Fresnillo Reports Higher Revenue and Operating Profit Despite Increased Tax Burden

Fresnillo reported a significant rise in revenue and operating profit for 2024, driven by higher silver and gold prices. However, a substantially increased tax burden weighed on net earnings.

The Mexico-focused precious metals producer recorded a 29% increase in revenue, reaching $3.50 billion from $2.71 billion in 2023. Pretax profit surged to $743.9 million from $114.0 million, while earnings before interest, tax, depreciation, and amortization (EBITDA) more than doubled to $1.55 billion from $655.7 million.

Despite the improved operating performance, net profit fell 21% to $226.7 million from $288.3 million due to a sharp rise in tax expenses. Total income tax and mining rights charges increased to $517.2 million, compared to a tax benefit of $174.3 million in 2023. The corporate income tax charge climbed to $390.2 million from a tax gain of $205.0 million the previous year, while special mining rights payments rose to $127.0 million from $30.8 million.

Diluted earnings per share dropped to $0.191 from $0.317, while adjusted EPS increased 17% to $0.364 from $0.310. Fresnillo declared a final dividend of 26.1 cents per share, bringing total ordinary dividends to 32.5 cents per share for the year. This marked a recovery from 2023, when total dividends were cut to 5.6 cents per share. Additionally, the company announced a one-time special dividend of 41.8 cents per share, bringing total shareholder returns for 2024 to $547.5 million.

CEO Octavio Alvidrez highlighted Fresnillo’s strong financial performance, citing higher precious metal prices, operational discipline, and cost efficiencies. Silver production aligned with guidance, while gold production exceeded expectations. Lead and zinc output also increased, supported by improved efficiencies and optimized mine plans. The company completed full commissioning of the San Carlos shaft at its Fresnillo mine, expected to reduce haulage costs.

For 2025, Fresnillo forecasts silver production between 49.0 million and 56.0 million ounces, down from 56.3 million ounces in 2024. Gold output is projected between 525,000 and 580,000 ounces, compared to 631,573 ounces last year. The full commissioning of the San Carlos shaft is expected to yield operational efficiencies.

Shares in Fresnillo rose 2.7% to 774.50 pence in London on Tuesday morning.