Ecora upholds dividend plans even as easing commodity prices weighs down profits
Ecora Resources has upheld its dividend plans, even as easing commodity prices and declining royalties has weighed down the company’s bottom line.
The mining royalties specialist, formerly known as Anglo Pacific, has swung from profits to losses this year – posting a £8.1m ($10.2m) pre-tax loss over over its first six months of trading, after posting £103m ($130m) profits this time 12 months ago.
The year-on-year slide reflects a more than halving in royalty and metal stream revenue, which dipped from $93.2m to $42.7m.
However, it has sought to keep shareholders sweet with a quarterly dividend payment of 2.13 cents per share bringing the first half dividend to 4.25 cents.
This was not enough for the London listed company to avoid a slide in its share price, suffering a 4.88 per cent drop in this morning’s session – priced 105.2p per share in the early afternoon. Its shares dropped to around -5.5 per cent by 2.30pm.
It comes after commodity prices dropped from record levels last year – caused by Russia’s invasion of Ukraine – with market prices withdrawing to pre-crisis levels.
The company has also suffered a $43.8m value loss in its portfolio contribution, following the revaluation of the Kestrel steelmaking coal royalty – depletion and slightly lower forward-looking pricing inputs resulted in the loss .
Ecora has begun a multi-year transition towards greener commodities for its portfolio – ramping up cobalt, copper and nickel in its portfolio.
This includes six deliveries of cobalt received under the Voisey’s Bay stream, with a further four to five deliveries scheduled in the second half of the year.
Each delivery is 20 tonnes, of which 70 per cent is attributable to the group, with a ramp up of the underground operations expected to continue in the second half with further supplies coming in.
Meanwhile, construction of the West Musgrave nickel-copper project is ongoing, with BHP continuing to target first production in the second half 2025
Last month – outside the latest results window – Ecora snapped up a 0.25 per cent royalty over Chile’s Vizcachitas copper project, which has an estimated 26-year life.
Chief executive Marc Bishop Lafleche predicted that the green-focused minerals has the potential to contribute over $100m to the portfolio.
“Commodity prices have remained subdued in the first half of the year however the longer-term outlook continues to remain very positive for decarbonising commodities which, combined with an environment of limited sources of growth capital for mining companies, has created a favourable dynamic for royalty acquisitions,” he said.