Noranda Income Fund
TSX : NIF.UN

Noranda Income Fund

February 14, 2012 18:57 ET

Noranda Income Fund Reports Fourth Quarter Cash Provided by Operating Activities of $18 Million

SALABERRY-DE-VALLEYFIELD, QUÉBEC--(Marketwire - Feb. 14, 2012) - Noranda Income Fund (the "Fund") (TSX:NIF.UN)

Q4 2011 and Subsequent Highlights:

  • Cash provided by operating activities before non-cash working capital items was $18.0 million compared to $17.0 million in the same quarter a year ago.
  • Debt (before deferred financing fees) was reduced by $37.0 million to $98.7 million.
  • The Fund issued a cash distribution of $0.04167 per unit to Priority Unitholders in each of October, November and December 2011, and January 2012.
  • The Fund announced changes to the Trust Indenture to mitigate the tax consequences of the 2011 In-Kind Distribution.
  • The employees of the Processing Facility ratified a new, three-year collective agreement.

In a separate press release also issued today, the Fund declared a cash distribution for February 2012, and provided an update on the determination of distributions.

Conference Call and Webcast:
February 15 at 8:30 a.m. EST
Dial in number: 416-340-2216
Toll-free North American number: 1-866-226-1792
In addition, you can listen to the teleconference and view the slide presentation from the Noranda Income Fund website http://www.norandaincomefund.com/.
Recording of the Conference Call:
Dial in number: 905-694-9451 or
Toll-free North American number: 1-800-408-3053.
The pass code is 8867 226# and you will be prompted for your name and company.
The recording will be available until midnight on February 29, 2012.

Noranda Income Fund (the "Fund") (TSX:NIF.UN) reported earnings before finance costs and income taxes of $2.4 million in the fourth quarter of 2011, compared to $11.1 million in the same quarter a year ago. The $8.7 million decrease was mainly due to lower zinc metal sales and the non-recurring $7.1 million cost increase for additional pension benefits and early retirement provisions for the new three-year collective agreement. This decrease was partially offset by higher zinc metal premiums.

Earnings before finance costs and income taxes were $59.9 million in 2011 compared to $47.7 million in 2010. The $12.2 million increase was mainly due to higher byproduct revenues, processing fee and premiums, partially offset by lower zinc metal sales, the negative impact of the new collective agreement and a stronger Canadian dollar.

Fourth Quarter Year Year
$ millions 2011 2010 2011 2010
Revenues 137.8 168.7 644.3 643.0
Net Revenues* 64.2 63.0 303.8 271.4
Earnings before finance costs and income taxes 2.4 11.1 59.9 47.7
Cash provided by operating activities before non-cash working capital items 18.0 17.0 71.5 69.6
* Revenues less raw material purchase costs

"The Fund had a good year. The fourth quarter results were impacted by the lower zinc sales volumes and the new collective agreement," said Manuel Álvarez Dávila, CEO of the Fund's Manager. "While U.S. manufacturing activity is still weak, it does not appear to have deteriorated further in early 2012. This is encouraging given the challenges posed by the financial strains in Europe and the policy-induced slowdown in China. In spite of slow construction activity, zinc demand is expected to steadily build during the first half of 2012 as customers experience better order levels and rebuild their inventories as the general outlook improves."

A full version of the year-end 2011 Management's Discussion and Analysis ("MD&A") and the Unaudited Interim Financial Statements will be posted on the Fund's website, http://www.norandaincomefund.com/investorcentre/financials.html today, February 14, 2012 and they will be available on www.sedar.com on February 15, 2012. Readers should be advised that the summarized communication presented in this press release is limited in its disclosure. It is not a suitable source of information for readers who are unfamiliar with the Fund, and it is not in any way a substitute for reading the Unaudited Interim Financial Statements and MD&A because a reader relying on this summary alone might overlook decision critical information.

FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including statements on when it intends to provide an update on distributions and statements regarding the long-term strategy of the Fund and the current outlook for its metal and sulphuric acid businesses. The Fund provides this latter information on its businesses because they comprise some its key drivers. Readers are cautioned that this information may not be appropriate for other reasons.

Forward-looking information contained in this press release is based on, among other things, management's current estimates, expectations, assumptions, plans and intentions, which management believes are reasonable as of the current date, and which are subject to a number of risks and uncertainties. You should not place undue importance on forward-looking statements or information and should not rely upon such information as of any other date. Except as required by law, the Fund does not undertake to update these forward-looking statements or information, whether written or oral, that may be made from time to time by the Fund or on the Fund's behalf.

Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause actual events, results or performance to be materially different from any future events, results or performance expressed or implied by the forward-looking information. As a result, the Fund cannot guarantee that any forward-looking statements or information will materialize. For further details concerning the risks, uncertainties and other factors which may cause actual events, results or performance to be materially different from those expressed or implied by the forward-looking statements and information, reference should be made to the Fund's most recent Annual Report and Annual Information Form, copies of which are available on www.sedar.com.

Noranda Income Fund is an income trust whose units trade on the Toronto Stock Exchange under the symbol "NIF.UN". The Noranda Income Fund owns the CEZinc processing facility and ancillary assets (the "CEZinc processing facility") located in Salaberry-de-Valleyfield, Québec. The CEZinc processing facility is the second-largest zinc processing facility in North America and the largest zinc processing facility in eastern North America, where the majority of zinc customers are located. It produces refined zinc metal and various by-products from zinc concentrates purchased from mining operations. The CEZ processing facility is operated and managed by Canadian Electrolytic Zinc Limited.

Further information about the Noranda Income Fund can be found at www.norandaincomefund.com.

Contact Information

  • Financial information: Michael Boone
    Vice President & Chief Financial Officer of
    Canadian Electrolytic Zinc Limited,
    Noranda Income Fund's Manager
    416 775-1561
    info@norandaincomefund.com