Fresnillo delivers 'sound' 2023 despite profits falling 54%

(Sharecast News) - Shares in Fresnillo gained on Tuesday after the Mexico-focused precious metals miner celebrated a "sound operating performance" in 2023 despite profits dropping by more than a half. The company achieved its production guidance of 105.1m silver equivalent ounces with gold, lead and zinc all within the targeted range, though silver output was slightly below expectations.

Adjusted revenues were up 10.6% at $2.97bn in 2023, but pre-tax profit dropped 54.1% to $114m due to the impact of the revaluation of the Mexican peso against the US dollar as well as inflation headwinds.

"Fresnillo delivered a sound operating performance in 2023 despite a number of headwinds, a testament to the strength and efforts of our teams," said chief executive Octavio Alvídrez.

"At the same time, we focused on increasing productivity and raising development rates while advancing our pipeline of future projects. We continued to identify and implement cost reduction measures, as well as improve efficiency across all of our mines."

In line with its dividend policy to pay out 33% to 50% of profits attributable to equity shareholders, Fresnillo's board declared a final dividend of 4.2 cents a share, which in addition to the interim payout of 1.4 cents makes 5.6 cents for the full year, down from 16.7 cents in 2022.

The stock was up 2.,6% at 488.4p by 0956 GMT.