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During the first quarter of 2013, TransGlobe has:
-- Experienced a significant increase in cash flow from operating activities from Q1-2012 due to increased collections on accounts receivable (collected $75.2 million in Egypt Q1-2013);-- Maintained a strong financial position, reporting a debt-to-funds flow ratio of 0.7 at March 31, 2013;-- Reported net earnings of $24.9 million;-- Achieved funds flow from operations of $36.0 million; and-- Spent $18.2 million on capital programs, which was funded entirely with funds flow from operations.
The accounting for the convertible debentures continued to have a significant impact on important components of the Company's financial statements:
-- Reported an increase in net earnings of $13.9 million as compared to the first quarter of 2012. This increase was principally a result of the unrealized gain on convertible debentures of $3.0 million recognized in the first quarter of 2013, combined with an unrealized loss on convertible debentures of $7.8 million in the first quarter of 2012; and-- Reported diluted earnings per share of $0.26 in Q1-2013, which varies significantly from basic earnings per share of $0.34. The prescribed calculation as required under IFRS resulted in a significant reduction in diluted earnings per share due to the effect of the convertible debentures. Diluted earnings per share prior to the dilutive effect of the convertible debentures was $0.33/share.
2013 TO 2012 NET EARNINGS VARIANCES
$ Per Share $000s Diluted % Variance--------------------------------------------------------------------------------------------------------------------------------------------------------Q1-2012 net earnings 10,975 0.15----------------------------------------------------------------------------Cash itemsVolume variance 8,958 0.12 81Price variance (8,469) (0.10) (77)Royalties 1,665 0.02 15Expenses:Production and operating (2,566) (0.03) (23) Cash general and administrative (273) - (2) Exploration 453 0.01 4 Current income taxes 237 - 2 Realized foreign exchange gain (loss) (9) - - Issue costs for convertible debentures 4,389 0.05 40 Interest on long-term debt (423) (0.01) (4)Other income (79) - (1)----------------------------------------------------------------------------Total cash items variance 3,883 0.06 35----------------------------------------------------------------------------Non-cash itemsUnrealized derivative loss 124 - 1Unrealized foreign exchange gain 1,155 0.01 11Depletion and depreciation 569 0.01 5Unrealized gain (loss) on financial instruments 10,830 0.13 99Impairment loss 16 - -Stock-based compensation (138) - (1)Deferred income taxes (2,573) (0.03) (23)Deferred lease inducement (1) - -Amortization of deferred financing costs 38 - -----------------------------------------------------------------------------Total non-cash items variance 10,020 0.12 92----------------------------------------------------------------------------Q1-2013 net earnings 24,878 0.33 127--------------------------------------------------------------------------------------------------------------------------------------------------------Other items affecting diluted earnings per shareConvertible debentures (0.07) (54)----------------------------------------------------------------------------Q1-2013 net earnings per share - diluted 0.26 73--------------------------------------------------------------------------------------------------------------------------------------------------------
