Yahoo Finance FTSE 100: Antofagasta share price dips as profits slump on volatile copper price
Antofagasta (ANTO.L) posted lower interim profits due to volatility in the price of copper, and a persistent drought in Chile hit the miner's copper production.
Shares in the FTSE 100 (^FTSE) miner, which is majority owned by Chile's wealthy Luksic family, fell 1.8% following the update in early trade on Thursday in London.
Core earnings fell 47.5% to $1.24bn (£1.01bn) in the first six months of the year on lower revenue and operating costs that jumped by 6.9%, largely due to higher input prices. That compared with $2,4bn in the year earlier.
Revenue declined by a third to $2.53bn on lower copper and by-product sales volumes and lower realised copper prices.
Chile faces a water crisis due to a drought that has lasted more than a decade that have affected mining output. The company operates four copper mines in the South American country and the world's top producer accounting for 30% of global output, and second producer of battery metal lithium.
"Copper has sunk from $10,000 a ton to below $8,000, and Antofagasta is down by a third from its spring high, although both have rallied a little of late," Russ Mould, investment director at AJ Bell said.
Read more: FTSE 100: Rio Tinto shares slide as mining bonanza fizzles
Antofagasta benefitted from the copper price boom which saw its profits surge to its highest ever in 2021, allowing it to make a record shareholder payout of $1.4bn for the year.
However it slashed its interim dividend on Thursday to 9.2 cents a share compared to a record 23.6 cents last year, joining rivals Rio Tinto (RIO.L) and Anglo American (AAL.L) in lowering payouts after last year's bonanza.
Despite that it said it remains on track to produce its revised guidance of 640,000 to 660,000 tonnes of copper for the full year.
"We expect the remainder of the year to look very different from the first half — as production improves quarter-on-quarter," chief executive Iván Arriagada said.
Major mining firms including Rio and Anglo have in recent months warned about future profits amid concerns that slower growth or recession in key markets could dent commodity demand.
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