Will Antofagasta plc beat Glencore PLC, Anglo American plc and Rio Tinto plc after 2017 results?

Does Antofagasta plc (LON:ANTO) (ANTO.L) have more investment potential than Glencore PLC (LON:GLEN) (GLEN.L), Anglo American plc (LON:AAL) (AAL.L) and Rio Tinto plc (LON:RIO) (RIO.L)?

Antofagasta plc
Antofagasta plc

Antofagasta plc (LON:ANTO) (ANTO.L) has risen 3% today after it released 2017 results. They show that it has been able to deliver improved financial performance while also investing for future growth.

For instance, the company’s EBITDA was 59.1% higher than in the previous year. This was aided by a revenue rise of 31.1%, which was pushed upwards by higher realised metal prices.

Copper production was in line with guidance at 704,300 tonnes. This was slightly lower than in the previous year and was due to the impact of the expected lower grades at Los Pelambres and Centinela. This was offset by Encuentro Oxides coming into production in October and following the ramp-up at Antucoya in 2016.

EPS from continuing operations and before exceptional items was up 119% versus 2016. Dividends were increased by 177% to $0.406 per share.

Looking ahead, Antofagasta expects production in 2018 to be between 705,000 and 740,000 tonnes of copper. It anticipates that capex will be $1 billion, while cost savings of $100 million are being targeted.

In the last 3 months the Antofagasta share price has fallen 1%. That’s a worse performance than other mining stocks such as Glencore PLC (LON:GLEN) (GLEN.L), Anglo American plc (LON:AAL) (AAL.L) and Rio Tinto plc (LON:RIO) (RIO.L). Glencore is up 6%, Anglo American has moved up 25% and Rio Tinto has gained 5% in the same time period.

In my view, Antofagasta has adopted a solid strategy which is bearing fruit. The company seems to have the cash resources to invest for future growth, while also maintaining a disciplined stance on costs.

It is benefitting from a more buoyant period for commodity prices, and this could lead to improving financial performance in future. Therefore, while its share price has underperformed versus some of its index peers, I’m optimistic about its future prospects.

About Robert Stephens 3630 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page