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Higher copper prices push Codelco to profit in FY'17

Chile's state-owned copper producer Codelco swung to a profit attributable to shareholders in 2017 of US$569.2 million, from a year-ago net loss of US$275.4 million.

Revenue in the 12 months jumped 26.9% year over year to US$14.64 billion, due to the 26.8% increase in the average LME copper price, partially offset by a 4.9% decline in sales volumes, according to the March 29 release.

On a yearly basis, the company's copper sales declined 0.8% to 1.8 million tonnes, while molybdenum sales slid 3% to 28,900 tonnes.

Codelco's cash cost in the year increased 7.8% to about US$1.36 per pound due to higher operational costs and appreciation of the Chilean peso.

Cost of sales for the company increased 9.8% year over year to US$10.38 billion.

Codelco swung to a pretax profit of US$1.82 billion in 2017, compared to a loss of US$430.7 million in the prior year.

The company booked a forex gain of US$206.1 million in 2017, compared to a forex loss of US$232.9 million in 2016.

The copper giant managed to cut its net financial debt by 7.7% to US$12.55 billion as of Dec. 31, 2017.

Net cash flows from operations swelled to US$4.72 billion from US$1.9 billion in 2016 thanks to higher copper and molybdenum prices.

Total copper mine production in the year, including El Abra and Anglo American Sur SA attributable production to Codelco, slightly increased to 1.84 million tonnes, compared to 1.83 million tonnes in 2016.

The increase was realized as higher production in Chuquicamata and Andina Division more than offset the lower production at Ministro Hales, El Teniente Divisions and El Abra.

Own molybdenum production declined 6.4% year over year to 28,700 tonnes.