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Franco-Nevada(FNV) - 2024 Q4 - Earnings Call Transcript
FNVFranco-Nevada(FNV)2025-03-10 17:55

Financial Data and Key Metrics Changes - The company reported a strong fourth quarter with total GEO sales of 463,334, near the top end of the revised guidance range of 445,000 to 465,000 GEOs for 2024 [19][20] - Total revenue for Q4 2024 was 321million,a5.8321 million, a 5.8% increase from 303.3 million in Q4 2023 [24] - Adjusted EBITDA for Q4 2024 was 277.4million,up9277.4 million, up 9% from 254.6 million in Q4 2023 [24][28] - Adjusted net income for Q4 2024 was 183.3million,or183.3 million, or 0.95 per share, representing a 6% increase year-over-year [28] Business Line Data and Key Metrics Changes - Precious metal GEOs sold in Q4 2024 were 95,565, a 5% increase compared to the prior year when excluding Cobre Panama [22] - The diversified assets contributed just over 108,000 GEOs sold for the year, with revenue from these assets in line with expectations [21] - Candelaria delivered 26,891 GEOs for Q4 2024, almost 70% higher than the prior year and twice as many as Q3 2024 [23] Market Data and Key Metrics Changes - Gold prices increased by 34.7% in Q4 2024 and 22.9% for the full year [18] - The average cash cost per GEO for the full year 2024 was 278,downfrom278, down from 286 in 2023 [30] - The company expects a 25% increase in 2025 revenue over 2024, based on budgeted gold prices [35] Company Strategy and Development Direction - The company aims to continue its business development activities, having completed over 1.3billioninacquisitionsandcommitmentsduring2024[9]−Newcontributionsfromrecentacquisitionsandorganicgrowthareexpectedtodrivegrowthinthemedium−termproductionprofile[12]−ThecompanyisoptimisticaboutdevelopmentsinPanama,withindicationsofawillingnesstodiscusscorporatematters[15]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthestrongperformanceofthegoldminingindustrydespitemarketvolatility[95]−Thecompanyanticipatesastrongersecondhalfof2025,withbetterperformanceexpectedastheyearprogresses[36]−Managementhighlightedtheimportanceofmaintainingastrongbalancesheettosupportfutureacquisitions[41]OtherImportantInformation−Thecompanyhasasubstantialcashbalanceandnodebt,allowingforcontinueddividendincreases[14]−LegalproceedingsrelatedtoCobrePanamaareexpectedtoincurannualcostsofapproximately1.3 billion in acquisitions and commitments during 2024 [9] - New contributions from recent acquisitions and organic growth are expected to drive growth in the medium-term production profile [12] - The company is optimistic about developments in Panama, with indications of a willingness to discuss corporate matters [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance of the gold mining industry despite market volatility [95] - The company anticipates a stronger second half of 2025, with better performance expected as the year progresses [36] - Management highlighted the importance of maintaining a strong balance sheet to support future acquisitions [41] Other Important Information - The company has a substantial cash balance and no debt, allowing for continued dividend increases [14] - Legal proceedings related to Cobre Panama are expected to incur annual costs of approximately 10 million [40] Q&A Session Summary Question: Comments on Cobre Panama and arbitration - Management confirmed that separate arbitration processes exist and can be put on hold for a fixed timeframe if needed [45] - The company believes the previous deal was favorable for Panama, and any changes in ownership would not affect the stream calculation [50] Question: Delivery timing for Sibanye-Stillwater South African PGM Stream - The first delivery related to 2024 production will occur in Q1, while the delivery for 2025 production will be in Q2 due to a 45-day delay [54] Question: Guidance for 2028 and 2029 - The drop in GEOs for 2029 is primarily due to the mine plan for Guadalupe and Palmarejo, with expectations of a 50% drop in production [105] Question: Energy division contribution to guidance - The energy division is expected to contribute around 16% to 17% of GEOs by 2029 [131] Question: Potential M&A opportunities - The company remains focused on precious metals for M&A opportunities, with a mix of potential deals in the 300millionto300 million to 500 million range [148]