Antofagasta 2017 Profit Rises; Revenue Up 31.1% On Higher Realised Metal Prices

Marco Green
March 13, 2018

The FTSE 100 company will pay 50.9 U.S. cents a share, or 67pc of its underlying earnings - well above its 35pc threshold. The company said the increase mainly reflected an increase in the realised copper price and copper sales volumes, as well as higher molybdenum revenue offset by lower gold revenue. Antofagasta also said there could be some supply disruption in Peru and Chile, given the "unusually" large number of labour negotiations taking place in the countries.

The average copper price on the London Metal Exchange stood at...

Group copper production in 2018 is expected to be in the range of 705-740,000 tonnes, higher than the 704,300 tonnes produced in 2017 as Encuentro Oxides reaches full capacity during the year.

"The copper market is expected to tighten in the second half of the year and to be in balance or in a slight deficit for the full year. From 2019 the likelihood of the market being in deficit is expected to increase", Antofagasta said.

Demand is set to keep growing, however, and Antofagasta said the rise in demand from electric vehicles and renewables, in which copper is a key element, will be "significant" if they develop at the rates analysts expect.

Iván Arriagada, chief executive, said the miner had helped itself by driving down costs, pointing to $166m in savings a year ago, allowing its margins to bounce back to 55pc, a level not seen since 2012.

Blue-chip miner Antofagasta PLC joined mining peers in paying out a bumper dividend to shareholders on Tuesday, as higher copper prices boosted 2017 cash flow and earnings.

Other reports by Click Lancashire

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