UK MIDDAY BRIEFING: Antofagasta And Petrofac Slump Despite Confidence

LONDON (Alliance News) - Antofagasta and Petrofac are among the leading FTSE 100 fallers Tuesday after reporting lower first-half profit but both reiterated their respective production forecasts for the full year.

Antofagasta shares slumped to the bottom of the blue-chip index after the miner said pretax profit fell 13% to USD850.7 million in the half from USD981.0 million a year before, as revenue declined 4.2% to USD2.66 billion from USD2.78 billion. The miner said copper prices fell by 2.2% as prices "trended downwards during the period, as well as lower gold sales and realised prices."

Copper production was down 4.4% on last year at 348,200 tonnes, though higher than expectations, primarily due to lower grades at Los Pelambres and Centinela, formerly Esperanza. Gold production for the half year at 123,900 ounces was 39,000 ounces less than the comparative on significantly lower grades and recoveries at Esperanza, and molybdenum production at Los Pelambres was 3,300 tonnes in the first half, down from 4,700 last year principally due to lower grade.

Despite the lower metrics Antofagasta increased its dividend for the half-year by 32% to USD11.7 cents per share from USD8.9 cents last year and reiterated its production guidance for the full year of 700,000 tonnes of copper, 270,000 ounces of gold, and 7,500 tonnes of molybdenum and net cash costs of USD1.45 per pound.

Petrofac also saw its shares drop after saying net profit for the six months to June 30 was USD136 million, sharply down from the USD243 million posted a year earlier, due to decreased revenue in the first half to USD2.5 billion from USD2.8 billion. The group reiterated that its year is weighted to the second-half as it said its engineering, construction, operations and maintenance business posted record order intake in the period.

Petrofac said it remains on track to deliver net profit of USD580 million to USD600 million for the full year, in line with previous guidance, and said that it would pay an interim dividend of 22 US cents per share, in line with the interim dividend paid in 2013.

Resources shares make up all the top losers in the FTSE 100 at midday Tuesday. Antofagasta leads blue-chip fallers, trading 2.7% lower at 786.00 pence per share. Petrofac shares trade 1.7% lower at 1,107.00 pence per share, making them the third biggest fallers after miner Rio Tinto and ahead of miner Fresnillo.
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Markets: UK shares have started the shortened week strongly as they look to catch up on the gains made in Europe on Monday.

In the US, futures point to a slightly higher open on Wall Street, with the DJIA expected to open 20 points higher at 17,095.6.

FTSE 100: up 0.4% at 6,800.97
FTSE 250: up 0.2% at 15,917.20
AIM ALL-SHARE: up 0.4% at 766.97
GBP-USD: flat at 1.6573
EUR-USD: up at 1.3196
GOLD: up at USD1,287.00 an ounce
OIL (Brent): up at USD102.80 a barrel
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Other Top UK Corporate News
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Media buying giant WPP said it is likely to achieve its targeted dividend pay-out ratio of 45% in 2014, a year ahead of schedule, as it saw pretax profit rise in the half-year to the end of June. The company proposed an interim dividend of 11.62 pence, up from 10.56 pence in the previous year. WPP posted a pretax profit of GBP491.1 million, up from GBP427.1 million in the previous year, as revenue rose 2.7% to GBP5.47 billion from GBP5.33 billion as the strength of sterling continued to hamper results. Revenues rose 11% on a constant currency basis.
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Bunzl raised its interim dividend by 10% after posting an uptick in profit for the first-half of the year, boosted by organic growth and recent acquisitions. Bunzl said it traded against a background of "mixed macroeconomic conditions" in the first-half of 2014, with continued challenging market conditions in some of its sectors, but said it improved profitability in all its business areas. "Significant adverse currency translation movements held back the reported growth rates at actual exchange rates by between 8% and 9%," the company said. Bunzl reported a pretax profit of GBP132.3 million for the six months to June 30, up 2.2% on a reported basis from GBP129.4 million in the first-half of 2013.
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GlaxoSmithKline said ViiV Healthcare Ltd, its joint venture HIV company with Pfizer Inc and Shionogi Ltd, received approval from the US Food and Drug Administration for its Triumeq HIV-1 treatment late last Friday. The single-pill treatment combines integrase strand transfer inhibitor dolutegravir and nucleoside reverse transcriptase inhibitors abacavir and lamivudine.
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Regus said a strong pound hit its reported profit in the first-half of the year, taking the shine off strong revenue growth in the period on the back of network expansion and strong returns. The workplace provider declared an interim dividend of 1.25 pence, a 14% increase on last year, which it said reflects "strong underlying performance and prospects." Regus posted a flat pretax profit of GBP31.0 million for the six months to June 30, the same level as the GBP31.1 million reported in the first half of last year. Whilst flat on a reported basis, it said profit was up 23% at constant exchange rates, driven by strong revenue growth and a "tight grip on costs."
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Telecity Group said Chief Executive Officer Michael Tobin will step down from the role October 31, 2014, following a handover period. The carrier-neutral data centre provider said it will commence an immediate search for a successor, with Chairman John Hughes assuming executive responsibilities until a new CEO is appointed.
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Tesco-owned convenience store business, One Stop, is to rollout Apple Inc's beacon technology in its stores, allowing customers to use their smartphones to receive tailor-made discounts, according to the Financial Times on Sunday. One Stop, which has been a subsidiary of Tesco since 2003, will launch the in-store beacon system next week in its 740 stores.
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AIM MOVERS
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Circle Oil shares are trading higher after the company said good light oil shows had been found at its El Mediouni-1 well in Tunisia. The company said the strong hydrocarbon indications at the Birsa and Ketatna targets confirm the existence of working petroleum at the site. Also trading up is Coal Of Africa; the developer said it would raise GBP38.2 million via a private placement at a huge premium to its quoted share price.
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Other Top Economics And General
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UK mortgage approvals declined unexpectedly in July from a 3-month high, data from British Bankers' Association revealed Tuesday. The number of loans approved for house purchases fell to 42,792 from 43,180 in June. It was forecast to rise to 44,065 in July. Having declined during the early months of 2014, approval volumes turned up in June, in the aftermath of the implementation of the Mortgage Market Review, which might have slowed down processing of applications in the earlier part of the year, it said.
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Ukrainian President Petro Poroshenko dissolved Parliament and set early elections for October 26, on the eve of his expected meeting Tuesday with Russian President Vladimir Putin. "The early parliamentary elections are part of my peace plan," Poroshenko said in his announcement late Monday. The "key element" is political dialogue with pro-Russian separatists in eastern Ukraine, he said. The dissolution of parliament fulfilled one of Poroshenko's campaign promises in the May presidential election. Surveys have shown 80% of Ukrainians in support of early elections. Poroshenko and Putin are expected to discuss the conflict in eastern Ukraine, during a summit of the Russia-led Customs Union on Tuesday in Belarus. It will be their second face-to-face meeting since the Ukraine crisis erupted in February.
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France was set to get a new government Tuesday, a day after President Francois Hollande and Prime Minister Manuel Valls dissolved their five-month-old Socialist administration following an internal clash on economic policy. Valls stunned the country Monday by presenting the government's resignation to Hollande after the economy and education ministers publicly criticized France and Europe's economic policies, charging that they were choking growth. Valls took the decision in consultation with Hollande, who immediately reappointed him as premier and tasked him with forming a new government that supports the government's centre-left agenda. Rebellious Economy Minister Arnaud Montebourg and his ally Education Minister Benoit Hamon, who represent the left wing of the ruling Socialist Party, said Monday that they would not be part of the new team.
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The Israeli air force ramped up its targeting of high-rise buildings in Gaza City, destroying a 13-storey building overnight into Tuesday. The Basha Tower was evacuated before the attack, which left several people injured, local reports said. The building, which had housed the offices of a dpa correspondent until being damaged last month, was reduced to rubble. Earlier, the Israeli air force fired rockets at a mixed residential and office complex with 100 apartments and 150 businesses in the northern part of the city, causing severe damage.
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Afternoon Watchlist (all times British Summer Time)

13:30 US Durable Goods Orders
14:00 US S&P/Case-Shiller Home Price Indices
15:00 US Consumer Confidence
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Wednesday's Key UK Corporate Events

888 Holdings Half Year Results
John Laing Infrastructure Fund Half Year Results
Foxtons Half Year Results
Chime Communications Half Year Results
Cape Half Year Results
Industrial Multi Property Trust Half Year Results
APR Energy Half Year Results
Candover Investments Half Year Results
Polymetal International Half Year Results
Evraz Half Year Results
Hansteen Holdings Half Year Results
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Wednesday's Key Economic Events (all times British Summer Time)

07:00 Germany Gfk Consumer Confidence Survey
07:45 France Business Climate
12:00 US MBA Mortgage Applications
15:30 US EIA Crude Oil Stocks change
18:00 US 5-Year Note Auction
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