Altius Minerals’ Earnings Call: Optimism Amid Challenges

Altius Minerals ((TSE:ALS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Altius Minerals’ recent earnings call conveyed a cautiously optimistic sentiment, underscored by positive developments in the potash market, significant investments in iron ore, and advancements in renewable energy. Despite these promising growth opportunities, the company faced challenges with declines in royalty revenue and adjusted net earnings.

Potash Market Strength

The earnings call highlighted the robust demand in the potash market, with reports from potash royalty mines indicating a 10% to 20% increase in prices. This strength in the market is a positive indicator for Altius Minerals, suggesting potential for future revenue growth.

Significant Iron Ore Investments

Altius Minerals is benefiting from Rio Tinto IOC’s ongoing multi-year program to modernize and upgrade its infrastructure in Labrador West. This significant capital investment is expected to enhance the company’s iron ore segment, contributing to its long-term growth strategy.

Base Metals Progress

Vale’s operations at Voisey’s Bay have shown positive progress, with higher production volumes anticipated from the Reid Brook and Eastern Deeps mines. This development is expected to bolster Altius Minerals’ base metals portfolio.

Renewable Energy Investments

Altius Renewable Royalties is expanding its exposure to cash-flowing projects, having secured a $100 million debt-based funding package. This strategic move positions the company well in the growing renewable energy sector.

Orogen Royalties Acquisition

The proposed acquisition of Orogen Royalties and Triple Flag Precious Metals was announced, indicating an implied increase in value for Altius’s royalty interest. This acquisition could enhance the company’s portfolio and market position.

Positive Net Earnings Growth

Altius Minerals reported net earnings of $6.3 million, or $0.13 per share, for Q1 2025, up from $4.8 million, or $0.10 per share, in Q1 2024. This growth reflects the company’s ability to manage costs effectively, despite revenue challenges.

Decrease in Royalty Revenue and EBITDA

The company experienced a slight decrease in royalty revenue to $15 million for Q1 2025, down from $15.4 million in Q1 2024. Adjusted EBITDA also declined to $9.5 million from $10.9 million in the previous year, highlighting areas for potential improvement.

Lower Potash Volumes

The current quarter’s results were impacted by lower potash volumes, which affected overall revenue figures. Addressing this issue will be crucial for future performance.

Adjusted Net Earnings Decline

Adjusted net earnings per share fell to $0.05, primarily due to an unrealized loss on derivatives. This decline underscores the need for careful financial management moving forward.

Forward-Looking Guidance

Looking ahead, Altius Minerals provided guidance on several financial metrics. The company reported a slight decrease in royalty revenue and adjusted EBITDA, but net earnings rose due to lower amortization and G&A costs. The company maintained liquidity with $12.1 million in cash and $116 million available under a revolver, positioning it well for future investments, particularly in renewable energy.

In conclusion, Altius Minerals’ earnings call presented a mixed picture, with positive developments in key markets tempered by challenges in revenue and earnings. The company’s strategic investments in iron ore and renewable energy, along with its cautious financial management, suggest a promising path forward despite current hurdles.