By Carlo Martuscelli
Fresnillo PLC (FRES.LN) said Tuesday that pretax profit fell in 2018 despite increased production as the company faced a number of headwinds, and guided for a difficult year ahead.
The company said profit before tax for the year totaled $483.9 million, compared with $741.5 million the year before, on revenue that rose 0.5% to $2.10 billion.
A challenging operating environment hit earnings at the precious-metal miner. A higher stripping ratio--a measure of how much waste material must be processed to extract a given amount of ore--at the Herradura mine in Mexico dampened profits, as did inflation and depreciation.
Fresnillo said it expects 2019 to be a difficult year as a result of lower precious-metal prices, as well as inflation.
"I also expect to see higher depreciation costs as a result of the investments we have made in recent years into the operations, while we continue to expect to work through operational issues and lower grades at certain mines during the year," Chief Executive Octavio Alvidrez said.
The FTSE 100-listed company declared a final dividend of 16.7 cents per share, bringing the total dividend to 27.4 cents.
Fresnillo previously said that while it achieved record production in 2018, it still came in below guidance as a result of lower-than-expected ore grades at its Fresnillo and Saucito mines in Mexico.