Mesabi Trust (MSB, Financial) filed Quarterly Report for the period ended 2011-10-31.
Mesabi Trust has a market cap of $359.4 million; its shares were traded at around $27.39 with a P/E ratio of 11.7 and P/S ratio of 10.8. The dividend yield of Mesabi Trust stocks is 16.4%. Mesabi Trust had an annual average earning growth of 16.4% over the past 10 years. GuruFocus rated Mesabi Trust the business predictability rank of 1-star.
The table below shows that the base overriding royalties and the bonus royalties for the three months ended October 31, 2011, as compared to the three months ended October 31, 2010, increased by $847,708, and $1,494,636, respectively. Fee royalties increased by $50,586 over the same period. The increases in the base overriding royalties and the bonus royalties are both attributable to higher realized sales prices per ton, as compared to the three months ended October 31, 2010.
The table below shows that the bonus royalties, and the fee royalties increased $381,576, and $178,198 respectively, and the base overriding royalties decreased $774,367 for the nine months ended October 31, 2011, from the comparable period in 2010. The increase in the bonus royalties is attributable to the higher sales prices per ton of iron ore pellets during the nine months ended October 31, 2011, as compared to the nine months ended October 31, 2010. The decrease in the base overriding royalties is attributable to lower volume of total shipments of iron ore products from Mesabi Trust lands during the nine months ended October 31, 2011, as compared to the nine months ended October 31, 2010. For the nine months ended October 31, 2011 and October 31, 2010, components of Mesabi Trusts royalty income were as described below.
Net income for the three months ended October 31, 2011 was $13,756,337, an increase of $2,359,771 compared to the three months ended October 31, 2010. As with the increase in total royalty income, the increase in net income for the quarter ended October 31, 2011 was the result of higher sales prices per ton of iron ore pellets shipped, partially offset by a decrease in the volume of tons shipped. The Trusts expenses increased $32,321 for the three months ended October 31, 2011, as compared to the three month period ended October 31, 2010, as a result of higher expenses incurred in connection with the administration of the Trust, mostly due to higher legal and accounting fees and insurance expenses. The increase in legal and accounting fees was primarily driven by additional regulatory requirements (chiefly, the new XBRL format requirements) and reviewing the impact of the settlement agreement between Cliffs and Arcelor-Mittal. The table below summarizes the Trusts income and expenses for the three months ended October 31, 2011 and October 31, 2010.
The Trustees have determined that the unallocated cash and U.S. Government securities portion of the Unallocated Reserve should be maintained at a prudent level, usually within the range of $500,000 to $1,000,000, to meet present or future liabilities of the Trust. The actual amount of the Unallocated Reserve will fluctuate from time to time and may increase or decrease from its current level. Future distributions will be highly dependent upon royalty income as it is received, changes in estimated pricing, potential for future price adjustments and the level of Trust expenses. The amount of future royalty income available for distribution will be subject to the volume of iron ore product shipments and the dollar level of sales by Northshore. Shipping activity is greatly reduced during the winter months and economic conditions, particularly those affecting the steel industry, may adversely affect the amount and timing of such future shipments and sales. The Trustees will continue to monitor the economic and other circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain a reserve for unexpected loss contingencies at a prudent level, given the unpredictable nature of the iron ore industry, the Trusts dependence on the actions of the lessee/operator, and the fact that the Trust essentially has no other liquid assets.
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Mesabi Trust has a market cap of $359.4 million; its shares were traded at around $27.39 with a P/E ratio of 11.7 and P/S ratio of 10.8. The dividend yield of Mesabi Trust stocks is 16.4%. Mesabi Trust had an annual average earning growth of 16.4% over the past 10 years. GuruFocus rated Mesabi Trust the business predictability rank of 1-star.
Highlight of Business Operations:
Total royalty income for the three months ended October 31, 2011 increased by $2,392,930 to $13,967,426, as compared to the three months ended October 31, 2010. The increase in total royalty income, despite the fact that total shipments during the period decreased from the prior comparable period, is due to an increase in the average sales price per ton during the three months ended October 31, 2011 as compared to the three months ended October 31, 2010.The table below shows that the base overriding royalties and the bonus royalties for the three months ended October 31, 2011, as compared to the three months ended October 31, 2010, increased by $847,708, and $1,494,636, respectively. Fee royalties increased by $50,586 over the same period. The increases in the base overriding royalties and the bonus royalties are both attributable to higher realized sales prices per ton, as compared to the three months ended October 31, 2010.
The table below shows that the bonus royalties, and the fee royalties increased $381,576, and $178,198 respectively, and the base overriding royalties decreased $774,367 for the nine months ended October 31, 2011, from the comparable period in 2010. The increase in the bonus royalties is attributable to the higher sales prices per ton of iron ore pellets during the nine months ended October 31, 2011, as compared to the nine months ended October 31, 2010. The decrease in the base overriding royalties is attributable to lower volume of total shipments of iron ore products from Mesabi Trust lands during the nine months ended October 31, 2011, as compared to the nine months ended October 31, 2010. For the nine months ended October 31, 2011 and October 31, 2010, components of Mesabi Trusts royalty income were as described below.
Net income for the three months ended October 31, 2011 was $13,756,337, an increase of $2,359,771 compared to the three months ended October 31, 2010. As with the increase in total royalty income, the increase in net income for the quarter ended October 31, 2011 was the result of higher sales prices per ton of iron ore pellets shipped, partially offset by a decrease in the volume of tons shipped. The Trusts expenses increased $32,321 for the three months ended October 31, 2011, as compared to the three month period ended October 31, 2010, as a result of higher expenses incurred in connection with the administration of the Trust, mostly due to higher legal and accounting fees and insurance expenses. The increase in legal and accounting fees was primarily driven by additional regulatory requirements (chiefly, the new XBRL format requirements) and reviewing the impact of the settlement agreement between Cliffs and Arcelor-Mittal. The table below summarizes the Trusts income and expenses for the three months ended October 31, 2011 and October 31, 2010.
The Trustees have determined that the unallocated cash and U.S. Government securities portion of the Unallocated Reserve should be maintained at a prudent level, usually within the range of $500,000 to $1,000,000, to meet present or future liabilities of the Trust. The actual amount of the Unallocated Reserve will fluctuate from time to time and may increase or decrease from its current level. Future distributions will be highly dependent upon royalty income as it is received, changes in estimated pricing, potential for future price adjustments and the level of Trust expenses. The amount of future royalty income available for distribution will be subject to the volume of iron ore product shipments and the dollar level of sales by Northshore. Shipping activity is greatly reduced during the winter months and economic conditions, particularly those affecting the steel industry, may adversely affect the amount and timing of such future shipments and sales. The Trustees will continue to monitor the economic and other circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain a reserve for unexpected loss contingencies at a prudent level, given the unpredictable nature of the iron ore industry, the Trusts dependence on the actions of the lessee/operator, and the fact that the Trust essentially has no other liquid assets.
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