14th Aug 2018 07:53
LONDON (Alliance News) - FTSE 100-listed Antofagasta PLC on Tuesday reported a drop in interim earnings as cost rises offset a revenue increase.
For the six months to June, the Chilean miner's revenue increased 3.6% year-on-year to USD2.12 billion, driven by a 10% rise in copper prices despite copper output falling 8.5% to 317,000 tonnes.
Earnings before interest, tax, depreciation, and amortisation fell 16% to USD904.2 million due to higher costs - the Ebitda margin fell to 43% from 53%.
Antofagata's pretax profit for the period was USD465.6 million, down from USD688.6 million a year ago.
Group cash costs were USD1.92 per pound, 36 cents higher year-on-year, due to a stronger Chilean peso, lower production, and higher input costs.
Production was hit by lower grades as well as a pipeline blockage at the Los Pelambres mine.
Antofagasta's gold production fell 36% to 72,000 ounces due to lower grades from the Centinela mine.
Despite the fall in interim copper production, Antofagasta is maintaining its full-year guidance at between 705,000 tonnes to 740,000 tonnes, with grades set to improve going ahead.
The company is paying a 6.8 cents interim dividend, compared to 10.3 cents a year ago, in line with its 35% net earnings payout ratio.
Chief Executive Ivan Arriagada said: "As we have guided, this year is a tale of two halves. The first half, on which we are reporting, is expectedly softer due to lower sales tonnes and grades and higher costs, but we are expecting tonnages and unit costs to improve substantially during the second half and well into 2019 as mined grades increase in line with our mine plan.
"Regardless of external factors such as prices, inflation and foreign exchange movements, Antofagasta is well positioned for growth, generating strong cash flow and improving returns. The outlook is positive."
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