Profits Up, Production Down
Antofagasta Posts Soaring Half-Year Profits Despite Lower Copper Output, Citing Rainfall Disruption
Key Points
H1 copper production was 285,000 tonnes, down 9% year-on-year, with lower output at Los Pelambres and Centinela driving the decline.
EBITDA margin for the period rose to 63.4%, up five percentage points, and operating cash flow jumped 53% to about $2.77 billion.
Inspections found no material damage to key equipment after the Los Pelambres shutdown, but some pipeline platforms and water-management systems will need repairs; Chile’s government had declared a 'state of catastrophe' in the Coquimbo region due to heavy rainfall.
Interim dividend of 30.1 US cents per share represented about 35% of underlying net earnings.
Antofagasta also signaled that quarterly production is expected to rise sequentially through the remainder of 2026 as operations restart and ramp up following the weather-related disruption.
Antofagasta posted a 27% rise in first-half EBITDA to $2.84 billion, driven by strong copper prices even as output fell. Revenue climbed 18% to $4.48 billion, and pretax profit jumped 72%, according to Morningstar. The London-listed miner also raised its interim dividend by about 81% to 30.1 US cents per share.
The strong earnings came with a catch. Antofagasta cut its 2026 copper production outlook to 625,000–655,000 tonnes, down from 650,000–700,000 tonnes, after heavy rainfall forced a temporary shutdown at its Los Pelambres mine in Chile. Investors Chronicle reported that Chile's government declared a 'state of catastrophe' in the Coquimbo region due to the severe weather.
Strong Copper Prices Offset a Sharp Drop in Output
Antofagasta produced 285,000 tonnes of copper in the first half of 2026, down 9% from a year earlier. Lower output at both Los Pelambres and Centinela drove the decline. But high copper prices more than covered the gap. The EBITDA margin rose to 63.4%, up five percentage points year-on-year.
Operating cash flow surged 53% to about $2.77 billion. Cash costs fell to $1.22 per pound, helped by by-product credits and the company's ongoing competitiveness program. Net debt to EBITDA stood at 0.68 times at mid-year, a comfortable level that signals financial discipline, according to MarketScreener.
Los Pelambres Shutdown Triggers Revised Production Targets
Heavy rainfall hit the Coquimbo region of Chile, forcing Antofagasta to temporarily halt operations at Los Pelambres. Inspections found no material damage to key equipment. However, some pipeline platforms and water-management systems will need repairs, Investors Chronicle reported.
Operations have since resumed. Antofagasta said quarterly copper output is expected to rise sequentially through the rest of 2026. The trimmed guidance range of 625,000–655,000 tonnes reflects caution as the mine ramps back up. The disruption was weather-driven, not structural, the company emphasized.
Dividend Jumps 81% as Earnings Beat Forecasts
Antofagasta raised its interim dividend to 30.1 US cents per share, up about 81% year-on-year. That payout represents roughly 35% of underlying net earnings for the period. The jump reflects management's confidence in the company's cash generation, despite the near-term production setback.
Earnings beat analyst forecasts, though debt also rose during the period, according to MarketScreener. The majority-owned Luksic family company is pressing ahead with expansion projects, which remain on track for commissioning in 2027. Stronger realized copper prices and productivity gains are supporting that timeline.
Expansion Plans Stay on Track for 2027 Commissioning
Antofagasta's growth projects are moving forward despite the weather disruption. The company confirmed commissioning is targeted for 2027. Efficiency gains from the competitiveness program are helping fund those plans without straining the balance sheet. Net debt to EBITDA of 0.68 times leaves room to invest, according to Investors Chronicle.
The overall picture is one of resilience. Higher copper prices are doing the heavy lifting, masking near-term output volatility. As long as prices hold, Antofagasta's margins and cash flows should remain strong through the second half of 2026 and into the expansion phase ahead.
Sentiment
Mostly NegativePublishers
14
Articles
36
Reach
50
