Antofagasta hit by slide despite bumper payout
CHILEAN copper miner Antofagasta briefly delighted the market yesterday with a better-than-expected dividend, but a decline in full-year revenue and earnings took the shine off results.
The FTSE 100-quoted company issued a final dividend of 86.1 cents per share, bringing the total dividend for the year to 95 cents per share. This represents a total pay-out of $936.6m.
But revenue was 11.4 per cent lower at $5.97bn, due to the falling price of copper last year.
The average realised copper price fell by 10.6 per cent during the period.
Earnings fell by 30.1 per cent to $2.7bn, with record copper production offset by the lower metal prices and higher costs.
“There is no doubt that this has been a challenging year with weaker commodity prices and higher costs, particularly energy,” said chief executive Diego Hernandez.
“In this environment we are focused on resetting our cost base and optimising our operating assets, while continuing to invest in the future.”
In 2014, the company expects production to remain relatively flat, with profitability dependant on the volatile copper price.
“[The dividend] is well above expectations and clearly reflects a desire to return surplus cash to shareholders given the strong balance sheet,” said Marc Elliott, analyst at Investec.
“However, we continue to see the shares as fundamentally overvalued, particularly given the current volatile copper pricing environment.”
Shares closed down 2.24 per cent.