By Clara Ferreira-Marques
LONDON, March 12 Copper miner Antofagasta
sought to brush off investor worries about its growth
options with a better-than-expected 2012 payout and special
dividend on Tuesday, as profits ticked higher despite lower
The group said on Tuesday that it would pay a dividend of
98.5 cents per share, more than double a year ago, implying a
payout ratio of 70 percent of net earnings - above market
forecasts. That includes a special dividend of 77.5 cents.
Analysts hoped Antofagasta's robust balance sheet and the
suspension of its only major growth project late last year would
mean a boost for 2012 dividends, reinvigorating shares that have
underperformed since the group announced lacklustre 2013
Antofagasta has been one of the worst performers among
London-listed blue chips so far this year.
The Chilean miner has paid special dividends for the past
decade, even through the global financial crisis - though it
reined in its payout for 2011 and said it would spend more on a
new generation of growth projects.
Antofagasta halted development at its $1.7 billion Antucoya
copper mine in December, blaming escalating costs at what was
already one of the most capital intensive projects in the copper
Chief Executive Diego Hernandez - pushing for better
returns, along with the rest of the sector - said then that
Antofagasta would "temporarily suspend" work.
It said on Tuesday that the Antucoya review continued,
though its "conservative" assessment had prompted the group to
take a $500 million impairment on the value of the asset - $350
million for the group, based on Antofagasta's majority share.
Antofagasta had approved Antucoya only the previous year,
selling a 30 percent stake to Japanese trading house Marubeni
Corp to help shoulder the burden of the costs.
The miner's full-year earnings before interest, tax,
depreciation and amortisation (EBITDA) were $3.83 billion, up
just under 5 percent and within analyst forecasts, though just
above a consensus market forecast of $3.72 billion, according to
Thomson Reuters I/B/E/S.
Revenues rose almost 11 percent, despite an almost 10
percent drop in the copper price.
Antofagasta warned when it published 2012 production numbers
earlier this year that it would not increase output this year,
while cash costs would jump by over a third due to greater
spending at two key mines, Esperanza and Los Pelambres.
The world's biggest miners have had their profits dented by
costs and weaker prices, prompting them to scale back expansion
and raising concerns that a decade-long mining boom is over.