Franco-Nevada Q2 Earnings Miss, Revenues Decline Y/Y

Franco-Nevada Corporation FNV reported adjusted earnings of 75 cents per share in second-quarter 2024, missing the Zacks Consensus Estimate of 78 cents. The bottom line decreased 21% year over year.

The company generated revenues of $260 million in the reported quarter, down 21.2% year over year. The downside was driven by lower contributions from Antapaccay, Candelaria and Energy assets, partially offset by record gold prices. In the June-end quarter, 74.2% of revenues were sourced from Precious Metal assets (60.3% gold, 10.8% silver and 3.1% platinum group metals).

The company sold 82,350 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down from the prior-year quarter's 132,033 GEOs.

In the reported quarter, adjusted EBITDA was down 19.5% year over year to $222 million. The adjusted EBITDA margin was 85.3% in the quarter under review compared with the prior-year quarter's 83.5%.

Financial Position

The company had $1.44 billion cash in hand at the end of the second quarter of 2024, up from $1.42 billion as of the end of 2023. It recorded an operating cash flow of $373 million in the first half of 2024, down from $472 million in the prior-year period.

Franco-Nevada is debt-free and uses its free cash flow to expand its portfolio and pay out dividends. FNV now has an available capital of $2.4 billion.

Other Updates

On Aug 13, 2024, FNV announced that it acquired a 1.8% net smelter return royalty on Newmont's Yanacocha operations in Peru from Buenaventura BVN. The transaction strengthens Franco-Nevada's portfolio with immediate gold equivalent ounces and long-term growth prospects.

This transaction is valued at $210 million in cash at closing, plus a $15-million contingent payment in shares.

Price Performance

Franco-Nevada's shares have lost 10.8% in the past year against the industry's growth of 34.3%.

Image Source: Zacks Investment Research

Zacks Rank

FNV currently flaunts a Zacks Rank #1 (Strong Buy).

Peer Performances

Agnico Eagle Mines Limited AEM reported adjusted earnings of $1.07 per share in the second quarter of 2024, up from 65 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 93 cents.

The company generated revenues of $2.08 billion, up nearly 21% year over year. The top line surpassed the Zacks Consensus Estimate of $1.72 billion.

Kinross Gold Corporation KGC reported adjusted earnings of 14 cents per share, in line with the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 13 cents.

Revenues rose nearly 12% year over year to $1.22 billion in the second quarter. It topped the Zacks Consensus Estimate of $1.02 billion.

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