Labrador Iron Ore Royalty (LIF) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 results were impacted by lower iron ore prices, reduced pellet premiums, and lower concentrate for sale (CFS) sales, partially offset by higher pellet sales tonnages.

• Royalty revenue fell 12% year-over-year and 21% sequentially; net income per share dropped 32% compared to both Q3 2023 and Q2 2024.

• IOC operations faced a site-wide shutdown due to forest fires, leading to a 10% year-over-year drop in concentrate production.

Financial highlights

• Q3 2024 revenue: $42.3M (down from $47.7M in Q3 2023); net income: $33.6M (down from $49.4M); net income per share: $0.53 (down from $0.77).

• Equity earnings from IOC: $9.7M (Q3 2023: $23.1M); IOC dividend received: $20.3M (Q3 2023: $30.6M).

• Adjusted cash flow per share: $0.68 (down 23% year-over-year and 39% sequentially).

• Q3 2024 cash flow from operations: $43.0M; dividends declared per share: $0.70.

Outlook and guidance

• IOC's 2024 saleable production guidance reduced to 15.5–16.3M tonnes (previously 16.7–19.6M), reflecting fire-related shutdown and revised mine plan.

• 2024 capital expenditure forecast lowered to US$381M from US$431M; spending on track with new forecast.

• Iron ore pricing outlook remains challenging due to weak global steel demand, especially in China, and ongoing economic headwinds.