The Company has also published its audited 2019 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.
BACKGROUND
We are presenting this set of full year results amid the unprecedented global humanitarian and economic crisis caused by the COVID-19 pandemic. Along with the rest of the business community, we are focused on securing the safety of our employees and are mindful of the economic impact that we are likely to experience in the coming months.
Whilst it is very difficult to make forward looking statements or predictions with any great certainty, we believe that the impact of COVID-19 will be a temporary disruption and will ultimately pass. In the meantime, we have stress tested our business model to assess what the impact would be under several downside scenarios. Overall, we consider that
Following the application of IFRS 9, the royalties received from EVBC are reflected in the fair value movement of the underlying royalty rather than recorded as royalty income.
FINANCIAL HIGHLIGHTS
Record
Total portfolio contribution increased by 20% to
21% increase in operating profit to
Profit after tax, which includes valuation and impairment charges, in line with previous year of
13% increase in adjusted earnings1 per share to 20.41p (2018: 18.02p)
Net debt at the year-end of
Recently announced refinancing of the Group's borrowing facility to increase commitments from
DIVIDEND UPDATE BASED ON RECORD PERFORMANCE AND INVESTMENT IN 2019
Recommended 32% increase in the final dividend for 2019 to 4.125p, which is in line with previous guidance. If approved at the 2020 AGM, it will be paid shortly thereafter
Along with the 4.875p of interim dividends already paid in respect of 2019, the final dividend would bring the total dividend for 2019 to 9.00p, a 12.5% increase on that of 2018
The Company will no longer be holding its 2020 Annual General Meeting on
OPERATING HIGHLIGHTS
Kestrel operator achieved a 42% increase in saleable coal production, exceeding its 40% target, resulting in a record year of royalty income for the Group
Income of
Record production levels achieved at Maracas Menchen, with the expansion plan on track although the significant decrease in the vanadium price impacted revenue
Post period-end,
OUTLOOK
Refined investment strategy recently announced, with the Group committing to no further investment in thermal coal
Further volume growth expected from the portfolio in 2020 subject to any impact of COVID-19 on business operations
Kestrel owners are targeting a further 6.5% increase in saleable coal production in 2020
Maracas operator is targeting further growth in 2020 following the completion of its plant expansion project in H2 2019
Full year of revenue to come from the Group's Mantos Blancos royalty (only four months included in 2019)
Further
In excess of
COVID-19 UPDATE
Business as usual for
No operational restrictions in force at Kestrel at the time of writing
EVBC and
Spot prices of the commodities which underpin the Group's revenues have held up well thus far in 2020
Currencies have remained volatile following unprecedented
Effective hedging program in place during 2019 which will benefit 2020 cashflow with
The most material mines from which we generate the majority of our revenue remain in production and are able to ship and sell. We have seen some instances of COVID-19 related shutdowns at EVBC and
Market conditions are very challenging for conventional mining finance, and this will see the environment for raising capital becoming much more difficult and perhaps prohibitively expensive. This should increase the demand for alternative financing, and we will look to prudently put capital to work, financed from our recently upsized revolving credit facility.
We at
Our business remains in sound financial health, with leverage ratios of less than 0.7x, no material capital commitments, and debt maturity extended for a further twelve months to
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.
Contact:
Tel: +44 (0) 20 3435 7400
About
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) are provided for the purposes of assisting the reader in understanding the Group's financial position and results of operations as at and for the periods ended on certain dates, and to present information about management's current expectations and plans relating to the future. Readers are cautioned that such forward-looking statements may not be appropriate for other purposes than outlined in this announcement. 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 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 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'. 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; 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 and investments in a manner consistent with past practice; 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 and operators of such underlying properties; 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 and investments; no material adverse change in foreign exchange exposure; no adverse development in respect of any 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.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which could cause actual results to differ materially from those 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. No statement in this communication is intended to be, nor should it be construed as, a profit forecast or a profit estimate. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate; that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. 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, royalties and investments, and could cause actual results to differ materially from those suggested any forward-looking information. Such risks and uncertainties include, but are not limited to current global financial conditions, 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 and investments, royalties 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. Readers are cautioned that the list of factors noticed in the 'Principal Risks and Uncertainties' section of our most recent Annual Report is not exhaustive of the factors that may affect the Group's forwardlooking statements. Readers are also cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.
This announcement also contains forward-looking information contained and derived from publicly available information regarding properties and mining operations owned by third parties. The Group's management relies upon this forwardlooking information in its estimates, projections, plans, and analysis. Although the forward-looking statements contained in this announcement are based upon what the Group believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. 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.
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