Fresnillo (LSE:FRES) reported a substantial improvement in its financial performance for the six months ended 30 June 2026, benefiting from exceptionally strong gold and silver prices that more than compensated for lower production volumes. Revenue increased 74.7% to US$3.38 billion, while gross profit rose 130.7% to US$2.36 billion. EBITDA also more than doubled, supporting robust operating cash flow and lifting the company’s cash balance to US$2.50 billion.
The stronger financial position enabled Fresnillo to complete the acquisition of Probe Gold, continue investing in exploration activities and maintain capital expenditure across its operations. The Board also increased the interim dividend to 43.4 US cents per share, reflecting confidence in the group’s financial strength. Although silver production declined by 11.4% and gold output fell 7.3% due to lower ore grades, adverse weather conditions and minor project delays, the company left its full-year production guidance unchanged and highlighted ongoing cost management initiatives and infrastructure investment as key priorities.
Adjusted production costs increased during the period, primarily due to the appreciation of the Mexican peso, inflationary pressures and higher maintenance and contractor expenses at certain operations. However, these higher costs were more than offset by favourable commodity prices. Profit for the period more than tripled to US$1.46 billion, while earnings per share increased by almost 228%, providing additional capacity to invest in future growth while maintaining a strong balance sheet and supporting its safety and community programmes.
The company’s outlook is supported by significantly improved profitability, stronger cash flow generation and low leverage, together with a solid pipeline of development and exploration projects. However, near-term technical indicators remain mixed, with the shares trading below their 20-day and 50-day moving averages. Valuation also appears relatively full, while management highlighted higher capital expenditure and tax payments during 2026 as potential headwinds.
More about Fresnillo
Fresnillo plc is a London-listed precious metals mining company with operations centred on large-scale silver and gold production in Mexico. The group owns a portfolio of high-quality mining assets and focuses on operational efficiency, disciplined cost management and targeted acquisitions to support long-term growth.
In addition to silver and gold, Fresnillo produces lead and zinc as by-products and continues to invest in exploration and infrastructure to replenish reserves and extend mine life. Its principal operations include the Saucito, Herradura, Fresnillo, Juanicipio, San Julián and Ciénega mines, providing diversified exposure to precious metals production while positioning the company to benefit from favourable commodity price trends.
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