Press release from CNW Group
Sprott Inc. announces 2013 second quarter results
Thursday, August 08, 2013
Sprott Inc. announces 2013 second quarter results07:00 EDT Thursday, August 08, 2013
TORONTO, Aug. 8, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the three and six months ended June 30, 2013.
Q2 2013 Overview
- Assets Under Management ("AUM") were $7.1 billion as at June 30, 2013, compared to $8.5 billion as at June 30, 2012 and $9.1 billion as at March 31, 2013
- Assets Under Administration ("AUA") were $2.6 billion as at June 30, 2013, compared to $3.8 billion as at June 30, 2012 and $3.3 billion as at March 31, 2013
- Management Fees were $21.5 million, a decrease of 23.6% compared with the three months ended June 30, 2012
- EBITDA was $8.1 million ($0.05 per share), compared with $10.4 million ($0.06 per share) for the three months ended June 30, 2012, a decrease of 22.0%
- Net loss was $6.7 million (negative $0.04 per share) for the three months ended June 30, 2013, compared with net income of $0.7 million ($0.00 per share) for the three months ended June 30, 2012
- On July 23, 2013, Sprott completed the acquisition of all of the outstanding shares of Sprott Resource Lending Corp.
- As previously announced, effective July 31, 2013 Renewable Energy Developers Inc. ("ReD"), formerly Sprott Power Corp. terminated the Management Services Agreement between Sprott Consulting Limited Partnership and ReD.
"In July, we completed the acquisition of Sprott Resource Lending Corp. in a transaction that further strengthens our balance sheet and provides us with the ability to reposition our business to thrive in a changing asset management landscape," said Mr. Grosskopf. "We now have more than $350 million in available capital that we will actively deploy to seed new products and pursue synergistic acquisition opportunities. We also intend to re-launch our successful resource lending strategy and expand our private equity business through new limited partnerships that we will be developing this fall."
"We are focused on positioning the business for better performance, developing new products and increasing client diversity," continued Mr. Grosskopf. "At the same time, we are committed to managing expenses through prudent cost cutting measures."
|For the three months ended||For the six months ended|
|June 30,||June 30,|
|($ in millions)||2013||2012||2013||2012|
|AUM, beginning of period||9,110||9,683||9,931||9,137|
|Net sales (redemptions)||(144)||(158)||(418)||387|
|Market value depreciation of portfolios||(1,819)||(1,040)||(2,366)||(1,039)|
|AUM, end of period||7,147||8,485||7,147||8,485|
Assets Under Management
At June 30, 2013, AUM decreased by 15.8% to $7.1 billion from $8.5 billion at June 30, 2012. Net redemptions for the three months ended June 30, 2013 were nearly $0.2 billion. Average AUM for the three months ended June 30, 2013 was $8.0 billion compared with $9.0 billion for the three months ended June 30, 2012, a decrease of 10.8%.
Total revenues for the three months ended June 30, 2013, decreased by 39.6% to $16.6 million from $27.4 million for the three months ended June 30, 2012. For the six months ended June 30, 2013, total revenues decreased by 38.6% to $44.1 million from $71.8 million in the first six months of 2012.
For the three months ended June 30, 2013, management fees decreased by 23.6% to $21.5 million from $28.1 million in the three months ended June 30, 2012. For the first six months of 2013, management fees decreased by 22.4% to $47.4 million from $61.1 million in the first half of 2012. The decrease in management fees is primarily attributable to both the lower average AUM for the three and six months ended June 30, 2013 as well as an increase in lower fee products such as the physical bullion trusts and fixed-income funds.
Losses from proprietary investments, which include investments in products that Sprott manages, certain other resource-related stocks and warrants, and bullion, totaled $9.5 million, compared with $4 million in the three months ended June 30, 2012. For the six months ended June 30, 2013, losses from proprietary investments totaled $12.5 million, compared with gains of $0.3 million during the first six months of 2012.
Commission revenue for the three months ended June 30, 2013, decreased by $0.5 million to $1.6 million from $2.1 million during the three months ended June 30, 2012. For the six months ended June 30, 2013, commission revenue decreased by $4.2 million to $3.6 million from $7.8 million during the prior year period.
Total expenses for the three months ended June 30, 2013 were $26.7 million, an increase of $0.5 million or 1.7% compared with $26.2 million for the three months ended June 30, 2012. Total expenses for the first six months of 2013 were $50.4 million, an increase of 2.0% from $49.4 million in the six months ended June 30, 2012.
EBITDA for the three months ended June 30, 2013 was $8.1 million, representing a decrease of $2.3 million or 22.0% compared with the three months ended June 30, 2012. For the six months ended June 30, 2013, EBITDA decreased by 30.3% to $18.5 million from $26.6 million in the first half of 2012.
Net loss for the three months ended June 30, 2013 was $6.7 million (negative $0.04 per share) compared to net income of $0.7 million ($0.00 per share) for the three months ended June 30, 2012. Net loss for the first six months of 2013 was $4.6 million (negative $0.03 per share), compared to net income of $17.7 million ($0.10 per share) for the six months ended June 30, 2012.
On May 7, 2013, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2013. On August 7, 2013, a dividend of $0.03 per common share was declared for the quarter ended June 30, 2013.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday, August 8, 2013 at 10:00am ET to discuss the Company's financial results. To participate in the call, please dial 416-764-8688 or 1-888-390-0546 ten minutes prior to the scheduled start of the call. A taped replay of the conference call will be available until Thursday, August 15, 2013 by calling 416-764-8677or 1-888-390-0541, reference number 29871520. The conference call will be webcast live at www.sprottinc.com and www.newswire.ca
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, AUA, EBITDA and net sales) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-IFRS measures, including the calculation of these measures, please refer to the "Non-IFRS Financial Measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com.
This release contains "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's annual information form dated March 26, 2013. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies. Sprott U.S. Holdings Inc. includes Sprott Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
SOURCE: Sprott Inc.
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