Altius Minerals Reports Revenue Growth in Q2 Amidst Diverse Challenges

Altius Minerals Corporation (ALS:TOR), a diversified mining royalty company, announced a revenue increase for the second quarter of 2024, reaching $21.8 million, compared to $18.7 million for the same period last year. This growth has been attributed to higher base metal prices, dividends from iron ore, and expansion in its renewable royalty portfolio.

However, the company faced challenges due to declining potash prices and the closure of the Genesee coal mine, which partially offset its gains. Net earnings experienced a notable rise, reaching $8.3 million, or $0.18 per share, compared to $3.3 million, or $0.06 per share, in Q2 2023.

Key Takeaways

• Revenue Growth: Altius Minerals reported Q2 2024 revenue of $21.8 million, an increase from $18.7 million in Q2 2023.
• EBITDA Margin: The mineral royalties segment had a robust EBITDA margin of 77%.
• Cash Flow: Adjusted operating cash flow decreased to $9.2 million from $14.1 million, attributed to the timing of royalty receipts and working capital changes.
• Net Earnings: Net earnings increased to $8.3 million, or $0.18 per share, from $3.3 million, or $0.06 per share.
• Renewable Royalties: The renewable royalties segment reported 12 operating projects and 700 megawatts under construction.
• Liquidity Position: The company maintained a strong liquidity position with $19.2 million in cash and a $93 million unused credit facility.
• Potential Sales: Altius is exploring the sale of silicon assets while awaiting an arbitration decision that may affect potential buyers.
• Financial Activities: Included a cash inflow of CAD 9 million from the Adventus deal and CAD 15.7 million from the sale of non-core investments.

Company Outlook

• Potash Royalties: Guidance indicates a projected 8-9% volume growth by 2026, as per Nutrien.
• Long-Term Demand: Altius anticipates global potash demand growth of 2.5-3% in the long term.

Challenges

• Lower potash prices and the closure of the Genesee coal mine are impacting earnings.
• Adjusted operating cash flow has decreased due to timing issues with royalty receipts.

Positive Developments

• The growth of Altius’s renewable royalty portfolio, featuring 12 operating wind and solar projects coupled with 700 megawatts under construction, signifies positive momentum in this sector.

Financial Discussions

Altius Minerals concluded its earnings call highlighting the prospective sale of silicon assets contingent on an arbitration decision. Their financial health appears strong, bolstered by significant recent cash inflows and a robust credit position. Investors can look forward to updates in the company’s next earnings call scheduled for November, where Q3 results will be discussed.

Call Summary

The earnings call provided insights into Altius’s financial performance and strategic directions, addressing questions regarding asset sales, potash volume growth, and the impact of arbitration on potential future negotiations. The management emphasized the company’s resilience and the optimistic outlook for ongoing projects and market conditions.