Antofagasta profit rises as higher copper sales offset lower prices

In the six months to the end of June, earnings before interest, taxes, depreciation and amortisation increased 44% to €1.3bn on revenue of €2.5bn, up 19.1% as group copper production pushed up 22.2% to 387,399 tonnes, with higher production at all operations. This helped to offset a 6.3% drop in realised prices.

Pre-tax profit rose to $763m from $465.6m and the EBITDA margin came in at 51.7%, up from 42.6% in the first half of last year as unit production costs fell.

The company said its Cost and Competitiveness Programme continues to deliver benefits, helping to yield a cost saving of 7 cents a pound in the first half of the year and reducing its net cash costs by 33c/lb to $1.19/lb.

Antofagasta left its guidance for the full year unchanged. It continues to expect copper production of 750,000 to 790,000 tonnes, while capital expenditure guidance remains at $1.2bn.

Chief executive officer Ivan Arriagada said he expects the rate of copper production to continue into the second half of the year, which should be "another year of record copper production".

"While the outlook for the copper market remains uncertain with the protracted negotiations between the USA and China impacting global trade, Antofagasta continues to be in a strong position generating solid cash flows and improving returns. We have the assets, capabilities and disciplined capital allocation strategy that allow us to deliver long-term value for all our stakeholders even in a challenging external macro environment."