Fresnillo beats estimates as first-half profits surge

(Sharecast News) - Fresnillo beat expectations with its interim results on Tuesday, helped by higher volumes and lower-than-forecast operating costs, with gross profits more than doubling compared with last year.

The Mexico-focused precious metals miner held on to full-year product guidance, but lowered its capex projections for 2026 to $500m-550m as a result of the "rationalisation of capex across mining operations". This is significantly lower than the $765m guided to at the time of the company's annual results in March.

Revenues were 74.7% higher than last year at $3.38bn, due to higher silver and gold prices, partly offset by lower volumes of gold and silver sold.

Cost of sales, however, only rose 12% to $1.02bn, helping drive gross profits up 130.7% to $2.36bn, beating analysts' forecasts of $2.27bn. Earnings per share came in at $1.75, well ahead of the $1.66 consensus estimate.

Chief executive Octavio Alv�drez said the company delivered an "exceptional financial performance".

"Through a combination of solid operational execution and cost discipline, we continued to capitalise on the historic strength of precious metals prices," he said.

Operational numbers, which were pre-released as part of the second-quarter production update in July, showed a 11.4% year-on-year fall in silver production to 22.0 ounces and a 7.3% decline in gold output to 290,900 ounces.

This was more than offset by a 134.4% surge in the average realised silver price to $78.9 per ounce and a 47.3% jump in the gold price to $3,666.80 an ounce.

"Our full-year production guidance remains unchanged, and our high-margin portfolio puts us in a strong position to capitalise on ongoing market tailwinds," said Alv�drez.

Fresnillo shares were up 1.0% at 2,522p by 1025 BST.

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