Champion Iron posts 41% drop in Q4 net income, revises dividend policy
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The news: Champion Iron reported fourth-quarter net income of CAD23.1 million ($23.4 million), marking a 41% drop year on year, as costs surged during the period.
The numbers: The iron ore produce reported quarterly revenue of CAD414.5 million, down 3% compared to the prior corresponding period. Earnings (EBITDA) fell 10% to CAD114.3 million.
Quarterly production of 3.4 million wet metric tonnes was an 8% increase year on year. Quarterly sales of 3.5 million dry metric tonnes was flat with the prior-year period.
Freight and other costs jumped 18% year on year, partially due to a recent increase in market rates driven by the escalation of the conflict in Iran.
Champion’s C1 cash cost for the period was negatively impacted by lower volumes transported to port yard facilities due to rail service disruptions and severe winter conditions, along with a “significant rise” in fuel prices attributed to the Middle East conflict.
The board has approved a revised shareholder return framework for future dividends from FY27, aimed at providing semi-annual payouts of between 30% and 40% of the company’s trailing six-month free cashflow.
The company said the change “provides flexibility for potentially higher dividend distributions in periods of strong financial results and low capital investments, while preserving the company’s balance sheet in periods of softer profitability and increased capital requirements”.
What they said: “Although we are near the completion of a multi-year growth capital investment cycle at Bloom Lake, our focus is to protect our financial liquidities in response to the volatile macroeconomic environment and rising fuel and freight prices,” said Champion CEO David Cataford.
“Looking forward, our revised dividend policy will align our shareholder returns with our company’s financial capacity.”
The source: ASX
