Air Canada's $2.5B Aeroplan sale to Blackstone and CDPQ cushions a $500M fuel-cost hit this year. Barrick's profit jumps on gold at $4,417/oz.
Air Canada shares jumped as much as 15% Wednesday after the carrier agreed to sell a 25% stake in its Aeroplan loyalty program for $2.5 billion, a cash cushion against fuel prices from the Middle East war that are delivering a half-billion-dollar hit to earnings this year. The stock settled up roughly 10% in morning trading, after the announcement the night before.
The transaction implies a $10 billion valuation for Aeroplan. Air Canada will keep full control of the travel reward program's day-to-day operations. The buyers are led by Blackstone and the Caisse de dépôt et placement du Québec, with the Public Sector Pension Investment Board and British Columbia Investment Management Corp. among the other investors.
Jet fuel follows crude oil, and the Middle East conflict has kept crude volatile. Cargojet, a Canadian cargo carrier, reported revenue of $275.8 million for the quarter, up from $238.2 million a year earlier, a gain of about 16%. CEO Pauline Dhillon said the company's strategy lets it deploy assets to the highest-return opportunities. In May, she said Cargojet has mechanisms in place to protect against higher fuel costs. The board declared a cash dividend of 38.5 cents per common share.
Fuel prices track the conflict. De-escalation pressures them lower; escalation pressures them higher. The Aeroplan sale gives Air Canada a $2.5 billion buffer either way.
Barrick Mining Corp. earned US$1.22 billion, or 73 cents US per diluted share, in the second quarter, up from US$811 million, or 47 cents US per share, a year earlier. Adjusted earnings came to 82 cents US per share, versus 47 cents, a gain of about 74%. Revenue rose to US$5.29 billion from US$3.68 billion, up about 44%.
The company realized US$4,417 an ounce for gold, up 34% from US$3,295 in the same quarter last year. Production was roughly flat at 796,000 ounces, while sales rose to 801,000 ounces from 770,000.
Barrick also announced an agreement with Newmont Corp. to amend their Nevada Gold Mines joint venture. Barrick's Fourmile project will join the venture. Newmont's Fiberline and Mike developments will also be added. Newmont has given its consent to Barrick's proposed IPO of its North American gold assets.
Royal Bank of Canada, which carries an Alpha Score of 66 on AlphaScala, and BMO Financial Group have agreed to jointly sell Moneris Solutions Corp. to Francisco Partners for about $2 billion, with each bank receiving a 50% share. The deal is expected to close by the end of the first quarter of fiscal 2027, subject to closing conditions and regulatory approvals.
After the closing, RBC and BMO will enter into a long-term customer referral arrangement with Moneris. Jeff Sloan, former CEO of Global Payments Inc., will join the Moneris board as chairman. James Hicks, Moneris's president and CEO, said Francisco Partners brings deep global expertise in technology and payments and is well positioned to accelerate its strategy.
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