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Interim Results

Fresnillo profits up 87.2%

01 August 2017 09:40

Fresnillo's profits rose to $310.1m in the six months to the end of June - 87.2% up on a year ago.

Adjusted revenue increased by 11.5% to US$1,069.5m while gross profit and EBITDA of $460.0m and $522.5m, were up 16.6% and 10.2%, respectively.

Profit from continuing operations before net finance costs and income tax rose to $377.9m, up 24.2%.

Silver production - including Silverstream - totalled 28.0 moz, up 11.2%, while gold production of 446 koz was 0.4% down on last time.

Chief executive Octavio Alvidrez said: "We are pleased to report a strong first half of the year, with silver production up 11% and gold production stable at 446 thousand ounces.

"This performance was driven by the successful ramp-up of San Julian (phase I) since its start-up in the second half of 2016 and the operational improvements made at the Fresnillo mine.

"The turnaround plan at the Fresnillo mine continues to progress with ore processed increasing for the fourth consecutive quarter.

"We completed the construction of San Julian (phase II) on time and on budget and I am confident that this new mine will be further proof of the effectiveness of our strategy of continued investment in quality growth.

"We are applying the same disciplined approach to the construction of the pyrites plant in the Fresnillo district and the second line of the dynamic leaching plant at Herradura and expect to commission both projects in 2018.

"We have intensified exploration activities around our mining districts and prioritised areas with the greatest potential.

"We are confident that these efforts will provide a solid base upon which our future growth will be built.

"The solid operational performance was supported by higher metal prices, delivering good financial results during the period.

"Our ongoing commitment to investing in cost reduction initiatives and efficiency projects is increasingly relevant as some cost pressures in Mexican pesos are starting to be evident after the devaluation of the Mexican peso relative to the US dollar.

"We will continue to work on maintaining a competitive cost position and preserve our profit margins.

"Our priorities for the second half of this year are to make further progress to ensure Fresnillo is operating at full capacity as well as the ramp-up of San Julian (phase II).

"I am confident that we are well positioned to meet our 2017 production targets and establish the basis for long-term growth as we approach the 10 year anniversary of Fresnillo plc".

At 9:40am: (LON:FRES) Fresnillo PLC share price was -28p at 1508p

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