Gold
Franco-Nevada Q3 revenue declines 6.1%, but maintains strong financial position
The overall Q3 revenue decline is due to rising gas and oil prices
Franco-Nevada Corporation (TSX: FNV) (NYSE: FN) says that expanding existing mines and developing new ones will drive its growth over the next five years.
In spite of the company’s optimistic projections, company revenues were USD$309.5 million, which indicated a decline of 6.1 per cent over its Q2 revenue of USD$329.9 million, but an increase by 1.7 per cent over its earnings from Q3, 2022. The company said in the Q3 financial statement released on Thursday that the yearly increase has compensated for its decline in revenue from its diversified assets, which occurred due to the decrease in oil and gas prices compared to the year prior.
Revenue from precious metals constitute 77.8 per cent of Franco-Nevada’s total revenue, with 64.5 per cent attributed to gold, 10.2 per cent to silver, and 3.1 per cent to PGM (Platinum Group Metals). The revenue breakdown by region showed that 88 per cent was sourced from the Americas, with 28.7 per cent from South America, 28.4 per cent from Central America and Mexico, 15.9 per cent from the United States and 15.0 per cent from Canada.
Franco-Nevada maintains a strong financial position despite the decline in revenue,
boasting a total absence of debt and a substantial USD$2.3 billion in available capital as of September 30, 2023. During the last quarter, the company demonstrated robust financial performance by generating USD$236.0 million in operating cash flow, and offering the sixteenth annual dividend increase. Shareholders now receive a quarterly dividend payout of USD$0.34 per share.
Diversified assets decline due to lower gas and oil prices
Franco-Nevada’s diversified assets, which consist of its iron ore and energy interests, recorded revenue of USD$68.7 million, a decline from USD$97.5 million in Q3 2022.
This decrease can be attributed primarily to lower oil and gas prices compared to the relatively high prices in the same period the previous year.
Revenue from the iron ore Vale S.A (NYSE: VALE) royalty increased compared to Q3 2022. This boost was driven by higher estimated iron ore prices relative to the prior year quarter.
The company’s attributable interest in revenue remained relatively consistent with Q3 2022. However, Rio Tinto Group (ASX: RIO) (NYSE: RIO) (LSE: RIO), which operates the iron ore company in Canada, faced challenges including extended plant downtime and the wildfires in Northern Quebec in the second quarter of 2023.
Meanwhile, Lundin Mining (TSX: LUN) started an extensive exploration program into the Caserones mine, including a drilling phase of over 10,000 meters. The company expects results in the first half of 2024.
In the Energy sector, revenue from Franco-Nevada’s U.S. energy interests decreased compared to Q3 2022, primarily due to lower realized oil and gas prices. However, the impact of these lower prices was partially mitigated by approximately $1.3 million in lease bonus revenue related to the company’s Haynesville interests.
Higher production from the Permian assets was noted due to the completion of new wells. Meanwhile, revenue from Canadian Energy interests remained relatively consistent with Q3 2022. For the Weyburn Net Royalty Interest (NRI), the effect of lower prices was partially offset by reduced operating and capital expenditures at the Weyburn Unit.
https://mugglehead.com/franco-nevada-shows-strong-financial-position-despite-q3-revenue-decline/
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Franco-Nevada Corporation
Franco-Nevada 3Q earnings top estimates as precious metals assets shine
Franco-Nevada Corporation (TSX:FNV) after Wednesday’s close announced third-quarter
2023 adjusted earnings per share (EPS) that increased 10% year over year to US$0.91, surpassing Zacks Equity Research's consensus forecast of US$0.88.
Its revenue for the period, meanwhile, rose 2% to US$309.5 million.
"Our core precious metal assets anchored the quarter, resulting in increased revenue and earnings over the prior year period," Franco-Nevada CEO Paul Brink said in a statement.
"We are looking forward to added precious metal contributions from a number of new mines in 2024 and, in particular, from the Tocantinzinho stream where G Mining Ventures is progressing construction on time and budget," he added.
Franco-Nevada noted that precious metals sales accounted for 77.8% of its revenue, about 64.5% of which was from gold as the company benefitted from a higher gold price during the quarter.
The company added that it has no debt and $2.3 billion in available capital as of September 30, 2023
https://www.proactiveinvestors.com/companies/news/1032653/franco-nevada-3q-earnings-top-estimates-as-precious-metals-assets-shine-1032653.html
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