Fresnillo first-half profit triples as precious metals prices lift revenue

Fresnillo plc (LON:FRES) has announced its interim results for the six months to 30 June 2026

Octavio Alvídrez, Chief Executive Officer, commented:

“Fresnillo delivered an exceptional financial performance in the first half of 2026. Through a combination of solid operational execution and cost discipline, we continued to capitalise on the historic strength of precious metals prices, with revenues up 74.7% to US$3.4 billion, driving Gross Profit up 130.7% to US$2.4 billion and strong operating cash flow. Our financial position enabled us to fund the strategic acquisition of Probe Gold, ongoing capex requirements, investment in exploration, and to declare an increased interim dividend of 43.4 cents per share for the period, in accordance with our dividend policy, while maintaining a robust balance sheet.

“Operationally, gold and silver production was in line with our expectations and plans across our mines are progressing well. We saw year-on-year changes from lower grades, a minor delay in the commissioning of the leaching pad XV at Herradura, and weather-related disruptions.

“We remain focused on managing costs within our control by driving efficiencies across our supply chain and advancing key infrastructure projects, including the interconnection of the Jarillas shaft at Saucito.

“Our full-year production guidance remains unchanged, and our high-margin portfolio puts us in a strong position to capitalise on ongoing market tailwinds. The safety and well-being of our people and host communities remain our core priority as we deliver on our strategy for the remainder of 2026.”

First half highlights

Financial highlights (1H26/1H25 comparisons)

·    Adjusted Revenues^[1] of US$3,413.2m, up 72.1%; mainly due to higher silver and gold prices, partly offset by the anticipated lower volumes of gold and silver sold.

·    Revenues of US$3,382.6m, up 74.7%; driven by the increased adjusted revenues and lower treatment and refining charges.

·    Adjusted production costs^[2] of US$811.9m, up 20.5% over 1H25, primarily due to the 12.5% revaluation of the Mexican peso vs. the US dollar, cost inflation, higher maintenance costs at Saucito, higher stripping and longer haulage distances at Herradura, together with higher contractor costs associated with the temporary hauling of material while the two sections of the Jarillas shaft at Saucito are being interconnected.

·    Cost of sales of US$1,023.2m, up 12.0% mainly as a result of the higher adjusted production costs, mitigated by lower depreciation.

·    Gross profit and EBITDA^[3] of US$2,359.4m and US$2,349.7m, up 130.7% and 113.2%, respectively.

·    Exploration expenses of US$109.3m, up 42.5% but in line with the increased guidance to intensify exploration activities at several operations and advanced exploration projects.

·    Profit from continuing operations before net finance costs and income tax of US$2,143.8m, up 149.0%.

·    Profit for the period before income tax of US$2,163.1m, up 227.6%.

·    Income tax expense of US$516.5m and mining rights of US$183.2m, up 322.6% and 159.6%, respectively.

·    Profit for the period of US$1,463.4m, up 213.0% from US$467.6m.

·    Basic and diluted EPS from continuing operations of US$175.1 cents per share, up 227.9% from US$53.4 cents per share.

·    Cash generated from operations, before changes in working capital, of US$2,364.7m, up 114.3%.

·    Strong balance sheet with cash and other liquid funds as of 30 June 2026 of US$2,503.1m (31 December 2025: $2,756.5m).

·    Interim dividend of 43.4 US cents per share, totalling US$319.8m (1H25: US$153.3m).

Operational highlights (1H26/1H25 comparisons)

As disclosed in the 2Q26 production report on 22 July 2026:

·    First half attributable silver production of 22.0 moz decreased 11.4% vs. 1H25, mainly due to the end of the contribution from the Silverstream contract, the lower ore grade and decrease in volume of ore processed at Saucito, the lower ore grade at Juanicipio, Fresnillo and San Julián Veins, and the lower ore grade and recovery rate, and decreased volume of ore processed at Ciénega.

·    First half attributable gold production of 290.9 koz, decreased 7.3% vs. 1H25, mainly due to the lower ore grade, decreased volume of ore processed and lower recovery rate at Herradura.

·    Ongoing focus on safety, cost control, and productivity.

Highlights for 1H26

* Silver production includes volumes realised under the Silverstream contract

¹ Adjusted revenues are the revenues shown in the income statement adjusted to add back treatment and refining charges. The Company considers this is a useful additional measure to help understand underlying factors driving revenue in terms of volumes sold and realised prices

² Adjusted production costs are calculated as cost of sales less depreciation, profit sharing, hedging and change in inventories. 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.

³ 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, less other operating income plus other operating expenses and depreciation.

⁴ The weighted average number of shares for H1 2026 and H1 2025 was 736.9m. See Note 8 in the Interim Consolidated Financial Statements.