LONDON (ShareCast) - (Sharecast News) - Fresnillo issued its interim results for the six months ended 30 June on Tuesday, reporting an 11.3% improvement in adjusted revenue to $1.19bn.
The FTSE 100 precious metals miner said gross profit and EBITDA were of $502.2m and $566.9m - increases of up 9.2% and 8.5% respectively.

Silverstream valuation - a non-cash item - had an adverse effect on profit before income tax, which came down 16.6% to $323.0m, the board said.

In addition, profit for the period of $229.3m - a drop of 26.1% - was adversely impacted by changes in the Mexican peso - dollar exchange rate, and the inflation rate on deferred taxes.

Basic and diluted earnings per share from continuing operations were 31.2 US cents per share, and adjusted earnings per share fell to 33.3 cents per share - decreases of 25.5% and 9.3% respectively.

Cash generated from operations, before changes in working capital, rose 6.6% to $575.9m, and net cash from operating activities was ahead 3.5% at $366.6m.

Fresnillo said it had a "strong" balance sheet, with cash and other liquid assets as at 30 June of $708.6m.

The board declared an interim dividend of $78.8m, or 10.7 cents per share.

"I am pleased to report a robust performance in the first half, with silver and gold production both up in the period, and our new San Julián phase II mine making a strong contribution to overall production, while gold production at Herradura continues to outperform," said chief executive Octavio Alvídrez.

"We have marginally adjusted full year production guidance to reflect a stronger performance in gold and short term challenges at our silver operations though consolidated guidance remains unchanged."

On the operational front, Fresnillo said silver production was 30.8 moz for the period, including Silverstream, which was an increase of 9.7%, while gold production rose 4.4% to 465 koz.

It said ongoing tests at the Herradura leaching pads had resulted in an increase of 98.9 koz of gold in inventory as of 1 January.

Full-year consolidated production guidance was revised marginally, with total gold production upped to between 900 koz and 930 koz from 870 koz to 900 koz, and total silver production dropped to between 64.5 moz and 67.5 moz from 67 moz to 70 moz, including Silverstream.

The Pyrites plant at Saucito was commissioned with minimal delays and on budget, the board claimed.

It said final testing of the second line of the dynamic leaching plant was "on track", with commercial production expected in the third quarter.

"In line with our strategy to actively manage and strengthen our asset portfolio, we are making good progress on the broader development pipeline which continues to provide a strong foundation for long term sustainable growth," Octavio Alvídrez added.

"The Pyrites Plant at Saucito has been commissioned and final testing at the Second Dynamic Leaching Plant is on track. Both projects will make a meaningful contribution to overall 2018 production.

"Once again we have maintained an extensive exploration programme during the first half and remain confident these proactive activities will provide a solid foundation on which our long term future growth will be built. We continue to believe the vast potential of our exploration pipeline is a core differentiators for Fresnillo."

Looking ahead, Alvídrez said Fresnillo remained "confident" in its full year expectations.

"We will continue to maintain this disciplined approach to investment, to support our strategy and deliver shareholder returns.

"We are focused on efficiency and controlling costs to underpin projects, while driving performance improvements at our mines."

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