Altius Minerals (ALS) Q3 2024 earnings summary

Executive summary

• Q3 2024 attributable royalty revenue was $16.6 million, down from $17.8 million in Q3 2023, mainly due to lower potash prices, coal and iron ore revenue, and mine closures, partially offset by higher base metal prices and renewables growth.

• Net earnings for Q3 2024 were $3.2 million ($0.06/share), compared to $3.5 million in Q3 2023; adjusted net earnings per share remained steady at $0.05.

• Several royalty projects in base and battery metals are nearing construction completion or ramp-up, with El Domo copper-gold mine beginning early construction.

• ARR reported record GBR revenue of US $5.1 million in Q3, with new solar projects expected to contribute in Q4; a take-private transaction at $12/share is expected to close in late November.

• Market value of the project generation portfolio reached $65 million at September 30, 2024, with $6.5 million in net investment proceeds during the quarter.

Financial highlights

• Adjusted EBITDA margin for the mineral royalty segment was 69% in Q3 2024, down from 76% last year, impacted by higher professional fees.

• Adjusted operating cash flow was $10.9 million, nearly flat year-over-year.

• Cash at September 30, 2024 was $25.6 million (excluding ARR), with public equities valued at $87 million, and significant holdings in ARR ($232 million) and LIORC ($120 million).

• Total debt stood at $109 million, with $125 million available on the revolver as of September 30, 2024.

• Basic market capitalization was $1.24 billion as of November 7, 2024.

Outlook and guidance

• Potash demand is expected to set new records this year and next, with limited near-term supply growth.

• Renewable royalty revenue is ramping up as new acquisitions contribute and power demand forecasts rise.

• Organic growth is expected from existing portfolio assets, with less reliance on M&A.

• New revenue contributions expected in Q4 from Angelo Solar and El Sauz projects.

• Curipamba project received final exploitation permit and began construction, targeting first production in 2026.