Market Overview

Noranda Income Fund Announces a Restatement of Its December 31, 2017 Consolidated Financial Statements

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SALABERRY-DE-VALLEYFIELD, QUÉBEC, April 26, 2018 (GLOBE NEWSWIRE) -- Noranda Income Fund (TSX:NIF) (the "Fund") announces a restatement to its December 31, 2017 consolidated financial statements. Following the filing on March 15, 2018 of the audited consolidated financial statements as at and for the years ended December 31, 2017 and 2016, management and the Fund's external auditors reconsidered the accounting treatment of the sale of the 20,000 tonnes of zinc cathode to Glencore Canada in November 2017. As previously disclosed, the extra cathode had been produced because of the roasters, leaching plant and cell house operating at 70% of capacity during the second half of the year, while the zinc casting facility operated at 50% of capacity. The sale of cathode decreased the volume of inventory for the Fund and reduced the Fund's working capital. The transaction had been reported as a sale but, following this reconsideration, the Fund has determined that a correction was required and the accounting treatment has been changed to reflect a financing transaction in light of the tolling requirement should Glencore Canada choose not to ship the cathode to another processing facility.  Therefore, the Fund has restated its previously reported consolidated financial statements as at and for the year ended December 31, 2017 and all related disclosures. The financial statements as at and for the year ended December 31, 2016 are not affected by the restatement. The impact of the correction is as follows (in thousands of US dollars):

Consolidated statement of financial position  As reported  Adjustments  Restated
       
Inventories   171,655     60,376     232,031  
Prepaid and other assets   1,854     1,864     3,718  
Deferred tax assets   12,453     (501 )   11,952  
       
Trade and other payables   26,835     (1,195 )   25,640  
Deferred revenues   -     61,459     61,459  
       
Net assets attributable to Unitholders and
  Non-controlling interest
  156,333     1,475     157,808  
       
Net assets attributable to:      
Priority Unitholders   123,002     1,106     124,108  
Ordinary Unitholders   41,023     369     41,392  
    164,025     1,475     165,500  
Non-controlling interest   (7,692 )   -     (7,692 )
    156,333     1,475     157,808  

On the amended and restated consolidated statement of financial position, the restatement resulted in the increase in the reported inventories and an increase in deferred revenues reported. The trade and other payables were reduced reflecting the reduction of the transportation and distribution costs. Prepaid and other assets were increased reflecting the prepaid financing cost associated with the transaction.

Consolidated statement of comprehensive loss  As reported  Adjustments  Restated
       
Sales   677,159     (59,062 )   618,097  
Transportation and distribution costs   (13,503 )   1,195     (12,308 )
Revenues   663,656     (57,867 )   605,789  
Raw material purchase costs   523,058     (51,700 )   471,358  
Net revenues less raw material purchase costs   140,598     (6,167 )   134,431  
Other expenses - Production   118,902     (7,728 )   111,174  
Depreciation   18,100     (948 )   17,152  
Loss before finance costs and income taxes   (29,867 )   2,509     (27,358 )
Finance costs, net   5,211     533     5,744  
Loss before income taxes   (35,078 )   1,976     (33,102 )
Deferred income tax recovery   (577 )   501     (76 )
Loss attributable to Unitholders and Non-controlling interest   (26,811 )   1,475     (25,336 )
Decrease in net assets attributable to Unitholders and
  Non-controlling interest
  (27,522 )   1,475     (26,047 )
Comprehensive loss   (19,785 )   1,475     (18,310 )
       
Decrease in net assets attributable to:      
Priority Unitholders   (15,825 )   1,106     (14,719 )
Ordinary Unitholders   (5,275 )   369     (4,906 )
    (21,100 )   1,475     (19,625 )
Non-controlling interest   (6,422 )   -     (6,422 )
    (27,522 )   1,475     (26,047 )
Comprehensive loss attributable to:      
Priority Unitholders   (10,940 )   1,106     (9,834 )
Ordinary Unitholders   (3,645 )   369     (3,276 )
    (14,585 )   1,475     (13,110 )
Non-controlling interest   (5,200 )   -     (5,200 )
    (19,785 )   1,475     (18,310 )

On the amended and restated consolidated statements of comprehensive loss, the restatement resulted in the reversal of the sales, transportation and distribution costs, raw material purchase costs, production expenses and depreciation associated with the cathode sale. In addition, a finance cost was recorded related to the transaction.

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