4th Aug 2015 06:52
LONDON (Alliance News) - Mexico-focused precious metals miner Fresnillo PLC on Tuesday said its gold and silver production both rose in the first half, but its pretax profit plunged as the prices for its metals dropped heavily.
The FTSE 100-listed company said its pretax profit for the six months to the end of June was USD136.1 million, sharply down from the USD208.2 million it posted a year earlier.
The group's silver production in the half was up by 11% to 23.8 million ounces from 21.5 million ounces a year earlier, while gold production increased to 364,020 ounces from 265,670 ounces, up 37%. But despite the rise in production, Fresnillo said its realised price for silver fell by 18% in the half, while its realised price for gold was down 7.4%.
On the back of the fall in pretax profit, Fresnillo said it will pay an interim dividend of 2.1 US cents, less than half the 5 cents it paid out a year earlier.
Still, the group has upgraded its production guidance for the year for gold, up to 715,000 to 730,000 ounces from 670,685 ounces, mainly thanks to production from the now-operational Herradura site. Silver production guidance for the year has been maintained.
"The pricing environment remains challenging, with ongoing precious metals price volatility. Our strategic objectives remain unchanged, and we continue to take a long-term view, but we will also take into account the effect of market dynamics on our operating assumptions, if necessary deferring expenditures without compromising the profitable growth we continue to deliver, as evidenced by our reduced capital expenditure estimate for the full year 2015," said Chief Executive Octavio Alvídrez.
"We are fortunate to have both the financial and operational flexibility to adapt to market conditions as needed. Our high-quality, low-cost assets and significant quality growth pipeline, combined with our balance sheet strength, leave us in a strong position even in challenging market circumstances," Alvídrez added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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