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Talison Lithium Reports Second Quarter Fiscal Year 2013 Results


Talison Lithium Reports Second Quarter Fiscal Year 2013 Results

PERTH, WESTERN AUSTRALIA -- (Marketwire) -- 02/14/13 -- (TSX:TLH) Talison Lithium Limited ("Talison" or the "Company"), today announced its results for the three months ended December 31, 2012 ("Second Quarter")(1).

HIGHLIGHTS


 
--  Revenue of A$43.1m, a 90% increase on the corresponding period in the
    prior year ("q/q") 
--  EBITDA2 of A$14.9m, a A$9.5m or 177% q/q increase, and an EBITDA margin
    of 35% 
--  Net profit of A$9.4m3, and basic EPS of 8.5 cents per share 
--  Average sales price for the second quarter was US$367 per tonne, a 19%
    q/q increase 
 
----------------------------------------------------------------------------
HIGHLIGHTS      Three Months ended                Six Months ended          
                Dec 31 (unaudited)              Dec 31 (unaudited)          
(in thousands                                                               
 A$, unless                                                                 
 noted                                                                      
 otherwise)         FY13      FY12   % Change      FY13       FY12 % Change 
----------------------------------------------------------------------------
Sales Volume                                                                
 (tonnes                                                                    
 lithium                                                                    
 concentrate)    119,995  75,221(1)        60%  202,405  155,536(1)      30%
Sales Price                                                                 
 (Average                                                                   
 US$/tonne)          367       310         19%      361        320       13%
Revenue           43,128    22,686         90%   71,606     48,565       47%
Cash Operating                                                              
 COGS ($/tonne                                                              
 lithium                                                                    
 concentrate)        213       187         14%      209        197        6%
EBITDA          14,935(2)    5,387        177% 23,362(3)    11,513      103%
EBITDA Margin      35%(2)       24% +1,100b
ps     33%(3)        24% +900bps 
Net Profit       9,400(2)    5,642         67% 14,886(3)     7,249      105%
Basic EPS                                                                   
 (cents/share)     8.5(2)      5.2         63%   13.4(3)       6.7      100%
----------------------------------------------------------------------------
Notes:                                                                      
(1) Approximately 38,000 tonnes lithium concentrate sales were delayed from 
    Q2 FY2012 into Q3 FY2012 due to unscheduled shutdowns at the Port of    
    Bunbury.                                                                
(2) Excluding A$8.2 million in non-recurring acquisition advisory costs and 
    break fee.                                                              
(3) Excluding A$9.4 million in non-recurring acquisition advisory costs and 
    break fee.                                                              

SECOND QUARTER RESULTS

Sales of lithium concentrate during the Second Quarter of 119,995 tonnes (approximately 18,000 tonnes lithium carbonate equivalent) represented a 60% increase over the corresponding period in the prior year. In the corresponding period in the prior year, approximately 38,000 tonnes of Talison's lithium concentrate sales were delayed from December 2011 to January 2012 due to unscheduled shutdowns at the Port of Bunbury. Had this delay not occurred, sales of lithium concentrate during the Second Quarter would have represented a 6% increase over the corresponding period in the prior year.

Revenue of A$43.1 million was generated in the quarter, a 90% increase over the corresponding period in the prior year.

EBITDA of A$14.9 million (excluding A$8.2 million in non-recurring acquisition advisory costs and break fee) increased A$9.5 million or 177% over the corresponding period in the prior year. Including acquisition advisory costs and break fee, EBITDA for the Second Quarter was A$6.7 million, a 25% increase over the corresponding period in the prior year.

EBITDA margin of 35% (excluding non-recurring acquisition advisory costs and break fee) for the Second Quarter, compared to 24% in the corresponding period in the prior year. The increase in EBITDA was due to higher sales volume and an increase in the average sales price.

Net profit after tax of A$9.4 million (excluding non-recurring acquisition advisory costs and break fee), a 67% increase compared to the corresponding period in the prior year. Including non-recurring acquisition advisory costs and break fee, net profit after tax and basic EPS for the Second Quarter was A$3.7 million and 3.3 cents respectively.

Operating costs for the Second Quarter were A$25.6 million, 82% higher than the corresponding period in the prior year due to the increase in sales.

Cash inflow from operating activities for the Second Quarter of A$15.9 million (excluding acquisition advisory costs and break fee) was A$3.9 million higher than the corresponding period in the prior year due to the increase in sales.

Cash and cash equivalents at the end of the Second Quarter were A$87.4 million, an increase of A$13.2 million from the balance as at June 30, 2012.

OTHER INFORMATION

A Second Quarter conference call will not be held.

The unaudited condensed consolidated interim financial statements of Talison as at and for the interim period ended December 31, 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


 
                        Three Months Three Months   Six Months   Six Months 
                               Ended        Ended        Ended        Ended 
                        December 31, December 31, December 31, December 31, 
                                2012         2011         2012         2011 
INCOME STATEMENT         (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
                              A$'000       A$'000       A$'000       A$'000 
                                                                            
Sales revenue                 43,128       22,686       71,606       48,565 
Operating costs              (25,594)     (14,097)     (42,204)     (30,691)
Other income /                                                              
 (expenses)                   (2,600)      (3,202)      (6,041)      (6,361)
Acquisition advisory                                                        
 costs and break fee       (8,193)(2)           -    (9,366)(2)           - 
EBITDA(1) (See Key                                                          
 Results below)                6,741        5,387       13,995       11,513 
Depreciation and                                                            
 amortization                 (1,523)        (725)      (3,131)      (1,413)
Net financing income / 
                                                     
 (costs)                         412          589          807        1,446 
Net realized US$ hedging                                                    
 gain / (loss)                  (333)         975         (765)       3,023 
Net realized foreign                                                        
 exchange gain / (loss)         (186)         581         (696)       1,012 
Net fair value                                                              
 gain/(loss) on                                                             
 financial assets and                                                       
 liabilities                     (67)       1,065        1,180       (5,354)
Income tax (expense) /                                                      
 benefit                      (1,379)      (2,230)      (3,060)      (2,978)
Net profit/(loss) for                                                       
 the period (See Key                                                        
 Results below)                3,665        5,642        8,330        7,249 
                                                                            
                                                                            
Basic earnings per share                                                    
 (cents/share)(3) (See                                                      
 Key Results below)              3.3          5.2          7.6          6.7 
Diluted earnings per                                                        
 share (cents/share)(3)          3.3          5.2          7.4          6.7 
Basic weighted average                                                      
 number of shares        110,988,333  107,771,151  109,846,776  107,751,096 
                                                                            
                                                                            
Key Results (excluding acquisition advisory costs and break fee)            
EBITDA(1)                    14,934          5,387         23,361     11,513
Net profit for the                                                          
 period                       9,400          5,642         14,886      7,249
Basic earnings per                                                          
 share                                                                      
 (cents/share)(3)               8.5            5.2           13.4        6.7
                                                                            
Notes:                                                                      
(1) EBITDA is a non IFRS financial measure. For a reconciliation of EBITDA  
    to its IFRS compliant income statement, see "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 December 31, 2012 (which can be found on   
    Talison's SEDAR profile at http://www.sedar.com/).                      
(2) A$8.2 million and A$9.4 million in non-recurring advisory costs and     
    break fee associated with the proposed Rockwood acquisition and the     
    Tianqi Schemes were incurred during three and six months ended December 
    31, 2012, respectively. The Tianqi Schemes contemplate that Windfield   
    Holdings Pty Ltd, an Australian incorporated subsidiary of Chengdu      
    Tianqi Industry (Group) Co., Ltd, will acquire the balance of the       
    ordinary shares in the capital of Talison ("Shares") that it does not   
    already own through a scheme of arrangement for cash consideration of   
    C$7.50 and 100% of the options to acquire Shares ("Options") through an 
    option scheme of arrangement for cash consideration of C$7.50 per Option
    less the exercise price for that Option.                                
(3) Basic and diluted earnings per share have been calculated based on the  
    weighted average number of shares on issue. For the three and six months
    ended December 31, 2012, 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. For the three and six months ended December 31,
    2011, 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. See "Outstanding Share Data" 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 December 31, 2012
    (which can be found on Talison's SEDAR profile at                       
    http://www.sedar.com/).                                                 
                                                                            
                                                                            
                                                        As at          As at
                                            December 31, 2012  June 30, 2012
                                                  (Unaudited)      (Audited)
STATEMENT OF FINANCIAL POSITION                        A$'000         A$'000
----------------------------------------------------------------------------
Assets                                                                      
Cash and cash equivalents                              87,413         74,178
Trade and other receivables                            15,489         18,355
Inventories                                            20,989         16,040
Derivative financial instruments                        2,291          2,984
Property, plant and equipment                         170,862        166,369
Exploration and evaluation assets                      15,273         14,500
Total assets                                          312,317        292,426
                                                                            
Liabilities                                                                 
Trade and other payables                               13,624         14,270
Interest-bearing liabilities                           26,904         27,548
Tax payable                                             9,613          5,348
Provisions                                             19,797         20,775
Deferred tax liabilities                                9,574         10,038
Total liabilities                                      79,512         77,979
Shareholders' equity                                  232,805        214,447
                                                                            
                                                                            
                                                       As at                
                                                Decembe
r 31,          As at 
                                                        2012  June 30, 2012 
                                                 (Unaudited)      (Audited) 
                                                      A$'000         A$'000 
----------------------------------------------------------------------------
                                                                            
Outstanding number of shares                                                
Ordinary shares of Talison                       114,401,293    112,341,336 
Shares held in trust                              (3,082,410)    (4,299,367)
Total outstanding number of shares               111,318,883    108,041,969 

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, among 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, 2012 dated September 26, 2012, 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.

1 Information in this press release is in relation to the unaudited condensed consolidated interim financial statements of Talison as at December 31, 2012 and for the three and six months ended December 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 Reporti ng 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 EBITDA excluding A$8.2 million in non-recurring acquisition advisory costs and break fee. 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 December 31, 2012 (which can be found on Talison's SEDAR profile at www.sedar.com).

3 Net profit and basic EPS excluding A$8.2 million in non-recurring acquisition advisory costs and break fee. Contacts: Talison Lithium Limited Frank Wheatley Executive Director +1 (604) 985 0528 frank.wheatley@talisonlithium.com www.talisonlithium.com

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