Antofagasta (LON:ANTO) has updated investors on its full-year performance this morning.
Highlights from the company statement:
Antofagasta plc CEO Iván Arriagada said: "2016 has been a year of operational delivery for Antofagasta putting us on a stronger and larger production base from which to grow. The successful integration of Zaldívar and the ramp-up of Antucoya - alongside the completion of the expansion of Centinela Concentrates - have contributed to a 12.5% rise in copper production to 709,400 tonnes.
"But volume increases are not the whole story at Antofagasta. We are focused on growth through profitable tonnes. A combination of measures to boost productivity, improve efficiencies and reduce costs has led to sustainable mine site cost reductions of $176 million in 2016. This performance helped cash flow from operations increase by 70% to $1.5 billion during the year whilst our EBITDA margins improved from 28% to 45%. In the medium term we expect to see a steady shift from a copper market in balance to a slight deficit, leading to further improvement in prices.
The Board has decided that in view of the Company's improved performance and the more positive outlook to declare a final dividend of 15.3 cents per share, bringing the dividend for the full year to 18.4 cents per share, which represents 53% of underlying earnings per share, significantly more than the company's commitment to pay-out a minimum of 35%.
"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. As a company we were founded with an entrepreneurial spirit, one that looks for opportunities where others do not see them and it is this attitude - combined with a continued commitment to capital discipline - that informs our outlook. 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."
Outlook for 2017
· Group production in 2017 is expected to be 685-720,000 tonnes of copper (as previously announced), 185-205,000 ounces of gold and 8,500-9,500 tonnes of molybdenum.
· Group cash cost before by-product credits in 2017 (as previously announced) are expected to be similar to this year's at $1.55/lb and net cash cost are expected to be approximately $1.30/lb.
· Further cost savings of $140 million under the Cost and Competitiveness Programme are included in the unit cost guidance figures
· Capital expenditure for 2017 is estimated at less than $900 million with some $100 million carried over from 2016