UPDATE: Fresnillo's revenue jumps but small miss on profits

2nd Aug 2011 08:04

Soaring precious metals prices boosted revenues at Mexican silver and gold miner Fresnillo in the six months to 30 June.Total revenue rose to $1.056bn (£644.5m) from $605.7m the previous year, while earnings before interest, depreciation and amortisation (EBITDA) rose to $757m from $394.3m.Fresnillo pointed to silver prices that nearly doubled between the two periods to $35.74 an ounce. Average gold prices rose by a quarter to $1,462 an ounce. However, investment bank Citi highlighted a small miss in the numbers: the company reported $422m of attributable net profit in the first half of 2011 (excluding Silverstream), under the US broker's expectations of $467m, while earnings per share of 58.8 cents was short of estimates of 65.2 cents. Nevertheless, analyst Jon Bergtheil said, "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."Fresnillo upped output of both commodities, with silver production climbing 2.6% to 21.46m ounces and gold production jumping 17.1% to 206,477 ounces."We are confident that our strong foundations will continue delivering robust operational performance in the second half of the year, consolidating Fresnillo plc's global leadership in silver production and continuing to create ongoing and sustainable value to all our stakeholders," said chief executive Jaime Lomelin. "Given our strong platform and the strength of precious metal prices, we continue to have confidence in the second half of this year." ---RG