Antofagasta H1 Pre-tax Profit Plunges Amid Lower Prices

Prior-year results have been restated.

Yesterday there was only one rising stock on the FTSE, RSA, but today there were just 3 companies that ended the day down – Randgold Resources, Fresnillo, and Royal Mail.

The Chile-based copper mining company said significant declines in copper and delayed shipments from bad weather caused underlying profits to slump by 48.6pc to $561m in the first half of the year, compared to the same period in 2014.

The Group sold Aguas de Antofagasta S.A. (ADASA), its water division, to Empresas Públicas de MedellÃn (EPM) on 2 June 2015 for a total cash consideration of $947.3 million.

Basic earnings per share increased to 71.6 cents from 33.6 cents as the latest results were benefited by 62.8 cents per share in discontinued operations. The impact of the protests at Los Pelambres and the heavy rains at Centinela in the first quarter affected production. JPMorgan Chase & Co. lowered their price target on shares of Rotork p.l.c. from GBX 265 ($4.15) to GBX 245 ($3.84) and set an overweight rating on the stock in a report on Wednesday, August 5th. Antofagasta said that throughout this period of lower copper prices, it has had a rigorous approach to cost control and is on track to make $160 million savings in 2015.

Antofagasta declared an interim dividend of 3.1 cents per share, representing a 35% pay-out ratio of the half-year net earnings and said that its $1 billion purchase of a 50% stake in the Chilean Zaldivar copper mine is due to close by the end of the year.

The company also recently disclosed a dividend, which will be paid on Friday, September 25th.

“In the medium to longer term the group remains confident that steady demand growth from emerging markets – notably China, where we anticipate considerable additional spend on its power infrastructure in coming years – combined with the current slowdown in investment in new mine expansions will lead to a shortfall in supply and support a recovery in the copper prices”.

Antofagasta cut its annual copper output forecast for the second time this year to 665,000 tonnes, due to delays at its Antucoya project in Chile.

ANTO.L climbed 3.1 percent in early trade to 549.50 pence.