Antofagasta posts US$4.8bn earnings on back of copper boom

Antofagasta profits rise 77% thanks to booming demand for copper despite COVID-19 pandemic and drought conditions

Antofagasta benefited from the ongoing strength of copper prices to post EBITDA of US$4.8bn in 2021.

CEO Iván Arriagada said the expansion of Los Pelambres (pictured) is now 68% complete and the desalination plant remains on track for completion in the first half of this year.

The Chloride Leach project at Zaldívar was completed in January and at Centinela, pre-stripping advanced over the year at the Esperanza Sur pit ready for mining ore for processing in the first half.

“Our mines and plants performed as planned and we can be proud of our achievements, regardless of the challenges of the year including COVID-19 and continued drought conditions in central Chile," he said. "We have made excellent progress on unlocking the embedded growth options in our portfolio with identified key brownfield developments and incremental growth within our asset portfolio."

Climate change remains a key focus for Antofagasta, expanding its capital allocation framework to include climate risk factors and have set environmental commitments to significantly reduce our continental water consumption and emissions by 2025.

By then around 90% of its water use will be sea or recirculated water and GHG emissions will have reduced by its 30% target. Clear social commitments to workers and to make our mines safer and greener are other commitments.

The board has declared a final dividend of 118.9 cents per share, bringing the total dividend for the year to 142.5 cents per share, equivalent to a pay-out ratio of 100% and an increase of 161% on 2020.

Antofagusta copper mining highlights in 2021

  • Revenue for the full year was $7,470mn, 46% higher than in 2020 reflecting a 47% increase in copper realised prices
  • EBITDA was $4,836mn, 77% higher than the previous year on higher revenue, partially offset by higher operating costs
  • EBITDA margin increased to 64.7% from 53.4% in 2020
  • Cost and Competitiveness Programme (CCP) generated benefits of $131mn, above the original target of $100mn
  • Profit before tax including exceptional items increased by 146% to $3,477mn
  • Cash flow from operations was $4,508mn, 85% higher than in 2020 due to higher EBITDA
  • Strong balance sheet with net cash of $540mn at the end of 2021, an improvement of $622mn from the net debt position at the end of 2020
  • Capital expenditure increased to $1,778mn, $470mn higher than in 2020 with increased capital expenditure on the Los Pelambres Expansion project, Centinela’s Esperanza Sur pit and higher mine development expenditure at Centinela
  • Underlying earnings per share from continuing operations and excluding exceptional items of 142.5 cents, an increase of 161% compared to 2020 with higher EBITDA partly offset by higher non-controlling interests and tax
  • Exceptional items after tax for the year were a cost of $87mn, following the impairment of the Company’s holding in Twin Metals and the recognition of previously unrecognised deferred tax assets
  • Earnings per share from continuing and discontinued operations including exceptional items were 130.9 cents, 155% higher than in 2020
  • Final dividend of 118.9 cents per share declared, bringing the total dividend for the year to 142.5 cents per share, equal to 100% of underlying earnings per share

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