Wheaton Precious Metals 4Q Adjusted Profit Holds Steady
(Kitco News) - Streaming company Wheaton Precious Metals Corp. (TSX, NYSE: WPM) late Wednesday reported that its adjusted profit in the fourth quarter was comparable to the same period a year ago.
Adjusted net earnings were listed $82.3 million, or 19 cents per share, compared to $81.9 million, also 19 cents, in the fourth quarter of 2016. Fourth-quarter cash flow was $165 million, compared to $175 million in the same period of 2016.
Wheaton, which gets a portion of producers’ metal output in return for up fronting money typically used to develop projects, took an impairment charge of $229 million in connection with Barrick Gold Corp.’s Pascua-Lama project. Barrick itself announced an impairment charge last month due to reclassification of reserves after Chilean authorities ordered closure of certain infrastructure as part of a re-evaluation process ordered by the country’s Environmental Court.
With the impairment and other special items, Wheaton’s fourth-quarter net loss was $137.7 million, or 31 cents, compared to a profit of $10.9 million, or 2 cents, in the year-ago period.
During the fourth quarter, production was 7.2 million ounces of silver and 96,500 ounces of gold, which were decreases of 5% and 14%, respectively, from the fourth quarter of 2016.
Adjusted net earnings for full-year 2017 were $277 million, or 63 cents per share, up from $266 million, or 62 cents, in 2016. Production of 28.6 million silver ounces and 355,000 gold ounces exceeded guidance, although it was down from 30.4 million silver ounces and 366,000 gold ounces in 2016.
“Wheaton’s high-quality portfolio of low-cost, long-life assets once again exceeded production guidance for both gold and silver, resulting in sector-leading operating cash flow of over $535 million in 2017,” said Randy Smallwood, president and chief executive officer. “With 30% of our cash flows being distributed in dividends, we now provide the highest yield of all the precious metal streamers.”
Wheaton forecast that its production in 2018 will be approximately 22.5 million silver ounces and 355,000 gold ounces. The estimated average annual output over the next five years -- including 2018 -- is projected to be around 25 million silver ounces and 370,000 gold ounces per year.
Average output over the next five years is expected to increase primarily due to continued production growth from both Peñasquito and Constancia, Wheaton said. This does not include any production from Barrick’s Pascua-Lama project or Hudbay’s Rosemont project.
A dividend of 9 cents per share – the same as after Wheaton’s third-quarter earnings report – will be paid to around April 20 to shareholders of record as of the close of business on April 6.
By Allen SykoraFor Kitco News
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