Fresnillo share price: Silver miner posts 2015 results

Fresnillo (LON:FRES) has this morning posted its full-year results.

**Highlights from the miner’s statement:**
· Adjusted revenue of US$1,583 million, 2.5% increase on 2014 as higher volumes more than offset lower metal prices
· Gross profit and EBITDA of US$433.1 million and US$547.5 million, down 16.9% and 3.5% respectively
· Profit from continuing operations of US$200.4 million, down 18.4%
· Devaluation of the Mexican peso vs. US dollar positively affected production costs, but also resulted in increased deferred taxes with a negative impact on effective tax rate

· Net cash from operating activities was US$542.9 million vs US$121.6 million in 2014
· Capital expenditures of US$474 million and exploration spend of US$140 million
· Maintained financial flexibility, with year-end cash balance of US$500.1 million and net debt position of US$296.9 million at 31 December 2015
· Basic and diluted EPS from continuing operations of US$0.094; adjusted EPS of US$0.069, down 36.1% and 6.8%
· 2015 final dividend of 3.35 US cents per share, equivalent to approximately US$24.7 million, recommended by the Board
· The consolidated income statement for the year was significantly impacted by certain foreign exchange effects, gold hedging and the Silverstream revaluation. Adjusting for these effects1, would result in EBITDA of US$576.1 million (2014: US$568.4 million) and profit for the year of US$131.0 million (2014: US$134.4 million).
Octavio Alvídrez, CEO said:
“I am pleased to report a solid overall performance against a backdrop of continued global economic uncertainty and weak precious metals prices. Silver production was at the top end of our guidance, whilst in gold we surpassed our long term 2018 target. Our performance was driven by substantial operational progress during the year: we ramped up Saucito II, reached steady state at Herradura, and have begun to see the results of the measures we have put in place to solve development delays at Fresnillo.
Development projects advanced largely according to plan, with commissioning of phase 1 at San Julián due in the second quarter of 2016, and we have continued to invest in exploration to advance projects and prospects where we have identified strong potential.
We maintained a strong financial position, ending the year with a healthy cash balance, and without impairments. Weaker precious metals prices clearly impacted financial performance, but this was offset by higher volumes; we continued to generate sound profit margins and substantial cashflow from operating activities.
Our 2015 performance underlines the quality of our assets, our low-cost and flexible operations, and the benefits of a disciplined approach to investment, maintenance of a strong balance sheet and a clear commitment to sustainable business practices. We are confident in our ability to build on these solid foundations to deliver long-term value for our shareholders, balancing growth and returns whilst maintaining the strong financial position which allows us to optimise performance in current market conditions.
In light of the weak precious metals price backdrop, we reduced 2015 capital expenditure and exploration spend from budgeted levels, and have similarly reduced these budgets for 2016, deferring certain investments whilst favouring those which accelerate cashflow generation as part of our contingency plan. We will continue to focus on further cost reductions, productivity improvements and value preservation measures as we work towards our 2016 production targets.”
As of 07:27 GMT, Tuesday, 01 March, Fresnillo Plc share price is 1,000.00p.