Fresnillo PLC (LSE:FRES) posted a 3% lift in earnings for 2021 after a challenging year for the precious metals producer.
“The continued impact of the pandemic, combined with the new Mexican labour reform, have presented Fresnillo with operational challenges during the year,” said chief executive Octavio Alvídrez. “More recently, we were all devastated to report the passing of Alberto Baillères, our honorary chairman.”
The FTSE 100 group noted that a fourth wave of COVID-19 has reached Mexico and that it has started to feel the impact. Staff absenteeism increased from the second week of December and has accelerated throughout the first few weeks of the current year.
Underlying earnings (EBITDA) rose to US$1.21bn (£0.92bn), from US$1.17bn the previous year. Total revenue grew 11% on higher gold and silver prices and lower treatment and refining charges.
It plans to pay a final dividend of 24.0 US cents per share, bringing the total for the year to 33.9 US cents per share.
Fresnillo said it remained positive about the outlook for precious metals prices, but was more cautious elsewhere.
“Looking ahead we remain alert to potential on-going challenges that are outside our control, not least possible further regulatory reform, inflationary pressures and of course the threat of new COVID variants,” said Alvídrez.
“Lower production and recovery rates at Herradura and the continuing workforce shortages at Saucito caused by the new labour reform - as well as the impact of recent geotechnical instability in the Saucito area - are also likely to add to the pressures we may face in 2022.
“In addition, the extension to the timeline for the tie-in to the national grid of both the Juanicipio plant and the Pyrites Plant mean that we now expect lower contributions than previously anticipated from these operations during 2022.”