Paris, France, February 23, 2018: EURO
Ressources S.A. ("EURO" or "the Company") (Paris: EUR) today
announced its audited statutory financial results prepared in
accordance with French Generally Accepted Accounting Principles
("GAAP") and its audited financial results prepared in accordance
with International Financial Reporting Standards ("IFRS") for the
year ended December 31, 2017. These audited financial results
were approved by the Board of Directors on February 23, 2018.
All financial amounts are expressed in Euros ("€" or "euros")
unless otherwise specified.
Under French GAAP, EURO reported a net profit of
€15.9 million (€0.255 per share) for the year ended December
31, 2017, compared to €16.0 million (€0.256 per share) for the
year ended December 31, 2016.
Under IFRS, EURO reported a net profit of
€18.7 million (€0.299 per share) for the year ended December
31, 2017, compared to €15.9 million (€0.255 per share) in
2016.
Highlights for 2017
EURO recorded revenues of €26.1 million in
2017 similar to revenues reported in 2016.
EURO distributed a dividend in the amount of
€9.4 million (€0.15 per share) in June 2017.
Liquidity and capital resources
Cash at December 31, 2017 totaled €15.5 million
as compared to €11.1 million at December 31, 2016. The
increase was mainly due to cash flow from operating activities
partially offset by a dividend paid in 2017.
Comments on financial results prepared in accordance with
French GAAP for the year ended December 31, 2017
EURO recorded revenues of €26.1 million in
2017 similar to revenues reported in 2016. Revenues were mainly
attributable to the Rosebel royalty for €25.7 million in 2017
(2016: €25.7 million). Revenues were similar but
included the impact of a higher average gold price of US$1,258 per
ounce in 2017 compared to US$1,249 per ounce in 2016
(€0.3 million), and higher gold production with 318,117 ounces
in 2017 compared to 311,808 ounces during 2016 (€0.2 million),
offset by the negative impact of a stronger euro
(€0.5 million).
Under French GAAP, operating expenses (excluding
amortization and depreciation expenses) totaled €1.08 million
in 2017 compared to €0.76 million in 2016. The increase
was mainly due to higher administrative costs in 2017 following the
accounting of a credit adjustment in 2016, and higher legal fees
during 2017 mainly related to the claim of prior years' tax on
dividends.
The amortization expense for €0.527 million
in 2017 was lower than the amortization expense of
€0.585 million in 2016 mainly due to higher gold reserves at
the Rosebel mine.
EURO recorded a net foreign exchange loss of
€2.6 million in 2017 compared to a gain of €0.2 million
in 2016, mainly due to a significant fluctuation of foreign
exchange rates in 2017 used for the conversion of bank accounts and
trade receivables held in US dollars.
Under French GAAP, EURO recorded an income tax
expense of €6.3 million in 2017 compared to €9.0 million
in 2016. The decrease was mainly due to the tax impact of the
higher foreign exchange loss and the reimbursement receivable of
the 3% tax on dividends paid during prior years. On October
6, 2017, the Constitutional Council of France ruled that the 3% tax
on dividends in its entirety is contrary to the Constitution.
Therefore, whatever the origin of the dividends distributed
(distribution of dividends from subsidiaries or operating profit),
this 3% tax is abolished from that date. The Constitutional
Council's decision also applies retrospectively. EURO's
estimated refund of the tax on dividends paid from 2014 to 2017 of
€1.56 million was accounted for in 2017.
Select IFRS financial results for 2017 compared to
2016
Since December 31, 2010, EURO no longer prepares
and publishes consolidated financial statements for French
purposes; only French GAAP can be applied for the presentation of
statutory financial statements and approval by the shareholders.
However, in order to comply with Canadian requirements and
have equivalency of information between French financial
requirements and Canadian financial requirements, the following
information on the IFRS financial results is provided for
comparison purposes.
2017 compared to 2016 (IFRS)
Under IFRS, EURO recorded a net profit of
€18.7 million (€0.299 per share) in 2017 compared to
€15.9 million (€0.255 per share) during 2016.
Under IFRS, revenues totaled €26.1 million
in 2017 compared to revenues of €26.1 million during 2016, the
same as under French GAAP as explained above.
Operating expenses in 2017 were
€0.5 million, higher than €0.4 million in 2016. The
difference was mainly due to higher administrative costs in 2017
following the accounting of a credit adjustment in 2016, and higher
legal fees during 2017 mainly related to the claim of prior years'
tax on dividends, partially offset by a reimbursement of operating
taxes paid in prior years and interest receivable on the
reimbursement of tax on dividends.
The amortization expense of €0.6 million
during 2017 was lower than the amortization expense of
€0.7 million recorded during 2016, mainly due to higher gold
reserves at the Rosebel mine.
EURO recorded an income tax expense of
€6.2 million in 2017 compared to €9.2 million in
2016. The decrease was mainly due to translation adjustments
and the reimbursement receivable of the 3% tax on dividends paid
during prior years as mentioned above.
Fourth quarter ended December 31, 2017
compared to the same period in 2016 (IFRS)
Under IFRS, EURO recorded a net profit of €6.1 million
(€0.097 per share) for the fourth quarter of 2017 compared to €4.1
million (€0.066 per share) for the fourth quarter of
2016.
Revenues were €6.7 million during the
fourth quarter of 2017, a decrease of 8% compared to revenues of
€7.2 million for the fourth quarter of 2016. Revenues
were mainly attributable to the Rosebel royalty of
€6.6 million (fourth quarter of 2016:
€7.2 million). The decrease in revenues was mainly due
to lower gold production with 83,595 ounces in the fourth quarter
of 2017 compared to 88,121 ounces during the fourth quarter of 2016
(€0.5 million), and the strengthened euro (€0.5 million),
partially offset by the higher average gold price during the fourth
quarter of 2017 of US$1,275 per ounce of gold compared to US$1,222
per ounce of gold during the fourth quarter of 2016
(€0.4 million).
The amortization expense of €0.14 million
during the fourth quarter of 2017 was lower than the amortization
expense of €0.21 million recorded during the fourth quarter of
2016, mainly due to higher gold reserves at the Rosebel mine.
EURO recorded income tax expense of
€0.4 million during the fourth quarter of 2017 compared to
€2.9 million during the fourth quarter of 2016. The
decrease was mainly due to translation adjustments and the
reimbursement receivable of the 3% tax on dividends paid during
prior years as mentioned above.
Marketable securities
EURO holds marketable securities related to
mining companies which are part of a volatile market. Share
market price exposure risk is related to the fluctuation in the
market price of marketable securities. This investment in
marketable securities is recorded at fair value.
Marketable securities were comprised of
19.1 million shares of Columbus Gold Corp. ("Columbus") (12.0%
of outstanding shares at December 31, 2017;
December 31, 2016: 13.4%).
Subsequent event
Following the approval of an arrangement by
Columbus' shareholders on November 27, 2017, and the approval from
the TSX Venture exchange, Columbus completed the spin-out of
Allegiant Gold Ltd ("Allegiant") to Columbus shareholders.
EURO holds 19,095,345 shares of Columbus. Accordingly, EURO
received in January 2018, a common share of Allegiant for every
five Columbus shares held, being 3,819,069 shares. This
transaction resulted in a non-cash gain of €1.7 million which will
be accounted for in 2018, based on the fair value of shares
received of C$0.68 per share on the date of the transaction.
Outlook
The Rosebel royalty production in 2017 was
318,117 ounces and is anticipated to be between 311,000 ounces and
326,000 ounces in 2018. In 2018, the Rosebel royalty is
expected to provide revenues to the Company of between
approximately €23.7 million and €24.9 million
(US$28.0 million and US$29.4 million). These pre-tax
numbers assume a gold price of US$1,250 per ounce and an exchange
rate of €1 for US$1.18. The impact of changes in the average
gold price on EURO's annual revenues, based on an estimated
production of 318,000 ounces, would be approximately
US$3.1 million for each US$100 per ounce change in the gold
price. The impact of a 5% change in the average foreign
exchange rate on EURO's annual revenues would be approximately
€1.2 million. EURO's cash flow is expected to be
primarily affected by income tax payments.
About EURO
EURO is a French company whose principal asset
is a gold production royalty from the Rosebel gold mine in Suriname
(the "Rosebel royalty"). The Rosebel gold mine is 95%-owned by
IAMGOLD Corporation ("IAMGOLD"), and is operated by IAMGOLD.
EURO has approximately 62.5 million shares outstanding.
At December 31, 2017, IAMGOLD France S.A.S., a wholly owned
subsidiary of IAMGOLD, owned approximately 89.71% of all issued
outstanding shares of EURO.
Statements Regarding Forward-Looking
Information: Some statements in this news release
are forward-looking statements. Investors are cautioned that
forward-looking statements are inherently uncertain and involve
risks and uncertainties. There can be no
assurance that future developments affecting the Company will be
those anticipated by management.
Not for distribution to United States newswire
services or for dissemination in the United States. The securities
referred to herein have not been registered under the United States
Securities Act of 1933, as amended (the Securities Act), and may
not be offered or sold in the United States or to a U.S. person
absent registration, or an applicable exemption from the
registration requirements of the Securities Act.
Additional information relating to
EURO Ressources S.A. is available on SEDAR at
www.sedar.com. Further requests for information should be
addressed to:
Benjamin LittleDirecteur-GénéralTel: +1 416 933 4954Email:
blittle@euroressources.net |
Line
LacroixDirecteur-Général DéléguéTel: +1 450 677 2056Email :
llacroix@euroressources.net |
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/b885f975-2872-4e08-b4b7-81b69b629ec4
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