By Alex MacDonald
LONDON--Mexican precious metals miner Fresnillo PLC (FRES.LN)
said Wednesday that net profit slumped last year due to lower gold
and silver prices and falling gold output, which more than offset
higher silver production.
Fresnillo, the world's largest primary silver producer and
Mexico's second-largest gold producer, said net profit fell 55% to
$108 million last year after revenue fell 12% to $1.41 billion and
earnings before interest, taxes, depreciation and amortization, or
Ebitda, dropped 22% to $567 million. The Ebitda figure missed
analysts' expectations of $610 million based on a FactSet poll of
seven analysts.
"In 2014 we have delivered a reasonable performance considering
the lower silver and gold prices that impacted the industry as a
whole," said Fresnillo's Chief Executive Octavio Alvídrez. He noted
that the company suffered from operational challenges at its
Fresnillo and Herradura mines last year but said it remains
confident that initiatives put in place at those mines will help
boost production in 2015.
The company said it expects to produce 750,000 troy ounces of
gold and 65 million ounces of silver in 2018 following its
acquisition of the remaining 44% stake in the Penmont joint venture
last year.
This compares with gold output of 596,000 troy ounces last year,
down 2.4% on year due to the suspension of its Soledad Dipolos
mines as a result of a legal dispute with a local agrarian
community. Silver output, including output from the Silverstream
contract, however rose 4.9% last year to a record 45 million troy
ounces.
The company declared a final dividend of $0.03 a share and said
it had $449.3 million of cash and short-term investments on hand at
the end of December.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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