Canaccord highlights positive dividend surprise at Antofagasta

18th Mar 2014 11:26

Canaccord Genuity has reiterated its 'buy' recommendation and 1,030p target price for Antofagasta, highlighting the large positive dividend surprise announced alongside the copper miner's 2013 results.Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 30.1% to $2,702.2m in 2013, compared with Canaccord's forecast of $2,789m and the Vuma consensus estimate of $2,694m.However, the final dividend of 86.1 cents per share, although under the previous year's, came in significantly ahead of the consensus prediction of 24 cents, the broker said. This implies a final payout ratio of 142% compared with 35% previously.Analyst Peter Mallin-Jones said: "The very high dividend payout meant much higher-than-expected withholding tax charges in the year pushing down the reported net income well below our and consensus estimates. "Of earnings misses to have, we think one caused by paying out extra tax triggered by a dividend 3.6 times larger than expected is likely to be a palatable one."He added: "Interestingly, the large final dividend has been presented as a normal dividend rather than a small "ordinary" dividend and a much larger special dividend as is usually the case. This may signal a change in the underlying dividend payout policy of 35%."The stock was down 2.24% at 828.5p by 12:32, having erased gains which sent it to a high of 900p early on.BC