Scully Royalty (SRL) Q2 2024 earnings summary

Executive summary

• Scully Royalty Ltd. reported a net loss of $19.9 million for the six months ended June 30, 2024, compared to net income of $0.9 million in the same period of 2023, mainly due to a non-cash impairment loss on assets held for sale.

• Revenue declined to $18.1 million from $26.5 million year-over-year, primarily from lower royalty income and the sale of hydrocarbon properties.

• The company resumed its dividend policy, declaring a US$0.26 per share dividend payable in February 2025.

• Scully is streamlining to focus on its core iron ore royalty asset, divesting non-core businesses and simplifying its structure.

• The Scully Mine operator completed a $250 million recapitalization and restructuring, strengthening the mine's long-term outlook.

Financial highlights

• Net loss attributable to shareholders was $19.9 million ($1.34 per share) versus net income of $0.9 million ($0.06 per share) in H1 2023.

• EBITDA was negative $12.2 million, including an $18.6 million non-cash impairment loss, compared to positive $9.1 million in H1 2023.

• Revenue fell 32% year-over-year to $18.1 million, with royalty revenue down to $10.6 million from $15.0 million.

• Cash decreased to $35.9 million from $78.3 million at year-end 2023, mainly due to asset reclassification.

• Book value per share declined to $20.54 from $21.76 at December 31, 2023.

Outlook and guidance

• The company expects further progress in 2025 on asset rationalization and corporate simplification.

• Future dividends will depend on royalty payments and the financial condition of both the company and the Scully Mine operator.

• The Scully Mine operator's recapitalization and new management are expected to support a ramp-up to historic production levels.