Sprott Inc. saw its net income drop by 34.8% in the fourth quarter of 2009 as revenues declined sharply.

The asset management firm reported net income of $13.3 million, or nine cents per share, for the three months ended Dec. 31, down from $20.4 million, or 14 cents per share, in the same quarter of 2008. Revenues for the quarter totaled $35.7 million, down from $57.7 million the previous year.

Management fees for the quarter increased to $23.1 million from $21.7 million, but accrued performance fees plummeted by $31.8 million to $10.6 million.

Sprott’s assets under management increased during the quarter, rising by $436 million to $4.77 billion at the end of 2009. For the year, Sprott’s AUM rose by $325 million.

Net income for the year was $31.8 million, or 21 cents per share, down from $52.1 million, or 36 cents per share in 2008.

Total revenue for the year plunged by 35.1% to $107.5 million, from $165.8 million in 2008. Most of the decrease was attributable to lower performance fees and lower management fees, the company said. Management fees fell by 29% to $88 million in 2009, as monthly average AUM decreased by approximately 28.8% over the same period.

“As the markets rallied in 2009, the majority of our long funds outperformed their benchmarks, some by a wide margin, while most of our hedge funds were constrained by their short positions during the year, limiting them to modest returns,” said Eric Sprott, CEO of Sprott Inc. “The results delivered by our investment team in 2009 generated performance fees for some of our funds and reduced the performance deficits that others carried forward into 2009. These results position us well to return to generating potentially significant performance fees in the year ahead.”

Total expenses for the year were $62.4 million, down 27.9% from $86.5 million in 2008. The decline was mainly due to a $16.5-million decrease in compensation and benefits, a $7.3-million drop in trailer fees, along with decreases in general and administrative costs and donations.

In the year ahead, Sprott said the company expects to introduce new products and services, and to continue expanding its fund lineup.

On March 9, 2010, Sprott’s board of directors declared a special eligible dividend of $0.04 per common share for the fiscal year ended December 31, 2009, payable on April 5, 2010 to shareholders of record at the close of business on March 19, 2010.

IE