Franco-Nevada(FNV) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a revenue of $275.7 million for Q3 2024, down from$309.5 million in the prior year, but up by $33.5 million or 14$236.2 million, compared to $255.1 million in Q3 2023, while adjusted net income was$153.9 million, down from $175.1 million in the prior year [19] - The cash cost per GEO was$290 per GEO in Q3 2024, down from $304 per GEO in Q3 2023, indicating improved margins [24] Business Line Data and Key Metrics Changes - Total GEOs sold were 110,110 for Q3 2024, compared to 160,848 in the prior year, with a significant decrease attributed to lower deliveries from Candelaria and Antapaccay [11][19] - Precious metal GEOs sold were 84,377, down from 90,370 in the prior year, representing approximately 77$2,200 per ounce in Q3 2024 [25] - The company expects total GEOs sold for 2024 to be between 445,000 to 465,000, down from the original guidance of 480,000 to 540,000 [27] Company Strategy and Development Direction - The company is focused on diversifying its portfolio, with a strong deal pipeline for adding precious metal assets and potentially entering the potash market [9][34] - The management expressed confidence in the long-term performance of the portfolio, despite short-term challenges in 2024 [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the inflation-protected business model is performing well, with record gold prices positively impacting revenues [5] - The company remains optimistic about the reopening of Cobre Panama, with discussions expected to take place in early 2025 [8][60] Other Important Information - The company is currently debt-free, with available capital of $2.3 billion as of September 30, 2024 [25] - The effective tax rate for the quarter was 21.6%, with expectations to average around 20% going forward [22] Q&A Session Summary Question: What could be a driver for you to either hit the higher end of the revised guidance range or come in on the lower end? - Management indicated that gold price performance and timing of deliveries from key assets like Candelaria will influence the outcome [30] Question: Can you clarify the company's interest in potash and potential opportunities? - The company is strategically interested in potash due to its long reserve life and is considering options for acquiring royalties [34] Question: What is the expected impact of the U.S. election on the company's operations? - Management anticipates positive impacts, particularly regarding permitting processes for mines in which the company holds royalties [66]