Wrap Text
Forbes - Third quarter results
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 THIRD QUARTER RESULTS
TORONTO, ONTARIO – January 14, 2013: Forbes & Manhattan Coal Corp.
(TSX: FMC) (JSE: FMC) reports its financial results for the third
quarter of fiscal 2013 (three month period ended November 30, 2012).
All figures are in Canadian dollars unless specified.
Third Quarter 2013 Financial Results:
Third Quarter 2013 Second Quarter 2013
(Sept – Nov 2012) (June – August 2012)
Revenue $10.83 million $23.39 million
Gross profit -$2.29 million $2.35 million
Consolidated EBITDA
(see non-IFRS -$3.39 million $2.72 million
measures)
Forbes Coal Dundee
Stand Alone EBITDA
-$1.43 million $3.34 million
(see non-IFRS
measures)
Cash and cash
$3.73 million $14.6 million
equivalents
”Third quarter results reflect the four and a half week labour
disruption this past November in addition to the challenging
international coal market. The company has resumed operating at full
production and taking into consideration the seasonal December
closure, we are pleased to see the quick ramp up and momentum we have
achieved in the weeks since. At a high level, our year to date run of
mine tonnes has surpassed the same period in FY2012. Our continued
commitment to achieving growth is our priority”, commented Stephan
Theron, President and Chief Executive Officer.
Operational Overview
During the third quarter the mining industry in South Africa
experienced tense labour relations issues. Labour disruptions at the
Forbes Coal Dundee properties lasted four and a half weeks of the 13
week quarter, which had a significant negative impact on the
operations and financial results of the company.
ROM Production
Total run of mine (ROM) production from all operations for Q3 2013 was
246,000 tonnes, a 40% decrease compared to 415,000 tonnes produced in
Q2 2013.
Magdalena ROM production was 184,000 tonnes, a 35% decrease over Q2
2013 production of 284,000 tonnes.
Aviemore run of mine production was 62,000 tonnes, a 53% decrease over
Q2 2013 of 131,000 tonnes.
Saleable Production and Sales
The total saleable production at the Magdalena bituminous and Aviemore
anthracite operations declined in the third quarter of 2013, when
compared to the second quarter of fiscal 2013. Total saleable
production for the third quarter was 152,000 tonnes, a 41% decrease
from the previous quarter.
Magdalena saleable production was 112,000 tonnes, a 37% decrease over
second quarter 2013 production of 177,000 tonnes.
Aviemore saleable production was 40,000 tonnes, a 49% decrease over
second quarter 2013 production of 79,000 tonnes.
In addition, Forbes Coal bought in 25,000 tonnes resulting in 177,000
total saleable tonnes for the third quarter 2013.
Total sales were 147,000 tonnes, a 48% decrease over second quarter
2013 sales of 286,000 tonnes.
The company exported 73,000 tonnes, with domestic sales of 74,000
tonnes.
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 Nine months ended
August 31, 2012 November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
Run of Mine (ROM) (t) 414,551 246,002 354,003 1,047,628 987,770
Run of Mine (ROM) coal purchased (t) - - 21,660 1,569 21,660
Saleable production (t) 256,583 152,013 246,570 653,201 672,483
Saleable coal purchased, including adjustment (t) 32,946 24,936 27,313 79,755 27,313
Plant feed (t) 412,718 239,450 364,358 1,032,088 995,171
Yield (%) on plant feed 62.2% 63.5% 67.7% 63.3% 67.6%
Inventory tonnes balance open 73,144 80,407 82,425 41,109 189,778
Inventory tonnes balance close 80,407 102,924 38,258 102,924 38,258
Sales (t) 286,186 146,559 331,296 667,742 861,925
Revenue 000,000’s (CAD) 23.4 10.8 31.2 55.0 86.0
EBITDA 000,000’s (CAD) 3.3 (1.4) 9.0 5.1 24.4
CAD: USD (average) 1.01 0.99 1.02 1.00 0.99
ZAR: CAD (average) 8.21 8.69 7.77 8.25 7.30
Selling price (average) / sold production tonnes (CAD) 81.73 73.91 94.03 82.40 99.78
Selling price (average) / sold production tonnes (USD) 80.85 74.81 92.56 82.45 101.30
Cash cost of sales and operating expenses
18.3 11.1 20.5 45.6 57.1
000,000's (CAD)
Cash cost of sales and operating expenses
63.95 75.96 61.76 68.31 66.19
/ sold production tonnes (CAD)
Cash cost of sales and operating expenses
63.26 76.89 60.79 68.35 67.20
/ sold production tonnes (USD)
Capital expenditures 000,000's (CAD) 1.91 1.77 13.49 5.64 17.45
Capital expenditures per t of saleable production (CAD) 7.45 11.65 54.69 8.63 25.95
(*) 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 Nine months ended
August 31, 2012 November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
$000's $000's $000's $000's $000's
Net income (loss) for the period (226) (4,972) 3,523 (6,788) 1,097
add back - - - 0
Amortization and depletion 2,738 1,993 3,907 7,538 12,355
Income tax (recovery) expense (10) (1,161) (396) (893) 2,672
Foreign exchange (gain) 14 - (1,203) 2 (1,131)
Fair value adjustment on endowment policy (331) (140) - (471) -
Interest and dividend expense (income) 407 588 306 1,577 827
Change in estimates on contingent acquisition liability - - 120 - 120
Accretion - - 475 - 1,540
Business combination transaction costs - 273 2 273 24
Stock based compensation 11 6 64 35 1,996
Loss on share-based payments - - 1,488 - 1,488
Unrealized (gain) on marked-to-market securities 117 27 (54) 512 (54)
EBITDA Forbes Coal Consolidated 2,720 (3,386) 8,232 1,785 19,500
EBITDA – Forbes Coal Dundee Stand Alone
Three months ended Nine months ended
August 31, 2012 November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
$000's $000's $000's $000's $000's
Net income (loss) for the period (226) (4,972) 3,523 (6,788) 1,097
add back
Amortization and depletion 2,738 1,993 3,907 7,538 12,355
Income tax (recovery) expense (10) (1,161) (396) (893) 2,672
Foreign exchange (gain) 14 - (1,203) 2 (1,131)
Fair value adjustment on financial assets (331) (140) - (471) -
Interest and dividend expense (income) 407 588 306 1,577 827
Change in estimates on contingent acquisition liability - - 120 - 120
Accretion - - 475 - 1,540
Business combination transaction costs - 273 2 273 24
Mineral properties investigation costs (Non FC Dundee) 7 2 190 16 190
Stock based compensation 11 6 64 35 1,996
Loss on share-based payments - - 1,488 - 1,488
Unrealized loss (gain) on marked-to-market securities 117 27 (54) 512 (54)
General and administration (Non FC Dundee) 608 1,957 615 3,255 3,320
EBITDA Forbes Coal Dundee 3,335 (1,427) 9,037 5,056 24,444
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 Forbes Coal 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 Forbes
Coal 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
Forbes Coal, 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
Forbes Coal 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 Forbes Coal 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
President and Chief Executive Officer
+1(416)861-5912
Email: stheron@forbescoal.com
Samantha Thomson
Investor Relations Manager
+1 (416) 309-2957
Email: sthomson@forbescoal.com
Johannesburg
15 January 2013
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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