REG - Antofagasta PLC - HALF YEARLY FINANCIAL REPORT <Origin Href="QuoteRef">ANTO.L</Origin> - Part 2
19/08/2016 12:35
- Part 2: For the preceding part double click ID:nRSP2314Ha
62.4
Total earnings per share from continuing and discontinued operations 8.9 71.6
Earnings per share calculations are based on 985,856,695 ordinary shares. As a result of the factors set out above, profit
from continuing operations in the first half of 2016 attributable to equity shareholders of the Company was $88.1 million
compared with $90.8 million in the first half of 2015. Accordingly, earnings per share from continuing operations were 8.9
cents in the first half of 2016 compared with 9.2 cents in first half of 2015, a decrease of 3.3%. Including the earnings
from discontinued operations, total earnings per share from continuing and discontinued operations in the first half of
2015 were 71.6 cents.
Dividends
Dividends per share declared in relation to the period are as follows:
Six months ended 30.06.16 Six months ended30.06.15
$ cents $ cents
Ordinary - -
Interim 3.1 3.1
Final - -
Total dividends to ordinary shareholders 3.1 3.1
The Board determines the appropriate dividend each year based on consideration of the Group's cash balance, the level of
free cash flow and earnings generated during the year and significant known or expected funding commitments. It is expected
that the total annual dividend for each year would represent a payout ratio based on net earnings for that year of at least
35%.
The Board has declared an interim dividend for the first half of 2016 of 3.1 cents per ordinary share, which amounts to
$30.6 million and will be paid on 30 September 2016 to shareholders on the Register at the close of business on 9 September
2016.
Capital expenditure
Capital expenditure decreased by $87.0 million from $595.9 million in the first half of 2015 to $508.9 million in the
period. This was mainly due to decreased construction costs at Antucoya which is now in operation and the Encuentro Oxides
project, partly offset by increased expenditure in respect of Los Pelambres, relating mainly to capitalised stripping
costs. NB: capital expenditure figures quoted in other sections of this report are on a cash flow basis, unless stated
otherwise.
Derivative financial instruments
The Group periodically uses derivative financial instruments to reduce exposure to commodity price movements. At 30 June
2016 the Group had entered into min/max contracts at Centinela for a notional amount of 12,000 tonnes of copper production
covering a period up to 31 December 2016, with an average minimum price of $2.11/lb and an average maximum price of
$2.69/lb. The Group also periodically uses interest rate swaps to swap the floating rate interest for fixed rate interest.
At 30 June 2016 the Group had entered into contracts at Centinela for a maximum notional amount of $105 million at a
weighted average fixed rate of 3.372 % fully maturing in August 2018. The Group had also entered into contracts in relation
to a financing loan at the FCAB for a maximum notional amount of $120 million at weighted average fixed rate of 1.634%
fully maturing in August 2019.
Cash flows
The key features of the Group cash flow statement are summarised in the following table.
Six months ended 30.06.16 Six months ended 30.06.15
$m $m
Cash flows from continuing and discontinued operations 774.1 807.7
Income tax paid (257.5) (191.2)
Net interest paid (13.6) (10.6)
Disposal of subsidiary - 947.3
Capital contribution and loan to associates (1.0) (39.4)
Capital increase from non-controlling interest - -
Change in ownership interest in subsidiary - -
Acquisition of available-for-sale investments - -
Purchases of property, plant and equipment (385.4) (662.3)
Acquisition of mining properties (7.0) (78.0)
Proceeds from sale of property, plant and equipment 0.1 -
Dividends paid to equity holders of the Company - (96.6)
Dividends paid to non-controlling interests (40.0) -
Dividends from associates 13.6 6.6
Other items (115.1) -
Changes in net cash relating to cash flows (31.8) 683.5
Exchange and other non-cash movements 15.7 61.7
Movement in net cash in the period (16.1) 745.2
Net cash at the beginning of the year (1,023.5) (1.6)
Net cash/(debt) at the end of the year (1,039.6) 743.6
Cash flows from continuing and discontinued operations were $774.1 million in the first half of 2016 compared with $807.7
million in the first half of 2015. This reflected EBITDA from subsidiaries for the period of $531.6 million 1 (first half
of 2015 - $558.7 million) adjusted for a net working capital decrease of $242.5 million (first half of 2015 - decrease of
$226.4 million).
Cash tax payments in the first half of 2016 year were $257.5 million (first half of 2015 - $191.2 million), comprising
corporate tax of $255.3 million (first half of 2015 - $165.6 million), mining tax of $2.2 million (first half of 2015 -
$11.7 million) and withholding tax of $12.9 million (first half of 2015 - $12.9 million). These amounts differ from the
current tax charge in the consolidated income statement of $118.0 million (first half of 2015 - $117.8 million) mainly
because cash tax payments for corporate tax and the mining tax partly comprise the settlement of outstanding balances in
respect of the previous year's tax charge and payments on account for the current year based on the prior year profit
levels.
At 30 June 2015 the disposal of subsidiary amount of $947.3 million related to the disposal of Aguas de Antofagasta S.A.,
which carried out of the Group's water operations.
Contributions and loans to associates and joint ventures of $1.0 million relates to the Group's share of the funding of the
costs of Energia Andina.
Cash disbursements relating to capital expenditure in the first half of 2016 were $385.4 million compared with $662.3
million in the first half of 2015. This included expenditure of $7.3 million at Antucoya (first half of 2015 - $175.4
million), $262.1 million relating to Centinela (first half of 2015 - $233.6 million) and $94.4 million relating to Los
Pelambres (first half of 2015 - $101.8 million).
At 30 June 2015 dividends paid to ordinary shareholders of the Company were $96.6 million, which related to the payment of
the final dividend declared in respect of the previous year.
Dividends paid by subsidiaries to non-controlling shareholders were $40 million (first half of 2015 - nil).
Financial position
At 30.06.16 At 30.06.15
$m $m
Cash, cash equivalents and liquid investments 2,180.1 3,220.0
Total borrowings (3,219.7) (2,476.4)
Net cash/(debt) at the end of the period (1,039.6) 743.6
1 EBITDA excluding the Group`s share of EBITDA from associates and joint ventures.
At 30 June 2016 the Group had combined cash, cash equivalents and liquid investments of $2,180.1 million (30 June 2015 -
$3,220.0 million). Excluding the non-controlling interest share in each partly-owned operation, the Group's attributable
share of cash, cash equivalents and liquid investments was $1,801.8 million (30 June 2014 - $2,785.0 million).
New borrowings in the first half of 2016 were $656.8 million (first half of 2015 - $357.3 million), including new
short-term borrowings at Los Pelambres of $160.0 million and new long-term borrowings at Corporate of $496.8 million.
Repayments of borrowings and finance leasing obligations in the first half of 2016 were $307.2 million, relating mainly to
repayments at Los Pelambres of $229.9 million and Centinela $75.0 million.
Total Group borrowings at 30 June 2016 were $3,219.7 million (at 30 June 2015 - $2,479.4 million). Of this, $2,410.1
million (at 30 June 2015 - $1,754.8 million) is proportionally attributable to the Group after excluding the
non-controlling interest shareholdings in partly-owned operations.
Going concern
The Group's business activities, together with those factors likely to affect its future performance, are set out in the
Review of Operations. Details of the cash flows of the Group during the period, along with its financial position at the
period-end are set out in this Financial Review. The half yearly financial report includes details of the Group's cash,
cash equivalent and liquid investment balances in Note 19, and details of borrowings are set out in Note 15. When assessing
the going concern status of the Group the Directors have considered in particular its financial position, including its
significant balance of cash, cash equivalents and liquid investments and the borrowing facilities in place, including their
terms and remaining durations. When assessing the prospects of the Group, the Directors have considered the Group's copper
price forecasts, the Group's expected production levels, operating cost profile, capital expenditure and financing plans.
The Directors have taken into consideration the Group's key risks which could impact the prospects of the Group, with the
most relevant to this assessment considered to be risks to the copper price outlook. Robust down-side sensitivity analyses
have been performed, assessing the impact of a significant deterioration in the copper price outlook. These stress-tests
all indicated results which could be managed in the normal course of business. Based on their assessment of the Group's
prospects and viability, the Directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for at least twelve months from the date of approval of the financial statements. Having reassessed
the principal risks, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing
its condensed interim financial statements.
Principal risks and uncertainties
There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over
the remaining six months of the financial year and could cause actual results to differ materially from expected and
historical results. The Directors do not consider that the principal risks and uncertainties have changed since the
publication of the annual report for the year ended 31 December 2015. A detailed explanation of the risks summarised below
can be found in the Risk Management section of that annual report which is available at www.antofagasta.co.uk. Key headline
risks relate to the following:
· Community relations
· Strategic resources
· Operational risks
· Projects management
· Political, legal and regulatory risks
· Health and safety
· Environmental management
· Growth opportunities
· Commodity prices
· Foreign currency exchange
· Identification of new mineral resources
· Ore reserves and mineral resources estimates
· Talent management and labour relations
Cautionary statement about forward-looking statements
This half yearly financial report contains certain 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 at the date of this report.
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 and other 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.
Past performance cannot be relied on as a guide to future performance.
Condensed Consolidated Income Statement
Six months Six months
ended ended Year ended
30.06.2016 30.06.2015 31.12.2015
(Unaudited) (Unaudited)
Notes $m $m $m
Group revenue 2,3 1,448.0 1,775.9 3,394.6
Total operating costs (1,163.9) (1,463.1) (3,090.2)
Operating profit from subsidiaries 2,3 284.1 312.8 304.4
Share of results from associates and joint ventures 3 9.7 (0.2) (5.8)
Total profit from operations, associates and joint ventures 2,3 293.8 312.6 298.6
Investment income 13.5 8.8 18.1
Interest expense (32.0) (15.6) (33.7)
Other finance items 0.8 (4.4) (23.6)
Net finance expense 6 (17.7) (11.2) (39.2)
Profit before tax 276.1 301.4 259.4
Income tax expense 7 (118.0) (117.4) (160.4)
Profit for the period from continuing operations 158.1 184.0 99.0
Discontinued operations
Profit for the period from discontinued operations 8 - 615.0 602.7
Profit for the period 158.1 799.0 701.7
Attributable to:
Non-controlling interests 70.0 93.2 93.5
Owners of the parent 88.1 705.8 608.2
US cents US cents US cents
Basic earnings per share 9
From continuing operations 8.9 9.2 0.6
From discontinued operations - 62.4 61.1
Total continuing and discontinued operations 8.9 71.6 61.7
8.9
9.2
0.6
From discontinued operations
-
62.4
61.1
Total continuing and discontinued operations
8.9
71.6
61.7
Condensed Consolidated Statement of Comprehensive Income
Six months Six months
ended ended Year ended
30.06.2016 30.06.2015 31.12.2015
(Unaudited) (Unaudited)
Notes $m $m $m
Profit for the period 158.1 799.0 701.7
Items that may be reclassified subsequently to profit or loss:
Gains/(losses) in fair value of cash flow hedges deferred in reserves (3.6) 2.5 1.7
Share of other comprehensive losses of associates and joint ventures, net of tax (17.5) 0.7 (16.0)
Gains/(losses) in fair value of available-for-sale investments 13 1.2 (1.3) (3.2)
Currency translation adjustment 8 - (3.9) (1.8)
Deferred tax effects arising on cash flow hedges deferred in reserves 1.3 (0.3) -
Losses/(gains) in fair value of cash flow hedges transferred to the income statement 5 3.6 2.5 5.8
Losses in fair value of available-for-sale investments transferred to income statement 6 - - 1.0
Deferred tax effects arising on amounts transferred to the income statement (0.9) (0.5) (1.3)
Total items that may be reclassified subsequently to profit or loss (15.9) (0.3) (13.8)
Items that will not be subsequently reclassified to profit or loss:
Actuarial (losses)/gains on defined benefit plans (2.3) (5.7) 3.8
Tax on items that will not be reclassified 1.1 0.9 (1.2)
Total Items that will not be subsequently reclassified to profit or loss (1.2) (4.8) 2.6
Total other comprehensive income (17.1) (5.1) (11.2)
Total comprehensive income for the period 141.0 793.9 690.5
Attributable to:
Non-controlling interests 70.0 93.8 90.9
Owners of the parent 71.0 700.1 599.6
141.0
793.9
690.5
Attributable to:
Non-controlling interests
70.0
93.8
90.9
Owners of the parent
71.0
700.1
599.6
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2016 (Unaudited)
Share capital Share premium Other reserves (note 17) Retained earnings (note 17) Net equity Non- controlling interests Total
$m $m $m $m $m $m $m
Balance at 1 January 2016 89.8 199.2 (59.3) 6,416.4 6,646.1 1,873.2 8,519.3
Profit for the period - - - 88.1 88.1 70.0 158.1
Other comprehensive expense for the period - - (15.6) (1.5) (17.1) - (17.1)
Dividends - - - - - (40.0) (40.0)
Balance at 30 June 2016 89.8 199.2 (74.9) 6,503.0 6,717.1 1,903.2 8,620.3
For the six months ended 30 June 2015 (Unaudited)
Share capital Share premium Other reserves (note 17) Retained earnings (note 17) Net equity Non- controlling interests Total
$m $m $m $m $m $m $m
Balance at 1 January 2015 89.8 199.2 (47.4) 5,932.1 6,173.7 1,861.0 8,034.7
Profit for the period - - - 705.8 705.8 93.2 799.0
Other comprehensive expense for the period - - (4.4) (1.4) (5.8) 0.6 (5.1)
Dividends - - - (96.6) (96.6) (80.0) (176.6)
Balance at 30 June 2015 89.8 199.2 (51.8) 6,540.0 6,777.2 1,874.8 8,652.0
For the year ended 31 December 2015 (Audited)
Share capital Share premium Other reserves (note 17) Retained earnings (note 17) Net equity Non- controlling interests Total
$m $m $m $m $m $m $m
Balance at 1 January 2015 89.8 199.2 (47.4) 5,932.1 6,173.7 1,861.0 8,034.7
Profit for the year - - - 608.2 608.2 93.5 701.7
Other comprehensive expense for the year - - (11.9) 3.3 (8.6) (2.6) (11.2)
Loss of control in subsidiaries - - - - - (13.3) (13.3)
Capital contribution from non-controlling interests - - - - - 14.6 14.6
Dividends - - - (127.2) (127.2) (80.0) (207.2)
Balance at 31 December 2015 89.8 199.2 (59.3) 6,416.4 6,646.1 1.873.2 8,519.3
Dividends
Dividends to ordinary shareholders of the Company Notes Six months ended 30.06.2016 Six months ended 30.06.2015 Year ended 31.12.2015
Per share US cents US cents US cents
Dividends per share proposed in relation to the period 10
- ordinary dividend (interim) 3.1 3.1 3.1
- ordinary dividend (final) - - -
3.1 3.1 3.1
Dividends per share paid in the period and deducted from net equity
- ordinary dividend (interim) - - -
- ordinary dividend (final) - 9.8 9.8
- 9.8 9.8
In aggregate $m $m $m
Dividends proposed in relation to the period 10 30.6 30.6 30.6
Dividends paid in the period and deducted from net equity - 96.6 127.2
Condensed Consolidated Balance Sheet
At 30.06.2016(Unaudited) At 30.06.2015(Unaudited) At 31.12.2015(Audited)
Non-current assets Notes $m $m $m
Intangible asset 11 150.1 150.1 150.1
Property, plant and equipment 12 8,799.1 8,535.1 8,601.1
Investment property 2.6 2.2 2.0
Inventories 213.9 233.8 263.9
Investment in associates and in joint ventures 1,081.3 161.4 1,146.6
Trade and other receivables 308.1 233.9 292.9
Available-for-sale investments 13 4.1 4.5 2.7
Deferred tax assets 150.3 144.6 124.6
10,709.5 9,465.6 10,583.9
Current assets
Inventories 364.7 442.4 297.1
Trade and other receivables 385.9 511.6 604.8
Current tax assets 341.8 129.5 319.5
Derivative financial instruments 5 0.4 0.1 0.2
Liquid investments 19 1,602.4 1,366.8 924.1
Cash and cash equivalents 19 577.7 1,853.2 807.5
3,272.9 4,303.6 2,953.2
Total assets 13,982.4 13,769.2 13,537.1
Current liabilities
Short-term borrowings 15 (813.2) (465.8) (758.9)
Derivative financial instruments 5 (1.9) (2.9) (2.0)
Trade and other payables (464.7) (806.0) (478.9)
Current tax liabilities (25.6) (254.3) (198.8)
(1,305.4) (1,529.0) (1,438.6)
Non-current liabilities
Medium and long-term borrowings 15 (2,406.5) (2,010.6) (1,996.2)
Derivative financial instruments 5 (2.1) (2.8) (1.5)
Trade and other payables (4.5) (3.2) (24.4)
Post-employment benefit obligations (100.1) (102.6) (86.9)
Decommissioning & restoration and other long term provisions (399.6) (432.3) (394.0)
Deferred tax liabilities (1,143.9) (1,036.7) (1,076.2)
(4,056.7) (3,588.2) (3,579.2)
Total liabilities (5,362.1) (5,117.2) (5,017.8)
Net assets 8,620.3 8,652.0 8,519.3
Equity
Share capital 16 89.8 89.8 89.8
Share premium 16 199.2 199.2 199.2
Other reserves 17 (74.9) (73.4) (59.3)
Retained earnings 17 6,503.0 6,561.6 6,416.4
Equity attributable to owners of the parent 6,717.1 6,777.2 6,646.1
Non-controlling interests 1,903.2 1,874.8 1,873.2
Total equity 8,620.3 8,652.0 8,519.3
The interim condensed consolidated financial statements were approved by the Board of Directors on 15 August 2016.
Condensed Consolidated Cash Flow Statement
Six months Six months Year ended 31.12.2015(Audited)
ended ended
30.06.2016 (Unaudited) 30.06.2015(Unaudited)
Notes $m $m $m
Cash flows from operating activities 18 774.1 807.7 858.3
Interest paid (20.5) (20.2) (38.6)
Income tax paid (257.5) (191.2) (427.1)
Net cash from operating activities 496.1 596.3 392.6
Investing activities
Capital contributions and loans to associates and joint ventures (1.0) (39.4) (112.0)
Acquisition of joint ventures 16 - - (972.8)
Dividends from associate 13.6 6.6 12.1
Acquisition of available-for-sale investments 13 - - (0.2)
Disposal of subsidiaries 8 - 947.3 942.9
Acquisition of mining properties 13 (7.0) (78.0) (78.0)
Proceeds from sale of property plant and equipment 12 0.1 - 1.6
Purchases of property, plant and equipment 12 (385.4) (662.3) (1,048.5)
Net (increase)/decrease in liquid investments (678.3) 162.3 605.0
Interest received 6.9 9.6 11.1
Net cash (used)/from in investing activities (1,051.1) 346.1 (638.9)
Financing activities
Dividends paid to equity holders of the Company - (96.6) (127.2)
Dividends paid to preference shareholders of the Company (0.1) (0.1) (0.2)
Dividends paid to non-controlling interests (40.0) - (80.0)
Capital increase from non-controlling interests - - 14.6
Net proceeds from issue of new borrowings 15 656.8 357.3 725.9
Repayments of borrowings 15 (292.5) (182.9) (276.4)
Repayments of obligations under finance leases 15 (14.7) (5.7) (11.9)
Net cash generated from financing activities 309.5 72.0 244.8
Net (decrease)/ increase in cash and cash equivalents (245.5) 1,014.4 (1.5)
Cash and cash equivalents at beginning of the period 807.5 845.4 845.4
Net (decrease)/increase in cash and cash equivalents 19 (245.5) 1,014.4 (1.5)
Effect of foreign exchange rate changes 19 15.7 (6.6) (36.4)
Cash and cash equivalents at end of the period 19 577.7 1,853.2 807.5
Notes
1. General information and accounting policies
a) General information
These June 2016 interim condensed consolidated financial statements ("the condensed financial statements") are for the six
months ended 30 June 2016. The condensed financial statements are unaudited.
The information for the year ended 31 December 2015 does not constitute the Group's statutory accounts as defined in
section 434 of the Companies Act 2006 (the "Act") but is derived from those accounts. The statutory accounts for the year
ended 31 December 2015 have been approved by the Board and have been delivered to the Registrar of Companies. The auditor
has reported on those accounts and their report was unqualified, with no matters by way of emphasis, and did not contain
statements under section 498(2) of the Act (regarding adequacy of accounting records and returns) or under section 498(3)
(regarding provision of necessary information and explanations).
b) Significant events during 2016
The Antucoya operation achieved commercial production in 1 April 2016, and its revenue and costs have accordingly been
recognised in the income statement from that date onwards.
c) Basis of preparation
The annual financial statements of Antofagasta plc for the year ended 31 December 2015 were prepared in accordance with
International Financial Reporting Standards ("IFRS") and with those parts of the companies Act 2006 applicable to companies
reporting under IFRS. For these purposes, IFRS comprise the standards issued by the International Accounting Standards
Board ("IASB") and IFRS Interpretations Committee ("IFRIC IC") that have been endorsed by the European Union ("EU").
The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance
with the accounting policies for the year ended 31 December 2015 and the International Accounting Standard ("IAS") 34
Interim Financial Reporting and the requirements of the UK Disclosure and Transparency Rules ("DTR") of the Financial
Conduct Authority ("FCA") in the United Kingdom as applicable to interim financial reporting.
The condensed financial statements represent a "condensed set of financial statements" as referred to in the DTR issued by
the FCA. Accordingly, they do not include all of the information required for a full annual financial report and are to be
read in conjunction with the Group's financial statements for the year ended 31 December 2015.
d) Change in estimation
The Group has revised its estimation of deferred stripping costs which has impacted the amounts capitalised at the Los
Pelambres mine during the first six months of 2016, where $61 million of deferred stripping costs have been capitalised
during the period.
e) Going concern
When assessing the going concern status of the Group the Directors have considered in particular its financial position,
including its significant balance of cash, cash equivalents and liquid investments and the borrowing facilities in place,
including their terms and remaining durations. When assessing the prospects of the Group, the Directors have considered the
Group's copper price forecasts, the Group's expected production levels, operating cost profile, capital expenditure and
financing plans. The Directors have taken into consideration the Group's key risks which could impact the prospects of the
Group, with the most relevant to this assessment considered to be risks to the copper price outlook. Robust down-side
sensitivity analyses have been performed, assessing the impact of a significant deterioration in the copper price outlook.
These stress-tests all indicated results which could be managed in the normal course of business. Based on their assessment
of the Group's prospects and viability, the Directors have a reasonable expectation that the group has adequate resources
to continue in operational existence for at least twelve months from the date of approval of the financial statements.
Having reassessed the principal risks, the Directors considered it appropriate to adopt the going concern basis of
accounting in preparing its condensed interim financial statements.
f) Adoption of new accounting standards
The following accounting standards, amendments and interpretations became effective in the current reporting period:
· IFRS 14 Regulatory Deferral Accounts
· IAS 19 Defined Benefit Plans, Employee Contributions (Amendments to IAS 19)
· Annual improvements 2010 - 2012 Cycle - improvements to six IFRSs
· Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
· Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
· Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)
· Equity Method in Separate Financial Statements (Amendments to IAS 27)
· Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS
28)
· Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)
·
D
isclosure Initiative
(Amendments to IAS 1)
The application of these standards and interpretations effective for the first time in the current period has had no
significant impact on the amounts reported in these condensed consolidated financial statements.
Accounting standards issued but not yet effective applied
The following accounting standards, interpretations and amendments have been issued by the IASB, but are not yet
effective:
New Standards Effective date (Subject to EU endorsement)
IFRS 9, Financial instruments Annual periods beginning on or after January 1, 2018
IFRS 15, Revenue from Contracts with Customers Annual periods beginning on or after January 1, 2018
IFRS 16, Leases Annual periods beginning on or after January 1, 2019
Amendments to IFRSs Effective date (Subject to EU endorsement)
Recognition of Deferred Tax Assets for Unrealized Losses (Amendments to IAS 12) Annual periods beginning on or after January 1, 2017
Disclosure Initiative (Amendments to IAS 7) Annual periods beginning on or after January 1, 2017
Annual improvements 2012 - 2014 Cycle - improvements to four IFRSs Annual periods beginning on or after July 1, 2016
The Group is continuing to evaluate the impact of adopting these new standards and interpretations.
The Group is continuing to evaluate in detail the potential impact of IFRS 9 Financial Instruments and IFRS 15 Revenue from
contracts with customers but does not currently expect these to have a material impact. In respect of IFRS 16 Leases the
Group is not yet able to estimate the impact of the new rules on the Group´s financial statements. The Group will make more
detailed assessments of the impact.
2. Total profit from operations, associates and joint ventures
Six months
ended
30.06.2016 Six months
ended
30.06.2015 Year ended 31.12.2015 $m $m $m Group revenue 1,448.0 1,775.9 3,394.6 Cost of sales (including depreciation, amortization and disposal) (936.9) (1,174.8) (2,478.9) Gross profit 511.1 601.1 915.7 Administrative and distribution expenses (194.5) (210.6) (455.7) Other operating income 7.8 6.2 37.6 Other operating expenses (40.3) (83.9) (193.2) Operating results of the parents and subsidiaries 284.1 312.8 304.4 Share of income/(loss) from associates and joint ventures 9.7 (0.2) (5.8) Total profit
from operations, associates and joint ventures 293.8 312.6 298.6
Six months
ended
30.06.2016
Six months
ended
30.06.2015
Year ended 31.12.2015
$m
$m
$m
Group revenue
1,448.0
1,775.9
3,394.6
Cost of sales (including depreciation, amortization and disposal)
(936.9)
(1,174.8)
(2,478.9)
Gross profit
511.1
601.1
915.7
Administrative and distribution expenses
(194.5)
(210.6)
(455.7)
Other operating income
7.8
6.2
37.6
Other operating expenses
(40.3)
(83.9)
(193.2)
Operating results of the parents and subsidiaries
284.1
312.8
304.4
Share of income/(loss) from associates and joint ventures
9.7
(0.2)
(5.8)
Total profit from operations, associates and joint ventures
293.8
312.6
298.6
3. Segmental analysis
The Group's reportable segments are as follows:
· Los Pelambres
· Centinela
· Michilla
· Antucoya
· Zaldivar
· Exploration and evaluation
· Railway and other transport services
· Water concession
· Corporate and other items
For management purposes, the Group is organised into three business divisions based on their products - Mining, Railway and
Other Transport Services and the Water concession. The mining division is split further for management reporting purposes
to show results by mine and exploration activity. Los Pelambres, Centinela and Antucoya are operating mines, Michilla was
placed on care and maintenance at the end of 2015, Zaldivar, in which the Group has acquired a 50% stake, was acquired in
December 2015. Los Pelambres produces primarily copper concentrate and molybdenum as a by-product. Centinela produces
primarily copper concentrate containing gold as a by-product and copper cathodes. Michilla, Antucoya and Zaldivar produce
copper cathodes. The transport division provides rail cargo (based in Chile and formerly Bolivia) and road cargo (based in
Chile) together with a number of ancillary services (based in Chile). The water division produced and distributed potable
water to domestic customers and untreated water to industrial customers in Chile's Antofagasta Region, this segment had
been disposed of during H1 2015. The Exploration and evaluation segment incurs exploration and evaluation expenses.
"Corporate and other items" comprises costs incurred by the Company, Antofagasta Minerals S.A., the Group's mining
corporate centre and other entities, that are not allocated to any individual business segment. Consistent with its
internal management reporting, the Group's corporate and other items are included within the mining division.
Management monitors the operating results of business segments separately for the purpose of making decisions about
resources to be allocated and of assessing performance. Segment performance is evaluated based on the operating profit and
EBITDA of each of the segments.
Zaldivar, in which the Group has acquired 50% stake in December 2015, has been included as new segment in 2016.
a) Segment revenues and results
For the six months ended 30 June 2016
Los Pelambres Centinela Michilla Antucoya Zaldivar Exploration and evaluation2 Corporate and other items Total Mining Railway and other transport services Total
$m $m $m $m $m $m $m $m $m $m
Revenue 847.5 449.3 3.8 67.3 - - - 1,367.9 80.1 1,448.0
Cost of sales (412.1) (363.9) (9.0) (51.1) - (18.9) (20.3) (875.3) (41.1) (916.4)
Depreciation and amortization (96.7) (123.4) - (16.7) - - (3.2) (240.0) (7.3) (247.3)
(Loss)/gains on disposals (0.2) - - - - - - (0.2) - (0.2)
Operating profit/(loss) 338.5 (38.0) (5.2) (0.5) - (18.9) (23.5) 252.4 31.7 284.1
Share of results from
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