22nd Feb 2022 09:40
(Alliance News) - Antofagasta PLC on Monday said profit had more than doubled in 2021, with revenue boosted by almost 50% on the back of higher copper prices, but it warned that production will decrease and prices will continue to stabilize in the coming year.
For 2021, the Chilean miner reported profit before tax had more than doubled to USD3.48 billion, up from USD1.41 billion the last year.
Revenue was USD7.47 billion, up 46% from USD5.13 billion, reflecting a 47% increase in realised copper prices. Copper sold for an average of USD4.37 per pound in 2021, up from USD2.98 per pound in the year prior. Prices reached an all-time high in May at USD4.86 per pound before stabilising.
High demand and a shortage of supply reaped rewards for Antofagasta this year, but it faces some headwinds in 2022.
Whilst "several major greenfield and brownfield" projects are scheduled to start production, the miner expects any additional production in 2022 to be hit by a litany of issues, including continued falling grades, ongoing water restrictions, civil unrest, and supply chain constraints, as well as the continuing impact from the Covid-19 pandemic. Copper prices will continue to stabilise, it said.
However, demand for copper is expected to grow by 2.5% to 3%, though this is slower than in 2021. Antofagasta has maintained production guidance of 660,000 to 690,000 tonnes of copper in 2022, as well as 170,000 to 190,000 ounces of gold, and 8,500 to 10,000 tonnes of molybdenum.
This would be around a 6.4% decrease on copper production in 2021 of 721,500 tonnes, which was 1.7% lower than 2020 mostly due to water restrictions resulting from the drought in central Chile, the company said.
Basic earnings per share for 2021 were 130.9 cents in total, over double that of 50.6 cents in 2020.
Antofagasta declared a final dividend of 118.9 cents per share, bringing the total for the year to 142.5 cents, equivalent to 100% of underlying earnings per share. The total dividend in 2020 was 54.7 cents.
Net cash at year-end totalled USD540.5 million, up from debt of USD82.0 million a year before. This was boosted by higher earnings, with USD634 million of net borrowings repaid over the year.
Chief Executive Officer Ivan Arriagada commented: "Antofagasta ended the year on a strong footing...These results illustrate our performance as a reliable and responsible copper producer with the operational and financial strength and balance sheet to deliver on our promises.
"Our mines and plants performed as planned, and we can be proud of our achievements, regardless of the challenges of the year including COVID-19 and continued drought conditions in central Chile"
Shares in Antofagasta were up 2.0% to 1,424.50 pence each in London on Tuesday morning.
By Elizabeth Winter; [email protected]
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