Franco-Nevada CEO Optimistic Heading into Q4

Precious metals powerhouse Franco-Nevada (TSX:FNV,NYSE:FNV) experienced a small blip during the third quarter when it posted slightly lower adjusted net income of US$54.6 million and revenue of US$170.6 million.

The miner’s Q3 net income and revenue results were down compared to the US$55.3 million and US$171.5 million, respectively, that it garnered this time last year.

Despite the minor decrease, the company remains positive, with CEO David Harquail stating, “Franco-Nevada’s diversified portfolio and business model continues to generate strong revenues and margins.”

During the quarter the company sold a total of 120,021 gold-equivalent ounces compared with the 123,787 ounces sold during Q3 2017. Precious metals gold-equivalent ounces also dipped during the most recent quarter, falling to 116,478 ounces from 118,456 year-on-year.

The company noted that revenue, which is earned from 51 mining assets and 57 oil and gas assets, experienced a 9.2-percent decrease from its mining assets, but overall was relatively flat.

Franco-Nevada has built up its oil and gas portfolio substantially over the past two years and doubled the revenue from its energy sector to US$26.2 million throughout the third quarter.

On a similar positive note, the miner revealed that it once again increased its full-year guidance for oil and gas revenue to between US$75 and US$85 million, up from its August guidance of US$65 to US$75 million and its initial March guidance of US$50 to US$60 million.

In October, Harquail spoke with the Investing News Network during the Denver Gold Forum, where he was realistic yet optimistic on the current state of gold.

“It’s been a tough environment for gold. We’ve had almost every headwind possible with the US dollar, higher interest rates, tariff barriers and some issues at various projects.”

He added,“[b]ut despite that, gold has been staying steady at US$1,200, so that gives me a lot of optimism that we’ll see better gold prices in the future.”

Harquail applied that same optimism to Franco-Nevada as it moves through the final quarter of 2018. “Revenues are expected to increase by more than 30 percent once Cobre Panama ramps-up towards full production,” he explained.

As of 3:06 p.m. EST on Tuesday (November 6), Franco-Nevada was up 2.03 percent, trading at C$86 in Toronto and at US$65.51 in New York.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.