CALGARY, June 1 /CNW/ - Humboldt Capital Corporation (TSX-V: HMB)
For the three months ended March 31, 2009, Humboldt reported earnings of
$1.7 million, or $0.14 per share. At March 31, 2009, Humboldt's working
capital was $21.5 million or 61% of its asset value. During the quarter,
Humboldt's net asset value increased by 3.9% to $2.82 per share, compared with
$2.75 per share at the beginning of the quarter.
Humboldt remained cautious in the first quarter of 2009 and made a
decision to retain a strong liquidity position and limit new investments.
However, the significant stock market low, at the end of March 2009,
likely indicates the panic bottom for this market cycle and with the steady
increase in world wide indices since then bodes well for a sustained, but
choppy upward move. Humboldt's investment outlook for the balance of 2009 is
now more optimistic and the Company plans to steadily redeploy some of its
cash in selected equities over the remainder of the year.
Based on a review of Humboldt's more cautious investment requirements for
2009, the board of directors authorized a special dividend of $3.0 Million or
$0.25 per share to the shareholders. Humboldt plans to review further
dividends based on ongoing capital requirements.
Humboldt now has a very positive outlook for commodity stocks.
Humboldt's view for the economy remains quite pessimistic for 2009, while
it is clear that the world wide stock markets are discounting a steady world
wide economic recovery. It is also clear that the recession in the United
States will be severe and has already spread to the UK, Japan and Europe.
Indications point to a severe slowdown in China and other Asian economies as
This current business cycle, while very severe, appears to be following
the pattern of previous stock market and economic downturns. Hence, a year of
financial crisis is followed by a lengthy period of declining economic
fundamentals. Ironically, by the time the worst year of most economic
recessions is reached, the stock market usually has already discounted
economic problems and has commenced a recovery phase. Unfortunately, this
pattern may not necessarily apply to all resource stocks as commodity prices
usually only begin to rise well into an economic recovery. This is due to the
availability of existing stockpiles and under-utilized capacity, especially in
the mining industry.
Hence, while we appear to be entering a year of extreme gloom and doom,
nevertheless, the seeds of the economic recovery have actually been sown.
These factors comprise very low interest rates, low energy prices, low metal
prices, availability of cheaper labor and an abundance of inexpensive homes
and commercial properties.
As a result of these greater uncertainties at this phase of the business
cycle, Humboldt has increased its current level of liquidity. At the time of
writing, Humboldt's cash reserves were in excess of $16.8 million, after the
distribution of $3.0 million to its shareholders.
Humboldt is in an enviable position, with a substantial cash balance, to
be able to weather this storm. In addition, Humboldt's Board has strongly
encouraged the management teams of its major holdings to be prepared to modify
their capital expenditure programs to maintain adequate medium-term liquidity.
Humboldt is reviewing a great number of investment opportunities which,
due to the correction, are much more attractively priced. Humboldt's focus
will be on companies with quality management teams with attractive prospects,
and the financial resources with which to continue their exploration.
Finally, Humboldt anticipates that the oil and gas business, which is
suffering a major correction in commodity prices, will recover in the future,
after costs come back into line and an extremely negative sector rotation, out
of energy stocks, will be reversed.
Three Months Ended March 31
(Thousands, except per share amounts) 2009 2008 2007
Earnings (Loss) and comprehensive
income (loss) for the period $ 1,703 $ (883) $ (5,192)
Earnings (Loss) per share,
basic and diluted $ 0.14 $ (0.07) $ (0.42)
Share capital $ 2,042 $ 2,065 $ 2,080
Retained earnings $ 31,945 $ 52,130 $ 62,592
Shareholders' equity $ 35,328 $ 55,461 $ 65,542
Cash and cash equivalents $ 21,476 $ 9,576 $ 6,110
Shares outstanding 12,169 12,305 12,384
Net asset value per share, diluted $ 2.82 $ 4.37 $ 5.08
Further information regarding financial and operating results may be
obtained at www.sedar.com, where the Company's MD&A and financial statements
will be filed this week.
Forward-looking statements - the press release today contains
"forward-looking" information. Actual results could differ materially from the
conclusions, forecasts or projections in the forward-looking information.
Certain material factors and assumptions were applied in drawing the
conclusions or making the forecasts or projections as reflected in the
forward-looking information. Additional information about the material factors
that could cause actual results to differ materially from the conclusion,
forecast or projection in the forward-looking information and the material
factors or assumptions that were applied in drawing the conclusion or making
the forecast or projection as reflected in the forward-looking information is
contained in the press release.
Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil at six thousand
cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly
if used in isolation. A boe conversion of six thousand cubic feet per barrel
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
References to oil in this discussion include crude oil and natural gas liquids
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: R.W. Lamond, Chairman of the Board - or - C.A.
(Tony) Teare, Executive Vice President, HUMBOLDT CAPITAL CORPORATION,
Telephone: (403) 269-9889, Fax: (403) 269-9890, TSX-V: HMB