Antofagasta blames falling copper production for drop in profits
London-listed miner Antofagasta blamed inflation, weak copper prices and production problems for its hefty drop in earnings last year, with revenues and profits falling 22 and 26 per cent respectively.
The FTSE 100 firm reported that revenues had fallen from $7.5bn to $5.9bn over the past 12 months, while profits had slumped from $3.5bn to $2.6bn over the same period.
The Chile-focused mining giant suffered a 12 per cent decrease in copper sales to 642,500 tonnes from 725,600 tonnes, alongside a 12 per cent decline in realised copper prices.
Meanwhile, copper production fell 15 per cent to 646,200 tonnes, gold output dropped 30 per cent and molybdenum was down eight per cent.
It also chopped its full-year dividend by 58 per cent to 59.7 cents per share.
Chief executive Ivan Arriagada said “the expected continuing drought in Chile and the effects of increased input prices, and the pipeline incident at Los Pelambres” had all contributed to the fall in production across the board.
The firm is still struggling to resolve issues with an underground pipeline at Los Pelambres, which transports concentrate from the plant to the port at Los Vilos, meaning work at the development has stalled.
Antofagasta, however, now expects 2023 copper output to be between 670,000 tonnes and 710,000 tonnes; and gold between 220,000 ounces and 240,000 ounces.
“All this is supported by copper’s fundamentals which remain strong, with China showing signs of recovery and with the energy transition underpinning the long-term demand for copper,” Arriagada said.
Antofagasta shares were down 2.2 per cent on the London Stock Exchange this morning following the announcement, trading a 1,722p per share.