Precious metals miner Fresnillo posted a 63% slump in 2019 pretax profit on Tuesday, much worse than analysts' estimates, as low-grade ore hit production and it curtailed operations at its Noche Buena mine in Mexico.
The company cut its production forecast four times last year, as it grapples with lower quality ore and construction delays at its Herradura mine in Mexico.
Profits halved in the first half of 2019, forcing the Mexico-based gold and silver producer to rein in expenditure by cutting its capital investments and delaying renewals of equipment and infrastructure.
"2019 was a more challenging year as expected ...," CEO Octavio Alvídrez said in a statement.
The company's shares, which tumbled about 26% in 2019, slipped 1.5% to 610.6 pence in early trading.
Mexico's largest gold producer said profit before income tax for the year ended December 31 fell to $178.8-million from $483.9-million a year earlier, far behind analysts' estimates of $222.44-million according to Refinitiv IBES.
Gold output from the Noche Buena mine dropped 23.9% in 2019 as volumes of ore processed fell. The mine, which accounted for almost 18% of the group's total gold output in 2018, will be closed next year as it reaches its end of life.
The company, which operates six mines in Mexico, reaffirmed its 2020 production outlook for gold and silver.
Fresnillo last week said it expected to start production at its Mexican joint venture with Canada's MAG Silver earlier than anticipated this year.