Antofagasta share price: 4 things to watch out for in its 2018 results

The Chilean-based copper miner will unveil its full-year results on Tuesday next week that will reflect what has been a strong 12 months of trading for the company, with investors expecting good things from Antofagasta in 2019.

Copper sheets Antofagasta Source: Bloomberg

Antofagasta finished 2018 on a high after achieving record copper production in its fourth quarter of 220,000 tonnes, bringing its full year total to 725,300 tonnes – hitting the top end of revised guidance.

However, when the company published its full-year results on Tuesday next week, investors have already baked in what will be a strong set of results into its share price.

Therefore, on results day, investors focus will turn to the company’s 2019 outlook, with it predicted to be another record year of production, according to RBC.

Analysts lower target price

RBC recently cut its recommendation for Antofagasta from ‘outperform’ to ‘sector perform’, meaning the investment believes that expected returns to be in line with the sector average over the next 12 months.

The downgrade also led the investment bank to lower its target price for the mining company’s stock to 850p a share, down from 890p.

Record production

After a record year of copper production in 2018, led by growth from it Centinela operation, Antofagasta is looking to take that momentum forward into this year, with the Chilean-based miner forecast to break records again in 2019.

The company’s operations have achieved an improve level of operating stability as the it headed into the new year with real momentum for what the business expects to be another record-setting year, with production increasing by up to 9% to 750,000 – 790,000 tonnes at net cash costs of $1.30/lb, Antofagasta’s CEO Ivan Arriagada.

Update on the expansion of Los Pelambres

Investors will focus on how the company’s expansion plans at its Los Pelambres are going, with construction at the site a major priority for the miner as it continues to strengthen operational safety and efficiency at the site.

‘The Los Pelambres expansion should pic up pace in 2019,’ RBC said in a note to investors. ‘We expect this project will increase production circa 60,000 tonnes per annum over the next 15 years.’

‘Once complete this would open up the Phase 2 expansion which has low capital intensity for an additional 35,000 tonnes.’

In October last year, after 26 months without a fatality there was a fatal accident at the Los Pelambres site. A full investigation was carried out and the company has taken steps to improve safety at the mine.

2019 guidance

Group cash cost in 2019 before and after by-product credits are expected to be similar to last year at $1.70/lb and $1.30/lb respectively.

Meanwhile, capital expenditure in 2019 is forecast to be $1.2 billion, including the Los Pelambres expansion project, which will add 60,000 tonnes of copper per annum.

Sustaining capital expenditure and mine development will remain at similar levels as 2018, the company said.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.