Proactiveinvestors United Kingdom Antofagasta PLC https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Antofagasta PLC RSS feed en Sun, 16 Jun 2019 04:09:01 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - TR-1: Notification of major holdings ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190613140936_14110136/ Thu, 13 Jun 2019 14:09:36 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190613140936_14110136/ <![CDATA[News - Liberum ups blue chip miner Antofagasta to ‘hold’ from ‘sell’, says would not now be short of copper equities ]]> https://www.proactiveinvestors.co.uk/companies/news/221969/liberum-ups-blue-chip-miner-antofagasta-to-hold-from-sell-says-would-not-now-be-short-of-copper-equities-221969.html Analysts at Liberum Capital have upgraded their rating for Chile-based miner Antofagasta PLC (LON:ANTO) to ‘hold’ from ‘sell’ as they say they would not now be short of copper equities.

In a sector note to clients, the Liberum analysts pointed out: “Copper prices have been weighed down by negative global growth sentiment, driven by the continuing trade war between the US and China and the weakness in global manufacturing purchasing managers indices (PMI).

“However the fundamentals in 2019 are more robust than other years with a slow year for mine supply and recycling.”

READ: Antofagasta leaves guidance unchanged after quarterly copper production rises as expected

They added: “There is undoubtedly weakness in the global growth engine as evidenced by weakening yields, slowing trade and contracting manufacturing PMIs.

“The continuing trade war with the U.S. and China is part of the problem, but we are late in the business cycle and we do expect global growth to slow, increasing the likelihood of central bank action in the various regions.”

However, the analysts concluded: “Catalysts including spreading supply disruption in Zambia, further stimulus from China and a Fed rate cut, could result in a decent snap back in copper prices as the currently extended net short futures positioning reverses.”

The analysts also said that the do not believe the recent weakness in copper prices has harmed the chances of the juniors, such as Asiamet Resources PLC (LON:ARS) and SolGold plc (LON:SOLG), being acquired, given the strength of the majors balance sheets.    

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Wed, 12 Jun 2019 11:46:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221969/liberum-ups-blue-chip-miner-antofagasta-to-hold-from-sell-says-would-not-now-be-short-of-copper-equities-221969.html
<![CDATA[RNS press release - REPORT ON PAYMENTS TO GOVERNMENTS ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190612100002_14108023/ Wed, 12 Jun 2019 10:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190612100002_14108023/ <![CDATA[RNS press release - TR-1: Notification of major holdings ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190530102731_14092383/ Thu, 30 May 2019 10:27:31 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190530102731_14092383/ <![CDATA[RNS press release - Results of Annual General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190522174556_14084180/ Wed, 22 May 2019 17:45:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190522174556_14084180/ <![CDATA[RNS press release - CHAIRMAN'S COMMENTS AT THE 2019 AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190522100005_14083428/ Wed, 22 May 2019 10:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190522100005_14083428/ <![CDATA[RNS press release - FINAL DIVIDEND PAYABLE ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190502120425_14061095/ Thu, 02 May 2019 12:04:25 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190502120425_14061095/ <![CDATA[RNS press release - APPOINTMENT OF INDEPENDENT NON-EXECUTIVE DIRECTOR ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190424141902_14050517/ Wed, 24 Apr 2019 14:19:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190424141902_14050517/ <![CDATA[News - Antofagasta leaves guidance unchanged after quarterly copper production rises as expected ]]> https://www.proactiveinvestors.co.uk/companies/news/219011/antofagasta-leaves-guidance-unchanged-after-quarterly-copper-production-rises-as-expected-219011.html Antofagasta PLC (LON:ANTO) shares slipped on Wednesday as the FTSE 100-listed miner left its full-year copper production guidance unchanged after first quarter output grew in line with expectations.

Copper production in the first quarter increased 22.6% year-on-year to 188,600 tonnes, supported by higher throughput and grades, mainly at the Centinela mine.

READ: City broker questions Antofagasta’s strategy at Centinela copper project

Total copper output at Centinela gained 45.5% to 68,800 tonnes while the Los Pelambres mine produced 89,200 tonnes of copper, up 10.0% on a year ago.

However, group production was 14.3% lower than the previous quarter due to scheduled maintenance at Los Pelambres and Centinela.

A trade dispute between the US and China dragged benchmark copper prices down 17% last year.

Antofagasta started construction of a major infrastructure project at Los Pelambres in April. The company said the work would increase production by 15%.

"The high level of operating performance achieved in the second half of last year continues and we are on-track for another record-setting year with full year production expected to increase by up to 9% to 750-790,000 tonnes,” said chief executive Ivan Arriagada.

In late morning trading, shares in Antofagasta were 0.6% lower at 969.20p.

In a note to clients, analysts at RBC Capital repeated a ‘sector perform’ rating and 870p price target on Antofagasta shares.

Commenting on the update, they said: “A solid quarter from Antofagasta. Production was 3% behind our estimates but strong performance on net cash costs (5% better than our estimates) should keep the financial impact from the quarter neutral, especially with full-year production and cost guidance reiterated.”

 -- Adds analyst comment, updates share price --

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Wed, 24 Apr 2019 08:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219011/antofagasta-leaves-guidance-unchanged-after-quarterly-copper-production-rises-as-expected-219011.html
<![CDATA[RNS press release - Q1 2019 PRODUCTION REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190424070003_14049191/ Wed, 24 Apr 2019 07:00:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190424070003_14049191/ <![CDATA[RNS press release - 2018 ANNUAL REPORT PUBLICATION / 2019 AGM NOTICE ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190412120003_14039671/ Fri, 12 Apr 2019 12:00:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190412120003_14039671/ <![CDATA[RNS press release - COMPLETION OF LOS PELAMBRES EXPANSION FINANCING ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190404130457_14029430/ Thu, 04 Apr 2019 13:04:57 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190404130457_14029430/ <![CDATA[RNS press release - Notification of Managerial Transactions ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190403122847_14027533/ Wed, 03 Apr 2019 12:28:47 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190403122847_14027533/ <![CDATA[News - City broker questions Antofagasta’s strategy at Centinela copper project ]]> https://www.proactiveinvestors.co.uk/companies/news/217637/city-broker-questions-antofagastas-strategy-at-centinela-copper-project-217637.html Antofagasta PLC’s (LON:ANTO) decision to build a second concentrator at its Centinela copper mine in Chile is likely to erode returns on capital, according to Peel Hunt.

The City broker had expected that Antofagasta bosses would look to expand the existing Centinela operation, which would have required less upfront capital.

“We again question the capital discipline in the group following the shift to a second concentrator at Centinela as the longer-term growth project for Antofagasta,” read a note to clients.

READ: Antofagasta slips as Barclays downgrades

“We believe the switch favours earnings and dividend growth over returns on capital. We estimate that in order to generate a 10% internal rate of return (IRR) the project will require copper prices to reach US$7,500 per tonne.”

The analysts added: “Due to the higher capex spending, we see Antofagasta’s returns on cash invested in the business steadily falling down the single-digit levels.”

Peel Hunt slashed its earnings per share estimates for the next three years to reflect the changes at Centinela, as well as higher-than-expected depreciation charges in the recent results statement.

Downgraded on valuation grounds

For 2019, it is forecasting adjusted underlying earnings (adj EBITDA) of US$2.58bn and earnings per share of 62 cents, down from its previous estimates of US$2.61bn and 73 cents.

But the analysts didn’t downgrade their recommendation of the stock because of that, but on valuation grounds, given the recent share price surge.

“The shares have performed strongly of late (up 27% since Jan) and are at our target price (of 920p). We downgrade to ‘hold’.”

Antofagasta shares were up 2.6% to 991p in mid-morning trading on Monday.

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Mon, 01 Apr 2019 11:35:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/217637/city-broker-questions-antofagastas-strategy-at-centinela-copper-project-217637.html
<![CDATA[RNS press release - Notification of Managerial Transactions ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190327110920_14017812/ Wed, 27 Mar 2019 11:09:20 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190327110920_14017812/ <![CDATA[News - Antofagasta slips as Barclays cuts to ‘underweight’, although Deutsche Bank raises its target price ]]> https://www.proactiveinvestors.co.uk/companies/news/217237/antofagasta-slips-as-barclays-cuts-to-underweight-although-deutsche-bank-raises-its-target-price-217237.html Barclays has cut its stance on blue-chip copper miner Antofagasta PLC (LON:ANTO) to ‘underweight’ from ‘equal-weight’ on valuation grounds, preferring mid-cap peer KAZ Minerals PLC (LON:KAZ).

In a note to clients, the global bank’s analysts said: “Strong outperformance (+15% vs. pure-play peers in past year) has left Antofagasta as one of the most expensive base metal pure plays we cover globally.”

READ: Antofagasta slips as HSBC downgrades its rating to ‘reduce’ from ‘hold’

They added: “We see negative catalysts ahead driven by declining grades and rising opex and capex limiting FCF (free cashflow) generation close to zero at spot over the next 5yrs.”

The analysts said they estimate that the FTSE 100-listed miner is pricing in copper prices at $3.30 per pound into perpetuity which they think “looks challenging over 2020-22 given ample supply growth.”

They pointed out: “While ANTO is considered a ‘sleep-easy’ copper exposure, we’d rather play upside to copper prices through KAZ which trades at a 61%-64% discount to ANTO on P/E (spot 2019⁄20) with similar leverage to copper prices and more attractive catalysts (Baimskaya sell-down)."

The global bank reduced its target price for Antofagasta by 6% to 750p from 800p, with the stock currently trading at 935p, down 0.3% on Monday’s close.

But Deutsche Bank raises target price

However, Antofagasta’s share price decline was cushioned by a more upbeat note from Deutsche Bank, which raised its target price for the Chile-focused miner to 880p from 800p, while retaining a hold rating on the stock, in a report on copper miners.

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Tue, 26 Mar 2019 12:58:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217237/antofagasta-slips-as-barclays-cuts-to-underweight-although-deutsche-bank-raises-its-target-price-217237.html
<![CDATA[News - Antofagasta slips as HSBC downgrades its rating to ‘reduce’ from ‘hold’ following miner’s 2018 full-year results ]]> https://www.proactiveinvestors.co.uk/companies/news/216852/antofagasta-slips-as-hsbc-downgrades-its-rating-to-reduce-from-hold-following-miners-2018-full-year-results-216852.html HSBC trimmed its view on Antofagasta PLC (LON:ANTO) on Wednesday, downgrading its rating to ‘reduce’ from ‘hold’ following the Chilean copper miner’s 2018 full-year results.

The global bank only raised its price target for the FTSE 100-listed firm to 790p from 720p, with the stock currently trading at 960.40p, down 0.5% on Tuesday’s close.

READ: Record production can't hide drop in revenues, earnings and dividends from Antofagasta

In a note to clients, HSBC’s analysts pointed out that Antofagasta posted a higher-than-expected dividend for 2018 but its core earnings dropped, in line with projections

They said they believe the miner has a quality portfolio with a good operational delivery track record, solid balance and stable forward dividend yields.

However, the analysts added, the company’s cost positioning in the second/third quarter has created high levels of gearing to the copper price, resulting in its share price rising by 20% in the year-to-date, while the copper price has only risen 8%.

The analysts concluded that although Antofagasta’s operational outlook is encouraging, they believe most of the upside is already priced into the stock.

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Wed, 20 Mar 2019 13:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216852/antofagasta-slips-as-hsbc-downgrades-its-rating-to-reduce-from-hold-following-miners-2018-full-year-results-216852.html
<![CDATA[News - Record production can't hide drop in revenues, earnings and dividends from Antofagasta ]]> https://www.proactiveinvestors.co.uk/companies/news/216724/record-production-can-t-hide-drop-in-revenues-earnings-and-dividends-from-antofagasta-216724.html Antofagasta PLC's (LON:ANTO) chief executive, Iván Arriagada opened his full-year results commentary in an upbeat tone by highlighting that 2018 was a record production year for the company.

Overall, the FTSE 100-listed firm produced 725,300 tonnes of copper last year. However, realised copper prices were on average 6% lower than they were in 2017 and that fed through into lower revenue, down 0.3% at US$4.7bn, and a fall in earnings per share, down 28% to US$0.55.

READ: Antofagasta posts strong rise in 2018 copper production to record levels, forecasts another record year

The company blamed higher unit costs and lower grades at its copper mines, while net debt was 31% higher at US$596mln, and operating cash flow rang in at US$1.9bn.

It said production in 2019 is expected to be between 750,000 and 790,000 tonnes of copper, as well as between 240,000 and 260,000 ounces of gold and between 11,500 and 12,500 tonnes of molybdenum. Copper production is expected to grow as grades improve at all operations but particularly Centinela Concentrates.

The group cuts its 2018 dividend by 13.9% to US$0.43.80.

In a note to clients, however, analysts at RBC Capital pointed out that the dividend was higher than expected and noted that Antofagasta is “effectively pushing through non-core asset proceeds to investors which should be taken positively.”

They also said: “The decision on Centinela is interesting in our view as the company has chosen to push forward a second concentrator for 180ktpa incremental production rather than expand the current one.

“This will provide more growth but we would expect to come with a higher capex charge from 2020 onwards.”

RBC reiterated a ‘sector perform’ rating and 850p target price on Antofagasta, having downgraded its rating from ‘outperform’ on 12 March.

In afternoon trading, Antofagasta shares were 3.2% at 969.20p.

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Tue, 19 Mar 2019 07:56:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216724/record-production-can-t-hide-drop-in-revenues-earnings-and-dividends-from-antofagasta-216724.html
<![CDATA[RNS press release - PRELIMINARY RESULTS ANNOUNCEMENT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190319070022_14006628/ Tue, 19 Mar 2019 07:00:22 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190319070022_14006628/ <![CDATA[News - Antofagasta will have good 2019 but shares are fairly valued, says RBC as it cuts rating ]]> https://www.proactiveinvestors.co.uk/companies/news/216279/antofagasta-will-have-good-2019-but-shares-are-fairly-valued-says-rbc-as-it-cuts-rating-216279.html Antofagasta PLC (LON:ANTO) will have a good year in 2019 but this has already been baked into the share price, RBC Capital Markets said as it downgraded the stock.

Ahead of its full-year results next Tuesday, the Chilean-based miner predicted another record year of production in 2019 as it reported a strong rise in 2018 fourth quarter copper output, led by growth from Centinela.

READ: Antofagasta posts strong rise in 2018 copper production to record levels, forecasts another record year

Following a recovery in sentiment and copper prices after the positive production update, RBC said it sees the risk/reward more balanced as Antofagasta embarks on another investment phase, which is likely to compress free cash yields.

Nonetheless, it believes Antofagasta remains a "relatively straight-forward and solid exposure in the sector".

Shares fairly valued

RBC cut its recommendation to ‘sector perform’ from ‘outperform’ and lowered its target price to 850p from 890p.

"With growth delivery now coming back into the cards and the shares trading at an elevated premium to net asset value, at current share prices we think the stock is fairly valued," the broker said.

RBC sees the miner’s interim results in March beating consensus estimates by about 1%.

It expects Centinela to perform well in 2019 on higher grades, and Los Pelambres to maintain higher levels of production before the tie-in of the US$1.3bn expansion of the mine in 2020.

Los Pelambres expansion to boost production 

“The Los Pelambres expansion should pick up pace in 2019,” RBC said.

“We expect this project will increase production by circa 60,000 tonnes per annum over the next 15 years (US$21,000 per annual tonne, RBC estimates 12% internal rate of return). “

“Once complete this would open up the Phase 2 expansion which has lower capital intensity for an additional 35,000 tonnes (US$14,000 per annual tonne).”

Antofagasta has previously said it anticipates a decision on the expansion of Centinela by the end of 2018 but RBC does not expect spending to begin until 2020.

A pre-feasibility study for the US-based Twin Metals project should also be close to completion, RBC pointed out.

“By no means do we see growth in copper (especially return on invested capital accretive growth) as negative, but we forecast Antofagasta with the Pelambres expansion underway to have an average 3.4% free cash flow yield over the next two years,” RBC said.

“Although there is plenty of debt capacity in Antofagasta, at this juncture we wouldn't expect any acceleration of the two growth projects.”

In mid-morning trading, shares were trading 0.6% lower at 934p each.

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Tue, 12 Mar 2019 10:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216279/antofagasta-will-have-good-2019-but-shares-are-fairly-valued-says-rbc-as-it-cuts-rating-216279.html
<![CDATA[News - Antofagasta posts strong rise in 2018 copper production to record levels, forecasts another record year ]]> https://www.proactiveinvestors.co.uk/companies/news/213130/antofagasta-posts-strong-rise-in-2018-copper-production-to-record-levels-forecasts-another-record-year-213130.html Antofagasta PLC (LON:ANTO) has continued the fourth quarter 2018 updates from the blue-chip miners by reporting a strong rise in copper production to record levels and forecasting another record year in 2019.

The Chile-based group said its fourth-quarter copper production rose 16.8% to a record 220,000 tonnes as a result of higher production at all operations, particularly at Centinela Concentrates which increased production by 68.3%

READ: Antofagasta reports slump in nine-month copper and gold production

The FTSE 100-listed firm added that full-year production was at the top-end of revised guidance, up 3% to 725,300 tonnes due to higher production at Los Pelambres and Centinela.

It said gold production in the fourth quarter was 90,000 ounce, an 87.1% increase on the third quarter due to higher throughput, grades and recoveries at Centinela, with full-year gold production of 210,100 ounces also at the top end of guidance.

Antofagasta said group production in 2019 is expected to be a record year, estimating 750,000-790,000 tonnes of copper, 240,000-260,000 ounces of gold, and 11,500-12,500 tonnes of molybdenum.

The firm added that group cash costs in 2019, before and after by-product credits, were expected to be similar to 2018's at $1.70/lb and $1.30/lb respectively.

It said capital expenditure in the current year was expected to be $1bn, including the Los Pelambres expansion project, which will add 60,000 tonnes per annum to its copper output.

Iván Arriagada, Antofagasta’s CEO commented: "Reflecting our continued focus on costs our net cash costs for the quarter were $0.99/lb, the lowest since 2012, and for the year were only 3% higher than in 2017 despite average grades declining and cost pressure from rising input prices.”

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Wed, 23 Jan 2019 07:39:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/213130/antofagasta-posts-strong-rise-in-2018-copper-production-to-record-levels-forecasts-another-record-year-213130.html
<![CDATA[RNS press release - Q4 2018 PRODUCTION REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190123070003_13943327/ Wed, 23 Jan 2019 07:00:03 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190123070003_13943327/ <![CDATA[RNS press release - DIRECTOR CHANGE ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190116164927_13937161/ Wed, 16 Jan 2019 16:49:27 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20190116164927_13937161/ <![CDATA[RNS press release - Remuneration and Talent Management Committee Chair ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181129070006_13884358/ Thu, 29 Nov 2018 07:00:06 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181129070006_13884358/ <![CDATA[RNS press release - Los Pelambres Expansion Approved ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181115070002_13867510/ Thu, 15 Nov 2018 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181115070002_13867510/ <![CDATA[News - Antofagasta dividend yield lower than peers but balance sheet robust, says UBS ]]> https://www.proactiveinvestors.co.uk/companies/news/208109/antofagasta-dividend-yield-lower-than-peers-but-balance-sheet-robust-says-ubs-208109.html Antofagasta PLC’s (LON:ANTO) dividend yield of 4% is low compared to its peers but could be higher if the Chilean copper miner sells infrastructure assets, according to UBS.

UBS said the pumping and pipeline assets at the Centinela mine could fetch between US$800mln and US$1bn, potentially crystallising some value. However, UBS added that there would be higher costs related to operating expenditure trade-offs so integrated infrastructure asset sales are only likely to be moderately accretive to net present value.

“Given Anto's potential capital expenditure (capex) commitments in our view it is not a foregone conclusion they would pay a large special dividend post a sale,” UBS said.

The investment bank thinks it is unlikely that Antofagasta would pay a dividend yield of more than 5% without a higher copper price.

If Antofagasta presses ahead with its planned expansion at Centinela and Los Pelambres, UBS reckons it will need to increase net debt to fund capex in 2021-24 so will probably pay a dividend of no more than 35% of underlying net earnings – the minimum percentage outlined the miner’s dividend policy.

“But in our view the best strategy would be to prioritise project development, increasing leverage to copper price upside vs competing with the diversified miners by paying large dividends,” UBS said.

UBS upgrades Antofagasta to 'neutral'

UBS raised its rating on the stock to ‘neutral’ from ‘sell’ and maintained a target price of 800p, saying it believes the risk vs reward has improved.

The bank thinks the company offers “low-risk exposure to copper price upside;" but does not believe its "medium-term equity story is compelling and need higher conviction on tightening in the copper market to consider becoming genuinely positive”.

On Antofagasta’s projects in Chile, UBS noted that most are brownfield and low risk but expects the returns to be mixed.

It sees the expansion at Los Pelambres adding about 90,000 tonnes of copper production but lower grades. The Centinela expansion could add 95,000 to 140,000 tonnes by the mid-2020s, lifting group production growth to 20-25% over five years, but the returns are less compelling and the project is broadly NPV neutral US$3.00 per pound.

UBS says copper price needs to rise before turning positive on Antofagasta

Last week, the mining group said copper and gold production in the year to date had slumped due to lower grades and narrowed its full-year copper production guidance.

READ: Antofagasta reports slump in nine-month copper and gold production

“Anto has a robust balance sheet, a reasonable cost position and low-risk growth options; as a result, it offers relatively low-risk exposure to copper price upside and operational/financial performance should improve in 4Q18/2H18,” UBS said.

“Following share price weakness the risk vs reward is improving, but with free cash flow & dividend yields below peers we need higher conviction on a copper price to become genuinely positive.”

UBS sees the near-term copper price outlook as “balanced” until there is more certainty on the trade war between China and the US after the mid-term elections in the US.

Shares rose 1.8% to 772p in morning trading. 

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Tue, 30 Oct 2018 10:24:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/208109/antofagasta-dividend-yield-lower-than-peers-but-balance-sheet-robust-says-ubs-208109.html
<![CDATA[News - Antofagasta reports slump in nine-month copper and gold production ]]> https://www.proactiveinvestors.co.uk/companies/news/207726/antofagasta-reports-slump-in-nine-month-copper-and-gold-production-207726.html Antofagasta Plc (LON:ANTO) said that copper and gold production in the year to date had slumped due to lower grades and narrowed its full-year copper production guidance.

The Chile-based company on Tuesday reported that group copper production for the first nine months of the year was 505,500 tonnes, 4.0% lower than in the same period last year, while gold production dropped by 30.1% to 120,100 ounces due to lower grades at Centinela.

READ: Antofagasta shares jump as RBC upgrades the stock to 'outperform'

Molybdenum production, meanwhile, was 43.1% higher than in the same period last year, principally due to higher grades and recoveries at Los Pelambres, it added.

The mining group, however, said it expects copper production volumes to be “particularly strong” in the final quarter of the year after a 15.4% increase in third-quarter production to 188,300 tonnes compared to the prior three month period.

Antofagasta said that third-quarter gold production jumped by more than a fifth to 48,100 ounces compared to the previous quarter and that molybdenum production came in at 4,400 tonnes, 57.1% higher than in the second quarter.

The company added that Centinela had started producing molybdenum during the quarter.

The copper mining group said that though it benefited from higher production in the quarter, its disciplined approach to costs allowed it to combat inflationary pressures during the year, which - combined with the strong molybdenum market - contributed to a 15% fall in its net cash costs to US$1.27/lb. Guidance for the full year remains unchanged at US$1.35/lb, it said.

“Production (of copper) volumes will continue to grow, with the fourth quarter expected to be particularly strong,” CEO Iván Arriagada said in a statement.

"The physical copper market continues to look tight and the outlook for next year remains positive despite ongoing fears about disruptions to global trade. We have narrowed our copper production guidance for the full year to 705-725,000 tonnes and looking ahead we expect production in 2019 to increase to 750-790,000 tonnes, driven by higher average grades at Centinela Concentrates and Zaldívar,” he added.

Arriagada said he expected total capital expenditure for the year to be less than the $1.0bn previously guided.

In a note to clients, UBS analysts said that while Antofagasta offers investors exposure to potential medium-term copper price upside they still feel that the company’s valuation remains full and it offers inferior dividends and cash returns compared to its peers.

Shares in the company were 0.13% down at 755.6p in mid-morning trade. 

- updates adding analyst comment, share price - 

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Wed, 24 Oct 2018 07:27:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/207726/antofagasta-reports-slump-in-nine-month-copper-and-gold-production-207726.html
<![CDATA[RNS press release - Q3 2018 PRODUCTION REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181024070001_13839818/ Wed, 24 Oct 2018 07:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20181024070001_13839818/ <![CDATA[RNS press release - INTERIM DIVIDEND PAYABLE ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180918130314_13795108/ Tue, 18 Sep 2018 13:03:14 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180918130314_13795108/ <![CDATA[News - Antofagasta shares jump as RBC upgrades the stock to 'outperform' ]]> https://www.proactiveinvestors.co.uk/companies/news/203555/antofagasta-shares-jump-as-rbc-upgrades-the-stock-to-outperform--203555.html Antofagasta PLC (LON:ANTO) shares shot higher after RBC Capital Markets upgraded the stock, saying the valuation provides a “compelling entry point” following a recent sell off.

RBC raised its rating on the FTSE 100-listed group to ‘outperform’ from ‘sector perform’ but cut its target price to 950p from 980p after poor first-half results.

READ: Antofagasta cautions on short-term copper outlook due to trade tensions as first-half earnings drop

Shares in Antofagasta fell following disappointing first half results and weaker copper prices but RBC said the second half suggests better prospects.

“The shares have derated significantly, a rarity for ANTO,” the broker said.

“Valuation provides a compelling entry point in our view. We expect the shares to regain a premium valuation over the coming months possibly enhanced by its copper exposure, which has significantly underperformed iron ore by 10% in the year to date.”

RBC said Antofagasta “checks nearly all of the boxes that we look for in a mining company for long-term investment”, pointing to the company’s “large, long-life and expandable assets in a mining-friendly jurisdiction producing a commodity into a structurally compelling market, at a reasonable margin, with little to no debt”.

The broker added: "The previous ‘invincibility’ in the rating, much like the Ark from Indiana Jones, is likely to return in our view, in due course. We also think this window might be brief, providing investors an opportunity to switch a proverbial bag of sand with the proverbial golden idol of outperformance."

RBC said it remains cautious in the near-term for London miners but thinks Antofagasta’s growth profile and counter-cyclical investment style should help it continue to differentiate.

"With a still robust long-term outlook for copper and a tightening market from 2019, we view purchasing ANTO at below its 10 year average price (890p) with a 2% implied dividend yield at spot as attractive."

Shares gained 2.9% to 828p in morning trading. 

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Fri, 24 Aug 2018 10:47:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/203555/antofagasta-shares-jump-as-rbc-upgrades-the-stock-to-outperform--203555.html
<![CDATA[News - Antofagasta cautions on short-term copper outlook due to trade tensions as first-half earnings drop ]]> https://www.proactiveinvestors.co.uk/companies/news/202823/antofagasta-cautions-on-short-term-copper-outlook-due-to-trade-tensions-as-first-half-earnings-drop-202823.html Antofagasta PLC (LON:ANTO) topped the blue-chip fallers on Tuesday after the Chilean miner said trade tensions are clouding the short-term copper demand outlook as it reported a drop in first-half earnings and cut its dividend.

The FTSE 100-listed group saw its underlying earnings (EBITDA) fall by 16.2% to US$904.2mln for the first six months of 2018, down from US$1.079bn a year earlier.

READ: Antofagasta reports higher quarterly output despite pipeline blockage at Los Pelambres

The earnings drop came despite first-half revenue rising by 3.6% to US$2.121bn as higher realised prices offset lower copper sale volumes.

The group’s EBITDA margin fell to 42.6%, down from 52.7% during the same period last year as unit production costs increased.

However, it kept its group copper production and net cash cost guidance for the full year unchanged at 705-740,000 tonnes at US$1.35/lb as it said grades continue to improve over the rest of the year.

In its results statement, Antofagasta said: "The copper market outlook in the mid to longer term continues to be favourable as demand is expected to grow at around 2% while supply growth remains constrained."

But, it added: "In the shorter term, there is considerable market uncertainty with the outcome of current international trade negotiations unclear."

The group is paying an interim dividend of 6.8 US cents per share, down 34% from the 10.3 US cents pay-out a year earlier.

In early morning trading, Antofagasta shares were 5% lower at 904.8p.

"Share price could suffer heavier damage"

Russ Mould, investment director at AJ Bell commented: “Today’s results from copper producer Antofagasta fall down on nearly every measure. Earnings, margins and the dividend are all well short of what had been pencilled in by analysts.”

“The blame is pinned on production issues, higher input costs and a stronger Chilean peso and for now the market appears happy to take the company at its word that this was just a bad half year period and that things will get much better in the second half.

He added: “The shares have fallen since early June. However, the highs achieved by the stock during that period were driven by a spike in copper prices, in turn, the result of miners threatening to strike in Chile and potentially cause a major supply disruption.

“Putting this fairly anomalous trading to one side, the shares have barely shifted in the last 12 months. If the company is unable to follow through on the guided second half improvement, underpinned by a reduction in costs and rising output, then the share price could suffer heavier damage.”    

 -- Adds analysts comment, share price --

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Tue, 14 Aug 2018 07:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202823/antofagasta-cautions-on-short-term-copper-outlook-due-to-trade-tensions-as-first-half-earnings-drop-202823.html
<![CDATA[RNS press release - HALF YEARLY FINANCIAL REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180814070011_13753908/ Tue, 14 Aug 2018 07:00:11 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180814070011_13753908/ <![CDATA[News - Antofagasta reports higher quarterly output despite pipeline blockage at Los Pelambres ]]> https://www.proactiveinvestors.co.uk/companies/news/201534/antofagasta-reports-higher-quarterly-output-despite-pipeline-blockage-at-los-pelambres-201534.html Chilean miner Antofagasta PLC (LON:ANTO) reported an increase in second-quarter copper production as higher output at its Centinela and Antucoya mines mitigated declines at Los Pelambres and Zaldívar.

Total copper production for the quarter rose 6.1% to 163,200 tonnes from 153,800 tonnes the previous year, boosted by increased sulphide grades and higher throughput at all operations.

Production at the Los Pelambres mine came to 78,000 tonnes, 3.8% lower than the previous quarter, due to a blockage in the concentrate pipeline in April and May.

The mining operation and the processing plant continued to operate normally during the blockage. Concentrates containing 9,200 tonnes of copper were stockpiled at the plant, which will be pumped down to the port in the third quarter.

READ: Antofagasta clears blockage at Los Pelambres pipeline

At Zaldívar, copper production fell 2.8% to 10,500 tonnes, although throughput increased 22.4% and grades and recoveries grew 8.65 and 7.2% respectively.

Centinela copper output increased 19.2% to 56,400 tonnes as grades improved in the Esperanza pit.

Antucoya production was up 25.4% to 18,300 tonnes as throughput jumped 43.8% to the highest level since output began in 2016.

Net cash costs for the quarter were US$1.50 per pound, down 2.6% on the previous quarter due to lower cash costs before by-product credits.

"We continue our disciplined approach to costs, but we have seen higher input prices and the impact of a stronger Chilean peso coupled with lower grades during the first half of the year,” said chief executive Ivan Arriagada.

“However, with grades and by-product volumes expected to increase in the second half, we expect a reduction in net cash costs.”

Antofagasta left its full-year guidance unchanged at a production of 705-740,000 tonnes and a net cash cost of US$1.35 per pound.

Shares fell 1.3% to 961.4p in morning trading. 

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Wed, 25 Jul 2018 09:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/201534/antofagasta-reports-higher-quarterly-output-despite-pipeline-blockage-at-los-pelambres-201534.html
<![CDATA[RNS press release - Q2 2018 PRODUCTION REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180725070005_13729978/ Wed, 25 Jul 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180725070005_13729978/ <![CDATA[News - Antofagasta's Mineral Centinela sells electricity transmission lines for US$117mln ]]> https://www.proactiveinvestors.co.uk/companies/news/200749/antofagasta-s-mineral-centinela-sells-electricity-transmission-lines-for-us117mln-200749.html Antofagasta PLC’s (LON:ANTO) subsidiary Mineral Centinela has agreed to sell its electricity transmission lines as part of its strategy to dispose of non-core assets.

Mineral Centinela, of which Antofagasta owns 70%, is selling Centinela Transmisión, the company that holds its electricity transmission lines, for US$117mln.

READ: Antofagasta nearly doubles 2017 dividend as it posts sharp rise in earnings, thanks to higher copper prices

"This sale is consistent with the group's strategy of disposing of its water and energy assets,” said Antofagasta chief executive Ivan Arriagada.

“This allows us to focus on our core business of producing copper safely and profitably, while also taking advantage of any organic growth opportunities that may arise.”

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Fri, 13 Jul 2018 08:37:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200749/antofagasta-s-mineral-centinela-sells-electricity-transmission-lines-for-us117mln-200749.html
<![CDATA[RNS press release - Sale of Electricity Transmission Lines ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180713070618_13716525/ Fri, 13 Jul 2018 07:06:18 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180713070618_13716525/ <![CDATA[RNS press release - REPORT ON PAYMENTS TO GOVERNMENTS ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180601070005_13662669/ Fri, 01 Jun 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180601070005_13662669/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180531070007_13660760/ Thu, 31 May 2018 07:00:07 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180531070007_13660760/ <![CDATA[RNS press release - Results of Annual General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180523161526_13652854/ Wed, 23 May 2018 16:15:26 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180523161526_13652854/ <![CDATA[RNS press release - CHAIRMAN'S COMMENTS AT THE 2018 AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180523102649_13652172/ Wed, 23 May 2018 10:26:49 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180523102649_13652172/ <![CDATA[News - Antofagasta clears blockage at Los Pelambres pipeline ]]> https://www.proactiveinvestors.co.uk/companies/news/196531/antofagasta-clears-blockage-at-los-pelambres-pipeline-196531.html Antofagasta PLC (LON:ANTO) said a blockage in the pipeline that transports concentrates from the processing plant at Los Pelambres copper mine in Chile to the port of Los Vilos has been cleared.

The company said filtering of concentrates at Los Vilos has resumed and no damage to the pipeline or leaks have been detected.

The pipeline was suspended after a blockage was discovered in April in testing during scheduled preventative maintenance.

During the suspension, the mining operation and processing plant continued to operate normally with concentrates being stockpiled at the plant.

It will take up to three months for the stockpiles at the plant and port to return to normal levels, Antofagasta said.

READ: Antofagasta nearly doubles 2017 dividend as it posts sharp rise in earnings, thanks to higher copper prices

The impact of the blockage on production for the six months to June 30 is expected to be 10,000 tonnes of copper. Sales are expected to be hit by 15,000 tonnes.

For the year, the estimated impact is less than 5,000 tonnes for both sales and production.

Antofagasta said its production guidance for the full year remains unchanged at 705,000 to 740,000 tonnes and the work in bringing the pipeline back to normal operations did not result in material capital expenditure.

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Tue, 08 May 2018 08:20:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196531/antofagasta-clears-blockage-at-los-pelambres-pipeline-196531.html
<![CDATA[RNS press release - Los Pelambres Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180508070012_13631803/ Tue, 08 May 2018 07:00:12 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180508070012_13631803/ <![CDATA[RNS press release - Final Dividend Payable ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180504105800_13630599/ Fri, 04 May 2018 10:58:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180504105800_13630599/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180430104104_13623647/ Mon, 30 Apr 2018 10:41:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180430104104_13623647/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180425141831_13618497/ Wed, 25 Apr 2018 14:18:31 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180425141831_13618497/ <![CDATA[RNS press release - Q1 2018 Production Report ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180425070009_13617266/ Wed, 25 Apr 2018 07:00:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180425070009_13617266/ <![CDATA[RNS press release - Publication of 2017 Annual Report & Notice of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180416123417_13605959/ Mon, 16 Apr 2018 12:34:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180416123417_13605959/ <![CDATA[RNS press release - Notification of Management Transactions ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180403112403_13589389/ Tue, 03 Apr 2018 11:24:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180403112403_13589389/ <![CDATA[RNS press release - Notification of Management Transactions ]]> https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180327113334_13583156/ Tue, 27 Mar 2018 11:33:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3995/LSE20180327113334_13583156/ <![CDATA[News - Antofagasta nearly doubles 2017 dividend as it posts sharp rise in earnings, thanks to higher copper prices ]]> https://www.proactiveinvestors.co.uk/companies/news/193056/antofagasta-nearly-doubles-2017-dividend-as-it-posts-sharp-rise-in-earnings-thanks-to-higher-copper-prices-193056.html Antofagasta PLC (LON:ANTO) reported a sharp rise in full-year earnings, thanks to higher copper prices and said it would nearly double its dividend.

The FTSE 100-listed Chilean miner said its 2017 underlying earnings (EBITDA) rose by 59% to US$2.6bn, up from US$1.63bn in 2016, as its EBITDA margin improved to 54.5% from 44.9%.

READ: Antofagasta's production challenges should subside in 2019, says Berenberg

Antofagasta's revenue increased by 31% to US$4.75bn, up from US$3.62bn in 2016., and its free cash flow jumped to US$1.20bn, well above the US$343.0mln seen in 2016.

The miner’s net debt at the year-end was US$456.4mln, compared to US$859.6mln at the end of June 2017, while capital expenditure rose, as planned, to US$899.0mln from US$795.1mln.

The firm reiterated its forecasts for 2018 copper production guidance of between 705,000 and 740,000 tonnes, which would compare to 704,300 tonnes in 2017.

It said it expects the copper market to tighten in the second half of 2018, and to be in balance or in a slight deficit for the whole year, with 2019 more likely to be in deficit

Antofagasta’s CEO Iván Arriagada said: "Our priorities for 2018 are continued capital discipline and the next phase of our growth - notably the review and expected approval of the Los Pelambres Incremental Expansion project and progressing expansion plans at Centinela."

The group is paying a final dividend of 40.60 US cents, boosting its total payout by 177% to 50.9 US cents per share, up from 18.40 US cents in 2016.

In a note to clients, analysts at RBC Capital said: “The better-than-expected dividend, and better net debt will help to offset the ~25% increase in Pelambres expansion capex (c.2% of ANTO market cap), however we highlight ANTO is trading at its lowest relative level to consensus in the past 2 years at (5.7x EV/EBITDA, RBC 5.5x).”

RBC repeated a ‘sector perform' rating on Antofagasta with a price target to 1,060p.

In afternoon trading, Antofagasta shares were up 1.9% at 904.8p.

 -- Adds broker comment, updates share price --

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Tue, 13 Mar 2018 08:14:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/193056/antofagasta-nearly-doubles-2017-dividend-as-it-posts-sharp-rise-in-earnings-thanks-to-higher-copper-prices-193056.html