Antofagasta Earnings Badly Impacted by Diving Copper Prices

SEATTLE (Scrap Monster): Chile-based Antofagasta plc. saw its earnings take a hit due to decline in copper prices. The company’s copper production too declined, mainly on account of Covid-19 pandemic uncertainties.

The company reported net profit of $135.2 million for the six months ended June 30, 2020. This is down significantly when compared with $302.4 million during the similar six-month period in 2019. The revenue posted 15.3% dip to $2,139 million. The EBITDA margin fell from 51.7% in H1 2019 to 47.4% in the first half of 2020. The earnings per share including exceptional items dipped from 30.7 cents to 13.7 cents.

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The Group reported copper production of 371,700 tonnes during the first six months of the year. The production was down by 4% from the previous year, mainly due to lower grades, particularly at Centinela Concentrates. Further, it guided the 2020 copper production at the lower end of the earlier guidance of 725,000-755,000 tonnes. Also, the capital expenditure for the year is likely to be lower than $1.3 billion.

Commenting on the results, Ivan Arriagada, CEO, Antofagasta plc noted that the 12.5% lower realised copper price has significantly impacted the company’s revenue. Despite severe market challenges, the company was able to report strong operating and cost performance, he added.