NEW YORK, Nov. 15, 2011 /PRNewswire/ -- MFC Industrial Ltd. ("MFC" or the "Company") (NYSE: MIL) today announced results for the three and nine months ended September 30, 2011.  Unless otherwise noted, all dollar amounts are in United States dollars.

The Company moved ahead with its previously announced name change on September 30, 2011 and is now officially MFC Industrial Ltd.  We concurrently changed our ticker symbol on the New York Stock Exchange to "MIL," and launched our new website: www.mfcindustrial.com.

RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

Revenues for our commodities and resources business were $358.9 million for the nine months ended September 30, 2011, compared to $24.9 million for the same period in 2010, primarily as a result of the inclusion of the integrated commodities operations of Mass Financial Corp. ("Mass"), which we acquired in the fourth quarter of 2010. Included in our commodities and resources business are the gross revenues generated by our royalty interest, which increased to approximately $24.5 million for the nine months ended September 30, 2011. The increase in the gross royalty revenue was mainly attributable to a higher royalty rate. A total of 2,687,933 tons of iron ore pellets were shipped during the nine-month period ended September 30, 2011.

Revenues for our merchant banking business were $19.5 million for the nine months ended September 30, 2011, compared to $nil for the same period in 2010, primarily as a result of the inclusion of Mass's results.

Other revenues, which encompass our corporate and other investments, were $12.9 million for the nine months ended September 30, 2011, compared to $2.5 million for the same period in 2010, primarily as a result of the inclusion of Mass' results.

Costs of sales increased to $319.2 million during the nine months ended September 30, 2011 from $11.6 million for the same period in 2010. Selling, general and administrative expenses increased to $31.4 million for the nine months ended September 30, 2011 from $9.3 million for the same period in 2010. The increases were primarily linked to the inclusion of Mass's operations.

RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

Revenues for our commodities and resources business were $101.9 million for the three months ended September 30, 2011, compared to $4.9 million (excluding royalty payments for prior years) for the same period in 2010, primarily as a result of the inclusion of the integrated commodities operations of Mass. Included in our commodities and resources business are the gross revenues generated by our royalty interest of approximately $12.2 million for the three months ended September 30, 2011. A total of 1,172,813 tons of iron ore pellets (excluding sale of chips) were shipped during the three months ended September 30, 2011.

Revenues for our merchant banking business were $7.0 million for the three months ended September 30, 2011, compared to $nil for the same period in 2010 as a result of the inclusion of the activities of Mass.

Other revenues, which encompass our corporate and other investments, were $4.9 million for the three months ended September 30, 2011, compared to $1.5 million for the same period in 2010, and are attributable to the inclusion of Mass in the current quarter.

Costs of sales increased to $92.3 million during the three months ended September 30, 2011 from $5.6 million for the same period in 2010, while selling, general and administrative expenses increased to $9.6 million from $5.0 million for the same period of 2010. These increases are primarily linked to the inclusion of Mass's operations in the current period.

OVERVIEW OF OUR RESULTS FOR THE NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 2011

The table below shows our total revenues by operating segment for the nine and three months ended September 30, 2011, as well as each of the three months ended June 30 and March 31, 2011.  

The table below shows our income by operating segment from continuing operations for the nine and three months ended September 30, 2011, as well as each of the three months ended June 30 and March 31, 2011.  

ONE-TIME NON-CASH EXPENSES

The following table shows the effects of one-time and non-cash discretionary expenses on 2011 earnings.

REVENUE BREAKDOWN FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

Revenue by for the nine months ended September 30, 2011 were from the following regions: 31 percent came from Europe EU (excluding Germany); 20 percent from Germany; 19 percent from the Americas; 13 percent from Europe Non-EU; 15 percent from Asia; and 2 percent other.

FINANCIAL HIGHLIGHTS

The following table highlights certain selected key numbers and ratio in order to better understand MFC's financial position.

LIQUIDITY

As at September 30, 2011, we had cash and short-term securities of $393.4 million. We monitor our capital on the basis of our debt-to-adjusted capital ratio and long-term debt-to-equity ratio. The debt-to-adjusted capital ratio is calculated as net debt divided by adjusted capital, while net debt is calculated as total debt less cash and cash equivalents. The long-term debt-to-equity ratio is calculated as long-term debt divided by shareholders' equity.

We had a net cash and cash equivalents balance after deduction of our total debt, and our long-term debt-to-equity ratio was 0.05 and 0.09, as at September 30, 2011 and December 31, 2010, respectively.

CREDIT FACILITIES

We maintain various types of credit lines and facilities with various banks, and most of these are short-term.  These facilities are used for day-to-day business, structured finance and various other activities in both the commodities and finance areas.

As at September 30, 2011, we had credit facilities aggregating $381.2 million as follows: (i) we had unsecured revolving credit facilities aggregating $190.2 million from banks; (ii) we had revolving credit facilities aggregating $35.6 million from banks for structured finance, a special financing. The margin is negotiable when the facility is used; (iii) we had a non-recourse factoring arrangement with a bank for up to a credit limit of $114.3 million for our commodities activities. Generally, we may factor our commodity receivable accounts upon invoicing at the inter-bank rate plus a margin; and (iv) we had a foreign exchange credit facility of $41.0 million with a bank. All of these facilities are renewable on a yearly basis.

APPOINTMENT OF NEW AUDITORS

The Company has appointed Deloitte & Touche LLP ("Deloitte"), as its new auditors. Deloitte works in nearly 150 countries, the member firms of Deloitte deliver audit, tax, consulting and financial advisory services worldwide, serving more than one-half of the world's largest companies.

The Company's former auditors, a member of Nexia International, Davidson & Company LLP, have resigned voluntarily and there were no disagreements between the Company and the former auditors on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures.

PENDING SALE / DIVESTITURE OF ASSETS

As we stated in our last quarterly report, we had completed a review of our assets and identified some merchant banking and other non-core net assets in the amount of approximately $100.0 million for potential divestiture. We are disappointed that we have been unable at this time to finalize an overall comprehensive plan for the divestiture of these assets that minimizes the potential impact on the Company. We still believe it is in the best interest of our shareholders to receive this value directly, by way of a special cash and/or spinout dividend or distribution. We plan to complete the final plan in whole or part, in the most tax efficient manner for both our Company and our shareholders and we will keep you informed.

DIRECTIONAL FOCUS

We have now started building a global commodities supply chainbusiness.We are now committing our capital and personnel to this strategy, which will allow us to maximize returns throughout the commodities supply chain. However we still need to penetrate other markets and enhance our product lines.  We view the major advantages of the commodities supply chain business to be:

• Turnaround cycle is generally short, resulting in a minimum risk profile.
• Requires a minimal investment in fixed assets.
• Allows us to leverage our financial capabilities, arranging financing for suppliers.
• Enables us to capitalize on our risk management expertise.  

CORPORATE TAXATION

The Company continued to be fiscally responsible and had a reasonable corporate income tax rate during the first nine months of 2011. The corporate income tax paid in cash was $354 thousand in the nine months ended September 30, 2011.

ANNUAL CASH DIVIDEND

The Company's annual cash dividend is based on the annual dividend yield of the New York Stock Exchange Composite Index for the preceding year, plus 25 basis points. In January we announced the declaration of an aggregate cash dividend for 2011 of $0.20 per common share, representing a dividend yield of 2.58 percent, payable quarterly. The final payment for 2011 was completed in October of this year and we plan to make an announcement regarding our 2012 annual cash dividend in early January 2012. The declaration, timing and payment of future dividends will depend on, among other things, our financial results.

EXPANSION PLANS

Chairman Michael Smith commented: "We are pleased with our new focus on building a global commodities supply chain company together with all of our corporate changes and emphasis on the expansion of our operations.  As we stated earlier, we have identified several strategic acquisitions and alliances, which we are certainly working on, that will complement our business focus. Our task is to acquire and integrate new operations that will make us larger and, most important, more profitable.  

We remain cautiously optimistic as we pursue our global strategy. We have a much stronger financial base than many other companies our size. With the current financial uncertainty in the markets, there are interesting opportunities."

Mr. Smith concluded "our goal is to use the expertise and capabilities we have developed over several decades of procurement and logistics to create a global commodity supply chain business whose mandate is to supply basic materials to major industries in developed and emerging economies of the world.  This strategy allows us to capitalize on our sourcing, finance, risk management and logistics capabilities, and to be a preferred supplier of resources, materials and logistics to industries and manufacturers.  But first, we must always defend our capital and evaluate new risks very thoroughly."

Shareholders are encouraged to read the entire Form 6-K, which includes our unaudited financial statements and management's discussion and analysis for the nine months ended September 30, 2011 and has been filed with the Securities and Exchange Commission ("SEC"), for a greater understanding of the Company.

Our annual report for the fiscal year ended December 31, 2010 on Form 20-F was filed with the SEC and Canadian securities regulators on March 31, 2011.  The Company will provide a hard copy of the annual report, free of charge, upon request.  Requests can be sent by mail to:  Suite 1620, 400 Burrard Street, Vancouver, British Columbia, Canada V6C 3A6.

Today at 10:00 a.m. EDT (7:00 a.m. PDT), a conference call will be held to review MFC's announcement and results. This call will be broadcast live over the Internet at www.mfcindustrial.com.  An online archive will be available immediately following the call and will continue for seven days. You may also to listen to the audio replay by phone by dialing: 1 (877) 344 7529, using conference number 10005814.  International callers should dial: 1 (412) 317 0088.

About MFC Industrial Ltd.

MCF is a global commodity supply chain company and is active in a broad spectrum of activities related to the integrated combination of commodities and resources, including commodity and resource interests, and structured finance, and proprietary investing. To obtain further information on the Company, please visit our website at: http://www.mfcindustrial.com.

Disclaimer for Forward-Looking Information

This document contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "projects",  "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, revenues, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our actual results, revenues, performance or achievements to differ materially from our expectations include, among other things:(i) periodic fluctuations in financial results as a result of the nature of our business; (ii) commodities price volatility; (iii) economic and market conditions; (iv) competition in our business segments; (v) decisions and activities of operators of our resource interests; (vi) the availability of commodities for our commodities and resources operations; (vii) the availability of suitable acquisition or merger or other proprietary investment candidates and the availability of financing necessary to complete such acquisitions; (viii) our ability to realize the anticipated benefits of our acquisitions; (ix) additional risks and uncertainties resulting from strategic investments, acquisitions or joint ventures; (x) counterparty risks related to our trading activities; (xi) unanticipated grade, geological, metallurgical, processing or other problems experienced by the operators of our resource interests; and (xii) other factors beyond our control. Such forward-looking statements should therefore be construed in light of such factors. Other than in accordance with its legal or regulatory obligations, the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Additional information about these and other assumptions, risks and uncertainties are set out in our MD&A for the three and nine months ended September 30, 2011, which has been filed with Canadian securities regulators and filed on Form 6-K with the United States Securities and Exchange Commission.

UNAUDITED FINANCIAL TABLES FOLLOW –

SOURCE MFC Industrial Ltd.