(Alliance News) - Antofagasta PLC on Tuesday hiked its dividend by more than expected, as it reported positive annual results and a strengthened balance sheet.
The Chilean copper miner said revenue increased by 3.3% to USD5.13 billion in 2020 from USD4.94 billion in 2019, while pretax profit was USD1.41 billion, up 4.4% from USD1.35 billion. This reflects increases in copper and gold realised prices that were partially offset by the decrease in sales volumes, Antofagasta said.
Earnings before interest, tax, depreciation and amortisation rose 12% to USD2.74 billion in 2020 from USD2.44 billion the year prior, just above analysts' expectations of USD2.6 billion. This is a result of higher revenue and lower costs due to the weaker Chilean peso, lower input costs, and tight cost control, Antofagasta said.
Due to its strong results, the miner declared a final 2020 dividend of 48.5 US cents per share, bringing the total dividend for the year to 54.7 cents per share, up from 17.8 cents in 2019. This is above analysts' expectations of a total of 31 cents for 2020.
Shares in Antofagasta were down 1.0% at 1,719.00 pence in London on Tuesday.
Antofagasta's 2020 copper production fell 4.7% to 738,500 tonnes, mainly due to lower production at the Centinela mine in the north of Chile, it said, but slightly above its guidance for the lower end of between 725,000 and 755,000 tonnes. Its average realised copper price rose 8.4% to USD2.98 from USD2.75.
Gold production totalled 204,100 ounces in 2020, above guidance but 28% lower than in 2019, again due to expected lower grades at Centinela, of which Antofagasta owns 70%.
Chief Executive Ivan Arriagada said: "The year has been challenging, but we have successfully kept our people safe and healthy, achieved our production and exceeded our cost targets, and increased Ebitda by 12.3% to USD2.7 billion, yielding a 53% Ebitda margin...Our resilient operations performed well with high levels of throughput and our Cost & Competitiveness Programme delivered benefits of USD197 million, nearly double the targeted amount. Our balance sheet strengthened even further."
Antofagasta said it had USD82 million in net debt at the end of 2020, for a net debt to Ebitda ratio of just 0.03 times.
Looking ahead, Antofagasta said it expects 2021 copper production to be between 730,000 ounces and 760,000 ounces, and gold production to be between 240,000 ounces and 260,000 ounces.
It expects 2021 capital expenditure to be USD1.6 billion, as the rate of expenditure on its growth projects accelerates following their temporary suspension in 2020, which deferred USD200 million into 2021. Additionally, higher expenditure at the Los Pelambres Expansion project is forecast.
By Zoe Wickens; zoewickens@alliancenews.com
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Antofagasta (ANTO)
