Forward guidance and well-trailed production reports mean financial results are rarely the source of leaps in the share price of large miners. But so sharp was the reduction in second-quarter unit costs at Chilean copper miner Antofagasta (ANTO) that the market sent the stock up by 9 per cent on the publication of half-year numbers.
Given the rise was more or less equal to the sell-off that greeted March's preliminaries, it's tempting to read the reintroduction of the dividend - equal to 35 per cent of annual net earnings - as the main cause of the rally this time around. But investors will have been equally enthused by stable operating cash-flow generation of $774m (£595m) despite a 14.6 per cent decline in prices, and a second-half weighting to production.
The pressure on the top-line was partly offset by a 6.6 per cent increase in tonnes mined, thanks to the inclusion of copper from the higher-cost Antucoya mine, while credit for the strong cash position goes to big cost reductions at the Los Pelambres and Zaldivar mines. Before these results, analysts at Canaccord Genuity were forecasting full-year cash profit of $1.4bn and adjusted EPS of 23¢, against $891m and 1¢ in 2015.
ANTOFAGASTA (ANTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 560p | MARKET VALUE: | £5.52bn | |
| TOUCH: | 559-560p | 12-MONTH HIGH: | 633p | LOW: 341p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 2424 | |
| NET ASSET VALUE: | 681¢ | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 1.78 | 301 | 9.2 | 3.1 |
| 2016 | 1.45 | 276 | 8.9 | 3.1 |
| % change | -18 | -8 | -3 | - |
Ex-div: 8 Sep Payment: 30 Sep £1=$1.30 | ||||
