2Q23 Results: Revenue Continues to Trend Higher, Driving Positive Net Income
RE Royalties reported 2Q23 revenue of C$3.4 million, up 291.0% Y/Y from C$0.9 million in 2Q22. The company bought back the royalty from Teichos Energy and the loan repaid in the current quarter, driving a gain of $1.5 million in revenue. The company’s finance income has seen a decrease as a result of the repayment of the Teichos loan in May 2023 and no additional loan was advanced during the quarter. The company reported a gross profit of C$3.4 million, compared with C$0.8 million in 2Q22, primarily driven by higher finance income. Operating expenses increased by 72.2% Y/Y to C$1.1 million, driven by increases in wages and benefits, which were higher due to additional hiring to support the business. Finance expenses increased to C$0.9 million, compared with C$0.5 million in 2Q22, driven by the issuance of Series-3 green bonds during the course of 1Q23, offset by lower convertible note expenses, driven by the repayment of the convertible notes in January 2023. Net income increased to C$1.2 million, compared with C$0.3 million in 2Q22. Basic and diluted EPS increased to C$0.02 from C$0.00 in 2Q22. At the end of 2Q23, cash stood at C$17.7 million, while debt outstanding was at C$35.8 million. RE Royalties’ debt increased, driven by the issuance of C$20 million in green bonds at the start of the year. RROYF affirmed that it has sufficient liquidity to fund new projects and earn royalties through lending for the upcoming fiscal year. There is a robust backlog of royalty investment opportunities that is under due diligence for investing by the company.
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