Antofagasta (ANTO) - We could see a fall

Tuesday, 14th August 2018 09:26 - by Rajan Dhall

One of the biggest miners reported today, Antofagasta shares have not been performing too well recently and have fallen significantly since the start of the trade wars initiated by the US president. The Co.'s CEO is on a cost-saving drive and now estimates the company can save around 7c/lb. He then goes on to say ''The copper market outlook in the mid to longer term continues to be favorable as demand is expected to grow at around 2% while supply growth remains constrained. In the shorter term, there is considerable market uncertainty with the outcome of current international trade negotiations unclear.''

·      Revenue up 3.6% to $2,120.7 million as higher realised prices offset lower copper sales volumes

·      EBITD for the first six months of the year was $904.2 million, 16.2% lower than the $1,078.9 million in the previous year

·      EBITDA margin of 42.6%, down from 52.7% during same period last year as unit production costs increased

·      Cost and Competitiveness Programme achieved savings of $54 million in the first half of 2018, equivalent to 7c/lb

·      Profit before tax from continuing operations for the period decreased by 32.4% to $465.6 million

·     Cash flow from continuing and discontinued operations of $890.4 million, down 22.4% compared to the same period last year due to lower margins

·      Capital expenditure of $422.0 million, 42% of unchanged full year guidance

·      Net debt increased by $320.7 million from the end of 2017 to $781.2 million, representing a Net Debt to EBITDA ratio of 0.32 times on lower cash flow from operations and after the payment of the 2017 final dividend and increased taxes.

·      Earnings per share from continuing operations of 19.6 cents per share, a 33.3% decrease on 2017

·     Interim dividend of 6.8 cents per share, equivalent to a payout ratio of 35% of net earnings from continuing operations

The weekly chart seems somewhat sideways at present, there is a strong trendline acting as support. This may give way as the market could focus on the 16% fall in earnings and 880p is where I am looking for the next support level. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.