Berenberg reiterates sell on Antofagasta

Whereas Antofagasta had been guiding towards full-year 2016 copper production of between 710 to 740kt, the end result was likely to be 708kt, down from a previous forecast for 713kt, analysts Fawzi Hanano, Yuriy Vlasov and Alessandro Abate said in a research report sent to clients on 11 July.

Hence, they believed it "possible" the company would downgrade its guidance for copper output when it released its second quarter production report on 27 July, with a narrowing of the band towards the lower end of the range as a likely outcome.

The main sticking point was at the company´s Centinela operations, which had produced 81.2kt ytd, the analysts added, versus annual guidance for between 235 to 250kt.

Efforts to raise daily throughput at the Centinela concentrator from the its original design capacity of 97ktpd to 105ktpd should see production increase in the backhalf of 2016, but the company´s guidance "may not be achievable this year."

Following on from all of the above, the team of analysts from Berenberg reduced its 2016 estimates for the company and were now projecting EBITDA down 1.3% to $993m and a decline in earnings per share of 5.3% to $0.08 per share.

Those were below the then current Bloomberg consensus of $1,111m for EBITDA and $0.13 for EPS.

Berenberg reiterated its 'sell' recommendation on the shares while keeping its target price unchanged at 370p.