Sprott (SII) Q2 2024 earnings summary

Executive summary

• Assets under management (AUM) reached a record $31.1 billion in Q2, up $1.7 billion, and further increased to $31.5 billion as of August 1, 2024, driven by market appreciation, net inflows, and the launch of the Sprott Physical Copper Trust.

• Net sales rebounded to $357 million in Q2, plus $110 million from the Sprott Physical Copper Trust IPO, offsetting Q1 net redemptions.

• Precious metals and critical materials strategies are well positioned amid market volatility and geopolitical uncertainty, with expanded offerings and strong positioning.

• Management fees and net fees both increased 16% year-over-year, reflecting higher average AUM and market appreciation.

• Well positioned for a volatile second half of 2024.

Financial highlights

• Net income for Q2 2024 was $13.4 million ($0.53/share), down 25% from $17.7 million last year due to a prior non-recurring gain; excluding this, net income increased.

• Adjusted base EBITDA rose 25% to $22.4 million in Q2 and 19% to $42.1 million for the first half of the year, with a 58% margin.

• Total net revenues for Q2 2024 were $41.6 million, up from $32.0 million in Q2 2023.

• Management fees were $38.1 million in Q2 2024, up from $32.9 million in Q2 2023; net fees were $34.4 million, up from $29.9 million.

• Adjusted base EBITDA per share was $0.88 in Q2 2024, up from $0.71 in Q2 2023.

Outlook and guidance

• Inflation remains sticky; U.S. rate cuts are anticipated, with the Fed expected to move in September.

• Fiscal deficits and geopolitical risks are expected to support gold prices.

• Management expects China-driven copper weakness to be short-lived and is expanding critical materials strategies to gain market share.

• Board declared a quarterly dividend of $0.25 per share on August 6, 2024.

• Management expresses confidence in supporting dividend levels while funding future growth initiatives.