Talison Lithium Reports Third Quarter Fiscal 2012 Results
PERTH, WESTERN AUSTRALIA -- (Marketwire) -- 05/10/12 -- Talison Lithium Limited ("Talison" or the "Company") (TSX: TLH), today announced results for the third quarter of the 2012 fiscal year(1).
THIRD QUARTER HIGHLIGHTS
-- Record revenue and EBITDA(2) 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$85.1m at March 31, 2012
notwithstanding continued capital expenditure during the quarter for the
Expansion
-- Outlook remains positive, with early indications that global supply may
tighten in FY2013
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THIRD QUARTER % %
HIGHLIGHTS Three Months ended Change Nine Months ended Change
March 31
(unaudited) March 31 (unaudited)
(in thousands A$,
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 +1,000
32% 22% bps 27% 22% +500bps
Net Profit $ 8,220 $ 3,874 112% $ 15,469 $15,045(3) 3%
Basic EPS
(cents/share) 7.6 3.8 100% 14.3 18.1(3) (21%)
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"Talison had an outstanding third quarter, with records achieved in sales volume, revenue and EBITDA." Peter Oliver, Chief Executive Officer and Managing Director commented. "This exceptional performance, in conjunction with Talison's strong cash reserves, positions the Company well for the future development of the lithium carbonate plant."
Oliver continued, "Adding to our record quarter, I am pleased to report that the Expansion continues on-time and on budget as it nears completion. The increased capacity provided by the expansion will enable Talison to respond rapidly to changing conditions in the lithium market."
(1) Information in this press release is in relation to the unaudited condensed consolidated interim financial statements of Talison as at and for the interim period ended March 31, 2012 (collectively, the "Financial Statements") and should be read in conjunction with Financial Statements. The financial information contained in this press release is derived from the Financial Statements, which were prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts in this press release are expressed in Australian dollars ("A$") 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.
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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
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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
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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
March 31, March 31, March 31,
INCOME STATEMENT 2012 2011 2012 March 31, 2011
(Unaudited) (Unaudited) (Unaudited) (Unaudited)(1)
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A$'000 A$'000 A$'000 A$'000
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Sales revenue 36,965 29,207 85,530 83,089
Operating costs (21,766) (18,962) (52,457) (53,639)
Other income /
(expenses) (3,235) (3,937) (9,596) (11,139)
EBITDA(3) 11,964 6,308 23,477 18,311(2)
Depreciation and
amortization (625) (925) (2,038) (2,792)
Net financing income /
(costs) 574 298 2,020 (4,747)
Net realized US$
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
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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
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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.
Contacts:
Talison Lithium Limited
Gary Dvorchak
CFA
+1 (310) 954-1123
gary.dvorchak@icrinc.com