Wrap Text
Forbes Coal reports 11% growth in consolidated EBITDA and a 12% increase in revenue.
FORBES & MANHATTAN COAL CORP.
(Registration number: 002116278)
(External company registration number: 2011/011661/10)
Share code on the Toronto Stock Exchange: FMC
Share code on the JSE Limited: FMC
ISIN: CA3451171050
(“Forbes Coal”)
FORBES COAL REPORTS 11% GROWTH IN CONSOLIDATED EBITDA
AND A 12% INCREASE IN REVENUE
TORONTO, ONTARIO – October 15, 2012: Forbes & Manhattan Coal Corp. (TSX: FMC)
(JSE: FMC) is pleased to announce its financial results for the second quarter of fiscal 2013
(three month period ended August 31, 2012) All figures are in Canadian dollars unless
specified.
Second Quarter 2013 Financial Highlights:
Second Quarter 2013 First Quarter 2013
(June – August 2012) (March-May 2012)
Revenue $23.39 million $20.8 million
Gross profit $2.35 million $1.81 million
Consolidated EBITDA $2.72 million $2.45 million
(see non-IFRS measures)
Forbes Coal Dundee
Stand Alone EBITDA $3.34 million $3.15 million
(see non-IFRS measures)
Cash and cash
$14.6 million $8.1 million
equivalents
”I am again pleased to report that Forbes Coal continues to grow production, revenue, and
profit. On the back of these strong set of results in a challenging coal market environment and
with the recent announcement of the ZAC acquisition, we believe that the Company is going
from strength to strength in terms of both performance and achieving its growth strategy”,
commented Stephan Theron, President and Chief Executive Officer.
Operational Highlights
Strong operations continue to support the financial position of the Company, with continued
increased production at both Magdalena and Aviemore. At Aviemore in particular, production
levels indicate record run of mine (ROM) and saleable tonnes.
Operational highlights include:
- Total sales of bituminous coal and anthracite products for Q2 2013 were 286,185
tonnes, a 22% increase quarter-over-quarter.
- Operating expenses were $18.3 million ($63.95 per tonne) for Q2 2013, up from $16.2
million ($68.86 per tonne) in Q1 2013, a decrease of 7% on a per ton basis.
- Total ROM production from all operations for Q2 2013 was 414,551 tonnes, a 7%
increase compared to 387,075 tonnes produced in Q1 2013.
- Total saleable coal production for Q2 2013 increased 5% quarter-over-quarter. In
addition, Forbes Coal bought in 32,946 tonnes in Q2 2013, compared to 21,873 tonnes
in Q1 2013, resulting in total saleable tonnes of 289,529 in Q2 2013, a 9% increase
compared to 266,478 total saleable tonnes in Q1 2013.
ROM Production
- Total ROM production from all operations for Q2 2013 was 414,551 tonnes, a 7%
increase compared to 387,075 tonnes produced in Q1 2013. The increase in ROM
production was mainly due to more production days in Q2 2013, compared to the
number of days in Q1 2013, which included the April Easter period.
- Total ROM production for Q2 2013 was below targeted ROM production of 436,910
tonnes as a result of difficult geology, overloading of the underground conveyor system,
interruptions in the power supply and high target tonnages for a stone section in
Magdalena. An upgrade of the conveyor system was implemented during Q2 which has
increased the capacity of the conveyors. The capacity increase commenced in Q3.
- ROM production from Magdalena operations, underground and open pit combined, for
Q2 2013 was 283,950 tonnes, an 8% increase compared to 262,416 tonnes produced in
Q1 2013. The increase includes a 20% increase in underground production, with
200,101 tonnes produced underground in Q2 2013.
- ROM production from Aviemore operations for Q2 2013 was 130,601 tonnes, a 5%
increase compared to 124,659 tonnes produced in Q1 2013. The second section
introduced in Aviemore in January 2012 was ramped-up during Q1 2013, and full
production was achieved in Q2 2013, resulting in higher productivity for this period.
Saleable Production and Sales
- Saleable coal production for Q2 2013 was 256,583 tonnes, a 5% increase compared to
244,605 saleable tonnes in Q1 2013, as a result of the higher ROM production.
- Saleable coal bought in for Q2 2013 was 32,946 tonnes, compared to 21,873 tonnes in
Q1 2013, resulting in total saleable tonnes of 289,529 in Q2 2013, a 9% increase
compared to 266,478 total saleable tonnes in Q1 2013.
- The total calculated yield from plant feed was 62.2% for Q2 2013, compared to 64.7%
for Q1 2013.
- Total sales of bituminous coal and anthracite products for Q2 2013 were 286,186
tonnes, a 22% increase compared to 234,997 tonnes sold in Q1 2013.
- The majority of product sold to local and overseas markets continues to be thermal coal
with export sales higher than domestic sales for Q2 2013.
- Export sales for Q2 2013 were 180,479 tonnes, a 56% increase compared to 115,528
tonnes sold in Q1 2013.
- Domestic sales in Q2 2013 were 105,707 tonnes, a 12% decrease compared to 119,469
tonnes sold in Q1 2013.
Full Financial Statements and the Management Discussion and Analysis Report will be
available under the Forbes Coal profile at www.sedar.com or at www.forbescoal.com.
SUMMARIZED FINANCIAL RESULTS OF FORBES COAL DUNDEE
Three months ended S ix months ended
May 31, 2012 August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
Run of M ine (ROM ) (t) 387,075 414,551 322,765 801,626 633,767
Run of M ine (ROM ) coal purchased (t) 1,569 - - 1,569 -
Saleable production (t) 244,605 256,583 218,724 501,188 425,913
Saleable coal purchased, including adjustment (t) 21,873 32,946 - 54,819 -
Plant feed (t) 379,920 412,718 327,744 792,638 630,813
Yield (%) on plant feed 64.7% 62.2% 66.7% 63.2% 67.5%
Inventory tonnes balance open 41,109 73,144 204,396 41,109 189,778
Inventory tonnes balance close 73,144 80,407 82,425 80,407 82,425
Sales (t) 234,997 286,186 339,802 521,183 530,629
Revenue 000,000’s (CAD) 20.8 23.4 35.2 44.2 54.9
EBITDA 000,000’s (CAD) 3.1 3.3 9.2 6.5 15.4
CAD: USD (average) 1.00 1.01 0.97 1.01 0.97
ZAR: CAD (average) 7.87 8.21 7.09 8.04 7.07
Selling price (average) / sold production tonnes (CAD) 88.51 81.73 103.59 84.79 103.37
Selling price (average) / sold production tonnes (USD) 88.60 80.85 106.54 84.37 106.55
Cash cost of sales and operating expenses
16.2 18.3 24.1 34.5 36.6
000,000's (CAD)
Cash cost of sales and operating expenses
68.86 63.95 70.92 66.16 68.96
/ sold production tonnes (CAD)
Cash cost of sales and operating expenses
68.92 63.26 72.94 65.83 71.09
/ sold production tonnes (USD)
Capital expenditures 000,000's (CAD) 1.95 1.91 2.30 3.86 3.97
Capital expenditures per t of saleable production (CAD) 7.98 7.45 10.51 7.71 9.32
(*) Numbers in this chart are derived from the Forbes Coal Dundee stand alone financial statements (See non-IFRS
measures).
NON-IFRS PERFORMANCE MEASURES
The Company has included in this document certain non-IFRS performance measures that are
detailed below. These non-IFRS performance measures do not have any standardized
meaning prescribed by IFRS and, therefore, may not be comparable to similar measures
presented by other companies. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use this information to evaluate
the Company’s performance. Accordingly, they are intended to provide additional information
and should not be considered in isolation or as a substitute for measures of performance
prepared with IFRS. The definition for these performance measures and reconciliation of the
non-IFRS measures to reported IFRS measures are as follows:
EBITDA - Forbes Coal Consolidated
Three months ended Six months ended
May 31, 2012 August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
$000's $000's $000's $000's $000's
Net income (loss) for the period (1,590) (226) (1,421) (1,816) (2,426)
add back -
Amortization and depletion 2,807 2,738 5,520 5,545 8,448
Income tax (recovery) expense 278 (10) 2,190 268 3,068
Foreign exchange (gain) (12) 14 (236) 2 72
Fair value adjustment on endowment policy - (331) - (331) -
Interest and dividend income 582 407 209 989 521
Accretion - - 528 - 1,065
Business combination transaction costs - - 3 - 22
Stock based compensation 18 11 92 29 1,932
Unrealized (gain) on marked-to-market securities 368 117 - 485 -
EBITDA Forbes Coal Consolidated 2,451 2,720 6,885 5,171 12,702
EBITDA – Forbes Coal Dundee Stand Alone
Three months ended Six months ended
May 31, 2012 August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
$000's $000's $000's $000's $000's
Net income (loss) for the period (1,590) (226) (1,421) (1,816) (2,426)
add back
Amortization and depletion 2,807 2,738 5,520 5,545 8,448
Income tax (recovery) expense 278 (10) 2,190 268 3,068
Foreign exchange (gain) (12) 14 (236) 2 72
Fair value adjustment on financial assets - (331) - (331) -
Interest and dividend income 582 407 209 989 521
Accretion - - 528 - 1,065
Business combination transaction costs - - 3 - 22
Mineral properties investigation costs (Non FC Dundee) 7 7 - 14 -
Stock based compensation 18 11 92 29 1,932
Unrealized loss (gain) on marked-to-market securities 368 117 - 485 -
General and administration (Non FC Dundee) 690 608 2,273 1,298 2,705
EBITDA Forbes Coal Dundee 3,148 3,335 9,158 6,483 15,407
About Forbes Coal
Forbes Coal is a growing coal producer in southern Africa. It holds a majority interest in two
operating mines through its 100% interest in Forbes Coal (Pty) Ltd., a South African company
("Forbes Coal Dundee") which has a 70% interest in Zinoju Coal (Pty) Ltd. ("Zinoju"). Zinoju
holds a 100% interest in the Magdalena bituminous mine and the Aviemore anthracite mine in
South Africa (collectively, “the Forbes Coal Dundee Properties”). The mines have a substantial
resource base and each mine has a projected life span in excess of 20 years. Forbes Coal is in
the process of increasing production at both mines using existing infrastructure and capacity.
The Company has in-place transportation infrastructure allowing its coal to reach both export
corridors and the growing domestic coal market. Forbes Coal has a strong balance sheet and
an experienced coal-focused management team.
Please refer to the Company's NI 43-101 compliant technical report on the Forbes Coal Dundee
Properties dated March 1, 2011 entitled "Technical Report on Slater Coal and Subsidiaries,
KwaZulu-Natal Province, South Africa", available on the SEDAR profile of the Company at
www.sedar.com. Additional information is available at www.forbescoal.com.
Cautionary Notes:
Johan Odendaal, B.Sc.(Geol.), B.Sc.(Hons)(Min. Econ.), M.Sc. (Min. Eng.), a director of
Minxcon and an independent Qualified Person, as defined in National Instrument 43-101 has
reviewed and approved the scientific and technical information contained in this release.
The ability of the Company to increase production amounts has not been the subject of a
feasibility study and there is no certainty that the proposed expansion will be economically
feasible.
This press release contains “forward-looking information” within the meaning of applicable
Canadian securities legislation. Forward-looking information includes, but is not limited to,
statements with respect to the anticipated production results with respect to the Forbes Coal
Dundee Properties, future financial or operating performance of the Company and its projects,
statements regarding the anticipated improvements in logistical support and anticipated
improvements in sales, statements made with respect to prospects for the business of the
Company, requirements for additional capital, government regulation of the mineral exploration
industry, environmental risks, acquisition of mining licences, title disputes or claims, limitations
of insurance coverage and the timing and possible outcome of pending litigation and regulatory
matters. Generally, forward-looking information can be identified by the use of forward-looking
terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or state that certain actions, events or
results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-
looking information is subject to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or achievements of the Company to
be materially different from those expressed or implied by such forward-looking information,
including but not limited to: general business, economic, competitive, foreign operations,
political and social uncertainties; a history of operating losses; delay or failure to receive board
or regulatory approvals; timing and availability of external financing on acceptable terms; not
realizing on the potential benefits of the proposed transaction; conclusions of economic
evaluations; changes in project parameters as plans continue to be refined; future prices of
mineral products; failure of plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; and, delays in obtaining governmental
approvals or required financing or in the completion of activities. Although the Company has
attempted to identify important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that such information
will prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue reliance on
forwardlooking information. The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
Stephan Theron Samantha Thomson
President and Chief Executive Officer Investor Relations Manager
+1 (416) 861-5912 +1 (416) 309-2957
Email: stheron@forbescoal.com Email: sthomson@forbescoal.com
Johannesburg
16 October 2012
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
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