Antofagasta profit surges, helped by higher output

Antofagasta PLC (ANTO.LN) on Thursday reported a 56% rise in net profit for the first half of 2019 after higher copper and gold production offset weaker copper prices, which the company attributed to the trade war between the U.S. and China.

The Chile-based copper miner, which is listed in London, made a profit of $302.4 million in the six months ended June 30, compared with a profit of $194.3 million in the year-earlier period.

Earnings before interest, taxes, depreciation and amortization–the company’s preferred measure–rose to $1.31 billion, from $904.2 million in the first half of 2018.

The increase in earnings follows markedly high production across its portfolio, but particularly in copper and gold. In July, Antofagasta reported a 22% rise in copper production, while gold production more than doubled to 149,100 ounces.

The company said a 25% rise in copper sales volumes and higher revenue from gold production at its Centinela mine helped to offset a 6.3% fall in copper prices and a 5.3% fall in molybdenum prices. Overall, revenue for the first half of the year rose 19% to $2.53 billion, Antofagasta said.

The company hiked its interim dividend by 57% to 10.7 cents a share, up from 6.8 cents a share last year.

Antofagasta backed its full-year capital expenditure guidance at $1.2 billion. It backed its full-year copper production guidance at 750,000 to 790,000 metric tons but said group output of the metal is expected to fall to 2018 levels next year. This forecast decline will be partially reversed in 2021, it said.

The company said uncertainty caused by the trade dispute between the U.S. and China is hitting market sentiment and the copper price.

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