20th Aug 2020 08:32
(Alliance News) - Antofagasta PLC on Thursday slashed its interim payout by 42%, as first half earnings took a hit from a drop in copper prices due to the coronavirus crisis.
The Chilean copper miner also warned that 2020 copper output will be at the lower end of its original 725,000 to 755,000 tonnes range, and only provided that no Covid-19 related shutdowns occur during the rest of the year.
Annual net cash cost guidance has been reduced by 10 US cents per pound to USD1.20 per pound, assuming production guidance is achieved and the Chilean peso averages 800 pesos to the US dollar for the year. In the first half of 2020, cash costs were reduced by 5.9% on a year before to USD1.12.
"The outlook for the remainder of the year depends largely on the impact of Covid-19 on global consumption," the FTSE 100-listed company explained.
Antofagasta said that due to the outbreak of the coronavirus and its damage to consumer markets, the realised copper price was 13% lower year-on-year at USD2.46 per pound, and this was felt in lower revenue and profit.
For the half-year ended June 30, revenue fell 15% to USD2.14 billion from USD2.53 billion last year as a result of lower realised copper prices and sales volumes, partially offset by the increase in the realised gold price.
First half pretax profit fell by 49% to USD387.5 million from USD763 million.
Earnings before interest, tax, depreciation and amortisation - the company's preferred profit measure - fell 22% year-on-year to USD1.01 billion on lower revenue, partially offset by lower operating costs due to the weaker Chilean peso, lower input costs and continued tight cost control.
The company produced 371,700 tonnes of copper in the first half, 4.0% lower than in the same period last year, largely due to expected lower ore grades at Centinela Concentrates. Copper sales were down 2.2% at 346,800 tonnes.
Gold output was down 26% to 111,100 ounces on expected lower grades at Centinela. Molybdenum production was 5,500 tonnes, compared with 6,400 tonnes in the first six months of 2019, principally due to lower grades and throughput at Los Pelambres mine.
Antofagasta declared an interim dividend of 6.2 cents, down 42% from 10.7 cents paid out last year. It noted that this was in line with its dividend policy of paying out 35% of underlying net earnings.
Shares in the miner were down 2.6% at 1,118.50 pence each in London on Thursday morning.
By Tapan Panchal; [email protected]
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