Antofagasta (ANTO) booked cash profits of $562m (£358m) for the half-year. The figure was both short of the City consensus and 49 per cent down on the 2014 half-year figure. The Chile-focused miner's profits suffered due to a 17.5 per cent fall in realised copper prices, while both production and sales volumes were hampered by environmental protests at Los Pelambres and heavy rains at Centinela. Total copper output was down 13 per cent, and the group also had to contend with a fall-away in byproduct receipts.
Antofagasta has reduced its 2015 production guidance to 665,000 tonnes, as output from its new $1.9bn Antucoya mine will be delayed to the end of the third quarter. The production shortfall also forced the group to raise its net cash cost estimate to $1.47 per pound, from $1.40 previously. Management is roughly halfway towards its targeted savings of $160m this year, although we don't expect the effects on unit costs to become apparent until the final quarter.
In June, Antofagasta received around $1bn from the sale of its water business. But the subsequent acquisition of a 50 per cent stake in the Zalidar copper mine, not to mention the dividend cut, demonstrate that Antofagasta is prioritising growth and the pursuit of scale benefits over returning cash to shareholders, which include Chile's Luksic dynasty as majority owners.
JPMorgan Cazenove estimates adjusted full-year EPS of 85¢, against 47¢ in 2014.
| ANTOFAGASTA (ANTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 566p | MARKET VALUE: | £5.6bn | |
| TOUCH: | 566-567p | 12-MONTH HIGH: | 813p | LOW: 520p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 687¢ | NET CASH: | $744m | |
| Half-year to 30 June | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 2.60 | 821 | 31.2 | 11.7 |
| 2015 | 1.79 | 297 | 8.8 | 3.1 |
| % change | -31 | -64 | -72 | -74 |
Ex-div: 17 Sep Payment: 8 Oct £1=$1.57 | ||||
