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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights a mix of positive financial performance with a 6% EPS increase, a consistent dividend increase, and substantial cash reserves with no debt. While GEOs sold decreased due to Cobre Panama, other areas showed growth. The Q&A confirmed management's confidence in negotiations and future production, despite minor uncertainties. The dividend increase and substantial capital position, combined with optimistic guidance, suggest a positive stock price reaction over the next two weeks.
EPS $0.95, up 6% year-over-year from $0.89 due to higher revenue and adjusted EBITDA.
Total GEOs Sold (Q4 2024) 120,063, down from 152,351 in Q4 2023, primarily due to the absence of Cobre Panama.
Precious Metal GEOs Sold (Q4 2024) 95,565, up 5% year-over-year when excluding Cobre Panama, driven by strong contributions from Candelaria and new mines.
Total Revenue (Q4 2024) $321 million, a 5.8% increase from $303.3 million in Q4 2023, attributed to higher precious metal prices.
Adjusted EBITDA (Q4 2024) $277.4 million, up 9% from $254.6 million in Q4 2023, reflecting increased revenue.
Depletion (Q4 2024) $60 million, down from $68.9 million in Q4 2023, due to less stream ounces sold.
Adjusted Net Income (Q4 2024) $183.3 million, or $0.95 per share, up 6% and 5% respectively versus prior year.
Cash Cost per GEO (Q4 2024) $287 per GEO, down from $296 in Q4 2023, due to rising gold prices.
Margin per GEO (Q4 2024) $2,375 per GEO, increased due to rising commodity prices.
Cumulative Dividends Since IPO Greater than $2.5 billion, reflecting consistent dividend increases.
Total Available Capital (Dec 31, 2024) $2.4 billion, including a $1 billion credit facility.
New Product Launches: Franco-Nevada has completed construction and commenced commercial operations at Tocantinzinho in Brazil, where they hold a 12.5% gold stream.
New Partnerships: Announced a financing package to support Discovery Silver’s acquisition of Newmont’s Porcupine Complex, including a royalty credit facility.
Market Expansion: Entered into over $1.3 billion in acquisitions and commitments, including a gold stream investment in Cascabel, Ecuador, and a royalty on the Yanacocha gold mine in Peru.
Operational Efficiency: Achieved a cash cost per GEO of $278 for the full year 2024, down from $286 in 2023.
Revenue Growth: Total revenue for Q4 2024 was $321 million, a 5.8% increase from $303.3 million in Q4 2023.
Strategic Shifts: The company is focusing on organic growth from existing assets and new acquisitions to drive production growth, with a forecast of 465,000 to 525,000 GEOs sold in 2025.
Competitive Pressures: Franco-Nevada faces competitive pressures in the mining sector, particularly in acquiring high-quality assets. The company has been active in business development, completing over $1.3 billion in acquisitions, which indicates a competitive landscape for securing valuable mining opportunities.
Regulatory Issues: There are ongoing legal proceedings related to Cobre Panama, which are expected to incur annual costs of approximately $10 million. This indicates potential regulatory challenges that could impact financial performance.
Supply Chain Challenges: The company has noted volatility in commodity prices, particularly for palladium, iron ore, and oil, which could affect supply chain stability and cost management.
Economic Factors: The company’s guidance for future GEO sales is based on volatile commodity prices, which can significantly impact revenue and profitability. The forecast assumes stable prices for gold, silver, and energy, but any fluctuations could lead to financial risks.
Operational Risks: The absence of contributions from Cobre Panama has impacted GEO sales and revenue, highlighting operational risks associated with reliance on specific assets.
Acquisitions and Commitments: Franco-Nevada entered into more than $1.3 billion in acquisitions and commitments during 2024, including a gold stream investment in Cascabel, a royalty on Yanacocha, and a gold stream on Sibanye’s western limb PGM operations.
Partnerships: Announced a financing package to support Discovery Silver’s acquisition of Newmont’s Porcupine Complex, including a royalty credit facility.
Production Growth: The acquisitions have the potential to add 85,000 to 95,000 GEOs per annum to the medium-term production profile.
New Mines: Expecting contributions from new mines such as Tocantinzinho, Greenstone, and Salares Norte.
Cobre Panama Developments: Positive sentiment in Panama regarding the restart of operations.
2025 GEO Guidance: Guiding total GEOs sold of between 465,000 to 525,000, a 7% increase over 2024.
Precious Metal GEOs Guidance: Guiding 385,000 to 425,000 precious metal GEOs for 2025, a 14% increase over 2024.
Revenue Expectations: Expecting a 25% increase in 2025 revenue over 2024 based on budgeted gold price of $2,800 per ounce.
Long-term Outlook: Forecasting GEOs sold to reach 490,000 to 550,000 by 2029, with significant contributions from new and expanded mines.
Annual Costs for Cobre Panama: Expecting to incur annual costs of approximately $10 million related to legal proceedings for Cobre Panama.
Dividends Increase: Franco-Nevada increased dividends for the 18th consecutive time in January 2025.
Cumulative Dividends: Cumulative dividends since IPO are now greater than $2.5 billion.
Acquisitions and Commitments: Franco-Nevada entered into more than $1.3 billion in acquisitions and commitments during 2024.
Cash Balance: The company ended the year with a substantial cash balance and no debt.
Franco-Nevada's earnings call highlights strong growth prospects with several project advancements, positive developments in partnerships, and strategic equity investments. Despite some uncertainties in non-precious metal transactions and project timelines, the overall sentiment is positive due to strong revenue guidance and strategic positioning in precious metals. The Q&A session reinforced positive expectations, with management addressing key bottlenecks and market opportunities effectively. The company's shareholder return plan and stable financial health further support a positive outlook.
The earnings call reveals strong financial performance, with record revenues and EBITDA increases. Despite a rise in cash cost per GEO, margins remain high due to increased gold prices. Management's optimistic guidance and strategic acquisitions bolster future growth prospects. The Q&A session highlighted confidence in asset value and long-term strategy, with no major negative concerns raised. The combination of strong financials, strategic growth, and positive sentiment from analysts suggests a positive stock price movement over the next two weeks.
The earnings report highlights strong financial performance with a 51% increase in adjusted net income and increased margins per GEO. The dividend increase and no debt status are positive indicators. While the Q&A reveals some uncertainties, such as the arbitration claim and lack of clear guidance on concentrate sales, the overall sentiment remains positive due to optimistic revenue guidance and production growth. The stock price is likely to react positively, given the strong financial metrics, dividend increase, and optimistic guidance, despite some concerns.
The earnings call highlights a mix of positive financial performance with a 6% EPS increase, a consistent dividend increase, and substantial cash reserves with no debt. While GEOs sold decreased due to Cobre Panama, other areas showed growth. The Q&A confirmed management's confidence in negotiations and future production, despite minor uncertainties. The dividend increase and substantial capital position, combined with optimistic guidance, suggest a positive stock price reaction over the next two weeks.
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