Silver Wheaton Reports Higher Adjusted Profit, Dividend, Plans Name Change

Allen Sykora  

Tuesday March 21, 2017 18:03

Silver Wheaton Corp. (TSX, NYSE: SLW) late Tuesday announced record revenue for 2016, a rise in fourth-quarter and 2016 adjusted earnings, and a planned name change.
The world’s largest precious-metals streaming company also reported that its dividend increased for the second quarter in a row, this time by a penny to 7 cents a share, due to rising sales volumes, especially in gold, that resulted in increased operating cash flow of some $175 million in the fourth quarter. The dividend will be paid around April 21 to shareholders of record as of the close of business on April 5.

The board of directors has recommended changing the company's name to Wheaton Precious Metals Corp. since the company now has a diverse portfolio that includes gold streams along with silver. Approval for the name change will be sought from shareholders at the annual meeting in May.

"Since 2013, our company has seen a marked increase in gold production, and in the second half of 2016, revenue was evenly split between silver and gold,” said Randy Smallwood, president and chief executive officer. “In order to better align our corporate identity with underlying operations while maintaining a link to our past and the innovation that the 'Wheaton' name has become synonymous with, we have recommended changing our name to Wheaton Precious Metals.”

Fourth-quarter net earnings were $11 million, or 2 cents per share, compared with a net loss of $169, or 42 cents, in the same period of 2015. Adjusted net earnings were $82 million, or 19 cents per share, up 43% from $57 million, or 14 cents, in the fourth quarter of 2015. Revenues of $258 million were up 29% from $200 million in the year-ago period.

Fourth-quarter production was 7.6 million ounces of silver and 107,300 ounces of gold, compared with 10.3 million ounces of silver and 72,400 ounces of gold in the year-ago period. This equated to 15.2 million silver-equivalent ounces (SEOs) or 214,100 gold-equivalent ounces (GEOs), compared with 15.7 million or 209,800 in the year-ago period, respectively.

"2016 was a record year for Silver Wheaton on many fronts. We sold more silver and gold than any other year and produced over 350,000 ounces of gold for the first time," Smallwood said.

For the full year, the company listed record revenues of $892 million, up 37% from $649 million in 2015. Net earnings were $195 million, or 45 cents, compared with a net loss of $162 million, or 41 cents, in 2015. Adjusted full-year net earnings were $266 million, or 62 cents, up 27% from $210 million, or 53 cents, in 2015.

Full-year production was 30.4 million ounces of silver and 353,700 ounces of gold, compared with 30.7 million ounces of silver and 243,000 ounces of gold in 2015. The gold output was up 46% and a company record.

Average realized prices per ounce sold were $16.96 for silver and $1,246 for gold. Each was up 8% from 2015.

For 2017, Silver Wheaton estimated production will be 28 million ounces of silver and 340,000 ounces of gold. This assumes an ongoing strike at San Dimas will continue for a three-month period and that San Dimas will otherwise achieve production in line with 2016. Silver Wheaton said its estimated average annual production over the next five years is anticipated to be in line with 2017 production at approximately 29 million ounces of silver and 340,000 ounces of gold.