Editing Wheaton Precious Metals (section)

== Q122 results ==
Underlying net earnings in Q122 were within 2.1% of Edison Investment Research's prior expectations. In broad terms, sales were slightly (3.8%) below Edison's forecasts. This was matched by a similar decline in the direct costs of sales. However, there was also a sharp quarter-on-quarter decline in the depletion charge across most of WPM’s assets (implying a reassessment upwards of its assets’ mine lives), which resulted in profits before tax being US$3.0m (or 1.9%) above its prior forecasts – a variance that was then sustained to the bottom line. A summary of WPM’s underlying financial and operating results in the context of both the preceding quarter and Edison’s prior expectations is provided in the exhibit below:
{| class="wikitable"
|+Exhibit 1: WPM underlying Q122 results cf Q421 and Q122e, by quarter<ref>Source: WPM, Edison Investment Research. Note: *As reported by WPM, excluding exceptional items. **Q122 versus Q421. ***Q122 actual versus Q122 estimate.</ref>
!US$000s

(unless otherwise stated)
!Q120
!Q220
!Q320
!Q420
!Q121
!Q221
!Q321
!Q421
!Q122e
!Q122a
!Chg

<nowiki>**</nowiki>(%)
!Variance

<nowiki>***</nowiki>(%)
|-
|Silver production (koz)
|6,704
|3,650
|6,028
|6,509
|6,754
|6,720
|6,394
|6,356
|5,972
|6,206
|<nowiki>-2.4</nowiki>
|3.9
|-
|Gold production (oz)
|94,707
|88,631
|91,770
|93,137
|77,733
|90,290
|85,941
|88,321
|88,678
|79,087
|<nowiki>-10.5</nowiki>
|<nowiki>-10.8</nowiki>
|-
|Palladium production (koz)
|5,312
|5,759
|5,444
|5,672
|5,769
|5,301
|5,105
|4,733
|4,750
|4,488
|<nowiki>-5.2</nowiki>
|<nowiki>-5.5</nowiki>
|-
|Cobalt production (klbs)
|
|
|
|
|1,161
|380
|370.5
|381
|347
|234
|<nowiki>-38.6</nowiki>
|<nowiki>-32.6</nowiki>
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Silver sales (koz)
|4,928
|4,729
|4,999
|4,576
|6,657
|5,600
|5,487
|5,116
|5,865
|5,553
|8.5
|<nowiki>-5.3</nowiki>
|-
|Gold sales (oz)
|100,405
|92,804
|90,101
|86,243
|75,104
|90,090
|67,649
|79,622
|83,286
|77,901
|<nowiki>-2.2</nowiki>
|<nowiki>-6.5</nowiki>
|-
|Palladium sales (koz)
|4,938
|4,976
|5,546
|4,591
|5,131
|3,869
|5,703
|4,641
|4,731
|4,075
|<nowiki>-12.2</nowiki>
|<nowiki>-13.9</nowiki>
|-
|Cobalt sales (klbs)
|
|
|
|
|132.3
|395
|131.2
|228
|321
|511
|124.1
|59.2
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Avg realised Ag price (US$/oz)
|17.03
|16.73
|24.69
|24.72
|26.12
|26.69
|23.80
|23.36
|24.04
|24.19
|3.6
|0.6
|-
|Avg realised Au price (US$/oz)
|1,589
|1,716
|1,906
|1,882
|1,798
|1,801
|1,795
|1,798
|1,878
|1,870
|4.0
|<nowiki>-0.4</nowiki>
|-
|Avg realised Pd price (US$/oz)
|2,298
|1,917
|2,182
|2,348
|2,392
|2,797
|2,426
|1,918
|2,329
|2,339
|21.9
|0.4
|-
|Avg realised Co price (US$/lb)
|
|
|
|
|22.19
|19.82
|23.78
|28.94
|33.78
|34.61
|19.6
|2.5
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Avg Ag cash cost (US$/oz)
|4.50
|5.23
|5.89
|5.51
|6.33
|6.11
|5.06
|5.47
|5.63
|5.10
|<nowiki>-6.8</nowiki>
|<nowiki>-9.4</nowiki>
|-
|Avg Au cash cost (US$/oz)
|436
|418
|428
|433
|450
|450
|464
|472
|430
|477
|1.1
|10.9
|-
|Avg Pd cash cost (US$/oz)
|402
|353
|383
|423
|427
|503
|468
|340
|419
|394
|15.9
|<nowiki>-6.0</nowiki>
|-
|Avg Co cash cost (US$/lb)
|
|
|
|
|4.98
|4.41
|5.15
|4.68
|6.08
|5.76
|23.1
|<nowiki>-5.3</nowiki>
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Sales
|254,789
|247,954
|307,268
|286,213
|324,119
|330,393
|268,957
|278,197
|319,280
|307,244
|10.4
|<nowiki>-3.8</nowiki>
|-
|Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|-
|Cost of sales, excluding depletion
|66,908
|65,211
|70,119
|64,524
|78,783
|78,445
|62,529
|68,190
|72,819
|69,994
|2.6
|<nowiki>-3.9</nowiki>
|-
|Depletion
|64,841
|58,661
|60,601
|59,786
|70,173
|70,308
|54,976
|59,335
|70,699
|57,402
|<nowiki>-3.3</nowiki>
|<nowiki>-18.8</nowiki>
|-
|Total cost of sales
|131,748
|123,872
|130,720
|124,310
|148,956
|148,753
|117,505
|127,525
|143,518
|127,396
|<nowiki>-0.1</nowiki>
|<nowiki>-11.2</nowiki>
|-
|Earnings from operations
|123,040
|124,082
|176,548
|161,902
|175,164
|181,640
|151,452
|150,672
|175,762
|179,848
|19.4
|2.3
|-
|Expenses and other income
|
|
|
|
|
|
|
|
|
|
|
|
|-
|– General and administrative
|13,181
|21,799
|21,326
|9,391
|11,971
|18,465
|13,595
|16,954
|19,405
|20,118
|18.7
|3.7
|-
|– Foreign exchange (gain)/loss
|0
|0
|0
|0
|
|
|
|
|
|
|N/A
|N/A
|-
|– Net interest paid/(received)
|7,118
|4,636
|2,766
|2,196
|1,573
|1,357
|1,379
|1,508
|1,292
|1,422
|<nowiki>-5.7</nowiki>
|10.1
|-
|– Other (income)/expense
|<nowiki>-1,861</nowiki>
|234
|391
|850
|420
|136
|(684)
|(58)
|
|229
|<nowiki>-494.8</nowiki>
|N/A
|-
|Total expenses and other income
|18,438
|26,669
|24,483
|12,437
|13,964
|19,958
|14,290
|18,404
|20,696
|21,769
|18.3
|5.2
|-
|Earnings before income taxes
|104,602
|97,413
|152,065
|149,465
|161,199
|161,682
|137,162
|132,268
|155,066
|158,079
|19.5
|1.9
|-
|Income tax expense/(recovery)
|8,442
|59
|58
|24
|67
|56
|75
|36
|250
|72
|100.0
|<nowiki>-71.2</nowiki>
|-
|Marginal tax rate (%)
|8.1
|0.1
|0.0
|0.0
|0.0
|0.0
|0.1
|0.0
|0.2
|0.0
|N/A
|<nowiki>-100.0</nowiki>
|-
|Net earnings
|96,160
|97,354
|152,007
|149,441
|161,132
|161,626
|137,087
|132,232
|154,816
|158,007
|19.5
|2.1
|-
|Average no. shares in issue (000s)
|447,805
|448,636
|449,125
|449,320
|449,509
|450,088
|450,326
|450,614
|450,864
|450,915
|0.1
|0.0
|-
|Adjusted basic EPS (US$)
|0.215
|0.217
|0.338
|0.333
|0.358
|0.359
|0.304
|0.293
|0.343
|0.350
|19.5
|2.0
|-
|Adjusted diluted EPS (US$)
|0.214
|0.216
|0.336
|0.331
|0.358
|0.358
|0.303
|0.293
|0.334
|0.350
|19.5
|4.8
|-
|DPS (US$)
|0.10
|0.10
|0.10
|0.12
|0.13
|0.14
|0.15
|0.15
|0.15
|0.15
|0.0
|0.0
|}
From an operational perspective, San Dimas, Penasquito, Antamina, Minto, Stratoni and Neves-Corvo all outperformed Edison Investment Research's prior expectations in terms of production and/or sales for at least the second quarter in succession. In the case of Q122, they were also joined by Constancia and 777. Production at Sudbury continued to be below normal levels on account of the closure – albeit temporary – of the Totten mine (which accounts for approximately 15–20% of Sudbury’s production); however, the operator, Vale, reports that production from Totten has now resumed and is expected to normalise in Q222. Production at WPM’s flagship asset, Salobo in Brazil (also operated by Vale), was hampered by above-average seasonal rainfall in the region as well as planned and corrective maintenance to the operation’s mill liners. In the meantime, according to Vale’s most recent performance report, physical completion of the Salobo III mine expansion was 90% at end-Q122, despite a landslide that damaged a conveyor belt and temporarily blocked access to the project site. The degree of advancement of the project during the quarter was nevertheless still comparable with recent quarters, as shown in the table below:
{| class="wikitable"
|+Exhibit 2: Physical completion of Salobo III, by quarter, Q319–Q122<ref>Source: Vale, Edison Investment Research.</ref>
!
!Q119
!Q219
!Q319
!Q419
!Q120
!Q220
!Q320
!Q420
!Q121
!Q221
!Q321
!Q421
!Q122
|-
|Physical completion (%)
|7
|15
|27
|40
|47
|54
|62
|68
|73
|77
|81
|85
|90
|-
|Implied quarterly completion (%)
|7
|8
|12
|13
|7
|7
|8
|6
|5
|4
|4
|4
|5
|}
Safety protocols in the area were subsequently re-established and a full assessment of the impact of the landslip by Vale is in the process of being concluded. Nevertheless, Salobo III is still expected to be commissioned in H222 (albeit probably Q422) to be followed by a 15-month ramp-up to full capacity.