Agnico Eagle Earnings: Higher Prices and Volumes Partially Offset by Increased Costs

No-moat Agnico Eagle’s 2023 third-quarter result met our expectations. Adjusted EBITDA of USD 760 million increased 13% on the same quarter of 2022, driven by higher gold sales volumes and price, partially offset by increased unit cash costs. Adjusted net profit after tax of roughly USD 220 million was similar to last year due to higher depreciation and amortization from the purchase of the remaining 50% of the Malartic mine from Yamana Gold in March 2023. However, the increased share count from this acquisition meant EPS was 10% lower, at USD 0.44 per share. Similar to last year, and consistent with its quarterly dividend payout policy, Agnico will pay a USD 0.40 (roughly CAD 0.56) per share dividend in December. Free cash flow was roughly USD 80 million, down from USD 140 million last year due to increased working capital, likely mostly temporary. The balance sheet is sound. Net debt was USD 1.6 billion at end September 2023, around 0.5 times trailing 12 months EBITDA.