Franco-Nevada (FNV) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $275.7 million, down 11% year-over-year, but up 14% excluding Cobre Panamá, with 110,110 GEOs sold; record gold prices drove high revenues and margins despite lower volumes.

• Precious metals contributed 77% of revenue, with gold accounting for 65%; new contributions came from Tocantinzinho, Greenstone, and Yanacocha royalties.

• Cobre Panamá remains on care and maintenance, with discussions for reopening expected in early 2025 and ongoing arbitration and audit processes.

• The company maintains a strong deal pipeline, actively pursuing precious metal and diversified asset opportunities, and remains debt-free with $2.3 billion in available capital.

• High margins were sustained due to strong commodity prices and a consistent cost structure.

Financial highlights

• Q3 2024 revenue was $275.7 million, down from $309.5 million in Q3 2023, with adjusted EBITDA of $236.2 million (margin 85.7%) and adjusted net income of $153.9 million ($0.80/share).

• Net income was $152.7 million ($0.79/share), and operating cash flow was $213.6 million.

• Cash cost per GEO was $290, down from $304 in Q3 2023, with a margin of approximately $2,200 per ounce.

• Quarterly dividend increased to $0.36/share, up 5.88% annually.

• The company remains debt-free with $2.3 billion in available capital as of September 30, 2024.

Outlook and guidance

• 2024 revenue guidance revised to $1,050–$1,150 million, higher than original March guidance, but GEOs sold guidance lowered to 445,000–465,000 (from 480,000–540,000), with precious metal GEOs at 340,000–360,000.

• Five-year outlook (to 2028) for GEOs sold remains at 540,000–600,000.

• Q4 expected to see stronger GEO deliveries from Candelaria, Tocantinzinho, and Greenstone.

• Revised assumptions: $2,600/oz gold, $31/oz silver, $950/oz platinum, $1,000/oz palladium for the remainder of 2024.

• Funding commitments include a $75 million term loan to G Mining Ventures and $20–$30 million for Continental Royalty Acquisition Venture.