Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Miner Fresnillo reported a fall in profits as lower production and sales of gold and silver in the first half and a fall in metal prices dented performance.
Gross profit and earnings (EBITDA) of US$205.5m and US$307.9m, were down 59.1% and 45.7%, respectively. Total revenues decreased 10.1% to US$1,069m in the half.
Silver production fell 10.4% to 27.6m ounces, and gold production fell 7.1% to 432,000 ounces as previously reported on 17 July, which the company blamed on continued challenges at its Fresnillo, Saucito and Herradura mines andf higher costs both of which conspired to knock back profits in the half.
The average realised silver price decreased 7.5% from US$16.5 per ounce in 1H8 to US$15.2 per ounce in 1H19, while lead and zinc prices decreased 20.8% and 13.1% respectively on 1H18. The average realised gold price remained flat at US$1,320.7 in 1H19.
An interim dividend of 2.6 cents was declared.
The maintained its recently revised guidance for the year, estimating total gold production guidance of 880,000-910,000 (down from 910,000-930 ,000 ounces previously) and total silver production guidance of 55-58m ounces (down from 58-61m ounces previously).
'Performance of the business in the first half has not met our expectations. I am however encouraged that the steps we are taking, the targeted, albeit downsized compared to last year exploration programme and the progress on nearer term growth projects, give us greater confidence in the medium term outlook,' said Octavio Alvídrez, Chief Executive Officer of Fresnillo.