PERTH, WESTERN AUSTRALIA--(Marketwire - Sept. 6, 2012) - Talison Lithium Limited (TSX:TLH) ("Talison" or the "Company"), today announced results for the fourth quarter and fiscal year end 2012(1).
HIGHLIGHTS
- Revenue of A$120m for the fiscal year, a 10% y/y increase
- EBITDA(2) for the fiscal year of A$34m, a 41% y/y increase, and an EBITDA margin of 28%
- Compound annual growth rate in EBITDA of 35% between fiscal year 2010 and fiscal year 2012
- Net profit and basic EPS(3), before impairment, for the fiscal year of A$25m and 23.1 cents per share respectively
- Average sales price for the fourth quarter was US$351 per tonne, a 16% y/y increase
- Construction of the Stage 2 expansion of the Greenbushes Lithium Operations to double production capacity was completed during the quarter on time and in line with budget
| HIGHLIGHTS | Three Months ended | % Change | Twelve Months ended |
% Change | ||
| June 30 (unaudited) | June 30 (Audited)** | |||||
| (in thousands A$, unless noted otherwise) | FY12 | FY11 | FY12 | FY11 | ||
| Sales Volume (tonnes lithium concentrate) | 98,113 | 92,416 | 6% | 365,545 | 339,501 | 8% |
| Sales Price (Average US$/tonne) | US$351 | US$302 | 16% | US$334 | US$308 | 8% |
| Revenue | $34,516 | $26,412 | 31% | $120,046 | $109,501 | 10% |
| Cash Operating COGS ($/tonne lithium concentrate) | $211 | $184 | 15% | $200 | $200 | 0% |
| EBITDA | $10,490 | $5,755 | 82% | $33,967 | $24,066 | 41% |
| EBITDA Margin | 30% | 22% | +800bps | 28% | 22% | +600bps |
| Net Profit* | $9,462 | $7,891 | 20% | $24,932 | $22,936 | 9% |
| Basic EPS (cents/share)* | 8.8 | 7.3 | 20% | 23.1 | 25.7 | (10%) |
| * | Before impairment |
| ** | The financial results for the twelve months ended June 30, 2011 are comprised of the audited results of Talison for the period from August 12, 2010 to June 30, 2011 (i.e., post-Reorganization) and the carve-out audited results of the Greenbushes Lithium Operations for the period from July 1, 2010 to August 11, 2010 (i.e., pre-Reorganization). |
| (1) | Information in this press release is in relation to the financial condition and results of operations of Talison Lithium Limited ("Talison" or the "Company") as at June 30, 2012 and for the three and twelve months ended June 30, 2012. This press release should be read in conjunction with the Audited Annual Report of Talison and the related notes thereto as at June 30, 2012 and for the three and twelve months ended June 30, 2012 (collectively, the "Financial Statements"). The financial information contained in this press release is derived from the Financial Statements, which were prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts in this press release are expressed in Australian dollars ("A$") unless otherwise identified. References to "C$" are to Canadian dollars and references to "US$" are to United States dollars. |
| (2) | The term "EBITDA" is a non-IFRS financial measure. For further information and a reconciliation of EBITDA to its IFRS-compliant income statement, refer to "Non-IFRS Performance Measures" in Management's Discussion and Analysis of the financial condition and results of operations of Talison Lithium Limited as at June 30, 2012 and for the three and twelve months ended June 30, 2012 (which can be found on Talison's SEDAR profile at www.sedar.com). |
| (3) | The net profit and basic EPS for the twelve months ended June 30, 2011 include certain items which relate to the Re-Organization of Talison Minerals Pty Ltd before it was acquired by Talison and as such, do not provide a meaningful comparative to the results of Talison for the twelve months ended June 30, 2012. |
FOURTH QUARTER
Revenue of A$34.5 million was generated in the quarter, a 31% increase over the corresponding period in the prior year.
EBITDA of A$10.5 million increased A$4.7 million, or 82% over the corresponding period in the prior year. EBITDA margin increased to 30% from the 22% reported in the fourth quarter of fiscal 2011. Increased revenue and EBITDA were primarily driven by a 16% increase in average sales price, higher sales volumes and a 6% reduction in the value of the A$ against the US$ between the two periods.
Net profit after tax and earnings per share, before impairment, were A$9.5 million and A$0.088, respectively, both representing a 20% increase on the corresponding period in the prior year.
Talison has ownership interests in exploration concessions in Chile. Exploration and evaluation assets were assessed for impairment at the end of the quarter on June 30, 2012 and an impairment provision of A$48.1 million was recognised during the quarter.
Operating costs were A$20.7 million, an increase of 22% over the corresponding period in the prior year, as a result of a 6% increase in sales volume and a 15% increase in the operating cost per tonne of lithium sold. Operating cost per tonne increased primarily as a result of the shut-down of chemical-grade lithium concentrate production for approximately two weeks during the quarter to link the existing production circuits to the new expanded production circuits as part of the Stage 2 expansion of the Greenbushes Lithium Operations. For the full year ended June 30, 2012, the operating cost per tonne is consistent with the result for the previous year.
Cash outflow from investing activities for the three months ended June 30, 2012 was A$20.3 million consisting mainly of costs associated with the Stage 2 expansion of the Greenbushes Lithium Operations.
FISCAL 2012
Revenue for the twelve months ended June 30, 2012 was A$120.0 million, a 10% increase from the corresponding period in the prior year. In US$ terms, revenue was 17% higher, but the adverse effect of a 3% increase in the value of the A$ against the US$ between the two periods acted to reduce A$ revenue.
EBITDA for the twelve months ended June 30, 2012 was A$34.0 million, a A$9.9 million, or 41%, increase over the corresponding period in the prior year. This increase was mainly due to the 8% y/y growth in sales volume and 8% y/y increase in average US$ sales price for the same period in the corresponding year.
Net profit and earnings per share for the twelve months ended June 30, 2012, before impairment, was A$24.9 million and A$0.231.
An impairment provision of A$48.1 million was recognised for the twelve months ended June 30, 2012 in relation to exploration and evaluation assets.
Operating costs for the twelve months ended June 30, 2012 were A$73.2 million, an increase of 4% over fiscal year 2011, due to the increased sales volume.
Cash inflow from operating activities for the twelve months ended June 30, 2012 was A$46.0 million, A$23.7 million higher than the corresponding period in the prior year. This increase was mainly due to an increase in EBITDA, and increase in net interest received, and as the year ended June 30, 2011 included a A$9.2 million increase in working capital.
Cash and cash equivalents at June 30, 2012 was A$74.2 million, a A$28.4 million reduction from the balance as at June 30, 2011. This is due mainly to the significant investment that the Company made in the Stage 2 expansion of the Greenbushes Lithium Operations.
SUBSEQUENT EVENTS
On 23 August 2012, Talison Lithium entered into a definitive Scheme Implementation Agreement ("SIA") with Rockwood Holdings, Inc. ("Rockwood") under which it is proposed that Rockwood, or a wholly-owned entity of Rockwood, will acquire 100% of the ordinary shares in the capital of Talison Lithium by way of a scheme of arrangement under the Australian Corporations Act 2001 (Cth) for cash consideration of C$6.50 per share.
The A$48.1 million impairment provision in the Financial Statements does not constitute a Material Adverse Change (as defined in the SIA) and this has been agreed by Rockwood.
Further details are included in the executed SIA which is available on SEDAR at www.sedar.com and on the Talison website www.talisonlithium.com.
OTHER INFORMATION
A fourth quarter conference call will not be held.
The Audited Annual Report and Management's Discussion and Analysis of the financial condition and results of operations of Talison Lithium Limited as at June 30, 2012 and for the three and twelve months ended June 30, 2012 are accessible at Talison's website, www.talisonlithium.com and on SEDAR at www.sedar.com.
ABOUT TALISON
Talison is a leading global producer of lithium and has been supplying a global customer network from the Greenbushes Lithium Operations in Western Australia for over 25 years. In anticipation of sustained growth in lithium consumption, driven primarily by the secondary lithium battery market, Talison has doubled its production capacity at the Greenbushes Operations.
FINANCIAL STATEMENTS
| INCOME STATEMENT |
Three Months Ended June 30, 2012 (Unaudited) |
Three Months Ended June 30, 2011 (Unaudited) |
Twelve Months Ended June 30, 2012 (Audited) |
Twelve Months Ended June 30, 2011 (Audited) (1) |
Twelve Months Ended June 30, 2010 (Audited) (1) |
|||||
| A$'000 | A$'000 | A$'000 | A$'000 | A$'000 | ||||||
| Sales revenue | 34,516 | 26,412 | 120,046 | 109,501 | 81,278 | |||||
| Operating costs | (20,731 | ) | (16,977 | ) | (73,188 | ) | (70,616 | ) | (58,064 | ) |
| Other income / (expenses) | (3,295 | ) | (3,680 | ) | (12,891 | ) | (14,819 | ) | (4,553 | ) |
| EBITDA(3) | 10,490 | 5,755 | 33,967 | 24,066(2 | ) | 18,661 | ||||
| Depreciation and amortization | (945 | ) | (636 | ) | (2,983 | ) | (3,428 | ) | (2,646 | ) |
| Net financing income / (costs) | 436 | 949 | 2,456 | (3,798 | ) | (25,502 | ) | |||
| Net realized US$ hedging gain / (loss) | (247 | ) | 1,473 | 3,077 | 2,979 | 1,670 | ||||
| Net realized foreign exchange gain / (loss) | 750 | (1,375 | ) | 957 | 7,561 | - | ||||
| Net fair value gain/(loss) on financial assets and liabilities | (1,165 | ) | 1,803 | (6,122 | ) | 4,664 | 3,982 | |||
| Income tax (expense) / benefit(4) | 143 | (78 | ) | (6,420 | ) | (9,108 | ) | (30,591 | ) | |
| Net profit/(loss) for the period before impairment | 9,462 | 7,891 | 24,932 | 22,936 | (34,426 | ) | ||||
| Impairment provision | (48,144 | ) | - | (48,144 | ) | - | - | |||
| Net profit/(loss) for the period | (38,682 | ) | 7,891 | (23,212 | ) | 22,936 | (34,426 | ) | ||
| Basic earnings/(loss) per share (cents/ share)(5) |
(35.8 | ) | 7.3 | (21.5 | ) | 25.7 | (113.4 | ) | ||
| Diluted earnings/(loss) per share (cents/ share)(5) |
(35.8 | ) | 7.1 | (21.5 | ) | 24.9 | (113.4 | ) | ||
| Basic earnings per share before impairment (cents/ share)(6) |
8.8 | 7.3 | 23.1 | 25.7 | (113.4 | ) | ||||
| Diluted earnings per share before impairment (cents/ share)(6) |
8.7 | 7.1 | 23.0 | 24.9 | (113.4 | ) | ||||
| Basic weighted average number of shares | 108,041,969 | 108,110,928 | 107,860,200 | 89,321,872 | 30,366,968 |
| Notes: | |
| (1) | The financial results for the twelve months ended June 30, 2011 are comprised of the audited results of Talison for the period from August 12, 2010 to June 30, 2011 (i.e., post-Reorganization) and the carve-out audited results of the Greenbushes Lithium Operations for the period from July 1, 2010 to August 11, 2010 (i.e., pre-Reorganization). The audited results for the twelve months ended June 30, 2010 are comprised of the carve-out results of the Greenbushes Lithium Operations. Readers are cautioned that the results for the period from July 1, 2010 to August 11, 2010 and from July 1, 2009 to June 30, 2010 may not be reflective of the ongoing affairs of Talison. |
| (2) | EBITDA for the twelve months ended June 30, 2011 included A$1.6 million in non-recurring Reorganization costs. |
| (3) | EBITDA is a non IFRS financial measure. For a reconciliation of EBITDA to its IFRS compliant income statement, see "Non-IFRS Performance Measures". |
| (4) | Income tax (expense)/benefit for the twelve months ended June 30, 2010 included an expense of A$28.1 million as tax losses carried forward from a prior year were no longer recognized. Income tax (expense)/benefit for the three and twelve months ended June 30, 2011 and income tax (expense)/benefit for the three and twelve months ended June 30, 2012, include a tax benefit of A$1.9 million and A$2.7 million, respectively, as it was considered probable that certain prior year tax losses could be recouped. |
| (5) | Basic and diluted earnings per share have been calculated based on the weighted average number of shares on issue. For the three and twelve months ended June 30, 2012, the weighted average number of shares includes both the outstanding ordinary shares of Talison adjusted to remove ordinary shares held by the Talison Long Term Incentive Plan Trust which is consolidated under IFRS, and the exchangeable shares of Talison Lithium Exchangeco Limited, an indirect wholly-owned subsidiary of Talison that are exchangeable (on a one-for-one basis) for ordinary shares of Talison. For the three and twelve months ended June 30, 2011, the weighted average number of shares includes the outstanding ordinary shares of Talison adjusted to remove ordinary shares held by the Talison Long Term Incentive Plan Trust which is consolidated under IFRS, and the exchangeable shares of Talison Lithium Exchangeco Limited that are exchangeable (on a one-for-one basis) for ordinary shares of Talison, and the ordinary shares of Talison Minerals adjusted for the Talison Minerals share consolidation which occurred as part of the Reorganization. For the twelve months ended June 30, 2010, the weighted average number of shares includes the ordinary shares of Talison Minerals adjusted for the Talison Minerals share consolidation which occurred as part of the Reorganization. See "Outstanding Share Data". |
| (6) | Basic and diluted earnings per share before impairment have been calculated based on "Net profit/(loss) for the period before impairment" divided by the weighted average number of shares on issue as per Note (5) above. |
| STATEMENT OF FINANCIAL POSITION | As at June 30, 2012 (Audited) A$'000 |
As at June 30, 2011 (Audited) A$'000 |
||
| Assets | ||||
| Cash and cash equivalents | 74,178 | 102,605 | ||
| Trade and other receivables | 18,355 | 21,543 | ||
| Inventories | 16,040 | 11,182 | ||
| Derivative financial instruments | 2,984 | 10,205 | ||
| Property, plant and equipment | 166,369 | 95,215 | ||
| Exploration and evaluation assets | 14,500 | 61,714 | ||
| Total assets | 292,426 | 302,464 | ||
| Liabilities | ||||
| Trade and other payables | 14,270 | 12,380 | ||
| Interest-bearing liabilities | 27,548 | 29,243 | ||
| Tax payable | 5,348 | - | ||
| Provisions | 20,775 | 14,668 | ||
| Deferred tax liabilities | 10,038 | 10,622 | ||
| Total liabilities | 77,979 | 66,913 | ||
| Shareholders' equity | 214,447 | 235,551 | ||
| As at June 30, 2012 (Audited) A$'000 |
As at June 30, 2011 (Audited) A$'000 |
|||
| Outstanding number of shares | ||||
| Ordinary shares of Talison | 112,341,336 | 110,527,347 | ||
| Exchangeable shares of Talison Lithium Exchangeco Limited(1) | - | 1,494,239 | ||
| Shares held in trust(2) | (4,299,367 | ) | (4,299,367 | ) |
| Total outstanding number of shares | 108,041,969 | 107,722,219 |
| Notes: | |
| (1) | The exchangeable shares of Talison Lithium Exchangeco Limited were exchangeable (on a one-for-one basis) for ordinary shares of Talison. On 31 May 2012, all outstanding exchangeable shares were exchanged for ordinary shares of Talison. |
| (2) | On June 7, 2011, Talison Lithium established the Incentive Plan Trust.Talison Lithium issued 3,862,767 ordinary shares to the Incentive Plan Trust and the Incentive Plan Trust purchased 436,600 ordinary shares of Talison Lithium on-market. |
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this press release, including any information as to Talison's mineral reserve and mineral resource estimates, strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance, may constitute "forward-looking information" within the meaning of Canadian securities laws. All statements, other than statements of historical fact, constitute forward-looking information. Forward-looking information can often, but not always, be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "predicts", "potential", "continue" or "believes", or variations (including negative variations) of such words, or statements that certain actions, events or results "may", "could", "would", "should", "might", "potential to", or "will" be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts. The purpose of forward-looking information is to provide the reader with information about management's expectations and plans. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made or incorporated in this press release are qualified by these cautionary statements.
Forward-looking statements are necessarily based on a number of factors, estimates and assumptions that, while considered reasonable by Talison, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such factors, estimates and assumptions include, but are not limited to: anticipated financial and operating performance of Talison, its subsidiaries and their respective projects; Talison's market position; future prices of lithium or lithium concentrates; estimation of mineral reserves and mineral resources; realization of mineral reserve and mineral resource estimates; timing, amount and costs of estimated future production; grade, quality and content of concentrate produced; sale of production; capital, operating and exploration expenditures; costs and timing of the expansion of the Greenbushes Lithium Operations; exploration and development of the Salares 7 lithium project; costs and timing of future exploration; requirements for additional capital; government regulation of exploration, development and mining operations; environmental risks; reclamation and rehabilitation expenses; title disputes or claims; absence of significant risks relating to Talison's mining operations; the costs of Talison's hedging policy; sales risks related to China; currency; interest rates, and limitations of insurance coverage. While Talison considers these factors, estimates and assumptions to be reasonable based on information currently available to it, they may prove to be incorrect and actual results may vary.
Readers are cautioned that forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Talison and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such risk factors include, amount others, those described in the Financial Statements and under the heading "Risk Factors" in the annual information form of Talison for the year ended June 30, 2011 dated September 23, 2011, each of which can be found on Talison's SEDAR profile at www.sedar.com. While Talison considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect and actual results may vary.
Although Talison has attempted to identify statements containing important factors that could cause actual actions, event or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein is made as of the date of this press release based on the opinions and estimates of management on the date statements containing such forward-looking information are made. Except as required by law, Talison disclaims any obligation to update any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information.
Contact Information:
Frank Wheatley
Executive Director
+1 (604) 985 0528
frank.wheatley@talisonlithium.com