Fresnillo (LON:FRES) has delivered strong results driven by a recovery in silver and gold prices as well as strong operational performance. Revenue of US$1.9bn was up 32% YoY on the back of a 7% YoY increase in silver production to 50.3mnoz as well as a 23% YoY increase in gold production to 934koz. EBITDA of US$1bn, up 89% YoY, benefitted from the stronger top line as well as depreciation in the Peso versus the US Dollar. As a consequence of the strong earnings improvement, net income was up from US$69m in 2015 to US$425mn in 2016.
Free cash flow generation was up strongly due to the earnings improvement although lower capital spending, down 9% YoY to US$434m, also enhanced this. It was, however, partly a result of delays in San Julian Phase 2 which is now expected to be commissioned in Q2 2017. Consequently silver production of 58-61mnoz is expected in 2017 although gold production is likely to be lower YoY at 870-900koz.
A final dividend of 21.5 US cents per share was announced meaning a full year dividend of 30.1 US cents per share.