Price-Driven Profit Growth
Fresnillo's First-Half Profits Triple as Surging Metal Prices Boost Revenue Despite Lower Production
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Key Points
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The interim dividend was increased to 43.4 US cents per share, with the total interim payout around $319.8 million, effectively more than doubling from the prior year.
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Capex guidance for 2026 was cut to $500–$550 million as Fresnillo rationalises capital expenditure across its mines, well below the $765 million previously guided in March.
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Detailed 2026 production outlook was provided: attributable silver production of 42.0–46.5 million ounces; gold production of 500,000–550,000 ounces; lead 54,000–59,000 tonnes; zinc 85,000–95,000 tonnes; total silver-equivalent production of 82–91 million ounces.
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EBITDA rose to about $2.35 billion, with an EBITDA margin of about 69.5%, up from 56.9% a year earlier, underscoring a price-driven earnings surge despite lower volumes.
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Realized prices for metals surged: silver averaged about $78.9 per ounce and gold around $3,666.80 per ounce, helping drive the revenue uplift even as volumes fell.
Fresnillo posted a stunning first-half earnings beat, with pre-tax profit more than tripling to $2.16 billion as soaring gold and silver prices overwhelmed falling output and rising costs, according to Mining Weekly. Revenue surged 74.7% year-on-year to $3.38 billion for the six months ending June 30, 2026.
Silver fetched an average of $78.90 per ounce — up 134% — while gold averaged $3,666.80 per ounce, a 47% jump, according to MarketScreener. Fresnillo shares rose in early trading after the results, reflecting investor confidence in the company's cash generation power.
Record Metal Prices Drive a Price-Not-Volume Win
Fresnillo's earnings surge came entirely from price, not production. Silver output fell about 11% and gold output dropped roughly 7%, MarketScreener reported. Yet the metal price rally was so strong it overwhelmed those volume losses entirely.
EBITDA — earnings before interest, taxes, depreciation and amortisation — hit roughly $2.35 billion. The EBITDA margin expanded to 69.5%, up from 56.9% a year earlier, according to Discovery Alert. Earnings per share jumped to about $1.75, a sharp rise from the prior year.
Cost Pressures Mount But Don't Dent the Windfall
Fresnillo did face real cost headwinds. A stronger Mexican peso made labour and local expenses more expensive in dollar terms. Higher maintenance and haulage costs also pushed adjusted production costs up, according to MarketScreener.
Yet those cost pressures were small compared to the revenue windfall. Management kept its full-year production guidance unchanged, signalling confidence that costs remain manageable at current metal prices, Mining.com reported.
Dividend More Than Doubles as Cash Floods In
Fresnillo rewarded shareholders with a big dividend increase. The interim dividend rose to 43.4 US cents per share. The total interim payout came to about $319.8 million — more than double the prior year's level, according to Mining Weekly.
That payout reflects just how much cash the metal price rally generated. With gold near record highs and silver at multi-decade highs, Fresnillo's mines became highly profitable even as they produced less metal than a year ago.
Capex Slashed and 2026 Output Targets Set
Fresnillo also cut its 2026 capital expenditure guidance sharply. The new target is $500–$550 million, down from $765 million guided in March, as the company rationalises spending across its mines, according to Discovery Alert.
The company provided detailed 2026 production targets: 42.0–46.5 million ounces of attributable silver, 500,000–550,000 ounces of gold, 54,000–59,000 tonnes of lead, and 85,000–95,000 tonnes of zinc. Total silver-equivalent production is guided at 82–91 million ounces, Mining.com reported.
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