Performance

Interim Report - 1H21

Octavio Alvídrez, Chief Executive Officer, said: “I am pleased to report a strong financial result in the first half. The combination of improved production performance and higher precious metals prices has seen a sharp increase in profitability during the period.
This in turn, has enabled us to declare a dividend of US$73.0 million to shareholders, while continuing to invest in both our development and exploration projects. The Juanicipio mine remains on track, with commissioning of the processing plant expected by the end of the year, and we are making strong progress with our intensified exploration activities to convert resources into reserves."  Read full release »


Financial highlights (1H21/1H20 comparisons)

  • Adjusted Revenues1 of US$1,543.1m, up 37.1%; 75.8% of this due to higher metal prices and 24.2% due to increased volumes.
  • Gross profit and EBITDA2 of US$606.8m and US$747.0m, up 88.9% and 59.0%, respectively.
  • Operating profit and profit before income tax of US$471.9m and US$445.4m, up 117.6% and 248.3%, respectively.
  • Profit for the period of US$308.4m, up 445.8%.
  • Basic and diluted EPS from continuing operations of US$41.0 cents per share, up 365.9%.
  • Adjusted EPS3 of US$41.4 cents per share, up 250.8%.
  • Cash generated from operations, before changes in working capital, of US$750.4m, up 64.5%.
  • Free cash flow4 of US$305.1m in 1H21 (US$265.7m in 1H20).
  • Strong balance sheet with cash and other liquid funds5 as at 30 June 2021 of US$1,202.9m (31 December 2020: $1,070.4m); net debt/EBITDA of -0.02x6 (31 December 2020: 0.08x).
  • Interim dividend of 9.90 US cents per share, totalling US$73.0m (1H20: 16.9m).

Operational highlights (1H21/1H20 comparisons)

  • First half attributable silver production of 27.5 moz (including Silverstream), up 2.7% vs. 1H20.
  • First half attributable gold production of 428.4 koz, up 12.3% vs. 1H20.
  • Continued progress was achieved on the construction of the Juanicipio processing plant, with the assembly of flotation cells and filters concluded during the quarter. Commissioning of the plant in 4Q21 remains on track and on budget.
  • As previously reported, the connection of the new circuit to the Fresnillo flotation plant was completed in 1Q21, and the programming of the control loop system was concluded in 2Q21.
  • Ongoing focus on costs control and productivity.

Covid-19 Update

We continue to prioritise the safety and welfare of our people and our local communities. Our teams have adapted very well and we have been able to contain the impact of the virus, though we remain vigilant around the continued evolution of the pandemic and its potential effect on our operations. Our various community health programmes are ongoing, as are the safety measures we put in place last year.

2021 Outlook

We remain on track to meet our 2021 full year guidance of 53.5 to 59.5 moz of silver (including Silverstream) and 675 to 725 koz of gold. We are assessing any potential impact that might result from the implementation of the new law restricting the ability to subcontract labour in Mexico. However, these new measures are not expected to impact second half production.

Total Production

 

2Q21

1Q21

% change

2Q20

% change

1H21

1H20

% change

Silver (koz)

14,092

11,839

19.0

12,944

8.9

25,931

25,491

1.7

Silverstream (koz)

803

796

1.0

648

23.9

1,599

1,328

20.4

Total Silver (koz)

14,895

12,635

17.9

13,592

9.6

27,530

26,819

2.7

Gold (oz)

200,163

228,193

(12.3)

184,356

8.6

428,356

381,319

12.3

Lead (t)

16,386

15,340

6.8

16,180

1.3

31,726

30,085

5.5

Zinc (t)

27,687

25,881

7.0

26,726

3.6

53,568

49,381

8.5


Financial Performance

 

2020

2019

2018

2017

2016

2015

2014

2013

2012

Total attributable silver
production incl. Silverstream (Moz)

53.1

54.6

61.8

58.7

53.0

47.0

45.0

43.0

41.0

Attributable Gold Production (koz)

769.6

875.9

922.5

911.1

935.5

761.7

596.0

425.8

473.0

EBITDA (millions of US$)

1,169.1

674.0

915.1

1,060.1

1,032.0

547.5

567.3

729.8

1,315.3

Cash flow from operating activities
before changes in working capital
(millions of US$)

1,168.7

685.5

930.7

1,073.7

1,023.3

537.3

568.5

750.2

1,356.7


Decade of progress and achievement

Prelims 27FEB17 Decade Of Progress And Achievement

Key Commitments and Targets

1. Explore » Ensure business continuity and growth by replenishing depleted reserves and maintaining a robust growth pipeline
Evaluate early-state acquisitions and maintain reserves for 10 years. Ensure organic growth and assess key acquisition opportunities.
2. Develop » Deliver growth through development projects
Deliver profitable growth by advancing new projects towards commissioning, whist optimising cash flow and returns. Maintain track record of delivery on time and on budget and focus on CAPEX control as well as specialised engineering and construction teams.
3. Operate » Maximise the potential of exisiting operations
Maximise our potential of exisiting operations whilst maintaing our position as leading low cost producer. Operate at 100% capacity and remain a low-cost producer whilst optimising mining methods and metallurgy to maintain high recovery rates.
4. Sustain » Advance and enhance the sustainability of our business and uphold our licence to operate
Strengthen our safety performance with zero tolerance for non-compliance, and increase investment and support for training and oversight. Improve general health and minimise environmental impact whilst maintaining sound relations within our communities.