North European Oil Royalty Trust (NYSE: NRT) Announces Net Income Results
North European Oil Royalty Trust (NYSE: NRT) Announces Net Income Results
North European Oil Royalty Trust (NYSE: NRT) announced its net income and results for the first quarter of fiscal 2013. Total royalty income and net income showed a marked decrease as compared to the same quarter last year. However, the company’s closing year net income in 2012 at 22.61 million is higher than that recorded in 2011.
| 1st Fiscal QuarterEnded 1/31/2013 | 1st Fiscal QuarterEnded 1/31/2012 | PercentageChange | |
| Total Royalty Income | $5,795,834 | $6,538,261 | - 11.36% |
| Net Income | $5,473,010 | $6,079,264 | - 9.97% |
| Distribution per Unit | $0.59 | $0.66 | - 10.61% |
The company receives its income under two royalty agreements; the Exxon Mobil Corporation (NYSE: XOM) Royal Dutch Shell plc (NYSE: ADR) rate agreement which covers gas sales from the western part of the Oldenburg concession and the OEG agreement that covers the entire Oldenburg concession. Decline in total royalty income has been attributed to the negative adjustment from the fourth quarter of 2012. There was also a decline in sulfur royalties covered by the Mobil agreement. Overall gas sales were much lower, as compared to the same period last year.
Overall, North European Oil Royalty Trust continues to maintain strong profitability with operating margins hovering around 95 percent. According to a recent article by Forbes, “North European Oil Royalty Trust About To Put More Money In Your Pocket”, investors should expect the company to maintain its dividend payout levels. Though dividend payments are difficult to predict and may be based on multiple factors, the company has been able to maintain consistent dividend payout over the years. The Trustees of North European Oil Royalty Trust, announced a quarterly dividend payout of $0.59 per unit, 10.6 percent lower than that of the first quarter in 2012.
Anticipated royalties are expected to remain steady in the coming months.
|
Combined Royalties In Euros |
Combined Royalties In Dollars |
Dollar Royalties In Cents per Unit |
||
| February Royalties Anticipated |
Euros 1,538,527 |
$2,072,704 |
$0.225 |
|
| March Royalties Anticipated |
Euros 1,538,527 |
$2,072,704 |
$0.225 |
|
| April Royalties Anticipated |
Euros 1,538,527 |
$2,072,704 |
$0.225 |
|
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The price action is in a very clear down sloping trend and earnings are right there with it. EPS are expected to fall another 6.5% this year which could put pressure on that near 10% dividend if things don’t turnaround soon.
This is scarey. Enough said.
On a slow decline. Possible sell-off soon.
@ Lillie, it sure looks scary, but have you considered buying when everyone is selling? Not that I would make a buy though.
True…but for some reason this one bothers me. Gut feeling. Will watch though.
Everyone is correct. It’s not the best time for North European Oil. Here is where I differ. I’m not always about earning reports. I think this company has a decent operation core. It’s difficult to buy when everyone is selling, but in this case I think it may be a decent investment on the long run.