Wheaton Precious Metals Corp (WPM) Q4 2024 Earnings Call Highlights: Record Revenue and ...

GuruFocus.com
03-15
  • Revenue: Record quarterly revenue of $381 million, a 21% increase over the prior year.
  • Gross Margin: $247 million, a 40% increase over the comparable period of the prior year.
  • Net Earnings: $88 million, impacted by a $109 million impairment charge.
  • Adjusted Net Earnings: $199 million, a quarterly record, with adjusted earnings per share of $0.44, a 21% increase over the prior year.
  • Annual Revenue for 2024: Approximately $1.3 billion, a 26% increase, representing a company record.
  • Annual Gross Margin for 2024: Increased by $229 million to $803 million.
  • Annual Adjusted Net Earnings for 2024: Increased by 20% to $640 million.
  • Operating Cash Flow: Record quarterly cash flow from operations of $319 million, a 30% increase over the fourth quarter of 2023.
  • Dividend: Increased by 6.5% to $0.165 per share, with over $280 million distributed in 2024.
  • Gold Equivalent Ounces (GEOs) Production: 635,000 GEOs for 2024, exceeding annual guidance.
  • Sales Volumes: 143,000 GEOs, an 8% decrease relative to the fourth quarter of 2023.
  • General and Administrative Expenses: $10.5 million for Q4 2024, with total annual G&A of $40.7 million.
  • Cash and Cash Equivalents: $818 million as of December 31, 2024.
  • Warning! GuruFocus has detected 5 Warning Sign with WPM.

Release Date: March 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Wheaton Precious Metals Corp (NYSE:WPM) achieved record revenue, adjusted net earnings, and operating cash flows in 2024.
  • Annual production exceeded the top end of guidance with 635,000 gold equivalent ounces produced.
  • The company announced a 6.5% increase in its quarterly dividend, maintaining a leading payout ratio in the sector.
  • Wheaton Precious Metals Corp (NYSE:WPM) was recognized as one of the 2025 Global 100 most Sustainable Corporations and received an AAA ESG rating by MSCI.
  • The company has a strong growth forecast, expecting a 40% increase in annual production to 870,000 gold equivalent ounces by 2029.

Negative Points

  • Wheaton Precious Metals Corp (NYSE:WPM) recognized an impairment charge of $109 million due to a decline in market cobalt prices.
  • Gold production at Constancia decreased by approximately 18% in the fourth quarter of 2024 due to lower gold grades.
  • Co-product production at Penasquito is expected to decline in 2025 as mining transitions to lower silver grade areas.
  • General and administrative expenses are expected to increase to $50 million to $55 million in 2025, up from $40.7 million in 2024.
  • The company faces challenges with the timing and ramp-up of new projects, which could impact production forecasts.

Q & A Highlights

Q: The market has been impressed with the dividend increase, but the payout is lower than the 20% to 30% range previously discussed. Is there a plan to increase it further? A: Randy Smallwood, CEO, explained that maintaining a healthy balance sheet is crucial to take advantage of opportunities. The company aims to balance commitments and cash flow, and the dividend increase reflects their confidence in their growth profile.

Q: Could Wheaton deploy the same amount of capital in 2025 as in 2024, given the $882 million in contractual obligations? A: Haytham Hodaly, SVP of Corporate Development, stated that Wheaton has historically deployed over $800 million annually on high-quality transactions. They see opportunities ranging from $100 million to $1 billion and will continue to pursue accretive deals.

Q: How should we think about production in the first half versus the second half of the year? A: Gary Brown, CFO, indicated that production is expected to be 45% in the first half and 55% in the second half, with a bias towards the latter half due to mine startups and ramp-ups.

Q: Are there any seasonal impacts or maintenance downtimes to consider in Wheaton's operations? A: Wesley Carson, VP of Mining Operations, noted that Salobo experiences a rainy season in the first quarter, but most other operations are not seasonally affected. There are no significant maintenance downtimes expected.

Q: With gold prices at all-time highs, will Wheaton focus more on silver streams? A: Haytham Hodaly mentioned that while they would like to add more silver, it typically comes as a byproduct of polymetallic assets. Wheaton will continue to transact in a manner that ensures solid returns, regardless of commodity price fluctuations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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