Antofagasta (LON:ANTO) - Rebasing expectations

Thursday, Jul 18 2013 by

Jul 18th 2013 - Edison Investment Research today published a report on Antofagasta (ANTO.L, LSE:ANTO, LON:ANTO) entitled "Rebasing Expectations". In summary, the report says:

After three years of strong production growth, we anticipate three years of stable copper output before Antofagasta’s next major growth phase. A lower copper price, rising costs and falling by-product credits adversely affect FY13 EPS, which we forecast to fall 46% y-o-y to US$0.75. The return to a 35% payout ratio results in a 72% y-o-y fall in our forecast FY13 total dividend. Highly cash generative current operations underpin our standard NPV10 valuation of 742p per share and arguably a 9% discount rate would be justified, which would raise it to 828p. Although growth projects could double copper output, value generation is limited by their capital intensity.




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