Fresnillo Net Profit Falls, Cuts Dividend, Capex

By Alex MacDonald

LONDON--Precious-metals producer Fresnillo PLC (FRES.LN) Wednesday reported a fall in first-half net profit, slashed its dividend payout, and said it would reduce capital expenditure as the Mexican miner grapples with falling gold and silver prices.

Fresnillo, the world's largest primary silver producer and Mexico's second-largest gold producer, reported a 41% drop in net profit of $76.5 million in the six months to end-June on higher exploration and administrative expenses and a currency-related loss of $15.6 million.

They more than offset an 11% revenue rise to $752 million on an 11% increase in attributable silver production, including silver from its Silverstream supply contract, to 23.8 million ounces, and a 37% rise in gold output to 364,020 ounces during the period.

Fresnillo said it would cut is capital expenditure to $570 million for this year from $700 million previously.

The FTSE-100 miner declared an interim dividend of $0.021 a share, down 58% from 0.05 a share in the same period a year before.

The miner reaffirmed that it's on track to meet its higher 2015 gold production forecast of between 715,000 and 730,000 ounces, up from 670,000 to 685,000 ounces previously.

Silver production remains on track to reach 45 million to 47 million ounces this year, including output from Fresnillo's Silverstream contract.

-Write to Alex MacDonald at [e-mail]

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