Antofagasta plc (LON:ANTO) reported a 78.7% jump in full year earnings as operating costs fell, commodity prices recovered and copper production grew.
The Chilean miner said underlying earnings (EBITDA) rose to $1.6bn in 2016 from $910mln the previous year on revenue of $3.6bn, up from $3.2bn a year earlier.
Copper sales rose to 698,500 tonnes from 635,900, gold sales increased to 271,400 ounces from 219,200 ounces and molybdenum sales edged up to 7,200 tonnes from 9,900 tonnes.
Operating costs dropped to $2.1bn from $2.3bn, reflecting a decline in mine operating costs, lower corporate expenditure and reduced exploration and evaluation.
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Copper production rose 12.5% to 709,400 tonnes, supported by the successful integration of the Zaldivar mine, the ramp-up of the Antucoya mine and the expansion of the Centinela Concentrates site. It was offset partly by the disposal of Minera Michilla at the end of 2015.
The EBITDA margin rose to 44.9% from 28.2%, as commodity prices increased in the second half of the year.
Antofagasta recommended a final dividend of 15.3c per share, bring the total dividend to 18.4c per share, compared to 3.1c the prior year.
“Antofagasta’s cautious approach has served us well in what is a cyclical industry, providing us with a stable operating base and a strong balance sheet,” said chief executive Iván Arriagada.
“Consequently, our focus in 2017 is on developing those projects that offer all our stakeholders the best returns – such as the incremental expansion at Los Pelambres, which we expect to approve by the end of the year – and will underpin the continued success of Antofagasta.”
The group expects 2017 production of 685,000 to 720,000 tonnes of copper and 185,000 to 205,000 ounces of gold and 8,500-9,500 tonnes of molybdenum.
Capital expenditure for 2017 is estimated at less than $900 million with some $100 million carried over from 2016.
Antofagasta is targeting further cost savings of $140mln under its cost and competitiveness programme.