By Christian Moess Laursen
Antofagasta’s profit fell last year–although less than what analysts expected–thanks to an increase in copper sales as well as pricing, trends reflected in its positive outlook for the red metal.
The Chilean copper miner said Tuesday that its pretax profit decreased to $1.97 billion in 2023 from $2.56 billion a year before, mainly reflecting an one-off gain of $944.7 million from the disposal of the Reko Diq project in Pakistan in 2022. A consensus of five market analysts had forecast $1.72 billion, according to FactSet.
Adjusted for exceptional items, pretax profit rose 11% to $1.80 billion as a results of increases in both copper sales and pricing, offsetting a rise in cash costs.
Driven by the same factors, earnings before interest, taxes, depreciation and amortization rose 5% to $3.09 billion, while revenue increased 8% to $6.325 billion.
Analysts had forecast an Ebitda of $3.0 billion on revenue of $6.30 billion, based on a FactSet poll.
Copper market forecasts for 2024 were upended late last year, pivoting from surplus to deficit following major disruptions to supply in South America and a significant outlook cut from Anglo American. The projected deficit boosted prices for the red metal to a five-month high in December.
Although prices have fallen since, the supply issues are likely to support higher prices going forward, HSBC analysts said in a research note from January.
“Copper prices in 2023 showed reduced volatility, with prices displaying a high degree of stability in the second half of the year,” Antofagasta’s Chief Executive, Ivan Arriagada, said.
“Over the medium to long-term, we continue to believe in copper’s fundamental role in the energy transition.”
In December, the company received approval from Chilean authorities to build a second concentrator at its key Centinela mine, which is expected to contribute 170,000 metric tons, or 26% of last year’s total output, annually.
The funding of the expansion–in which the miner will invest $4.4 billion–is a point of concern for some investors, Citi analysts said in a research note. Antofagasta said Tuesday that the costs will reduce by around $400 million if it elects to continue outsourcing Centinela’s water assets.
The FTSE-100 listed miner declared a final dividend of 24.3 cents, brining the full-year payout to 36.0 cents. For 2022, it declared 59.7 cents.
Antofagasta reaffirmed its 2024 guidance as issued last month, still expecting copper output to rise, as it targets 670,000-710,000 metric tons at a net cash cost of $1.60 a pound.
At 0824 GMT, shares are down 2.2% at 1,727.00 pence.
Write to Christian Moess Laursen at [email protected]
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