Given the state of copper prices in 2015, few investors in Antofagasta (ANTO) would have been expecting a glittering set of results. But full-year figures still surprised the market, which wiped 9 per cent off the shares as the miner joined the growing list of FTSE 100 stocks to can its final dividend.
To be fair to Antofagasta, the move was in line with its policy to pay a minimum 35 per cent of net earnings, which was covered by the $30.6m (£21.5m) interim payout. There were several reasons why cash flow was so depleted, aside from the 24 per cent fall in realised prices. A decline in volumes was the most notable, as protests at its Los Pelambres mine spilled over into 2015 and lower recoveries and grades at Centinela led to a 10.6 per cent drop in production to just 630,300 tonnes of copper.
Net cash costs of $1.50 per pound - above management expectations and 4.9 per cent higher than 2014 - didn't help either. This was due to lower realised byproduct prices and gold production, which fell from 18 per cent to 219,200 ounces. Synergies at the Zaldivar mine and an additional $160m cost reduction plan this year should help to reduce cash costs before by-products to levels last seen in 2012.
Prior to these results, analysts at JPMorgan were forecasting full-year adjusted EPS of 1¢, against zero earnings for 2015.
ANTOFAGASTA (ANTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 490.3p | MARKET VALUE: | £4.83bn | |
| TOUCH: | 488.6-490.4p | 12-MONTH HIGH: | 812p | LOW: 341p |
| DIVIDEND YIELD: | 0.4% | PE RATIO: | 1,160 | |
| NET ASSET VALUE: | 674¢ | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 6.10 | 3.10 | 125 | 20* |
| 2012 (restated) | 6.70 | 2.80 | 105 | 21* |
| 2013 | 5.97 | 2.08 | 66.9 | 95.0 |
| 2014 | 5.15 | 1.52 | 42.8 | 21.5 |
| 2015 | 3.39 | 0.26 | 0.6 | 3.1 |
| % change | -34 | -83 | -99 | -86 |
Ex-div: na Payment: na £1=$1.42. *Excludes special dividend payments per share of 77.5¢ in 2012 and 24¢ in 2011 | ||||
