2018 Year End Financial Update
Tuesday, January 22, 2019
Commitment to Carbon-Offset Project Pays Off in 2018
Sealaska is experiencing unprecedented growth and income, supported by thriving businesses that have a common purpose, connected by a shared goal of working toward healthier oceans and enhancing the natural environment.
One project a decade in the making is Sealaska’s carbon-offset project, which set aside over half of our forested lands to create a carbon bank. Sealaska receives carbon credits for allowing project lands to remain forested. The proceeds from selling these credits in 2018 will contribute significantly to one of our strongest net income years to date. Our forested lands will remain standing, absorbing carbon throughout the next century and generating long-term return for Sealaska‘s shareholders.
We continue to build our businesses inspired by the unique culture, knowledge and heritage of our people. The income comes from three sources:
- Sealaska’s Business Income Source:
- Our businesses – land management, consulting services emphasizing groundwater and natural foods – continue to be a strong source of income and should provide results similar to 2017.
- We are still seeing the positive effect of our strategic plan set five years ago, and we expect that trajectory of stable income to continue.
- Investment Income Source:
- On an average annual basis, we expect our investment portfolio to provide approximately $8-9 million in investment income for the next decade. Due to market volatility, we are estimating large swings from year to year.
- For example in 2017, stock markets performed well, and Sealaska had $22 million in investment income, while in 2018, stock markets had their worst year since the 2008 financial crisis which will lead to negative investment income for Sealaska in 2018.
- Natural Resource Revenue Sharing Income [ANCSA Section 7(i)]:
- Sealaska Natural Resource sharing income, or 7(i) income, has been strong over the last two years. High zinc prices have benefited the revenue sharing and the amounts Sealaska receives from NANA Regional Corporation’s Red Dog mine.
- 7(i) results for 2018 should be close to the 7(i) results from 2017.
We continue to grow our business income to offset the volatility of 7(i) revenue sharing income and investments.
Administrative Costs and Shareholder Benefits:
- Administrative costs declined over the last five years through cost-saving efforts but may rise slowly in relation to the growth of our businesses and increased shareholder benefits.
- Shareholder benefits are included in our administrative costs. Payments into shareholder programs include the new Deishú Memorial Fund, running the shareholder intern program and Sealaska’s annual contributions to Sealaska Heritage Institute. While these are shown as deductions from Sealaska’s net income, we view them as investments in our shareholders, and the growth of these benefits are a direct result of our financial growth and stability.
Happy New Year to all our shareholders.
Anthony Mallott, President & CEO