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Wheaton's adjusted net earnings up 29% to $121M in Q3 despite Peñasquito suspension

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(Kitco News) - On Thursday, streaming company Wheaton Precious Metals (TSX: WPM) reported that in Q3 2023, the company generated $223 million in revenue, $171 million in operating cash flow, $116 million in net earnings and $121 million in adjusted net earnings.

Wheaton also reported production of 154,800 gold equivalent ounces (GEOs) in Q3 2023, which is an increase of 1.2% compared to Q3 2022 (153,025 GEOs), driven by strong outperformances at both Salobo and Constancia, and despite the temporary suspension at Peñasquito.

The company said its Q3 2023 revenue of $223 million increased by 2% relative to the prior period quarter (Q3 2022: $219 million) primarily due to a 16% increase in realized commodity prices, partially offset by lower sales volumes.

Importantly, Wheaton noted that its cash operating margin in Q3 2023 amounted to $1,457 per GEO sold, an increase of 25% as compared with the third quarter of 2022, - a result of the higher realized price per ounce.

The company’s operating cash flow in the third quarter of 2023 amounted to $171 million, with the $17 million increase due primarily to the higher realized price per GEO sold coupled with higher amounts of interest received in the third quarter of 2023.

The company posted net earnings of $116 million or $0.257 per share (Q3 2022: $196 million or $0.435 per share) and adjusted net earnings of $121 million or $0.268 per share (Q3 2022: $94 million or $0.208 per share).

Wheaton also maintained its average annual production guidance for 2023 of 600,000 to 660,000 GEOs and declared a quarterly dividend of $0.15 per common share.

Commenting on the results, President and CEO Randy Smallwood said, "The importance of having a diversified portfolio of high-quality, low-cost assets was evidenced by Wheaton's ability to deliver solid operating results in the quarter, despite the temporary suspension of one of our largest assets, which has since begun the safe ramp-up of operations.

“Strong outperformances from Salobo and Constancia, have not only offset challenges faced by others, but also contributed significantly to our overall success. As such, we are pleased to reiterate our annual production guidance range for 2023.

"In this high interest rate environment, streaming continues to be one of the most competitive sources of capital, and our corporate development team remains exceptionally busy evaluating new opportunities. We remain resolutely committed to enhancing our portfolio with growth that is accretive and sustainable, benefiting all stakeholders."

Wheaton Precious Metals is the world's premier precious metals streaming company. The company indicated that its business model offers investors leverage to commodity prices and exploration upside but with a much lower risk profile than a traditional mining company.

Gold producer Endeavour Mining increases adjusted net earnings in Q3, reiterates 2023 guidance

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