Franco-Nevada's fourth-quarter results showed a notable increase compared to previous years, with earnings surpassing market expectations thanks to elevated gold prices. The company is optimistic that its sales of gold equivalent ounces (GEOs) will rise this year, marking a positive outlook for investors and stakeholders alike. The Canadian mining company disclosed adjusted earnings of $0.95 per share for the December quarter, reflecting an increase from $0.90 in the same quarter of the previous year.
This figure aligned with the consensus forecast from FactSet. Additionally, revenue climbed by 6% to $321 million, exceeding the $304.4 million projection from five analysts surveyed by FactSet. Chief Executive Paul Brink highlighted that the elevated gold prices have significantly contributed to the improved quarterly revenue and adjusted earnings.
Notably, this performance occurred despite the absence of contributions from the Cobre Panama mine, which had operations suspended in November 2023 due to public unrest concerning its environmental impact and an unconstitutional operating contract. Franco-Nevada reported selling 120,063 GEOs in the fourth quarter, representing a substantial yearly decline of 21% primarily attributed to the shutdown of the Cobre Panama project.
However, Brink expressed optimism regarding future discussions with Panama's President Jose Raul Mulino about the mine's potential reopening, noting that public sentiment in Panama now appears more favorable towards the restart. Gold futures prices have surged approximately 30% over the past year, with the Wells Fargo Investment Institute connecting this rally to central bank purchases and a growing demand for safe assets amid ongoing geopolitical uncertainty.
Franco-Nevada's stock has experienced a substantial uptick of over 20% during the same timeframe, with a 1.1% increase observed pre-bell on Monday. Looking ahead to the current fiscal year, the company anticipates revenue to exceed $1.11 billion marked in 2024 by over 25%. Analysts are projecting revenue of around $1.38 billion.
Furthermore, Franco-Nevada expects GEO sales to range between 465,000 and 525,000 for 2025, assuming no contributions from the Cobre Panama mine, which would represent a 7% annual gain. The company also indicated that increases in precious metals GEO sales are expected to mitigate the impact of lower ounces from diversified assets.
By 2028, Franco-Nevada projects GEOs sold to range from 505,000 to 565,000, indicating a projected 15% increase compared to 2024. As for 2029, the firm estimates production metrics to fall between 490,000 and 550,000 ounces. The potential resumption of operations at the Cobre Panama mine could enhance annual output by as much as 130,000 to 150,000 GEOs, according to the company’s forecast..