MS-Industrias Penoles S.A.B. de C.V. 2Q25 Earnings Beat on Solid Gold Shipments from Fresnillo-20250805

2Q25 Results: Adj. EBITDA of $680m surpassed our $618m estimate driven byhigher revenues, despite higher COGS. Normalized EPS of $0.84 beat our $0.52estimate; compared to our model, the beat was mainly driven by the betteroperating results and a lower effective tax rate (15% vs. MSe of 40%).

Cash from ops. of $1,095m came in above our $775m estimate, on lower workingcapital needs.

Highlights: i) Mine production vs. MSe: 15.2Moz of silver (in line vs. MSe), 164Koz ofgold (+9%) and 60kt of zinc (+15%); ii) The mining division saw a 13.8% decrease inore milled; the Y/Y decrease in ore milled is largely due to the suspension of miningactivities at San Julian in November, as mining activities came to an end with thedepletion of reserves, and the strike at Tizapa which began on August 30th, 2024,and ended in June 19th, 2025, fully returning to activities as of June 30th, 2025; iii)Gold production was up 12% Y/Y due to better recoveries and more leaching activityat Herradura, on a sequential basis production was flat; iv) In the refinery business,gold production was higher Y/Y (+11.1%), as a result of the higher production inHerradura, while zinc production was down (-14.8%) due to lower treatedconcentrate volumes caused by several operational issues in the zinc plant; v) In thechemicals business, sodium sulfate production increased Y/Y (+4.4%) from thehigher demand for detergents and the lower comparison base from the previousyear. Ammonium sulfate output decreased Y/Y (-49.4%) as the company continuesto implement strategies to replace production and redirect the plant's capacitytowards more profitable products.