Wheaton Precious Metals - Solid Q221 results set up H221

WPM’s Q221 results were characterised by record quarterly revenue, which contributed towards record revenue and cash-flow for the half-year period and a fourth successive increase in the quarterly dividend, to US$0.15/share for Q321 (cf US$0.10/share for Q320). In general, financial results were closely aligned with our prior expectations and well within the range of analysts’ expectations. Production was strong from both Wheaton’s gold and silver divisions although, whereas the gold division’s sales were closely aligned with production, the silver division reverted to its more normal pattern of a 16.7% under-sale of metal relative to production and a consequent (albeit modest) increase in ounces produced but not yet delivered. In the wake of Q221 results, we have adjusted our forecasts for WPM for FY21 to reflect the ‘flash crash’ in precious metals prices between 4-10 August, although we do not believe that there will be an end to the structural bull market unless and until real interest rates in the US exceed 4% on a sustained basis.