For 2020, G&A expenses were 2.8% of revenues, lower than the 3.4% of revenues in 2019. Its general & administrative costs have been relatively stable and averaged $5-$8 million per quarter for the past 13 years. Cost-Cutting Actions to Drive Marginsĭriven by its efforts to cut down costs, Franco-Nevada’s cash costs per GEO (Cost of sales, less depletion and oil and gas costs, divided by gold equivalent ounces) came in at $252 in the March-end quarter, down 18.2% from the prior year quarter. The company has royalties and streams on several properties mined by some of the most reputable mining companies in the world. It has operator diversification as well with no single operator accounting for more than 17% of its revenues in the March-end quarter. The Cobre Panama contributed 17% to revenues in the first quarter followed by Antapaccay, which contributed 11%. Antamina, Cobre Panama, and Hemlo contributed to the company’s revenue performance in the recently-reported quarter.
One of the inherent strengths of its business model is the diversification of its portfolio. Diversified Business Modelįranco-Nevada Corporation operates as a gold-focused royalty and stream company with additional interests in silver, platinum group metals ("PGM"), oil & gas and other resource assets. The top-line figure, however, missed the Zacks Consensus Estimate of $313 million. The company generated revenues of $309 million in the reported quarter, reflecting year-over-year growth of 28%. Additionally, the bottom line surpassed the Zacks Consensus Estimate of 79 cents. The company recently reported adjusted earnings of 84 cents per share in first-quarter 2021, up 47% from the prior-year quarter. However, uncertainty regarding the pandemic’s impact on the company’s mining operators and decline in gold prices remain concerns. The company continues to deliver improved margins, aided by its continued focus on cost management. The company is well poised for growth backed by its healthy and diversified portfolio of streaming and royalty agreements, and a debt-free balance sheet.
On May 13, we issued an updated research report on Franco-Nevada Corp ( FNV Quick Quote FNV - Free Report).
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