Royal Gold(RGLD) - 2024 Q3 - Earnings Call Transcript

Financial Performance - The company reported record revenue of $194 million, a 40% increase year-over-year [5][21] - Operating cash flow was$ 137 million, up 39% compared to the previous year [5][25] - Net income reached $96 million or$ 1.46 per share, a 95% increase from the same quarter last year [5][25] - Adjusted earnings were $97 million or$ 1.47 per share, marking a record high [6][25] - The adjusted EBITDA margin remained strong at 81% for the quarter [6] Business Segment Performance - Revenue from the royalty segment was $61 million, accounting for about 31% of total revenue, up 53% from the prior year [12] - Stream segment revenue was$ 133 million, a 34% increase from last year [12] - New producing assets contributed nearly $13 million in revenue this quarter [11] Market Performance - Gold accounted for 76% of total revenue, with silver at 12% and copper at 9% [22] - Metal prices increased significantly, with gold up 28%, silver up 25%, and copper up 10% year-over-year [21] Company Strategy and Industry Competition - The company aims to add exposure in familiar metals markets within safe jurisdictions and with quality counterparties [31] - The rising gold price has created opportunities for new project developments [31] - The company remains disciplined in its due diligence standards despite elevated metal prices [31] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the strong performance driven by rising gold prices and new producing assets [30] - There is an expectation of a slightly softer Q4 due to timing of metal deliveries [28] - The company is tracking well against its 2024 guidance for gold, copper, and other metals [27] Other Important Information - The company is now debt-free with over$ 1.1 billion in available liquidity [6][26] - An amendment to the 2023 Form 10-K is expected due to SEC's Regulation SK 1300, but this does not change the risk profile of the business [9] Q&A Session Summary Question: Clarification on SK 1300 standard - Management explained that the amendment to the 10-K is primarily about reporting standards and does not imply any change in the risk profile [33][34] Question: Guidance for 2024 - Management confirmed expectations for gold sales to be at or below the midpoint of the guidance range, while copper and other metals are expected to be at the higher end [37] Question: Deal pipeline and transaction environment - The company noted a robust increase in opportunities for project financing and acquisitions, maintaining a focus on quality projects in safe jurisdictions [41][54] Question: Political risk in Botswana - Management indicated it is too early to assess the impact of recent government changes in Botswana, but current assessments remain unchanged [50][51] Question: Appetite for further deals in Africa - The company is selectively looking at opportunities in Africa but primarily focuses on safe jurisdictions, with most opportunities currently in the Americas and Australia [53]