Franco-Nevada 4Q adj EPS $1.85, est. $1.67

Franco-Nevada Corp. (FNV) reported adjusted earnings per share (EPS) of $0.95 for the fourth quarter of 2024, representing a 6% year-over-year increase from $0.89. The results exceeded analyst estimates, driven by higher revenue and adjusted EBITDA. Total revenue for the quarter reached $321 million, up 5.8% compared to $303.3 million in Q4 2023, attributed to elevated precious metal prices. Adjusted EBITDA rose 9% to $277.4 million, reflecting stronger operational performance.

Despite a 20% decline in total gold equivalent ounces (GEOs) sold year-over-year (120,063 vs. 152,351), the company noted improved efficiency, with cash costs per GEO decreasing to $287 from $296 in Q4 2023. The decline in GEOs was primarily due to the absence of contributions from Cobre Panama, though precious metal GEOs sold increased 5% year-over-year when excluding Cobre Panama, supported by growth at Candelaria and new mines.

Looking ahead, Franco-Nevada provided 2025 guidance, forecasting GEOs sold between 465,000 and 525,000—a 7% increase over 2024—and anticipating a 25% rise in revenue, assuming a gold price of $2,800 per ounce. The company also highlighted strategic investments, including a gold stream in Cascabel, Ecuador, and a royalty on Peru's Yanacocha mine, which are expected to add 85,000 to 95,000 GEOs annually.

Risks include ongoing legal costs related to Cobre Panama ($10 million annually) and commodity price volatility. The company ended 2024 with a $2.4 billion cash balance and no debt, supporting its dividend policy, which has increased for 18 consecutive years.