Fresnillo PLC on Tuesday said results for 2022 were hit by industry pressures, including volatile precious metal prices and rising cost inflation.
The Mexican miner said silver production edged up 1.2% to 53.7 million ounces from 53.1 million a year ago, but gold production fell 15% to 635,926 ounces from 751,203. Both were in line with company guidance, however.
Total revenue fell 10% to $2.43 billion from $2.70 billion due to the lower adjusted revenue combined with ‘higher treatment and refining charges’, it said.
Pretax profit slumped 59% to $248.6 million from $611.5 million. Adjusted production costs rose 15% to $1.45 billion from $1.26 billion.
UBS had predicted pretax profit to drop to $192 million and revenue to $2.52 billion.
Earnings before interest, tax, depreciation and amortisation amounted to $751.1 million, down 38% from $1.21 billion a year ago.
Chief Executive Officer Octavio Alvidrez said: ‘Fresnillo delivered a resilient operating performance in 2022, with our people rising to meet a number of external challenges and deliver on our production guidance. Our financial results were impacted by industry pressures included volatile precious metal prices and higher cost inflation, while our workforce continued to feel the impact of the pandemic and caused delays to our development programme, and more specific to Mexico, the labour reform which limited the use of contractors requiring us to train new employees.’
Fresnillo declared a final dividend of 13.3 US cents per share, bringing the annual total to 16.7 US cents, down 51% from 33.9 US cents a year prior.
In 2023, it expects attributable silver production expected to be in the range of 57.0 million to 64.0 million ounces, including silverstream, so up by 6.1% to 19%.
Gold production is expected at 590,000 to 640,000 ounces, so down by 7.2% to up marginally.
Fresnillo said it expects cost inflation to persist in the year ahead.
Shares were down 0.8% at 754.60 pence each on Tuesday morning in London.
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