Antofagasta shares rose on Tuesday after the mining giant announced rising revenue and EBITDA during the first half of 2024.
It’s a copper pure play targeting between 670k and 710k tonnes of production for 2024, making it one of the world’s foremost producers. A mining company with the scale of Antofagasta has inevitably encountered other minerals in its search for copper and produces gold and molybdenum, but these are a sideshow to copper production.
In the first half of 2024, Antofagasta generated $2,955m in revenue, an increase of $2,890m in the same period a year ago.
Stronger copper prices, on average 10% better than the comparable period last year, drove higher revenue. However, lower production offset the increase by 4%.
“Antofagasta has reported a five percent increase in half-year profits this morning as higher copper prices drove performance in the first half of the year,” said Mark Crouch, Market Analyst at investment platform eToro.
“However, after reaching a record high in May, the price of copper has since retraced nearly 20 percent. Not surprisingly, Antofagasta’s share price has moved in near identical fashion.”
The key to future profit appreciation will be dictated by the wider macro picture, most notably how well China can navigate shifting undercurrents in its economy.
“Antofagasta shareholders might be asking themselves: is the bull run in copper over or is this just the end of the beginning?” Crouch questions.
“A leading economic indicator, Dr Copper, as the industrial metal is often referred to, could be diagnosing a period of queasiness ahead for markets following copper’s recent sell off. In June, the world’s largest consumer of the industrial metal, China, reported copper stockpiles at a four-year high.
“However, with cooling inflation giving way to Central Banks around the world cutting interest rates, a bump in economic activity could likely follow, at which point demand for copper is sure to ramp up again.”
Antofagasta will pay a 7.9 cent dividend for the half-year period.