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
Subsequent Events
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%.
Income Statement
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.
Dividends
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.
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