Fresnillo’s (FRES) production woes have sent its share price and dividend way down just as precious metals are at their highest point in years. The silver and gold miner’s half-year financial figures followed poor first-half production numbers announced on 17 July with a year-on-year cash profit crash of 45.7 per cent to $307.9m (£253m) and a severe haircut for the half-year dividend.
The Mexico-focused miner said the hit to its adjusted revenues was due to a mix of lower volumes and lower prices. Gold cracked $1,400 an ounce (oz) in June, and silver picked up this month, hitting a 12-month high of $16.40 an oz. Fresnillo produced 27.6m oz of silver in the six months to 30 June, a 10.4 per cent year-on-year drop, and 432,000 oz of gold, 7.1 per cent down on the first half of 2018. Full-year guidance has been cut to 55m-58m oz silver and 880,000-910,000oz of gold.
Costs also climbed 31.7 per cent in the period due to the operational issues and a change in the way stripping costs are treated. The all-in sustaining cost (AISC) climbed over $1,000 an oz on a gold equivalent basis, a 24 per cent year-on-year increase.
The Bloomberg consensus forecast is for adjusted 2019 EPS is 26.8¢, down 75 per cent on 2018.
FRESNILLO (FRES) | ||||
ORD PRICE: | 607p | MARKET VALUE: | £4.47bn | |
TOUCH: | 606.5-608p | 12-MONTH HIGH: | 1,048p | LOW: 617.2p |
DIVIDEND YIELD: | 2.6% | PE RATIO: | 29 | |
NET ASSET VALUE: | 410¢ | NET DEBT: | 14% |
Half-year to 30 June | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2018 | 1.12 | 323 | 31.1 | 10.7 |
2019 | 1.00 | 54.1 | 9.5 | 2.6 |
% change | -10 | -83 | -69 | -76 |
Ex-div: | 8 Aug | |||
Payment: | 6 Sep | |||
£1=$1.22 |