Fresnillo plc (LON:FRES) has announced its financial results for the full year ended 31 December 2024.
Octavio Alvídrez, CEO said:
“I am pleased to report a solid financial performance for Fresnillo in 2024, underpinned by higher precious metal prices, operational discipline, and a continued focus on cost efficiencies. This result is testament to the hard work and diligence of our teams on the ground, who have delivered another year of operational consistency.
“Our adjusted revenue grew by 26.9% to US$3.64 billion, while EBITDA more than doubled to US$1.55 billion, reflecting our ability to capitalise on market conditions and drive efficiencies across our operations. As a result of this strong financial performance, and in line with our dividend policy, we are returning US$192.3 million to shareholders as final ordinary dividend and an additional US$308.0 million as a one-off special dividend. These, together with the interim ordinary dividend, bring Fresnillo’s total distribution to shareholders for 2024 to US$547.5 million, our highest return
“Operationally, we delivered silver production in line with guidance and gold production slightly ahead, with lead and zinc production also up strongly over the year. Meanwhile, we have made significant strides in improving efficiencies, optimising mine plans, and advancing key projects, including the full commissioning of the San Carlos shaft at our Fresnillo mine.
“Looking ahead, we remain committed to responsible growth with the safety of our people at its heart, further cost optimisation, and advancing our exploration pipeline to ensure long-term value creation for our stakeholders. Our financial position remains strong, with a net cash position of $458.3 million, allowing us to continue investing in the future while delivering returns to shareholders.”
Financial Highlights – 12 months to 31 December 2024
| $ million unless stated | 2024 | 2023 | % change |
| Silver Production1 (kOz) | 56,307 | 56,282 | 0.0 |
| Gold Production1 (Oz) | 631,573 | 610,646 | 3.4 |
| Total Revenue | 3,496.4 | 2,705.1 | 29.3 |
| Adjusted Revenue2 | 3,639.9 | 2,869.1 | 26.9 |
| Gross Profit | 1,246.3 | 503.2 | 147.7 |
| EBITDA3 | 1,547.3 | 655.7 | 136.0 |
| Profit Before Income Tax | 743.9 | 114.0 | 552.5 |
| Profit for the year | 226.7 | 288.3 | (21.4) |
| Basic and Diluted EPS excluding post-tax Silverstream effects (USD)4 | 0.364 | 0.310 | 17.4 |
1 Fresnillo attributable production, plus ounces registered in production through the Silverstream Contract.
2 Adjusted Revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges and lead and zinc hedging.
3 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as gross profit plus depreciation less administrative, selling and exploration expenses. The reconciliation of EBITDA to amounts determined in accordance with IFRS can be found in the Financial Review.
4. The weighted average number of ordinary shares was 736,893,589 for 2024 and 2023. See note 18 in the consolidated financial statements.
2024 Highlights
Increased profit margins and strong financial position underpinned by higher precious metal prices, operational discipline and focus on costs
· Adjusted revenue of US$3,639.9 million, up 26.9% vs 2023 primarily due to the higher precious metals prices and higher volumes of all metals sold.
· Revenue of US$3,496.4 million, up 29.3% vs 2023 driven by the increase in adjusted revenue and lower treatment and refining charges.
· Adjusted production costs1 of US$1,582.2 million, down 2.6% vs 2023 primarily driven by the efficiencies and economies of scale achieved and the favourable effect of the devaluation of the Mexican peso vs. US dollar, partly offset by cost inflation.
· Gross profit of US$1,246.3 million, up 147.7%; EBITDA2 of US$1,547.3 million, up 136.0%.
· Exploration expenses of US$163.0 million, down 10.6%.
· Profit from continuing operations of US$945.8 million, up 563.8%. as a result of higher gross profit and lower administrative and exploration expenses.
· Silverstream revaluation loss, net of its amortisation and before taxes, of US$182.3 million as a result of the initial assessment of the possible implication of the operational and financial difficulties at the Sabinas mine on the Silverstream Agreement.
· Income tax expense and mining rights of US$390.2 million and US$127.0 million, compared negatively to the tax income of US$205.0 million and mining rights of US$30.8 million in 2023, primarily as a result of the impact of the 20.0% devaluation of the spot Mexican peso/US dollar on the tax value of assets and liabilities in 2024.
· Profit for the year attributable to equity shareholders of the Group of US$140.9 million, down 39.8% on 2023.
· US$1,297.8 million in cash and other liquid funds as of 31 December 2024. Net cash position of US$458.3 million as of 31 December 2024.
· Final ordinary dividend of 26.1 cents per share, amounting to US$192.3 million.
· One-off special dividend of 41.8 cents per share, amounting to US$308.0 million.
Total 2024 dividend payment of 32.5 US cents per share, or US$239.5 million, plus a one-off special dividend of 41.8 US cents per share amounting to US$308.0 million.
· Final ordinary dividend of 26.1 US cents per share, amounting to US$192.3million. This is in addition to the 2024 interim ordinary dividend of 6.4 US cents per share, amounting to US$47.2 million, which was paid in September 2024 and represented 1/3 of the expected total dividend for 2024. This brings the total ordinary dividend for the year to 32.5 US cents per share, amounting to US$239.5 million. This is in line with the Group’s dividend policy to pay out 33-50% of the profit attributable to equity shareholders of the company after making certain customary adjustments to exclude extraordinary non-cash effects in the income statement.
· One-off special dividend of 41.8 US cents per share, equivalent to US$308.0 million which will also be payable on 30 May 2025 to shareholders on the register as at 22 April 2025. This decision was made after a comprehensive review of the Group’s financial position, its strong balance sheet and took into consideration the positive free cash flow that the Group is expecting to generate in the coming years.
1 Adjusted production costs are calculated as cost of sales less depreciation, profit sharing, hedging, change in inventories and unproductive costs. The Company considers this a useful additional measure to help understand underlying factors driving production costs in terms of the different stages involved in the mining and plant processes, including efficiencies and inefficiencies as the case may be and other factors outside the Company’s control such as cost inflation or changes in accounting criteria.
2 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as profit for the year from continuing operations before income tax, less finance income, plus finance costs, less foreign exchange gain/(loss), less revaluation effects of the Silverstream contract and other operating income plus other operating expenses and depreciation.
Consistent operating performance with silver in line and gold slightly ahead of guidance
· Full year attributable silver production of 56.3 moz (including Silverstream) in line with guidance and flat vs 2023 as the higher ore grades and increased volumes of ore processed at San Julián Veins and Saucito and, the higher contribution of Juanicipio were offset by the decreased production at San Julián DOB as it approached the end of its life, and lower contribution from Fresnillo and the Silverstream agreement.
· Full year attributable gold production of 631.6koz, up 3.4% vs. FY23 mainly due to the higher ore grade at Fresnillo and increased ore processed and higher ore grades at Saucito and San Julián Veins.
· Full year attributable by-product lead and zinc production up 14.8% and 8.3% vs. FY23 respectively, mainly due to higher ore grades at Fresnillo and Juanicipio and increased volume of ore processed and higher lead ore grade at Saucito, partly offset by the decreased contribution from San Julián DOB.
Ongoing focus on operational improvement and projects that will increase efficiencies
· US$40.0 million in efficiencies and cost savings achieved, including efforts to rationalise the contractor base and increase the efficiency of the maintenance process across the Group.
· The connection of the two sections of the San Carlos shaft at Fresnillo was concluded and is fully operational, with reductions in haulage costs expected from 2025. Development rates increased to an average of 3,236 metres per month.
· At Saucito, the project to deepen the Jarillas shaft from 630m to 1,000m progressed with completion expected in 2027.
· Optimised plant operation at San Julián veins, together with improvements to the mine plan, enabled it to deliver a solid operational and cost performance.
· The reassessment of the strategic mine plan at Herradura progressed and identified several optimisation projects that have been compiled in an Operational Excellence programme, with phase one implemented in 2024.
Continued progress at our advanced exploration projects and promising exploration results
· Silver resources increased 1.4% vs 2023 to 2.25bn oz due to additional drill hole information and revised economic assumptions at the Guanajuato and Lucerito exploration projects and the Fresnillo mine, partly offset by depletion at most of our mines.
· Gold resources increased 1.4% vs 2023 to 38.5 moz primarily driven by the positive exploration results at Guanajuato, Lucerito and Candameña, partly offset by depletion at our underground mines.
· Proven reserves were reported at all mines.
· Silver reserves decreased 7.1% vs 2023, mainly driven by mining depletion and a more conservative approach to reserve estimation at San Julián and Ciénega.
· Gold reserves increased 2.5% vs 2023, mostly due to the higher price, and cut-off grades strategy at Herradura.
· Several pre-feasibility level studies were completed at Orisyvo and are currently under review.
· Conceptual studies continued at Tajitos and a preliminary economic assessment is in progress.
· Resources increased at Guanajuato and a preliminary economic assessment of priority areas is ongoing.
· Long-term land access with local communities was reached at Rodeo and drilling resumed, albeit in the last quarter.
Further improvement in the sustainability of our operations
· Improved TRIFR to 7.59 and decreased Fatality Frequency Rate to 0.044.
· Increased proportion of municipal wastewater consumption to 30.2%.
· Increased our electricity supply from renewable sources from 53.3% in 2023 to 80.6% in 2024.
· Generated a positive economic impact[1] of US$2,152.5 million in 2024.
2025 outlook and longer term prospects
· Attributable silver production expected to be in the range of 49.0 to 56.0 moz (including Silverstream).
· Attributable gold production expected to be in the range of 525 to 580 koz.
· Expressed in silver equivalent ounces1, production is expected to be 91-102 million ounces.
· Capex for 2025 is anticipated to be approximately US$530 million and will continue to be primarily focused on mining works, sustaining capex, the deepening of the Jarillas shaft at Saucito and a haulage conveyor at Juanicipio.
· Exploration expenses are expected to be c.US$190 million, maintaining our strategy to intensify exploration activities in specific target areas.
· Continue to monitor costs closely and capture further efficiencies where possible.
· Continue working towards reducing our TRIFR and Fatality rate to the ICMM range by 2026.
Board Committee changes
Fresnillo plc announces that its Board of Directors, on the recommendation of the Nomination Committee has approved changes to the composition of the Audit and Remuneration Committees effective as at today, 4 March 2025.
Ms Rosa Vázquez has been appointed as an additional member of the Audit Committee and Ms Georgina Kessel has been appointed as an additional member of the Remuneration Committee. Ms Vázquez and Ms Kessel are currently Independent Non-Executive Directors.
Ms Vázquez has proven previous experience in risk, audit and oversight committees and the Board believes that she brings valuable insight to the work of the Audit Committee.
Ms Georgina Kessel’s experience in the finance sector will bring additional skills and relevant experience to the Remuneration Committee. As part of this change, Ms Kessel will step down as a member of the Health, Safety, Environment and Community Relations (HSECR) Committee.
Analyst Presentation
Fresnillo plc will be hosting a webcast presentation for analysts and investors today at 9:00am (GMT). A link to the webcast will be made available on Fresnillo’s homepage: www.fresnilloplc.com or can be accessed directly here: https://sparklive.lseg.com/Fresnillo/events/294a5f20-2bb7-4365-8dca-b7a2a299ac12/fresnillo-fy24-prelim-results
Event registration: https://registrations.events/direct/LON387064
