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Antofagasta PLC on Thursday slashed its interim dividend as lower copper prices and operational strife hit the Chilean miner's first-half outturn.
For the six months to June 30, revenue dropped 30% to $2.53 billion from $3.59 billion a year before, due to lower copper and by-product sales volumes, and lower realised prices.
Pretax profit was down 62% to $679.6 million from $1.79 billion.
Earnings before interest, tax, depreciation and amortisation fell 48% to $1.24 billion from $2.36 billion, reflecting ‘lower revenue and higher cost of sales which increased by 6.9%,’ the company explained.
Chief Executive Officer Ivan Arriagada said: ‘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.
‘Sales volumes during the period were lower as were copper prices and this is reflected in the 30% decline in revenue. As we previously announced, with the fall in production and higher input prices, cash costs were higher.’
The miner declared an interim dividend of 9.2 US cents, down 61% from 23.6 cents paid out last year.
Looking ahead, Antofagasta reiterated 2022 copper production is expected to land around 640,000 to 660,000 tonnes.
Turning to its growth projects, Antofagasta said that following the completion of a detailed review of the Centinela second concentrator project, the capital cost estimate has been revised to $3.7 billion, up from $2.7 billion in the 2015 pre-feasibility study.
This estimate includes a new water system, and the increase reflects design changes, inflation, heightened environmental and other regulatory requirements, and the results of advanced engineering and a more detailed execution plan. The decision on whether to proceed with the project is scheduled for early 2023, Antofagasta added.
‘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 Arriagada.
‘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.’
Shares were down 1.7% at 1,173.00 pence on Thursday morning in London.
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