Antofagasta's first-half profits fall as expected

Copper miner Antofagasta reported a 7% drop in half-year profits as higher prices were offset by falling volumes and higher depreciation and amortisation, though the bottom line came in slightly ahead of market forecasts.

Pre-tax profit totalled $712.6m, down from $764.5m the year before but above the consensus forecast of $710.6m.

The company saw increased depreciation and amortisation, mainly due to the start of depreciating the assets at the Los Pelambres Phase 1 Expansion project, which is now in operation.

The headline profit figure also included an exceptional fair-value gain of $51m related to its recent investment in Peruvian base metals operator Buenaventura. Excluding this one-off gain, pre-tax profits would have been down 13% year-on-year at $661.6m.

While copper sales volumes were 6% lower than last year while gold volumes sank 23%, realised prices of both commodities increased 10% and 16% respectively, leading to a 2% uplift in revenues in the first half to $2,955m, more or less in line with forecasts.

Looking ahead, the miner reaffirmed full-year production guidance for output to be at the lower end of the 670,000-710,000 tonne range.

Cash cost guidance was also maintained, with after by-product credit costs expected at $1.70 a pound, down from $1.60 previously.