DOUGLAS HAMILTON douglas.hamilton@theherald.co.uk ROBUST prices for commodities helped Antofagasta, a British copper miner with operations in Chile, Ecuador and Colombia, post record profits for the full year in 2006.
The company said yesterday pre-tax profits for year ended December 31 surged by 86% to $2.86bn (£1.48bn), up from $1.54bn in 2005, on turnover 58% higher at $3.87bn.
Production of molybdenum, which is used to harden steel, rose 13%. Net income for the year rose to $1.35bn, from $725.8m, the company said in a statement to the London Stock Exchange.
Antofagasta had some good news for investors, saying it had pushed up its total dividend for the year by 119% to 48.2 cents a share. The final pay-out proposed for 2006 is 42 cents, which includes an ordinary dividend of five cents and a special dividend of 38 cents.
The solid results prompted the Evolution brokerage to repeat its "add" advice and 485p price target.
The broker said the figures were in line with its forecasts, while the 38 cent special dividend was better than forecast.
However, Evolution thinks Kazakhmys, due to report results tomorrow, appears more attractive stock to hold. The company is trading on a lower multiple and is likely to diversify into other commodities later this year.
Antofagasta expects copper production to fall by about 2% to 456,000 tonnes in 2007, mainly as a result of minor reductions at each of the group's operations.
Copper prices rose to a record in 2006 on demand from rapidly expanding economies such as China and India, but wobbled in recent weeks.
"The copper market has declined somewhat since mid-December, although more recently appears to have rebalanced," the company said.
"We currently expect the copper and molybdenum markets to remain well above historical levels in 2007 with the potential, through the year, for copper prices to recover from recent weakness."
Antofagasta shares shed 5.5p to 469p by the close of dealing - a loss of 1.2%.
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