Political uncertainty benefited Fresnillo (FRES) in two ways last year. Most obviously, the average realised price for gold and silver - both of which act as imprecise proxies for investor nerves - edged up 10 per cent for the year. Secondly, the 20 per cent devaluation in the Mexican peso, itself sparked by fractious campaign rhetoric in the US presidential election, was a lead contributor to the 8.1 per cent drop in weighted average input costs.
Added to that was a drop in capital expenditure and developmental spend across the precious metal miner's three most productive projects: Herradura, Saucito and Fresnillo. That led to a decline in all-in sustaining costs of 18, 33 and 32 per cent, respectively.
With the balance sheet swinging into a net cash position, capital expenditure is set to surge this year, on top of a planned exploration outlay of $160m. The group has set aside $800m in 2017 to boost production at San Julián and hit another group production record, expected to be as much as 61m ounces of silver.
Prior to these results, analysts at Numis were guiding for full-year pre-tax profits of $562m and EPS of 50¢ in 2017.
| FRESNILLO (FRES) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,463p | MARKET VALUE: | £10.8bn | |
| TOUCH: | 1,462-1,465p | 12-MONTH HIGH: | 2,056p | LOW: 892p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 364¢ | NET CASH: | $114m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢)* |
|---|---|---|---|---|
| 2012 | 2.20 | 1.20 | 103 | 57.9 |
| 2013 | 1.70 | 0.40 | 32.9 | 27.3 * |
| 2014 | 1.41 | 0.25 | 14.7 | 3.0 * |
| 2015 | 1.44 | 0.21 | 9.6 | 5.45 |
| 2016 | 1.91 | 0.72 | 57.9 | 30.1 |
| % change | +32 | +238 | +503 | +452 |
Ex-div: 27 Apr Payment: 26 May £1=$1.24 *Excludes special dividends of 6.8¢ a share in 2013 and 5¢ in 2014 | ||||
