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Franco-Nevada swings to Q4'18 loss of US$31.3M on impairments

Franco-Nevada Corp. said March 19 that it swung to a net loss of US$31.3 million, or 17 cents per share, for the fourth quarter of 2018, from a net profit of US$43.5 million, or 23 cents per share, recorded a year earlier.

The loss reflects US$75.4 million in impairment charges associated with KGHM Polska Miedź SA's Sudbury operation in Ontario, in which Franco-Nevada holds a 50% precious metals stream.

Revenues for the quarter stood at US$148.2 million from the sale of 104,877 gold equivalent ounces, down 11.4% from US$167.2 million in the prior-year period.

Quarterly adjusted EBITDA fell 7.3% to US$118.7 million from US$128.0 million in the year-ago period.

For the full year of 2018, net income totaled US$139 million, or 75 cents per share, dropping 28.6% from US$194.7 million, or US$1.06 per share in 2017.

The company recorded US$653.2 million in revenues from the sale of 447,902 gold equivalent ounces, a decrease of 3.2% from US$675.0 million a year earlier.

In 2019, Franco-Nevada expects attributable royalty and stream production to come in at 465,000 to 500,000 gold equivalent ounces from its mining assets, and revenue of US$70 million to US$85 million from its energy assets.

CEO David Harquail said the company expects very good growth in its gold equivalent ounces over the next five years, driven by improved production from several of its key assets. Franco-Nevada is also seeing a rising number of gold investment opportunities and has added several smaller gold royalties this year, the executive noted.