Antofagasta 2023 Financial Report

Antofagasta is set to disclose its financial results for 2023 this Tuesday. Let's take a closer look at what to expect.

Revenue Projection

The Chilean copper miner is anticipated to announce $6.30 billion in revenue for the year. This figure, based on a consensus of fifteen analysts' forecasts compiled by FactSet, represents a 7.4% increase from the previous year's $5.86 billion.

EBITDA Forecast

Earnings before interest, taxes, depreciation, and amortization (EBITDA) are predicted to come in at $3.0 billion for 2023. This slight uptick from the prior year's $2.93 billion showcases a positive trend in the company's operational performance.

Pre-tax Profit Outlook

Analysts foresee a decline in pre-tax profit for Antofagasta in 2023, with an estimated $1.72 billion compared to $2.56 billion in 2022. It's important to note that the prior year's figures were influenced by a significant one-off gain of $944.7 million following the company's exit from a project in Pakistan.

Stock Performance

Antofagasta's shares have experienced significant growth since mid-November, driven by output disruptions in key copper-producing countries in South America. Price increases for copper were further fueled by a reduction in copper outlook by peer company Anglo American. As of now, Antofagasta's shares have climbed by 8.7% through 2023, outperforming industry peers and the FTSE 100 index. The current value stands at 1,766.50 pence.

Key Factors to Monitor

Financial Results and Funding Clarity

While the financial results are unlikely to differ significantly from consensus, Antofagasta is expected to provide more clarity on the funding of the Centinela mine expansion. This expansion is a key concern for investors, as the $4.4 billion budget for the project is believed to leave very little free cash flow. However, Citi analysts suggest that Antofagasta could potentially fund the project through the sale of infrastructure assets without impacting unit costs negatively.

Centinela Mine Expansion

Collaboration with Buenaventura

In December, Antofagasta acquired a 19% share in Peruvian mining company Compania de Minas Buenaventura, with discussions already underway for a collaboration pact. However, it remains unclear what Antofagasta's intentions are besides potentially partnering with Buenaventura on long-term copper projects.

Strategic Stake Acquisition

Analysts from Peel Hunt noted in a recent research note that it is essential for investors to comprehend Antofagasta's plan for the stake in Buenaventura, considering previous unsuccessful ventures. Similarly, Morgan Stanley analysts advised investors to pay attention to any commentary regarding the strategic benefits of acquiring this stake.

Key Highlights in Mining Sector

According to Citi analysts, earnings forecasts have decreased and capital expenditure has seen a slight increase in the last six months. This has led to a lowered expectation for cash returns within the mining sector.

Antofagasta's Dividend Outlook

In line with this trend, analysts at Morgan Stanley are projecting a full-year dividend of 63.6 cents for Antofagasta. This marks an increase from the previous year's dividend of 59.7 cents.