Mesabi Trust(US:MSB)2024-12-13 21:30Financial Performance - Total revenues for the three months ended October 31, 2024, were $79,001,840, a significant increase from $4,896,066 in the same period of 2023, representing a growth of approximately 1515%[14] - Net income for the nine months ended October 31, 2024, was $87,207,203, compared to $14,292,545 for the same period in 2023, indicating an increase of about 510%[14] - The Trust's net income for the three months ended October 31, 2024, was $78,325,525, reflecting a strong performance compared to previous periods[52] - Net income for the three months ended October 31, 2024, was $78,325,525, a significant increase of 1,818.5% compared to $4,086,066 for the same period in 2023[90] - Total revenues for the nine months ended October 31, 2024, were $91,742,322, a substantial increase from $16,634,160 in the prior year[92] Royalty Income - Royalty income for the three months ended October 31, 2024, was $7,348,366, up from $4,664,092 in 2023, reflecting a growth of approximately 57%[14] - The Trust's royalty income for the nine months ended October 31, 2024, totaled $19,613,693, compared to $16,106,008 in 2023, reflecting an increase of approximately 31%[30] - Total royalty income for the three months ended October 31, 2024, increased by $2,684,274 to $7,348,366 compared to the same period in 2023, driven by higher pricing and shipments of iron ore[84] - For the nine months ended October 31, 2024, total royalty income increased to $19,613,693, up 21.5% from $16,106,008 in the prior year[88] Cash and Reserves - The Trust's cash and cash equivalents increased to $95,910,149 as of October 31, 2024, compared to $23,980,448 at the beginning of the period, marking a rise of about 300%[20] - The unallocated reserve increased significantly to $95,324,736 as of October 31, 2024, compared to $20,975,143 at the beginning of the period, indicating a growth of approximately 354%[20] - As of October 31, 2024, the Trust's unallocated cash and cash equivalents amounted to $90,793,345, a significant increase from $19,126,044 as of January 31, 2024[52] - Accrued Income Receivable rose to $3,883,400 as of October 31, 2024, a 106.0% increase from $1,885,432 a year earlier[97] Distributions - Distributions to unitholders for the nine months ended October 31, 2024, amounted to $12,595,210, with distributions declared and payable at $5,116,804[23] - The Trustees declared a distribution of $0.39 per Unit of Beneficial Interest, totaling $5,116,804, payable on November 20, 2024, compared to $0.35 per Unit for the same quarter in 2023[46] - Mesabi Trust declared a distribution of $0.39 per Unit of Beneficial Interest for November 20, 2024, an increase from $0.35 per Unit for the same period last year, reflecting a growth of approximately 11.4%[107] Arbitration and Legal Matters - The Trust received an arbitration award of $71,185,029 during the nine months ended October 31, 2024, which was not present in the same period of 2023[14] - The Trust received a final arbitration award of $71,185,029 on October 4, 2024, which includes $59,799,977 for underpaid royalties and $11,385,052 in pre-award interest[39][40] - The arbitration initiated by the Trust in October 2022 concluded in June 2024, focusing on royalty underpayments[136] - The Tribunal denied the Trust's request for declaratory relief regarding the timing of royalty obligations accrual[138] Operational Insights - For the three months ended October 31, 2024, production and shipments of iron ore pellets totaled 1,066,665 tons, an increase from 918,482 tons in the same period of 2023, reflecting higher demand[78] - For the nine months ended October 31, 2024, production and shipments reached 3,019,695 tons, up from 2,123,063 tons in the comparable period of 2023, due to three full quarters of operations after the restart in April 2023[79] - Cliffs has treated Northshore as a swing operation since April 2023, with no specific production volume information provided to the Trustees[75] - The Trust's revenue is highly dependent on Northshore's operations, which are influenced by market demand and pricing adjustments under customer contracts[62][71] Financial Management - The Trust's financial statements are prepared on an accrual basis, and distributions are declared based on actual royalties received[45] - The Trustees have invested the AAA award funds in interest-bearing accounts while holding them in reserve pending procedural deadlines related to the arbitration[109] - There were no changes in the Trust's internal control over financial reporting during the last fiscal quarter that materially affected its operations[133] - The Trust's disclosure controls and procedures were evaluated and deemed effective by the Trustees[132] Regulatory and Risk Factors - The Trust is subject to extensive regulation under the Securities Act and the NYSE, but is exempt from many corporate governance requirements due to its nature as a pass-through royalty trust[123] - Variations in royalties received by Mesabi Trust can be significant and are influenced by multiple factors, including operational decisions by Cliffs and market conditions[105] - Future distributions to Unitholders may vary significantly and could be negatively impacted by price adjustments in royalties[119] - There have been no material changes in the Trust's risk factors as outlined in previous reports[141]