Fresnillo Share Price Rallied 4.25% on Its Upbeat FY 2023 Results

The Fresnillo Plc (LON: FRES) share price rallied 4.25% after releasing its financial results for the year ended 31 December 2023. The company reported that its adjusted revenues saw a 10.5% increase from 2022, attributed to a higher quantity of silver sales and modest increases in lead and zinc sales, and boosted by the rise in gold and silver market prices.

Total revenues rose by 11.2% to $2,705.1 million, driven by the upsurge in adjusted revenues, although an increase in treatment and refining costs somewhat mitigated this. 

Adjusted production expenses climbed by 12.3% to $1,624.1 million compared to the previous year, mainly due to the negative impact of the Mexican peso strengthening against the US dollar by an average of 11.7%, along with a 3.9% rise in inflation costs. 

There were also additional expenses from the initiation of operations at the flotation plant and mine in Juanicipio and the commencement of the pyrites plant in Fresnillo.

There was a decline in both gross profit and EBITDA to $503.2 million and $655.7 million, respectively, marking a decrease of 6.1% and 12.7% from 2022. Exploration spending rose by 10% to $182.4 million, aligning with the strategy to boost exploration in specific areas of interest.

Profits from ongoing operations before finance and tax costs dropped by 54.1% to $114.0 million due to decreased gross profit alongside increased administrative and exploration costs.

Net profit attributable to the Group's equity shareholders fell by 14% to $233.9 million from the previous year, primarily because of the reduced operating profit, counterbalanced by a tax income of $205.0 million for the period, an improvement from the $67.4 million tax income in 2022.

Despite significant investments in capital expenditures amounting to $483.4 million, repaying $317.9 million in Senior Notes due in November 2023, and distributing $108.4 million in dividends, the cash and liquid assets stood at $534.6 million as of December 31, 2023.

Octavio Alvídrez, Fresnillo’s CEO, said: “Fresnillo delivered a sound operating performance in 2023 despite a number of headwinds, a testament to the strength and efforts of our teams. We achieved our guidance of 105.1 million silver equivalent ounces with gold, lead and zinc production within our guided range. Silver production benefitted from the ramp-up at Juanicipio and higher ore grade at San Julián (veins) but was slightly below expectations.”

Fresnillo share price. 

The Fresnillo share price rallied 4.25% to trade at 497.65p from Monday’s closing price of 477.35p.