Release Date: August 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 5% to $241 million, driven by stronger pricing.
- High EBITDA margin of 95%, showcasing the efficiency of the business model.
- Net profit after tax reached $155 million.
- Declared a fully franked final dividend of $0.144 per share, representing 100% of NPAT.
- Acquisition of Trident Royalties to diversify and grow the portfolio, providing immediate cash flow and future growth potential.
Negative Points
- Operating expenses increased by 6.5% year-on-year, reflecting wage and cost inflation.
- No capacity payment received for Mining Area C in FY24 due to lower sales volumes.
- Increased business development costs, up from $1.4 million in FY23 to $3.5 million in FY24.
- Net financing costs rose to $1.7 million, primarily due to increased credit facilities.
- Exposure to foreign exchange risk resulted in a non-cash fair value adjustment of negative $4.2 million.
Q & A Highlights
Highlights of Deterra Royalties Ltd (DETRF, Financial) FY 2024 Earnings Call
Q: Can you explain the significant increase in operating expenses in the second half of the year?
A: Julian Andrews, CEO: The increase in operating expenses reflects two main factors: the expenditure related to the Trident offer incurred in the second half and the full impact of increased headcount, including Jason Clifton joining as CFO.
Q: How should we think about the SG&A costs coming from Trident Royalties?
A: Julian Andrews, CEO: There are significant overlaps, and we do not anticipate all costs coming across. We expect some additional complexity but will evaluate the specifics once we are in control of the business.
Q: Will you consider exiting the gold royalty portion of the Trident acquisition?
A: Julian Andrews, CEO: We haven't made firm decisions yet, but gold assets tend to trade at high valuations. If they have higher value to others, we will explore that option.
Q: Why did you use cash instead of paper for the Trident acquisition?
A: Julian Andrews, CEO: The complexity of a cross-border scrip offer was significant. We chose cash considering our overall balance sheet position and the most cost-efficient source of capital.
Q: How should we think about the interplay between growth, dividends, and debt repayments going forward?
A: Jason Clifton, CFO: We are seeing a prospective environment for value-added opportunities. The cost of debt is competitive, and we aim to maintain liquidity for future investments. The dividend payout ratio will be considered alongside our investment pipeline and balance sheet needs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
