These full-year results from copper miner First Quantum Minerals (FQM) look exceptionally strong - but they were in line with analysts' expectations and were actually buoyed by a number of non-recurring factors. These included the recognition of previously unrecognised tax losses and a $1.2bn (£794m) settlement of legal claims in the Democratic Republic of Congo.
Copper production climbed 16 per cent in the year, but gross profit actually fell 16 per cent because of falling copper prices and rising operating costs. Looking toward 2013, First Quantum reiterated its previous guidance that copper production growth might stall this year - output of 302,000 to 330,000 tonnes of copper is expected, compared with a little over 307,000 tonnes in 2012. Meanwhile, costs are expected to keep rising. This is mainly due to the soaring cost of sulphur, which is a key component in the extraction process.
There was no update concerning First Quantum's hostile C$5.1bn (£3.3bn) bid for Canada's Inmet Mining. The current offer is open until 11 March and, if it were to lapse, that could be seen as a good thing for shareholders - many are worried about overpaying.
Broker Credit Suisse forecasts adjusted EPS of $1.34 in 2013 ($1.16 in 2012).
FIRST QUANTUM MINERALS (FQM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,188p | MARKET VALUE: | £5.7bn | |
| TOUCH: | 1,158-1,222p | 12-MONTH HIGH: | 1,579p | LOW: 1,010p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 1,119¢ | NET DEBT: | 1% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (US¢) | Dividend per share (C¢) |
|---|---|---|---|---|
| 2008 | 1.74 | 0.39 | 13.0 | 5.20 |
| 2009 | 1.90 | 0.75 | 123 | 11.8 |
| 2010 | 2.39 | 0.99 | 76.0 | 16.8 |
| 2011 | 2.58 | 1.12 | 118 | 18.1 |
| 2012 | 2.95 | 2.20 | 374 | 17.5 |
| % change | +14 | +96 | +217 | -3 |
Ex-div: 12 Apr Payment: 7 May £1=C$1.55 £1=$1.52 | ||||
