Broker snap: 'Small miss' in Fresnillo's results, says Citi

3rd Aug 2011 12:54

Citi has kept its hold rating on gold and silver mining giant Fresnillo, highlighting a "small miss" in its half-year figures.The company reported $422m of attributable net profit in the first half of 2011 (excluding Silverstream), under the US broker's expectations of $467m. Earnings per share of 58.8 cents was short of estimates of 65.2 cents."While this is a small miss on our numbers, the change from a year ago, compliments of precious metals prices and volume growth, is exceptionally good," said analyst Jon Bergtheil.The broker labels Fresnillo with a 'medium risk' view, noting that while silver prices are expected to hold at recent levels with limited upside, "silver has displayed a greater degree of volatility than other previous metals over recent years".Other risks also include fluctuations in the US dollar:Mexican peso exchange rate (which could impact profitability), cost pressures and political risk.The target price stays at 1,500p.Shares were trading 1.93% higher at 1,848p at 12:54 on Wednesday.BC