2024 RESULTS OF OPERATIONS
Canada NewsWire
TORONTO, March 11, 2025
TORONTO, March 11, 2025 /CNW/ - Labrador Iron Ore Royalty Corporation (TSX: LIF) announced the results of its operations for the year ended December 31, 2024.
To the Holders of Common Shares of Labrador Iron Ore Royalty Corporation
The Directors of Labrador Iron Ore Royalty Corporation ("LIORC" or the "Corporation") present the Annual Report for the year ended December 31, 2024.
87 Years in Labrador West
Labrador Iron Ore Royalty Corporation has been involved in Labrador West for 87 years. Under a Statutory Agreement with Newfoundland made in 1938, a predecessor company, Labrador Mining and Exploration Limited ("LM&E"), was granted extensive exploration and mining rights in Labrador West. LM&E found the iron ore bodies that now constitute the mine operated by Iron Ore Company of Canada. LM&E received grants of leases and licences under the Statutory Agreement. It also received a grant of surface rights to establish the town site that became Labrador City. LM&E sublets the leases to IOC and IOC, with major steel companies as original shareholders, built the infrastructure, mine, railway and port. Under the sublease, LIORC receives a 7% gross overriding royalty on iron ore products produced and sold by IOC.
Financial Performance
In 2024, LIORC's revenue for the year ended December 31, 2024 was $209.0 million, which was a 4% increase over 2023, as an increase in sales volume and a more advantageous product mix (higher volumes of pellet sales and lower volumes of concentrate for sale ("CFS") sales) were offset by lower iron ore prices and lower pellet premiums. Net income per share for 2024 was $2.73 per share, which was a 6% decrease over 2023, as equity earnings in IOC of $60.6 million were 28% lower than in 2023, partially as a result of a non-cash write down of prior capital expenditures associated with the replacement of the dumper car facility that did not proceed. However, LIORC's cash flow from operations per share for 2024 was $3.15 per share, which was 32% higher than in 2023, mainly due to IOC's decision to reduce its cash balance and increase the amount of dividends paid to its shareholders. In 2024, IOC paid dividends to its shareholders totalling US$400 million and had a year-end net working capital balance of US$172.8 million, compared to dividends of US$250 million and a year-end net working capital balance of US$364.9 million in 2023.
Iron ore prices weakened in 2024 as global steel demand contracted and seaborne iron ore supply remained robust. According to the World Steel Association, in 2024 global production of crude steel was down 1% from 2023. Steel production in China, which accounts for 53% of global production, was down 2%, as China's issues with its property sector persisted. Steel production in the rest of the world was flat. On the iron ore supply side, three producers, Rio Tinto, BHP and Vale, account for over half the world's volume of seaborne iron ore. The combined production of iron ore in calendar 2024 by these producers was 933 million tonnes, an increase of 1% over calendar 2023.
IOC sells CFS based on the the Platts index for 65% Fe, CFR China (the "65% Fe index"). All references to tonnes and per tonne prices in this report refer to wet metric tonnes, other than references to Platts quoted pricing, which refer to dry metric tonnes. Historically, IOC's wet ore contains approximately 3% less ore per equivalent volume than dry ore. In 2024, the average price for the 65% Fe index was US$123 per tonne, a decrease of 6% year over year. In addition to the reduction in iron ore prices, pellet premiums were lower as steel producers, faced with continuing low profit margins, substituted high quality pellets with cheaper, lower quality iron feed. The monthly Atlantic Blast Furnace 65% Fe pellet premium index as quoted by Platts (the "pellet premium") averaged US$40 per tonne in 2024, a decrease of 10% from 2023.
Rio Tinto disclosed that IOC achieved an average realised price for pellets, FOB Sept-Îles of approximately US$144 per tonne, a decrease of 7% year over year. Based on sales as reported for the LIORC Royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept-Îles was approximately US$125 per tonne in 2024, a decrease of 4% year over year. The decrease in the average realized price FOB Sept-Îles in 2024 was a result of lower CFS and pellet prices.
Iron Ore Company of Canada Operations
Operations
Total concentrate production in 2024 was 17.3 million tonnes. This was 2% lower than 2023. Concentrate production was negatively impacted by a number of operational challenges throughout the year, including maintenance over-runs, and lower feed from the mine (as a result of lower haul truck availability and ore delivery system reliability issues), as well as an 11-day site-wide shutdown caused by area forest fires in mid-July. In addition, IOC experienced lower weight yields in 2024, as a result of changes to the mine sequencing and lower quality iron ore being fed into the concentrator as a result of challenges with ore availability at the mine.
The IOC saleable production (CFS plus pellets) of 16.1 million tonnes in 2024 was 2% lower than 2023 and was 4% lower than the low end of the range of Rio Tinto's original annual guidance of 16.7 to 19.6 million tonnes, due to extended plant downtime as a result of the operational issues and the 11-day site-wide shutdown referred to above. Saleable production in the fourth quarter of 4.3 million tonnes was 6% lower than the fourth quarter of 2023, as a result of lower weight yields referred to above. In 2024, CFS production of 6.8 million tonnes was 17% lower than 2023, mainly due to lower concentrate production and higher amounts of concentrate being diverted to make pellets. Pellet production in 2024 of 9.3 million tonnes was 12% higher than 2023, as a result of a deferral of the induration machine 2 rebuild to 2025 and various operational issues that lowered pellet production in 2023.
Third party iron ore haulage by the Québec North Shore and Labrador Railway Company, Inc. ("QNS&L") of 19.4 million tonnes in 2024 was 9% higher than in 2023, driven by continued operational improvements to meet increasing third-party demand.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 16.9 million tonnes in 2024 was 3% higher than the total sales tonnage in 2023, as a result of timing differences and IOC drawing down inventory at Labrador City.
Capital Expenditures
Capital expenditures for IOC were US$376 million in 2024, or 4% higher than in 2023. Capital expenditures in 2024 were 13% lower than the US$431 million that IOC had originally forecasted, mainly due to the decision by IOC to defer certain capital projects, including the rebuild of induration machine #2 and the explosives plant upgrade.
Outlook
Rio Tinto's 2025 guidance for IOC's saleable production tonnage is 16.5 million to 19.4 million tonnes. This compares to 16.1 million tonnes of saleable production in 2024. Despite ongoing lower pellet premiums, it is expected that IOC will continue to focus on maximizing pellet production in 2025.
The capital expenditures for 2025 at IOC are forecasted by IOC to be approximately US$342 million. The 2025 forecast includes approximately US$51 million of growth and development projects. Significant development capital expenditure projects include the replacement of the dumper cages at Sept-Îles and the installation of a pilot plant to evaluate the replacement of spirals with reflux classifiers on Mills 12-14 as a result of the successful weight yield improvement from the installation of reflux classifiers on Mill 11. Significant sustaining capital expenditure projects include the QNS&L track and culvert replacement programs and the purchase of 7 new locomotives for increased third party and IOC capacity on the QNS&L, as well as the deferred rebuild of induration machine #2 and the explosives plant upgrade referred to above.
IOC's operator, Rio Tinto, remains committed to reaching net zero emissions by 2050 and is targeting a 15% reduction in Scope 1 & 2 emissions by 2025 and a 50% reduction by 2030 (1) (from a 2018 equity baseline). Approximately 70% of IOC's current total greenhouse gas ("GHG") emissions come from pelletizing. IOC is taking a number of initiatives to decarbonise its pellet production, including installing a 40MW electric boiler to displace emissions from the use of heavy fuel oil boilers, conducting hydro-powered plasma burner trials, and conducting research and development trials to reduce the use of coking coal, including through the use of biocarbon.
Rio Tinto is targeting a 50% reduction in Scope 3 emissions from IOC by 2035 relative to 2022. Steel production currently accounts for approximately 9% of global GHG emissions. IOC is seeking to reduce steel production GHG emissions by optimizing the use of IOC's higher-grade iron ore in traditional blast furnaces, and more importantly increasing the use of its high-grade direct reduction iron ore ("DRI") pellets to make low carbon DRI and hot briquetted iron ("HBI") for use as direct feed in electric arc furnaces. In June 2024, the government of Canada formally recognized the importance of high-grade low impurity iron ore, such as that produced by IOC, for the green steel transition by including it in its list of critical minerals. In November 2024, IOC agreed to supply high-grade DRI pellets to GravitHy, an early-stage industrial company, which is proposing to build a hydrogen-based HBI plant that has the potential to reduce ironmaking-related CO(2) emissions by more than 90%.
The outlook for iron ore pricing remains uncertain. Ongoing economic issues in China continue to negatively affect the demand for steel. In addition, threats of broad tariffs by the US and corresponding retaliatory tariffs by affected countries may cause a further decrease in economic investment and a further decrease in the global demand for steel. The negative impact on IOC may be partially mitigated to the extent that such actions cause a devaluation of the Canadian dollar, relative to the US dollar, which would effectively lower IOC's costs in US dollar terms. Thus far in 2025 (January and February), the average price of the 65% Fe index has been US$118 per tonne, down from an average of US$123 per tonne in 2024. The demand for pellets has also remained challenging as steel producer profit margins remain low and thus far in 2025 (January and February) the average pellet premium has averaged US$36 per tonne compared to an annual average of US$40 per tonne in 2024 and an annual average of US$45 per tonne in 2023.
I would like to take this opportunity to thank our Shareholders for their interest and support and my fellow Directors for their guidance.
(1) Source: Rio Tinto Climate Action Plan 2025.
Respectfully submitted on behalf of the Directors of the Corporation,
John F. Tuer
President and Chief Executive Officer
March 11, 2025
Corporate Structure
LIORC is a Canadian corporation formed to give effect to the conversion of the Labrador Iron Ore Royalty Income Fund (the "Fund") into a corporation under a plan of arrangement completed on July 1, 2010. LIORC is also the successor by amalgamation of a predecessor of LIORC with Labrador Mining Company Limited, formerly a wholly-owned subsidiary of the Fund, that occurred pursuant to the plan of arrangement.
LIORC, directly and through its wholly-owned subsidiary Hollinger-Hanna, holds a 15.10% equity interest in IOC and receives a 7% gross overriding royalty on all iron ore products produced, sold and shipped by IOC and a 10 cent per tonne commission on all iron ore products produced and sold by IOC. Generally, LIORC pays cash dividends from the free cash flow generated from IOC to the maximum extent possible, subject to the maintenance of appropriate levels of working capital. Quarterly dividends are payable to all shareholders of record on the last business day of each calendar quarter and are paid on or after the 26th day of the following month.
Seven Directors are responsible for the governance of the Corporation and also serve as directors of Hollinger-Hanna. The Directors, in addition to managing the affairs of the Corporation and Hollinger-Hanna, oversee the Corporation's interests in IOC. The Audit and Governance and Human Resources Committees are composed of four independent Directors.
Taxation
The Corporation is a taxable corporation. Dividend income received from IOC and Hollinger-Hanna is received tax free while royalty income is subject to income tax and Newfoundland and Labrador royalty tax. Expenses of the Corporation include administrative expenses. Hollinger-Hanna is a taxable corporation.
Income Taxes
Dividends to a shareholder that are paid within a particular year are to be included in the calculation of the shareholder's taxable income for that year. All dividends paid in 2024 were "eligible dividends" under the Income Tax Act.
Review of Operations
Iron Ore Company of Canada
The income of the Corporation is entirely dependent on IOC as the only assets of the Corporation and its subsidiary are related to IOC and its operations. IOC is one of Canada's largest iron ore producers, operating a mine, concentrator and pellet plant at Labrador City, Newfoundland and Labrador, and is among the top five producers of seaborne iron ore pellets in the world. It has been producing and processing iron ore concentrate and pellets since 1954. IOC is strategically situated to serve markets throughout the world from its year-round port facilities at Sept-Îles, Québec.
IOC has Proven and Probable Reserves of 966 million tonnes which, at the planned processing rates, is equivalent to approximately 20 years production. In addition, IOC has Measured and Indicated Resources of 820 million tonnes and a further 665 million tonnes of Inferred Resources. It currently has the nominal capacity to extract around 55 million tonnes of crude ore annually. The crude ore is processed into iron ore concentrate and then either sold or converted into many different qualities of iron ore pellets to meet its customers' needs. The iron ore concentrate and pellets are transported to IOC's port facilities at Sept-Îles, Québec via its wholly-owned QNS&L, a 418 kilometer rail line which links the mine and the port. From there, the products are shipped to markets throughout North America, Europe, the Middle East and the Asia-Pacific region.
IOC's 2024 sales tonnages totaled 16.9 million tonnes, comprised of 9.3 million tonnes of iron ore pellets and 7.6 million tonnes of iron ore concentrate. Saleable production in 2024 was 9.3 million tonnes of pellets and 6.8 million tonnes of CFS. IOC generated ore sales revenues (excluding third party ore sales) of $2,751 million in 2024 (2023 - $2,830 million).
Selected IOC Financial Information
2024 2023 2022 2021 2020
($ in millions)
Operating Revenues(1) 3,061 3,122 3,426 4,147 3,099
Cash Flow from Operating
Activities 808 788 1,021 1,955 837
Net Income 409 568 1,028 1,551 842
Capital Expenditures (2) 376 494 460 498 288
(1) 2024, 2023, 2022 and 2021 Ore sales revenue is presented
on a net basis (net of related freight costs) to align
with IFRS financial statements presentation.
(2) Reported on an incurred basis.
IOC Royalty
The Corporation holds certain leases and licenses covering approximately 18,200 hectares of land near Labrador City. IOC has subleased certain portions of these lands from which it currently mines iron ore. In return, IOC pays the Corporation a 7% gross overriding royalty on all sales of iron ore products produced from these lands. A 20% tax on the royalty is payable to the Government of Newfoundland and Labrador. The average royalty net of the 20% tax had been $173.2 million for the years 2019 to 2023 and in 2024 the net royalty was $164.7 million (2023 - $158.8 million).
Because the royalty is "off-the-top", it is not dependent on the profitability of IOC. However, it is affected by changes in sales volumes, iron ore prices and, because iron ore prices are denominated in US dollars, the United States - Canadian dollar exchange rate.
IOC Equity
In addition to the royalty interest, the Corporation directly and through its wholly owned subsidiary, Hollinger-Hanna, owns a 15.10% equity interest in IOC. The other shareholders of IOC are Rio Tinto Limited with 58.72% and Mitsubishi Corporation with 26.18%.
IOC Commissions
Hollinger-Hanna has the right to receive a payment of 10 cents per tonne on the products produced and sold by IOC. Pursuant to an agreement, IOC is obligated to make the payment to Hollinger-Hanna so long as Hollinger-Hanna is in existence and solvent. In 2024, Hollinger-Hanna received a total of $1.7 million in commissions from IOC (2023 - $1.6 million).
Quarterly Dividends
Dividends of $3.00 per share were declared in 2024 (2023 -- dividends of $2.55 per share). These dividends were allocated as follows:
Period Record Payment DividendIncome TotalDividend Ended Date Date per Share ($ million) Mar. 31, 2024 Mar. 28, 2024 Apr. 26, 2024 $0.45 $28.8 Jun. 30, 2024 Jun. 28, 2024 Jul. 26, 2024 1.10 70.4 Sep. 30, 2024 Sep. 27, 2024 Oct. 28, 2024 0.70 44.8 Dec. 31, 2024 Dec. 31, 2024 Jan. 29, 2025 0.75 48.0 Dividend to Shareholders -- 2024 $3.00 $192.0 Mar. 31, 2023 Mar. 31, 2023 Apr. 26, 2023 $0.50 $32.0 Jun. 30, 2023 Jun. 30, 2023 Jul. 26, 2023 0.65 41.6 Sep. 30, 2023 Sep. 29, 2023 Oct. 26, 2023 0.95 60.8 Dec. 31, 2023 Dec. 29, 2023 Jan. 26, 2024 0.45 28.8 Dividend to Shareholders -- 2023 $2.55 $163.2
The quarterly dividends are payable to all shareholders of record on the last business day of each calendar quarter and are paid on or after the 26th day of the following month.
Management's Discussion and Analysis
The following is a discussion of the consolidated financial condition and results of operations of the Corporation for the years ended December 31, 2024 and 2023. This discussion should be read in conjunction with the consolidated financial statements of the Corporation and notes thereto for the years ended December 31, 2024 and 2023 which are prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and all amounts are shown in Canadian dollars unless otherwise indicated.
Overview of the Business
The Corporation is a Canadian corporation resulting from the conversion of the Fund into a corporation under a plan of arrangement completed on July 1, 2010. LIORC is also the successor by amalgamation of a predecessor of LIORC with Labrador Mining Company Limited, formerly a wholly-owned subsidiary of the Fund, that occurred pursuant to the plan of arrangement.
The Corporation is economically dependent on the operations of IOC. IOC's earnings and cash flows are affected by the volume and mix of iron ore products produced and sold, costs of production and the prices received. Iron ore demand and prices fluctuate and are affected by numerous factors which include demand for steel and steel products, the relative exchange rate of the US dollar, global and regional demand and production, political and economic conditions and production costs in major producing areas.
Financial Highlights
Three Months Ended Year Ended
December 31, December 31,
2024 2023 2024 2023
(in millions except per share information)
Revenue $ 56.9 $ 54.9 $ 209.0 $ 201.3
Equity earnings from
IOC $ (1.93) $ 26.2 $ 60.6 $ 84.7
Net income $ 31.9 $ 51.4 $ 175.0 $ 186.3
Net income per share $ 0.51 $ 0.80 $ 2.73 $ 2.91
Dividend from IOC $ 21.8 - $ 83.6 $ 50.4
Cash flow from
operations $ 46.8 $ 26.4 $ 201.9 $ 152.5
Cash flow from
operations per
share(1) $ 0.73 $ 0.41 $ 3.15 $ 2.38
Adjusted cash flow(1) $ 53.1 $ 30.2 $ 199.0 $ 161.5
Adjusted cash flow per
share(1) $ 0.83 $ 0.47 $ 3.11 $ 2.52
Dividends declared per
share $ 0.75 $ 0.45 $ 3.00 $ 2.55
(1) This is a non-IFRS financial measure and does
not have a standard meaning under IFRS.
Please refer to Standardized Cash Flow and Adjusted
Cash Flow section in the MD&A.
The higher revenue achieved in 2024 as compared to 2023 was mainly due to an increase in sales and a more advantageous product mix (higher volumes of pellet sales and lower volumes of CFS sales), partially offset by lower iron ore prices and lower pellet premiums. The IOC saleable production in 2024 was 2% lower than 2023 due to a number of operational issues and an 11-day site-wide shutdown caused by area forest fires. However, total sales tonnage (pellets and CFS) at IOC was 3% higher in 2024 than 2023, predominantly as a result of timing differences and IOC drawing down inventory at Labrador City. Iron ore prices and pellet premiums were lower as a result of lower demand for steel and low margins causing steel producers to favour cheaper, low quality iron ore over high quality iron ore products.
Net income per share for 2024 was 6% lower than 2023, as equity earnings in IOC of were 28% lower than in 2023 due to lower profitability at IOC. Cash flow from operations for 2024 was 32% higher than in 2023, mainly due to IOC's decision to reduce its cash balance and increase the amount of dividends paid to its shareholders.
Fourth quarter 2024 sales tonnage (pellets and CFS) was lower year-over-year by 2% due to lower saleable production resulting in lower inventory availability. Royalty revenue was $56.1 million for the quarter as compared to $54.1 million for the same period in 2023. Fourth quarter 2024 cash flow from operations was $46.8 million or $0.73 per share compared to fourth quarter 2023 cash flow from operations of $26.4 million or $0.41 per share. LIORC received an IOC dividend of $21.7 million or $0.34 per share in the fourth quarter of 2024 (2023 - nil). Equity losses from IOC amounted to $1.9 million or $0.03 per share in the fourth quarter of 2024 compared to equity earnings of $26.2 million or $0.41 per share for the same period in 2023.
Operating Highlights
Three Months Ended Year Ended
December 31, December 31,
IOC Operations 2024 2023 2024 2023
(in millions of tonnes)
Sales(1)
Pellets 2.31 2.29 9.32 8.37
Concentrate for sale ("CFS")(2) 1.94 2.04 7.55 7.92
Total(3) 4.25 4.33 16.86 16.29
Production
Concentrate produced 4.87 5.01 17.32 17.73
Saleable production
Pellets 2.50 2.39 9.34 8.31
CFS 1.81 2.21 6.75 8.17
Total(3) 4.31 4.60 16.09 16.48
Average index prices per tonne (US$)
65% Fe index(4) $ 118 $ 139 $ 123 $ 132
62% Fe index(5) $ 103 $ 128 $ 109 $ 120
Pellet premium(6) $ 38 $ 37 $ 40 $ 45
(1) For calculating the royalty to
LIORC.
(2) Excludes third party ore sales.
(3) Totals may not add up due to
rounding.
(4) The Platts index for 65% Fe, CFR
China.
(5) The Platts index for 62% Fe, CFR
China.
(6) The Platts Atlantic Blast Furnace 65% Fe pellet
premium index.
IOC's total concentrate production in 2024 of 17.3 million tonnes was 2% lower than 2023. In the fourth quarter of 2024, concentrate production was 3% lower compared to the fourth quarter of 2023. Concentrate production was negatively impacted by a number of operational challenges throughout the year, including maintenance over-runs, and lower feed from the mine (as a result of lower haul truck availability and ore delivery system reliability issues), as well as an 11-day site-wide shutdown caused by area forest fires in mid-July. In addition, IOC experienced lower weight yields in 2024, as a result of changes to the mine sequencing and lower quality iron ore being fed into the concentrator as a result of challenges with ore availability at the mine. IOC's total saleable production of 16.1 million tonnes in 2024 was 2% lower than 2023, due to the issues affecting concentration production referred to above. In 2024, CFS production of 6.8 million tonnes was 17% lower than 2023, mainly due to lower concentrate production and higher amounts of concentrate being diverted to make pellets. Pellet production in 2024 of 9.3 million tonnes was 12% higher than 2023, as a result of a deferral of the induration machine 2 rebuild to 2025 and various operational issues that lowered pellet production in 2023.
IOC sells CFS based on the 65% Fe index. In 2024, the average price for the 65% Fe index was US$123 per tonne, a decrease of 6% year over year, as global steel demand contracted and seaborne iron ore supply remained robust. In addition to the reduction in iron ore prices, pellet premiums dropped as steel producers, faced with lower profit margins, continued to substitute high quality pellets with cheaper, lower quality iron feed. The monthly pellet premium averaged US$40 per tonne in 2024, a decrease of 10% from 2023. Based on sales as reported for the LIORC Royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept-Îles was approximately US$125 per tonne in 2024, a decrease of 4% year over year. The decrease in the average realized price FOB Sept-Îles in 2024 was a result of lower CFS and pellet prices.
Capital expenditures for IOC were US$376 million in 2024, or 4% higher than in 2023. Capital expenditures in 2024 were 13% lower than the US$431 million that IOC had originally forecasted, mainly due to the decision by IOC to defer certain capital projects, including the rebuild of induration machine #2 and the explosives plant upgrade.
Liquidity and Capital Resources
The Corporation had $42.3 million (2023 - $13.2 million) in cash as at December 31, 2024 with total current assets of $95.1 million (2023 - $67.5 million). The Corporation had working capital of $34.1 million (2023 - $27.2 million). The Corporation's operating cash flow was $201.9 million (2023 - $152.5 million) and dividends paid during the year were $172.8 million, resulting in cash balances increasing by $29.1 million during 2024.
Cash balances consist of deposits in Canadian dollars and US dollars with a Canadian chartered bank. Accounts receivable primarily consist of royalty payments from IOC. Royalty payments are received in U.S. dollars and converted to Canadian dollars on receipt, usually 25 days after the quarter end. The Corporation does not normally attempt to hedge this short-term foreign currency exposure.
Operating cash flow of the Corporation is sourced entirely from IOC through the Corporation's 7% royalty, 10 cents commission per tonne and dividends from its 15.10% equity interest in IOC. The Corporation normally pays cash dividends from the free cash flow generated from IOC to the maximum extent possible, subject to the maintenance of appropriate levels of working capital.
The Corporation has a $30 million revolving credit facility with a term ending September 18, 2026 with provision for annual one-year extensions. No amount is currently drawn under this facility (2023--nil) leaving $30 million available to provide for any capital required by IOC or requirements of the Corporation.
Selected Consolidated Financial Information
The following table sets out financial data from a Shareholder's perspective for the three years ended December 31, 2024, 2023 and 2022.
Years Ended December 31
Description 2024 2023 2022
------------------------------ -------------- -------------- --------------
(in millions except per share information)
Revenue $209.0 $201.3 $232.9
Net Income $175.0 $186.3 $265.4
Net Income per Share $2.73 $2.91 $4.15
Cash Flow from Operations $201.9(1) $152.5 (2) $184.2(3)
Cash Flow from Operations per
Share $3.15(1) $2.38 (2) $2.88(3)
Total Assets $836.1 $837.0 $825.8
Dividends Declared per Share $3.00 $2.55 $3.10
Number of Common Shares
outstanding 64.0 64.0 64.0
(1) Includes IOC dividends totaling $83.6 million
or $1.31 per Share.
(2) Includes IOC dividends totaling $50.4 million
or $0.79 per Share.
(3) Includes IOC dividends totaling $69.1 million
or $1.08 per Share.
The following table sets out quarterly revenue, net income, cash flow and dividend data for 2024 and 2023. Due to seasonal weather patterns the first and fourth quarters generally have lower production and sales. Royalty revenues and equity earnings in IOC track iron ore spot prices, which can be very volatile. Dividends, included in cash flow, are declared and paid by IOC irregularly according to the availability of cash.
Revenue Net Net Cash Flow Cash Flow Adjusted Dividends
Income Income from from
Operations Operations Cash Declared
per Flow per per Share
Share per Share
Share
(1)
------- ------ ------ ---------- ---------- -------- ---------
(in millions except per share information)
2024
--------
First
Quarter $56.7 $59.3 $0.93 $30.0 $0.47 $0.49 $0.45
Second
Quarter $53.1 $50.2 $0.78 $82.1(2) $1.28(2) $1.11(2) $1.10
Third
Quarter $42.3 $33.6 $0.53 $43.0(3) $0.67(3) $0.68(3) $0.70
Fourth
Quarter $56.9 $31.9 $0.50 $46.8(4) $0.73(4) $0.83(4) $0.75
2023
--------
First
Quarter $47.2 $43.6 $0.68 $19.5 $0.30 $0.41 $0.50
Second
Quarter $51.5 $41.9 $0.65 $40.9(5) $0.64(5) $0.75(5) $0.65
Third
Quarter $47.7 $49.4 $0.77 $65.7(6) $1.03(6) $0.89(6) $0.95
Fourth
Quarter $54.9 $51.4 $0.80 $26.4 $0.41 $0.47 $0.45
(1) "Adjusted cash flow" (see below).
(2) Includes $41.5 million IOC dividend.
(3) Includes $20.3 million IOC dividend.
(4) Includes $21.8 million IOC dividend.
(5) Includes $19.9 million IOC dividend.
(6) Includes $30.5 million IOC dividend.
Standardized Cash Flow and Adjusted Cash Flow
For the Corporation, standardized cash flow is the same as cash flow from operating activities as recorded in the Corporation's cash flow statements as the Corporation does not incur capital expenditures or have any restrictions on dividends. Standardized cash flow per share was $3.15 for 2024 (2023 - $2.38).
The Corporation also reports "Adjusted cash flow" which is defined as cash flow from operating activities after adjustments for changes in amounts receivable, accounts payable and income taxes recoverable and payable. It is not a recognized measure under IFRS. The Directors believe that adjusted cash flow is a useful analytical measure as it better reflects cash available for distributions to Shareholders.
The following reconciles standardized cash flow from operating activities to adjusted cash flow.
2024 2023
(in millions except per share information)
Cash flow from operating
activities $201.9 $152.5
Changes in amounts
receivable, accounts
payable and
income taxes recoverable (3.0) 9.0
Adjusted cash flow $198.9 $161.5
Adjusted cash flow per share $3.11 $2.52
Disclosure Controls and Internal Control over Financial Reporting
The President and CEO and the CFO are responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the Corporation. Two directors serve as directors of IOC and IOC provides monthly reports on its operations to them. The Corporation also relies on financial information provided by IOC, including its audited financial statements, and other material information provided to the President and CEO and the CFO by officers of IOC. IOC is a private corporation, and its financial statements are not publicly available.
The Directors are informed of all material information relating to the Corporation and its subsidiary by the officers of the Corporation on a timely basis and approve all core disclosure documents including the Management Information Circular, the annual and interim financial statements and related Management's Discussion and Analysis, the Annual Information Form, any prospectuses and all press releases related to the disclosure of quarterly and annual financial statements and the declaration of dividends. An evaluation of the design and operating effectiveness of the Corporation's disclosure controls and procedures was conducted under the supervision of the President and CEO and CFO. Based on their evaluation, they concluded that the Corporation's disclosure controls and procedures were effective in ensuring that all material information relating to the Corporation was accumulated and communicated for the year ended December 31, 2024.
The President and CEO and the CFO have designed internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. An evaluation of the design and operating effectiveness of the Corporation's internal control over financial reporting was conducted under the supervision of the President and CEO and CFO. Based on their evaluation, they concluded that the Corporation's internal control over financial reporting was effective as of December 31, 2024. In making this assessment, management used the criteria specified in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The preparation of financial statements requires the Corporation's management to make estimates and assumptions that affect the reported amounts of the assets, liabilities, revenue and expenses reported each period. Each of these estimates varies with respect to the level of judgment involved and the potential impact on the Corporation's reported financial results. Estimates are deemed critical when the Corporation's financial condition, change in financial condition or results of operations would be materially impacted by a different estimate or a change in estimate from period to period. By their nature, these estimates are subject to measurement uncertainty, and changes in these estimates may affect the consolidated financial statements of future periods.
No material changes in the Corporation's internal control over financial reporting occurred during the year ended December 31, 2024.
Forward-Looking Statements
This report may contain "forward-looking" statements that involve risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Words such as "may", "will", "expect", "believe", "plan", "intend", "should", "would", "anticipate" and other similar terminology are intended to identify forward-looking statements. These statements reflect current assumptions and expectations regarding future events and operating performance as of the date of this report. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly, including iron ore price and volume volatility; the performance of IOC; market conditions in the steel industry; fluctuations in the value of the Canadian and U.S. dollar; mining risks that cause a disruption in operations and availability of insurance; disruption in IOC's operations caused by natural disasters, severe weather conditions and public health crises, including the COVID-19 outbreak; failure of information systems or damage from cyber security attacks; adverse changes in domestic and global economic and political conditions; changes in government regulation and taxation; national, provincial and international laws, regulations and policies regarding climate change that further limit the emissions of greenhouse gases or increase the costs of operations for IOC or its customers; changes affecting IOC's customers; competition from other iron ore producers; renewal of mining licenses and leases; relationships with indigenous groups; litigation; and uncertainty in the estimates of reserves and resources. A discussion of these factors is contained in LIORC's annual
information form dated March 11, 2025 under the heading, "Risk Factors". Although the forward-looking statements contained in this report are based upon what management of LIORC believes are reasonable assumptions, LIORC cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this report and LIORC assumes no obligation, except as required by law, to update any forward-looking statements to reflect new events or circumstances. This report should be viewed in conjunction with LIORC's other publicly available filings, copies of which can be obtained electronically on SEDAR+ at www.sedarplus.ca.
Additional Information
Additional information relating to the Corporation, including the Annual Information Form, is on SEDAR+ at www.sedarplus.ca. Additional information is also available on the Corporation's website at www.labradorironore.com.
John F. Tuer
President and Chief Executive Officer
Toronto, Ontario
March 11, 2025
LABRADOR IRON ORE ROYALTY CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
December 31,
(in thousands of Canadian dollars) 2024 2023
Assets
Current Assets
Cash $ 42,300 $ 13,192
Amounts receivable 52,843 53,872
Income taxes recoverable - 465
Total Current Assets 95,143 67,529
Non-Current Assets
Iron Ore Company of Canada ("IOC")
royalty and commission interests 216,644 222,901
Investment in IOC 524,340 546,614
Total Non-Current Assets 740,984 769,515
Total Assets $ 836,127 $ 837,044
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities $ 11,205 $ 11,542
Dividend payable 48,000 28,800
Income taxes payable 1,800 -
Total Current Liabilities 61,005 40,342
Non-Current Liabilities
Deferred income taxes 132,190 137,370
Total Liabilities 193,195 177,712
Shareholders' Equity
Share capital 317,708 317,708
Retained earnings 330,966 347,927
Accumulated other comprehensive loss (5,742) (6,303)
642,932 659,332
Total Liabilities and Shareholders' Equity $ 836,127 $ 837,044
-
Approved by the Directors,
John F. Tuer Patricia M. Volker
Director Director
LABRADOR IRON ORE ROYALTY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
For the Year Ended
December 31,
(in thousands of Canadian dollars except for per 2024 2023
share
information)
Revenue
IOC royalties $ 205,847 $ 198,562
IOC commissions 1,660 1,604
Interest and other income 1,496 1,131
209,003 201,297
Expenses
Newfoundland royalty taxes 41,169 39,712
Amortization of royalty and commission
interests 6,257 6,017
Administrative expenses 3,059 3,054
50,485 48,783
Income before equity earnings and income taxes 158,518 152,514
Equity earnings in IOC 60,640 84,684
Income before income taxes 219,158 237,198
Provision for income taxes
Current 49,399 47,524
Deferred (5,280) 3,368
44,119 50,892
Net income for the year 175,039 186,306
Other comprehensive income (loss)
Share of other comprehensive income (loss) of
IOC
that will not be
reclassified subsequently to profit or loss
(net of
income
taxes/recovery of 2024 - $100; 2023 - $218) 561 (1,233)
Comprehensive income for the year $ 175,600 $ 185,073
Basic and diluted income per share $ 2.73 $ 2.91
LABRADOR IRON ORE ROYALTY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended
December 31,
(in thousands of Canadian dollars) 2024 2023
Net inflow (outflow) of cash related
to the following activities
Operating
Net income for the period $ 175,039 $ 186,306
Items not affecting cash:
Equity earnings in IOC (60,640) (84,684)
Current income taxes 49,399 47,524
Deferred income taxes (5,280) 3,368
Amortization of royalty and commission
interests 6,257 6,017
Common share dividends received from IOC 83,575 50,447
Change in amounts receivable 1,029 (11,114)
Change in accounts payable (337) 2,256
Income taxes paid (47,134) (47,632)
Cash flow from operating activities 201,908 152,488
Financing
Dividends paid to shareholders (172,800) (179,200)
Cash flow used in financing activities (172,800) (179,200)
Increase (decrease) in cash, during the year 29,108 (26,712)
Cash, beginning of year 13,192 39,904
Cash, end of year $ 42,300 $ 13,192
LABRADOR IRON ORE
ROYALTY
CORPORATION
CONSOLIDATED
STATEMENTS OF
CHANGES IN EQUITY
Accumulated
other
Common Share Retained comprehensive
(in thousands of shares capital earnings loss Total
Canadian dollars
except share
amounts)
Balance as at
December 31, 2022 64,000,000 $ 317,708 $ 324,821 $ (5,070) $ 637,459
Net income for the
year - - 186,306 - 186,306
Dividends declared
to shareholders - - (163,200) - (163,200)
Share of other
comprehensive
loss from
investment
in IOC (net of
taxes) - - - (1,233) (1,233)
Balance as at
December 31, 2023 64,000,000 $ 317,708 $ 347,927 $ (6,303) $ 659,332
Balance as at
December 31, 2023 64,000,000 $ 317,708 $ 347,927 $ (6,303) $ 659,332
Net income for the
year - - 175,039 - 175,039
Dividends declared
to shareholders - - (192,000) - (192,000)
Share of other
comprehensive
income from
investment
in IOC (net of
taxes) - - - 561 561
Balance as at
December 31, 2024 64,000,000 $ 317,708 $ 330,966 $ (5,742) $ 642,932
The complete consolidated financial statements for the year ended December 31, 2024, including the notes thereto, are posted on http://www.sedarplus.ca and labradorironore.com.
SOURCE Labrador Iron Ore Royalty Corporation
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2025/11/c8030.html
/CONTACT:
For further information, please contact: John F. Tuer, President & Chief Executive Officer, (416) 362-0066
Copyright CNW Group 2025
(END) Dow Jones Newswires
March 11, 2025 19:13 ET (23:13 GMT)
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