16:43:37 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Anglo Pacific Group PLC
Symbol APY
Shares Issued 169,942,034
Close 2016-01-26 C$ 1.45
Market Cap C$ 246,415,949
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Anglo Pacific cuts second half 2015 dividend to 3 pence

2016-01-28 06:43 ET - News Release

Mr. Julian Treger reports

ANGLO PACIFIC GROUP PLC: Q4 2015 TRADING UPDATE

Anglo Pacific Group PLC is providing an update for the period from Oct. 1, 2015, to Dec. 31, 2015, ahead of the release of its full year results on March 23, 2016. Unless otherwise stated, all unaudited financial information is for the quarter ended Dec. 31, 2015.

Highlights:

  • Royalty income for fourth quarter 2015 in the range of 2.7 million British pounds to three million British pounds (Q4 2014: 400,000 British pounds);
  • Royalty income for 2015 in the region of 8.5 million British pounds to 8.8 million British pounds (2014: 3.5 million British pounds);
  • Second half 2015 and full year Kestrel coal production within Anglo Pacific's royalty area of 84 per cent (above guidance of 70 to 75 per cent) and 49 per cent, respectively;
  • Updated tonnage sales forecasts from Rio Tinto, in accordance with Anglo Pacific's Kestrel information rights, confirm previous guidance of 60 to 65 per cent of Kestrel coal production will be within the group's royalty area during 2016 (first half 2016: 30 to 35 per cent and second half 2016: 85 to 90 per cent);
  • The Narrabri mine's production continues to outperform the group's expectations, setting an annual production record of 8.3 million tonnes of run-of-mine coal for the calendar year 2015, well in excess of the original design capacity of six million tonnes per annum;
  • Laramide Resources $5-million loan receivable repaid to Anglo Pacific on Dec. 31, 2015, upon maturity;
  • Unaudited cash and cash equivalents of 5.7 million British pounds as at Dec. 31, 2015 (Sept. 30, 2015: 3.6 million British pounds);
  • Unaudited net debt at Dec. 31, 2015, of 1.8 million British pounds (Sept. 30, 2015: 5.2 million British pounds);
  • Coking coal price weakness likely to result in a Q4 2015 pretax reduction in the carrying value of the group's Kestrel royalty in the range of $28-million (Australian) to $33-million (Australian), with a corresponding reduction in the associated deferred tax liability;
  • Operating costs, excluding share-based payments, will be less than four million British pounds, a significant reduction on the 4.9-million-British-pound equivalent in 2014;
  • Final dividend for 2015 to be reduced to three pence from the previous level of four pence per half year, bringing the total dividend for the year ended Dec. 31, 2015, to seven pence per share;
  • The company's revised dividend reflects lower income expectations due to an approximate decline in coking and thermal coal prices during 2015 of between 15 per cent and 25 per cent;
  • It is a continuing policy of the company to pay a substantial proportion of its royalties to shareholders as dividends, with a long-term target dividend of 65 per cent of adjusted earnings.

Julian Treger, chief executive officer of the company, commented:

"We are very pleased with the underlying performance of the group's royalties and expect further income growth from our royalties in 2016. Like everyone in the sector, we have been affected by the commodity environment and weakening coal prices have reduced our revenue. This decline, combined with a lower commodity price outlook, has led the board to reconsider our dividend policy. Despite this, we remain committed to paying attractive dividends and maximizing shareholder value.

"We continue to believe these challenging times for the mining sector will provide opportunities for Anglo Pacific to identify attractive new royalties that will enhance the lifespan and diversity of our portfolio."

We seek Safe Harbor.

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