Industrias Peñoles (PE&OLES) Q2 2026 earnings summary

Executive summary

• Precious metals saw a technical correction in 2Q26 after historic highs, but prices remained elevated: silver averaged 118.6% higher and gold 37.4% higher year-over-year, while copper and zinc also posted strong gains due to demand and supply constraints.

• Mining operations improved, with ore milled and processed up 4.3% and ore deposited up 1.0% year-over-year, driven by the resumption of Tizapa and higher activity at Herradura, offsetting declines at other units.

• Quarterly production of all metals increased, notably lead (+28.7%), copper in concentrates (+27.7%), zinc (+14.2%), gold (+6.5%), and silver (+2.4%), while copper cathodes fell 36.7% due to lower ore at Milpillas.

• Metallurgical operations saw declines in refined gold (-29.0%), silver (-23.4%), and zinc (-33.9%) due to plant shutdowns and scheduled maintenance.

Financial highlights

• Net sales reached US$2,886.9 million, up 38.9% year-over-year; gross profit was US$1,535.9 million (+117.9%), EBITDA US$1,444.3 million (+112.3%), operating income US$1,285.0 million (+150.8%), and net income attributable to controlling interest US$642.0 million (+92.6%).

• Gross margin improved from 33.9% to 53.2%; EBITDA margin rose from 32.7% to 50.0%.

• Higher realized metal prices contributed US$1,055.6 million to sales, offsetting lower volumes of refined metals and copper cathodes.

• Cost of sales decreased 1.7% due to lower third-party concentrate purchases, despite higher production costs from inflation, peso appreciation, and Tizapa's restart.

• Operating expenses rose 30.4% due to higher administrative, exploration, and selling expenses.

• Income tax provision increased by US$253.2 million, reflecting improved financial results.

Outlook and guidance

• Exploration focused on five priority base metal projects in Mexico, Peru, and Chile, with significant drilling progress and resource expansion plans.

• Ongoing operational improvements and project development are expected to support future growth.