Chile-focused copper miner Antofagasta Plc. (ANFGY.PK, ANTO.L) Tuesday said full-year profit declined from the prior year, as revenues were hit by falling prices for copper. Further, the company reduced its final dividend, and added that its production forecast looks uncertain due to protests at a key mine. The stock fell over 3 percent in early trade.
Attributable profit fell to $459.8 million from $659.6 million. Basic earnings per share in US cents was 46.6, compared to 66.9 last year. Excluding a $142.2 million deferred tax provision, net earnings fell 8.7 percent to $602.0 million.
Profit before tax decreased 24.5 percent to $1.57 billion from $2.08 billion in 2013.
Earnings Before Interest, Tax, Depreciation and Amortization or EBITDA dropped 17.8 percent to $2.22 billion, as a result of lower revenue and an increase in cash costs offset by lower exploration and evaluation costs.
Revenue declined 11.4 percent to $5.29 billion, mainly reflecting an 8.5 percent decrease in the realized copper price as well as lower copper sales volumes and reduced gold by-product revenues.
Turnover from copper sales decreased 12.2 percent to $4.39 billion, due to the impact of lower realized prices, and also lower sales volumes and increased tolling charges. Copper production declined 2.3 percent to 704,800 tonnes owing mainly to lower grades at the Los Pelambres mine.
Gold and molybdenum production were also lower at 270,900 ounces and 7,900 tonnes, respectively. Turnover from by-products decreased 7.2 percent to $595.0 million in 2014.
The Board of Antofagasta has recommended a final dividend for 2014 of 9.8 US cents per ordinary share. This gives total dividends for the year of 21.5 cents, including the interim dividend of 11.7 cents.
In 2013, total dividends were 95.0 cents, comprising interim dividend of 8.9 cents and final dividend of 86.1 cents.
Earlier this month, Los Pelambres witnessed some protests from local communities, and last week, it reached an agreement to resolve the protest actions. Normal operations are expected to be resumed in the coming days.
Further the company said, "Given the current uncertainties at Los Pelambres, the Company will keep the amount of future dividends under close review until it has greater clarity as to the resolution of these matters."
Antofagasta noted that the new year started with a rapid drop in copper price and although there has been some recovery since then, the outlook for 2015 is for price volatility to continue.
However, if the Chinese economy grows at the expected rate of 7 percent, it now appears more likely that the copper market will be largely in balance rather than in surplus as was expected a few months ago, the miner said.
The company's forecast issued in January projected production of 710,000 tonnes of copper, 250,000 ounces of gold and 8,000 tonnes of molybdenum. The copper production forecast comprised 385,000 tonnes at Los Pelambres, 255,000 tonnes at Centinela, 30,000 tonnes at Michilla and 40,000 tonnes at Antucoya.
But, local protests has reduced expected copper production at Los Pelambres by some 8,000 tonnes of copper. These protests, along with an adverse ruling from the Civil Court of Los Vilos, mean there is some inherent uncertainty as to the potential impact on Los Pelambres' 2015 production levels, Antofagasta said.
ANTO.L fell 3.6 percent in early trade to 681.50 pence.
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