Q2 2026 Franco-Nevada Corp Earnings Call Transcript
Key Points
- Franco-Nevada Corp (FNV) reported a strong second quarter with GEOs sold up 18% year-over-year, driven by higher production at key assets and new contributions from recent acquisitions.
- The company achieved record financial results for revenue, adjusted EBITDA, adjusted net income, and operating cash flow for the first half of 2026, with revenue up 57% and adjusted EBITDA up 45%.
- Franco-Nevada Corp (FNV) is tracking towards the upper half of its 2026 annual guidance range, supported by strong performance from Candelaria, Tocantinzinho, Côté, and Valentine in the second half.
- The company maintains a robust balance sheet with $4.3 billion in total available capital, including $1 billion in cash and no debt, positioning it well for future acquisitions.
- Franco-Nevada Corp (FNV) continues to see organic growth opportunities across its portfolio, with positive developments at multiple mines and successful exploration results, including at Porcupine and Bullabulling.
- The company's high-margin business model is evident, with margin per GEO increasing 179% since 2022, and adjusted EBITDA margin reaching 91.2%.
- Franco-Nevada Corp (FNV) received positive news on the Cobre Panamá environmental audit, with an 87.7% compliance rate and no major findings, supporting a potential restart.
- The company's diversified portfolio, with no single asset generating more than 10% of revenue, provides stability and reduces risk.
- Franco-Nevada Corp (FNV) is actively expanding its business development pipeline, with a focus on project finance opportunities and larger transactions, which could lead to significant capital deployment.
- The company's energy segment benefited from higher oil prices and increased rig counts, with expectations of higher production volumes in the future.
- Franco-Nevada Corp (FNV) experienced a decrease in diversified GEOs sold due to converting revenue at a higher gold price, which impacted reported volumes.
- Cost of sales increased to $45.9 million from $32.5 million year-over-year, driven by higher fixed costs for stream ounces and recent acquisitions with higher depletion rates.
- Depletion expense rose to $84 million from $64 million, reflecting higher per-ounce depletion from recent transactions like Yanacocha, Casa Berardi, Porcupine, and Cote.
- The company faces uncertainty regarding the Cobre Panamá restart, as negotiations with the government have not yet begun, and there is no clarity on potential changes to fiscal terms.
- Franco-Nevada Corp (FNV) noted that South Arturo's strong performance is weighted towards the first half of the year, leading to expected weaker contributions in the second half.
- The company's energy revenue was slightly light in the quarter due to delays in receiving production data, which could lead to conservative estimates and potential volatility.
- There is ongoing legal uncertainty regarding the Karma asset, with the company pursuing remedies under Ontario law and not carrying any book value for it.
- The business development pipeline includes smaller transactions, and the timing of larger deals is uncertain, with potential for lumpy capital deployment.
- Franco-Nevada Corp (FNV) faces potential volatility in NPIs, as seen with Hemlo and Musslewhite, which can impact quarterly results.
- The company's guidance for 2026 is tracking to the upper half of the range, but there is a possibility of surpassing it, which could indicate conservative guidance.
Good morning, and welcome to Franco-Nevada Corporation's second-quarter 2026 results conference call and Webcast. This call is being recorded on August 12, 2026. (Operator Instructions) I would now like to turn the conference over to your host, Bonavie Tek, VP Finance, Investor Relations. Please go ahead.
Thank you, [Andi]. Good morning, everyone. Thank you for joining us today to discuss Franco-Nevada's second-quarter 2026 results. Accompanying this call is a presentation, which is available on our website at franco-nevada.com, where you will also find our full financial results. The presentation is also available to view on webcast.
During our call this morning, Paul Brink, President and CEO, Franco-Nevada, will provide introductory remarks; followed by Sandip Rana, Chief Financial Officer, who will provide a brief review of our results. This will be followed by a Q&A period. Our executive team is available to answer any questions. Participants may send the questions
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