Antofagasta plc 2019 FY Results Iván Arriagada Chief Executive Officer Alfredo Atucha Chief Financial Officer 17 th March 2020
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. Examples of forward- looking statements include those regarding the Group's strategy, plans, objectives or future operating or financial performance; reserve and resource estimates; commodity demand and trends in commodity prices; growth opportunities; and any assumptions underlying or relating to any of the foregoing. Words such as “intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believe”, “expect”, “may”, “should”, “will”, “continue” and similar expressions identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that are beyond the Group’s control. Given these risks, uncertainties and assumptions, actual results could differ materially from any future results expressed or implied by these forward-looking statements, which apply only as of the date of this presentation. Important factors that could cause actual results to differ from those in the forward-looking statements include: global economic conditions; demand, supply and prices for copper; long-term commodity price assumptions, as they materially affect the timing and feasibility of future projects and developments; trends in the copper mining industry and conditions of the international copper markets; the effect of currency exchange rates on commodity prices and operating costs; the availability and costs associated with mining inputs and labour; operating or technical difficulties in connection with mining or development activities; employee relations; litigation; and actions and activities of governmental authorities, including changes in laws, regulations or taxation. Except as required by applicable law, rule or regulation, the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Certain statistical and other information about Antofagasta plc included in this presentation is sourced from publicly available third party sources. Such information presents the views of those third parties and may not necessarily correspond to the views held by Antofagasta plc. This presentation is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy shares in Antofagasta plc or any other securities in any jurisdiction. Further it does not constitute a recommendation by Antofagasta plc or any other person to buy or sell shares in Antofagasta plc or any other securities. Past performance cannot be relied on as a guide to future performance. 2
Agenda 1 Overview 2 Financial review 3 Growth opportunities and investment case 3
Overview Iván Arriagada Chief Executive Officer 4
Sustainability is central to everything we have and will achieve Economic Social Transparency and People Environment Performance Development Corporate Governance Zero fatalities Long term approach Shared development, not Environmental Risk appetite defined mitigating impacts management model Safety and health model High quality and long- Risk management life assets Relationship models: Use of renewable energy Labour relations Ethics committee ‘Somos Choapa’ and Value over volume Sea water use Diversity and inclusion Group values ‘ Diálogos para el Disciplined capital GHG emissions target Desarrollo’ Flexitime schemes allocation Shareholder returns 5
Improving operating discipline Record safety and production performance Safety performance Copper production (kt) 770 2.00 725 709 704 1.61 1.57 1.53 630 1.01 2 1 0 1 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Lost Time Injury Frequency Rate (LTIFR) 1 Fatalities 1 Number of accidents with lost time during the year per million hours worked 6
2019 Highlights Record safety and production performance Strong cost and operating performance Safety is the Group’s top priority • Net cash costs down $0.07/lb to $1.22/lb • The Group continued its period of no fatalities • CCP 3 savings of $132m, again ahead of target • LTIFR 1 down to 1.01 (Mining division LTIFR: 0.75) Record year of copper production Robust balance sheet and consistent dividend policy • 770,000 tonnes, 6.2% higher than 2018 • Net debt/EBITDA decreased to 0.23x • In line with guidance • Final dividend of 23.4 c/share EBITDA of $2,439m and margin 2 of 49% Brownfield projects advanced • Los Pelambres Expansion under construction • Increased EBITDA and margin reflect strong copper • Zaldívar Chloride Leach under construction production and lower cash costs • Esperanza Sur pit project approved 1 Lost Time Injury Frequency Rate. The number of injuries resulting in time lost from work during the period, per million hours worked 2 EBITDA Margin calculated as EBITDA/Group revenue. If Associates and JVs revenue is included EBITDA margin was 45.9% 3 Cost and Competitiveness Programme 7
Capital allocation drives decision making 2019 Operating Cash Flow 1 $2,571m • Stress test forecasts at various copper prices Copper Price Free Sustaining Capex & Mine Development $800m • Future free cash flow generation Cash • Cash buffer Flow DECISION Committed Dividends (35% pay-out) $175m FACTORS • Upcoming capital expenditure Capex Net Debt/EBITDA Strong Balance Sheet • Approved and under study projects 0.23x Balance • Debt structure Sheet • Strong liquidity Growth Excess Cash $279m $161m Capex Dividend 2019 total dividend of $336 million representing 67% of net earnings 1 Operating cash flow before income tax paid. Includes one-off $275 million VAT refund received in January 2019 8
2019 a record year of copper production Group production of 770,000 tonnes at $1.22/lb Antucoya Zaldívar Transport Los Pelambres Centinela Cu production 1 Cu production Cu production Cu production Tonnage 363,400 t 276,600 t 71,900 t 58,100 t transported Net cash costs Net cash costs Cash costs Cash costs 6,533 kt $0.91/lb $1.26/lb $2.17/lb $1.75/lb • Met production and • Met production and • Focused on optimising mine • Increased throughput and • Transport volumes grew outperformed cost guidance outperformed cost guidance and plant operations reliability 7.7% • Stable and reliable operation • Higher copper grades and • Improved dust suppression • Copper grades increased • Increased haulage capacity recoveries during the year and spent ore disposal and efficiency • Phase 1 expansion 31% • Strong gold production • New contracts signed complete 2 1 Group’s 50% share 2 As at 31 December 2019 9
2020 guidance Copper production (kt) Copper production • Guidance 725-755kt Guidance 1 • Lower production due to lower grades at 770 725-755 725 704 Centinela, expected to reverse in 2021 as 130 140 Antucoya & 120 grades increase 132 Zaldívar 277 Cash costs 248 245 Centinela 228 • Cash costs before by-products of $1.70/lb • Net cash costs of $1.30/lb 363 358 355 Capital expenditure 334 Los Pelambres • Currently under review. The revised estimate is expected to be in the range of $1.3-1.5bn 2017 2018 2019 2020E 1 Includes each operation at mid-point of guidance range and Zaldívar on a 50% basis. 10
Sustainability performance Economic growth not possible without social value creation and environmental care CO 2 emissions intensity (tCO 2 e/tCu) 1 Committed to climate change mitigation 3.87 3.67 ▪ Accelerating move to 100% renewable energy to 2022, reducing 3.33 3.10 costs by 10% to 20% ▪ Target of 3% reduction of forecast GHG by 2022 (300,000 t CO 2 ) ▪ Contracted 100% renewable energy for Zaldívar from 2020 and Antucoya from 2022 Water and tailings 2016 2017 2018 2019 ▪ 46% of water used comes from the sea ▪ 85% of water at Los Pelambres is recirculated Water consumption (Mm 3 ) ▪ Currently building a desalination plant at Los Pelambres 67.2 ▪ Thickened tailings at Centinela 65.8 60.8 55.4 36.9 36.5 32.6 From mitigating impacts to shared development 28.9 ▪ “ Somos Choapa ” and “ Dialogos para el Desarrollo” programmes 30.4 29.2 ▪ Antofagasta Region public-private Mining Cluster 28.2 26.5 ▪ Prioritising local suppliers and employment ▪ Regional development 2016 2017 2018 2019 Continental water Sea water 1 Tonnes of CO 2 equivalent per tonne of copper produced (Scope 1 and 2 emissions) 11
Financial review Alfredo Atucha Chief Financial Officer 12
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