Ecora Royalties (ECOR) H2 2024 earnings summary

Executive summary

• Portfolio contribution grew 9% year-over-year to $63.2m, driven by volume growth at Kestrel, Voisey's Bay, and Mantos Blancos, and supported by new acquisitions like the Phalaborwa royalty and Mimbula copper stream.

• Adjusted earnings per share were 11.43c, nearly flat compared to 2023's 11.82c, with a stable cost base and share buyback impact.

• Net debt increased to $82.3m from $74.5m, reflecting acquisitions, deferred consideration payments, and share buybacks.

• Dividend for FY24 was 2.81c per share, representing 32% of free cash flow, with a revised policy based on a percentage of free cash flow.

• Voisey's Bay underground expansion completed, with production ramping up and a $15.1m impairment due to low cobalt prices.

Financial highlights

• Adjusted contribution grew 9% year-over-year to $63.2m, excluding a one-off Four Mile payment in 2023.

• Adjusted earnings were $28.8 million, with an 11.4% margin, reflecting a stable cost base.

• Free cash flow of $22 million funded investments and share buybacks, with $19m spent on acquisitions and deferred consideration.

• Royalty assets decreased by 12.5% due to Kestrel depletion and a Voisey's Bay impairment from cobalt price declines.

• Net debt at year-end was $82m, with $10m invested in acquisitions and a $10m share buyback.

Outlook and guidance

• Expecting year-on-year volume growth across base metals royalties in 2025, especially at Voisey's Bay, Mimbula, and Mantos Blancos.

• Kestrel volumes projected to grow 5–10% in 2025 before tapering.

• Portfolio revenue is forecast to grow from GBP 20 million in 2024 to over GBP 100 million by 2030, with copper as the main driver.

• Analyst consensus forecasts further income growth from copper exposure and brownfield expansions.

• Anticipated continued deleveraging and balance sheet strengthening over the next 12–24 months.