Ever since its management overhaul three years ago, Atalaya Mining (ATYM) has been good at giving investors a strong narrative. First there was the speedy restart of the Riotinto mine to look forward to, then the promise of stable production, and now growth on two potential fronts. Results for 2018 again show that these tough targets can be delivered.
Indeed, almost every metric moved as the Spanish miner would have hoped last year. An 11 per cent rise in the copper price to $2.95 (£2.24) and a guidance-beating 13 per cent jump in production combined with a slight dip in all-in sustaining costs to boost operating cash flow by 81 per cent.
That cash has been well managed. While expansion of Riotinto caused capital expenditure to nearly triple to €65.7m (£56.1m), working capital dropped to a manageable €8.4m. With the project 80 per cent complete at the end of December, and on course for completion by June, one would expect most of the $92m (£70m) budget to have already been capitalised.
Management did not provide guidance on final costs, although 2019 production is forecast at 45-46,500 tonnes, 7 to 10 per cent above last year’s output. Anticipating 43,000 tonnes of copper output, analysts at Peel Hunt expect adjusted earnings of 34.4¢ a share this year, rising to 55.5¢ in 2020.
| ATALAYA MINING (ATYM) | ||||
| ORD PRICE: | 237p | MARKET VALUE: | £325m | |
| TOUCH: | 235-238p | 12-MONTH HIGH: | 265p | LOW: 188p |
| DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
| NET ASSET VALUE: | 205¢* | NET DEBT: | 30% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | nil | -11.2 | -0.9 | nil |
| 2015 | nil | -15.0 | -17.9 | nil |
| 2016 | 98.3 | -0.2 | 10.3 | nil |
| 2017 | 161 | 21.9 | 15.5 | nil |
| 2018 | 189 | 41.5 | 25.4 | nil |
| % change | +18 | +90 | +64 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=€1.17. *Includes intangible assets of €72m, or 52.4¢ a share | ||||
