Antofagasta shares slide 5.0% as it cuts guidance for copper production

Antofagasta plc (LON: ANTO) noted an annualised growth in its profit and revenue in the fiscal first half on Thursday. Shares of the company, however, tanked about 5% this morning as the mining company slashed its forecast for copper production this year.  

Full-year guidance for copper production

Antofagasta said it expects to produce up to 740,000 metric tons of copper this year. The upper end of the previous guidance stood at 760,000 tons instead. The trimmed guidance was related to the FTSE 100 company’s Los Pelambres project that continued to see low levels of precipitation weighing on its processing ability.

“We have now had 12 years of drought, and the precipitation in 2021 has so far been less than in 2019, which itself was one of the driest years on record,” the company said in a statement.

H1 financial performance

Antofagasta reported $665.3 million of net profit in H1 versus the year-ago figure of $135.2 million. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at $2.36 billion – an increase from $1.01 billion last year.

The Chile-based firm generated $3.59 billion in revenue in the fiscal first half. In the comparable period of last year, its revenue was capped at $2.14 billion. According to FactSet, however, analysts had forecast an even higher $3.69 billion in revenue for H1.

In separate news, peer Rio Tino partnered with the Western Australian government on Thursday to launch COVID-19 vaccination programmes.

The board lifted dividend to 23.6 cents a share

The board declared 23.6 cents per share of an interim dividend on Thursday versus 6.2 cents a share in the first half of the previous year. According to CEO Ivan Arriagada:

“We have seen strong copper demand and prices at multi-year highs over the first half of this year which has contributed to the robust financial performance of the Group.”

In April, Antofagasta said its copper sales were down 9.6% in the first quarter.