Elemental Royalties Corp. ((TSE:ELE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Elemental Altus Corp. recently held its earnings call, revealing a strong financial performance with record revenue and significant growth in EBITDA and cash flow. The company’s robust financial position is bolstered by substantial liquidity and new investor support from Tether Investments. Despite some challenges such as paused revenue from Wahgnion and increased tax costs, the overall sentiment was positive, with the benefits far outweighing the drawbacks.
Record Revenue and Strong Financial Position
Elemental Altus achieved record revenue for the first two quarters of fiscal year 2025, with adjusted revenue doubling year-on-year to $10.5 million. The company maintains a strong financial position, boasting $30 million in cash and an undrawn $50 million credit facility, providing a solid foundation for future growth.
Significant EBITDA and Cash Flow Growth
The company reported a remarkable 150% increase in adjusted EBITDA, reaching $8.8 million, while operating cash flows rose significantly to $14.4 million, up from $1.5 million the previous year. Free cash flow also saw a substantial increase, reaching $9.7 million.
Growth Driven by Key Assets
Key assets such as Korali-Sud have been instrumental in driving growth, generating $9.1 million in royalty revenue year-to-date. Other assets like Karlawinda and Caserones also performed well, with Karlawinda achieving 117,000 ounces and having expansion plans approved for further growth.
Increased Revenue and GEO Guidance
The company has increased its revenue guidance to USD 35 million to USD 40 million for 2025, with GEO guidance of 11,600 to 13,200, marking a nearly 40% year-on-year increase at the midpoint.
New Investor Support
Tether Investments has joined as a new investor, providing strong support for Elemental Altus’s future growth plans and backing for capital deployment, which is expected to enhance the company’s portfolio.
Paused Revenue at Wahgnion
Revenue accrual at Wahgnion is currently paused due to an external audit by the government, with payment expected in 2025. This delay is impacting current cash flow.
Higher Tax and Depletion Costs
The company faced higher tax accruals and depletion costs in Q2, which affected profitability despite the overall strong financial performance.
Noncash Impairment on Investment
A noncash impairment of $1.46 million was recorded due to the reclassification of the investment in Aterian plc, impacting financial reporting.
Forward-Looking Guidance
During the Q2 2025 call, Elemental Altus’s leadership highlighted key financial metrics that showcase the company’s robust performance. With adjusted revenue reaching $10.5 million and adjusted EBITDA surging by 150%, the company is well-positioned for future growth. The upgraded revenue guidance of $35-40 million for 2025 is supported by strong performances from key assets and new investor backing, enabling the company to capitalize on acquisition opportunities.
In conclusion, Elemental Altus Corp.’s earnings call painted a positive picture of the company’s financial health, with record revenue and significant growth in key financial metrics. While challenges such as paused revenue and higher tax costs exist, the overall sentiment remains optimistic, driven by strong asset performance and new investor support.