Altius Reports Q1 2021 Attributable Royalty Revenue of $17.8M And Adjusted Operating Cash Flow of $8.8M

Rhea-AI Summary

Altius Minerals Corporation (ATUSF) reported a notable increase in attributable royalty revenue of $17.8 million for Q1 2021, reflecting a 9% rise from $16.3 million in Q1 2020. Adjusted EBITDA rose 15% to $14.6 million, achieving an impressive 82% margin. However, adjusted operating cash flow declined 33% to $8.8 million due to tax timing issues. Net earnings reached $11.8 million with adjusted earnings of $6.3 million, up from $3.4 million in the same quarter last year. The company allocated capital towards debt repayments, dividends, and share buybacks during the quarter.

Positive

• 9% increase in attributable royalty revenue to $17.8 million.
• 15% rise in Adjusted EBITDA to $14.6 million, with an EBITDA margin of 82%.
• Adjusted earnings per share increased to $0.14, up from $0.08 a year earlier.
• Successful sale of Alderon's principal asset led to a reversal of impairment charges.

Negative

• 33% decline in adjusted operating cash flow to $8.8 million due to deferred tax installments.
• Seasonally lower copper concentrate production impacted revenue despite higher prices.

Altius Minerals Corporation (TSX: ALS; OTCQX: ATUSF) (“Altius” or the “Corporation”) reports attributable royalty revenue⁽¹⁾ of $17.8 million ($0.43 per share⁽¹⁾) for the quarter ended March 31, 2021 which was up 9% from royalty revenue of $16.3 million ($0.39 per share) reported in Q1 2020.

Adjusted EBITDA⁽¹⁾ for the quarter was $14.6 million or $0.35 per share, up 15% from Adjusted EBITDA of $12.7 million ($0.30 per share⁽¹⁾) in Q1 2020. The adjusted EBITDA margin for the quarter was 82%.

Adjusted operating cash flow of $8.8 million or $0.21 per share is down by 33% from the comparable quarter last year mainly because of the deferred timing of corporate tax installments during the prior year period.

Net earnings in Q1 2021 are $11.8 million, and on an adjusted basis are $6.3 million or $0.14 per share compared to $3.4 million or $0.08 per share of adjusted earnings in Q1 2020. The main adjusting items in the current quarter are a $0.09 gain on fair value of a derivative (due to increases in unrealized value of warrants in the junior equity portfolio) and a reversal of an impairment charge recorded last year related to a secured debt holding in Alderon Iron Ore Corp. (“Alderon”) following the successful sale of its principal asset through a receivership process. The main adjusting items in Q1 2020 were the non-cash impairment charges recorded on the debt and equity of Alderon when it entered receivership. The full table reconciling adjusted net earnings per share to net earnings per share is included below.

The project generation business contributed $2.5 million during the quarter from the sale of equity positions (net of cash reinvestments). These net proceeds are not included in the adjusted operating cash flow amount reported above as these are classified under “Investing Activities” within the Corporation’s consolidated statement of cash flows.

Capital Allocation Summary

The Corporation’s capital allocation priorities are linked to its strategy of creating per share value growth through a portfolio of assets that relate to long life, high margin operations while providing growing shareholder capital returns.

During the quarter, the Corporation made scheduled debt repayments of $5 million and paid cash dividends of $1.9 million and preferred distributions of $1.3 million. In addition the Corporation expended $7.4 million to repurchase and cancel 473,000 shares under its Normal Course Issuer Bid, with 400,000 shares acquired upon the exercise of warrants that generated proceeds of $5.6 million.

Outlook and Guidance

The majority of the Corporation’s attributable royalty revenue is derived as a function of attributable production volumes multiplied by relevant realized commodity prices. The Corporation provides production guidance summaries of the disclosable information it gains from the underlying operators of the projects on which it holds royalty interests. This volume based information, when considered in conjunction with commonly quoted commodity prices, is provided to help interested shareholders and investors make ongoing estimates of royalty revenue variability. A table that summarizes the production outlook is available as part of the Q4 2020 conference call presentation on the website at www.altiusminerals.com.

Portfolio Performance

Base metals (copper, nickel, zinc and cobalt) revenue of $7.6 million accounted for 43% of total attributable royalty revenue (40% Q1 2020). Base metal (primarily copper) revenue was positively impacted by improved year over year prices but was offset during the quarter by seasonally lower copper concentrate production as a higher percentage of ore was necessarily sourced from low-grade stockpiles, the timing of sales and residual lag impacts from a Q4 2020 unplanned production interruption at Chapada. This was partially offset by strong mill throughputs and the operator has reiterated full year production guidance. Revenue from both 777 and Voisey’s Bay were higher on a year over year comparable period basis on the strength of improved commodity prices and higher copper head grades at 777, and higher volumes of copper, nickel and cobalt production at Voisey’s Bay year over year given the reduced production during COVID 19 closures last year. A nominal payment was received from Gunnison related to sales of copper recov

FAQ

What was Altius Minerals' royalty revenue for Q1 2021?

Altius Minerals reported attributable royalty revenue of $17.8 million for Q1 2021.

How did Altius Minerals' Adjusted EBITDA perform in Q1 2021?

Adjusted EBITDA for Q1 2021 was $14.6 million, up 15% from the previous year.

What were Altius Minerals' adjusted earnings per share in Q1 2021?

Adjusted earnings per share for Q1 2021 were $0.14, an increase from $0.08 in Q1 2020.

What is the capital allocation strategy of Altius Minerals?

Altius focuses on creating per share value growth through high-margin operations and returning capital to shareholders.

What factors impacted Altius Minerals' revenue from base metals in Q1 2021?

Revenue was affected by lower copper concentrate production, timing of sales, and residual impacts from previous production interruptions.