Franco-Nevada impresses with earnings surprise; lifts dividend

VANCOUVER (miningweekly.com) – Canadian gold royalties and streaming firm Franco-Nevada Corp has reported better-than-expected first-quarter earnings on the back of strong output in the period, prompting it to revise upwards its quarterly dividend for the tenth consecutive year since it went public in 2007.

The Toronto-based company reported net earnings of $45.6-million, or $0.26 a share, which was a 52% increase when compared with the same period of 2016.

Stripped of special items, Franco-Nevada reported headline earnings of $0.25 a share, beating average Wall Street analyst forecasts calling for adjusted earnings of $0.22 apiece.

Attributable output came in at 132 000 gold equivalent ounces (GEOs), which represented a new record and a 23.4% increase year-over-year.

Franco-Nevada noted the strong performance of its Guadalupe-Palmarejo contract, which generated $23.7-million in revenue.

The company now has 339 assets – 107 producing, with 41 of the 107 tied to precious metals.

Franco-Nevada reconfirmed its full-year guidance, which calls for 470 000 GEO to 500 000 GEO, with oil and gas revenue totalling $35-million to $45-million.

The company also announced a $0.01 increase to its quarterly cash dividend, which now stands at 0.23 a share per quarter.

Franco-Nevada had $1.6-billion in available capital as of March 31, comprising $356-million in working capital, of which $283-million is in cash, $117-million is in marketable securities and $1.1-billion of available credit falls under its credit facilities. The company has also extended the term of its $1-billion credit facility by about 16 months to March 22, 2022.