Antofagasta share price: Miner posts full-year results

Antofagasta Plc (LON:ANTO) today published its financial results for the year ended December 31. Highlights provided below, with more to follow:

**Antofagasta plc CEO Diego Hernández said:** “I am pleased to report that Antofagasta’s operating performance in a year of falling copper prices continued to be solid and steady. With our focus on managing costs across our operations, helped by consolidating the Centinela district among other innovative initiatives, the impact of lower revenue to operating cash flow was reduced. This reflects the underlying health of the business as does the strong EBITDA margins of 42% which are among the highest of our peers. Our strong balance sheet means that we can continue to invest throughout the cycle and we have a portfolio of high quality organic growth projects in the pipeline to secure our future.
“Although we remain cautious on the macro environment for 2015, we are pleased to announce a final dividend of 9.8 cents per share, which is in line with our stated dividend policy. Our strategy for Antofagasta remains unchanged: we are focussed on engaging with all our stakeholders to find solutions to long term issues reinforcing our licence to operate, and we concentrate on doing what we know best – producing copper, reducing costs and building a platform for long term growth across the cycles.”
**Financial performance:** Revenue at $5,290.4 million was 11.4% lower than in 2013 as realised copper prices fell by 8.5% during the year accompanied by a small decline in sales volumes; EBITDA fell 17.8% to $2,221.6 million, as a result of lower revenue and an increase in cash costs offset by lower exploration and evaluation costs; EBITDA margin remains strong at 42.0%, though marginally down on last year’s margin of 45.3%; Net earnings fell 8.7% to $602.0 million, excluding the $142.2 million deferred tax provision resulting from the changes in the Chilean tax law during 2014 (decrease of 30.3% to $459.8 million including this deferred tax provision). The decrease is primarily due to the decrease in EBITDA and a $88.3 million increase in depreciation, principally at Centinela and Michilla; Earnings per share for the year were 61.0 cents, excluding the deferred tax provision resulting from the changes in the Chilean tax law (1) (46.6 cents including this provision); Operating cash flow generation was $2,507.8 million in the period, $151.4 million lower than in 2013; Group balance sheet remains strong with attributable net cash at 31 December of $315.4 million. Group net debt was $1.6 million at 31 December 2014; Final dividend of 9.8 cents per share, representing a pay-out ratio for the year of 35%.
**Operational performance:** Copper production of 704,800 tonnes, was 2.3% lower compared with the record production achieved in 2013 mainly due to lower grades at Los Pelambres; Cash costs before by-product credits at $1.83/lb were 2.2% higher than in 2013 primarily due to one-off signing bonuses paid following the conclusion of labour contract negotiations at all of the Group’s mining operations and which will be in effect for up to four years, but which according to applicable accounting policies are expensed when paid. This was partially offset by a weaker peso and lower input costs; Los Pelambres – as previously announced, local protests during February and March 2015 disrupted production, resulting in lost production of 8,000 tonnes of copper, and Pelambres will work to mitigate this impact over the rest of the year. In addition, as also previously announced, in March 2015 the Civil Court of Los Vilos, in considering a work plan submitted by Los Pelambres in order to comply with a decision of the Supreme Court, considered the plan to be insufficient, ordering the partial or total destruction of the El Mauro tailings dam wall. Los Pelambres considers the ruling of the Civil Court of Los Vilos to be flawed, has appealed the Court’s decision and is considering the exercise of all available legal measures that may be required to overturn this decision and address its potential consequences. The Group is working to fully resolve these issues, but there is some inherent uncertainty as to the potential impact of these matters on 2015; Net cash costs at $1.43/lb were 5.1% higher than in 2013 reflecting the higher cash costs before by-product credits, and lower gold production and realised gold prices at Centinela.
As of 07:22 GMT, Tuesday, 17 March, Antofagasta plc share price is 707.00p.