2016 FY Results Presentation 14 th March 2017 Iván Arriagada – CEO Alfredo Atucha – CFO
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 speak 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 asa guide to future performance. 2
Agenda Operating Financial Review & Guidance & Overview Overview Growth Investment Case Opportunities 3
Overview 4
Safety First Safety Performance • Regrettably two fatalities occurred during the year, one at Antucoya and one at the 40% reduction in 5 transport division LTIFR • Committed to zero fatalities 2.5 2.0 2 2 • 1.7 40% improvement in injury rate since 2012 1 1 1.9 • New safety and occupational health model 1.5 embedded in own employee and contractor activities 2012 2013 2014 2015 2016 (1) Fatalities LTIFR 1. LTIFR: Lost Time Injury Frequency Rate • Regular senior management site visits to High Potential Accidents and Near – Misses (Leading Indicators) reinforce Safety First 70 350 60 300 HP Near Misses / 1,000,000 MHW Renewed areas of focus 50 250 # HP Accidents 40 200 256 • Identify and assess fatality and serious injury 30 150 180 194 226 218 134 154 177 143 170 risks 20 100 90 • Implement critical controls 53 10 50 38 38 40 35 34 34 32 31 31 27 28 24 • Report and investigate near misses 0 0 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16Dec-16 • Increase on the ground senior leadership HP Accidents HP Near Miss Target HP N-M Index 2016 HP Near Miss Index 2016 5
Framework for sustained value creation Creating long Emphasis on Focus on cost term value Positioned for disciplined and operating through growth production reliability sustainability & innovation • • • • Only profitable Protect margins Community Positive copper production engagement outlook • Embedded Cost & model • • Every tonne Competitiveness Long term • must make an Programme Social licence to investment earnings operate or grow criteria • Releasing spare contribution • • capacity Embedded Disciplined practice of capital allocation innovation • Advance organic growth options 6
2016 – strong performance Cu Production Revenue Net Cash Costs EBITDA 709,400t $3,622 million $1.20/lb $1,626 million ↑12.5% compared to last year ↑12.3% compared to last year ↓20.0% compared to last year ↑78.7% compared to last year EBITDA Margin (1) Earnings per Share (2) Capital Expenditure Dividend 44.9% 18.4c/share $795 million 34 .7c/share 53% of net earnings (2) ↑ From 28.2% last year ↑35.2c compared to last year ↓24.2% compared to last year Strong performance across all metrics 1. Calculated as EBITDA/Group revenue. If Associates and JVs revenue is included EBITDA margin was 41.1% in 2016 and 27.3% in 2015 2. From continuing operations and before exceptional items 7
2016 -a year of achievement Los Centinela Zaldívar Antucoya Pelambres • New community • Completed installation of • Commercial production • Integration complete engagement model paste thickeners started • Higher copper recoveries • Resolved long standing • Approved EIA for Second • Ramp-up complete • Substantial synergies court cases and de-risked Concentrator • Primary crusher dust achieved expansion suppression system installed 13.8% 35.7% ~14% First year of operation in net cash costs in net cash costs in cash costs Operating improvements and cost control ongoing 8
Operations focus Los Pelambres Centinela • Next phase of community • Operate plant at 105ktpd engagement around • Smooth start up of growth Encuentro Oxides and • Plant reliability Moly projects • Advance Incremental • Advance 2 nd Concentrator Expansion project Antucoya Zaldívar • Increase metallurgical • Operate plant at steady recoveries state • Cost reductions • Focus on costs • Evaluate potential of primary sulphide 9
Financial Overview 10
Revenue -improving commodity price environment Revenue up 12.3% Copper price ($/lb) Higher copper prices and sales volumes • 3.4 Michilla closed o 3.0 Antucoya sales since April 2016 o 2.6 Achieved production guidance o $2.50/lb 2.2 Realised prices higher than average LME prices • $2.21/lb 1.8 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Revenue (1) 2015 vs 2016 ($m) Gold price ($/oz) $396m 1,400 1,300 8 92 $3,622m 85 $1,248/oz 1,200 212 $1,160/oz 1,100 $3,226m 1,000 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Molybdenum price ($/lb) 10 8 6 $6.7/lb $6.5/lb 4 2 2015 Copper sales Copper price By-products Transport 2016 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Average market price 11 1. Includes results of continuing operations and Antucoya from 1 April 2016. Excludes Zaldívar (JV).
Unit cash costs- down significantly Cash costs before by-product credits and C1 Cost ($/lb) - by operation ($0.27/lb) $1.81/lb $1.54/lb (0.08) $1.20/lb (0.18) (0.01) (0.34) (1) 2015 Los Pelambres Centinela Other Companies 2016 By product 2016 credits Cash costs before by-product credits and C1 Cost ($/lb) - by cost type ($0.27/lb) $1.81/lb 0.01 $1.54/lb (0.11) (0.12) (0.03) (0.02) $1.20/lb (0.34) (2) (3) 2015 CCP Savings Adjustment Inflation Input Prices Production 2016 By product credits 2016 1. “Other Companies” refers to combined effect of Michilla closure and the incorporation of Antucoya from April 2016 and Zaldíva r 2. Impact of revised estimation method for deferred stripping costs 12 12 3. Energy, diesel and acid
Operating cost savings – target exceeded $519 million of total operating cost savings achieved since 2014 Operating Cost Savings of $242 million in 2016 Grade Decline Mine Site Costs E&E and Corporate Costs Between 2014 - 2016 grades fell by 12%, but gross cash costs fell by 16% $176 million saved in 2016 in $66 million of savings coming mine site cash cost, 10% above from exploration & evaluation target and corporate costs Group mine site costs and copper grades ($/lb) $1.83 $1.81 $1.54 $1.55 $0.40 $0.31 Services Productivity $0.25 $0.34 $1.43 $1.50 $1.20 0.76% $1.30 Operating & Maintenance Management 0.68% 0.67% 0.64% Corporate & Organisational Effectiveness 2014 2015 2016 2017 Guidance $31m $152m $176m $140m Energy Efficiency Grade (%) By-products Mine Site Cash Cost Mine Site Cost Savings 13
Recommend
More recommend
