Tuesday preview: Antofagasta reveals annual results

Copper mining company Antofagasta unveils its 2012 financial results on Tuesday, following its strong fourth-quarter production released earlier in the year.

Copper mining company Antofagasta unveils its 2012 financial results on Tuesday, following its strong fourth-quarter production released earlier in the year.

The company's output increased 7.8% to 193,800 tonnes quarter-on-quarter, driven by production at Los Pelambres and Esperanza, according to a trading update on January 30th.

However, analysts at Investec warned in February that the firm faces "near-term declining production and rising costs".

"[...]we feel that with declining production and falling grades leading to rising costs the company is fundamentally overvalued," the broker said last month, issuing a 'sell' rating for the company's stocks and a target price of 958p.

Investec estimates revenues of $6.58bn compared to $6.0bn in 2011. Pre-tax profits are pegged at $3.3bn, up from $3.0bn. Earnings per share are expected to come in at $1.41, up from $1.26 previously.

"The company has a strong balance sheet and does not face financial distress," Investec added.

"However, we need to see a clearer path to growth to justify a higher valuation. Although should copper prices rally, then [Antofagasta] will respond similarly. [Antofagasta] is thus heavily dependent on the copper price to deliver share price upside."

Shares rose in Monday afternoon trading ahead of the results.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Consumer Price Index (GER) (07:00)

Treasury Budget Statement (US) (19:00)

GMS

Namakwa Diamonds Ltd. (DI)

FINALS

Antofagasta, Greka Drilling Ltd (DI), SDL, Stadium Group, Tyman

ANNUAL REPORT

Ladbrokes

EGMS

Atlantis Japan Growth Fund Ltd.

AGMS

Interbulk Group

TRADING ANNOUNCEMENTS

Inchcape

UK ECONOMIC ANNOUNCEMENTS

Industrial Production (09:30)

Manufacturing Production (09:30)

UK Trade (09:30)

RD

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