Sprott Inc. today reported robust growth in profit and revenue in its first earnings release since becoming a publicly traded company.

Despite the dismal markets, Sprott declared a second quarter dividend of 2.5¢ a share, one quarter ahead of schedule.

Net income for the second quarter ended June 30 was $11.4 million, or 8¢ a share, compared with a net loss of $7.7 million in the year ago period.

Assets under management were $7.7 billion at June, 30 June, 2008, 14% increase over the first quarter of this year, and a 24% increase since 31 December 2007.

Net sales for the quarter were $259 million.

The increase in AUM was largely due to $666 million appreciation in the market value of portfolios. “Funds tend to follow performance,” explained Eric Sprott, Sprott president and CEO, in a conference call.

The Sprott offshore funds were the largest contributors to the increase in AUM, largely due to the weak U.S. dollar the decision to go long on Canadian investments and short American holdings.

Revenue for the quarter was $39.5 million, up from increase of $3.7 million in the year ago period.

In calculating total revenue increases on management fees, crystallized performance fees, interest and other income outweighed losses for the second quarter.

Management fees for Q2 increased a staggering 38% over the same period the year before, bringing in $36.6 million. For the quarter crystallized performance fees shot skywards — $4 million compared to $0.3 million for the second quarter of 2007.

Losses on the sale of Sprott Asset Management Inc. proprietary investments due to Sprott’s initial public offering, a dilution loss on the IPO of Sprott Molybdenum Participation Corporation (Sprott Moly) and an impairment of long term assets amounted to $23.6 million.

Commenting on the results, Sprott says transparency is the distinct advantage of going public. “People will get to see what we are all about,” he says.

Referring to the current investment situation, which Sprott describes as a “systematic financial meltdown” he continues to focus on long-term returns and ignore the day-to-day hysteria of a volatile bear market.

Sprott says he will continue to go long on gold, versus currency, and energy, based on his belief in the peak oil theorem, and short American financials and housing. That will not change “until lenders are willing to lend”, he says. It is currently cheaper to buy a house than build one.

On the horizon Sprott Inc. hopes to build a brand on the back of its May IPO. Sprott Asset Management (SAM) has added senior portfolio manager Peter Hodgson and investment strategists Charles Oliver and Jamie Horvat to the roster after signing Allan Jacobs and Peter Imhof last year.

SAM has eight people in retail sales as well as four wholesalers, having just added a representative for the province of Quebec. One more is exploring off shore opportunities.

In addition to Sprott Moly, Sprott Consulting Inc. is building momentum consulting in the resources sector.