Antofagasta FY net profit rises 87 pct, to pay 38c special dividend
Source: AFX
metalsplace.com
Chilean copper miner Antofagasta PLC posted an 87 pct jump in full-year net profit, as record high copper prices last year outweighed lower production and an increase in mining costs.
It also announced a special dividend, for the third consecutive year, of 38 cents a share.
Net profit increased to 1.354 bln usd, from 725.8 mln usd in 2005, beating the 1.327 bln usd consensus of 19 analysts' forecasts provided by the company.
Pretax profit surged 86 pct to a record 2.86 bln usd, while revenue jumped 58 pct to 3.870 bln usd..
The company plans to pay a final dividend of 43 cents, including the special dividend, taking the total payout to 48.2 cents a share, also exceeding the market consensus of 29.8 cents.
The company previously said copper production fell to 465,500 tonnes last year, from 2005's 467,300 tonnes, but was 5.4 pct above its original forecast for the year of 441,500 tonnes.
Today, it raised its 2007 copper production forecast to about 456,000 tonnes, from the 453,000 tonnes estimated in January, as the group's interest in the El Tesoro (nyse: TSO – news – people ) mine increased to 100 pct, from 61 pct, on the completed acquisition of Equatorial Mining Ltd.
The company said the 140,000 tonnes a day plant expansion at Los Pelambres, its largest mine, is substantially complete five months ahead of schedule.
Construction at the Mauro tailings dam, which has been affected by legal action, is set to be completed by the end of 2007 at a total cost of about 534 mln usd. It said it believes all permits granted for Mauro have been properly applied for and issued.
Capital spending in 2006 rose to 506.6 mln usd, from 223.0 mln in 2005, mainly on expenditure on the Mauro and Los Pelambres projects.
Antofagast also said a study on the Esperanza copper-gold project study should be completed in April, as expected, with expected ore throughput of 90,000 tonnes a day and possible start-up in the third quarter of 2010.
A study was also started to consider a further expansion of the concentrator plant at Los Pelambres to 175,000 tonnes a day, which should be completed later this year.
The company said copper prices, which have fallen since mid-December on lower demand from the US and a prolonged de-stocking in China, have re-balanced.
'We currently expect the copper and molybdenum markets to remain well above historical levels in 2007 with the potential, through the year, for copper prices to recover from recent weakness and molybdenum prices to continue on their upward trend of recent months,' said the chief executive of Antofagasta's mining division Antofagasta Minerals SA, Marcelo Awad.
The group also anticipates copper prices remaining well above historical levels in 2008.
'However, the exceptional average copper price of 2006 might not be repeated and the recent volatility that has characterised the market is likely to continue,' Awad said.
The copper concentrate market has moved into sharp deficit, and should result in lower smelting and refining charges in 2007, the company said.
It expects copper output at Los Pelambres, where it has a 60 pct interest, to fall to 321,000 tonnes this year from 324,200 tonnes in 2006, but said production should increase in 2008 when higher ore grades are expected.
Output at El Tesoro is anticipated to decline to 90,000 tonnes, from 94,000 tonnes in 2006, and production at Michilla, its highest cost mine, is expected to drop to about 45,000 tonnes, from 47,300 tonnes.
Michilla completed a review of its resources in November 2006, and its revised mine plan envisages a three year remaining mine life to 2009, with average annual production of about 39,000 tonnes and average cash costs of about 130 cents a pound.
Preliminary results from the Reko Diq prospect in South-West Pakistan are encouraging and a new resource estimate is expected to be completed by the end of this year, it said.
Cost pressures for the group continued with overall cash costs in 2006 jumping to 40.2 cents, from 13.9 cents in 2005, on higher on site costs, increased tolling charges and lower molybdenum prices, a by product of copper mining.
Molybdenum prices averaged 24.8 usd a pound in 2006, down from 32.0 usd in 2005.
Output of molybdenum, a hardening agent for steel and cast iron, grew 13 pct to 9,800 tonnes, mainly helped by higher grades. The company anticipates molybdenum production rising to 11,000 tonnes this year.
It said both of its transport and water divisions increased volumes as new contracts with mining customers came on stream.
At 8.35 am, shares in the company were up 0.2 pct at 475.5 pence, valuing it at 4.69 bln stg. |
