Slide 1: 2014 Interim Results Presentation
2014 Interim Results Presentation Diego Hernández – Chief Executive Officer Alfredo Atucha – Chief Financial Officer 26 August 2014
Slide 2: Cautionary Statement
Cautionary Statement This presentation has been prepared by Antofagasta plc. By reviewing and/or attending this presentation you agree to the following conditions. This presentation contains forward-looking statements. All statements other than historical facts are forward-looking statements. Exampl
Slide 3: Agenda
Agenda Half year highlights Operations review Financial review Growth opportunities Investment case Questions 3
Slide 4: Half year highlights
Half year highlights Diego Hernández - CEO Los Pelambres
Slide 5: Half year highlights - operational
Half year highlights- operational • Production : Copper - 348,200 tonnes (-4.4%) Gold - 123,800 ounces (-24.0%) • Competitive group net cash costs of $1.46/lb • Esperanza and El Tesoro merged into one single operation, Minera Centinela • Antucoya project on-time and on-budget for H1 2015 ramp-up
Slide 6: Half year highlights - financial
Half year highlights - financial SIX MONTHS ENDING 30 JUNE 2014 2013 Movement Revenue ($m) 2,664.1 2,777.4 (4.2%) EBITDA ($m) 1,128.3 1,275.5 (11.5%) EDITDA margin (%) 42.4% 45.9% (7.6%) Net earnings ($m) 330.8 395.0 (16.2%) Earnings per share (cps) 33.6 40.1 (16.2%) Interim dividend (cps) 11.7 8.9
Slide 7: Focus on two 'world class' mining districts
Focus on two ‘world class’ mining districts BOLIVIA Esperanza + El Tesoro = Centinela H1 2014 Cu production 128,300 t Antofagasta Remaining life(1) 46 years CHILE Resource base(2) 6.9 billion t Los Pelambres Santiago H1 2014 Cu production 196,600 t Remaining life(1) 24 years ARGENTINA Resource base(
Slide 8: Centinela merger
Centinela merger • Merger of Esperanza and El Tesoro • Value creation through operational synergies: o sharing of operational overheads • Will develop some 7 billion tonnes of o combined management team resources o integration of the mine plans o sharing of mining properties and facilities • Merger
Slide 9: Operations overview
Operations overview Los Pelambres
Slide 10: Operational review – Los Pelambres
Operational review – Los Pelambres 2014 2013 Variance • Profitability – marginal higher net cash H1 H1 costs and lower realised prices Operating profit 661.0 726.7 (9.0%) ($m) Copper production 196.6 203.6 (3.4%) (‘000 tonnes) • Net cash cost increase mainly due to lower Pre by-product by-product cr
Slide 11: Operational review – Centinela concentrates
Operational review – Centinela concentrates 2014 2013 • Production decrease principally due to H1 H1 Variance lower grade and lower recoveries Centinela concentrates (previously Esperanza) Operating profit 198.7 271.7 (26.9%) ($m) Copper 82.3 90.1 (8.7%) • Net cash cost increase. Significant decreas
Slide 12: Operational review – Centinela cathodes and Michilla
Operational review – Centinela cathodes and Michilla Centinela cathodes 2014 2013 H1 H1 Variance • Production from higher grade Mirador pit Centinela cathodes (previously El Tesoro) ended Q4 2013 Operating profit 86.7 196.5 (55.9%) ($m) Copper production 46.0 51.8 (11.2%) • Grade declined and cash c
Slide 13: Financial review
Financial review Alfredo Atucha - CFO Centinela
Slide 14: Financial review - revenue
Financial review - revenue • Revenue down 4.2% due to lower realised copper and gold prices and a fall in by-product sales volumes • Copper and gold prices weaker, molybdenum price up 37% Revenue H1 2014 vs H1 2013 - Variance analysis ($m) $2,777 $2 $2,661 ($68) ($2) ($15) ($33) H1 2013 Copper Gold
Slide 15: Financial review – cash costs
Financial review – cash costs • Los Pelambres & Centinela concentrates – one-off signing bonuses • Centinela concentrates – lower production base • Centinela cathode – mining lower grade TC and TNE pits • Michilla – lower stripping costs and less processing of higher cost, third party ores Cash cost
Slide 16: Financial review – EBITDA
Financial review – EBITDA EBITDA Margin 45.9% EBITDA 2014HY vs 2013HY -Variance Analysis ($m) EBITDA Margin 42.4% $1,276 $15 $2 ($57) ($26) $50 $1,128 ($33) ($4) ($95) 16
Slide 17: Financial review – cash flow and position
Financial review – cash flow and position Solid operating Solid cash flow generation in the period period ($m)($m) $1,170 ($389) ($17) $704 ($849) $ 2,685 ($192) $2,264 ($789) ($59) Net cash position ($m) Gross basis at 30 June 2014 ($m) Attributable basis at 30 June 2014 ($m) $ 2,264 ($2,119) $ 1,8
Slide 18: Financial review – net earnings
Financial review – net earnings Net earnings 2014HY vs 2013HY – variance analysis ($m) $395 $22 $331 $41 $26 ($6) ($147) 2013HY EBITDA Tax Non-controlling NetFinance Financecosts Costs Others 2014HY interests 18
Slide 19: Financial review - return of capital
Financial review - return of capital Dividends per share (cents) and pay-out ratio (%) $1,144m $434m $971m $937m 160% 142% 140% 109% 120% 100% 100.0 70% 80% 86.1 77.5 60% 24.0 40% 35% 12.0 12.5 20% 12.0 8.0 8.5 8.9 11.7 4.0 0% 2010 2011 2012 2013 HY 2014 Interim dividends Final dividends Special div
Slide 20: Growth opportunities
Growth opportunities Diego Hernández - CEO Centinela
Slide 21: Production growth
Production growth Group Production Profile (‘000s tonnes) 1,000 900 800 700 600 500 400 2013FY 2014E 2015E 2016E 2017E 2018E Base BaseCase Case (Incl. EsperanzaConc. (Incl. Centinela 105ktpd) 105ktpd) Antucoya Encuentro Oxides Los Pelambres Expansion • Antucoya and brownfield expansions provide medi
Slide 22: Growth opportunities – focus on operating and project cost control
Growth opportunities – focus on operating and project cost control In periods of lower prices and increasing capital intensity: • Focus remains on cost control and efficiency throughout the operations • Focus on higher return, lower risk brownfield debottlenecking/ expansion projects • Advance green
Slide 23: Growth opportunities - Antucoya
Growth opportunities - Antucoya Delivering growth Current status • 85,000 tonnes per annum of production • 86% overall project progress (design, procurement, • Commence production first half 2015 construction) and 74% construction progress as at 30 June 2014 • First full year of production 2016 • Lo
Slide 24: Growth opportunities - focus on brownfield expansions
Growth opportunities - focus on brownfield expansions Centinela concentrates • Debottlenecking project to reach 105ktpd throughput from 97ktpd • Project completion in 2015 • Moly plant feasibility study due end of 2014 Encuentro Oxides • Encuentro Oxides will ensure maximum utilisation of existing C
Slide 25: Growth opportunities - beyond 2018
Growth opportunities - beyond 2018 Los Pelambres – long term further Twin Metals, Minnesota expansion • 2.3 billion tonne resource containing copper, • A world class deposit nickel and PGMs • Current resource base triple the size of the • Prefeasibility study completed current 23 year mine plan • Te
Slide 26: Investment case
ANTOFAGASTA @) PLC Investment case Centinela
Slide 27: Investment case
Investment case High • Competitive cash costs quality • Strong production and resource base assets • Focus on two ‘world class’ mining districts Cost • Focus on operating and project cost control control • Strong operating margins and capital efficiency Capital • Return of capital to shareholders di
Slide 28: Questions?
Questions? Centinela