(in U.S. dollars unless otherwise noted)
Growing free cash flow and strong outlook
TORONTO, March 9, 2020 /PRNewswire/ - "I am pleased that
Franco-Nevada is reporting its best results ever," stated
David Harquail, CEO. "Record
quarterly and annual results were achieved across all our important
sales and financial metrics. Results benefited from the start of
precious metals deliveries from Cobre Panama, strong production at
other key assets and higher precious metals prices. Thanks to our
diversified portfolio, we expect good overall growth in 2020 mostly
driven by the continued Cobre Panama ramp-up despite a more
conservative outlook for our energy assets. Franco-Nevada is
generating substantial free cash flow and, post year-end, is now
debt free. Franco-Nevada continues to be the gold investment
that works."
2019 Financial Highlights
- 516,438 Gold Equivalent Ounces1 ("GEOs") sold, a new
record
- $844.1 million in revenue, a new
record
- $344.1 million of Net Income, or
$1.83 per share, a new record
- $341.5 million of Adjusted Net
Income2, or $1.82 per
share, a new record
- $137.5 million in Cash
Costs3, or $266 per GEO
sold
- $673.4 million of Adjusted
EBITDA4, or $3.59 per
share, a new record
Q4/2019 Financial Highlights
- 153,396 GEOs sold, a new record
- $258.1 million in revenue, a new
record
- $113.3 million of Net Income, or
$0.60 per share, a new record
- $110.8 million of Adjusted Net
Income, or $0.59 per share, a new
record
- $44.1 million in Cash Costs, or
$287 per GEO sold
- $201.7 million of Adjusted
EBITDA, or $1.07 per share, a new
record
Revenue and
GEO Sales by Asset Categories
|
|
2019
|
2018
|
|
GEO
Sales
|
Revenue
|
GEO Sales
|
Revenue
|
|
#
|
(in millions)
|
#
|
(in millions)
|
Gold
|
387,663
|
$545.8
|
344,107
|
$435.8
|
Silver
|
58,906
|
83.2
|
61,737
|
78.2
|
PGMs
|
52,813
|
75.6
|
30,946
|
39.1
|
Other Mining
Assets
|
17,056
|
23.6
|
11,112
|
14.0
|
Mining
|
516,438
|
$728.2
|
447,902
|
$567.1
|
Energy
|
—
|
115.9
|
—
|
86.1
|
|
516,438
|
$844.1
|
447,902
|
$653.2
|
Revenue and
GEO Sales by Asset Categories
|
|
Q4/2019
|
Q4/2018
|
|
GEO
Sales
|
Revenue
|
GEO Sales
|
Revenue
|
|
#
|
(in millions)
|
#
|
(in millions)
|
Gold
|
117,698
|
$174.8
|
79,623
|
$98.3
|
Silver
|
15,427
|
22.8
|
12,895
|
16.1
|
PGMs
|
16,271
|
24.6
|
8,830
|
11.2
|
Other Mining
Assets
|
4,000
|
5.9
|
3,529
|
4.4
|
Mining
|
153,396
|
$228.1
|
104,877
|
$130.0
|
Energy
|
—
|
30.0
|
—
|
18.2
|
|
153,396
|
$258.1
|
104,877
|
$148.2
|
For Q4/2019, revenue was sourced 88.4% from gold and gold
equivalents (67.7% gold, 8.9% silver, 9.5% PGM and 2.3% other
mining assets) and 11.6% from energy (oil, gas and NGLs). The
portfolio's objective is to maintain a focus on precious metals
(gold, silver and PGM) with a target of no more than 20% in revenue
from energy. Geographically, revenue was sourced 84.9% from the
Americas (47.1% Latin America,
19.3% U.S. and 18.5% Canada).
Corporate Updates
- At-the-Market Equity Program ("ATM Program") & Debt:
In Q4/2019, the Company issued 549,400 shares under its ATM Program
for net proceeds of $53.0 million.
Proceeds from the ATM Program were used to pay down debt such that
the outstanding balance was $80
million as at December 31,
2019. This balance was subsequently repaid after year-end
and Franco-Nevada is now debt-free.
- Eagle's Nest & Noront Loan: On December 23, 2019, Franco-Nevada acquired a 1%
royalty on Noront Resources' Eagle's Nest nickel, copper and PGM
deposit in the Ring of Fire mining district of Ontario for $3.8
million. Franco-Nevada also extended the term of its
$25 million loan to Noront to
September 30, 2022.
- Project 81: On November 22,
2019, Franco-Nevada acquired a 2% royalty on Noble Mineral's
55,000 hectare patented land package known as Project 81 near
Timmins, Ontario, in exchange for
Franco-Nevada agreeing to waive certain rights on Project 81. The
royalty also covers the Crawford Nickel-Sulphide Project, which was
recently spun out to Canada Nickel Company Inc.
- Succession Plans: As previously announced, at the
May 6, 2020 AGM, the board of
Franco-Nevada intends to appoint David
Harquail as the non-executive Chair of the board of
directors, Pierre Lassonde as Chair
Emeritus, Paul Brink as President
& Chief Executive Officer and to nominate Paul Brink for election as a director.
2020 Guidance
In 2020, Franco-Nevada expects attributable royalty and stream
sales to total 550,000 to 580,000 GEOs from its mining assets and
revenue of $80 to $95 million from its energy assets. Of the
royalty and stream sales from mining assets, 375,000 to 405,000
GEOs are expected from Franco-Nevada's various stream agreements.
For 2020 guidance, silver, platinum and palladium metals have been
converted to GEOs using assumed commodity prices of $1,500/oz Au, $17.00/oz Ag, $900/oz Pt and $2,000/oz Pd. The WTI oil price and Henry Hub
natural gas price are assumed to average $45 per barrel and $2.00 per mcf, respectively. The Company
estimates depletion expense of $260
to $290 million. 2020 guidance
and 5‑year outlook below are based on public forecasts and other
disclosure by the third-party owners and operators of our assets or
our assessment thereof.
5-Year Outlook
Our outlook to 2024 assumes that the Cobre Panama project will
have expanded its mill throughput capacity to 100 million tonnes
per year starting in 2023. Using the same commodity price
assumptions as were used for our 2020 guidance (see above) and
assuming no other acquisitions, Franco-Nevada expects its existing
portfolio to produce between 580,000 to 610,000 GEOs by 2024.
Energy revenues are expected to range between $115 to $135
million, and assumes the remaining committed capital for the
Royalty Acquisition Venture with Continental is funded.
Q4/2019 Portfolio Updates
Gold Equivalent Ounces Sold: GEOs sold for the
quarter were 153,396, an increase of 46.3% from the 104,877 sold in
Q4/2018. Cobre Panama, Candelaria, and Guadalupe-Palmarejo,
Sudbury and Stillwater contributed to the
quarter-over-quarter increase which was slightly offset by lower
contributions from Antamina and the Goldstrike NPI.
Latin
America:
- Cobre Panama (gold and silver stream) – First Quantum
reported that Cobre Panama produced 147,480 tonnes of copper in
2019. For 2020, First Quantum expects Cobre Panama to produce
between 285,000 - 310,000 tonnes of copper as it continues to ramp
up. Franco-Nevada sold 43,554 GEOs from the mine in 2019 and in
2020, expects sales to be between 90,000 - 110,000 GEOs.
- Candelaria (gold and silver stream) – Production at
Candelaria increased quarter-over-quarter as the majority of the
mill feed was higher grade ore sourced directly from the open pit.
With the Underground South Sector now operational, underground
production ramped up to 13,500 tpd, approaching the 14,000 tpd
permitted. Lundin also reported that its mill optimization project
is on track for completion in Q1/2020. In 2020, Franco-Nevada
expects sales from its Candelaria stream to be between 70,000 -
80,000 GEOs.
- Antapaccay (gold and silver stream) – GEOs sold from
Antapaccay were slightly lower quarter-over-quarter due to
anticipated lower grades based on the life of mine plan. In 2020,
Franco-Nevada expects sales from its Antapaccay stream to be
between 60,000 - 70,000 GEOs.
- Antamina (22.5% silver stream) – GEOs sold from Antamina
were lower quarter-over-quarter, reflecting lower copper grades,
in-line with the life of mine plan. Due to a higher gold-to-silver
ratio, the conversion of silver ounces to GEOs was also negatively
impacted. In 2020, Franco-Nevada anticipates silver ounces sales
from its Antamina stream to be at the mid-point of our long-term
expected annual range of 2.8 million - 3.2 million ounces.
- Guadalupe-Palmarejo (50% gold stream) – Sales from
Guadalupe-Palmarejo increased quarter-over-quarter, not including
1,695 ounces sold subsequent to year-end.
- Cerro Moro (2% royalty) – We benefited from a first full
year of royalties from Cerro Moro in 2019. Yamana has reported good
exploration success at Cerro Moro and anticipates the mine to be
one of the main catalysts for its production levels in 2022.
U.S.:
- Goldstrike (2-4% royalty & 2.4-6% NPI) – Barrick
reported reserve additions of 1.5 million ounces due to changes in
the cut-off grade and mine design.
- Stillwater (5% royalty)
– Stillwater benefited from strong
palladium prices and the continued ramp-up of the Blitz project.
Sibanye-Stillwater expects PGM production to increase to between
660,000 - 700,000 ounces in 2020, from 594,000 ounces in 2019.
- South Arturo (4-9% royalty) – Joint venture operators
Nevada Gold Mines and Premier Gold
announced that commercial production at the El Nino underground was
achieved in October 2019.
- Castle Mountain (2.65% royalty) – Phase 1 production is
targeted by Equinox for Q3/2020 which anticipates production of
45,000 ounces per year for 3 years. Feasibility and permitting for
Phase 2 is underway, which anticipates production increasing to
approximately 200,000 ounces per year.
Canada:
- Detour Lake (2% royalty) – On January 31, 2020, Kirkland Lake Gold acquired Detour Gold
Corporation and intends to invest aggressively in exploration
drilling at Detour Lake.
- Kirkland Lake (1.5-5.5%
royalty & 20% NPI) – Kirkland
Lake continues to advance the construction of the #4 Shaft
with the expectation of increasing production at the Macassa mine
to over 400,000 ounces per year from the 241,297 ounces produced in
2019.
- Hemlo (3% royalty & 50%
NPI) – Royalties from Hemlo
increased significantly quarter-over-quarter as the operation was
modernized and refocused in 2019.
- Dublin Gulch (Eagle) (1-1.5% royalty) – First gold at
the Eagle Gold Mine was poured in September
2019. A full year of production is expected in 2020.
- Hardrock (3% royalty) – An updated Mineral Resource
estimate was announced in October
2019 for the Hardrock project which increased the Measured
and Indicated Resource to 7.1 million ounces.
- Canadian Malartic (1.5%
royalty) – Exploration programs continue to evaluate several
deposits to the east of the Canadian Malartic open pit that are
partly covered by Franco-Nevada's royalties.
Rest of World:
- Tasiast (2% royalty) – Kinross reported that Tasiast produced record
annual production in 2019 of 391,097 ounces due to the Phase One
expansion. The Tasiast 24k project is
proceeding on schedule and on budget and is expected to double
capacity.
- Subika (2% royalty) – Newmont declared commercial
production at the Ahafo Mill Expansion in October 2019. Annual gold production is expected
to reach between 550,000 - 650,000 ounces per year through
2024.
Energy: Revenue from the energy assets increased to
$30.0 million in Q4/2019 compared to
$18.2 million in Q4/2018, reflecting
contributions from new investments in the Marcellus and in the
SCOOP/STACK by the Royalty Acquisition Venture with Continental but
offset by lower commodity prices compared to Q4/2018.
U.S.:
- Marcellus (1% royalty) – The recently acquired royalty
contributed $4.9 million to revenue
in Q4/2019 and the asset will benefit from its first full year of
revenue in 2020.
- SCOOP/STACK (various royalty rates) – Royalties from
SCOOP/STACK increased quarter-over-quarter due to additional
contributions from the Royalty Acquisition Venture with
Continental. In Q4/2019, Franco-Nevada recorded contributions of
$8.3 million to the Royalty
Acquisition Venture and its remaining commitment through
December 31, 2021 is $143.8 million.
- Permian Basin (various royalty rates) – Despite an
increase in drilling activity on royalty lands, revenue from
Franco-Nevada's interests in the Permian Basin decreased
quarter-over-quarter due to lower realized prices.
Canada:
- Weyburn (NRI, ORR, WI)
– Revenue from Weyburn almost
doubled quarter-over-quarter due to higher realized prices and
lower capital and operating costs in the quarter.
- Orion (4% GORR) – Revenue from Orion was higher as a
result of increased production volumes from the asset and a
recovery in price differentials for heavy oil compared to the prior
year period.
Shareholder Information
The complete Consolidated Annual 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, Tuesday, March 10, 2020 at 10:00 a.m. Eastern Time to review Franco Nevada's
2019 results, as well as discuss its 2020 and five-year
outlook.
Interested investors are invited to participate as follows:
- Via Conference Call: Toll-Free: (888) 390-0546;
International: (416) 764-8688
- Conference Call Replay until March
17: Toll-Free (888) 390-0541; International (416) 764-8677;
Code 273625 #
- 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, the expected exposure
for current and future assessments and available remedies, the
remedies relating to and consequences of the ruling of the Supreme
Court of Panama in relation to the
Cobre Panama project, the aggregate value of Common Shares which
may be issued pursuant to the ATM Program, the Company's expected
use of the net proceeds of the ATM Program, and expected succession
planning. 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 Company 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 Company's
ongoing income and assets relating to determination of its PFIC
status; no material changes to existing tax treatment; the expected
application of tax laws and regulations by taxation authorities;
the expected assessment and outcome of any audit by any taxation
authority; 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; 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. In addition, there can be no assurance as to
the outcome of the ongoing audit by the CRA or the Company's
exposure as a result thereof. Franco-Nevada cannot assure investors
that actual results will be consistent with these forward-looking
statements. Accordingly, 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 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 Q4/2019, the average commodity prices were as
follows: $1,480 gold (2018 -
$1,228), $17.31 silver (2018 - $14.55), $907
platinum (2018 - $822) and
$1,800 palladium (2018 - $1,157). For 2019, the average commodity prices
were as follows: $1,392 gold (2018 -
$1,268), $16.20 silver (2018 - $15.71), $863
platinum (2018 - $881) and
$1,539 palladium (2018 - $1,028).
- Adjusted Net Income and Adjusted Net Income per share
are non-IFRS financial measures, which exclude the following from
net income and EPS: impairment charges related to royalty, stream
and working interests and investments; gains/losses on the sale of
royalty, stream and working interests and investments; foreign
exchange gains/losses and other income/expenses; unusual
non-recurring items; and the impact of income taxes on these
items.
- Cash Costs attributable to GEOs sold and Cash Costs per GEO
sold are non-IFRS financial measures. Cash Costs attributable
to GEOs sold is calculated by starting with total costs of sales
and excluding depletion and depreciation, costs not attributable to
GEO sales 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 sold.
- 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 and finance income; depletion and depreciation;
non-cash costs of sales; impairment charges related to royalty,
stream and working interests and investments; gains/losses on the
sale of royalty, stream and working interests and investments;
foreign exchange gains/losses and other income/expenses; and
unusual non-recurring items.
Reconciliation to IFRS measures:
|
For the three
months ended
|
For the year
ended
|
|
December 31,
|
December 31,
|
(expressed in
millions, except per GEO amounts)
|
2019
|
2018
|
2019
|
2018
|
Total costs of
sales
|
$
|
119.0
|
$
|
86.3
|
$
|
408.0
|
$
|
365.9
|
Depletion and
depreciation
|
|
(72.7)
|
|
(61.5)
|
|
(263.2)
|
|
(247.7)
|
Energy operating
costs
|
|
(2.2)
|
|
(1.9)
|
|
(7.3)
|
|
(5.9)
|
Non-cash costs of
sales
|
|
—
|
|
(1.4)
|
|
—
|
|
(7.1)
|
Cash Costs
attributable to GEOs sold
|
$
|
44.1
|
$
|
21.5
|
$
|
137.5
|
$
|
105.2
|
GEOs, excluding
prepaid ounces
|
|
153,396
|
|
103,344
|
|
516,438
|
|
439,902
|
Cash Costs per GEO
sold
|
$
|
287
|
$
|
208
|
$
|
266
|
$
|
239
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
For the year
ended
|
|
December 31,
|
December 31,
|
(expressed in
millions, except per share amounts)
|
2019
|
2018
|
2019
|
2018
|
Net
Income
|
$
|
113.3
|
$
|
(31.3)
|
$
|
344.1
|
$
|
139.0
|
Income tax
expense
|
|
17.2
|
|
11.7
|
|
61.8
|
|
50.1
|
Finance
expenses
|
|
2.1
|
|
2.2
|
|
10.6
|
|
4.6
|
Finance
income
|
|
(0.8)
|
|
(0.7)
|
|
(3.5)
|
|
(3.1)
|
Depletion and
depreciation
|
|
72.7
|
|
61.5
|
|
263.2
|
|
247.7
|
Non-cash costs of
sales
|
|
—
|
|
1.4
|
|
—
|
|
7.1
|
Impairment of royalty,
stream and working interests
|
|
—
|
|
76.0
|
|
—
|
|
76.0
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
(2.8)
|
|
(2.1)
|
|
(2.8)
|
|
(1.8)
|
Adjusted
EBITDA
|
$
|
201.7
|
$
|
118.7
|
$
|
673.4
|
$
|
519.6
|
Basic weighted
average shares outstanding
|
|
188.8
|
|
186.4
|
|
187.7
|
|
186.1
|
Adjusted EBITDA
per share
|
$
|
1.07
|
$
|
0.64
|
$
|
3.59
|
$
|
2.79
|
|
|
|
|
|
|
|
|
For the three
months ended
|
For the year
ended
|
|
December 31,
|
December 31,
|
(expressed in
millions, except per share amounts)
|
2019
|
2018
|
2019
|
2018
|
Net
Income
|
$
|
113.3
|
$
|
(31.3)
|
$
|
344.1
|
$
|
139.0
|
Foreign exchange
(gains)/losses and other (income)/expenses
|
|
(2.8)
|
|
(2.1)
|
|
(2.8)
|
|
(1.8)
|
Impairment of royalty,
stream and working interests
|
|
—
|
|
76.0
|
|
—
|
|
76.0
|
Tax effect of
adjustments
|
|
0.3
|
|
(0.3)
|
|
0.2
|
|
(0.6)
|
Other tax related
adjustments:
|
|
|
|
|
|
|
|
|
Barbados Tax Reform
impact
|
|
—
|
|
2.4
|
|
—
|
|
2.4
|
U.S. Tax Reform
impact
|
|
—
|
|
—
|
|
—
|
|
2.0
|
Adjusted Net
Income
|
$
|
110.8
|
$
|
44.7
|
$
|
341.5
|
$
|
217.0
|
Basic weighted
average shares outstanding
|
|
188.8
|
|
186.4
|
|
187.7
|
|
186.1
|
Adjusted Net
Income per share
|
$
|
0.59
|
$
|
0.24
|
$
|
1.82
|
$
|
1.17
|
FRANCO-NEVADA CORPORATION
CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
(in millions of U.S.
dollars)
|
At
December 31,
|
At
December 31,
|
|
2019
|
2018
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents (Note 5)
|
$
|
132.1
|
$
|
69.7
|
Receivables
|
|
97.8
|
|
75.5
|
Prepaid expenses and
other (Note 7)
|
|
48.8
|
|
33.3
|
Current
assets
|
$
|
278.7
|
$
|
178.5
|
|
|
|
|
|
Royalty, stream and
working interests, net (Note 8)
|
$
|
4,797.8
|
$
|
4,555.6
|
Investments and loan
receivable (Note 6)
|
|
183.2
|
|
169.7
|
Deferred income tax
assets
|
|
6.8
|
|
17.3
|
Other assets (Note
9)
|
|
14.1
|
|
10.7
|
Total
assets
|
$
|
5,280.6
|
$
|
4,931.8
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accounts payable and
accrued liabilities (Note 10)
|
$
|
41.8
|
$
|
23.6
|
Current income tax
liabilities
|
|
11.6
|
|
1.4
|
Current
liabilities
|
$
|
53.4
|
$
|
25.0
|
|
|
|
|
|
Lease
liabilities
|
$
|
2.6
|
$
|
—
|
Debt (Note
11)
|
|
80.0
|
|
207.6
|
Deferred income tax
liabilities
|
|
82.4
|
|
67.3
|
Total
liabilities
|
$
|
218.4
|
$
|
299.9
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY(Note 19)
|
|
|
|
|
Share
capital
|
$
|
5,390.7
|
$
|
5,158.3
|
Contributed
surplus
|
|
14.2
|
|
15.6
|
Deficit
|
|
(164.4)
|
|
(321.7)
|
Accumulated other
comprehensive loss
|
|
(178.3)
|
|
(220.3)
|
Total shareholders'
equity
|
$
|
5,062.2
|
$
|
4,631.9
|
Total liabilities and
shareholders' equity
|
$
|
5,280.6
|
$
|
4,931.8
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies(Notes 22 and 23)
|
|
|
|
|
Subsequent
events(Note 24)
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
2019 Annual Report available on our website
FRANCO-NEVADA CORPORATION
CONSOLIDATED STATEMENTS
OF INCOME AND COMPREHENSIVE INCOME
(in millions of U.S.
dollars and shares, except per share amounts)
|
For the year ended
|
|
December 31,
|
|
2019
|
2018
|
Revenue(Note 14)
|
$
|
844.1
|
$
|
653.2
|
|
|
|
|
|
Costs of
sales
|
|
|
|
|
Costs of sales
(Note 15)
|
$
|
144.8
|
$
|
118.2
|
Depletion and
depreciation
|
|
263.2
|
|
247.7
|
Total costs of
sales
|
$
|
408.0
|
$
|
365.9
|
Gross
profit
|
$
|
436.1
|
$
|
287.3
|
|
|
|
|
|
Other operating
expenses (income)
|
|
|
|
|
General and
administrative expenses
|
$
|
28.8
|
$
|
22.6
|
Impairment of royalty,
streams and working interests (Note 8)
|
|
—
|
|
76.0
|
Gain on sale of gold
bullion
|
|
(2.9)
|
|
(0.1)
|
Total other operating
expenses (income)
|
$
|
25.9
|
$
|
98.5
|
Operating
income
|
$
|
410.2
|
$
|
188.8
|
Foreign exchange gain
and other income (expenses)
|
$
|
2.8
|
$
|
1.8
|
Income before finance
items and income taxes
|
$
|
413.0
|
$
|
190.6
|
|
|
|
|
|
Finance items
(Note 17)
|
|
|
|
|
Finance
income
|
$
|
3.5
|
$
|
3.1
|
Finance
expenses
|
|
(10.6)
|
|
(4.6)
|
Net income before
income taxes
|
$
|
405.9
|
$
|
189.1
|
|
|
|
|
|
Income tax expense
(Note 18)
|
|
61.8
|
|
50.1
|
Net
income
|
$
|
344.1
|
$
|
139.0
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss:
|
|
|
|
|
Currency translation
adjustment
|
$
|
32.3
|
$
|
(68.3)
|
|
|
|
|
|
Items that will
not be reclassified subsequently to profit and loss:
|
|
|
|
|
Gain (loss) on changes
in the fair value of equity investments at fair
|
|
|
|
|
value through other
comprehensive income (loss) ("FVTOCI"),
|
|
|
|
|
net of income tax
(Note 6)
|
|
9.9
|
|
(18.4)
|
Other comprehensive
income (loss)
|
$
|
42.2
|
$
|
(86.7)
|
|
|
|
|
|
Comprehensive
income
|
$
|
386.3
|
$
|
52.3
|
|
|
|
|
|
Earnings per share
(Note 20)
|
|
|
|
|
Basic
|
$
|
1.83
|
$
|
0.75
|
Diluted
|
$
|
1.83
|
$
|
0.75
|
Weighted average
number of shares outstanding (Note 20)
|
|
|
|
|
Basic
|
|
187.7
|
|
186.1
|
Diluted
|
|
188.0
|
|
186.4
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
2019 Annual Report available on our website
FRANCO-NEVADA CORPORATION
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(in millions of U.S. dollars)
|
For the year ended
|
|
December 31,
|
|
2019
|
2018
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
$
|
344.1
|
$
|
139.0
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depletion and
depreciation
|
|
263.2
|
|
247.7
|
Share-based
payments
|
|
4.9
|
|
5.2
|
Impairment of royalty,
stream and working interests
|
|
—
|
|
76.0
|
Non-cash costs of
sales
|
|
—
|
|
7.1
|
Unrealized foreign
exchange gain
|
|
—
|
|
(0.4)
|
Deferred income tax
expense
|
|
22.7
|
|
10.0
|
Other non-cash
items
|
|
(7.8)
|
|
(1.1)
|
Acquisition of gold
bullion
|
|
(31.8)
|
|
(25.6)
|
Proceeds from sale of
gold bullion
|
|
36.2
|
|
12.5
|
Operating cash flows
before changes in non-cash working capital
|
$
|
631.5
|
$
|
470.4
|
Changes in non-cash
working capital:
|
|
|
|
|
Increase in
receivables
|
$
|
(22.3)
|
$
|
(9.6)
|
(Increase) decrease in
prepaid expenses and other
|
|
(14.3)
|
|
11.6
|
Increase in current
liabilities
|
|
22.8
|
|
2.4
|
Net cash provided by
operating activities
|
$
|
617.7
|
$
|
474.8
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Acquisition of
royalty, stream and working interests
|
$
|
(443.9)
|
$
|
(988.0)
|
Acquisition of energy
well equipment
|
|
(1.3)
|
|
(1.6)
|
Acquisition of
investments
|
|
(3.9)
|
|
—
|
Proceeds from sale of
investments
|
|
13.0
|
|
0.9
|
Net cash used in
investing activities
|
$
|
(436.1)
|
$
|
(988.7)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from draw of
revolving credit facilities
|
$
|
275.0
|
$
|
237.0
|
Repayment of revolving
credit facilities
|
|
(485.0)
|
|
(27.0)
|
Proceeds from draw of
term loan
|
|
160.0
|
|
—
|
Repayment of term
loan
|
|
(80.0)
|
|
—
|
Proceeds from
at-the-market equity offering
|
|
136.0
|
|
—
|
Credit facility
amendment costs
|
|
(0.8)
|
|
(0.5)
|
Payment of
dividends
|
|
(138.2)
|
|
(136.1)
|
Proceeds from exercise
of stock options
|
|
13.2
|
|
4.2
|
Net cash (used in)
provided by financing activities
|
$
|
(119.8)
|
$
|
77.6
|
Effect of exchange
rate changes on cash and cash equivalents
|
$
|
0.6
|
$
|
(5.1)
|
Net change in cash
and cash equivalents
|
$
|
62.4
|
$
|
(441.4)
|
Cash and cash
equivalents at beginning of period
|
$
|
69.7
|
$
|
511.1
|
Cash and cash
equivalents at end of period
|
$
|
132.1
|
$
|
69.7
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for
interest expense and loan standby fees
|
$
|
9.5
|
$
|
3.7
|
Income taxes
paid
|
$
|
38.6
|
$
|
28.5
|
The accompanying notes are an integral part of
these consolidated financial statements and can be found in our
2019 Annual Report available on our website
View original
content:http://www.prnewswire.com/news-releases/franco-nevada-delivers-record-q4-and-annual-results-301020097.html
SOURCE Franco-Nevada Corporation