27th Mar 2019 09:05
LONDON (Alliance News) - Anglo Pacific Group PLC on Wednesday reported strong royalty growth during 2018, boosted by its core Kestrel and Maracas Menchen mine investments.
Overall royalty income rose 13% to GBP42.1 million in the year, with Kestrel's rising 13% to GBP32.6 million and Maracas Menchen nearly trebling to GBP5.9 million.
Kestrel is an underground coal mine in Queensland, Australia, operated by EMR Capital and PT Adaro Energy, while Maracas Menchen is a vanadium mine in Brazil.
Royalties from its Narrabri coal mine in New South Wales fell 29% to GBP3.5 million, while there was a maiden GBP100,000 contribution from the Four Mile uranium mine in South Australia.
On the back of this strong income growth, Anglo Pacific is paying a 3.125 pence final dividend, which takes its total for 2018 to 8p, 14% higher year-on-year.
Anglo Pacific's pretax profit rose fourfold to GBP44.5 million, due in part to the increased royalties.
Chief Executive Julian Treger said: "2018 was the second year in a row in which we reported record contribution from our royalty portfolio.
"Based on 2018 revenue, we have now successfully increased revenues by approximately GBP15 million annually over the last four years. We have also systematically strengthened the balance sheet, senior management and the board which together provides the company with added firepower to grow and execute accretive transactions."
"This is good progress, but we have more to do and our target for 2019 is accelerating the rate of our growth," he continued.
Looking to 2019, Anglo Pacific expects "significant" volume growth at Kestrel, whose operators are targeting a 40% rise in production in the year.
"The backdrop for raising capital for natural resources companies continues to be challenging given the scarcity of capital in the sector, however we feel confident we can continue to make investments and grow our portfolio in a meaningful way in 2019," said Treger.
Shares were 2.3% higher on Wednesday morning at a price of 165.65 pence each.
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