Major copper miner Antofagasta, listed on the London Stock Exchange and based in Chile, has revealed preliminary results for last year that are down on the results for 2013, but which the company regards as respectable, given the decline in market conditions. The 2014 preliminary results report is entitled ‘Steady Operating Performance in a Weaker Market’. The company has issued a final dividend for the year of 9.8 cents a share, which is a pay-out ratio of 35% for 2014 and is in line with its stated dividend policy.

“I am pleased to report that Antofagasta’s operating performance in a year of falling copper prices continued to be solid and steady,” wrote CEO Diego Hernández in the preliminary results report. “With our focus on managing costs across our operations, helped by consolidating the Centinela district among other innovative initiatives [Centinela was created by merging the previously separate Esperanza and El Tesoro operations], the impact of lower revenue to operating cash flow was reduced. This reflects the underlying health of the business as does the strong Ebitda [Earnings before interest, taxes, depreciation and amortisation] margins of 42%, which are among the highest of our peers. Our strong balance sheet means that we can continue to invest throughout the cycle and we have a portfolio of high organic growth projects in the pipeline to secure our future.”

Total copper production was 704 800 t, which was a 2.3% decline, compared with the previous year – but 2013 set a production record. The fall was largely due to lower grades mined at the Los Pelambres mine. Cash costs (prior to the credits for the by-products also extracted by the company) were $1.83/lb, which was 2.2% up on 2013. However, the main cause was a one-off payment of signing bonuses at all mining operations as a result of the finalisation of con-tract negotiations with the workers. A weaker peso and lower input costs offset this expense in part.

Revenues last year, at $5 290.4-million, were 11.4% down on 2013 because realised copper prices declined by 8.5% and because sales volume fell slightly. Ebitda was also down, by 17.8%, coming to $2 221.6-million owing to the lower revenues and a rise in cash costs. However, the latter was offset by a fall in the costs of exploration and evaluation. Net earnings, at $602-million, declined 8.7%, as a consequence of the fall in Ebitda and a rise in depreciation, mainly at the Centinela and Michilla operations, of $88.3-million. However, these net earnings exclude a $142.2-million deferred tax provision that stems from Chilean tax law changes which took place last year. If this deferred tax provision is included, net earnings fell by 30.3% to $459.8-million. Earnings per share were 61 cents, if the deferred tax provision is excluded; if it is included, earnings per share come to 46.6 cents. An operating cash flow of $2 507.8-mil- lion was generated, which amounted to a fall of $151.4-million, compared with 2013. Even so, Antofagasta’s balance sheet is still strong, with (as of December 31, 2014) attributable net cash of $315.4-million; the net debt of the group was (on that same day) $1.6-million.

“Although we remain cautious on the macroenvironment for 2015,” wrote Hernández, “Our strategy for Antofagasta remains unchanged: we are focused on engaging with all our stakeholders to find solutions to long term issues reinforcing our licence to operate and we concentrate on doing what we know best – producing copper, reducing costs and building a platform for long term growth across the cycles.”