Antofagasta PLC (LSE:ANTO) reported a 48% drop in interim earnings on the back of a fall in copper output and prices and higher input costs.
But the FTSE 100 miner said it expects an improvement in the second half.
Underlying earnings (EBITDA) slumped to US$1.24bn, from US$2.36bn in the year-earlier period, as revenue fell 30% to US$2.53bn.
“Although we have experienced significant challenges over the half year - a volatile copper price as a result of macro developments, the continued drought in Chile, and an incident with our concentrate pipeline at Los Pelambres - the actions we have taken, coupled with the quality of our assets and balance sheet, have meant that we were able to weather the storm,” said chief executive Iván Arriagada.
The company announced last month first-half copper production fell 26% year-on-year to 268,600 tonnes and it revised its full-year copper output guidance to 640,000-660,000 tonnes to factor in the impact of the concentrate pipeline incident and a water shortage at Los Pelambres. It also revealed that net cash costs jumped 60% to US$1.82/lb, exceeding the company’s full-year guidance of US $1.65/lb.
"We expect the remainder of the year to look very different from the first half - as production improves quarter-on-quarter, we ship and sell the concentrate that was impacted by the concentrate pipeline incident, and the desalination plant at Los Pelambres starts, significantly alleviating the issue of water availability,” said Arriagada.
Completion of the desalination plant is expected in the fourth quarter and a concentrator plant in early 2023.
"While the short-term outlook remains uncertain for copper, inflation, global economics and geopolitics, we remain committed to maintaining our operating discipline and cost control, and a strong balance sheet,” said Arriagada.
Antofagasta plans to pay an interim dividend of 9.2 US cents per share.