Labrador Iron Ore Royalty (LIF) Q2 2024 earnings summary

Executive summary

• Q2 2024 results driven by higher pellet sales, increased iron ore prices, and favorable US/CAD exchange, partially offset by lower CFS sales and pellet premiums.

• Net income per share rose 20% year-over-year to $0.78, but fell 15% sequentially from Q1 2024.

• Adjusted cash flow per share surged 47% year-over-year and 127% sequentially, reaching $1.11.

• IOC dividend received was $41.5 million, more than double the prior year’s Q2.

Financial highlights

• Q2 2024 revenue was $53.1 million, up from $51.5 million in Q2 2023.

• Net income for Q2 2024 was $50.2 million, up from $41.9 million year-over-year.

• Cash flow from operations reached $82.1 million, compared to $40.9 million in Q2 2023.

• Dividends declared per share were $1.10, up from $0.65 in Q2 2023.

• Equity earnings from IOC were $18.5 million, up from $13.5 million in Q2 2023.

Outlook and guidance

• IOC’s 2024 saleable production guidance remains 16.7–19.6 million tonnes, but July wildfires and evacuation may impact annual output.

• IOC’s 2024 capital expenditure forecast reduced to US$408 million from US$431 million.

• S&P Global expects further iron ore price weakening in Q3 2024; World Steel Association forecasts global steel demand growth of 1.7% in 2024 and 1.2% in 2025.

• July 2024 65% Fe index averaged US$122/tonne, down from Q2.