Franco-Nevada(FNV) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2025 was $368.4 million, a 43.5% increase from $256.8 million in Q1 2024[4] - Net income for Q1 2025 reached $209.8 million, up 45.3% compared to $144.5 million in Q1 2024[4] - Gross profit for Q1 2025 was $261.5 million, representing a 58.5% increase from $165.0 million in Q1 2024[4] - Basic earnings per share for Q1 2025 were $1.09, an increase from $0.75 in Q1 2024[4] - For Q1 2025, the company reported a net income of $209.8 million, resulting in a diluted earnings per share (EPS) of $1.09, compared to a net income of $144.5 million and an EPS of $0.75 in Q1 2024[61] - Total revenue for Q1 2025 was $368.4 million, an increase from $256.8 million in Q1 2024, driven by higher revenues from precious metals and energy segments[62] - Gold revenue increased to $245.9 million in Q1 2025 from $160.9 million in Q1 2024, representing a 52.7% growth[47] - Energy revenue increased to $58.0 million in Q1 2025 from $43.8 million in Q1 2024, a growth of 32.5%[47] Cash Flow and Assets - Cash and cash equivalents decreased to $1,128.1 million at March 31, 2025, down 22.2% from $1,451.3 million at December 31, 2024[3] - Total assets increased to $6,653.4 million at March 31, 2025, a rise of 5.1% from $6,330.4 million at December 31, 2024[3] - Shareholders' equity rose to $6,292.5 million at March 31, 2025, an increase of 4.9% from $5,996.6 million at December 31, 2024[3] - Operating cash flows before changes in non-cash working capital for Q1 2025 were $287.0 million, compared to $185.7 million in Q1 2024[5] Dividends and Shareholder Returns - The company declared dividends of $73.4 million in Q1 2025, up from $69.4 million in Q1 2024[6] - The company declared dividends of $0.38 per common share in Q1 2025, up from $0.36 in Q1 2024, with total cash dividends paid amounting to $70.2 million compared to $58.9 million in the prior year[60] Acquisitions and Investments - The company acquired royalty, stream, and working interests totaling $505.2 million in Q1 2025, compared to $146.9 million in Q1 2024[5] - The Company acquired a 4.25% NSR royalty for $300.0 million on Discovery Silver Corp.'s Porcupine Complex and provided a $100.0 million senior secured term loan[17] - The Company completed the acquisition of a precious metals stream from Sibanye Stillwater Limited for $500.0 million, primarily comprising gold and platinum components[23] - The company reported a total of $4,539.0 million in royalty, stream, and working interests as of March 31, 2025, up from $4,098.8 million at December 31, 2024[43] Expenses and Costs - General and administrative expenses rose to $8.7 million in Q1 2025, compared to $4.2 million in Q1 2024, reflecting a 69% increase[50] - Share-based compensation expenses totaled $5.7 million in Q1 2025, up from $2.8 million in Q1 2024, indicating a 103.6% increase[51] - The company recorded $38.5 million in costs of sales for Q1 2025, compared to $33.6 million in Q1 2024, marking a 14.6% increase[49] Taxation and Regulatory Matters - The company is currently undergoing an audit by the Canada Revenue Agency for its taxation years from 2013 to 2021[56] - The Company received reassessments from the CRA for taxation years 2013-2016, resulting in additional taxes of $20.8 million (C$29.9 million) and penalties of $8.3 million (C$12.0 million) related to its Mexican subsidiary[84] - For taxation years 2014-2019, the Company faces potential additional taxes of $77.4 million (C$111.1 million) and penalties of $12.2 million (C$17.6 million) concerning its Barbadian subsidiary[84] - If the CRA reassesses taxation years 2020-2024, the Company estimates potential additional taxes of $273.3 million (C$392.8 million) and penalties of $103.3 million (C$148.6 million)[91] - The Company has filed formal Notices of Objection with the CRA against the reassessments and has posted security for 50% of the reassessed amounts[86] - The Company intends to seek relief from double taxation under the Canada-Mexico tax treaty and the Canada-Barbados tax treaty if required[87][92] - The CRA expanded its audit to include the 2020 and 2021 taxation years, but no proposals or reassessments have been received for these years[93] - The Company believes it has complied with all applicable tax laws and has not recorded any liabilities for the Transfer Pricing Reassessments in its financial statements[94] - The CRA audit is ongoing, and there is a risk of additional income taxes, penalties, and interest if the CRA successfully challenges the Company's tax filings[95] Commitments and Future Obligations - As of March 31, 2025, the company has capital commitments totaling $1.0 billion, including $501.6 million for the Cascabel stream and $300.0 million for the Porcupine Complex royalty[79] - The company has remaining commitments of up to $44.7 million related to the Royalty Acquisition Venture as of March 31, 2025[25] - The company has commitments related to environmental and social initiatives in connection with its acquisition of royalty and stream interests[82] - The company has a commitment of 118,534 common shares (equivalent to $15.0 million) related to the Yanacocha royalty, contingent on achieving commercial production[79] - The company has a commitment of $12.5 million for the Copper World royalty, contingent on project permits and approvals[79] - The company has a commitment of $4.9 million related to sourcing new precious metals and copper royalties through a joint acquisition agreement[79] - The Company has a fixed delivery commitment of 8,760 ounces of gold per annum from January 1, 2021, to December 31, 2025[77] - The company has a purchase commitment for gold deliveries indexed to copper production, with specific delivery rates until certain thresholds are met[71]