Franco-Nevada Reports 2022 Results.
TORONTO: "Franco-Nevada is reporting strong fourth quarter and annual results for 2022. Our Diversified assets outperformed due to elevated energy prices in the year, stated Paul Brink, CEO. We are pleased that First Quantum and the Government of Panama have agreed on terms for a refreshed concession contract and look forward to Cobre Panama achieving its expanded throughput capacity later this year. Precious metal GEOs and Diversified production in 2023 are expected to be consistent with 2022. We are however guiding to lower total GEOs for the year as current energy prices are below 2022 levels. The organic growth in our 5 year outlook comes from both mine expansions and new mines. Franco-Nevada is debt-free, is growing its cash balances and has an active pipeline of growth opportunities."
Q4 2022
2022
Q4 results
vs
Annual results
vs
Q4 2021
2021
Total GEOs1 sold (including Energy)
183,886 GEOs
+1 %
729,960 GEOs
+0.2 %
Precious Metal GEOs1 sold
129,642 GEOs
-7 %
510,385 GEOs
-9 %
Revenue
$320.4 million
-2 %
$1,315.7 million
+1 %
Net income
$165.0 million ($0.86/share)
-25 %
$700.6 million ($3.66/share)
+5 %
Adjusted Net Income2
$164.9 million ($0.86/share)
+1 %
$697.6 million ($3.64/share)
+4 %
Adjusted EBITDA2
$262.4 million ($1.37/share)
-3 %
$1,106.9 million ($5.78/share)
+1 %
Adjusted EBITDA Margin2
81.9 %
-0.5 %
84.1 %
+0.1 %
Strong Financial Position
Earned record GEOs, revenue, Adjusted Net Income, Adjusted EBITDA and operating cash flow in 2022
No debt and $2.2 billion in available capital as at December 31, 2022
Generated close to $1 billion in operating cash flow in 2022
Quarterly dividend increased 6.25% to $0.34/share effective Q1 2023
Sector-Leading ESG
Ranked #1 gold company by Sustainalytics, AA by MSCI and Prime by ISS ESG
Named on the Corporate Knights' 2022 list of the Best 50 Corporate Citizens in Canada
Committed to the World Gold Council's "Responsible Gold Mining Principles"
Partnering with our operators on community and ESG initiatives
Goal of 40% diverse representation at the Board and top leadership levels as a group by 2025
Diverse, Long-Life Portfolio
Most diverse royalty and streaming portfolio by asset, operator and country
Core assets outperforming since time of acquisition
Long-life reserves and resources
Growth and Optionality
Acquisitions, mine expansions and new mines driving future growth
Long-term optionality in gold, copper and nickel and to some of the world's great mineral endowments
Strong pipeline of precious metal opportunities
Quarterly revenue and GEOs sold by commodity
Q4 2022
Q4 2021
GEOs Sold
Revenue
GEOs Sold
Revenue
(in millions)
(in millions)
PRECIOUS METALS
Gold
102,583
$
178.2
109,637
$
196.5
Silver
18,493
32.7
21,479
38.6
PGM
8,566
15.5
7,683
14.0
129,642
$
226.4
138,799
$
249.1
DIVERSIFIED
Iron ore
6,230
$
10.8
8,600
$
15.5
Other mining assets
301
0.5
656
1.1
Oil
19,619
34.2
16,148
28.9
Gas
24,630
42.5
14,569
26.3
NGL
3,464
6.0
3,771
6.8
54,244
$
94.0
43,744
$
78.6
183,886
$
320.4
182,543
$
327.7
Annual revenue and GEOs sold by commodity
2022
2021
GEOs Sold
Revenue
GEOs Sold
Revenue
(in millions)
(in millions)
PRECIOUS METALS
Gold
401,756
$
723.1
420,535
$
750.6
Silver
77,232
139.9
97,234
172.7
PGM
31,397
56.7
40,628
72.4
510,385
$
919.7
558,397
$
995.7
DIVERSIFIED
Iron ore
30,803
$
55.5
49,748
$
89.6
Other mining assets
3,760
6.9
2,836
5.2
Oil
86,068
156.0
60,447
108.1
Gas
84,227
150.9
44,685
79.8
NGL
14,717
26.7
12,124
21.6
219,575
$
396.0
169,840
$
304.3
729,960
$
1,315.7
728,237
$
1,300.0
In Q4 2022, we earned $320.4 million in revenue, down 2.2% from Q4 2021. The decrease was driven by lower contributions from our Precious Metal and Iron Ore assets, largely offset by our Energy assets due to higher realized oil and gas prices. Precious Metal revenue accounted for 70.7% of our revenue (55.6% gold, 10.2% silver, 4.9% PGM). Revenue was sourced 90.5% from the Americas (26.8% South America, 22.8% Central America & Mexico, 27.0% U.S. and 13.9% Canada).
2023 Guidance
Please see our MD&A for the year ended December 31, 2022 for more details on our guidance and see "Forward-Looking Statements" below.
For 2023, we expect GEO sales from our Precious Metal assets to range between 490,000 and 530,000 GEOs, consistent with 2022, but anticipate total GEOs sales to be between 640,000 and 700,000 GEOs, a reduction from 2022 primarily based on lower assumed oil and gas prices. With respect to Cobre Panama, based on First Quantum's most recent 2023 guidance of between 350,000 and 380,000 tonnes of copper, our attributable GEO production would be between 131,000 and 142,000 GEOs. Following the restriction of concentrate shipments in February, we have made a larger allowance for the impact of shipment timing for the year. We have estimated GEOs delivered and sold from Cobre Panama to be between 115,000 and 135,000 GEOs. We expect higher production from Antapaccay, MWS and Musselwhite, and initial contributions from new mines including Magino, Seguela and Salares Norte, partly offset by anticipated decreases in GEO sales from Antamina, Hemlo and Candelaria. For our Diversified assets, we are guiding to...
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