Photo by: Bloomberg
VANCOUVER (miningweekly.com) – The NYSE-listed stock of royalty and streaming company Franco-Nevada on Wednesday gained nearly 5% after the company reported an increase in revenues and profit for the three months ended June.
The Toronto-based company, which does not operate mines, develop projects or conduct exploration, but instead relies on its partners to provide it with net smelter return royalties or commodity streams in exchange for an initial capital investment, reported headline earnings of $46.1-million, or $0.25 a share, for the quarter, an increase of 15.3% over the comparable period of 2016.
Adjusted earnings beat average Wall Street analyst forecasts calling for earnings of $0.24 a share, based on forecast revenues of $163.6-million.
Net income, which includes special items, amounted to $45.6-million, or $0.25 a share, reflecting an increase of 7.8% over the $42.3-million, or $0.24 a share, reported for the year-earlier period.
Franco-Nevada produced 122 541 gold-equivalent ounces (GEOs), which was 8.6% higher year-on-year.
As a function of the increased output, Franco-Nevada recognised revenues totalling $163.6-million, up 8.4% from the $150.9-million reported in the second quarter of 2016, and right on the mark of analyst forecasts.
Top line earnings, as measured by the adjusted earnings before interest, taxes, depreciation and amortisation metric, totalled $125.5-million, or $0.69 a share, an increase of 4.1% year-on-year and buoying a somewhat lower margin at 76.7%.
During the second quarter, Franco-Nevada realised proceeds of $356.3-million from share purchase warrants being exercised, shoring up its total liquidity of $1.9-billion available as at June 30, comprising $680.8-million of working capital, $106.7-million in marketable equity securities, and $1.1-billion available under the company’s credit facilities.
CEO David Harquail commented that the company is now expecting to finish 2017 at the higher end of its original GEO guidance of between 470 000 oz and 500 000 oz. Franco-Nevada expects full-year revenue from its oil and gas assets to realise between $35-million and $45-million of revenue to the top line.
He added: "Franco-Nevada is very active in both precious metals and oil and gas investment opportunities and I am confident we can add further assets in each category before year-end."
Franco-Nevada’s stock on Wednesday morning gained $3.62 a share to trade at $76.32 apiece.