(Sharecast News) – Fresnillo’s profits were hammered during the first half of 2023 by cost inflation and the sharp strengthening in the Mexican peso.
The world’s largest silver miner said that its profit before tax dropped 69.2% to $47.9m and basic diluted earnings per share from continuing operations by 44.7% to 8.8 US cents.
Free cash flow reduced sharply, falling from $93.5m in the year earlier period to $18.7m.
However, the company’s boss, Octavio AlvÃdrez, said the company was now fully staffed, having overcome the challenges presented by the labour reforms in Mexico.
AlvÃdrez also highlighted the ramp up during the period at Fresnillo’s new Juanicipio mine and the start of production at its new pyrites plant.
The company reported a 6.1% increase in adjusted first half revenues to reach $1.43bn.
Cost of sales grew 18.7%, chiefly on account of higher adjusted production costs as well as the consumption of inventories at Juanicipio and Noche Buena to reach $1.06bn.
In parallel, its exploration expenses rose by 24.7% to hit $96.9m due to front loading.
The miner declared an interim dividend of 1.40 US cents or $10.3m, down from $25.0m one year before.
Gearing rose from 0.26 times earnings before interest, taxes, depreciation and amortisation to 0.42 times.
Its cash and other liquid assets as of 30 June stood at $889.7m, against $969.1m one year before.
