Antofagasta profits fall on volatile copper price
By Frank Prenesti
Date: Thursday 11 Aug 2022
(Sharecast News) - Miner Antofagasta reported lower interim profits due to a volatile copper price, a drought in Chile and concentrate pipeline problems at its Los Pelambres operation.
Core earnings fell 47.5% to $1.24bn on lower revenue and operating costs that increased by 6.9%, mainly due to higher input prices. Revenue was down by a third to $2.53bn due to lower copper and by-product sales volumes and lower realised copper prices.
"We expect the remainder of the year to look very different from the first half - as production improves quarter-on-quarter, we ship and sell the concentrate that was impacted by the concentrate pipeline incident, and the desalination plant at Los Pelambres starts, significantly alleviating the issue of water availability," the company said on Thursday.
The interim dividend was slashed to 9.2 cents a share compared to a record 23.6 cents last year when copper prices had surged to record levels, allowing it to make a record shareholder payout of $1.4bn.
Antofagasta said it was still on track to produce its revised guidance of 640,000-660,000 tonnes of copper for the full year.
"The London-listed Chilean miner is struggling with tough year-on-year comparables, given last year's surge in copper to record highs, which lifted the share price to all-time highs as well," said Interactive Investor analyst Victoria Scholar.
"Post the peak in April 2021, the stock suffered, reaching fresh lows last month. However with copper back up at six-week highs, the recent trajectory for the stock has started to look more bullish as fears of more aggressive rate hikes ease off."
Reporting by Frank Prenesti at Sharecast.com
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