
Today at 10:00 a.m. EDT(7:00 a.m. PDT), a conference call will be held to review MFC's announcement and results. This call will be broadcast live over the Internet at www.mfcindustrial.com. An online archive will be available immediately following the call and will continue for seven days. You may also to listen to the audio replay by phone by dialing: 1 (888) 286 8010, using conference number 49101090. International callers dial: 1 (617) 801 6888.
About MFC Industrial Ltd.
MFC is a global commodity supply chain company and is active in a broad spectrum of activities related to the integrated combination of commodities and resources interests. We also provide logistics, financial and risk management services to producers and consumers of commodities. To obtain further information on the Company, please visit our website at: http://www.mfcindustrial.com.
Disclaimer for Forward-Looking Information
This document contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature, including, without limitation, statements regarding our future plans, including in respect of partnerships and joint ventures respecting our processing facilities and related expansion projects, implementation of current strategies and our plans for our projects and the future plans and projections of the operator of our royalty interest. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "projects", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, revenues, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our actual results, revenues, performance or achievements to differ materially from our expectations include, among other things:(i) periodic fluctuations in financial results as a result of the nature of our business; (ii) commodities price volatility; (iii) economic and market conditions; (iv) competition in our business segments; (v) decisions and activities of operators of our resource interests or any revisions to their current plans and projections, which could be made without notice to us; (vi) the availability of commodities for our commodities and resources operations; (vii) the availability of suitable acquisition or merger or other proprietary investment candidates and the availability of financing necessary to complete such acquisitions or development plans; (viii) our ability to realize the anticipated benefits of our acquisitions; (ix) additional risks and uncertainties resulting from strategic investments, acquisitions or joint ventures; (x) counterparty risks related to our trading activities; (xi) unanticipated grade, geological, metallurgical, processing or other problems experienced by the operators of our resource interests (xii) delays in obtaining requisite environmental and other permits or project approvals; (xiii) potential title and litigation risks inherent with the acquisition of distressed assets; (xiv) risks related to exploration, development and construction of a previously shut-down mine project, including the suitability and integrity of historic mine structures; (xv) the availability of services and supplies; (xvi) operating hazards; and (xvii) other factors beyond our control. Such forward-looking statements should therefore be construed in light of such factors. Other than in accordance with its legal or regulatory obligations, the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about these and other assumptions, risks and uncertainties are set out in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission and our Management's Discussion and Analysis for the year ended December 31, 2012, filed with the Canadian securities regulators.
UNAUDITED FINANCIAL TABLES FOLLOW -
MFC INDUSTRIAL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
September 30, 2013and December 31, 2012
(Unaudited)
(United States Dollars in Thousands)
ASSETS | September 30, | December 31, |
Current Assets | 2013 | 2012 |
Cash and cash equivalents | $ 281,225 | $ 273,790 |
Short-term deposits | 188 | 182 |
Securities | 12,253 | 6,658 |
Restricted cash | 243 | 889 |
Trade receivables | 95,504 | 72,820 |
Other receivables | 22,450 | 18,314 |
Inventories | 94,589 | 142,925 |
Real estate held for sale | 47,510 | 12,210 |
Deposits, prepaid and other | 26,998 | 27,833 |
Assets held for sale | 105,440 | 124,192 |
Total current assets | 686,400 | 679,813 |
Non-current Assets | ||
Securities | 5,574 | 9,637 |
Equity method investments | 24,493 | 22,382 |
Investment property | - | 34,152 |
Property, plant and equipment | 78,481 | 80,139 |
Interests in resource properties | 339,515 | 383,745 |
Hydrocarbon probable reserves | 95,903 | 99,142 |
Hydrocarbon unproved lands | 30,520 | 31,701 |
Accrued pension assets, net | 760 | - |
Deferred income tax assets | 27,136 | 25,640 |
Other | 631 | 776 |
Total non-current assets | 603,013 | 687,314 |
Total assets | $ 1,289,413 | $ 1,367,127 |
MFC INDUSTRIAL LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (cont'd)
September 30, 2013and December 31, 2012
(Unaudited)
(United States Dollars in Thousands)
LIABILITIES AND EQUITY | September 30, 2013 | December 31, 2012 |
Current Liabilities | ||
Short-term bank borrowings | $ 165,949 | $ 150,396 |
Debt, current portion | 40,555 | 44,169 |
Account payables and accrued expenses | 58,593 | 79,323 |
Facility term financing | 6,701 | 10,462 |
Provisions | 70 | 80 |
Income tax liabilities | 2,163 | 2,866 |
Deferred sale liabilities | - | 26,637 |
Liabilities relating to assets held for sale | 13,614 | 29,806 |
Total current liabilities | 287,645 | 343,739 |
Long-term Liabilities | ||
Debt, less current portion | 145,977 | 118,824 |
Facility term financing | - | 12,263 |
Deferred income tax liabilities | 3,340 | 3,391 |
Decommissioning obligations | 106,850 | 136,642 |
Accrued pension obligation, net | - | 1,228 |
Puttable instrument financial liabilities | 7,703 | 7,761 |
Total long-term liabilities | 263,870 | 280,109 |
Total liabilities | 551,515 | 623,848 |
EQUITY | ||
Capital stock | 383,116 | 382,746 |
Treasury stock | (68,980) | (68,610) |
Contributed surplus | 13,037 | 13,037 |
Retained earnings | 419,417 | 406,078 |
Accumulated other comprehensive income (loss) | (11,251) | 3,840 |
Shareholders' equity | 735,339 | 737,091 |
Non-controlling interests | 2,559 | 6,188 |
Total equity | 737,898 | 743,279 |
$ 1,289,413 | $ 1,367,127 |
MFC INDUSTRIAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2013and 2012
(Unaudited)
(United States Dollars in Thousands, Except Per Share Amounts)
2013 | 2012 | |
Net Sales | $ 586,124 | $ 369,091 |
Equity income | 5,679 | 4,805 |
Gross revenues | 591,803 | 373,896 |
Costs and Expenses: | ||
Costs of sales | 508,446 | 302,861 |
Selling, general and administrative | 46,293 | 32,394 |
Share-based compensation - selling, general and administrative | - | 9 |
Finance costs | 11,551 | 6,913 |
566,290 | 342,177 | |
Income from operations | 25,513 | 31,719 |
Other items: | ||
Exchange differences on foreign currency transactions | 104 | 774 |
Change in fair value of puttable instrument financial liabilities | (920) | - |
Bargain purchase | - | 225,183* |
Income before income taxes | 24,697 | 257,676 |
Income tax (expense) recovery: | ||
Income taxes | 1,208 | (417) |
Resource property revenue taxes | (3,611) | (4,010) |
(2,403) | (4,427) | |
Net income for the period | 22,294 | 253,249 |
Net income attributable to non-controlling interests | (67) | (1,103) |
Net income attributable to owners of the parent company | $ 22,227 | $ 252,146 |
Basic earnings per share | $ 0.36 | $ 4.03 |
Diluted earnings per share | $ 0.35 | $ 4.03 |
Weighted average number of common shares outstanding - basic - diluted | 62,552,126 62,833,963 | 62,556,572 62,556,572 |
*Note: Revised during the measurement period as required by IFRS 3,Business Combinations | ||
MFC INDUSTRIAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2013and 2012
(Unaudited)
(United States Dollars in Thousands, Except Per Share Amounts)
2013 | 2012 | |
Net Sales | $ 213,418 | $ 118,597 |
Equity income | 2,198 | 1,515 |
Gross revenues | 215,616 | 120,112 |
Costs and Expenses: | ||
Costs of sales | 194,811 | 100,449 |
Selling, general and administrative | 12,961 | 11,620 |
Finance costs | 3,620 | 2,582 |
211,392 | 114,651 | |
Income from operations | 4,224 | 5,461 |
Other items: | ||
Exchange differences on foreign currency transactions | 2,596 | (206) |
Change in fair value of puttable instrument financial liabilities | (441) | - |
Bargain purchase | - | 222,824* |
Income before income taxes | 6,379 | 228,079 |
Income tax (expense) recovery: | ||
Income taxes | 2,738 | (2,019) |
Resource property revenue taxes | (2,067) | (1,445) |
671 | (3,464) | |
Net income for the period | 7,050 | 224,615 |
Net loss income attributable to non-controlling interests | (73) | (474) |
Net income attributable to owners of the parent company | $ 6,977 | $ 224,141 |
Basic earnings per share | $ 0.11 | $ 3.58 |
Diluted earnings per share | $ 0.11 | $ 3.58 |
Weighted average number of common shares outstanding - basic - diluted | 62,552,126 62,723,772 | 62,552,201 62,552,201 |
*Note: Revised during the measurement period as required by IFRS 3,Business Combinations | ||
MFC INDUSTRIAL LTD.
FINANCIAL HIGHLIGHTS
As of September 30, 2013
(Unaudited)
(United States Dollars in Thousands, Except Per Share Amount and Ratios)
Cash and cash equivalents and short-term securities | $ 293,478 |
Trade receivables | 95,504 |
Current assets | 686,400 |
Total assets | 1,289,413 |
Current liabilities | 287,645 |
Working capital | 398,755 |
Current ratio | 2.39 |
Acid test ratio | 1.50 |
Long term debt, less current portion | 145,977 |
Long-term debt-to-shareholders' equity | 0.20 |
Total Liabilities | 551,515 |
Shareholders' equity | 735,339 |
Equity per common share | 11.76 |
SOURCE MFC Industrial Ltd.
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