REG - Antofagasta PLC - Preliminary Results Announcement <Origin Href="QuoteRef">ANTO.L</Origin> - Part 2
15/03/2016 07:06
- Part 2: For the preceding part double click ID:nRSO0969Sa
Centinela reflecting one-off costs incurred in 2014 as a consequence of a refinancing in that year.
Other finance items comprised a loss of $23.6 million (2014 - loss of $36.3 million). A gain of $0.1 million (2014 - loss
of $5.1 million) has been recognised in respect of the time value element of changes in the fair value of commodity
derivative options, which is excluded from the designated hedging relationship, and is therefore recognised directly in
profit or loss. Foreign exchange losses included in finance items were $13.6 million in 2015, compared with a gain of $4.0
million in 2014. An expense of $9.1 million (2014 - $8.9 million) has been recognised in relation to the unwinding of the
discount on provisions. An impairment charge of $26.3 million was recognised in 2014 in respect of Duluth Metals shares,
with fair value losses previously recorded within the Consolidated Statement of Comprehensive Income being transferred to
the income statement and recognised within this impairment loss.
Profit before tax
As a result of the factors set out above, profit before tax decreased by $1,256.2 million or 82.9% to $259.4 million in
2015 compared with $1,515.6 million in 2014.
Income tax expense
The tax charge in 2015 was $160.4 million (2014 - $702.3 million) and the effective tax rate was 61.8% (2014 - 46.3%).
Year ended Effective Year ended Effective
31.12.2015 tax rate 31.12.2014 tax rate
$m % $m %
Profit before tax 259.4 1,515.6
Taxes (current and deferred)
Corporate tax (110.6) 42.6 (350.9) 21.8
Adjustment to deferred tax attributable to changes in tax rates - - (215.1) 14.2
Mining tax (34.0) 13.1 (79.1) 5.2
Withholding tax (14.8) 5.7 (56.8) 3.7
Exchange rate (1.0) 0.4 (0.4) -
Total tax charge (160.4) 61.8 (702.3) 46.3
The tax charge for 2015 was $160.4 million and the effective tax rate was 61.8%. The statutory rate of Chilean corporate
(first category) tax in 2015 was 22.5% (2014 - 20%). In 2015 the effective tax rate varied from the statutory rate
principally due to tax losses which under Chilean tax carry-back rules generated a credit at historic tax rates below the
current year statutory rate, as well as the effect of expenses not deductible for Chilean corporate tax purposes
(principally the funding of expenses outside of Chile) and the effects of the mining tax which resulted in a charge of
$34.0 million and a withholding tax charge of $14.8 million. In 2014, the effective tax rate varied from the standard rate
(comprising corporate (first category) tax) principally due to the one-off deferred tax charge of $215.1 million reflecting
the increase in tax rates as a result of the Chilean tax reform enacted in that year. Further details are given in Note 7
to the preliminary results announcement.
Discontinued operations
During the year the Group completed the disposal of its water division, Aguas de Antofagasta S.A. ("ADASA") as well as part
of its transport division. The results of these operations for the year prior to disposal as well as the profit on disposal
have been presented on the "Profit for the year from discontinued operations" line in the income statement.
The profit for the year from discontinued operations was $602.7 million, compared with $37.4 million in 2014, reflecting a
net profit on disposal of $595.2 million (2014 - nil) and a net profit from operations prior to disposal of $7.5 million
(2014 - $37.4 million). Further details are given in Note 8 to the preliminary results announcement.
Non-controlling interests
Profit for the year attributable to non-controlling interests was $93.5 million, compared with $390.9 million in 2014,
reflecting the lower profit attributable to the non-controlling interests as a consequence of the decrease in the earnings
of the mining operations analysed above.
Earnings per share
Year ended 31.12.15 Year ended31.12.14
US cents US cents
Earnings per share from continuing operations 0.6 42.8
Earnings per share from continuing and discontinued operations 61.7 46.6
Earnings per share calculations are based on 985,856,695 ordinary shares. As a result of the factors set out above, profit
in 2015 attributable to equity shareholders of the Company was $608.2 million compared with $459.8 million in 2014.
Accordingly, earnings per share were 61.7 cents in 2015 compared with 46.6 cents in 2014, an increase of 32.3%.
Dividends
Dividends per share proposed in relation to the year are as follows:
Year ended 31.12.15 Year ended31.12.14
US cents US cents
Ordinary
Interim 3.1 11.7
Final - 9.8
Total dividends to ordinary shareholders 3.1 21.5
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 total dividend for the year is 3.1 cents per share, or $30.6 million, which was paid as the interim dividend, and
exceeds the Group's 35% minimum payout ratio dividend policy for the year. Therefore, no final dividend has been
recommended by the Board.
Capital expenditure
Capital expenditure (including discontinued operations) decreased by $568.4 million from $1,581.0 million in 2014 to
$1,012.6 million in 2015. This was mainly due to lower construction expenditure at the Antucoya project, where construction
substantially completed during 2015. 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 31
December 2015, the Group had commodity swaps for 300 tonnes of copper production covering a total year up to 31 January
2016. The Group´s exposure to the copper price was limited by the extent of these instruments.
The Group periodically uses foreign exchange derivatives to cover expected operational cash flow needs. At 31 December 2015
the Group had no foreign exchange derivatives.
The Group also periodically uses interest rate swaps to swap the floating rate interest for fixed rate interest. At 31
December 2015 the Group had entered into contracts in relation to the Centinela financing 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 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.
Year ended 31.12.15 Year ended 31.12.14
$m $m
Cash flows from operations 858.3 2,507.8
Income tax paid (427.1) (641.5)
Net interest paid (27.6) (28.9)
Capital contribution and loan to associates (112.0) (125.2)
Acquisition of joint venture (972.8) -
Disposal of subsidiaries 942.9 -
Acquisition of mining interests (78.0) -
Purchases of property, plant and equipment (1,048.5) (1,646.3)
Dividends paid to equity holders of the Company (127.2) (964.2)
Dividends paid to non-controlling interests (80.0) (412.2)
Dividends from associate 12.1 20.0
Other items 74.4 5.2
Changes in net cash relating to cash flows (985.5) (1,285.3)
Exchange and other non-cash movements (36.4) (27.5)
Movement in net cash in the year (1,021.9) (1,312.8)
Net cash at the beginning of the year (1.6) 1,311.2
Net cash at the end of the year (1,023.5) (1.6)
Cash flows from operations were $858.3 million in 2015 compared with $2,507.8 million in 2014. This reflected EBITDA for
the year of $890.7 million (2014 - $ 2,141.4 million) adjusted for a net working capital increase of $32.4 million (2014 -
decrease of $286.2 million).
Cash tax payments in 2015 year were $427.1 million (2014 - $641.5 million), comprising corporation tax of $249.7 million
(2014 - $264.0 million), mining tax of $32.2 million (2014 - $98.2 million) and withholding tax of $145.2 million (2014 -
$279.3 million). These amounts differ from the current tax charge in the consolidated income statement of $160.4 million
(2014 - $702.3 million) mainly because cash tax payments for withholding tax includes $132.4 million related to the
disposal of ADASA and therefore is disclosed within the results from discontinued operations. In addition, under the
Chilean tax regime the Group has prepaid taxes at rates higher than the final effective tax rate. As a consequence the
Group has current tax receivables of $319.5 million at 31 December 2015.
Contributions and loans to associates and joint ventures of $112.0 million mainly relate to the Group's share of the
funding of the development of the Alto Maipo project.
Cash disbursements relating to capital expenditure (including discontinued operations) in 2015 were $1,048.5 million
compared with $1,646.3 million in 2014. This included expenditure of $143.4 million at Antucoya (2014 - $734.6 million),
$559.4 million relating to Centinela (2014 - $566.9 million) and $203.1 million relating to Los Pelambres (2014 - $230.0
million). NB: capital expenditure figures quoted in other sections of this report are on a cash flow basis, unless stated
otherwise.
Dividends paid to ordinary shareholders of the Company in 2015 were $127.2 million (2014 - $964.2 million), which related
to the final dividend declared in respect of the previous year and the 2015 interim dividend.
Dividends paid by subsidiaries to non-controlling shareholders were $80.0 million (2014 - $412.2 million), consisting of
distributions by Los Pelambres.
Financial position
At 31.12.15 At 31.12.14
$m $m
Cash, cash equivalents and liquid investments 1,731.6 2,374.5
Total borrowings (2,755.1) (2,376.1)
Net debt at the end of the year (1,023.5) (1.6)
At 31 December 2015 the Group had combined cash, cash equivalents and liquid investments of $1,731.6 million (31 December
2014 - $2,374.5 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 $1,410.8 million (31 December 2014 - $2,007.0
million).
New borrowings in 2015 were $725.9 million (2014 - $1,583.4 million), mainly due to new short-term borrowings at Los
Pelambres of $312.0 million, Centinela of $200.0 million and Antucoya of $30.0 million. Repayments of borrowings and
finance leasing obligations in 2015 were $288.3 million (2014 - 570.9 million), relating mainly to regular repayments on
existing loans of $34.9 million and repayments on short-term loans at Los Pelambres of $205.9 million and regular
repayments of existing loan of $30.0 million at Ferrocarril Antofagasta Bolivia.
Total Group borrowings at 31 December 2015 were $2,755.1 million (2014 - $2,376.1 million). Of this, $1,936.2 million (2014
- $1,691.6 million) is proportionally attributable to the Group after excluding the non-controlling interest shareholdings
in partly-owned operations.
Cautionary statement about forward-looking statements
This preliminary results announcement 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; 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.
Consolidated Income Statement
Year ended31.12.2015 Year ended31.12.2014(Restated)
Notes $m $m
Group revenue 3,4 3,394.6 5,145.6
Total operating costs (3,090.2) (3,562.0)
Operating profit from subsidiaries 2,3 304.4 1,583.6
Share of results from associates and joint ventures 2,3 (5.8) (4.1)
Total profit from operations, associates and joint ventures 298.6 1,579.5
Investment income 18.1 16.8
Interest expense (33.7) (44.4)
Other finance items (23.6) (36.3)
Net finance expense 6 (39.2) (63.9)
Profit before tax 259.4 1,515.6
Income tax expense 7 (160.4) (702.3)
Profit for the financial year from continuing operations 99.0 813.3
Discontinued operations Profit for the financial year from discontinued operations 8 602.7 37.4
Profit for the year 701.7 850.7
Attributable to:
Non-controlling interests 93.5 390.9
Equity holders of the Company (net earnings) 608.2 459.8
Basic earnings per share1 US cents US cents
From continuing operations 9 0.6 42.8
From discontinued operations 9 61.1 3.8
Total continuing and discontinued operations 61.7 46.6
1Basic and diluted earnings per share is calculated on profit after tax and non-controlling interests giving net earnings
of $608.2 million (2014 - $459.8 million) and amounted to 61.7 cents and based on 985,856,695 ordinary shares. There was no
potential dilution of ordinary shares in either year.
Consolidated Statement of Comprehensive Income
Year ended 31.12.2015 Year ended 31.12.2014
Notes $m $m
Profit for the financial year 701.7 850.7
Items that may be or were reclassified subsequently to profit or loss:
Gains/(losses) in fair value of cash flow hedges deferred in reserves 1.7 (0.2)
Share of other comprehensive (losses)/income of equity accounted units, net of tax (16.0) (42.0)
Losses in fair value of available for sale investments 14 (3.2) (6.1)
Currency translation adjustment (1.8) (26.2)
Deferred tax effects arising on cash flow hedges deferred in reserves - 2.1
Losses/(gains) in fair value of cash flow hedges transferred to the income statement 5.8 (8.5)
Losses in fair value of available- for- sale investments transferred to income statement 1.0 26.3
Deferred tax effects arising on amounts transferred to the income statement (1.3) 1.8
Total items that may be or were reclassified subsequently to loss (13.8) (52.8)
Items that will not be subsequently reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit plans 3.8 (17.4)
Tax on items recognised directly in equity that will not be reclassified (1.2) 4.2
Total items that will not be subsequently reclassified to loss 2.6 (13.2)
Total other comprehensive income (11.2) (66.0)
Total comprehensive income for the year 690.5 784.7
Attributable to:
Non-controlling interests 90.9 370.1
Equity holders of the Company 599.6 414.6
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
Share capital Share premium Other reserves (note 22) Retained earnings (note 22) 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
Comprehensive income 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
For the year ended 31 December 2014
Share capital Share premium Other reserves (note 22) Retained earnings (note 22) Net equity Non- controlling interests Total
$m $m $m $m $m $m $m
Balance at 1 January 2014 89.8 199.2 (12.0) 6,447.5 6,724.5 1,939.1 8,663.6
Comprehensive income for the year - - - 459.8 459.8 390.9 850.7
Other comprehensive expense for the year - - (35.4) (9.8) (45.2) (20.8) (66.0)
Change in ownership interest in subsidiaries - - - 1.5 1.5 (32.0) (30.5)
Loss of control in subsidiaries - - - - - (56.7) (56.7)
Capital increase in non-controlling interest - - - (2.7) (2.7) 2.7 -
Capital contribution from non-controlling interests - - - - - 50.0 50.0
Dividends - - - (964.2) (964.2) (412.2) (1,376.4)
Balance at 31 December 2014 89.8 199.2 (47.4) 5,932.1 6,173.7 1,861.0 8,034.7
Dividends Dividends to ordinary shareholders of the Company Notes
Per share US cents US cents
Dividends per share proposed in relation to the year 10
- ordinary dividend (interim) 3.1 11.7
- ordinary dividend (final) - 9.8
3.1 21.5
Dividends per share paid in the year and deducted from net equity
- ordinary dividend (interim) 3.1 11.7
- ordinary dividend (final) 9.8 86.1
9.8 97.8
In aggregate $m $m
Dividends proposed in relation to the year 10 30.6 212.0
Dividends paid in the year and deducted from net equity 127.2 964.2
Consolidated Balance Sheet
At 31.12.15 At 31.12.14(Restated)
Non-current assets Notes $m $m
Intangible assets 11 150.1 118.6
Property, plant and equipment 12 8,601.1 8,213.9
Investment property 2.0 2.6
Inventories 18 263.9 247.8
Investment in associates and joint ventures 14 1,146.6 198.1
Trade and other receivables 292.9 239.5
Available for sale investments 15 2.7 15.6
Deferred tax assets 22 124.6 104.6
10,583.9 9,140.7
Current assets
Inventories 297.1 382.5
Trade and other receivables 604.8 810.3
Current tax assets 319.5 106.9
Derivative financial instruments 5 0.2 0.2
Liquid investments 26 924.1 1,529.1
Cash and cash equivalents 26 807.5 845.4
2,953.2 3,674.4
Total assets 13,537.1 12,815.1
Current liabilities
Short-term borrowings 19 (758.9) (284.5)
Derivative financial instruments 5 (2.0) (7.5)
Trade and other payables (478.9) (793.8)
Current tax liabilities (198.8) (77.6)
(1,438.6) (1,163.4)
Non-current liabilities
Medium and long-term borrowings 19 (1,996.2) (2,091.6)
Derivative financial instruments 5 (1.5) (3.5)
Trade and other payables (24.4) (4.8)
Post-employment benefit obligations 20 (86.9) (103.0)
Decommissioning & restoration and other long term provisions 21 (394.0) (434.3)
Deferred tax liabilities 22 (1,076.2) (979.8)
(3,579.2) (3,617.0)
Total liabilities (5,017.8) (4,780.4)
Net assets 8,519.3 8,034.7
Equity
Share capital 23 89.8 89.8
Share premium 23 199.2 199.2
Other reserves 24 (59.3) (47.4)
Retained earnings 24 6,416.4 5,932.1
Equity attributable to equity holders of the Company 6,646.1 6,173.7
Non-controlling interests 1,873.2 1,861.0
Total equity 8,519.3 8,034.7
The preliminary information was approved by the Board of Directors on 14 March 2016.
Consolidated Cash Flow Statement
Year ended 31.12.2015 Year ended 31.12.2014
Notes $m $m
Cash flows from continuing and discontinuing operations 24 858.3 2,507.8
Interest paid (38.6) (45.4)
Income tax paid (427.1) (641.5)
Net cash from continuing and discontinued activities 392.6 1,820.9
Investing activities
Capital contributions and loans to associates and joint ventures 14 (112.0) (125.2)
Acquisition of joint ventures 14 (972.8) -
Dividends from associate 14 12.1 20.0
Acquisition of available for sale investments 16 (0.2) (5.9)
Disposals of subsidiaries 8 942.9 -
Acquisition of mining properties 15 (78.0) -
Reclassification - (7.6)
Proceeds from sale of property plant and equipment 1.6 1.7
Purchases of property, plant and equipment (1,048.5) (1,646.3)
Net decrease in liquid investments 605.0 542.3
Interest received 11.1 16.5
Net cash used in investing activities (638.9) (1,204.5)
Financing activities
Dividends paid to equity holders of the Company (127.2) (964.2)
Dividends paid to preference shareholders of the Company (0.2) (0.2)
Dividends paid to non-controlling interests (80.0) (412.2)
Capital increase from non-controlling interests 14.6 50.0
Change in ownership interest in subsidiaries 29c - (30.9)
Net proceeds from issue of new borrowings 19 725.9 1,583.4
Repayments of borrowings (276.4) (570.9)
Repayments of obligations under finance leases 19 (11.9) (12.2)
Net cash used in financing activities 244.8 (357.2)
Net (decrease)/increase in cash and cash equivalents (1.5) 259.2
Cash and cash equivalents at beginning of the year 845.4 613.7
Net (decrease)/increase in cash and cash equivalents 26 (1.5) 259.2
Effect of foreign exchange rate changes 26 (36.4) (27.5)
Cash and cash equivalents at end of the year 26 807.5 845.4
Notes
1. General information and accounting policies
a) General information
This preliminary results announcement is for the year ended 31 December 2015. While the financial information contained in
this preliminary results announcement has been prepared in accordance with International Financial Reporting Standards
("IFRS"), this announcement does not itself contain sufficient information to comply with IFRS. For these purposes, IFRS
comprise the Standards issued by the International Accounting Standards Board ("IASB") and IFRS Interpretations Committee
("IFRS IC") that have been endorsed by the European Union. The Group will send its full financial statements that comply
with IFRS to shareholders in April 2016.
The financial information contained in this preliminary results announcement has been prepared on the going concern basis.
Details of the factors which have been taken into account in assessing the Group's going concern status are set out within
the Financial Review.
This preliminary results announcement 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 will be delivered to the Registrar of Companies following the Company's Annual
General Meeting which will be held on 18 May 2016. 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).
The information contained in this announcement for the year ended 31 December 2014 also does not constitute statutory
accounts. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's
report on those accounts was unqualified, with no matters by way of emphasis, and did not contain statements under sections
498(2) or (3) of the Companies Act 2006.
The information contained in Note 31 of this preliminary results announcement is not derived from the statutory accounts
for the years ended 31 December 2014 and 2015 and is accordingly not covered by the auditor's reports.
Construction of the Antucoya project was completed during 2015 and the project is currently in its initial start-up phase
during which final commissioning activities are being performed to ensure that the operation's assets are capable of
operating in the manner intended by management.During this initial start-up period all costs of the Antucoya operation,
along with related revenues, are being capitalised.
On 1 December 2015 the Group completed the agreement with Barrick Gold Corporation ("Barrick") under which Antofagasta
acquired a 50% interest in Compañia Minera Zaldívar SPA ("Zaldivar"), and has accounted for its 50% interest in Zaldivar as
a joint venture from that date.
In January 2015 the Group completed its acquisition of Duluth Metals Limited ("Duluth"). As a result of the acquisition the
Group now has a 100% interest in Twin Metals Minnesota Limited ("Twin Metals") and therefore it has been consolidated as a
subsidiary of the Group from that date.
The Group completed the sale of its Water Division, Aguas de Antofagasta S.A. to Empresas Públicas de Medellín, on 2 June
2015 and the sale of its transport operation in Bolivia, Empresa Ferroviaria Andina ("FCA") to Kimarcus Group Corp, on 28
August 2015. In these financial statements the net results of the Water Division for the five months to May 2015 and of the
FCA for the eight months to August 2015, are shown in the income statement on the line for "Profit for the period from
discontinued operations". The comparative results for the prior year have been restated in order to present the comparative
net result on the "Profit for the period from discontinued operations" line.
A reclassification between property, plant and equipment and current inventories has been made in the prior period
comparative figures related to Ferrocarril Antofagasta Bolivia (FCAB). This has resulted in an increase in current
inventories and a corresponding decrease in property, plant and equipment of $13.2 million as at 31 December 2014.
During 2014 the Group merged Minera Esperanza and Minera El Tesoro into a single entity - Minera Centinela. The production
of copper concentrate which was previously within Minera Esperanza is now referred to as Centinela concentrates, and the
production of copper cathodes which was previously within Minera El Tesoro is referred to as Centinela cathodes. In the
prior year comparatives the results and balances for Minera Esperanza and Minera El Tesoro have been combined into a single
segment for Centinela, consistent with the current year presentation.
b) Going concern
Having reassessed the principal risks of the Group, the Directors considered it appropriate to adopt the going concern
basis of accounting in preparing the annual financial statements report.
c) Accounting policies
The following International Financial Reporting Standards (IFRS), amendments and interpretations are effective for the
first time in the current period.
Adoption of new accounting standards
Annual improvements 2011 - 2013 Cycle - improvements to four IFRSs
IFRIC 21, Levies
The application of these standards and interpretations effective for the first time in the current year has had no
significant impact on the amounts reported in these 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 14, Regulatory Deferral Accounts Annual periods beginning on or after January 1, 2016
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)
IAS 19,Defined Benefit Plans, Employee Contributions (Amendments to IAS 19) Annual periods beginning on or after February 1, 2015
Annual improvements 2010 - 2012 Cycle - improvements to six IFRSs Annual periods beginning on or after February 1, 2015
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) Annual periods beginning on or after January 1, 2016
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38) Annual periods beginning on or after 1 January 2016
Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) Annual periods beginning on or after 1 January 2016
Equity Method in Separate Financial Statements (Amendments to IAS 27) Annual periods beginning on or after January 1, 2016
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
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) Annual periods beginning on or after January 1, 2016
Disclosure Initiative Annual periods beginning on or after January 1, 2016
(Amendments to IAS 1)
Annual improvements 2012 - 2014 Cycle - improvements to four IFRSs Annual periods beginning on or after January 1, 2016
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
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 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
Year ended 31.12.2015 Year ended 31.12.2014(Restated) $m $m Group revenue 3,394.6 5,145.6 Cost of sales (2,478.9) (2,869.3) Gross profit 915.7 2,276.3 Administrative and distribution expenses (455.7) (457.2) Other operating income 37.6 20.8 Other operating expenses (193.2) (256.3) Operating results from subsidiaries 304.4 1,583.6 Share of income from associates and joint ventures (5.8) (4.1) Total profit from operations, associates and joint ventures 298.6 1,579.5
Year ended 31.12.2015
Year ended 31.12.2014(Restated)
$m
$m
Group revenue
3,394.6
5,145.6
Cost of sales
(2,478.9)
(2,869.3)
Gross profit
915.7
2,276.3
Administrative and distribution expenses
(455.7)
(457.2)
Other operating income
37.6
20.8
Other operating expenses
(193.2)
(256.3)
Operating results from subsidiaries
304.4
1,583.6
Share of income from associates and joint ventures
(5.8)
(4.1)
Total profit from operations, associates and joint ventures
298.6
1,579.5
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 and Centinela are both operating mines, Michilla was placed
on care and maintenance at the end of 2015, Antucoya is in its initial ramp-up stage and 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. 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 of
each of the segments.
a) Segment revenues and results
For the year ended 31 December 2015
Los Pelambres Centinela Michilla Antucoya Zaldivar Exploration and evaluation2 Corporate and other items Mining Railway and other transport services Water concession Total
$m $m $m $m $m $m $m $m $m $m $m
Revenue 1,807.2 1,266.1 168.9 - - - - 3,242.2 152.4 - 3,394.6
EBITDA1 749.3 238.4 14.1 - - (101.9) (67.6) 832.3 58.4 - 890.7
Depreciation and amortisation (191.6) (367.6) - - - - (3.1) (562.3) (13.8) - (576.1)
(Loss)/gains on disposals (2.7) (1.8) 1.3 - - - (4.4) (7.6) (2.6) - (10.2)
Operating profit 555.0 (131.0) 15.4 - - (101.9) (75.1) 262.4 42.0 - 304.4
Share of results from associates and joint ventures (3.7) - - - (2.8) - (7.5) (14.0) 8.2 - (5.8)
Investment income 10.2 4.3 0.6 - - - 2.2 17.3 0.8 - 18.1
Interest expense (1.8) (27.1) - - - - (1.8) (30.7) (3.0) - (33.7)
Other finance items (4.6) (9.7) 0.6 (3.4) - - (7.5) (24.6) 1.0 - (23.6)
Profit before tax 555.1 (163.5) 16.6 (3.4) (2.8) (101.9) (89.7) 210.4 49.0 - 259.4
Tax (161.8) 49.6 (6.0) (21.8) - - 1.8 (138.2) (22.2) - (160.4)
Profit for the period from continuing operations 393.3 (113.9) 10.6 (25.2) (2.8) (101.9) (87.9) 72.2 26.8 - 99.0
Profit for the period from discontinued operations - - - - - - - - (13.1) 615.8 602.7
Profit for the period 393.3 (113.9) 10.6 (25.2) (2.8) (101.9) (87.9) 72.2 13.7 615.8 701.7
Non-controlling interests (151.8) 46.5 (0.2) 11.9 - - - (93.6) 0.1 - (93.5)
Net earnings 241.5 (67.4) 10.4 (13.3) (2.8) (101.9) (87.9) (21.4) 13.8 615.8 608.2
Additions to non-current assets
Capital expenditure 188.3 535.1 - 147.9 - - 111.0 982.3 13.9 16.4 1,012.6
Segment assets and liabilities
Segment assets 3,753.3
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