Performance

Highlights

Financial highlights (1H17/1H16 comparisons)

  • Adjusted revenue of US$1,069.5m, up 11.5%
  • Gross profit and EBITDA of US$460.0m and US$522.5m, up 16.6% and 10.2%, respectively
  • Profit from continuing operations before net finance costs and income tax of US$377.9 million, up 24.2%
  • Profit for the period of US$310.1m, up 87.2%
  • Basic and diluted EPS from continuing operations of US$41.9 cents per share, adjusted EPS of US$36.7 cents per share, up 84.6% and 200.8%
  • Cash generated from operations, before changes in working capital of US$540.3m, up 13.7% 
  • Net cash from operating activities of US$354.2m, down 13.2%
  • Strong balance sheet with cash, cash equivalents and short-term investments as at 30 June 2017 of US$884.9m
  • Interim dividend of US$78.1m (10.6 US cents per share)

Operational highlights (1H17/1H16 comparisons)

  • Silver production of 28.0 moz (including Silverstream), up 11.2%, and gold production of 446 koz, broadly in line
  • Construction of San Julián (phase II) completed on time and on budget and commercial production began in mid-July
  • The turnaround plan at the Fresnillo mine continues to show good signs as volume of ore processed increased for the fourth consecutive quarter
  • On track to achieve 2017 production target of 58-61 moz silver (including Silverstream) and 870-900 koz gold
(US$ million unless stated)  1H17 1H16 % change
Silver Production (koz)* 28,044 25,212 11.2
Gold Production (oz) 445,769 447,569 -0.4
Total revenues 995.8 886.9 12.3
Adjusted revenues1
1,069.5 959.4 11.5
Exploration expenses 64.2 52.1 23.4
EBITDA2
522.5 474.0 10.2
Profit for the period 310.1 165.6 87.2
Cash generated by operations before changes in working capital 540.3 475.2 13.7
Basic and Diluted EPS (US$)3
0.419 0.227 84.6
Dividend per ordinary share (US$) 0.106 0.086 23.3

*Silver production includes volumes realised under the Silverstream Contract. 1Adjusted revenues are the revenues shown in the income statement adjusted to add back treatment and refining costs and the effects of gold, lead and zinc hedging. The Company considers this is a useful additional measure to help understand underlying factors driving revenue in terms of volumes sold and realised prices. 2Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as gross profit plus depreciation less administrative, selling and exploration expenses. 3The weighted average number of shares for H1 2017 and H1 2016 was 736.9m. See Note 8 in the Interim Consolidated Financial Statements.

Total Production

  2Q17 2Q16 % change 1Q17 1H17 1H16 % change
Silver (koz) 13,328 11,777 13.2 12,424 25,752 22,824 12.8
Silverstream (koz) 1,188 1,217 -2.4 1,105 2,292 2,388 -4.0
Total Silver (koz) 14,515 12,994 11.7 13,529 28,044 25,212 11.2
Gold (oz) 223,479 217,645 2.7 222,290  445,769 447,569 -0.4
Lead (t) 11,385 11,585 -1.7 11,461 22,846 22,668 0.8
Zinc (t) 14,919 12,529 19.1 13,806 28,725 25,380 13.2

Financial Performance

 201620152014201320122011201020092008
Total attributable silver production incl Silverstream (Moz) 53.0 47.0 45.0 43.0 41.0 41.9 42.1 41.3 34.8
Attributable Gold Production (koz) 935.5 761.7 596.0 425.8 473.0 448.9 369.0 276.6 263.6
EBITDA (in millions of US$) 1,032.0 547.5 567.3 729.8 1,315.3 1,538.5 945.0 496.6 337.4
Cash flow from operating activities before changes in working capital (millions of US$) 1,023.3 537.3 568.5 750.2 1,356.7 1,612.1 983.6  548.8 405.8

Key Commitments and Targets

  1. Operations » Maximise the potential of existing operations
    Fresnillo - Improve and optimise performance by developing infrastructure at the lower levels sufficient to increase the development rate to 4,800 metres per month by year end; commence work on plant optimisation; continue the deepening of the San Carlos shaft and expansion of the tailings dam.
  2. Development » Deliver growth through development projects
    San Julián - Commission the second phase on time and on budget in 2Q 2017, including installing vibrating screens at the leaching plant to achieve an average of 4,000 tpd milling capacity.
    Pyrites plant - Continue detailed engineering works and commence construction.
  3. Exploration » Extend the growth pipeline
    Deploy US$160 million in exploration investment
  4. Sustainability » Advance and enhance the sustainability of our business
    Strengthen our safety performance with zero tolerance for non-compliance, and increased investment and support for training and oversight.