Antofagasta's revenues rise on back of record copper output

Copper mining heavyweight Antofagasta reported on Tuesday a 10.9 per cent rise in 2012 revenues driven by a year of record production.

Group revenues jumped to $6.74bn from $6.07bn, beating the estimate by analysts at Investec of $6.5bn.

Earnings before interest, tax, depreciation and amortisation also exceeded expectations as the company posted a 4.6% year-on-year increase to $3.8bn.

During the year the company achieved record production of just under 0.71m tonnes, up 11% from 2011 and ahead of forecasts.

The firm's Esperanza mine contributed a major chunk of the overall output, reaching 89,000 tonnes per day in the fourth quarter, compared with 70,000 per day in the first quarter.

Antofagasta rewarded shareholders with a total dividend of $0.98 per share, more than double the year before. It includes a special dividend of $0.77 per share and ordinary dividend of $0.21 per cent.

Newly appointed Chief Executive Officer, Diego Hernandez, said 2012 was an important year for the group in strengthening its position for future opportunities.

"I have now been with Antofagasta for just over seven months, and during that time I have been able to get a clear view of the group's key strengths and opportunities," he said.

"Firstly the quality of the group's existing assets and its people provides an extremely strong base for our future development. Secondly, we have very significant and high quality growth opportunities - both in terms of optimising and expanding our existing operations, and also our potential for further green field development.

"...I am looking forward to playing a part in the next stage of the group's development, and I am sure that the next few years will be an exciting and significant period for the group."

Looking ahead, copper production is anticipated to reach 700,000 tonnes this year, broadly in line with 2012.

An increase in production at Esperanza, due to higher average plant throughput levels, is expected to be offset by a decrease in grades at Los Pelambres.

Copper prices will weigh heavy on results in the year ahead, with average forecasts at $3.65 per pound for 2013.

The resource has traded within a range of between $3.50 to $3.70 per pound since the year-end.

"There continues to be a tight market with relatively low levels of visible stocks," the company said in a statement.

"Although additional production is expected to come on-stream in 2013 we remain positive on the longer-term fundamentals of the copper industry and expect an increase in demand growth in both China and the United States."

RD