Antofagasta reports decent first-half growth

(Sharecast News) - Copper-focussed miner Antofagasta reported significant first-half growth and progress in various sectors on Thursday, with revenue rising 14.3% year-on-year to $2.89bn. The FTSE 100 company put the growth down to higher copper and by-product sales volumes, coupled with enhanced realised by-product prices.

EBITDA saw a rise of 7.5% from the same period last year, reaching $1.33bn, while its EBITDA margin stood at 46.1%, a slight dip from 49% a year earlier.

There was a significant achievement in its 'cost and competitiveness programme', resulting in savings and productivity enhancements worth $60m in the period.

Profit before tax stood at $765m, making for growth of 12.5%, while the company said it maintained a robust balance sheet, with a net debt-to-EBITDA ratio of 0.27x at the end of the half-year.

Copper production increased 10% year-on-year to 295,500 tonnes, which the board said was majorly due to a 23.9% rise in throughput at Los Pelambres.

Cash costs before by-product credits reached $2.48 per pound, increasing 4.6% from the first half of 2022, due to higher input costs and appreciation of the Chilean peso.

Looking ahead, Antofagasta noted that its updated production guidance had been set at between 640,000 and 670,000 tonnes, reflecting its anticipated output increment in the second half.

The company's full-year cash costs before by-product credits were expected to be around $2.30 per pound, while its capital expenditure guidance remained unchanged at $1.9bn.

"The first half of the year delivered another strong safety performance across all our operations," said chief executive officer Iván Arriagada.

"We continue to operate fatality free, and both leading and lagging indicators of safety are at a level ahead of last year.

"Our financial metrics over the period were also strong; revenue was 14.3% higher due to higher copper, gold and molybdenum sales volumes and higher realised by-product prices, partially offset by a 3.4% decline in copper prices."

Arriagada said the company was focussed on cost control through its 'cost and competitiveness programme', which so far this year had delivered $60m in savings and productivity improvements, achieving the firm's goal of $60m of savings for the full year.

"EBITDA was 7.5% higher and profit before tax was 12.5% higher than last year.

"Earnings per share came in at 33.5 cents, which is an increase of 26.9% compared to last year.

"Looking ahead to the second half of the year, we expect the desalination plant will continue to ramp-up to its design capacity, which will allow increased throughput at Los Pelambres, supporting the delivery of our production and cost guidance."

Reporting by Josh White for Sharecast.com.