With the support of the company’s solid financial profile and investor confidence, we were able to successfully place new bond issues on international markets totaling US$ 1.45 billion. Part of the proceeds were used to restructure debt under more favorable conditions. Peñoles issued US$ 600 million in two tranches: US$ 100 million through the reopening of a bond placed last year (for US$ 550 million expiring in 2029) and another for US$ 500 million at 30 years. Of these proceeds, US$ 300 million were used to prepay a syndicated loan (originally set to expire in 2024). Fresnillo plc meanwhile placed a US$ 850 million bond issue at 30 years and bought back US$ 481.7 million of a US$ 800 million issue expiring in 2023. The credit ratings of both issuers remained at investment grade with a stable outlook. This not only improved our long-term maturity profile but strengthened our liquidity with the additional resources—at lower cost—and the company’s balance sheet maintains a prudent amount of leverage and a more comfortable maturity profile.

In our financial results for the year, sales benefited from the rise in gold and silver prices, while costs and expenses were down both because of austerity measures and because of less consumption by our operations. These benefits were offset by an increase in financial expenses relating to the bond issuance and debt prepayment, as well as impairment of assets at the Bismark, Madero and Milpillas units, where operations, as we mentioned above, were suspended. We also registered a correction to the tax treatment of mining work which, together with the rise in deferred taxes because of the peso’s devaluation against the dollar, meant a higher tax provision for the period. In billions of dollars, sales totaled US$ 4.67, a 4.5% increase; gross income was US$ 1.25 (+43.4%), EBITDA grew to US$ 1.46 (+50.4%) and operating income was US$ 743 million (+170.0%). All this resulted in a net loss of the controlling interest of US$ 34 million for the fiscal year.

To focus on becoming more resilient amid growing uncertainty, to improve our operating and administrative efficiency and enhance the company’s performance and results, we have undertaken a transcendental transformation, sustained by three pillars: 1) enriching the strategy of our mining and metallurgical businesses; 2) restructuring the organization, and 3) bringing about a change in culture. These pillars constitute the foundation to pursue our goals, both as a business and as an employer concerned about the welfare of our people and their families, and to continue contributing to the development of our beloved Mexico.

As part of the organizational restructuring, a new unit was created within Peñoles called Baluarte Minero, which will group together and reorganize the functions and structures that provide shared services (administrative and technical) to Peñoles and Fresnillo plc, to make them more effective and take advantage of all possible synergies without affecting the autonomy that each company’s management should have. This restructuring does not imply additional costs; in fact, it aims at a gradual and sustainable reduction. Starting January 1, 2021, the date on which this new structure took effect, Fernando Alanís will lead the new task as CEO of Baluarte Minero, and Rafael Rebollar was appointed CEO of Industrias Peñoles. We are grateful to Fernando for his hard work, dedication and achievements as Chief Executive Officer for more than 12 years.

With this transformation, we are confident that we will be optimally prepared to face the challenges that arise in an increasingly complex, changing environment.