Talison Lithium Reports Third Quarter Fiscal 2012 Results
PERTH, WESTERN AUSTRALIA--(Marketwire - May 10, 2012) -
Talison Lithium Limited ("Talison" or the "Company") (TSX:TLH), (Nasdaq - TLTHF) today
announced results for the third quarter of the 2012 fiscal year1.
THIRD QUARTER HIGHLIGHTS
- Record revenue and EBITDA2 of A$37m and A$12m, an increase of 27% and 90% y/y respectively
- Net profit of A$8.2m resulting in basic EPS of 7.6 cents per share, a 112% and 100% y/y increase respectively
- Construction of the Stage 2 Expansion of the Greenbushes Lithium Operations (Expansion) remains on schedule and budget with commissioning expected to be completed by the end of June 2012
- Cash and cash equivalents increased to A$85.1m at March 31, 2012 notwithstanding continued capital expenditure during the quarter for the Expansion
- Outlook remains positive, with early indications that global supply may tighten in FY2013
| THIRD QUARTER HIGHLIGHTS | Three Months ended | % Change | Nine Months ended | % Change | |||||||||||||||||
| March 31 (unaudited) | March 31 (unaudited) | ||||||||||||||||||||
| (in thousands A$, unless noted otherwise) | FY12 | FY11 | FY12 | FY11 | |||||||||||||||||
| Sales Volume (tonnes lithium concentrate) | 111,896 | 97,001 | 15 | % | 267,432 | 247,085 | 8 | % | |||||||||||||
| Sales Price (Average US$/tonne) | US$340 | US$303 | 12 | % | US$328 | US$310 | 6 | % | |||||||||||||
| Revenue | $ | 36,965 | $ | 29,207 | 27 | % | $ | 85,530 | $ | 83,089 | 3 | % | |||||||||
| Cash Operating COGS ($/tonne lithium concentrate) | $ | 195 | $ | 195 | 0 | % | $ | 196 | $ | 208 | (6 | %) | |||||||||
| EBITDA | $ | 11,964 | $ | 6,308 | 90 | % | $ | 23,477 | $ | 18,311 | 28 | % | |||||||||
| EBITDA Margin | 32 | % | 22 | % | +1,000bps | 27 | % | 22 | % | +500bps | |||||||||||
| Net Profit | $ | 8,220 | $ | 3,874 | 112 | % | $ | 15,469 | $ | 15,0453 | 3 | % | |||||||||
| Basic EPS (cents/share) | 7.6 | 3.8 | 100 | % | 14.3 | 18.13 | (21 | %) | |||||||||||||
"Talison had an outstanding third quarter, with records achieved in sales volume, revenue and EBITDA." Peter Oliver, Chief Executive Officer and Managing Director commented. "This exceptional performance, in conjunction with Talison's strong cash reserves, positions the Company well for the future development of the lithium carbonate plant."
Oliver continued, "Adding to our record quarter, I am
pleased to report that the Expansion continues on-time and on budget as
it nears completion. The increased capacity provided by the expansion
will enable Talison to respond rapidly to changing conditions in the
lithium market."
1 Information in this press release is in
relation to the unaudited condensed consolidated interim financial
statements of Talison as at and for the interim period ended March 31,
2012 (collectively, the "Financial Statements") and should be read in
conjunction with 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 and
for the interim period ended March 31, 2012 (which can be found on
Talison's SEDAR profile at www.sedar.com).
3 The net profit and basic EPS for the nine
months ended March 31, 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 nine months ended March 31, 2012.
THIRD QUARTER-FINANCIAL RESULTS
Revenue of A$37.0 million was generated in the quarter, a 27% increase from the third quarter of fiscal 2011.
EBITDA of A$12.0 million represented a A$5.7 million, or 90%
increase over the corresponding period in the prior year. EBITDA margin
increased to 32%. Increases in revenue and EBITDA were primarily driven
by higher sales volume and an increase in average sales price.
Net profit and earnings per share for the third quarter of
A$8.2 million and A$0.076 were respectively a 112% and 100% increase on
the corresponding period in fiscal 2011.
Cash inflow from operating activities for third quarter of
A$16.3 million, was A$8.1 million higher than the corresponding period
in the prior year due to increased sales revenue.
Cash and cash equivalents at March 31, 2012 increased during
the quarter to A$85.1 million notwithstanding the ongoing capital
expenditure of the Expansion.
THIRD QUARTER-SALES & PRODUCTION RESULTS
Talison sold a record 111,896 tonnes of lithium concentrate
(approximately 16,600 tonnes lithium carbonate equivalent ("LCE")) in
the third quarter, representing a 15 per cent increase over the
corresponding period of fiscal 2011. Sales included approximately 38,000
tonnes of Talison's lithium concentrate that were delayed from the
second quarter.
Sales for the nine months ended March 31, 2012 of 267,432
tonnes of lithium concentrate (approximately 40,000 tonnes LCE)
materially matches production for the nine months ended March 31, 2012
of 273,286 tonnes of lithium concentrate (approximately 40,500 tonnes
LCE).
Production volume for the third quarter was a record 93,563
tonnes lithium concentrate (approximately 14,000 tonnes LCE), a 6%
increase compared to the third quarter fiscal 2011.
The average sales price of lithium concentrates sold during
the third quarter was US$340 per tonne, a 12% increase over the average
sales price of US$303 per tonne during the three months ended March 31,
2011. The increase in average sales price demonstrated the initial
impact from the price increase that applied from January 2012.
FISCAL 2012 OUTLOOK
Talison expects to sell approximately 350,000 to 360,000 tonnes of lithium concentrate for the full year ending June 30, 2012.
There are early indications of tightening in the global
supply of lithium, which may result in price increases, for the year
ending June 30, 2013. Following the completion of the Stage 2 Expansion
of the Greenbushes Lithium Operation, Talison will be well positioned to
adjust sales volumes in response to changing market conditions that
confirm a tightening market.
EXPANSION UPDATE
The Stage 2 Expansion at the Greenbushes Lithium Operations
continues to proceed on schedule and on budget. Commissioning of the
Expansion has now commenced and is expected to be completed by the end
of June 2012.
To view "Stage 2 Expansion at the Greenbushes Lithium Operations", please visit the following link: http://media3.marketwire.com/docs/Stage2.jpg.
THIRD QUARTER FINANCIAL RESULTS CONFERENCE CALL
Talison will host a conference call to discuss the financial
results on Monday, May 14, 2012 at 9.00 a.m. (EST). The call is being
webcast by Thomson Reuters and can be accessed at www.earnings.com or at Talison's website, www.talisonlithium.com.
The unaudited interim consolidated financial statements and
Management's Discussion and Analysis of the financial condition and
results of operations of Talison Lithium Limited as at and for the
interim period ended March 31, 2012 are accessible at Talison's website,
www.talisonlithium.com.
| Teleconference call details are as follows: | |
| North America: | +1 (800) 706 7748 |
| International: | +1 (617) 614 3473 |
| Participant Code: | 33870090 |
| Chairperson: | Peter Oliver, Chief Executive Officer and Managing Director |
| Replay | |
| Available from: | May 14, 2012, 11.00 a.m. (EST) |
| Available to: | May 21, 2012 |
| Dial In: | +1 (888) 286-8010 |
| International: | +1 (617) 801-6888 |
| Passcode: | 19830888 |
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 is doubling its production
capacity at the Greenbushes Operations and also developing several
growth projects including a lithium carbonate plant in Western
Australia.
| FINANCIAL STATEMENTS | ||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||
| Ended | Ended | Ended | Ended | |||||
| INCOME STATEMENT | March 31, 2012 | March 31, 2011 | March 31, 2012 | March 31, 2011 | ||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited)(1) | |||||
| A$'000 | A$'000 | A$'000 | A$'000 | |||||
| Sales revenue | 36,965 | 29,207 | 85,530 | 83,089 | ||||
| Operating costs | (21,766 | ) | (18,962 | ) | (52,457 | ) | (53,639 | ) |
| Other income / (expenses) | (3,235 | ) | (3,937 | ) | (9,596 | ) | (11,139 | ) |
| EBITDA(3) | 11,964 | 6,308 | 23,477 | 18,311(2 | ) | |||
| Depreciation and amortization | (625 | ) | (925 | ) | (2,038 | ) | (2,792 | ) |
| Net financing income / (costs) | 574 | 298 | 2,020 | (4,747 | ) | |||
| Net realized US$ hedging gain | 301 | 869 | 3,324 | 1,506 | ||||
| Net realized foreign exchange gain / (loss) | (805 | ) | (259 | ) | 207 | 8,936 | ||
| Net fair value gain/(loss) on financial assets and liabilities | 397 | (113 | ) | (4,957 | ) | 2,861 | ||
| Income tax (expense) / benefit | (3,586 | ) | (2,304 | ) | (6,564 | ) | (9,030 | ) |
| Net profit/(loss) for the period | 8,220 | 3,874 | 15,469 | 15,045 | ||||
| Basic earnings per share (cents/share)(4) | 7.6 | 3.8 | 14.3 | 18.1 | ||||
| Diluted earnings per share (cents/share)(4) | 7.6 | 3.7 | 14.3 | 17.5 | ||||
| Basic weighted average number of shares | 107,899,247 | 101,668,000 | 107,799,832 | 83,076,000 | ||||
| Notes: |
| (1) | The financial results for the nine months ended March 31, 2011 are comprised of the results of Talison for the period from August 12, 2010 to March 31, 2011 (i.e., post-Reorganization) and the carve-out results of the Greenbushes Lithium Operations for the period from July 1, 2010 to August 11, 2010 (i.e., pre-Reorganization). Readers are cautioned that the results for the period from July 1, 2010 to August 11, 2010 may not be reflective of the ongoing affairs of Talison. |
| (2) | EBITDA for the nine months ended March 31, 2011 included A$1.6 million in non-recurring Reorganization costs. |
| (3) | EBITDA is a non IFRS financial measure. For a reconciliation of EBITDA to its IFRS compliant income statement, see "Non-IFRS Performance Measures". |
| (4) | Basic and diluted earnings per share have been calculated based on the weighted average number of shares on issue. For the three and nine months ended March 31, 2012, the weighted average number of shares includes both the outstanding ordinary shares of Talison adjusted to remove ordinary shares held by the Talison Long Term Incentive Plan Trust which is consolidated under IFRS, and the exchangeable shares of Talison Lithium Exchangeco Limited, an indirect wholly-owned subsidiary of Talison that are exchangeable (on a one-for-one basis) for ordinary shares of Talison. For the three and nine months ended March 31, 2011, the weighted average number of shares includes the outstanding ordinary shares of Talison, the exchangeable shares of Talison Lithium Exchangeco Limited that are exchangeable (on a one-for-one basis) for ordinary shares of Talison, and the ordinary shares of Talison Minerals adjusted for the Talison Minerals share consolidation which occurred as part of the Reorganization. See "Outstanding Share Data". |
| As at | As at | ||||
| STATEMENT OF FINANCIAL POSITION | March 31, 2012 | June 30, 2011 | |||
| (Unaudited) | (Audited) | ||||
| A$'000 | A$'000 | ||||
| Assets | |||||
| Cash and cash equivalents | 85,057 | 102,605 | |||
| Trade and other receivables | 12,879 | 21,543 | |||
| Inventories | 17,808 | 11,182 | |||
| Derivative financial instruments | 3,891 | 10,205 | |||
| Property, plant and equipment | 142,314 | 95,215 | |||
| Exploration and evaluation assets | 62,982 | 61,714 | |||
| Total assets | 324,931 | 302,464 | |||
| Liabilities | |||||
| Trade and other payables | 12,954 | 12,380 | |||
| Interest-bearing liabilities | 27,647 | 29,243 | |||
| Tax payable | 6,781 | - | |||
| Provisions | 15,182 | 14,668 | |||
| Deferred tax liabilities | 9,136 | 10,622 | |||
| Total liabilities | 71,700 | 66,913 | |||
| Shareholders' equity | 253,231 | 235,551 | |||
| As at | As at | ||||
| March 31, 2012 | June 30, 2011 | ||||
| (Unaudited | ) | (Audited | ) | ||
| A$'000 | A$'000 | ||||
| Outstanding number of shares | |||||
| Ordinary shares of Talison | 112,003,670 | 110,527,347 | |||
| Exchangeable shares of Talison Lithium | |||||
| Exchangeco Limited(1) | 337,666 | 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 are exchangeable (on a one-for-one basis) for ordinary shares of Talison. See "Outstanding Share Data". | |
| (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
Talison Lithium Limited
Gary Dvorchak
CFA
+1 (310) 954-1123
gary.dvorchak@icrinc.com
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