* HY core profit up 44%
* Company to focus on controlling costs
* Full year outlook unchanged
* Expects 2020 output to decline (Adds detail, analyst, Fitch, shares)
Aug 22 (Reuters) - Chilean miner Antofagasta Plc delivered slightly better than expected half-year profit as it reined in costs to cope with lower copper prices, which have been hit by softer Chinese demand and the drawn-out Sino-U.S. trade dispute.
The copper producer posted core earnings of $1.31 billion, up 44% on the year and just beating analysts’ average forecast of $1.29 billion as costs came in slightly lower than expected.
The company said it was striving to offset the impact of lower copper prices, which have fallen 4% this year.
“The uncertainty caused by the continuing trade negotiations between the USA and China has had a significant negative impact on market sentiment and copper prices,” the company said.
Net cash costs fell 22% year-on-year in the first half to $1.19 per pound, helped by an ongoing drive to make savings and boost productivity, as well as higher output, a rise in by-product revenues and a weaker Chilean peso, Antofagasta said.
It sees full-year net cash costs at $1.25 per pound.
Shares in the FTSE 100 company slipped as much 3.8% in early trading, but had pared losses to trade down 0.3% at 816.6 pence as of 1040 GMT in a largely flat London market.
The stock has fallen 13% in a turbulent few weeks for global markets due largely to concerns over the trade dispute’s impact on global growth and commodity prices. It is still higher for the year and outperforming the FTSE’s mining index.
The company stuck to its full year output forecast, but said it expected copper production to decline in 2020 towards 2018 levels due to a reduction in grades at its Centinela mine. It anticipates the decline will be partially reversed in 2021.
“Antofagasta remains the best positioned of the European copper pure plays,” said Edward Sterck, an analyst at BMO Capital Markets.
Its strong balance sheet, quality of assets and operational performance, along with consistently high shareholder returns over time, justifies its higher price compared with its peers, Sterck said.
A report by ratings agency Fitch on Wednesday said growth in copper demand in China would only modestly recover from current levels as the car and consumer sectors, where a large portion of the metal is used, struggle for growth in 2020.
Antofagasta’s revenue rose 19% to $2.53 billion, in line with analysts’ expectations, which had predicted costs of $1.20 per pound, according to a company-compiled consensus of 15 estimates. (Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and Mark Potter)
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