TSX:DHT.UN - Post Discussion
Post by
retiredcf on Aug 04, 2022 1:04pm
RBC
August 4, 2022
Q2/22 Results Mixed - Revenue below consensus estimates while adj. EBITDA was ahead of consensus
TSX: DHT-U | CAD 8.75 | Outperform | Price Target CAD 14.00
Sentiment: Neutral
Our view: Overall, we view DRI's Q2/22 results as neutral for the shares. While Q2/22 revenue missed consensus estimates (-8%), adj. EBITDA for Q2 was ahead of consensus (+5%). Total revenue of $21.3MM was 3% ahead of RBCe ($20.7MM) but 8% below consensus estimates ($23.1MM). Cash royalty receipts (ex-interest receipts) of $24.0MM were marginally below our estimate ($24.5MM) but this variation, both positive and negative from quarter to quarter, is normal. Adj. EBITDA of $21.4MM was ahead of consensus ($20.5MM) and broadly in line with RBCe ($21.6MM). DRI declared a cash dividend of $0.0750/unit for Q3/22 to be paid on 20-Oct.
Royalty revenues above RBC but below consensus estimates; Cash royalties marginally below RBCe. DRI reported royalty income of $20.0MM in Q2/22, above our forecast of $19.5MM and below the $21.3MM reported in Q1/22. The strength in revenues vs. RBCe was largely led by Oracea revenues ($2.5MM vs. RBCe $2.2MM) and Xolair ($2.8MM vs. RBCe $2.6MM) partially offset by Vonjo ($0.7MM vs. RBCe $1.1MM) and Zytiga ($1.9MM vs. RBCe $2.2MM). Other Products royalties also includes royalty income of $0.75MM related to the settlement of litigation on a royalty asset. Total revenue including interest income was $21.3MM ($22.6MM in Q1/22) above RBCe ($20.7MM) but below consensus ($23.1MM). DRI reported cash royalty receipts of $24.0MM slightly below RBCe ($24.5MM). The miss in cash royalty receipts vs. RBCe was largely due to lower than expected royalties for Rydapt ($2.3MM vs. RBCe $3.3MM) and Mature Products ($0.6MM vs. RBCe $1.1MM) partially offset by higher receipts for Spinraza ($4.6MM vs. RBCe $3.7MM). Total cash receipts including interest receipts were $25.3MM.
Q2/22 adj. EBITDA of $21.4MM was in line with RBCe ($21.6MM) and ahead of consensus ($20.5MM). The Adj. EBITDA margin of 85% was flat q/q (85% in Q1/22).
Balance sheet and dividend update. DRI ended Q2/22 with cash on hand of $43.0MM and has drawn $67.0MM under its credit facility. On 20-Apr, DRI entered into an amended and restated credit agreement increasing the capacity of its credit facilities from $200MM to $350MM. After quarter-end, the company paid its previously declared dividend of $0.075/unit on 20-Jul. Today, it declared a cash dividend of $0.075/unit for Q3/22 payable on 20-Oct.
Tomorrow's conference call. We would look for updates on the existing portfolio of royalties, pacritinib's ramp-up following the FDA approval, additional details on the pegcetacoplan transaction and any updates on the deal pipeline.
Call details: Tomorrow (4-Aug) at 8:30AM ET. Dial-in: 1-888-664-6392 or 416-764-8659. Webcast link here.
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