Franco-Nevada Ends 2021 With US$1.3 Billion In Revenue, Expects Lower Production In 2022

Franco-Nevada (TSX: FNV) announced on Wednesday its Q4 and full-year financial results for 2021. The mining firm earned US$1.30 billion in revenue for the year, up from 2020’s US$1.02 billion.

Breaking down the topline revenue figure, precious metals revenue contributed US$995.7 million while energy revenue added US$304.3 million.

The annual revenue comes from 728,237 GEOs sold, up from last year’s 573,347 GEOs. Precious metals sold came in at 558,397 GEOs while energy resources sold were at 169,840 GEOs for the year.

“We achieved record annual top-line and bottom-line results,” said CEO Paul Bink. “GEO sales growth was driven by an increased contribution from Cobre Panama, outperformance by Antamina and contributions from new acquisitions. The advantage of our diverse portfolio was again demonstrated in 2021.”

The gross margin for the year rose to 63.2% compared to last year’s 60.8%. Further down, the firm ended with US$733.7 million in annual net income, up from US$326.2 million in the year-ago period. This translates to US$3.83 earnings per share.

Calibrating for financial items, adjusted EBITDA for the year ended at US$1.09 billion, also a jump from last year’s US$839.6 million.

For Q4, the firm recorded quarterly revenue of US$327.7 million, up from both Q3 2021’s US$316.3 million and Q4 2020’s US$304.5 million. The firm also had 182,543 GEOs sold during the quarter compared to 146,495 GEOs sold last quarter and 162,533 GEOs sold last year.

The mining firm also ended the quarter with US$220.9 million in net income or US$1.61 earnings per share. This is an increase from both Q3 2021’s US$166.0 million and Q4 2020’s US$$176.7 million.

Cash flow from operations for the year came in at US$955.4 million leading to end 2021 with a cash and cash equivalents balance of US$539.3 million. This puts the balance of the current assets at US$751.4 million while current liabilities ended at US$43.2 million.

The royalty and streaming company also announced its 2022 guidance and outlook for the next five years. The firm anticipates a lower production next year, guiding it at 680,000 – 740,000 GEOs, with precious metals contributing a lowered estimate of 510,000 – 550,000 GEOs.

“The outlook reflects an expected lower contribution from our Guadalupe-Palmarejo stream and expected lower grades at Antamina and Antapaccay in 2022,” the company said.

But in 2026, the company expects to reach 765,000 – 825,000 GEOs for the year, with precious metals contributing 570,000 – 610,000 GEOs. The firm said the outlook assumes that Cobre Panama will have expanded its capacity to 100 million tonnes per year during 2023 and the start of the production for Salares Norte, Greenstone (Hardrock), Rosemont, Valentine Lake, and Eskay Creek properties.

20212022 guidance2026 guidance
Total (GEOs)728,237680,000 – 740,000765,000 – 825,000
Precious Metals (GEOs)558,397510,000 – 550,000570,000 – 610,000
Diversified (GEOs)169,840170,000 – 190,000195,000 – 215,000

Franco-Nevada last traded at $205.90 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply