(in U.S. dollars unless otherwise noted)
Dividend Increased for 12th Consecutive
Year
Ongoing Board and Succession Planning
TORONTO, May 8, 2019 /CNW/ - "Franco-Nevada's
diversified portfolio performed very well in the first quarter
delivering record revenue and net income," stated David Harquail, CEO. "We expect even
stronger numbers in the second half as Cobre Panama begins its
initial deliveries, Candelaria returns to normal operations and our
U.S. energy royalties continue to grow. It is a testament to
both the portfolio and our business model that today Franco-Nevada
has increased its dividend for the 12th consecutive year
adding to the over $1 billion of
dividends already paid."
Pierre Lassonde, Chair, added: "I
would like to welcome Jennifer Maki
who was elected today at our AGM as the newest member of the
Franco-Nevada board. Jennifer is the former CEO of Vale
Canada and Executive Director of Vale Base Metals and is a
Chartered Professional Accountant. She brings a depth of
mining and financial experience to our board. On a separate
note, today at the AGM, I announced my intention to step down as
Chair at the next annual meeting in May
2020. At that point, I will have served as chair for over 12
years. Both announcements are part of an orderly and
long-term succession planning process being led by the board."
Q1/2019 Financial Highlights
- 122,049 GEOs sold
- $179.8 million in revenue – a new
record
- $65.2 million of Net Income (a
new record), or $0.35 per share
- $31.0 million in Cash Costs, or
$254 per GEO
- $140.9 million of Adjusted
EBITDA, or $0.75 per share
- Quarterly dividend increased to $0.25 from $0.24
per share – increased for 12th consecutive year
Revenue and
GEOs by Asset Categories
|
|
|
Q1/2019
|
|
Q1/2018
|
|
|
GEOs #
|
Revenue (in millions)
|
|
GEOs #
|
|
Revenue (in millions)
|
Gold
|
|
87,578
|
$114.0
|
|
88,794
|
|
$118.3
|
Silver
|
|
15,298
|
20.0
|
|
17,672
|
|
23.5
|
PGMs
|
|
14,629
|
19.1
|
|
6,935
|
|
9.3
|
Other Mining
Assets
|
|
4,544
|
5.9
|
|
2,270
|
|
3.0
|
Mining
|
|
122,049
|
$159.0
|
|
115,671
|
|
$154.1
|
Energy
|
|
—
|
20.8
|
|
—
|
|
19.0
|
|
|
122,049
|
$179.8
|
|
115,671
|
|
$173.1
|
For Q1/2019, revenue was sourced 88.4% from gold and gold
equivalents (63.4% gold, 11.1% silver, 10.6% PGM and 3.3% other
mining assets) and 11.6% from energy (oil, gas and NGLs). The
portfolio is actively managed to maintain a focus on precious
metals (gold, silver and PGM) with a target of no more than 20%
from energy. Geographically, revenue was sourced 81.6% from the
Americas (41.7% Latin America,
18.3% U.S. and 21.6% Canada).
Corporate Updates
- Board of Directors: Franco-Nevada's board is leading an orderly and
long-term succession process. At today's AGM, Jennifer Maki was elected to the board. She has
served as Chief Executive Officer of Vale Canada and Executive
Director of Vale Base Metals (2014 to 2017) and previously held
several other positions with Vale Base Metals and is a Chartered
Professional Accountant. Pierre
Lassonde has served as Chair of Franco-Nevada since 2007 and
has announced his intention to step down as Chair at the next
annual meeting in May 2020. These two
announcements are unrelated.
- Salares Norte: On January 31,
2019, Franco-Nevada, through a wholly-owned Chilean
subsidiary, acquired an existing 2% NSR on Gold Fields' Salares
Norte gold project in the Atacama region of northern Chile for $32.0
million, comprised of $27.0
million of Franco-Nevada common shares (366,499 common
shares) and $5.0 million in cash.
Gold Fields has an option to buy back 1% of the NSR for
$6.0 million within 24 months of
commercial production.
- Valentine Lake: On
February 21, 2019, Franco-Nevada
acquired a 2% NSR on Marathon Gold Corporation's ("Marathon")
Valentine Lake Gold Camp in central
Newfoundland for C$18.0 million. Marathon has an option to buy
back 0.5% of the NSR for $7.0 million
until December 31, 2022.
Q1/2019 Portfolio Updates
- Mining — Latin America:
GEOs from Latin American mining assets were stable year-over-year,
with 57,546 GEOs earned compared to 57,854 GEOs in Q1/2018. While
deliveries from Candelaria increased significantly year-over-year,
the impact was mostly offset by lower production from Antapaccay
and Antamina.
-
- Cobre Panama (gold and silver stream) – The operator,
First Quantum, reports that ore milling has begun and 25 tonnes of
copper concentrate were produced. First Quantum reiterated its
production guidance of 140,000 to 175,000 tonnes of copper for
Cobre Panama for 2019. It expects the operation to be milling at an
annualized rate of 72 mtpy by year end. First Quantum also released
a technical report in March that projects the operation reaching a
milling throughput of 100 mtpy in 2023. Franco-Nevada's precious metals streams are tied to
copper produced.
- Candelaria (gold and silver stream) – GEOs earned from
Candelaria in the quarter were higher due to the processing of
higher grade ore. The operation is expected to benefit
substantially in the second half from over $1 billion in fleet purchases, stripping and
development.
- Antapaccay (gold and silver stream) – GEOs earned from
Antapaccay were lower as expected with the life of mine plan.
- Antamina (22.5% silver stream) – GEOs earned from
Antamina were lower as expected in the life of mine plan.
- Cerro Moro (2% royalty) –
Cerro Moro began production in 2018.
Franco-Nevada will benefit from
the first full year of production in 2019. An aggressive drill
program is planned to delineate near-mine targets.
- Guadalupe-Palmarejo (50% gold stream) – GEOs sold in
Q1/2019 were down year-over-year as less mining occurred on
Franco-Nevada stream lands. Development at the La Nación deposit,
located between the Independencia and Guadalupe mines and
predominantly on stream lands, remains on-schedule with production
expected in the second half of 2019.
- Mining — U.S.: GEOs from U.S. mining assets decreased by
5.0% in Q1/2019 compared with Q1/2018 mainly due to lower payments
from Fire Creek/Midas and South Arturo, partly offset by strong
production from Stillwater. GEOs
received from the U.S. mining assets were 17,558 GEOs.
-
- Goldstrike (2-4% royalty & 2.4-6% NPI); Gold Quarry
(7.29% royalty) – Barrick and Newmont's joint venture in
Nevada is expected to realize
synergies. This could positively impact the NPI royalty at
Goldstrike.
- Rosemont (1.5% royalty)
– Hudbay announced in March 2019 the
receipt of the final key federal permit outstanding allowing the
company to advance Rosemont
towards construction. Hudbay subsequently announced that it has
reached an agreement to purchase United Copper & Moly LLC's
7.95% interest in the project and terminate the earn-in and
off-take rights. Franco-Nevada's
royalty is on all metals produced.
- South Arturo (4-9% royalty) – Joint venture operators
Barrick and Premier Gold continue to advance the construction of
the El Nino underground and Phase 1 open pit. A small amount of
production is expected in 2019 with more meaningful production
expected in 2020.
- Stillwater (5% royalty)
– Sibanye-Stillwater is forecasting PGM production between
645,000-675,000 ounces for 2019 as the Blitz project continues to
ramp-up. Blitz is anticipated to increase total PGM production from
Stillwater by more than 50% to
approximately 850,000 ounces per year by late 2021 or early
2022.
- Fire Creek/Midas (2.5% royalty) – The fixed delivery
requirement for Fire Creek/Midas was met in 2018. The new operator,
Hecla, has placed the Midas mine
on care and maintenance with more focus being placed on increasing
production from Fire Creek.
- Mining — Canada: GEOs
from Canadian mining assets increased 53.6% in Q1/2019 to 21,581
GEOs compared with Q1/2018 mainly due to the resumption of mining
at Sudbury's McCreedy mine.
-
- Sudbury (50% precious
metals stream) – KGHM announced that it has resumed mining the
PM zone at the McCreedy mine which contains higher grade precious
metal ore. As part of the revised arrangements with KGHM,
Franco-Nevada has agreed to increase its ongoing cost to
$800 per GEO delivered from McCreedy
until December 31, 2021. The increase
in deliveries from McCreedy will be partially offset going forward
by plans to put the Levack mine on
care and maintenance at the end of March
2019.
- Brucejack (1.2% royalty) – Pretium provided an updated
mine plan for the Brucejack operation in April 2019. The updated plan assumes average
annual production of over 525,000 ounces of gold over the first 10
years and over 440,000 ounces of gold over the 14-year mine life.
The mine passed the 503,386 gold ounce production threshold in
December 2018 which triggered the
start of royalty payments to Franco-Nevada.
- Hardrock (3% royalty) – The Hardrock project received
provincial government approval in March
2019 which follows receipt of the federal approval in
December 2018. The joint venture
partners will continue to advance permitting including construction
permit applications and additional drilling for the balance of
2019.
- Kirkland Lake (1.5-5.5%
royalty & 20% NPI) – The Macassa mine produced a record
72,776 ounces during the quarter, an increase of 35% from Q1/2018.
Kirkland Lake continues to advance
the construction of the #4 Shaft at the Macassa mine. Kirkland Lake has the goal of increasing
production at Macassa to over 400,000 ounces per year over the next
five to seven years.
- Musselwhite (5% NPI) – An underground fire at the end of
March 2019 caused the operation to be
suspended. Newmont, the new operator, is expected to give an update
on the integration of the Goldcorp assets during the second quarter
of 2019 with potentially more information regarding the re-opening
of Musselwhite.
- Golden Highway (0.25–10% royalty) – Franco-Nevada and
Kirkland Lake amended the royalty
agreement on the Holloway property to a fixed 3% NSR royalty versus
the previous sliding scale royalty. Kirkland Lake is now targeting approximately
20,000 ounces of production in 2019, growing to approximately
50,000 ounces by 2021. Previously, the Holloway mine was on care
and maintenance.
- Mining — Rest of World: GEOs from Rest of World mining
assets were 25,364 GEOs during the quarter, remaining stable
compared to Q1/2018.
-
- Subika (2% royalty) – Newmont declared commercial
production at the Subika Underground in Q4/2018. The second major
project, the Ahafo Mill expansion, is expected to have first
production and declare commercial production in the second half of
2019.
- Duketon (2% royalty) – Regis Resources commenced
underground development below the current Rosemont open pit and delineated a maiden
mineral reserve of 123,000 ounces.
- Ity (1–1.5% royalty) – Franco-Nevada has a 1.5% royalty
on the project until 35 tonnes of gold are produced. With
Endeavour's increased production
forecast for 2019, this threshold may be met by the end of the
year.
- Agi Dagi (2% royalty) – Alamos received its operating
permit for Kirazli (not subject to our royalty) and expects to
start earthworks at the project. When Kirazli is constructed, the
development focus is expected to shift to Agi Dagi.
- Tasiast (2% royalty) – The Phase One (12,000 tpd)
expansion is complete. Phase Two activities are paused as
Kinross continues to analyze
expansion options and engages in discussions with the Government of
Mauritania.
- Energy: Revenue from the energy assets increased to
$20.8 million in Q1/2019 compared to
$19.0 million in Q1/2018, reflecting
the additional contributions from new investments in the
SCOOP/STACK and positive year-over-year production from the Permian
interests. This was partially offset by lower revenue from our
Canadian assets.
-
- SCOOP/STACK (Continental) (various royalty rates) –The
Royalty Acquisition Venture is having good success at acquiring
additional royalties. In Q1/2019, Franco-Nevada recorded
contributions of $51.4 million to the
Royalty Acquisition Venture and its remaining commitment over the
next three years is $206.8 million.
Revenue in Q1/2019 totalled $2.8
million.
- SCOOP/STACK (Other) (various royalty rates) – These
assets generated $2.7 million in
revenue in Q1/2019 versus $2.2
million in Q1/2018, due to an increase in volumes from new
wells on royalty lands. Encana is now a significant operator over
our STACK royalty lands.
- Permian (various royalty rates) – Franco-Nevada's
interests in the Permian Basin earned revenue of $4.5 million in Q1/2019 versus $3.7 million in Q1/2018, reflecting the addition
of the Delaware royalties, an
increase in volumes from new wells and proceeds received from prior
periods.
- Weyburn (NRI, ORR, WI)
– Weyburn contributed $7.3 million in revenue in Q1/2019 versus
$10.1 million in Q1/2018. Revenues in
the quarter were affected by lower realized prices and increased
capital spending at the operation. Through 2019, realized prices
are expected to improve as a result of a more balanced market in
western Canada and capital
spending at Weyburn is expected to
be lower.
- Orion (4% GORR) – Orion generated $1.7 million in revenue in Q1/2019 versus
$0.8 million in Q1/2018. While
production volume was significantly higher, revenue was negatively
impacted by price differentials and government mandated volume
curtailments. These issues are expected to improve over the balance
of 2019.
Dividend Declaration
Franco-Nevada is pleased to
announce that its board of directors has declared a quarterly
dividend of $0.25 per share.
The dividend is a 4.2% increase from the previous $0.24 per share quarterly dividend and marks the
12th consecutive annual dividend increase for
Franco-Nevada shareholders. Canadian investors in
Franco-Nevada's IPO in December 2007
are now receiving an effective 8.9% yield on their cost base.
The dividend will be paid on June 27,
2019 to shareholders of record on June 13, 2019 (the "Record Date"). The
Canadian dollar equivalent is to be determined based on the daily
average rate posted by the Bank of Canada on the Record Date. Under
Canadian tax legislation, Canadian resident individuals who receive
"eligible dividends" are entitled to an enhanced gross-up and
dividend tax credit on such dividends.
The Company has a Dividend Reinvestment Plan (the "DRIP").
Participation in the DRIP is optional. The Company will issue
additional common shares through treasury at a 3% discount to the
Average Market Price, as defined in the DRIP. However, the Company
may, from time to time, in its discretion, change or eliminate the
discount applicable to treasury acquisitions or direct that such
common shares be purchased in market acquisitions at the prevailing
market price, any of which would be publicly announced. The DRIP
and enrollment forms are available on the Company's website at
www.franco-nevada.com. Canadian and U.S. registered shareholders
may also enroll in the DRIP online through the plan agent's
self-service web portal at www.investorcentre.com/franco-nevada.
Canadian and U.S. beneficial shareholders should contact their
financial intermediary to arrange enrollment. During Q2/2018,
the Company amended and restated the DRIP to allow for certain
non-Canadian and non-U.S. shareholders to participate in the DRIP,
subject to the satisfaction of certain conditions.
Non-Canadian and non-U.S. shareholders should contact the Company
to determine whether they satisfy the necessary conditions to
participate in the DRIP.
This press release is not an offer to sell or a solicitation of
an offer of securities. A registration statement relating to the
DRIP has been filed with the U.S. Securities and Exchange
Commission and may be obtained under the Company's profile on the
U.S. Securities and Exchange Commission's website at
www.sec.gov.
Shareholder Information
The complete Consolidated Interim Financial Statements and
Management's Discussion and Analysis can be found today on
Franco‑Nevada's website at www.franco-nevada.com, on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Management will host a conference call tomorrow, Thursday, May 9, 2019 at 8:30 a.m. Eastern
Time to review Franco‑Nevada's Q1/2019 results.
Interested investors are invited to participate as follows:
- Via Conference Call: Toll-Free: (888) 390-0546;
International: (416) 764-8688
- Conference Call Replay until May
16: Toll-Free (888) 390-0541; International (416) 764-8677;
Code 770553#
- Webcast: A live audio webcast will be accessible at
www.franco-nevada.com
Corporate Summary
Franco-Nevada Corporation is the leading gold-focused royalty
and stream company with the largest and most diversified portfolio
of cash-flow producing assets. Its business model provides
investors with gold price and exploration optionality while
limiting exposure to many of the risks of operating
companies. Franco-Nevada has a strong balance sheet and uses
its free cash flow to expand its portfolio and pay dividends.
It trades under the symbol FNV on both the Toronto and New
York stock exchanges. Franco-Nevada is the gold
investment that works.
Forward Looking Statements
This press release contains "forward looking information" and
"forward looking statements" within the meaning of applicable
Canadian securities laws and the United States Private Securities
Litigation Reform Act of 1995, respectively, which may include, but
are not limited to, statements with respect to future events or
future performance, management's expectations regarding
Franco-Nevada's growth, results of operations, estimated future
revenues, carrying value of assets, future dividends and
requirements for additional capital, mineral reserve and mineral
resource estimates, production estimates, production costs and
revenue, future demand for and prices of commodities, expected
mining sequences, business prospects and opportunities, audits
being conducted by the Canada Revenue Agency and available
remedies, and the remedies relating to and consequences of the
ruling of the Supreme Court of Panama in relation to the Cobre Panama
project. In addition, statements (including data in tables)
relating to reserves and resources and gold equivalent ounces
("GEOs") are forward looking statements, as they involve implied
assessment, based on certain estimates and assumptions, and no
assurance can be given that the estimates and assumptions are
accurate and that such reserves and resources and GEOs will be
realized. Such forward looking statements reflect management's
current beliefs and are based on information currently available to
management. Often, but not always, forward looking statements can
be identified by the use of words such as "plans", "expects", "is
expected", "budgets", "scheduled", "estimates", "forecasts",
"predicts", "projects", "intends", "targets", "aims", "anticipates"
or "believes" or variations (including negative variations) of such
words and phrases or may be identified by statements to the effect
that certain actions "may", "could", "should", "would", "might" or
"will" be taken, occur or be achieved. Forward looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
Franco-Nevada to be materially different from any future results,
performance or achievements expressed or implied by the forward
looking statements. A number of factors could cause actual events
or results to differ materially from any forward looking statement,
including, without limitation: fluctuations in the prices of the
primary commodities that drive royalty and stream revenue (gold,
platinum group metals, copper, nickel, uranium, silver, iron-ore
and oil and gas); fluctuations in the value of the Canadian and
Australian dollar, Mexican peso, and any other currency in which
revenue is generated, relative to the U.S. dollar; changes in
national and local government legislation, including permitting and
licensing regimes and taxation policies and the enforcement
thereof; regulatory, political or economic developments in
any of the countries where properties in which Franco-Nevada holds
a royalty, stream or other interest are located or through which
they are held; risks related to the operators of the properties in
which Franco-Nevada holds a royalty, stream or other interest,
including changes in the ownership and control of such operators;
influence of macroeconomic developments; business opportunities
that become available to, or are pursued by Franco-Nevada; reduced
access to debt and equity capital; litigation; title, permit or
license disputes related to interests on any of the properties in
which Franco-Nevada holds a royalty, stream or other interest;
whether or not the Corporation is determined to have "passive
foreign investment company" ("PFIC") status as defined in
Section 1297 of the United States Internal Revenue Code of
1986, as amended; potential changes in Canadian tax treatment of
offshore streams; excessive cost escalation as well as development,
permitting, infrastructure, operating or technical difficulties on
any of the properties in which Franco-Nevada holds a royalty,
stream or other interest; access to sufficient pipeline capacity;
actual mineral content may differ from the reserves and resources
contained in technical reports; rate and timing of production
differences from resource estimates, other technical reports and
mine plans; risks and hazards associated with the business of
development and mining on any of the properties in which
Franco-Nevada holds a royalty, stream or other interest, including,
but not limited to unusual or unexpected geological and
metallurgical conditions, slope failures or cave-ins, flooding and
other natural disasters, terrorism, civil unrest or an outbreak of
contagious diseases; and the integration of acquired assets. The
forward looking statements contained in this press release are
based upon assumptions management believes to be reasonable,
including, without limitation: the ongoing operation of the
properties in which Franco-Nevada holds a royalty, stream or other
interest by the owners or operators of such properties in a manner
consistent with past practice; the accuracy of public statements
and disclosures made by the owners or operators of such underlying
properties; no material adverse change in the market price of the
commodities that underlie the asset portfolio; the Corporation's
ongoing income and assets relating to determination of its PFIC
status; no material changes to existing tax treatment; no adverse
development in respect of any significant property in which
Franco-Nevada holds a royalty, stream or other interest; the
accuracy of publicly disclosed expectations for the development of
underlying properties that are not yet in production; integration
of acquired assets; the expected application of tax laws and
regulations by taxation authorities; the expected assessment and
outcome of any audit by any taxation authority; and the absence of
any other factors that could cause actions, events or results to
differ from those anticipated, estimated or intended. However,
there can be no assurance that forward looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Investors are cautioned that forward looking statements are not
guarantees of future performance. Franco-Nevada cannot assure investors that actual
results will be consistent with these forward looking statements
and investors should not place undue reliance on forward looking
statements due to the inherent uncertainty therein. For additional
information with respect to risks, uncertainties and assumptions,
please refer to the "Risk Factors" section of Franco-Nevada's most
recent Annual Information Form filed with the Canadian
securities regulatory authorities on www.sedar.com and
Franco-Nevada's most recent Annual Report filed on Form 40-F
filed with the SEC on www.sec.gov. The forward looking statements
herein are made as of the date of this press release only and
Franco-Nevada does not assume any obligation to update or revise
them to reflect new information, estimates or opinions, future
events or results or otherwise, except as required by applicable
law.
NON-IFRS MEASURES: Cash Costs, Adjusted EBITDA, and
Adjusted Net Income are intended to provide additional information
only and do not have any standardized meaning prescribed under IFRS
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
These measures are not necessarily indicative of operating profit
or cash flow from operations as determined under IFRS. Other
companies may calculate these measures differently. For a
reconciliation of these measures to various IFRS measures, please
see below or the Company's current MD&A disclosure found on the
Company's website, on SEDAR and on EDGAR. Comparative information
has been recalculated to conform to current presentation.
- GEOs include our gold, silver, platinum, palladium
and other mining assets. GEOs are estimated on a gross basis for
NSR royalties and, in the case of stream ounces, before the payment
of the per ounce contractual price paid by the Company. For NPI
royalties, GEOs are calculated taking into account the NPI
economics. Platinum, palladium, silver and other minerals are
converted to GEOs by dividing associated revenue, which includes
settlement adjustments, by the relevant gold price. The gold price
used in the computation of GEOs earned from a particular asset
varies depending on the royalty or stream agreement, which may make
reference to the market price realized by the operator, or the
average for the month, quarter, or year in which the mineral was
produced or sold. For Q1/2019, the average commodity prices were as
follows: $1,304 gold (2018 -
$1,329), $15.57 silver (2018 - $16.77), $823
platinum (2018 - $978) and
$1,435 palladium (2018 - $1,035).
- Cash Costs attributable to GEO production and Cash Costs per
GEO are non-IFRS financial measures. Cash Costs
attributable to GEO production is calculated by starting with total
costs of sale and excluding depletion and depreciation, costs not
attributable to GEO production such as our Energy operating costs,
and other non-cash costs of sales such as costs related to our
prepaid gold purchase agreement. Cash Costs is then divided by GEOs
sold, excluding prepaid ounces, to arrive at Cash Costs per
GEO.
- Adjusted EBITDA and Adjusted EBITDA per share are
non-IFRS financial measures, which exclude the following from net
income and earnings per share ("EPS"): income tax expense/recovery;
finance expenses; finance income; depletion and depreciation;
non-cash costs of sales; impairment charges related to royalty,
stream and working interests and investments; gains/losses on sale
of royalty interests; gains/losses on investments; and foreign
exchange gains/losses and other income/expenses.
- Adjusted Net Income and Adjusted Net Income per
share are non-IFRS financial measures, which exclude the
following from net income and EPS: foreign exchange gains/losses
and other income/expenses; impairment charges related to royalty,
stream and working interests and investments; gains/losses on sale
of royalty interests; gains/losses on investments; unusual
non-recurring items; and the impact of income taxes on these
items.
Reconciliation to IFRS measures:
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except per GEO amounts)
|
2019
|
|
2018
|
Total costs of
sales
|
$
|
93.3
|
|
$
|
90.8
|
Depletion and
depletion
|
|
(60.9)
|
|
|
(60.6)
|
Energy operating
costs
|
|
(1.4)
|
|
|
(1.0)
|
Non-cash costs of
sales
|
|
—
|
|
|
(1.9)
|
Cash Costs
attributable to GEO production
|
$
|
31.0
|
|
$
|
27.3
|
GEOs, excluding
prepaid ounces
|
|
122,049
|
|
|
113,504
|
Cash Costs per
GEO
|
$
|
254
|
|
$
|
241
|
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except per share amounts)
|
2019
|
|
2018
|
Net
Income
|
$
|
65.2
|
|
$
|
64.6
|
Income tax
expense
|
|
13.0
|
|
|
13.5
|
Finance
expenses
|
|
2.5
|
|
|
0.9
|
Finance
income
|
|
(0.7)
|
|
|
(1.0)
|
Depletion and
depreciation
|
|
60.9
|
|
|
60.6
|
Non-cash costs of
sales
|
|
—
|
|
|
1.9
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
—
|
|
|
(0.6)
|
Adjusted
EBITDA
|
$
|
140.9
|
|
$
|
139.9
|
Basic weighted
average shares outstanding
|
|
187.0
|
|
|
185.9
|
Adjusted EBITDA
per share
|
$
|
0.75
|
|
$
|
0.75
|
|
For the three
months ended
|
|
March 31,
|
(expressed in
millions, except per share amounts)
|
2019
|
|
2018
|
Net
Income
|
$
|
65.2
|
|
$
|
64.6
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
—
|
|
|
(0.6)
|
Tax effect of
adjustments
|
|
—
|
|
|
(0.1)
|
Adjusted Net
Income
|
$
|
65.2
|
|
$
|
63.9
|
Basic weighted
average shares outstanding
|
|
187.0
|
|
|
185.9
|
Adjusted Net
Income per share
|
$
|
0.35
|
|
$
|
0.34
|
FRANCO-NEVADA
CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(unaudited, in millions of U.S. dollars)
|
At
March 31,
|
|
At
December 31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents (Note 4)
|
$
|
72.6
|
|
$
|
69.7
|
Receivables
|
|
68.6
|
|
|
75.5
|
Prepaid expenses and
other (Note 6)
|
|
31.7
|
|
|
33.3
|
Current
assets
|
$
|
172.9
|
|
$
|
178.5
|
|
|
|
|
|
|
Royalty, stream and
working interests, net (Note 7)
|
$
|
4,604.4
|
|
$
|
4,555.6
|
Investments (Note
5)
|
|
197.6
|
|
|
169.7
|
Deferred income tax
assets
|
|
16.8
|
|
|
17.3
|
Other assets (Note
8)
|
|
13.4
|
|
|
10.7
|
Total
assets
|
$
|
5,005.1
|
|
$
|
4,931.8
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
36.9
|
|
$
|
23.6
|
Current income tax
liabilities
|
|
4.9
|
|
|
1.4
|
Current
liabilities
|
$
|
41.8
|
|
$
|
25.0
|
|
|
|
|
|
|
Lease
liabilities
|
$
|
2.8
|
|
$
|
—
|
Debt (Note
9)
|
|
157.2
|
|
|
207.6
|
Deferred income tax
liabilities
|
|
74.8
|
|
|
67.3
|
Total
liabilities
|
$
|
276.6
|
|
$
|
299.9
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY(Note 15)
|
|
|
|
|
|
Share
capital
|
$
|
5,196.5
|
|
$
|
5,158.3
|
Contributed
surplus
|
|
16.8
|
|
|
15.6
|
Deficit
|
|
(304.6)
|
|
|
(321.7)
|
Accumulated other
comprehensive loss
|
|
(180.2)
|
|
|
(220.3)
|
Total shareholders'
equity
|
$
|
4,728.5
|
|
|
4,631.9
|
Total liabilities and
shareholders' equity
|
$
|
5,005.1
|
|
$
|
4,931.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingencies(Note 19)
|
|
|
|
|
|
Subsequent
events(Note 20)
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
Q1/2019 Report available on our website
FRANCO-NEVADA
CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(unaudited, in millions of U.S.
dollars, except per share amounts)
|
For the three months ended
|
|
March 31,
|
|
2019
|
|
2018
|
Revenue
(Note 10)
|
$
|
179.8
|
|
$
|
173.1
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
Costs of sales
(Note 11)
|
$
|
32.4
|
|
$
|
30.2
|
Depletion and
depreciation
|
|
60.9
|
|
|
60.6
|
Total costs of
sales
|
$
|
93.3
|
|
$
|
90.8
|
Gross
profit
|
$
|
86.5
|
|
$
|
82.3
|
|
|
|
|
|
|
Other operating
expenses (income)
|
|
|
|
|
|
General and
administrative expenses
|
$
|
6.9
|
|
$
|
5.2
|
Gain on sale of gold
bullion
|
|
(0.4)
|
|
|
(0.3)
|
Total other operating
expenses (income)
|
$
|
6.5
|
|
$
|
4.9
|
Operating
income
|
$
|
80.0
|
|
$
|
77.4
|
Foreign exchange gain
and other income (expenses)
|
$
|
—
|
|
$
|
0.6
|
Income before finance
items and income taxes
|
$
|
80.0
|
|
$
|
78.0
|
|
|
|
|
|
|
Finance items
(Note 13)
|
|
|
|
|
|
Finance
income
|
$
|
0.7
|
|
$
|
1.0
|
Finance
expenses
|
|
(2.5)
|
|
|
(0.9)
|
Net income before
income taxes
|
$
|
78.2
|
|
$
|
78.1
|
|
|
|
|
|
|
Income tax expense
(Note 14)
|
|
13.0
|
|
|
13.5
|
Net
income
|
$
|
65.2
|
|
$
|
64.6
|
|
|
|
|
|
|
Earnings per share
(Note 16)
|
|
|
|
|
|
Basic
|
$
|
0.35
|
|
$
|
0.35
|
Diluted
|
$
|
0.35
|
|
$
|
0.35
|
Weighted average
number of shares outstanding (Note 16)
|
|
|
|
|
|
Basic
|
|
187.0
|
|
|
185.9
|
Diluted
|
|
187.3
|
|
|
186.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
|
Currency translation
adjustment
|
$
|
14.0
|
|
$
|
(23.2)
|
|
|
|
|
|
|
Items that will
not be reclassified subsequently to profit and loss:
|
|
|
|
|
|
Changes in the fair
value of equity investments at fair value through other
|
|
|
|
|
|
comprehensive income
("FVTOCI"), net of income tax (Note 5)
|
|
22.9
|
|
|
(25.7)
|
Other comprehensive
income (loss)
|
$
|
36.9
|
|
$
|
(48.9)
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
102.1
|
|
$
|
15.7
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
Q1/2019 Report available on our website
FRANCO-NEVADA
CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(unaudited, in millions of U.S. dollars)
|
For the three months ended
|
|
March 31,
|
|
2019
|
|
2018
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
65.2
|
|
$
|
64.6
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depletion and
depreciation
|
|
60.9
|
|
|
60.6
|
Non-cash costs of
sales
|
|
—
|
|
|
1.9
|
Share-based
payments
|
|
1.4
|
|
|
1.2
|
Unrealized foreign
exchange gain
|
|
(0.1)
|
|
|
—
|
Deferred income tax
expense
|
|
3.3
|
|
|
6.1
|
Other non-cash
items
|
|
0.3
|
|
|
(0.3)
|
Acquisition of gold
bullion
|
|
(7.6)
|
|
|
(6.4)
|
Proceeds from sale of
gold bullion
|
|
11.2
|
|
|
5.6
|
Operating cash flows
before changes in non-cash working capital
|
$
|
134.6
|
|
$
|
133.3
|
Changes in non-cash
working capital:
|
|
|
|
|
|
Decrease in
receivables
|
$
|
6.9
|
|
$
|
4.5
|
Increase in prepaid
expenses and other
|
|
(1.5)
|
|
|
(0.7)
|
Increase in current
liabilities
|
|
3.6
|
|
|
0.4
|
Net cash provided by
operating activities
|
$
|
143.6
|
|
$
|
137.5
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Acquisition of
royalty, stream and working interests
|
$
|
(57.3)
|
|
$
|
(523.0)
|
Acquisition of energy
well equipment
|
|
(0.3)
|
|
|
(0.2)
|
Proceeds from sale of
investments
|
|
1.3
|
|
|
—
|
Net cash used in
investing activities
|
$
|
(56.3)
|
|
$
|
(523.2)
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Repayment of credit
facilities
|
$
|
(50.0)
|
|
$
|
—
|
Credit facility
amendment costs
|
|
(0.8)
|
|
|
(0.5)
|
Payment of
dividends
|
|
(34.9)
|
|
|
(35.6)
|
Proceeds from exercise
of stock options
|
|
1.0
|
|
|
—
|
Net cash used in
financing activities
|
$
|
(84.7)
|
|
$
|
(36.1)
|
Effect of exchange
rate changes on cash and cash equivalents
|
$
|
0.3
|
|
$
|
(1.6)
|
Net change in cash
and cash equivalents
|
$
|
2.9
|
|
$
|
(423.4)
|
Cash and cash
equivalents at beginning of period
|
$
|
69.7
|
|
$
|
511.1
|
Cash and cash
equivalents at end of period
|
$
|
72.6
|
|
$
|
87.7
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Cash paid for
interest expense and loan standby fees
|
$
|
2.2
|
|
$
|
0.6
|
Income taxes
paid
|
$
|
7.0
|
|
$
|
7.7
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
Q1/2019 Report available on our website
View original
content:http://www.prnewswire.com/news-releases/franco-nevada-reports-record-q1-results-300846742.html
SOURCE Franco-Nevada Corporation