LONDON -- Copper miner Antofagasta (LSE: ANTO.L ) released its interim report this morning, with the announcement that earnings per share are down 7% year on year to $0.66 cents (from $0.71 cents at the same stage last year). However, the EPS figure is marginally higher than the $0.65 cents that had been forecast.
Like many of its rivals, the Chile-based company has been affected by the decrease in copper prices in recent times: The average London Metal Exchange copper price per pound was reported to be down 13.8% from H1 2011 to $3.67 from $4.26. EBITDA fell by 5.4% from $1.95 billion to $1.84 billion.
Antofagasta has attempted to offset this by increasing its production by 16.5% to 336,000 tonnes, largely from its Esperanza site, which saw an increased operating profit of $332 million in the first six months of 2012, compared with $122.8 million in the 2011 half-year. As a result of the increase in production, revenue was up by 3.5% to $3.16 billion.
CEO Diego Hernandez commented: "This increase in low-cost production from Esperanza has also allowed us to maintain a relatively stable cash cost position, within the context of an industry environment which remains tight. We have also continued to make good progress with our strong organic pipeline, predominantly within Chile, which has the potential to significantly increase the scale of the Group over the course of this decade."
With the fall in price of commodities, investors are wary of the mining sector at the moment. However, the well-respected management behind Rio Tinto believes there will be an upturn in China as we approach 2013, which would bring an increased demand for metals and thus a boost for mining companies.
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