REG - Antofagasta PLC - HALF YEARLY FINANCIAL REPORT JUNE 2017 <Origin Href="QuoteRef">ANTO.L</Origin> - Part 2
22/08/2017 07:06
- Part 2: For the preceding part double click ID:nRSV5934Oa
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 ended 30.06.2017 Six months ended 30.06.2016 Year ended 31.12.2016
Notes (Unaudited) (Unaudited/ Before exceptional items Exceptional items (Note 3) Total
Restated)
(Audited) (Audited) (Audited)
$m $m $m $m $m
Revenue 2,5 2,049.2 1,444.2 3,621.7 - 3,621.7
Total operating costs (1,327.9) (1,156.6) (2,698.1) (456.6) (3,154.7)
Operating profit from subsidiaries 2,4 721.3 287.6 923.6 (456.6) 467.0
Net share of profit/(loss) from associates and joint ventures 2,4 21.6 9.7 23.4 (134.7) (111.3)
Total profit from operations, associates and joint ventures 742.9 297.3 947.0 (591.3) 355.7
Investment income 10.2 13.1 26.9 - 26.9
Interest expense (48.6) (32.0) (86.1) - (86.1)
Other finance items (15.4) (1.9) (11.9) - (11.9)
Net finance expense 7 (53.8) (20.8) (71.1) - (71.1)
Profit before tax 689.1 276.5 875.9 (591.3) 284.6
Income tax expense 8 (234.5) (118.0) (313.5) 204.9 (108.6)
Profit for the period from continuing operations 454.6 158.5 562.4 (386.4) 176.0
Discontinued operations
Profit for the period from discontinued operations - (0.4) 38.3 - 38.3
Profit for the period 454.6 158.1 600.7 (386.4) 214.3
Attributable to:
Non-controlling interests 164.1 70.0 220.9 (164.6) 56.3
Profit for the period attributable to the owners of the parent 290.5 88.1 379.8 (221.8) 158.0
US cents US cents US cents US cents US cents
Basic earnings per share
From continuing operations 9 29.5 8.9 34.7 (22.6) 12.1
From discontinued operations 9 - - 3.9 - 3.9
Total continuing and discontinued operations 29.5 8.9 38.6 (22.6) 16.0
Condensed Consolidated Statement of Comprehensive Income
Six months Six months
ended ended Year ended
30.06.2017 30.06.2016 31.12.2016
(Unaudited) (Unaudited) (Audited)
Notes $m $m $m
Profit for the period 454.6 158.1 214.3
Items that may be or were reclassified subsequently to profit or loss:
Losses in fair value of cash flow hedges deferred in reserves (0.3) (3.6) (3.5)
Share of other comprehensive (losses)/ income of equity accounted units, net of tax (0.1) (17.5) 4.4
(Losses)/Gains in fair value of available for sale investments 14 (0.4) 1.2 1.7
Tax effects arising on cash flow hedges deferred in reserves (0.2) 1.3 0.6
Losses in fair value of cash flow hedges transferred to the income statement 6 0.8 3.6 5.8
Share of other comprehensive income of equity accounted units transferred to the income statement - - 52.6
Tax effects arising on amounts transferred to the income statement 0.1 (0.9) (1.4)
Total items that may be or were reclassified subsequently to profit or loss (0.1) (15.9) 60.2
Items that will not be subsequently reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit plans 2.5 (2.3) 7.8
Tax on items recognised through OCI which will not be reclassified to profit or loss in the future (1.4) 1.1 (1.3)
Total Items that will not be subsequently reclassified to profit or loss 1.1 (1.2) 6.5
Total other comprehensive income 1.0 (17.1) 66.7
Total comprehensive income for the period 455.6 141.0 281.0
Attributable to:
Non-controlling interests 164.4 70.0 24.9
Equity holders of the Company 291.2 71.0 256.1
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017 (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 2017 89.8 199.2 (22.3) 6,548.6 6,815.3 1,694.4 8,509.7
Profit for the period - - - 290.5 290.5 164.1 454.6
Other comprehensive expense for the period - - 8.0 (7.3) 0.7 0.3 1.0
Dividends - - - (150.8) (150.8) (100.0) (250.8)
Balance at 30 June 2017 89.8 199.2 (14.3) 6,681.0 6,955.7 1,758.8 8,714.5
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 year ended 31 December 2016 (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 2016 89.8 199.2 (59.3) 6,416.4 6,646.1 1.873.2 8,519.3
Profit for the year - - - 158.0 158.0 56.3 214.3
Other comprehensive income for the year - - 37.0 4.8 41.8 24.9 66.7
Dividends - - - (30.6) (30.6) (260.0) (290.6)
Balance at 31 December 2016 89.8 199.2 (22.3) 6,548.6 6,815.3 1,694.4 8,509.7
Condensed Consolidated Balance Sheet
At 30.06.2017(Unaudited) At 30.06.2016(Unaudited) At 31.12.2016(Audited)
Non-current assets Notes $m $m $m
Intangible asset 11 150.1 150.1 150.1
Property, plant and equipment 12 8,868.5 8,799.1 8,737.5
Other non-current assets 2.7 2.6 2.6
Inventories 111.8 213.9 157.3
Investment in associates and joint ventures 13 1,100.7 1,087.7 1,086.6
Trade and other receivables 55.5 308.1 66.7
Derivative financial instruments 0.1 - 0.2
Available-for-sale investments 14 4.4 4.1 4.6
Deferred tax assets 80.3 150.3 82.8
10,374.1 10,715.9 10,288.4
Current assets
Inventories 512.8 364.7 393.4
Trade and other receivables 467.9 385.9 736.1
Current tax assets 212.6 341.8 255.2
Derivative financial instruments 6 0.1 0.4 2.2
Liquid investments 19 1,421.1 1,602.4 1,332.2
Cash and cash equivalents 19 745.0 577.7 716.3
3,359.5 3,272.9 3,435.4
Total assets 13,733.6 13,988.8 13,723.8
Current liabilities
Short-term borrowings and leases 15 (822.7) (813.2) (836.8)
Derivative financial instruments 6 (4.2) (1.9) (2.0)
Trade and other payables (447.9) (464.7) (595.8)
Current tax liabilities (65.8) (25.6) (119.4)
(1,340.6) (1,305.4) (1,554.0)
Non-current liabilities
Medium and long-term borrowings and leases 15 (2,203.0) (2,406.5) (2,283.4)
Derivative financial instruments 6 (0.1) (2.1) (0.5)
Trade and other payables (5.9) (4.5) (7.9)
Liabilities in relation to joint venture 13 (3.6) (6.4) (3.1)
Post-employment benefit obligations (94.9) (100.1) (92.2)
Decommissioning & restoration and other long term provisions (399.3) (399.6) (392.1)
Deferred tax liabilities (971.7) (1,143.9) (880.9)
(3,678.5) (4,063.1) (3,660.1)
Total liabilities (5,019.1) (5,368.5) (5,214.1)
Net assets 8,714.5 8,620.3 8,509.7
Equity
Share capital 16 89.8 89.8 89.8
Share premium 16 199.2 199.2 199.2
Other reserves 17 (14.3) (74.9) (22.3)
Retained earnings 17 6,681.0 6,503.0 6,548.6
Equity attributable to equity holders of the Company 6,955.7 6,717.1 6,815.3
Non-controlling interests 1,758.8 1,903.2 1,694.4
Total equity 8,714.5 8,620.3 8,509.7
The interim condensed consolidated financial statements were approved by the Board of Directors on 21 August 2017.
Condensed Consolidated Cash Flow Statement
Six months Six months Year ended 31.12.2016(Audited)
ended ended
30.06.2017 (Unaudited) 30.06.2016(Unaudited)
Notes $m $m $m
Cash flows from continuing and discontinued operations 18 1,147.1 774.1 1,457.3
Interest paid (29.2) (20.5) (46.3)
Income tax paid (165.3) (257.5) (272.6)
Net cash from continuing and discontinued activities 952.6 496.1 1,138.4
Investing activities
Capital contributions and loans to associates and joint ventures (39.7) (1.0) (10.1)
Acquisition of joint ventures - - 20.0
Dividends from associate 8.4 13.6 10.2
Disposal of subsidiaries - - 10.0
Acquisition of mining properties - (7.0) (7.0)
Proceeds from sale of property plant and equipment 12 0.3 0.1 0.5
Purchases of property, plant and equipment 12 (410.0) (385.4) (795.1)
Net increase in liquid investments 19 (88.9) (678.3) (408.1)
Interest received 9.4 6.9 14.4
Net cash used in investing activities (520.5) (1,051.1) (1,165.2)
Financing activities
Dividends paid to equity holders of the Company (150.8) - (30.6)
Dividends paid to preference shareholders of the Company - (0.1) (0.1)
Dividends paid to non-controlling interests (100.0) (40.0) (260.0)
Net proceeds from issue of new borrowings 19 160.0 656.8 938.8
Repayments of borrowings 19 (291.3) (292.5) (693.1)
Repayments of obligations under finance leases 19 (17.4) (14.7) (31.3)
Net cash (used in)/from financing activities (399.5) 309.5 (76.3)
Net increase /(decrease) in cash and cash equivalents 19 32.6 (245.5) (103.1)
Cash and cash equivalents at beginning of the period 716.3 807.5 807.5
Net increase/(decrease) in cash and cash equivalents 19 32.6 (245.5) (103.1)
Effect of foreign exchange rate changes 19 (3.9) 15.7 11.9
Cash and cash equivalents at end of the period 19 745.0 577.7 716.3
Notes
1. General information and accounting policies
a) General information
These June 2017 interim condensed consolidated financial statements ("the condensed financial statements") are for the six
months ended 30 June 2017. The condensed financial statements are unaudited.
The information for the year ended 31 December 2016 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 2016 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 2017
The Group completed the disposal of its 40% interest in Alto Maipo in March 2017 for nil consideration. An impairment
provision was recognised in respect of the carrying value of the Group's investment in Alto Maipo in the 2016 year-end
results, and no gain or loss resulted from the completion of the disposal in the current period.
c) Basis of preparation
The annual financial statements of Antofagasta plc for the year ended 31 December 2016 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 2016 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 2016.
The Group completed the sale of Minera Michilla SA to Haldeman Mining Company S.A. on 30 December 2016, and accordingly in
the 2016 year-end results the net results of Michilla for the twelve months to December 2016 were shown in the income
statement on the line for "Profit for the period from discontinued operations". The comparative results for the six months
to 30 June 2016 in this half-yearly financial report have been restated in order to present the comparative net results on
the "Profit for the period from discontinued operations". During the first six months of 2016 Michilla contributed $36.9
million cash outflow (first six months of 2015 - $33.3 million cash inflow) in respect to the Group´s net cash flow from
operating activities, nil (first six months of 2015 - nil) in respect to net cash used in investing activities and nil
(first six months of 2015 - nil) in respect to net cash provided in financing activities.
d) Going concern
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.
e) Accounting policies
The following International Reporting Standards (IFRS), amendments and interpretations are effective for the first time in
the current reporting period.
Adoption of new accounting standards
The following accounting standards, amendments and interpretations became effective in the current reporting period:
- Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)
- Disclosure Initiative (Amendments to IAS 7)
- Annual improvements 2014 - 2016 Cycle (Amendments to IFRS 12)
The application of these standards and interpretations effective for the first time in the current period has had no
material impact on the amounts reported in these condensed consolidated financial statements.
Accounting standards issued but not yet effective
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
IFRS 17, Insurance Contracts Annual periods beginning on or after January 1, 2021
Amendments to IFRSs Effective date (Subject to EU endorsement)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) Effective date deferred indefinitely
Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) Annual periods beginning on or after January 1, 2018
Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4) Deferral approach effective for annual periods beginning on or after 1 January 2018 and only available for three years after that date
Transfers of Investment Property (Amendments to IAS 40) Annual periods beginning on or after January 1, 2018
Annual Improvements to three IFRS Standards 2014-2016 Cycle Annual periods beginning on or after January 1, 2018
New Interpretations Effective date (Subject to EU endorsement)
IFRIC 22, Foreign Currency Transactions and Advance Consideration Annual periods beginning on or after January 1, 2018
IFRIC 23, Uncertainty over Income Tax Treatments Annual periods beginning on or after January 1, 2019
The Group is continuing to evaluate the impact of adopting these new standards and interpretations.
In respect of IFRS 15 Revenue from contracts the current expectation is that the principal impact will relate to situations
where the Group is effectively providing a shipping service to customers who have purchased copper from the Group, to
transport that copper to a destination port specified by the customer. Such shipping services will represent a separate
performance obligation and should be accounted for over time separately from the sale of goods. The impact of recognising
shipping revenue over time rather than at a point in time is not expected to have a material impact on the financial
statements.
IFRS 16 Leases will result in most of the Group's existing operating leases being accounted for similar to finance leases
under the current IAS 17, resulting in the recognition of additional assets within property, plant and equipment in respect
of the right of use of the lease assets, and additional lease liabilities. The operating lease charges currently reflected
within operating expenses (and EBITDA) will be eliminated, and instead depreciation and finance charges will be recognised
in respect of the lease assets and liabilities. Based on the operating leases in place at 31 December 2016 it is currently
estimated that this would result in the recognition of additional lease assets within property, plant & equipment and
additional lease liabilities as at 1 January 2017 of approximately $100 million in each case. It is also estimated that
this would result in a decrease in annual operating expenses before depreciation (and therefore an increase in EBITDA) of
approximately $75m, an increase in annual depreciation of approximately $70 million, an increase in finance costs of less
than $15m, and a net impact on profit before tax of less than $15 million.
2. Total profit from operations, associates and joint ventures
Six months
ended
30.06.2017 Six months
ended
30.06.2016 Year ended 31.12.2016 $m $m $m Revenue 2,049.2 1,444,2 3,621.7 Cost of sales (1,091.5) (933.4) (2,087.0) Gross profit 957.7 510.8 1,534.7 Administrative and distribution expenses (192.5) (189.1) (479.1) Provision against carrying value of assets - - (456.6) Other operating income 10.3 6.6 20.2 Other operating expenses (54.2) (40.7) (152.2) Operating profit from subsidiaries 721.3 287.6 467.0 Equity accounting profit 21.6 9.7 23.4 Provision against carrying value of assets - - (134.7) Net
share of income/(loss) from associates and joint ventures 21.6 9.7 (111.3) Total profit from operations, associates and joint ventures 742.9 297.3 355.7
Six months
ended
30.06.2017
Six months
ended
30.06.2016
Year ended 31.12.2016
$m
$m
$m
Revenue
2,049.2
1,444,2
3,621.7
Cost of sales
(1,091.5)
(933.4)
(2,087.0)
Gross profit
957.7
510.8
1,534.7
Administrative and distribution expenses
(192.5)
(189.1)
(479.1)
Provision against carrying value of assets
-
-
(456.6)
Other operating income
10.3
6.6
20.2
Other operating expenses
(54.2)
(40.7)
(152.2)
Operating profit from subsidiaries
721.3
287.6
467.0
Equity accounting profit
21.6
9.7
23.4
Provision against carrying value of assets
-
-
(134.7)
Net share of income/(loss) from associates and joint ventures
21.6
9.7
(111.3)
Total profit from operations, associates and joint ventures
742.9
297.3
355.7
3. Exceptional items and assets sensitivities
Exceptional items are material items of income and expense which are non-regular or non-operational and typically non-cash
movements. There were no exceptional items at June 2017 and June 2016. The exceptional items in the year ended 31 December
2016 and their impact on the results are set out below.
Operating profit Share of profit/(loss) from associates and joint ventures
Six months ended Six months ended Year ended Six months ended Six months ended Year ended
30.06.2017 30.06.2016 31.12.2016 30.06.2017 30.06.2016 31.12.2016
$m $m $m $m $m
Beforeexceptionalitems 721.3 287.6 923.6 21.6 9.7 23.4
Provision against the carrying value of assets
Alto Maipo - Loan - - (241.0) - - -
Alto Maipo - Investment - - - - - (126.6)
Antucoya - PP&E - - (215.6) - - -
Energia Andina - Investment - - - - - (8.1)
Total Provision against the carrying value of assets - - (456.6) - - (134.7)
After exceptional items 721.3 287.6 467.0 21.6 9.7 (111.3)
Profit before tax Earnings per share
Six months ended Six months ended Year ended Six months ended Six months ended Year ended
30.06.2017 30.06.2016 31.12.2016 30.06.2017 30.06.2016 31.12.2016
$m $m $m US cents $m US cents
Beforeexceptionalitems 687.2 276.5 875.9 29.5 8.9 38.6
Provision against the carrying value of assets -
Alto Maipo - Loan - - (241.0) - - 6.3
Alto Maipo - Investment - - (126.6) - - 5.8
Antucoya - PP&E - - (215.6) - - 10.7
Energia Andina - Investment - - (8.1) - - (0.2)
Total Provision against the carrying value of assets - - (591.3) - - (22.6)
After exceptional items 687.2 276.5 284.6 29.5 8.9 16.0
Antucoya 2016 impairment
There have been no indications of potential impairments during the first six months of 2017, and accordingly no impairment
reviews have been performed as at 30 June 2017.
At the 2016 year-end an impairment review was conducted for the Antucoya operation, which resulted in the recognition of an
impairment provision of $215.6 million (on a pre-tax basis) in the 2016 financial statements. To illustrate the sensitivity
of the 2016 year-end valuation of Antucoya to negative movements in these parameters, a 5% decrease in the forecast
long-term copper price would have resulted in an increase in the impairment of $121.0 million, and an increase in the
discount rate from 8% to 9% would have resulted in an increase in the impairment of $89.0 million. These are simple
sensitivities, looking at illustrative movements in the long-term copper price and discount rate in isolation. In reality,
a deterioration in the long-term copper price environment is likely to result in corresponding improvements in a range of
input cost factors, as well as potential operational changes, which could partly mitigate these estimated potential
sensitivities.
Other asset sensitivities and relevant considerations
There were no indicators of impairment for the Group's other mining operations at the 2016 year-end, and accordingly no
detailed impairment reviews were performed for those operations. However, in order to provide an indication of the
sensitivities of the valuations of these assets, a sensitivity analysis was performed at the 2016 year-end. For all of the
other mining operations a valuation exercise using assumptions consistent with those used in the Antucoya impairment review
confirmed that the recoverable amount of the assets was in excess of their carrying value. The recoverable amount of the
assets still remained in excess of their carrying value for all of the other mining operations with either a 5% decrease in
the forecast long-term copper price or an increase in the discount rate from 8% to 9%.
With regard to the Twin Metals project, in December 2016 Twin Metals was notified that the relevant U.S. authorities had
denied renewal of two of its long-held federal mining leases. Twin Metals' leases had been held in good standing by the
federal government for more than 50 years, and had been twice renewed without controversy. Twin Metals filed a federal
lawsuit seeking to secure its rights to the two federal mineral leases and believes denial of the leases is inconsistent
with federal law, the terms of the leases themselves and the federal government's established precedent in supporting and
renewing the leases over five decades. At the 2016 year-end the potential operating and financial impact of the non-renewal
of these leases was reviewed, including an analysis of the potential impact on the mine plan and value of the project of
excluding the mineral resources relating to these two leases. This indicated a reduction in the net present value of the
project, but that the updated net present value was still in excess of the carrying value of the assets relating to the
Twin Metals project. As such the non-renewal of these leases does not have any financial impact and therefore no adjustment
was made to the carrying value of the Twin Metals project assets. There have been no further significant developments
during the first six months of 2017. Details of the current status of the legal process are set out in Note 20.
4. Segmental analysis
The Group's reportable segments are as follows:
· Los Pelambres
· Centinela
· Michilla (sold in 2016)
· Antucoya
· Zaldivar
· Exploration and evaluation
· Railway and other transport services
· Corporate and other items
For management purposes, the Group is organised into two business divisions based on their products - Mining and Railway
and Other Transport Services. The mining division is split further for management reporting purposes to show results by
mine and exploration activity. Following the completion of construction, the Antucoya achieved commercial production in
April 2016. The Group acquired a 50% stake in the Zaldivar mine in December 2015. The Michilla mine was placed on care and
maintenance at the end of 2015, and was disposed of in December 2016. 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. Antucoya and Zaldivar produce copper cathodes, as did Michilla. 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 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.
The Chief operating decision maker 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.
a) Segment revenues and results
For the six months ended 30 June 2017
Los Pelambres Centinela 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
Revenue 943.3 794.0 229.6 - - 1.5 1,968.4 80.8 2,049.2
Operating costs excluding depreciation (421.6) (374.0) (149.7) - (22.0) (25.3) (992.6) (45.4) (1,038.0)
Depreciation and amortisation (88.6) (152.2) (37.8) - - (3.6) (282.2) (7.8) (290.0)
Gains on disposals - - - - - - - 0.1 0.1
Operating profit/(loss) 433.1 267.8 42.1 - (22.0) (27.4) 693.6 27.7 721.3
Equity accounting profit/(loss) - - - 21.2 - (5.4) 15.9 5.8 21.6
Investment income 1.6 2.8 0.4 - - 5.1 9.9 0.3 10.2
Interest expense (3.4) (13.7) (22.1) - - (8.3) (47.5) (1.1) (48.6)
Other finance items (3.7) (8.7) (1.4) - - (1.2) (15.0) (0.4) (15.4)
Profit/(loss) before tax 427.6 248.2 19.0 21.2 (22.0) (37.2) 656.8 32.3 689.1
Tax (139.4) (63.5) (0.1) - - (25.1) (228.1) (6.4) (234.5)
Profit/(loss) for the period from continuing operations 288.2 184.7 18.9 21.2 (22.0) (62.3) 428.7 25.9 454.6
Profit for the period from discontinued operations - - - - - - - - -
Profit/(loss) for the period 288.2 184.7 18.9 21.2 (22.0) (62.3) 428.7 25.9 454.6
Non-controlling interests 114.6 50.3 (0.8) - - - 164.1 - 164.1
Profit/(loss) for the period attributable to owners of the parent 173.6 134.4 19.7 21.2 (22.0) (62.3) 264.6 25.9 290.5
Total EBITDA1 521.7 420.0 79.9 56.8 (22.0) (24.6) 1,031.8 48.0 1,079.8
Additions to non-current assets
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