Fresnillo earnings slide on falling silver price and soaring costs

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Fresnillo PLC FRES,
-2.17%
said on Tuesday that pretax profit fell sharply and revenue fell for the first half of 2022, and it was on track to meet its 2022 production guidance.

The Mexican precious metals miner posted a pretax profit of $155.2 million, compared to a pretax profit of $445.4 million for the first half of 2021. The company attributed the decline to lower revenue, higher cost of sales and higher exploration expenses.

Earnings before interest, taxes, depreciation and amortization fell to $459.1 million from $747.0 million a year earlier.

Revenue fell to $1.26 billion from $1.47 billion a year ago. The company attributed the slide to lower gold volumes and silver prices, although it was somewhat tempered by higher zinc and gold prices.

The board declared an interim dividend of 3.40 cents per share, up from 9.90 cents the year before.

Fresnillo said the fifth wave of the coronavirus pandemic in Mexico, coupled with global supply chain bottlenecks and cost inflation, is likely to have a negative effect on the second half, although that it is confident in its ability to overcome short-term challenges without limiting growth. .

The company backed its production guidance for the year of 50.5 to 56.5 million ounces of silver and 600,000 to 650,000 ounces of gold.

Write to Joe Hoppe at joseph.hoppe@wsj.com


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