Fresnillo plc.

    Fresnillo plc. SWOT & PESTLE

    • Report

    • ID: 540259
    • 15 Pages
    • July 2022
    • Region: North America
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    About Fresnillo plc.

    Fresnillo plc is a Mexican precious metals mining company headquartered in Mexico City and incorporated in the United Kingdom. The Fresnillo Group can trace its roots back to Penoles' mining operations in 1887 and smelting and refining operations in Torreon in 1901, owing to its history as part of the Penoles Group. Following a restructure of Penoles, the Fresnillo Group was formed in 2008. The Company's subsidiaries are involved in nonferrous mineral mining and beneficiation, as well as the marketing of associated products. Silver, gold, lead, and zinc are the key components of this manufacture. It focuses on projects with strong potential for becoming low-cost, world-class mines. In South and North America, the company owns a variety of subsidiaries. Fresnillo operates seven mines, all of which are located in Mexico, as well as three development projects and four advanced exploration prospects. Fresnillo's concessions span around 2 million acres. The business announced the Juanicipio plant's construction in March 2022, intending to meet the requirements of the state-owned electricity utility and the energy regulator to complete the tie-in to the national power grid.

The unique selling point of Fresnillo is that it is the world's greatest producer of silver from ore (primary silver) and Mexico's second-largest gold miner. The mission statement of the company reads, "We seek to attract, develop and retain the best people, and engage them over the long-term".

    Business Sector

    Mining and Metals

    Operating Geography

    Mexico, North America, Global

    Revenue

    US$ 2,703.1 million – for the FY ended Dec 2021 (y-o-y growth 11.2%)

    US$ 2,430.1 million – for the FY ended Dec 2020(y-o-y growth 14.6%)

    SWOT

    SWOT Matrix for Fresnillo plc.

    Strength

    Weakness
    1. Robust key performance indicators signifying foundational strength.
    2. The largest mining company in Mexico with economies of scale
    3. Global approach to product offerings.
    4. Strongfinancial performance during the pandemic.
    1. Lack of diversification may be a source of overdependence.
    2. Weaker human capital resources after labour reform.
    3. Lower volume of products due to less profitable mines.

    Opportunity

    Threat
    1. Transition into a sustainable business to attract investment.
    2. Aggressive global expansion post pandemic to increase consumer base.
    3. Gradual recovery of global economy may increase revenue.
    4. Develop technology to enable maximum extraction.
    1. The global variability in the pandemic threatens long run growth rate.
    2. Faces stiff competition from othermining companies globally.
    3. Presence of cartels and corruption in Mexican mines may impact growth negatively.

    Detailed SWOT Analysis of Fresnillo plc.

    The detailed SWOT analysis for Fresnillo plc. is presented below:

    Strength

    1. Robust key performance indicators signifying foundational strength: Fresnillo earned an adjusted revenue of US$2,608.1 million in 2020, up 14.9% over 2019 due to higher gold and silver prices, which were partially offset by the lower volumes of gold and silver sold. The company earned revenue of US$2,430.1 million, up 14.6% over 2019 primarily due to increased adjusted revenue. It also earned a gross profit of US$879.4 million, up 90.5% due to the favorable effect of higher average realized gold and silver prices. Profit from continuing operations before net finance costs and income tax of US$649.7 million was up 278.3% from 2019.Fresnillo generated a strong balance sheet and low leverage ratio; cash and other liquid funds of US$1,070.4 million, up 218.0% driven by effective debt restructuring and operational performance. In spite of the pandemic, the company invested US$412.3 million in capex and spent US$107.3 million on exploration expenses to underpin their future growth.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    Weakness

    This section is available only in the 'Complete Report' on purchase.

    Opportunity

    1. Transition into a sustainable business to attract investment: Since mining is an energy-intensive business and Fresnillo is a significant player in the extractive industry, there is need for the company to recognize that they have to responsibly respond to the climate change that is rapidly becoming a reality. The goal of Fresnillo is to improve energy efficiency and progressively introduce cleaner technologies, including renewables, into their energy mix. This is to be done in order to mitigate the physical, regulatory and reputational risks of climate change. The reduction in annual precipitation is expected to increase water stress in the river basins, while higher temperatures may increase water demand, for example to compensate for losses through evaporation. Among the acute physical risks, the frequency and magnitude of extreme events, such as rainfall, droughts and heat waves are expected to increase in the regions where the company operates.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    Threat

    This section is available only in the 'Complete Report' on purchase.

    PESTLE

    PESTLE Matrix for Fresnillo plc.

    Political

    Economic
    1. Change in mining regulations by political parties.
    2. Political uncertainty in Mexico post COVID-19.
    1. Gradual economic recovery globally and in Mexico.
    2. Inflationary pressure and higher interest rates in UK.

    Social

    Technological
    1. Develop human capital in Mexico with skills.
    2. Vaccination rate of Mexico to be increased for preventing infections.
    1. Digital solutions for customer services.
    2. Investment in AI, advanced technology for cutting costs,

    Legal

    ENVIRONMENTAL
    1. Potential lawsuits and litigations.
    2. Labour reform in Mexico may impact production.
    1. Transition into sustainable business to attract investment.
    2. Emphasis on robust ESG policy by governments and organisations.

    Detailed PESTLE Analysis of Fresnillo plc.

    The detailed PESTLE analysis for Fresnillo plc. is presented below:

    POLITICAL

    This section is available only in the 'Complete Report' on purchase.

    ECONOMIC

    This section is available only in the 'Complete Report' on purchase.

    SOCIAL

    This section is available only in the 'Complete Report' on purchase.

    TECHNOLOGICAL

    This section is available only in the 'Complete Report' on purchase.

    LEGAL

    This section is available only in the 'Complete Report' on purchase.

    ENVIRONMENTAL

    1. Transition into sustainable business to attract investment: Since mining is an energy-intensive business, companies need to recognize that they have to responsibly respond to the climate change that is rapidly becoming a reality. The goal of Fresnillo is to improve energy efficiency and progressively introduce cleaner technologies, including renewables, into their energy mix. This is to be done in order to mitigate the physical, regulatory and reputational risks of climate change. This is in line with the Paris Agreement (2015). The reduction in annual precipitation is expected to increase water stress in the river basins, while higher temperatures may increase water demand, for example to compensate for losses through evaporation. Among the acute physical risks, the frequency and magnitude of extreme events, such as rainfall, droughts and heat waves are expected to increase in the regions where the company operates.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    More Info

    Major Competitors

    • Polymetal International
    • Coeur Mining
    • Pan American Silver
    • SSR Mining
    • Hecla Mining
    • Silvercorp Metals
    • Fortuna Silver Mines
    • KGHM Polska Mied

    Major Brands

    • Fresnillo

    Table of Contents

    • Company Overview
      • 1.1 About the Company
      • 1.2 Business Sector
      • 1.3 Operating Geography
      • 1.4 Revenue
    • SWOT Analysis
      • 2.1 SWOT Table/ SWOT Matrix
      • 2.2 Detailed SWOT Analysis
      • 2.3 Strength, Weakness, Opportunity and Threat
    • PESTLE Analysis
      • 3.1 PESTLE Table/ PESTLE Matrix
      • 3.2 Detailed PESTLE Analysis
      • 3.3 Political, Economic, Social, Technological, Legal and Environmental
    • Appendix
      • 4.1 Major Competitors
      • 4.2 Major Brands
      • 4.3 Business Sectors / Diversification
      • 4.4 References used to prepare this reports
    • Conclusion
      • 5.1 Closing thoughts
      • 5.2 Methodology used to prepare this report
      • 5.3 Copyrights and Disclaimer

      References and Copyright

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