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Chile-based copper miner Antofagasta saw earnings per share (EPS) come in a smidgen ahead of expectations in the first half as a decrease in copper prices was offset by higher levels of production. EPS for this six months to June 30th were 65.5 US cents, 7.2% under the 70.6 cents reported the year before but slightly ahead of consensus forecasts of 65.0 cents. Credit Suisse had estimated EPS of 63 cents. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 5.4% from $1,946.7m to $1,841.4m. Nevertheless, cash costs (as already guided to) - a concern for most mining heavyweights in the industry as of late - actually decreased by 6.3% from 105.6 to 98.9 cents per pound (net of by-product credits). Revenue rose by 3.5% from $,3054.3m to $3,160.8m, with rising volumes outweighing a 13.8% fall in the average copper price (from 426.3 to 367.3 cents per pound). As already announced earlier this month, copper production rose by 16.5% year-on-year to 336,000 tonnes, mainly due to increased production from Esperanza which had started operation at the start of 2011. Gold production meanwhile almost doubled to 136,100 ounces, again due to the improvement at Esperanza. The group has maintained its full-year production forecast of around 700,000 tonnes of copper, as well as 280,000 ounces of gold and 11,000 tonnes of molybdenum.
Positive Points: The results proved to be broadly in line with analyst expectations. Copper production rose by 16.5% to 336,000 tonnes. Gold production almost doubled to 136,100 ounces, again due to the increase in Esperanza production. Management’s forecast production for the full year remains at approximately 700,000 tonnes of copper, as well as 280,000 ounces of gold and 11,000 tonnes of molybdenum. This increase in low-cost production from Esperanza has allowed Antofagasta to maintain a relatively stable cash cost position, within the context of an industry environment which remains tight. The gold price averaged at US$1,651 per ounce in H1 2012, a 14% increase on the average price during the first six months of 2011 of US$1,445 per ounce. Gold currently accounts for just over 6% of total group revenue. The Water division achieved a 7.0% increase in volumes, at 25.7 million cubic metres in the first half of the year. At 30 June 2012 the net cash balance of the company was US$1.345 billion (31 December 2011 - US$1.14 billion). Total Group borrowings were US$2.0 billion (31 December 2011 - US$2.14 billion). A 6.3% increase in the half year dividend was announced compared to the year before. As in previous years, the appropriate overall pay out level for the year, including any special dividends, will be determined at the year-end.
Negative Points: The copper price averaged 367 cents per pound in the first half of 2012, compared with 426 cents in H1 2011. After starting the year at 343 cents, the price rose to above 380 cents for much of February and March. However, the price fell significantly during May, and was 345 cents at 30 June 2012. The group has exposure to volatile copper prices. With approximately 80% total group revenue related to copper, any change in copper prices has a significant impact on the performance of the miner. The copper price remains something of a barometer for the health of the global economy. The company previously made a sharp cut to its dividend payment. For the Transport division, total volumes transported were 3.9 million tonnes compared with 4.1 million tonnes in the first half of 2011. During the period, the group's mining revenues included US$571.6 million related to one large customer that individually accounted for more than 10% of the Group's revenues. During 2012 the Chilean Congress has studied a bill that increases the rate of first category tax in 2013 from the previously expected 17% to 20%. This still requires final parliamentary and presidential approval. If passed the change is expected to be applied retrospectively with effect from 1 January 2012.
Financial Highlights: Group revenue rose by 3.5% to $3.16 billion. Adjusted profits (Earnings Before Interest, Tax and Amortization – EBITDA) declined by 5.4% to $1.84 billion. Earnings per share fell by 7.2% to 65.5 US cents per share. The half year dividend increased by 6.3% to 8.5 US cents per share.
Half year results: Increased production helps offset a falling copper price at Antofagasta. The figures proved to be broadly in line with analyst expectations. Increased group production helped to offset the fall in average market copper prices, with the result that group revenue expanded by 3.5% to $3.16 billion. Group core copper production rose by 16.5% to 336,000 tonnes, predominantly due to increased production at its Chilean Esperanza mine, which had commenced operation at the start of 2011, as well as increases at Los Pelambres and El Tesoro. Gold production almost doubled to 136,100 ounces, again due to an increase at Esperanza. Nonetheless, with the London Metal Exchange copper price averaging 367 cents per pound in the first half of 2012, compared with 426 cents in first half of 2011, and higher exploration and evaluation expenditure, profits declined. On balance, with expanded group production weighing against concerns for the global economic outlook,
Company overview The Group's key activities are the operation of 4 major copper mines, (Los Pelambres, Esperanza, El Tesoro and Michilla) the transportation of copper cathodes down from the mines and sulphuric acid back up to the mines by rail and road freight and a concession allowing the distribution of water within the Antofagasta region in Chile. The Group has operations in the United Kingdom, Chile, Peru and Bolivia. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Outlook Copper and gold have remained relatively stable since the period end, with copper continuing to trade around the 340 cents per pound level, and gold at just over US$1,600 per ounce. The molybdenum price continued to decline in July and August, decreasing from US$13 per pound at 30 June 2012 to just under US$11 per pound in mid-August. While the copper price has declined by more than 10% since the end of April, it has found good support at around the 330 - 340 cents per pound level, indicating relatively robust demand to provide support for the price at levels well above the current industry marginal cost of production. The industry fundamentals remain strong over the medium term, with the supply-side remaining relatively constrained. The Group's forecast for 2012 full year production remains as approximately 700,000 tonnes of copper, 280,000 ounces of gold and 11,000 tonnes of molybdenum. Esperanza production is expected to be at the lower end of the original forecast range, but this is expected to be offset by production at Los Pelambres and El Tesoro being marginally higher than originally forecast. The forecast for 2012 full year weighted average pre-credit cash costs also remains unchanged at 165 cents per pound. Average net cash costs are now expected to be approximately 110 cents per pound compared with the original forecast of 105 cents, mainly due to lower gold market prices.
Diego Hernandez, Chief Executive Officer of Antofagasta Minerals S.A. commented: "The Group's performance in the first half of 2012 has underlined the quality of the Group's asset base. We have continued to deliver strong volume growth, with copper production increasing by 16.5% to 336,000 tonnes, and gold production almost doubling to 136,100 ounces. These increases are primarily due to increased production from Esperanza, which had been ramping-up during the first half of 2011, along with continued strong performance from our other existing operations. This has allowed us to generate increased revenues of US$3,160.8 million, despite a decrease in average copper market prices. This increase in low-cost production from Esperanza has also allowed us to maintain a relatively stable cash cost position, within the context of an industry environment which remains tight. We have also continued to make good progress with our strong organic pipeline, predominantly within Chile, which has the potential to significantly increase the scale of the Group over the course of this decade. I am delighted to have taken on the role of Chief Executive Officer of Antofagasta Minerals S.A. from 1 August 2012. I am looking forward to helping the Group to realise the great potential from its current operations and strong pipeline of growth projects."
http://www.investegate.co.uk/Article.aspx?id=201208290700129444K
"On the face of it Serco's H1 [first half] results should not be flattering, but we believe the reasons for this have already been well flagged with the underlying growth/margin story firmly intact. We remain fans of the business and continue to believe the company is well placed to benefit from increased outsourcing activity in the UK market," said Panmure Gordon. The broker is forecasting revenues of £2,330.5m, up 3.8% year-on-year but with the improvement entirely due to new acquisitions; on a like-for-like basis, the broker thinks sales will have shrunk by 2%. Panmure Gordon predicts the underlying earnings before interest, tax and amortisation will be down 7.0% year-on-year (yoy) to £124.4m, while underlying profit before tax is seen tumbling 19.6% to £99.4m. "The anticipated YOY drop in EBITA should be purely driven by the £15m re-structuring charge taken above the line as indicated with underlying margin growth progressing as flagged (we anticipate these to be 6.3% vs. 6.0% last year ex re-structuring)," the broker said. Despite the fall in profits, Panmure Gordon thinks the interim dividend will be lifted to 2.8p from 2.5p. Peel Hunt thinks online gaming firm 888's interim results will show growth over the first half of 2011 but the second half of the year is likely to be more challenging, "given the investment in newly regulated markets and the potential disruption of the Olympics."
Chilean copper miner Antofagasta must have been thanking its lucky starts it operates in South America rather than South Africa, given the trials and tribulations the likes of sector peers Lonmin and Aquarius Platinum have been suffering lately. The group already updated the market at the beginning of August with its production and cash costs numbers, so the focus will be on earnings. Credit Suisse is forecasting half-year earnings per share of 63 cents, versus a market consensus forecast of 65 cents and a first-half of 2011 number of 71 cents. The projected year-on-year decline is largely down to lower copper prices, although this will have been offset some by improved copper production levels. Credit Suisse expects the firm's new Chief Executive Officer, Diego Hernandez, to present his master-plan for the group, "which over time will need to include project phasing, funding strategy and value proposition of new projects." Updates from out-sourcers have been coming thick and fast over the last week and on Wednesday Serco weighs in with its interims.
Canaccord Genuity maintained its "buy" rating for Antofagasta (ANTO) with an increased target price of 1,495p, up 15p. The Chile focused miner impressed the broker with second quarter production costs of 99 cents (63.7p) per pound of copper against an expected 105 cents (67.6p). However, with production coming slightly lower that anticipated, Canaccord reduced its full year copper production target to around 703 thousand tonnes. The broker noted that the shares trade on a prospective EV/EBITDA multiple of 4.5 times, towards the lower end of its historic 2 to 9 range. The shares tumbled by 52p to 1,046p.
Quarterly Production Report Q2 2012 1 August, 2012 Highlights · Group copper production was 173,200 tonnes in Q2 2012 and 336,000 tonnes in H1 2012, a 6.3% increase compared with the previous quarter and a 16.5% increase compared to H1 2011. This was mainly due to increased production at Esperanza as a result of higher throughput levels following the start of operations in 2011. · Copper production for the 2012 full year is still expected to be approximately 700,000 tonnes. · Gold production was 72,600 ounces in Q2 2012 and 136,100 ounces in H1 2012 compared with 63,500 ounces in the previous quarter and 70,700 ounces in H1 2011 reflecting the higher throughput at Esperanza explained above. · Molybdenum production at Los Pelambres was 3,400 tonnes in Q2 2012 and 6,500 tonnes in the first half of 2012. The 35.4% increase in production in H1 2012 compared to H1 2011 reflects higher ore grades. · Group cash costs (net of by-product credits) in Q2 were 99.3 cents per pound, broadly in line with the previous quarter's costs of 98.1 cents per pound. Cash costs excluding by-product credits decreased to 158.2 cents per pound in Q2 2012 compared with 163.6 cents per pound in the previous quarter mainly reflecting the impact of higher production on unit costs at Los Pelambres and Esperanza partly offset by expected higher costs at El Tesoro.This was offset by lower by-product credits. · Group cash costs (net of by-product credits) in the first half of 2012 were 98.9 cents per pound, a 6.7 cent per pound decrease compared with 105.6 cents per pound in the first half of 2011. This decrease mainly reflected an increase in by-product credits as a result of the higher gold production at Esperanza as well as to a lesser extent increased molybdenum production at Los Pelambres. · Closing of the agreement with Marubeni for its 30% interest in the Antucoya project was achieved on 31 July 2012. As of 30 June 2012 the overall project progress was 12% complete and the main EPC contracts had been executed.
Positive Points: At the end of March, Antofagasta's cash and cash equivalents position rose 8.2% on quarter to $3.29 billion. Antofagasta benefited from a 26% year on year rise in copper production, largely driven by the ramp up of its Esperanza gold and copper mine. Antofagasta is one of the most important conglomerates in Chile with equity participation in Antofagasta Minerals, the railroad from Antofagasta to Bolivia, and other investments worldwide. The miner maintains a good safety record. Antofagasta Minerals is also active in mineral exploration in Chile and Peru. In addition, the group runs an extensive railway network in north of Chile, centered in the port of Antofagasta.
Negative Points: The group encountered a 12.9% decrease in copper production compared with the final quarter of 2011, mainly due to planned maintenance and expected lower grades at Los Pelambres and lower throughput at Esperanza in February and March. The group has exposure to volatile copper prices. With approximately 80% of group sales related to copper, any change in copper prices has a significant impact on the performance of the miner. The company's share price could suffer if global demand for commodities slows. Chile lies along a major earthquake fault line.
Financial Highlights: Group EBITDA of $1.1 billion, compared with year-ago quarter's $811.9 million was reported. Group revenue for the latest quarter climbed 39% to $1.76 billion from $1.27 billion in the same period in 2011, mainly reflecting increased copper and gold volumes and increased gold prices. At 31 March the Group had cash, cash equivalents and liquid investments of US$3.5 billion (31 December 2011 - US$3.2 billion). Total Group borrowings at 31 March were US$2 billion (31 December 2011 – US$2.1 billion).
Quarterly results: Chilean miner Antofagasta reported a rise in earnings, largely due to higher copper volumes which more than offset higher costs. Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 35% in the year to $1.1 billion after revenue rose 39% to $1.76 billion. The company benefited in the first quarter from a 26% rise in copper production to 162,900 tons, largely driven by the ramp up of its Esperanza gold and copper mine. Sales volume reached 158,700 tons, the difference between output and sales being attributed to the timing of shipping and loading schedules. Sales volumes of copper were 158,700 tons, up from 120,800 tons a year earlier. The realised copper price in the period was 429.6 cents per pound, broadly in line with the realised price of 427.7 cents in the first quarter of 2011 (Q1 2011), said the company. Gold production volumes in the reporting period were 63,500 ounces and sales volumes were 63,400 ounces (Q1 2011: 22,100 ounces and 9,800 ounces respectively), reflecting the increased production as a result of the start-up of Esperanza.
The Group's key activities are the operation of 4 major copper mines, (Los Pelambres, Esperanza, El Tesoro and Michilla) the transportation of copper cathodes down from the mines and sulphuric acid back up to the mines by rail and road freight and a concession allowing the distribution of water within the Antofagasta region in Chile. The Group has operations in the United Kingdom, Chile, Peru and Bolivia. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Antofagasta Q1 Group Copper Production Up 25.5% - Quick Facts (RTTNews) - Antofagasta plc (ANTO.L: News ) reported a 25.5% rise in first-quarter 2012 Group copper production to 162,900 tonnes compared with last year, when Esperanza was commencing production. Nevertheless, there was a 12.9% sequential decrease in copper production, due mainly to planned maintenance and expected lower grades at Los Pelambres and lower throughput at Esperanza in February and March as a result of damage to the feed conveyor which has since been repaired. In the quarter, Gold production was 63,500 ounces, versus 22,100 ounces in the 2011 first quarter, also reflecting the greater contribution from Esperanza. Quarterly Molybdenum production at Los Pelambres was 3,100 tonnes, 19.2% higher than the previous quarter, as a result of an increase in the molybdenum grade, partially offset by the lower plant throughput. Esperanza currently expects to remain within the 2012 full-year forecast range announced on 1 February of between 160,000 and 175,000 tonnes of copper production and between 240,000 and 260,000 ounces of gold production, albeit at the lower end of these ranges. Anticipated production levels at the other three mines remain in line with the earlier forecast. http://www.rttnews.com/1875312/antofagasta-q1-group-copper-production-up-25-5-quick-facts.aspx?type=qf&utm_source=google&utm_campaign=sitemap Also, Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=252803 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
lonshares.blogspot.com/2012/03/antofagasta.html
Numis initiates hold on Antofagasta, target price 1170p.
Chilean miner Antofagasta (ANTO) reported a 22.9% rise in copper production to 640,500 tonnes for the year ended 31st December, with gold production also up at 196,800 ounces. However, the results fell short of broker Fox Davies' expectations of 715,000 tonnes of copper and 324,000 ounces of gold. Investors were also unimpressed to hear that the group cut its dividend by 62.1% to 44 cents (28.1p), although this was against a strong comparable in 2010 which included a special dividend of 100 cents (63.9p). The shares lost 29p to 1,241p.
CONT. Despite the improvement in the copper price since the year-end, macro-economic uncertainty means that prices in the short-term are likely to remain volatile. Nevertheless, long-term market fundamentals remain positive for copper, with inventories remaining at low levels by historic standards. Our continued production growth from our portfolio of low-cost assets, and our strong financial position, mean that we are well placed to make the most of these conditions.""