Franco-Nevada(FNV)2023-05-02 16:00Financial Performance - Revenue for Q1 2023 was 338.8 million in Q1 2022[16] - Adjusted EBITDA for Q1 2023 was 286.6 million in Q1 2022[16] - Basic earnings per share for Q1 2023 were 0.95 in Q1 2022, reflecting a decrease of 13.7%[16] - Franco-Nevada's Q1 2023 revenue was 229.4 million, down 20.0% from the same quarter in 2022, with an Adjusted EBITDA Margin of 83.0%[27] - Net income for Q1 2023 was 0.82 per share, down from 0.95 per share, in Q1 2022[60] - Adjusted Net Income for Q1 2023 was 0.79 per share, compared to 0.93 per share, in Q1 2022[60] - Revenue for Q1 2023 was 320.4 million in Q4 2022, reflecting a decline of approximately 13.8%[67] - Operating income in Q1 2023 was 188.9 million in Q4 2022, representing a decrease of about 8.9%[67] - Net income for Q1 2023 was 165.0 million in Q4 2022, indicating a decline of approximately 3.0%[67] Sales and Production - GEOs sold in Q1 2023 totaled 145,331, down 18.6% from 178,614 in Q1 2022[16] - The company sold 145,331 Gold Equivalent Ounces (GEOs) in Q1 2023, a decrease of 33,283 GEOs compared to 178,614 GEOs in Q1 2022[49] - Precious Metals contributed 76.8% of total revenue in Q1 2023, an increase from 71.6% in Q1 2022[52] - The company expects total GEO sales for 2023 to be between 640,000 and 700,000, with Q1 2023 actual sales at 145,331 GEOs[37] - Cobre Panama contributed 28,663 GEOs in Q1 2023, slightly down from 29,495 GEOs in Q1 2022, due to operational curtailments[56] Cash and Investments - Cash and cash equivalents as of March 31, 2023, were 1,196.5 million at the end of 2022[16] - The company has remaining funding commitments of 90.7 million funded in Q1 2023[24] - Franco-Nevada's cumulative investment in the Royalty Acquisition Venture with Continental Resources, Inc. reached 77.0 million[26] - Net cash provided by operating activities was 230.6 million in Q1 2022, a decrease of about 9.0%[78] - Net cash used in investing activities was 1.6 million in Q1 2022, primarily due to funding of the Tocantinzinho Stream deposit[79] Costs and Expenses - Total costs of sales decreased to 43.6 million in Q1 2022, reflecting a decrease in GEOs[58] - Depletion and depreciation expense was 74.6 million in Q1 2022, due to a decrease in GEOs[59] - General and administrative expenses increased to 5.6 million in Q1 2022, representing 3.4% of revenue, up from 2.9%[62] - Franco-Nevada's total costs of sales for Q1 2023 were 118.2 million in Q1 2022, resulting in Cash Costs of 43.6 million in the prior year[145] - The number of GEOs sold in Q1 2023 was 145,331, with Cash Costs per GEO sold increasing to 244 in Q1 2022[145] Market Conditions - The average gold price in Q1 2023 was 1,874 per ounce in Q1 2022[16] - Gold prices averaged 1,874/oz in Q1 2022, while silver prices decreased by 6.0% year-over-year[43] - The average price of silver decreased by 6.0% to 24.00 per ounce in Q1 2022[47] Tax and Regulatory Matters - The company reached a settlement with the Canada Revenue Agency regarding tax reassessments, vacating potential tax exposure of 26.5 million)[106] - The Company reached a settlement with the CRA regarding Canadian Domestic Tax Matters for 2014-2017, resulting in a tax adjustment of 19.9 million) and penalties of 6.6 million) being vacated[110][111] - The Company has filed formal Notices of Objection with the CRA against various reassessments and has commenced appeals in the Tax Court of Canada[114][120] - The ongoing CRA audit may lead to further challenges, potentially resulting in additional income taxes, penalties, and interest[127] Future Outlook - Franco-Nevada anticipates stronger deliveries in Q2 2023 as operations at Cobre Panama and Antapaccay have returned to full production levels[36] - Management is currently evaluating the implications of the Pillar Two proposals and will assess the impact once Canadian draft legislation is released[132] - The company believes current cash resources and available credit will cover commitments and expenses for the foreseeable future[85] - Management warns that actual results may differ materially from forward-looking statements due to various known and unknown risks[153] - Investors are cautioned against placing undue reliance on forward-looking statements due to inherent uncertainties[154]