Franco-Nevada (FNV) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $260.1 million, down 21% year-over-year, but up sequentially due to record gold prices; net income was $79.5 million, impacted by new tax measures and the absence of Cobre Panama.

• 110,264 GEOs sold in Q2 2024, with adjusted EBITDA of $221.9 million and an 85.3% margin; adjusted net income was $144.9 million ($0.75/share).

• Major new assets added: a gold stream on SolGold's Cascabel project (part of a $750 million syndicated package) and a 1.8% NSR royalty on Newmont's Yanacocha operations for $210 million.

• Maintained strong financial position with $2.4 billion in available capital and no debt as of June 30, 2024.

• Quarterly dividend increased 5.88% to $0.36/share, with a DRIP available at a 1% discount.

Financial highlights

• GEOs sold were 110,264 in Q2 2024, down 35% year-over-year (16% excluding Cobre Panama); total revenue was $260.1 million, with adjusted EBITDA margin at 85.3% and adjusted net income margin at 55.7%.

• Cash cost per GEO was $264, down from $280 in Q2 2023, supporting margin expansion.

• Operating cash flow was $194.4 million, a 26% decrease year-over-year.

• Basic EPS was $0.41, down from $0.96 in Q2 2023.

• Cash and cash equivalents totaled $1,439.0 million as of June 30, 2024.

Outlook and guidance

• 2024 GEO sales guidance remains at 480,000–540,000, expected at the lower end due to lower diversified asset contributions and revised commodity price assumptions.

• Anticipates stronger H2 2024 deliveries from Candelaria and ramp-up at Tocantinzinho, Greenstone, and Salares Norte.

• Cascabel stream expected to contribute ~50 koz GEOs annually over the first 10 years of full production.

• Yanacocha Sulfides project expected to extend mine life beyond 2040, with initial phase producing ~500 koz AuEq/year.

• Diversified assets expected to contribute fewer GEOs than initially anticipated.