Anglo Pacific Group PLC ('Anglo Pacific', the 'Company' or the 'Group') (LSE: APF, TSX: APY) is pleased to announce its full year results for the year ended 31 December 2020, consistent with the trading update published on 8 February 2021.
The Company has also published its audited 2020 Annual Report and Accounts, which are available on the Group's website at www.anglopacificgroup.com and on SEDAR at www.SEDAR.com. The following statement should be read in conjunction with the audited financial statements.
The results for 2020 reflect the business before the completion of the US$205m Voisey's Bay cobalt stream acquisition, announced on 12 March 2021, the Group's largest and most significant transaction, setting Anglo Pacific on the road to become the leading growth royalty and streaming company, focused on 21st century commodities.
Results reflect lower production levels from Kestrel compared to the record level produced in 2019. 2020 volumes were 11% lower at 5.8mt which are expected to be the level the operators are targeting in the near-term
Coal prices were significantly impacted by the closure of Indian ports for a period in mid-2020 as a measure to contain the outbreak of COVID-19
Royalty income reflects a US$1.3m charge at Maracas Menchen due to monies owed to Glencore upon the termination of its offtake agreement
GBP34.0m in royalty related revenue (2019: GBP55.7m)
Total portfolio contribution of GBP37.0m (2019: GBP59.5m)
Operating profit of GBP22.1m (2019: GBP44.8m)
Loss after tax, which includes valuation and impairment charges, of GBP18.6m (2019: profit after tax GBP29.0m) which reflects a GBP44.2m valuation charge against Kestrel and impairments of GBP3.4m
Basic loss per share of 10.31p (2019: earnings of 16.06p)
Adjusted earnings1 per share of 12.35p (2019: 20.41p)
Net debt at the year-end of GBP24.3m (2019: GBP28.8m) benefitting from the GBP15.2m of LIORC disposals made in December 2020, at a profit of GBP1.9m, in preparation for the financing of the Voisey's Bay stream acquisition
Kestrel represented 17% of the Group's royalty assets on the balance sheet (2019: 26%) expected to reduce further to 12% upon the acquisition of the Voisey's Bay cobalt stream in March 2021
JULIAN TREGER, CHIEF EXECUTIVE OFFICER OF ANGLO PACIFIC, COMMENTED: 'Anglo Pacific is a very different business to what I reported on this time twelve months ago. We have, with the Voisey's Bay cobalt stream acquisition, fundamentally repositioned our portfolio towards materials vital in providing cleaner energy for the future whilst ensuring that the Group replaces its Kestrel revenue ahead of time. This is immediately evident on our balance sheet where these materials now account for over 60% of our royalty and streaming assets.
Operationally our portfolio has performed well during the year considering the challenges presented to the industry by COVID-19, demonstrating the quality of the investment projects. The reduction in our royalty revenue during 2020 to GBP34.0m however, highlighted how important it was to act decisively to reduce our dependence on one single asset and commodity. The coal markets, coking coal in particular, had a turbulent year caused in large part by the closure of Indian ports and the knock-on impact of an over supplied seaborne market. Although prices recovered somewhat in early 2021, prices for coking coal remain subdued whilst thermal coal has rallied thus far this year. Our clear ambition is to reduce our coal exposure over the coming years through the acquisition of additional royalties and streams focussed on greener materials.
Although we are delighted with the quality, size and sustainability profile of the Voisey's Bay acquisition, the job is not done. We are determined to build on the momentum of this transaction to increase our base and battery metals exposure further over the course of 2021 and are working on a number of opportunities.
The wider market for base metals and strategic minerals looks favourable. The globally co-ordinated, planned infrastructure investment, as a kick start to economies post COVID-19, looks set to benefit these commodities. The movement towards the electrification of automobiles appears to be gathering pace, with an increasing number of manufacturers committing to this path and setting ambitious timetables. We also saw the US government invest directly into our Brazilian Nickel project, which is a clear sign that western countries are looking to secure vital access to strategic minerals. In the meantime, it is clear that future supply will not meet the excess demand and it is likely we will see prices remain at elevated levels.
We look forward to the remainder of the year with cautious optimism and with prospects to add further growth to our business. We were delighted with the response to our recent equity raise and the support from our existing and new shareholders to the transaction was overwhelmingly positive. We remain committed to delivering value for all stakeholders in the years ahead.
Finally, I would once again like to thank our employees and directors for adjusting so well to life in a COVID-19 environment. We know that it has been challenging but the way in which our team has adapted to this and delivered the largest and most important acquisition in our history whilst working remotely has been a phenomenal achievement.'
Adjusted earnings/(loss) represents the Group's underlying operating performance from core activities. Adjusted earnings/(loss) is the profit/(loss) attributable to equity holders less all valuation movements, non-cash impairments and amortisation charges (which are non-cash IFRS adjustments that arise primarily due to changes in commodity prices), finance costs, any associated deferred tax and any profit or loss on non-core asset disposals as these are not expected to be ongoing.
Free cash flow is the net increase/(decrease) in cash and cash equivalents prior to core acquisitions, equity raising and changes in the level of borrowings.
Tel: +44 (0) 20 3207 7800
About Anglo Pacific
Anglo Pacific Group PLC is a global natural resources royalty and streaming company. The Company's strategy is to become a leading natural resources company through investing in high quality projects in preferred jurisdictions with trusted counterparties, underpinned by strong ESG principles. It is a continuing policy of the Company to pay a substantial portion of these royalties and streams to shareholders as dividends.
Cautionary statement on forward-looking statements and related information
Certain statements in this announcement, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Group's expectations and views of future events. Forward-looking statements (which include the phrase 'forward-looking information' within the meaning of Canadian securities legislation) include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects', 'anticipates', 'plans', 'believes', 'estimates', 'seeks', 'intends', 'targets', 'projects', 'forecasts', or negative versions thereof and other similar expressions, or future or conditional verbs such as 'may', 'will', 'should', 'would' and 'could'. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, cash flow, requirement for and terms of additional financing, performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of the Group including the outlook for the markets and economies in which the Group operates, costs and timing of acquiring new royalties and making new investments, mineral reserve and resources estimates, estimates of future production, production costs and revenue, future demand for and prices of precious and base metals and other commodities, for the current fiscal year and subsequent periods.
Forward-looking statements are based upon certain material factors that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by the Group in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. The material factors and assumptions upon which such forward-looking statements are based include: the stability of the global economy; the stability of local governments and legislative background; the relative stability of interest rates; the equity and debt markets continuing to provide access to capital; the continuing of ongoing operations of the properties underlying the Group's portfolio of royalties, streams and investments by the owners or operators of such properties in a manner consistent with past practice; no material adverse impact on the underlying operations of the Group's portfolio of royalties, streams and investments from a global pandemic; the accuracy of public statements and disclosures (including feasibility studies, estimates of reserve, resource, production, grades, mine life and cash cost) made by the owners or operators of such underlying properties; the accuracy of the information provided to the Group by the owners and operators of such underlying properties; no material adverse change in the price of the commodities produced from the properties underlying the Group's portfolio of royalties, streams and investments; no material adverse change in foreign exchange exposure; no adverse development in respect of any significant property in which the Group holds a royalty or other interest, including but not limited to unusual or unexpected geological formations and natural disasters; successful completion of new development projects; planned expansions or additional projects being within the timelines anticipated and at anticipated production levels and maintenance of mining title.
A variety of material factors, many of which are beyond the Group's control, affect the operations, performance and results of the Group, its businesses and investments, and could cause actual results to differ materially from those suggested by any forwardlooking information. Such risks and uncertainties include, but are not limited to current global financial conditions, royalty, stream and investment portfolio and associated risk, adverse development risk, financial viability and operational effectiveness of owners and operators of the relevant properties underlying the Group's portfolio of royalties, streams and investments, royalties, streams and investments subject to other rights, and contractual terms not being honoured, together with those risks identified in the 'Principal Risks and Uncertainties' section of our most recent Annual Report, which is available on our website. If any such risks actually occur, they could materially adversely affect the Group's business, financial condition or results of operations.
Forward-looking statements are provided for the purposes of assisting readers in understanding the Group's financial position and results of operations as at and for the periods ended on certain dates, and of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such forward-looking statements may not be appropriate other than for purposes outlined in this announcement. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, that may be general or specific which could cause actual results to differ materially from those forecast, anticipated, estimated or intended in the forward-looking statements. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements made in this announcement relate only to events or information as of the date on which the statements are made and, except as specifically required by applicable laws, listing rules and other regulations, the Group undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. No statement in this communication is intended to be, nor should it be construed as, a profit forecast or a profit estimate. This announcement also contains forward-looking information contained and derived from publicly available information regarding properties and mining operations owned by third parties. This announcement contains information and statements relating to the Kestrel mine that are based on certain estimates and forecasts that have been provided to the Group by Kestrel Coal Pty Ltd ('KCPL'), the accuracy of which KCPL does not warrant and on which readers may not rely.