Franco-Nevada Sees Revenue Decline 18% In Q1 2023

Franco-Nevada (NYSE: FNV) announced on Tuesday post-closing bell its Q1 2023 financial results, earning $276.3 million in quarterly revenue, down from Q1 2022’s $338.8 million.

Breaking down the topline revenue figure, precious metals revenue contributed $212.2 million while energy revenue added $64.1 million. The quarterly revenue comes from 111,238 gold equivalent ounces (GEO) sold, down from last year’s 128,627 GEOs while energy resources sold were at 34,093 GEOs for the quarter, also down from last year’s 49,987 GEOs.

“Our diversified portfolio continues to generate strong cash flows and high margins. The first quarter was impacted by production disruptions at Cobre Panama and Antapaccay as well as lower energy prices,” said CEO Paul Brink.

The gross margin for the quarter slipped down to 64.1% compared to last year’s 65.1%. Further down, the firm ended with $156.5 million in net income, also down from $182.0 million in the year-ago period. This translates to $0.81 earnings per share.

Calibrating for financial items, adjusted EBITDA for the quarter ended at $229.4 million, also a drop from last year’s $286.6 million.

Cash flow from operations for the quarter came in at $209.8 million leading Franco-Nevada to end Q1 2023 with a cash and cash equivalents balance of $1.25 billion. This puts the balance of the current assets at $1.45 billion while current liabilities ended at $215.3 million.

The firm added that stronger precious metal deliveries are anticipated in Q2 with Cobre Panama and Antapaccay returning to normal operations.

“Cobre Panama’s CP 100 Expansion is on-track for year-end and we look forward to initial contributions from Magino, Séguéla and Salares Norte during the year,” Brink said.

Earlier in the year, the royalty and streaming company announced its 2023 guidance and outlook for the next five years. Coming from selling 729,960 total GEOs in 2022, the firm anticipates a lower production next year, guiding it at 640,000 – 700,000 GEOs, with precious metals contributing a lowered estimate of 490,000 – 530,000 GEOs.

But in 2027, the company expects to reach 760,000 – 820,000 GEOs for the year, with precious metals contributing 565,000 – 605,000 GEOs.

Franco-Nevada last traded at $157.90 on the NYSE.

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.

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